The Cheddar Path

Members of Congress have recently introduced the Trade Reform, Accountability, Development, and Employment (TRADE) Act, in the face of rampant outsourcing of US jobs overseas, a growing US trade deficit, and continual public opposition to current trade agreements such as NAFTA and GATT. Rep. Mike Michaud, D-Maine, a chief House sponsor, says that under this new legislation, the United States would have “trade agreements not written for multinational investors” but instead “written for working families and for our communities.”

It’s also impressive to look at the broad base of support the bill has, from organized labor to environmental groups to human rights and fair trade advocates.

The bill has a long way to go to get passed, but Presidential hopeful Barack Obama is apparently supportive of the legislation.

The time to renegotiate NAFTA and GATT is long overdue, so this bill looks like a strong step in the right direction.

The Wall Street Journal (WSJ) recently conducted an experiment in which a group of consumers were tested on how much they would pay for products they knew were produced with ethical standards versus without such standards. Contrary to popular belief that all people care about is low prices, their findings showed that people are willing to pay more for products made by socially responsible companies, and thus being socially responsible is highly profitable! This may not be news to a lot of people, but I found the article interesting in terms of the conservative WSJ conducting a scientific experiment centering around corporate social responsibility.

Economist and lawyer Michael H. Shuman has written extensively on many of the subjects discussed in this site, such as social entrepreneurship, progressive philanthropy and community based economics. Some of my favorite articles of his are:

“Profits for Justice” and “Why Do Progressive Foundations Give Too Little To Too Many?”

Recently, Shuman has shifted his focus to community based economics, specifically a movement to support locally owned businesses he calls the “Small-Mart Revolution.” He makes some great points why it is in society’s best interest to do so. In the face of rampant globalization and growth of multinational corporations, he points out that the majority of the US economy is still comprised of small, locally owned businesses (about 58%). Furthermore, those businesses are much more beneficial to local communities because they keep dollars circulating within that community (they buy materials from other local businesses, they use local lawyers and accountants, etc.). This means more people supporting their community through making money, spending money, and generating tax revenue. What is so ridiculous then, is how local governments (and the federal government for that matter) have pushed policy that unfairly favors the large corporations instead of the locally owned businesses that are strengthening the community and contributing more to the tax base. Local governments actually use tax dollars to pay companies like Wal-Mart to come to town, all in the name of “economic development.”

What’s interesting to me is the realization that small, locally owned businesses are (dare I say it) very socialist enterprises in a sense, while these large multinational corporations are the real capitalists.

The Small-Mart Revolution thus aims to promote a much more progressive model of economic development centered around empowering people to take their communities back. Shuman’s ideas are articulated in his book, The Small-Mart Revolution: How Local Businesses are Beating the Global Competition. Check it out! Better yet, head over to booksense.com, find a locally owned bookstore in your area, and buy it from there!

Also, much of Shuman’s ideas are summarized in an interview he did that is posted on youtube. It’s about 28 minutes but he makes some great points and throws out some compelling research.

The “Business of Green” blog over at the International Herald Tribune recently posted a short but interesting blurb on the “ferocious lobbying wars” taking place in the US Senate over what sort of system to put in place to curb carbon dioxide emissions from leading industries.

Basically, the government allows for companies from leading industries to purchase carbon “credits” that allow them to pollute for a price. The debate going on in the Senate essentially boils down to all of the huge corporations and their lobbyists arguing over who gets the most “credits.” If that isn’t the most backwards, ridiculous plan for curbing carbon emissions, I don’t know what is. No one should be allowed to pay to pollute! Pollution should not be a commodity! However, it reveals our government to be the shameful, corporate controlled beast that it really is.

The post states that a much better solution to curb emissions would be to institute a carbon tax, taxing any company that emits carbon. This is exactly right, and the whole situation again illustrates that solutions to confronting large social challenges like pollution will have to involve strong government leadership, vision and policy. Social entrepreneurship and market solutions alone, no matter how innovative, will not be enough.

This summer, eBay will be launching WorldofGood.com, an online market place for fair trade products. Although I strongly feel that the most beneficial thing we can do as consumers is buy local goods from locally owned businesses, I recognize that some goods cannot be found in our areas and must be imported. Therefore, if you can’t buy something locally and it has to be imported into your area, buying imported fair trade products makes a lot of sense in terms of ensuring that workers’ human and labor rights are respected along with other such ethical principles.

Robert Chatwani, eBay’s general manager of the project, says that: “WorldofGood.com will focus on giving people more information about products–where they come from, how they’re made, and how they effect the environment. Our challenge is not so much about getting people to spend more. It’s about introducing alternative forms of consumption.” I really like this point because it acknowledges that more consumption is not the answer (I am reminded of George Bush telling Americans that the best thing they could do for their country is to go shop at a mall or go to a ballgame). It really is about alternative consumption, and this type of project by eBay seems like a step in the right direction.

Michael Barker recently wrote a great article analyzing the ways major liberal foundations like Ford, Carnegie and Rockefeller have all co-opted revolutionary social movements through their “charitable” giving. He cites INCITE! Women of Color’s great anthology, The Revolution Will Not Be Funded, and also mentions further reading on the subject, such as Joan Roelofs’ 2003 book Foundations and Public Policy: The Mask of Pluralism.

He makes a really interesting point in describing how liberal foundations funded more mainstream “reformist” groups like the NAACP during the civil rights movement, instead of more radical, revolutionary organizations and activists. Even Martin Luther King, Jr. was forced to think about his decision for the Southern Christian Leadership Conference to take a more radical stance against the Vietnam War, and how that stance would jeopardize a large grant from the Ford Foundation!

