In recent decades a growing number of social scientists, like Theda Skocpol, whose Diminished Democracy I reviewed in this space (10/20/03), have rediscovered the voluntary associations of civil society that flourish in the social space between government agencies and profit-seeking firms. Today business schools and economics faculties are returning the favor, producing their own appreciations of the social entrepreneurs who create and drive many such organizations, especially those dedicated to improving the lot of the poor and vulnerable. Their fresh analysis forms the backdrop to David Bornstein’s How to Change the World: Social Entrepreneurs and the Power of New Ideas.
Bornstein’s first book profiled Mohammad Yunus, perhaps the greatest of the modern social entrepreneurs. The Price of a Dream: The Story of the Grameen Bank (1996) told how Yunus fought poverty in his native Bangladesh through microcredit. His now-famous village bank issued small capital loanssay, enough to buy a sewing machineto poor men and women in the countryside who aspired to self-employment. Yunus demonstrated, contrary to established belief, that the rural poor were excellent creditors, and his innovation has since been widely replicated.
How to Change the World introduces readers to a panoply of inspiring new social entrepreneurs. We meet Fábio Rosa, who developed a practical, low-cost method of rural electrification in Brazil, and tirelessly fought state utilities to make it happen, Jeroo Billimoria, whose toll-free Childline connects India’s millions of homeless and endangered children with a variety of social services and protections, and Jacob Schramm, whose college summit retreats prepare low-income students, whose parents are not themselves college-educated, for the rigors of the academic admissions process.
They and many others profiled share the support of Ashoka: Innovators for the Public. A venture capital firm for social entrepreneurs founded by a former Environmental Protection Agency official, Bill Drayton, Ashoka seeks out individuals who exhibit a combination of invention and passion that can transform society for the better. Entrepreneurs, for some reason deep in their personality, know from the time they are little that they are on this world to change it in a fundamental way, Drayton explains. The ideaand making it happen across the societyis something they are married to in the full sense of the word. Ashoka’s development and growth forms the book’s central narrative.
The book is not just a collection of inspiring anecdotes. At a time when business schools are offering programs in social entrepreneurship and business magazines are honoring social capitalists, Bornstein and Drayton are attempting to explain this budding field.
Over two centuries ago, Adam Smith’s Inquiry Into the Nature and Causes of the Wealth of Nations concluded that when governments relaxed protective tariffs and royal monopolies and competitive free-market entrepreneurs stepped into the breach, explosive economic growth followed. Now that totalitarian Communism has fallen, a generation of Latin American generals and strongmen has retired, and the welfare state’s prestige has dimmed in the West, Bornstein believes that a similar process is underway in civil society. Freelance do-gooders driven by a consuming vision are taking it upon themselves to tackle age-old problems of poverty, public health and prejudice that cumbersome political institutions had failed to solve. Government remained insulated from the pressures and incentives that forced businesses to continually improve their products, Bornstein explains, but now the citizen sector is in fact beginning to resemble a market economy of social ideas, characterized by a rich diversity of grassroots institutions and energetic entrepreneurs crafting solutions that no one could have anticipated, let alone planned for.
Certainly Rosa, Billimoria, Schramm and the other Ashoka fellows are attractive, magnetic personalitiesand entrepreneurial ones. As Bornstein argues, even profit-seeking business entrepreneurs are driven as much by a creative urge and a desire to achieve as by a desire for monetary rewards. If Ashoka makes social entrepreneurship a viable career path for entrepreneurial individualsa path oriented to the common good rather than mere commerceDrayton will have performed a great public service.
But there are important problems with this concept of social entrepreneurship. Entrepreneurs in the marketplace compete for customers; political leaders, at least in democratic societies, compete for votes. Competitive pressures compel both businesses and governments to be more responsive to those they serve. For what do social entrepreneurs compete? Financial support from deep-pocketed donors, media attention and key staff. The recipients of their charitable work are almost incidental to the competition in which they engage.
Drayton and Bornstein believe that it is all to the good when governments, insulated as they are from competition, shed their operational functions (if not their responsibility) for tackling social problems, leaving such practical challenges to the new breed of social entrepreneurs. But though Ashoka fellows have addressed many crying social needs that government has overlooked, can we really rely on private initiatives to provide comprehensive solutions for social problems? Catholic social thought, which has long insisted that government must take an active role in securing the welfare of the poor, has traditionally answered no.
Asked about the phenomenon, Columbia economics professor Jeffrey Sachsfamous for advising post-Communist nations to speedily privatize their economiesoffered a note of caution. We see a lot of major successes in social entrepreneurship, and we’re seeing more space for it in some societies, he told The New York Times. But we cannot simply rely on social entrepreneurship for what government needs to do.