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Could Social Entrepreneurs create new forms of power and influence?

Posted By Administration, Friday, March 29, 2019

Esmee Wilcox writes her third blog post in our Emerging Fellows program. She evaluates social entrepreneurs’ potency in terms of power and influence. The views expressed are those of the author and not necessarily those of the APF or its other members.

 

We’re living in a world where our institutions have been shaped by the power of capital are increasingly less able to meet the changing needs of citizens.  Social entrepreneurs can offer alterative pathways through collaborative and creatively intense enterprises.  If we fast forward to 2050, how might social entrepreneurs create new forms of power and influence? How might they exert this?

 

2050 will see the middle age of the next but one generation.  We’re just switching on now to the influence of Millennials in the working age population. In 2050 Generation Z will be in charge.  They will probably have lived through another global economic crash, after the end of the rapid rise of the next wave of technology.  The seeds of that technology are around us now, responding to climate and population change and attempting to tackle the scarcity of food, energy and water.  The more open socio-economic systems may be more conducive to these new technologies combining, innovating and solving problems at scale.

 

Capitalists and the myriad of related institutions derive power and influence by controlling the development of the infrastructure of our dominant technologies. Capital is allocated on the extent to which it can derive private gains to investors, over the most expedient timeframes.  What would it look like if instead we allocated capital on the basis of social cost and benefit, over time and spatial dimensions that allowed for systems development? How might we develop the infrastructure of the next wave of technology if decisions are based on social metrics? We might see investment programmes that leverage payback from the creation of social capital as an end in itself and not as a proxy for economic growth.  We might see global investment networks that tolerate the risks of start-ups from poor communities with greatest environmental potential.

 

So how might social entrepreneurs seize the opportunities in the next 15 years to shape the infrastructure around the next wave of technology? How might they use their networked influence that taps into the social concerns of Generation Y and Z?

 

We know there will be moments where the economic, political and environmental crises will open up spaces to redefine the legitimacy of existing power.  Think about our current international concern for tax avoiding corporations that dominate particular technologies. Our political institutions, influenced by capitalist models as they are now, have been unable to collaborate to regulate the exchange of benefits for the social and economic system costs.  Corporations play on the different local socio-economic conditions including desires for short-term growth.

 

Where capital starts to be allocated on a social return and system benefit, short-term policies that court tax avoiders start to decline.  Where political institutions have failed to create the pressure for corporations to reform, social entrepreneurs, who derive their political power through networks and the production of known social benefits, may be more able to step in.

 

But crucially, to shape the infrastructure of the next wave of technologies social entrepreneurs need to be connected into the innovation ecosystems where the technologies will combine.  From a number of different reporting metrics, social enterprises are on the rise globally. To capitalise on this growth, they need to be collaborating with enterprises that are seeking to tackle the problems of our environmental limits.  This ecosystem leadership requires a step-change in resources and mindset that allows for adaptive, long-term approaches.

 

2050 could be the place where power and influence are no longer dependent on financial capital but on the systems benefits of sharing new technologies widely. In this future social entrepreneurs could have expanded their political legitimacy and technical credibility to shape the enabling infrastructure.  This is a future where networking of accrued social capital has more influence than closed institutions.  The question still remains, what are the best routes to expand that network?

 

© Esmee Wilcox 2019

Tags:  entrepreneurship  influence  power 

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Is the ownership of capital changing?

Posted By Administration, Tuesday, March 26, 2019

Tim Morgan publishes his third blog post in our Emerging Fellows program by asking about the ownership of capital. The views expressed are those of the author and not necessarily those of the APF or its other members.

 

If you can’t open it, you don’t own it. That is the unofficial motto of the world-wide Maker Movement, which emerged along with the early development of the World Wide Web. It celebrates the fusion of art, technology, and do-it-yourself inventiveness. It inherited much of its emphasis on openness from the earlier Free and Open Source software (FOSS) movements.

 

FOSS formed in response to proprietary software which could not be changed by anyone but the copyright owners. FOSS advocates professed that collaboration via sharing source code was the best way to develop software. Makers embraced FOSS sharing sensibilities in no small part because automation was key to many of their projects. It was easier to bootstrap a new creation by copying and modifying existing code or hardware.

 

This free-as-in-speech information sharing ethos shaped the way the early Internet developed. Shared code forms the foundation of many commercial operating systems. Android alone powers over 2.7 billion smartphones and devices worldwide. The Internet and Web as we know them would not have expanded as quickly without shared-source software. This desire to share information is a design consequence of digital networks. Information can be copied with perfect fidelity as many times as desired. Perfectly copying information from computer to computer is fundamental to the design of the Internet. If the medium is the message, then the message of the Internet is to Share.

