Tag Archives: social entrepreneurs

The Delta Response to Gamma Rats and Sociopaths

Doug Casey may not believe, along with Margaret Thatcher, that there’s no such thing as society, but he seems to have given up on ours. An investor and a self-styled libertarian, Casey thinks the country is done: “All the institutions that made America exceptional – including a belief in capitalism, individualism, self-reliance and the restraints of the Constitution – are now only historical artifacts,” he wrote in a post this past week. The “moral rot” runs so deep, Casey argues, that there is no fixing the institutions; the rot has become institutionalized.

How did things get so bad? Casey has a simple answer, one that doesn’t require much reading of history or economic analysis: sociopaths. Sociopaths “are now fully in control of major American institutions. Their beliefs and attitudes are insinuated throughout the economic, political, intellectual and psychological/spiritual fabric of the US.” These “really bad actors” – Casey estimates that they make up about 4 percent of the population –“are drawn to government and other positions where they can work their will on other people and, because they’re enthusiastic about government, they rise to leadership positions. They remake the culture of the organizations they run in their own image.”

Casey is hardly the first to claim that sociopaths have taken over. The movie The Corporation popularized the trope. If in the wake of Citizens United corporations are persons, then (runs the argument) they are the kind who belong in a straitjacket. Since then, and especially since things went bust in 2008, it’s become popular to characterize CEOs and Wall Street investors as sociopaths; it borders on cliché. Casey’s simply transferred the argument to government: no surprise, really, that it is as dysfunctional and destructive as the other centers of power in twenty-first century America.

Casey recommends flight over fight. He argues that it makes better sense than ever to become an International Man (the initial caps are his: the International Man appears to have achieved an iconic status in his mind), and find a safe haven to keep one’s assets and one’s life out of the reach of the sociopaths. Casey sees this flight from society not as the act of a misanthrope, but a “gamma rat”:

You may recall the ethologist’s characterization of the social interaction of rats as being between a few alpha rats and many beta rats, the alpha rats being dominant and the beta rats submissive. In addition, a small percentage are gamma rats that stake out prime territory and mates, like the alphas, but are not interested in dominating the betas. The people most inclined to leave for the wide world outside and seek fortune elsewhere are typically gamma personalities.

I have to admit that the fantasy of becoming an International Man holds its attractions – a hoard of wealth, prime real estate, the finest mates (check their teeth and gums, just to make sure). But it is, ultimately, a fantasy of power and control that betrays a feeling of powerlessness and a loss of control.  The International Man would have us believe that he is a refugee, fleeing persecution, but he doesn’t ask for pity or succor; he demands privilege and exemption from all that is common.

He is shrewd and selfish, not heroic. Odysseus, arguably the first international man, was wily, but he suffered heroically because he longed for home. The gamma cannot be nostalgic; home is where he finds or makes his fortune, until the taxman catches up. He fancies himself a hobo or tramp, but he has investment assets, property and multiple passports. He wants to own but not owe – not nothing to nobody, nohow. He accumulates wealth but, it would seem, cares nothing for common wealth; that may make him rich, but it also makes him the enemy of prosperity.

If the International Man is iconic, he would appear to be an icon of idiocy, in the classical sense of that word. Arendt puts it this way in The Human Condition: “a life spent in the privacy of ‘one’s own’ ([in Greek,] idion), outside the world of the common, is ‘idiotic’ by definition.”

What else should we call a person who sees bad actors taking control, institutions failing, society collapsing, and decides to get out while he still can? What would be his motto? Ask not what you can do for your country, but what you can grab for yourself?

More importantly, what would it take to go beyond gamma – to delta, let’s say, where you can apply yourself to meaningful work, and to building the next society?

The delta understands social collapse and institutional failure not simply as a crisis, but as an opportunity to create something new. The delta wards off doom by doing humble work, tinkering, fixing and reclaiming. As I conceive it, delta is all about tikkun — doing the difficult work of “world repair,” not throwing one’s hands up in despair. It takes imagination. Poets, painters and teachers can be deltas; they give us new models to work with. So can inventors and entrepreneurs. In fact, I would put social entrepreneurs and socially responsible investors at the forefront of the delta group. And delta is on the rise: B-corporations, which work to produce public benefits, have won legitimacy in seven states; legislation in pending in seven others.

Deltas work at a remove from the dysfunctional centers of power, on the edges of organizations, independently and within small groups, where they can experiment and learn from each other. The delta looks for alternatives to the destructive power dynamics of the alphas and the betas – flatter organizations, fair dealing, transparency and collaboration. If the gamma is entirely self-directed, even to the point of idiocy, the delta is other-directed, altruistic, a maker of community. Deltas stay networked, because they recognize the limits of the self, and know that our lives and our liberty take on meaning only with and in relation to others, no matter how much we may fantasize about going it alone.

