Using Social Business to Reshape the Capitalist Economy and Support Environmental Awareness

By Gabrielle Micheletti
2010, Vol. 2 No. 02 | pg. 1/2 |
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During his Inaugural Address, President Barack Obama resonated with the ideals of many Americans—prosperity, freedom, good will, faith, and determination. He spoke of the market as having "umatched" power, "to generate wealth and expand freedom" (Obama). However, the market also has deeply complex roots in our society, where corporatism, consumerism, corruption, and exploitation all play a role, and together these more negative aspects have helped shape the current environmental crisis. The solutions to be carried out by the Obama administration must address first the extreme influence and hold that the apparatus, or the polluter-industrial complex, has over government and society, and second the ways in which the current system can be utilized for improvement. The shift toward economic, social, and environmental progression can be addressed through the introduction of social business, and the "de-colonization" of the state by the polluter-industrial complex.

Social business can be defined as a non-loss, non-dividend business with a social purpose. The concept was the creation of Nobel Prize winning economist Muhammad Yunus, the pioneer of microcredit. In a social business, a product or service is sold which in some way contributes to the improvement of society, however it is a non-profit-maximizing business. A social business begins as basically a charity with investors; once the company reaches full-cost recovery it becomes a social business (Yunus 23). The “profit” becomes 100% reinvested in the company to further improve and compete for their social purpose. Investors are first repaid, and then the surplus is reinvested in the business instead of being paid out to investors.

Ultimately, it is passed on to the target group of beneficiaries in such forms as lower prices, better service, and greater accessibility (Yunus 25). This makes it different from a profit-maximizing company, because they have a sole purpose and responsibility of maximizing profit for their shareholders. “In order for the crisis of philanthropy to be resolved, foundation grant making practices must be reinvented” (Faber, 2005). Although social business is by definition not a charity, it incorporates the zeal and empathy of philanthropy with new and improved ways of functioning. The difference between a social business and a charity is that once the social business had repaid its initial investors, the company becomes self-sustaining with no need for further investment. A charity could perform a service or sell a product, but the donation is one-time, whereas a social business earns that money back. Businesspeople will find this an exciting opportunity to bring money to social business and leverage their own business skills and creativity to solve social problems (Yunus 25). It is in this way that social business combines the ecological-humanitarian drive of philanthropy with creative business power.

Social business has the ability and tools needed to address the current crises of the environmental and human conditions. Because the current economic worldview is capitalistic and business-driven, the improvements should first be made within that system and not with attempts to completely reverse or debunk it. "When a large number of people are vying to do the best possible job of developing and refining an idea- and when the flow of money toward them and their company depends on the outcome of the competition- the overall level of everyone's performance rises dramatically (Yunus 27).” This is an undeniable benefit of capitalism- as compared to socialist ideology where it has been generally accepted that motivation is not created. “Competition (and the benefits of it) will factor in since social business will compete with profit-driven business and other social businesses (Yunus 26). The utilization of competition will further the company’s social purpose, whether it be developing renewable energy systems and selling them at reasonable prices to rural communities that otherwise can't afford access to energy, or recycling garbage, sewage, and other waste products that would otherwise generate pollution in poor or politically powerless neighborhoods (Yunus 23).

The negative impact of unlimited single-track is visible every day- in global corporations that locate factories in the world's poorest countries, where cheap labor (including children) can be freely exploited to increase profits; in companies that pollute the air, water and soil to save money on equipment and processes that protect the environment; in deceptive marketing and campaigns that promote harmful or unnecessary products. (Yunus 5)

Social business makes sense because it is not profit maximizing, therefore it has no fundamental reason to pollute, harm, or exploit the environment or its laborers. Obviously, not every problem can be solved immediately, but this concept offers a viable alternative to traditional business models and is worth considering.

The second prong of this comprehensive line-of-attack consists of necessity of de-colonization of the State by the polluter-industrial complex. There are five facets of colonization of the state by the polluter-industrial complex that must be addressed by government leaders, the media, and the general public. All facets of this concept must be brought to public attention to shed light on current circumstances and hope for reversal of this apparatus of power that is leading us toward destruction. They are the candidate selection process, political appointee process, special interest process, policy-making process, and propaganda process (Faber, 2008).

The candidate selection process refers to the election of the President, which is heavily influenced by key players in the polluter-industrial complex- industries such as petrochemical, oil, and agribusiness. Whether their influence is overriding or not, the fact remains that the more money the candidate raises the greater chance they have of winning the office. Dr. Faber details this process in regards to the Bush campaign, where generally his big donors were part of networks within the polluter-industrial apparatus. Regarding the Obama campaign, which was one of the highest fundraising campaigns ever, this concept was proved true. However, the difference with Obama was that for basically the first time it was done majorly through grassroots fundraising. Through utilization of and networking, the campaign raised staggering amounts of money, which inevitably led to criticism that Obama was then leading and eventually won the election because of the campaign’s runaway lead in terms of funds. Regardless of criticism, the Obama campaign was groundbreaking in the sense that it began the weakening of influence and pull possessed by the polluter-industrial donors.

The political appointee process involves the President appointing individuals to positions of power that run key agencies in examples such as environmental regulation. Depending on who is appointed and with whom their loyalties rest, the key agencies can either be favorable or detrimental to protecting the environment, human health, etc. For example if an appointed official of Department of Energy was a former ball-player for the oil industry, that will significantly affect the way the Department is run and how things like renewable energy are handled. That person in power will not favor renewable energy alternatives and will make it their business to see the power of the polluter oil industry is stabilized. President Obama has made considerable strides in this area, for example his appointment of Dr. Steven Chu as Secretary of Energy in the Department of Energy. According to the Departmental website:

"Dr. Chu has devoted his recent scientific career to the search for new solutions to our energy challenges and stopping global – a mission he continues with even greater urgency as Secretary of Energy.  He is charged with helping implement President Obama’s ambitious agenda to invest in alternative and renewable energy, end our addiction to foreign oil, address the global climate crisis and create millions of new jobs."

Another key appointee was Secretary of Labor in the Department of Labor Hilda L. Solis. Solis has worked toward improvements in green jobs and worker’s rights, and her selection was well received by labor groups but not so well received by business groups. “Solis became the first woman to receive the John F. Kennedy Profile in Courage Award in 2000 for her pioneering work on environmental justice issues. Her California environmental justice legislation, enacted in 1999, was the first of its kind in the nation to become law” (U.S. Department of Labor). It is these kinds of appointees that make the Obama Administration a promising one. However, there is much work to be done in establishing bi-partisan initiatives that will increase the chances of effective and positive changes being implemented with regards to the environment.

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