 

The drive to share is fundamental to human nature. Digital technologies unexpectedly created a new type of social structure that champions sharing - an Abundant Information Commons. Value is added by modifying for your needs; be it code, a design, a formula, or a written work. Those changes are then released back into the commons for anyone to use and improve.

 

Digital technologies are not completely free from restraints though. Individual possessiveness is in human nature too. Information may want to be free, but markets do not. Algorithms and hardware can put controls on data. Laws can penalize unauthorized use. The old ownership modes still exist, but now they are in tension with a network that wants to copy information. After several decades, we have reached an uneasy balance between owned information capital and shared information commons. Wikipedia did not replace Encyclopedia Britannica, but it did force it to adapt.

 

This balance is still shifting though. The more digital technology is embedded into everything, the more networks find new connections into physical, legal, and market domains. Cracks in the foundational layers supporting ownership are being slowly forced open by the roots and tendrils of ever-expanding networks. What was once purely physical is being bonded with the virtual.

 

Nothing owned is safe from this increasing integration with the digital realm. Networks want capital to be data-like and are actively working to make that happen by embedding code and connections in every owned thing.

 

The traditional capital triad of Ownership, Control, and Use is thus giving way to the networkable capital triad of Copying, Modification, and Sharing. The dynamic of how the virtual and real will fuse together will determine how future value is created.

 

The future of ownership is that if you want to own capital, you will need to find a way to open at least part of it and share.

 

© Tim Morgan 2019

Tags:  capital  economics  ownership 

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Is liberty compatible with capitalism?

Posted By Administration, Friday, March 22, 2019

Ruth Lewis a member of our Emerging Fellows program examines the compatibility of liberty with capitalism in her third blog post. The views expressed are those of the author and not necessarily those of the APF or its other members.

 

The current economic theory of the ‘free market economy’ and capitalism requires a world of scarce or finite resources, together with ‘infinite wants’ of the consumer, in order to work. Scarce resources drive consumer acquisition and increases the market value of the resources. This balances nicely with a key tenet of the liberal view: the freedom to acquire whatever you want, even (or especially) at the expense of others.

 

The free market economy with unconstrained and unrestricted growth at all cost is now impinging on the freedoms and livelihoods of others. This effect occurs within the market supply chains who manufacture and supply goods, services and natural resources. It occurs with those who do not have the means to afford current market value. This causes even greater scarcity in key earthly resources such as food, water, mineral deposits and energy. It also has a clear link to climate change.

 

We have the strange paradox of capitalist freedom of acquisition that leads to the undermining of liberty and human rights of others. This has been the pattern as long as the market economy has operated throughout history. Whilst the individual is encouraged to be competitive and individualistic, from a spiritual point of view consumerism proves to be an empty vessel that contains no nourishment. Capitalism promotes ‘happiness’ through acquisition of money and goods over community and individual spiritual prosperity and growth. It undermines the public ‘good’.

 

What other models can we consider going into the future that can promote liberty and freedom? It is interesting to explore some models that reverse the paradigms that we live within today and speculate on futures driven under different mental models for both liberty and economic good.

 

One model that we see today is the governance-driven capitalism model, where societal benefit is promoted alongside profit. This can be seen for example in the ‘B-CORP’ model, where capitalist endeavours can be nurtured spiritually by knowledge that they are promoting good in the world, or at least not causing harm.

 

Others observe that the future will evolve into a post-scarcity economy, where resources are abundant through greater utility and efficiency of innovation, and digitisation will provide both basic and greater needs of the world’s population. This is predicated upon greater information about the world we live in. However, when the commodity underpinning the economy is data or information, where will ownership lie?

 

Another model suggested is that of ‘Commoning’, where ownership and control of resources is participatory. Resources are protected from sale in the market and belong indefinitely to the community that created them or nurtured them - in the same way that a river might be maintained by communities along its banks, instead of being consumed or sold by a third party to outside interests. In such a model, data would be owned and consumed by those that generate it.

 

In all of these models, how will the desire of the individual to acquire at the expense of the community be balanced with the community good? One presumes in the manner that this has always been resolved, through some form of political governance, either provided internally by the community, or presided over by a benevolent external body. Benevolent governance seeks to balance the needs and wants of a community against the resources generated or available. It seeks to regulate the internal and external stakeholders’ interests against moral or ethical dilemmas.