What’s Really Wrong with Non-Profits?

You may have been fortunate enough to have missed Rush Limbaugh’s angry tirade last week against the non-profit sector and the “lazy idiots” and “rapists” who fill its ranks.

It’s disturbing to think there are people out there – millions of people — who tune into this buffoon on purpose, and share his views and are infected by his hysteria.

What’s even stranger is that — though I am loath to admit it — Rush got me thinking.

Having worked in the non-profit sector (as an educator) and for the non-profit sector (as a consultant) for most of my adult life, I have my own ideas about what’s really wrong with non-profits.

Here is my top-ten list. I won’t pretend that this list of troubles is exhaustive, and I admit up front that these are sweeping statements. My aim is simply to gather my thoughts and, if I’m lucky, start a conversation.

1. Many non-profits are unable to say what they are really about, or confuse their programs with their core mission.

2. Non-profits that begin from small, inspired efforts have a hard time figuring out how big they should grow, how small they should stay, or how to right-size themselves.

3. Many non-profits are founded by a charismatic leader, and remain captive to his or her charisma; but to flourish, the non-profit may require another organizational model.

4. Non-profits don’t do a great job of capturing knowledge, turning knowledge into assets, and sharing knowledge across the organization or with other organizations engaged in the same work; but they should.

5. People come into the non-profit organization inspired and ready to change the world, and become (at best) competent managers.

6. Many non-profits believe managers with corporate skill sets or consultants versed in management theory can create greater organizational efficiencies; but they too often simply don’t get the culture of the non-profit organization.

7. Non-profits lack the entrepreneurial audacity of social entrepreneurs, and tend to be risk averse.

8. For the sake of being inclusive and making sure everybody has a say, non-profits will often forgo the best ideas and the smartest choices.

9. Many non-profit organizations confuse capacity with resources, and resources with funding.

10. Non-profits tend to be captive to their history, because so many non-profits were formed as a solution to a particular problem, or were built in a single great effort, and it’s hard to move beyond that founding moment.

I wonder if my list resonates with the experiences of others. I wonder, too, what’s missing from it, and which non-profit organizations, in your view, really and consistently get it right.

Fishy Sustainability

Dear Wild Planet,

I’m unsure what to make of this: your sardines are “sustainably caught” off the California coast, then shipped to a cannery in Vietnam?

Vietnam! I didn’t find that interesting little fact anywhere on the Wild Planet package, and it’s nowhere on the web page you have devoted to “sustainable fishing methods.” It is, however, stamped on the cardboard cartons in which the tins of your sardines are packed for shipping, and just last week I had to lift about ten of these cartons during my shift at the Food Coop.

(All members of the Food Coop have to work a few hours each month; mine is an early Friday morning shift. I work at what’s called “the top of the belt,” unloading groceries from big palettes brought in by trucks, and sending them down the conveyer belt to the basement. I might complain about the shift — it is never convenient — but I usually enjoy the simple work, lifting and carrying, which is unlike any other work I do. It sometimes even has a nice rhythm to it; and I can allow my mind to wander as I work.)

So while stooping and lifting and carrying, I happened to notice that your shipping cartons make no secret of the fact that your sardines are packed in Vietnam. Maybe the law requires that declaration. But I was surprised to discover that everywhere else you seem to take great pains not to disclose the place where the sardines are packed. The packaged tin says the sardines are “micro-cannery produced for Wild Planet Foods, Inc.” A Google search reveals that the word “Vietnam” does not appear on your website at all. Not once.

Instead, one learns that Wild Planet sardines are “wild caught,” a method rated by various environmental organizations — Seafood Watch, Blue Ocean, Fish Wise, and Sea Choice — as the “best” or “green” method of catching sardines. The trouble is, the phrase “wild caught” is terribly vague: as one writer puts it, “‘wild-caught’ casts a wide net and can mean that your fish were caught using highly destructive (read: downright demonic) fishing methods such as dynamiting reefs, high-seas bottom-trawling, and drift nets. But the term wild-caught can also encompass more desirable lower-impact techniques, such as hand-lines, divers, or the use of pots or traps.” Let’s assume you opt for the low impact techniques: why not say so and specify those techniques? Instead, you ask that we take your word that you limit your “bycatch” (those fish who happen to get caught up in a net not intended to net them), and that you don’t use destructive methods.

As a result, your claim to sustainable fishing methods, your claim to sustainable practice, lacks cogency. NO PURSE SEINE OR LONG-LINE CAUGHT TUNA WILL EVER BE USED IN OUR PRODUCTS! your site boldly announces — in capital letters, and with an exclamation point to boot. But does that mean your sardine fishermen don’t use purse seine nets? After all, the purse seine is a very good, proven way to catch sardines; and one wonders how the fishermen casting those nets assure the bycatch is, in your words, “negligible.” Sea Choice currently rates the sardine “of ‘low’ conservation concern regarding fishing pressure”; and the big drop in sardine populations off the California coast in the middle of the last century seems to have been due as much to a natural cycle of boom and bust as to heavy fishing. So, taking all this into account, what exactly does sustainable fishing of sardines mean? Does it simply mean fishing that does not exceed catch quotas — in other words, fishing that’s simply legal?