I appreciated his call to explore alternative funding sources for sustaining grassroots activism. Check out Michael Shuman’s great article, Profits for Justice, to read about how social entrepreneurship could play a role in developing such alternative funding models.

Max Borders wrote an article in a North Carolina newspaper recently contrasting traditional solutions to poverty (the liberal preference for more government regulation, welfare programs, etc. and the conservative preference for less government aid and more “free market” policies).

He clearly comes from a more conservative perspective, and although he makes some interesting points, there are just as many problematic ones. For example, he says: “There are people in the world who’d never be able to survive without assistance from others — no matter how prosperous our society becomes. While we should not believe for a minute that a full quarter of our population should be dependent wards in relatively good economic times, we can all agree that the vulnerable and the poor will always be with us. And this brings us to the question: How might they best be helped?”

The vulnerable and the poor will always be with us because capitalism demands it, not because they are just some inherent part of society. It will also be exacerbated when large populations are excluded due to racism, discrimination, prejudice, etc. from financial mechanisms that traditionally aid in social mobility (loans and banking institutions, etc.). Furthermore, I think it is a disservice to simply dismiss government as being incapable of coming up with viable solutions to aiding the poor. I tend to think the problem lies with how welfare policies are set up, not with the existence of welfare policies themselves. Right now, they reward those who are the most poor and vulnerable with no real incentives to get out of their situations. For more innovative solutions to addressing this problem, check out the Family Independence Initiative, a longer post on them is sure to come in the future.

Borders points to social entrepreneurship as a new way of thinking about solutions to poverty that goes beyond the typical “government welfare” vs. “self-reliance” dichotomy. I agree, but would caution against putting social entrepreneurship on too high of a pedestal, and instead think about SE as something that could be used as a catalyst for strengthening a larger coalition of players including governments and their policies, businesses, organizations and whole communities.

Although originally from Oakland, CA, I now live, work and play in Atlanta, GA. Amidst Atlanta’s sprawling multinational corporate sheen, Interface Corporation is doing some really interesting work. In their words:

“Interface is the worldwide leader in design, production and sales of modular carpet and a leading manufacturer and marketer of broadloom carpet, panel fabrics and upholstery fabrics. Headquartered in Atlanta, Interface has manufacturing locations on four continents and offices in more than 100 countries.

In business for more than 30 years, Interface is a leader in industrial ecology. With the vision of becoming the world’s first environmentally restorative company by 2020, Interface is pioneering management and manufacturing processes that will achieve this goal.”

Thus, they have a goal of not simply lessening their destruction on the environment; they want to actually restore the environment while making a profit…by the year 2020! Very ambitious, here’s hoping for their success.

An interesting article in the San Francisco Chronicle recently highlighted the growing number of “B Corporations” in the San Francisco Bay Area. B Corporations, with the B standing for ‘beneficial,’ are for-profit companies that must receive a passing grade on a long scorecard that covers environmental practices, employment practices, purchasing policies and whether their products are beneficial to society. They must also adopt legal language stating that their directors may consider the welfare of outside stakeholders such as employees, customers, their community and the environment, as well as the financial interest of shareholders. Basically, the B Corporation movement is a way of creating sets of standards and legal structures that measure what exactly it means for a business to be responsible, sustainable and green.

Jay Coen Gilbert, one of the founders of the AND1 basketball footwear/apparel company and one of the co-founders of the B Corporation movement, summed up his dreams for socially responsible businesses by saying:

“We are witnessing the birth of a new sector of the economy between the private sector and the nonprofit sector. Our grandchildren will be talking about this new sector the way we talk about the nonprofit sector. … Eventually it will be 5, 7, 10 percent of GDP. And unlike nonprofits, it will have the ability to scale up from there because it can attract capital. There will be a social stock exchange, lower capital gains taxes for investing in these companies, and government procurement preferences. All of that is going to happen - but for it to happen, we need to create some standards.”

It seems to be very visionary thinking, and I think that kind of vision is exactly what we need in terms of taking the movement for progressive social justice, and the role of economics within that movement, to the next level.

Bill Drayton has been called the “godfather of social entrepreneurship.” He is the founder and current chair of Ashoka: Innovators for the Public, a nonprofit organization that, as stated by Wikipedia, works to “to identify and support leading social entrepreneurs though a Social Venture Capital approach with the goal of elevating the citizen sector to a competitive level equal to the business sector.” Ashoka has an extensive fellowship program that supports up and coming social entrepreneurs with innovative ideas for tackling social inequities around the world.

I have a tremendous amount of respect for Drayton and the work that Ashoka does. At the same time, I have to admit that some of their projects/fellows I read about reek of the privileged liberal mindset of people that want to go to India or Africa to teach “uneducated” brown people how to be sustainable but don’t want to do anything to empower the totally disenfranchised ghettos that are right in their backyard.

Again, I have the utmost respect for Ashoka and its work. I am only cautioning against the common dynamic in the nonprofit arena of glorifying one person/organization/strategy who claims to speak for oppressed communities, instead of continually thinking of ways to empower communities to speak for themselves. Social entrepreneurship is an amazing field that holds enormous potential as being a catalyst for real progressive social change. However, it is only one part of a larger set of players (ie governments, NGOs, effected communities, etc.) that all have to be at the table for a progressive social movement to be succesful.

Another organization Drayton chairs, Get America Working!, has some great concrete proposals for how to transform the American economy to address many social inequities, but I’m not so clear on their strategy to actually turn those proposals into reality.