Thursday, September 29, 2005

Objections to Social Entrepreneurship

If you have been telling people about social entrepreneurship for any length of time, you have no doubt discovered that there are folks who object to the concept. These objections to social entrepreneurship are frequently expressed in moral and ethical tones. Although I am persuaded that many of these objections are invoked merely to allow the objector to pretend to some moral high ground rather than expressions of real and fervent concerns, dismissing the objector does not disarm the objection.

Three common variations of the ethical objection (in my experience) are:

  1. "I don't believe it's moral to make money off other peoples' problems."
  2. "No one who engages in humanitarian work for a profit can have a good motive."
  3. "Social entrepreneurship is unethical."

I have heard all three of the above more than once.

With regard to the first objection, I agree, I don't believe it's right to seek to profit from other peoples' misery: that's why I am not in the tobacco business. Indeed, I don't think that I've ever met a social entrepreneur who has sought to profit from the pain of others. Just as good doctors and nurses attempt to cure disease, and to alleviate human pain and suffering, social entrepreneurs attempt to solve social and humanitarian problems, and alleviate the pain these unsolved social and humanitarian problems create.

However, unlike doctors and nurses, social entrepreneurs are paid for results produced rather than efforts made. Social entrepreneurs aren't bureaucrats! Perpetuating social and humanitarian problems doesn't work to the advantage of an honest social entrepreneur.

It is only by creating social goods that social entrepreneurs reap a profit (aka as an income to live on). Social entrepreneurs are creative risk takers in service to humanity. Those of us attracted to social entrepreneurship typically want to earn our keep by making the world a better place. We, unlike more traditional entrepreneurs, measure our success in terms of a double bottom line: mission results (the production of social and humanitarian good) and profit earned.

If social entrepreneurs earn their living off of the suffering of others, then how much more so do doctors and nurses.

The second objection listed above (no good motive) strikes me as unnecessarily dogmatic. I will concede that there may well be perversely motivated social entrepreneurs, but I know that such a categorical claim is without question false. Although I do think motives are important, I am not psychic. Personally, Kant's deontological moral and ethical stance appeals to me, but I have given up trying to scrutinize the inscrutable.

I am fairly certain that most of us have good and bad points, and that we unavoidably hold mixed motives when undertaking almost any task. I am less certain that severely malnourished children should do without food until my motives (or anyone else's) are more saintly. In my case, my wife and I have a 7 week old daughter (our first) at home. I don't believe that my efforts to feed starving children abroad should involve my starving my own child at home.

My motives are hopelessly mixed. I find the starvation of children anywhere in the world an outrage. Although we have the resource to bring this outrage to an end, after 50 years of sincere, but mostly ineffectual efforts by governments and aid organisations, 15,000 children under the age of five still perish/starve each and every day. I want to see this problem solved, but not enough to deny my own family food, shelter, clothing or any other normal amenity that people in the UK expect. I admit I am selfish, but would the starving children be better off if I were to fold my enterprise? (Over the past 3 years Nourish the Children has provided over 32 million meals to feed severely malnourished children around the world Nourish the Children.) Would the children we feed really be better off if I stop working to feed them until I become an ascended master?

How about you?

Assuming you are a social entrepreneur, are your motives entirely unselfish? Would the beneficiaries of your enterprise be better off if you forgot about them, and took a job with British American Tobacco?

Does anyone really believe that employees of more traditional humanitarian organisations work without even the slightest thought of gaining a personal benefit? Are they really all saints, ascended masters or bodisattvas? Why did the Red Cross pay its former president Elizabeth Dole 200k per year? Why did she accept it?

As you have probably noticed the "motive objection" irritates me. So does the third objection: "Social entrepreneurship is unethical." People who advance this objection, in my experience, aren't able to explain why social entrepreneurship is unethical. In most cases, when questioned they respond: "It just doesn't sound like a good idea." Now that is a powerful moral and ethical objection. (I'm being ironic.)