I would like to believe that Wild Planet is the environmentally-conscious company it makes itself out to be, and that you have simply done a bad job of explaining yourselves on sustainable fishing. Still, it’s a very narrow definition of sustainability that takes into account how the fish are pulled from the sea and doesn’t consider what happens to them after that. I imagine — I could be wrong — that the sardines are fresh frozen and then transported to Vietnam for canning. Have you calculated the amount of energy it takes to transport them to and from Vietnam? What is the carbon footprint of a typical catch? What can you tell me about the the Vietnamese canneries? Where exactly in Vietnam are they? What are the working conditions like? What is the average pay? Surely all of this has to figure into any discussion whether a practice rightly deserves to be called sustainable, doesn’t it?

Of course, there are no canneries here in the United States. The last one, the Stinson Sardine Cannery in Prospect Harbor, Maine, closed in February of this year. Steinbeck’s Cannery Row in Monterey, California is more like a mall or an amusement park than an industrial center. King Oscar packs their sardines in Poland. StarKist and Bumble Bee also ship their fish to faraway canneries. But (I couldn’t help but wonder as I stooped and lifted and carried) why Vietnam?

There is very little information readily available – at least to someone who can’t search in Vietnamese – about canneries in Vietnam. I was able to find a picture of a Vietnamese fish processing plant; it looks clean and orderly, with everyone dressed in protective face masks, a little like the high-tech manufacturing facilities I have seen, except there are dead fish everywhere.

I can infer a little more from a Request for Emergency Dislocation Aid filed by American Samoa’s governor, Togiola Tulafono, in May of 2009. There, Tulafono complains that a mandated 50-cent increase of the hourly minimum wage in American Samoa “is a direct cause” of the StarKist cannery moving to Vietnam, where workers earn around 70 cents an hour, “and less.” Granted, a worker earning 70 cents an hour, working five days a week, eight hours a day at one of your Vietnam canneries would not be considered poor in a country where per capita income in 2008 was $1,024, or about 85 dollars a month. But what drudgery!

Maybe I am not seeing the bigger picture here, and how this all adds up to sustainability or sustainable practice. In a business proposal for a cannery, Don Hosokawa, a consultant, lists some of the economic benefits that canneries bring: jobs — one cannery alone can generate 1,500 on-site jobs, and up to 2,000 more jobs in the surrounding community — economic development, a big client for local utilities and other services; “an entire infrastructure would be developed.” A fish cannery can be a real boon for the host region.

What’s more, Asian countries that are members in the ACP — the African, Caribbean and Pacific Group of States, created by the Georgetown Agreement in 1975 — enjoy special trade agreements with the EU; and the ACP is committed to “sustainable development of its Member-States and their gradual integration into the global economy, which entails making poverty reduction a matter of priority and establishing a new, fairer, and more equitable world order”.

Only Vietnam is not a member state. Hosokawa says this would spell “more advantages” for the entrepreneur in his cannery scheme; but it’s unclear to me what advantages the people working at the Vietnamese cannery might enjoy, and how all this might help secure them, or us, a new, fairer, and more equitable world order. On this last point, especially, I hope you can enlighten me.

Goodness Has a New Flavor, Maybe a New Form

Earlier this week, National Public Radio aired a story about efforts by lawyers in seven states to “rewrite laws” on behalf of social entrepreneurs.

Right now, according to April Dembosky’s report, social entrepreneurs operate in a state of legal limbo: in the eyes of the law, social enterprises are for-profit entities, but they have a non-profit ethos, a concern for doing good or simply doing less or no harm.

The law may respect and admire, but it doesn’t have to recognize that ethos; social enterprise is not – or not yet — a legitimate corporate form. The law in most states currently says that shareholders have the right to sue if your desire to do good compromises their ability to do well, or better than they are already doing. And shareholder value will always trump “social values” in a court of law.

But now there are now serious efforts, mainly in Vermont and California, to create the legal framework for a new, “for-benefit” corporate form. These efforts seek to undo what is commonly called “shareholder primacy” in the for-profit corporation and challenge the idea that the sole duty of corporate directors is to make decisions in the best interests of shareholders – or, as it’s usually put, to “maximize profits” or “maximize shareholder value.” Advocates say that corporations should also have a duty to various stakeholders, including employees and consumers as well as to society as a whole, and that this duty should be on par with, or sometimes trump, fiduciary duties – or, at the very least, that shareholders ought to take into account the costs corporations socialize (e.g., the degradation of the environment) for the sake of shareholder profits.

