This blog is posted in conjunction with our recently released Podcast #125 – Social Entrepreneurship
Although “social entrepreneurship” has become a fashionable expression only in the last few years, it has been around, under different names, since the dawn of commerce.
Social entrepreneurship is best defined as “being enterprising in a good cause”.
This covers a very wide spectrum of enterprises. At one end are voluntary or charitable organisations which use techniques associated with entrepreneurship but “not for profit”.
At the other end are commercial businesses that seek to make a profit but within the constraints of a code of ethics, self-styled “ethical businesses”.
In between are businesses that seek to make a profit by providing products and services that are in themselves morally desirable. Indeed, the majority of businesses exist only because they serve basic human needs. Private business provides most of the food, shelter, and medicine necessary to keep seven billion people alive and in good health.
Those who object to profit being made from providing necessities ignore the inconvenient truth that they could never be supplied to the quality and the quantity to which we have become accustomed without the past and continuing innovations of private enterprise.
Take, for example, the much-maligned pharmaceuticals giants. They are often accused of profiteering by charging excessively for the medicines they developed, but the fact remains that they did develop them, and, if they did not exist, neither would most of the people alive today.
For all the whinges about “hard hearted” or “uncaring” capitalism, the reality is that, without the innovation and energy that can come only from free enterprise, the vast majority of the human race would be dead, unborn, or, at the very least, much poorer. Profit is a great motivator and clarifier, and although much good work has been done on a “not for profit” basis, far more has been done by people seeking to keep a share of the benefits they give to others.
So we should stop being defensive about being in business. Without us and people like us, Mankind would still be living in caves. To that extent, all entrepreneurship – or at least most entrepreneurship – is ethical.
Yet some entrepreneurs and businesses deserve particular credit for making a special effort.
From the beginning of recorded commerce, there have been businesses and employers who have been described as “liberal” or “paternalistic” or “benevolent”. These are the ones who have gone out of their way to be generous to their employees or who give particularly lavishly to charity.
There are very few cities in the West without hospitals or schools or libraries or other public facilities built by prosperous local merchants wanting to “put something back”. The tradition continues today in the huge charitable donations of Bill Gates, Warren Buffett, and others. Indeed, it is hard to find someone on recent “Rich Lists” who has not made a significant voluntary contribution to the broader community in addition to their crucial contribution to the economy.
The motto of the Medici, the successful 15th Century Florentine bankers, was “In the Name of God and Profit”. As pious Christians, they ought to have remembered that Jesus said you cannot serve God and Mammon. Anyone in business will face a daily choice between the most ethical option and the most profitable option.
However, it should not be forgotten that most business is in itself ethical, because it supplies human need and is the foundation of economic prosperity for all, and there is no reason why any business has to do immoral things in order to make a profit.