Moral and ethical objections are often raised, but rarely are the objections substantial. This is in part because most people don't bother to examine their own hodge podge notions about morality, ethics, and right and wrong. Many when questioned will say that they just know that they know. This moral certitude, confirmed by beliefs and prejudice may be comfortable, but is it sane and coherent?

We might start by asking those who object to social entrepreneurship on moral and ethical grounds to be a little more specific. Are their objections deontological? consequentialist? Virtue based? Teleological? Does the objector hold, as does J. R. Searle, that "ought" can be derived from "is"? Or, does the objector follow Hume, and argue that "ought" cannot be derived from "is"? When evaluating a moral issue which is primary, the act, the motive or the consequence? Perhaps the objector agrees with the German theologian DietrichBonhoeffer's position in his Ethics, and believes that the attempt to gain a knowledge of "good" and "evil" is the root cause of all inhumanity, and that we should seek out the will of God rather than seeking to try to distinguish between right and wrong. Or maybe the objector follows Nietzsche and a few other existentialist philosophers and holds that humanitarian acts are in themselves immoral. How we might best respond depends on what the objector considers immoral and unethical.

In most cases I think the claim that social entrepreneurship is inherently unethical is rooted in the belief that the profit the social entrepreneur earns, is earned at the expense of the intended recipient (e.g. starving orphans in Africa). If that were to prove to be the case, then there might be some merit to this objection. It might point to an inherently teleopathic system, but it doesn't. That is not to say that all social entrepreneurs are supremely efficient, but rather that the marketplace does not favour inefficient, high cost, low quality providers. In time inefficient providers are driven from the field. The administrative inefficiencies of these entrepreneurial providers, however, pale in comparison to the inefficiencies of many governmental and non-profit providers of social and humanitarian goods. I suspect there is often a latent assumption that non-profit means no or low cost. But, does it really mean that?

Consider the case of the UK's Child Support Agency (CSA). It has recently come to light that it costs 54 pence to deliver £1 (100 pence) of benefit. (,11499,1565197,00.html) It is hard to imagine any social entrepreneur operating at that level of administrative inefficiency, and remaining in business for long. Business and entrepreneurial incentives, when properly applied, help to eliminate inefficiencies, and to bring more and better products and services to those who require them. The entrance of entrepreneurs into the UK communication marketplace illustrates my point.

In the not too distant past, the UK telecommunication network was run by the government. I well remember how I feared the arrival of my unitemised phone bill. As an American expat living in Britain, I make a fair number of calls back to the States. Under the old non-profit state system my bills frequently exceeded £400. My new carrier gives me free calls to the States, Canada and Australia. As a result my bill now rarely tops £30. The old system impoverished me (literally). On more than a few occasions I sold books from my library to raise the money I needed to pay my telephone bill. The new system leaves money on my table, and books on the shelves of my library. The efforts of profit seeking telecom entrepreneurs have benefited rich and poor alike.

Today social entrepreneurs are working to produce similar results in a variety of social and humanitarian fields. Indeed, we might well ask given the obvious teleopathy of established governmental and non-profit efforts to eradicate humanitarian problems, if it is moral to advocate the continuance of these ineffectual, resource draining, high cost programmes. By Einstein's measure it is slightly insane to advocate doing the same thing over and over, and yet expecting a different (better) result. In my opinion, it's time for the objectors to reconsider the morality of their opposition. It is time for them to remove the mote from their own eyes, before they spend too much time condemning the specks in ours.

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Blogger Stephen said...

Entrepreneurial approaches to social issues can also lead to completely new solutions, not just improvements in efficiency. In relation to your telephone example, this has been seen with the success of Skype, which has revolutionalised the industry. Since humanitarian problems have been approached with a lack of imagination for the last hundred years, I can't think of a more fertile area for such innovative thinking.

8:22 am  

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