There is already a for-benefit certification companies can earn. Think of it as a Good Housekeeping Seal for politically progressive investors, job seekers and consumers. But the for-benefit legal movement wants to do much more. For this reason, the movement represents more than another extension of the corporate social responsibility movement, more than a new chapter in the old debate about the public purpose of the corporation that dates back (at least) to the Berle-Dodd debates of the 1930s. The newly-chartered for-benefit corporation or “B-Corp” would, presumably, use “the power of business to solve social and environmental problems.” It would have a legal mandate to do so. In other words, the B-Corp would be a legally chartered, for-profit agent of social change or social “benefit”; its directors would be bound by law to take stakeholder interests and social benefits into account when faced with a decision.

To illustrate the need for the new corporate form, Dembosky looked briefly back to Unilever’s 2000 takeover of Ben & Jerry’s Homemade Ice Cream. As a case study, it’s a bit hackneyed, but as I went back to review it I discovered some distortions in Dembosky’s reporting, and came up against a number of questions about the for-benefit movement, and social enterprise in general, that I’ve run into before.

Ben & Jerry’s is widely regarded as a sort of ur-social enterprise, an early experiment in “hippy capitalism”. The company was founded in 1978. By 2000, Ben & Jerry’s had grown far bigger than its founders ever imagined it would. They needed to raise cash. The company had not solved its distribution problems: Ben & Jerry were still hitching a ride on other “super premium” ice cream distribution networks (mainly Haagen Dazs and Dreyer’s). Ben Cohen and Jerry Greenfield no longer saw eye to eye. All this made the company vulnerable and the target of speculation.

Still, the company was well past its hippy phase, and this is probably the first place where Dembosky’s story starts to distort the picture.

To hear her tell it, these really cool social entrepreneurs were just making their ice cream and trying to make the world a better place when the Unilever harpy swooped down upon them and carried them away, arms flailing.

Not quite.

First of all, Unilever was already part of a buyout offer engineered by Ben Cohen himself in March of 2000. He had teamed up with Unilever and Meadowbrook Lane Capital; Meadowbrook, a socially responsible investment firm, had put together a group of investors that included Bodyshop founder Anita Roddick. This unlikely trio offered $38 per share; Ben & Jerry’s was then trading at around $30. A shareholder who was privy to the board’s deliberations told the New York Times that the board had approved the deal (over Jerry Greenfield’s angry objections).

But then, in April, things took an unexpected turn. Unilever offered $43.60 per share – a 25 percent premium, almost nine dollars over the then-current share price — for a total offer of $326 million in cash.

Why the aggressive offer? Not because Unilever admired the social mission Cohen and Greenfield had set for their company, except insofar as it added to the buzz of the Ben & Jerry’s brand. Unilever had a nationwide distribution network already in place in the United States and access to European markets; and the company was faced with growing pains of its own: the consensus among analysts was that the company’s “longer-term fundamental growth rate” was “not inspiring.” It needed to enter new markets and find new areas of growth.

When the offer came in, Ben & Jerry’s Board of Directors was in no position to refuse, or stand on principle. This much Dembosky had right. However they may have felt about Unilever, however much they may have feared for the social mission of the ice cream company, they were prudent – and they were right — to reject the lower offer from the Cohen-Roddick group in favor of the higher cash offer.

To do otherwise would be to risk being sued by shareholders, and to be accused of neglecting their duty of care – even if the Cohen-Meadowbrook-Unilever group could somehow have proven that they and they alone could keep the ice cream company true to its social mission.

Which is, by the way, exactly what the Cohen-Meadowbrook-Unilever group had done when making their offer. As the Times reported, Meadowbrook Lane “pledged to create a ‘social performance plan’ that would place women and minorities on the board, pay about 7.5 percent of the company’s pretax profits into the Ben & Jerry’s Foundation and provide venture capital to other ‘progressively minded enterprises,’ among other social efforts.”

(Missing from this list – at least as reported by the Times — was the original Ben & Jerry’s compensation scheme, whereby no executive would earn more than seven times what an entry-level employee learned. The company had abandoned that policy in 1995, and apparently there was no going back. But all the ideas in the Meadowbrook package were, and — most people will tell you — still are, very fine sentiments. Whether they are good business practice is open to debate; whether they are to be dignified with the phrase “social mission” or “social responsibility” is even harder to decide.)

In the end, none of this stuff really mattered to the merger agreement. None of it influenced the Board’s deliberations or could make up the difference in the offers. So, when the deal was done, Cohen and Greenfield issued a joint statement celebrating Unilever’s commitment “to pursue and expand a social mission that continues to be an essential part of Ben & Jerry’s,” and the European multinational mumbled something about nurturing community values. None of this talk was binding or even very credible. At the time, it all seemed a little discouraging.