 

Accountable benevolence, ethics, morality and human rights must be clearly defined in accordance to a normalised common good. This clarifies what the community finds tolerable for the welfare, safety, security and health of the community members. The result is the antithesis of capitalism, to which liberty is incompatible.

 

© Ruth Lewis 2019

Tags:  capitalism  economics  liberty 

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Is capitalism a danger to itself?

Posted By Administration, Tuesday, March 19, 2019

Felistus Mbole a member of our Emerging Fellows program warns about the survival of capitalism in her third blog post. The views expressed are those of the author and not necessarily those of the APF or its other members.

 

Many believe that global inequality has been growing for decades. A month ago, the world’s elites - who comprise global political, business, advocacy, and activism leaders - gathered in Davos for the annual World Economic Forum.  Inequality was a key topic in their discussions. It seems the issue is finally getting their attention. Is capitalism becoming a danger to itself?

 

Inequality is likely to continue to grow into the foreseeable future based on the present trajectory. The growing inequality could lead to the classing of society into a small wealthy elite and the rest of the people. This could pose a danger to capitalism if markets are perceived as benefitting the owners of capital at the expense of workers and the consumers of the goods and services they provide.

 

For long, most people believed in the Washington Consensus that the market economy was the best way to deliver long-term prosperity. According to the consensus, wealth would somehow trickle down to the rest of society through employment and other forms of economic engagements with markets. This has not happened. Globally, people are less optimistic about the future than they were at the turn of this century. They are discontented about stagnating standards of living as the wealthy around them attain increasing levels of affluence.   

 

In wealthier economies, globalisation is becoming a chief agenda item for western populists. The opponents of globalisation dislike it for its power to potentially destabilise their status and sense of community economically and socially.  Economically, it is perceived to cause economic losses through the loss of jobs and the imports of goods and services from other economies. Globalisation was effectively slowed down between the two world wars. This is unlikely to happen in future given the advancement in technology. Rather than fight globalisation, business owners and global leaders should ensure that it works for everyone.  

 

Given prevailing rapid globalisation, it not surprising that there is a growing wave of populism especially in parts of America and Europe. Populists purport to speak for the average people - whom they position as different from those in authority - and as disadvantaged. They present themselves as having a solution to the problem and advocate for a change in the status quo.  Populism is disruptive to society and to capitalism in particular.

 

This state of affairs is not sustainable. If the wealthy are seen as the elite within society who are driving a political agenda which is divergent from the will of the people, this can lead to populism. As inequality increases, the proportion of those feeling left behind is likely to increase. This could endanger capitalism. Rather than being a zero-sum game where the wealthy are perceived to take it all, capitalism could be made a win-win game for everybody. How could capitalism be transformed into a responsible system that benefits society as a whole?

 

© Felistus Mbole 2019

Tags:  capitalism  economics  politics 

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Is faith in democracy in crisis?

Posted By Administration, Friday, March 15, 2019

Robin Jourdan examines trust in democracy in her third blog post for our Emerging Fellows program. The views expressed are those of the author and not necessarily those of the APF or its other members.

 

 Is trust in democracy in crisis today? No, and yes. The Pew Research Center (2017) reported that nearly 60 percent of countries worldwide are operating democracies; an all-time high. But, fewer than 20 are in practice “fully democratic” governments.

 

Conversely, economic-governance policies like the democracy-connected Washington Consensus are in decline today, some wonder if “faith” in democracy is endangered. Of course, what is meant is “trust”. Democracy can creep into despotism and dictatorship in response to distrust of leaders and growing inequality, both seemingly abundant today. News sources tell us that young people worldwide are increasingly disillusioned with democracy. This disillusion grows out of feelings of betrayal from political gridlock and ineffective governance. Globally, they are less partisan rather than less democratic in their leanings.

 

Social intelligence signals that when party affiliation becomes a religious, tribal-like identity, the odds stack against compromise as is evidenced today. Some put the blame on information glut, wars, and lack of credibility. How might this impact a world leaning more on technologies that are increasingly connected and autonomously sensing for a command-triggering fact?

 

Facts aren’t the problem. They are uncomfortable, sometimes inconvenient, and a free society must allow for them. The phrase “post-fact” is a coping mechanism for those reacting to facts that cause them to question their belief systems. Politics and politicians spin and lie. Always it has been the case. When prominent voices in the room change the facts to fit their view of the world, it’s concerning.  Note that people over age 50 are worse than younger people at distinguishing falsified facts.

