Source: Truths of Life.
Last semester I was asked to offer an interactive lecture on the similarities and differences between Gandhian Economic Philosophy and Neo-classical Economics. In the lecture, amongst other things, I talked about one of the principles that Gandhi espoused. Gandhi was a proponent of social responsibility. As such, he urged people to “think about the consequences of their actions”. He argued that the real value of wealth and goods depended not on its market price, but what you did with your goods or wealth. A simple example illustrates the point: If you buy a car and use it for yourself, this is less valuable than if you also use it in the service of others.
Social Entrepreneurship (SE), which is a program I direct here at Wooster is “the process of creative thinking, innovation, risk-taking, and analysis that creates opportunities with sustainable social and economic value.” While some social entrepreneurs focus on innovation and risk, there is a strong social dimension to our definition, as it is practiced here at Wooster. I find many similarities between the Gandhian ideal and SE. The process social entrepreneurs engage in asks them to be accountable to their constituents or “neighbors” as Gandhi would call them. In this way SE asks entrepreneurs to think about and be accountable for the social implications (outcomes) of their actions.
We can go further and attempt to be truer to the Gandhian ideal. Social entrepreneurs should not compartmentalize and disassociate means and ends but weave the social mission into the value creation process. The way in which social entrepreneurs create value should not only be limited to outcomes (did our product or service decrease poverty?), but also how one goes about achieving those outcomes (means). In other words, pillaging the poor and donating all your funds to a good cause is not the way to go. Neither is providing food to the poor in a way that does not think about long-run environmental damage or the impact of providing free-food on local income generation possibilities. If we can tie means to ends in all cases, I believe social entrepreneurs can better deliver on their promise to offer valuable solutions to the worlds most pressing and intractable social problems, such as hunger, the provision of clean water, poverty or even global warming.
A version of this post appeared on my personal blog.
This is an intriguing post with a good motivation for why social responsibility for an entrepreneur’s business is imperative. However, my main concern is defining how much investment in society is required to legitimize what essentially may promise to be a selfish cause. Or is that the wrong outlook altogether?
Dear Omer,
It is important to distinguish between “corporate social responsibility” and social entrepreneurship. Corporations are only required to be accountable to their shareholders and owners. That was Friedman’s view atleast. Corporations have now also found it financially prudent to be accountable to their customers and in some cases also their employees and neighborhoods where they are located. The problem is that these constituencies, especially neighborhoods are not empowered to affect change and corporations are not accountable to their constituents in the same manner the social entrepreneurs are. Because the social mission is central to the social entrepreneurs, and because they start with the desire to solve a social problem, not develop a product, social entrepreneurs are accountable in ways corporations are not. Interestingly there are some that argue that SE and CSR are the same. I am not one of them.