By December of the same year, Ben Cohen was threatening to quit unless Unilever appointed a CEO with the right “business mentality”: “otherwise,” he was quoted as saying, “I’m not interested in hanging around and supporting what I’m sure is a destruction of the company.” It’s worth noting that while making these threats Cohen was angling to have his own choice for CEO, Ben & Jerry’s director Pierre Ferarri, assume the role. He lost that battle. But over time, it seems, the guys from Unilever started to get the idea – or at least they learned how to keep up Ben & Jerry’s “socially responsible” brand.

The company continued to make decisions in keeping with the social agenda Cohen and Greenfield had set for it. It switched to “eco-pint” packaging in 2001. On Earth Day of 2005, Ben & Jerry’s protested oil drilling in the Arctic National Wildlife Refuge by delivering a half-ton “Baked Alaska” to the Capitol. In the same year, the company committed to fair trade; and just last month, Ben & Jerry’s announced that its entire “global flavor portfolio” would use only “fair trade ingredients” by the year 2013, engaging with “smallholders, who grow nuts, bananas, vanilla, cocoa and other Fair Trade-certified ingredients.” And in September of 2009, Ben & Jerry’s changed the name of Chubby Hubby to Hubby Hubby, in support of gay marriage.

All’s well that ends well, I suppose. But surely there are larger lessons here. What are we to make of the real buyout story, and what does it tell us about the efforts now underway to create a new corporate form?

For Dembosky, the moral of the story, or at least the good news, is that the new for-benefit corporate form will allow – or legally require — a social enterprise to stay true to its mission and its values. It will attract a different kind of investor, one who cares about balancing profits with social costs and social responsibilities. That may be true. But questions remain. Consider what would have happened if Ben & Jerry’s had been legally incorporated as a B-Corp back in 1978, at its founding. How would its for-benefit incorporation have affected its growth? Would it have been possible for the company to make those early distribution deals with Haagen-Dazs or Dreyer’s, without requiring those companies to undergo an intrusive social audit? A fussy shareholder could have demanded it; any early deals or alliances could have been subject to the same additional scrutiny. It sounds cumbersome, and a little absurd.

I’m no lawyer, but I don’t really see how legally-binding social commitments wouldn’t hang over all legally-binding deals or contracts that the B-corporation makes (unless of course the “social values” inscribed into the B-Corp charter are easily manipulated or ignored when it’s convenient to do so). The Meadowbrook Lane social performance plan would have been legally binding, written right into the merger agreement. It’s unclear whether under those conditions Ben Cohen would have been able to bring Unilever to the table at all. Jerry Greenfield might have liked that just fine. But would Unilever have agreed to be bound by the social mission of a Vermont ice cream company? It’s hard to see how that deal would have shaped up under these circumstances, but it’s clear that B-Corp charter would have altered the merger equation. Couldn’t shareholders have objected — as Greenfield did — that Unilever would compromise the company’s social mission, and held the merger up on those grounds?

There are broader and more interesting questions here, too. One has to do with the phrase “for-benefit” itself, and whether it can stand up to very close legal scrutiny, or survive a legal challenge. Current definitions of for-benefit corporations don’t really help in this regard. The Vermont Benefit Corporation Act defines “public benefit” as “a material positive impact on society and the environment, as measured by a third-party standard, through activities that promote some combination of specific public benefits.” That is sufficiently vague as to open the door to all kinds of arguments; and it’s also worth noting that the proposed legislation sets out “no criteria to qualify to be a ‘benefit corporation’.” The company is required only to file “annual reports about its community-oriented work.”

I suppose the “third-party standard” is meant to be reassuring; but it is bound to raise the question who will guard the guardians. That question doesn’t matter all that much when “for-benefit” is simply a certification or thumbs up from the progressive business community, or from the non-profit B-Lab; but when it’s a matter of corporate law, you can expect that someone is eventually going to point out that the third party needs to be checked and balanced, and that the for-benefit corporation is essentially chartered to pursue what looks very much like a political agenda.

Of course it’s nothing too offensive – a concern for the environment, fair dealing, civil rights, workers’ rights. If it were a Ben & Jerry’s flavor, it would be Progressive Passionfruit, or Vibrant Vanilla: easily digestible, soft, kind of sweet. Hope and Change. But what about other flavors, other political agendas to the right or the left of the B-Corporation’s Unitarian progressivism? To put the question bluntly, is B-corporation law essentially legislating an idea of what constitutes a “social benefit,” and therefore deciding for the rest of us what is good? How — outside Vermont – can that stand without a quarrel? What about other ideas of how businesses benefit society? How long before Milton Friedman rises from the grave to tell us that increasing profits is the highest social responsibility of a business? Or what happens to the idea of social “benefits” (for example) when the American religious right gets into the social enterprise game?