 

The public has faced railroading before. Minstrels and magicians did this as a show. Playing this out to the later-half of this century means an intensification of today’s overwhelming news flow; to game the system and grow distraction. Without efforts to also raise our collective social intelligence, the most vulnerable will live in a dystopia. Incremental improvements do little if polarization grows. Fact-checking costs to businesses may become financially unsustainable. Mountains of data and a further breakdown in public trust poses a potent risk.

 

If technology isn’t the provider of trust in the second half of this century, it must rest with us. For example, if 100% of birth certificates are issued; this has the potential to shift society in a transformative manner. Birth certificates document the birth of a person. Once supplied, the contractual obligations with the government begins; i.e., access to the rights, privileges, and consumption of citizenship. Shockingly, millions today don’t have this vital record.

 

When a consumer doesn’t trust a brand to deliver on its promises; if afforded choices, they vote with their wallets. Every brand has to build trust, i.e., faith, even if that brand is governance.

 

When we feel the system is rigged against us, disillusionment grows. Intelligence must evolve to stay ahead of the magicians. Not to learn how the trick is done, but know that it is a trick. Democracy isn’t a given: it is messy. Democracy isn’t an economic system. Consumers of democracy win so long as they have trusted options available. This is not true in systems that limit choices and access to them. Faith in a democracy means to believe in the people to decide; and if flawed, trust to choose again. 

 

© Robin Jourdan 2019

Tags:  democracy  politics  trust 

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Will Nationalism Reverse Global Finance?

Posted By Administration, Tuesday, March 12, 2019

Alex Floate, a member of our Emerging Fellows program studies the impact of nationalism on global finance in his third blog post. The views expressed are those of the author and not necessarily those of the APF or its other members.

The recent rise of populist movements in the West have rekindled a brand of nationalism that has created an ‘us’ versus ‘them’ mentality. Nationalism in this case goes beyond simple pride in country but develops into advocacy of one’s own nation above others and sees cross-border relations as a zero-sum game of win or lose. It also tends to be anti-immigrant, isolationist and even bigoted in nature and sees global trade and exchange as detrimental to the nation. Brexit and tariffs by the U.S. get the most press, but the rise of nationalist movements and autocrats is also affecting Turkey, Hungary, Poland, Italy, India, Israel, China, Russia and others. Europe’s financial institutions are especially at risk as nationalism threatens the continuance of the union and currency, but so are all standing financial relationships and markets.

 

This new nationalism will undoubtedly continue to reverse cooperative gains made so far and endanger financial institutions, both public and private, to efficiently and cost effectively provide services and capital across borders. The institutions of all nations may be threatened, but the severest consequences may be felt in developing nations as the West sees engagement with these countries as higher risk for less return. Engaging with them may also trigger some of the more racial elements of nationalists, as most famously represented by the American president’s reference to them as “shithole countries”.

 

Nationalism also endangers the internal finance of their own countries as vested interests capture government and enact laws that benefit domestic banks and entities over foreign competitors. Restrictions on the access of foreign based institutions to sell, buy, invest or lend will create multiple problems. Higher prices for goods and credit will be born primarily by the consumers of the economy. The inability to obtain investment capital or divest businesses will ripple through the entrepreneurial community and could lead to decreased business valuations. The largest corporate interests will not only survive but thrive in this environment as large banks become larger, and small competitors in all arenas are driven out.

 

However, these actions may sow the seeds of their own destruction. Control of the monetary system enables the nation to temper the expansion and contractions of the economy and in some cases prop up the ruling party. Just as the threat of nationalism may eventually destroy the Euro, the rise of alternative currencies and methods of value creation will spawn alternative finance networks that can also destroy the nation’s currency. A future scenario imagines these alternatives as creating systems that hasten national currencies to lose relevance and fracturing financial systems. If nationalist financial systems continue to be implemented, it will hasten that scenario as apolitical financial entities seek solutions to circumvent national politics.

 

Advances in global financial systems are in danger from a continued growth of nationalism. However, it will also affect global cooperation on shared problems such as climate change, nuclear proliferation and refugee crises, as well as endangering existing global political and economic relationships. An even more fragmented system global financial system will make meeting these challenges even more difficult. Just as the battle of communism versus capitalism defined the late 20th Century, globalism versus nationalism may define the 21st Century.  The question becomes will governments lead that battle, or just follow the money?

 

 

© E Alex Floate 2019

Tags:  economics  finance  nationalism 

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Has Finance Driven Digitisation?

