I admit that I have been on both sides of the debate about the definition of social enterprise: sometimes staunchly defending it as critical and essential, and at others times avoiding it as not pertinent and a waste of our time.
But now I realize it is important that we do define social enterprise. Because the argument is not about the meaning of social enterprise itself, it is not just about describing an alternative business model. Defining social enterprise is all about determining the values of the marketplace we wish to create.
In his new book Robert Reich, Saving Capitalism: For the Many, Not the Few helped me focus on the social enterprise debate. He argues that “The central choice is not between the “free market” and government; it is between a market organized for broadly based prosperity and one designed to deliver almost all the gains to a few at the top.” His goal to adjust the prosperity gap is great, but his method that if we change the rules, and let government direct the market then we can level the playing field, falls short.
Taxing the wealthy, limiting the power of banks, establishing a living wage, annual guaranteed incomes, and many other schemes for adjusting the current wealth distribution through government interventions are all valuable objectives, in the short term. But only using government rules and regulations to adjust the controls and influence the current private-wealth focused market will not offer an enduring solution.
Building a social value into the marketplace requires establishing the foundations of a business model that exemplifies a social impact principle. So insuring that the definition and measurement of social enterprise success includes both social impact and capital re-investment becomes emblematic of a dramatic shift in why and how we trade; and implicitly directs a social value result into our marketplace transactions.
Relying on government rule changes or letting any ‘good’ business be a social enterprise is just tweaking the underlying values the current marketplace. And in the long term, just tweaking the wealth-driven marketplace of capitalism will do as much good as assuring that the food banks are all well stocked!
To substantially and permanently address issues of poverty, social exclusion, and employment challenges requires adjusting the value base of the market itself.
We have to decide– will we regulate morality in a market that is based on trading in the pursuit of private wealth or use social enterprise to stimulate and fashion a market that creates a healthy local economy?