What bothers me most about all this is that behind the Unitarian progressivism of the B-corporation, behind much of the talk about social enterprise and delivering social benefits through business, lurks another 19th century idea: benevolent corporate paternalism, which, as I suggested in a recent post, now manifests itself in a more politically correct, palatable way, so kind and soft and sweet and full of concern that it might be better termed benevolent corporate maternalism.

By chartering corporations to deliver social benefits, isn’t society also surrendering power? Instead of rewriting the laws to create for-benefit, for-profit companies, why don’t states more strictly enforce the existing laws, or enact laws on behalf of communities and the environment? The rise of the social enterprise may actually signal society’s loss of its power to regulate and restrict business. These fledgling efforts to rewrite the law may — albeit inadvertently — usher in a new era of lawlessness, in which companies can do whatever they want, as long as they can claim to be doing good.

A Kinder, Gentler Disaster Capitalism

I suppose comparisons between the situation in Haiti after the earthquake and the situation in New Orleans after Hurricane Katrina were inevitable. The weird and almost comical arrival of George W. Bush on the scene of the Haiti relief efforts was sure to invite the comparison. But you wouldn’t expect it from people who have been to Haiti, or worked there; and that’s why I was surprised to find the comparison in an opinion piece by Eve Blossom on The Huffington Post.

Blossom is a “social entrepreneur,” a textile importer with a social conscience, and her for-profit company, Lulan Artisans, has done business in Haiti. Or, more precisely: Lulan had started “initial partnerships with a few cooperatives” to bring artisanal goods from Haiti to “a prominent U.S. retailer,” but those plans were interrupted by the earthquake, and many of the artisans who would have benefited from these partnerships are missing and among the dead; their workshops are, as Blossom puts it, “decimated.”

For Blossom, there is another side to the disaster in Haiti: an opportunity to get the country on a more sustainable economic path and to rebuild infrastructure. She is not the only one so far to advance this line of argument. Former Bush administration official Stephen Johnson made a similar call last week in a Wall Street Journal piece advocating “Haitianization of the recovery” and a role for the Haitian American middle class (which would not be without political consequences in Haiti). Blossom would no doubt reject the comparison; but in this article, at least, she advocates what can only be called a kinder, gentler disaster capitalism. Which brings me to the passage that tripped me up:

At Lulan, we find by going into communities, celebrating local skills in the culture, partnering with men and women artisans, paying fair wage and connecting them to a larger marketplace, the artisans become more than self-sufficient. They become savvy marketers who run successful businesses. Such people are more equipped to recover from natural disasters.

With stable incomes, access to savings and credit, marketable job skills, job training and control of resources, people can better withstand disaster interruptions.

Is this disaster not reminiscent of a previous disaster? New Orleans also lacked sufficient infrastructure and a strong economic foundation.

The passage starts out reading like a Lulan press release (and I am surprised the Huffington Post editors let it stand; on second thought, given what the Huffington Post has become, I am not so surprised), with plenty of social-entrepreneurial pixie dust to go around: there is talk of “celebrating” and “partnering,” keeping things “local” and “fair,” and (of course) of “connecting.”

Maybe it’s just me, but I distrust people who talk this way, and I can’t help but see through all this sunshine a mixture of condescension, pious self-regard, and enchantment with the ways of the Third World: a benevolent maternalism, as it were, our own 21st century, politically correct, post-colonial variant of the benevolent paternalism of 19th century anthropologists and industrialists. Ask the Haitians how that worked out for them.

Be that as it may — Ms. Blossom has a business to run, and if Huffington Post won’t prevent her from delivering a sales pitch in the midst of an article about Haitian relief, then why should I? — the real rub for me in all this comes with the comparison to New Orleans.

Blossom’s comparison of the infrastructure of New Orleans to that of Haiti might lead one to wonder whether she has actually been to either place (but she has); and it raises the more serious question what “sufficient” infrastructure really is. New Orleans’ infrastructure had fallen into disrepair; Haiti’s telecommunications infrastructure, to take just one example, is the least developed in all Latin America.

Comparing the economic conditions of an American city — any American city, New Orleans or Detroit or the South Bronx — with those of the poorest country in the Western hemisphere, where 80% of the population live under the poverty line, and 54% in abject poverty, is to make nonsense of economics, of history and of the world.

To take exception to Blossom’s line of argument is not to deny her main point. Savvy economic actors who run “successful businesses” and people with stable incomes and access to credit are, no doubt, better equipped than less fortunate or — dare I say it? — less entrepreneurial people to recover from natural disasters; and it’s important that as Haitians rebuild their economy and infrastructure, they also acquire new economic competencies and new skills for the local and global marketplace. There is no future in depending on foreign aid or on the kindness of strangers — even strangers who claim they are working on your behalf or for your own good.

More On My Social Entrepreneurship Twitter for @SocialEdge

It was an offhand remark, made in reply to a twitter from the Skoll World Forum. What we now call “social entrepreneurship”, I wrote in reply to @socialedge, should eventually just be business as usual.

If it hadn’t been an offhand remark, I might have put it differently. But that’s how conversations usually get started, online and off — a casually dropped remark raises more questions than one bargained for; interlocutors offer their own rough approximations, and (with luck) the thing goes forward, not necessarily toward resolution, but broadening its scope, picking up other questions, and inviting more people to participate. And since I’m not at the Skoll World Forum, where I could have this conversation in person, or with many people, I thought I would try to put together a few thoughts about what my remark was supposed to mean, what it could, or must, mean.

First, a little context. My exchange with @socialedge grew out of his coverage of a big theme at this year’s Skoll World Forum, on the teaching of social entrepreneurship. “‘Social entrepreneurship,” he wrote, “should be an adjective that describes entire business schools, not a department within them.”

It would be hard to take issue with the point, even if you are bothered by the fact that social entrepreneurship is not an adjective, even if you hold no brief for social entrepreneurs.

The current economic crisis has generated its own crisis of faith in, and within, the business schools, and MBA programs in particular. Business Week recently held a debate on the question whether “Business schools are largely responsible for the U.S. financial crisis”; and though that was meant to be a provocative statement, it’s actually quite guarded and misses the point altogether, because it confines the scope of the crisis to finance, when we are obviously witnessing a social and political crisis that arises from, or emerges in the form of, a financial crisis.

That is a point too often overlooked, even now: this is a political and social crisis as well as a financial crisis.

That it took a crisis of this proportion for Business Week and other business media to question the jargon-ridden theoretical twaddle and pseudo-scientific bombast that in many quarters passes for business education is astounding. It’s tempting to agree with Henry Mintzberg, Professor of Management Studies at McGill, who says that MBA programs teach only arrogance, and recommends that we “close them all down, period!” By and large, though, most people writing and talking about this subject are just hoping for a better way to go about things. And obviously the teaching of social entrepreneurship can help to re-orient business education, take it to the field, broaden its scope, and make it about something other, something more, than mere financials. (So, for that matter, can teaching history, languages, and philosophy; but that’s a subject for another day.)

This gets us closer to the heart of the issue, because the trouble is that “mere financials” are never really mere financials, and they are best understood from perspectives that business schools currently don’t, by and large, provide. Social entrepreneurs have a fresh perspective on this issue; and integrating that perspective throughout the business curriculum would require students and faculty to revisit, and re-think, the relationship between financial instruments and the human ends they serve, or business and society, in very broad terms. Teach social entrepreneurship and you teach not just concepts but context and contextual thinking.

It’s always good, in any conversation as well as any educational endeavor, to go back to basics. How business creates wealth; by what means, and to what end; what counts as wealth – these are all questions that social entrepreneurs must confront, in one way or another; and they confront them not as theoretical constructs or “case studies,” but as practical problems on which the success of their enterprise depends and which require an immediate and real-world solution.

Of course, our current problems extend far beyond the four walls of the classroom, and in the real world these basic questions have acquired a new urgency. And that, I suppose, is what prompted my offhand remark in the first place. Anyone who thinks that we are going to recover from this crisis and then return business to business as usual is suicidal, a sociopath, or not very bright.

Some on the right in America are ranting about socialism, or making dire forecasts about the United States turning into old Europe; but even they don’t have the faith or strength to advocate a return to the way we were.

Things are not going to return to normal. We are now entering “the new normal,” as Ian Davis puts it in the most recent issue of McKinsey Quarterly; and though Davis confines himself to a few boardroom bromides – capital outflows to Asia, less leverage, more government intrusion – he manages to hint that the old model of how business gets done, what business is, what business does, has run its course. It’s spent. The old normal has exhausted its social capital.

It won’t be enough for businesses to jump on the “social” bandwagon and preach “social responsibility” (too often a byword for lax regulation); and it’s a bad idea to demand that businesses effect “social change.” The past six months of Ponzi schemes, bank failures and bankruptcies, market dives, bailouts and rising unemployment numbers have proven, once and for all, that doing business always effects social change, and that social change is not a good in and of itself.

We now have a unique opportunity – or an urgent imperative — to rewrite the social charter of business and finance. Of course that’s not going to happen through some great constitutional convention held by some international body like the World Economic Forum (or the Skoll World Forum) or even through the backroom dealings of Tim Geithner, Ben Bernanke, and a group of their closest friends. Good policy can help, but real change is going to come about through entrepreneurial adaptations to new norms, trial and error, through a process of discovery, risk and failure.

And maybe that’s where the social entrepreneurs come in. Social entrepreneurial activity is now generating new ideas of wealth and how to create it, new kinds of credit and transactions and new business models, the likes of which the Fortune 500, with their industrial legacy, could never come up with. Why not, then, imagine that social entrepreneurial activity will eventually generate alternative models, or at least some useful guidelines, for how to scale, up or down, how to do mergers and acquisitions, where to make investments and to what end, how to effect meaningful, and sustainable organizational change, even how to have conversations about strategy or set governance?

And why not? Social entrepreneurs already remind us of what we should have known all along: that every enterprise has social consequences, intended and unintended, every business must raise social capital as well as investment capital, and every entrepreneur is a social agent, even if he’s got an MBA.

Will Entrepreneurs Usher In the End of Social Science?

Karl Popper did more than most writers in the twentieth century to debunk the toxic idea of scientific planning and managment of society — and the corollary idea that there could be a social “science” deserving of the name.

Popper’s masterwork in this area, The Open Society and Its Enemies, first appeared in 1945, in the aftermath of World War II. It is a sustained, at times passionate philosophical attack on social planners and utopians from Plato to Marx and their pretensions to scientific rigor. Small wonder, then, that Popper would be out of favor in most academic circles. (The charge I’ve most often heard levelled against him by academics is that he is a “positivist,” as if spitting out the word itself was sufficient argument; and yet Popper himself wrote wisely and critically of positivism. So I was never sure exactly what he was being accused of, but it was clear his accusers had their backs up. Could it be because in Popper’s pages they found themselves and the philosophers they most admired ranked among the enemies of openness? Or was it simply that they had never bothered to read his work, but took it on faith that he was among the heretics?)

And yet, even as Popper has never really been fully appreciated (or understood?) by the windy authorities who fill chairs in humanities and social science departments around the country with the ever expanding girth of their knowledge, he has gained on another front: in the real world, Popper’s thinking may be having a more profound influence on thinking about social change than anybody could have ever anticipated.

Let me take a step back here and observe that most thinking people with some practical experience easily ignore academic judgments on books and philosophers. (I count that a good thing.) Instead, they find another measure in conversation with people they trust and in the observable practical consequences, both intendend and unintended, of a philosopher’s ideas. So it’s worth noticing that George Soros claims in official biographical statements that that Popper had “a profound influence on his thinking and later on his professional and philanthropic activities.” Popper, the poo-pooed positivist? None other: he was teaching at the London School of Economics when Soros arrived, in 1947. Soros’ Open Society Institute even takes its name from the title of Popper’s book. Maybe there’s something to all that open society stuff, after all.

Of course, being admired by one of the world’s richest men is not necessarily a recommendation. (Consider Ivana Trump.) And people who wear their philosophical credentials on their sleeves are usually suspect — as are organizations like the German bank I came across a while ago, somewhere online, that claims to draw inspiration from Popper’s work. But the successful entrepreneur who made his way to America from Eastern Europe and made his fortune in the world financial markets has earned some credibility, and even his detractors must acknowledge that he is one of the most successful or at least one of the most visible social entrepreneurs.

Did Soros learn to be a social entrepreneur from Karl Popper? Probably not. In a 2000 interview, he claims he used to be “opposed to social entrepreneurship,” but now, he says, he’s a believer. What brought on the conversion? Not anything he read, I assume, but more likely things he saw and consequences of things he did. Still, it might be the case that Popper’s work in the second half of the twentieth century nicely anticipates a trend in the first decade of the twenty-first century away from the profession of a social “science” and toward the practice of social entrepreneurship. Or at least it provides some of the necessary philosophical underpinnings for that trend.

But it’s not simply a question of whether Popper’s work will be vindicated or whether it will outlast the inanities that currently engage social scientific mind. Of course it will. There’s a bigger question worth considering. Could it be that the century of social science is now yielding to the decade of the social entrepreneur? And that the trend toward social entrepreneurship could usher in the end of social science?

Certainly all the intellectual momentum is with the social entrepreneurs; social scientists and their tag-alongs in humanities departments may have mass but they don’t have velocity, and you need both for momentum. You can get a sense of some of the intellectual ferment around social entrepreneurship on sites like Social Edge (or the blog that Paul Light keeps for Social Edge), or have a look at Ashoka. Better yet, follow the money in the non-profit and economic development sector and you’ll see that social entrepreneurs are stealing all the thunder from social scientists.

And there’s a simple reason for that. The entrepreneur already belongs to the social world as an agent of change; she is a participant, not an outside observer pretending to disinterested objectivity or aiming to make a final report. There is nothing final or definitive or authoritative about the work of the entrepreneur; it’s partly an act of faith in market forces and in unintended consequences, which implies a deeper faith in the power of self-interest and human ingenuity, people’s real world aspirations, and the informal networks in which individuals share and communicate and work together.

Of course, to ask whether the trend toward social entrepreneurship marks the beginning of the end of social science also raises more serious questions — about the future of education, for instance. The question who will guard this new breed of self-appointed social guardians is a more serious one still, and one that Popper himself would have asked.