Posted By Administration, Friday, March 8, 2019

Charlotte Aguilar-Millan reflects her thoughts about the impact of finance on digitisation in her third blog post for our Emerging Fellows program. The views expressed are those of the author and not necessarily those of the APF or its other members.

Innovation within the finance industry has seen unprecedented development. Not only in the accessibility of data but also how households access and manage their finances. Attributes such as easy access, speed of logging in and flexibility of data are now at the core of our expectations. Finance companies have stored a mass of data on their users to enable this. But how much data are consumers unwittingly gifting to finance within this digitised world?

 

Digitisation within everyday life is significantly affected by the finance industry. Through innovation in software capabilities, we are now able to access our finances through one simple easy portal within various forms of media. The future of digitisation within finance is reliant upon further integration of the customer’s experience. With the EU’s 2007 Payments Services Directive 2, it is now legislated that banks allow customers to share their financial data if requested. This has been adopted through digitisation. Banking apps now embrace a new feature where all bank accounts with various providers can be shown within a single app.

 

Banks are in the strongest position to develop digitisation. For years they have collected and processed personal data with customer’s transactions. With social media supplying instant feedback from customers on new digital products - through the use of tweets or Facebook commenting - banks are able tailor and adapt to customers wishes. Banks are able to analyse the data they have available and partner with companies to create an experience evolved from traditional banking. Today, most bank cards offer cashback opportunities on purchases at retailers which are tailored to customer’s previous bank usage. This not only provides a customer the financial incentive to use their banking facilities but also induces loyalty to a specific bank. 

 

Banks have been at the forefront of digitisation with developments in online platforms. However, this has also resulted in banks being at increased risk for lost confidence where the technology fails. Data migration between platforms saw TSB customers in May 2018 unable to access their accounts or make payments for weeks on end in what was due to be a weekend migration of 5.2 million of its customers between technology platforms. The effects of this error was a compensation bill of £116m and savings balances of customers falling by roughly £1bn as a result of 26,000 customers switching to an alternative bank.

 

This cautionary tale of reliance on data must be heeded by consumers. Whilst the TSB migration was the most publicised, banks such as RBS, NatWest and Barclays also saw glitches in customer’s usage of their online accounts in 2018. All of which has regulatory impacts on the safety of customer’s money. Finance must now take more ethical responsibility above and beyond the regulatory requirements. Customer security must not be breached in the name of innovation. Where the integration of technology and finance meet, so must accountability and security meet.

 

Finance initially lead digitisation through established banks enhancing their services with digital products. However, this has now transformed into digitisation leading finance. Fintech companies are being set up which supersede previously dominant finance providers. Companies such as Monzo, Tandem and Loot are fully digitised current account providers and adaptations such as ApplePay or Samsung Pay are making tangible finance providers redundant. The future could be that digitisation will drive finance, and that future banks are, actually, technology companies. Households now need to adapt to personal security resilience in order to protect their future finances.

 

 

© Charlotte Aguilar-Millan 2019

Tags:  Digitisation  Economics  Finance 

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In a fully digital economy will you still be needed to work in a factory or sit at an office-desk?

Posted By Administration, Tuesday, March 5, 2019

Paul Tero a member of our Emerging Fellows program proceeds with his marvelous journey to the land of digital economy in his third blog post. The views expressed are those of the author and not necessarily those of the APF or its other members.

 

Work. Whether we sit in an office, walk in a manufacturing facility, or perform some other task, those of us who work are living examples basic economic theory. We are all playing our part in turning an input into an output. We could be making sales calls to increase demand for a product, driving a truck to deliver raw materials, or even developing software to make the process better. Whether our organisation produces goods or services, we are all being paid to perform our part somewhere along the value chain.

 

The economy of tomorrow, the time when teenagers of today have teenage grandchildren, is more than likely to be a fully digital economy. We can see evidence of this transition already. The value chain decades ago was all about atoms, all about making and using physical goods. Today it is a mix of atoms and bits, it is an economy where value is created in the digital sphere as well as the physical sphere. Tomorrow the value chain may well be dominated by that which is digital.

 

Consider the primary industries. Aren’t mines and farms becoming more automated? What about the secondary industries of manufacturing and construction? Isn’t automation taking hold there as well? Even for higher value sectors such as finance, health and professional services we are witnessing inroads being made by either automated or intelligence-laden digital processes. It can be argued that there will be less employment in industry sectors that create value out of atoms. Even though the value of these sectors is growing across the OECD, related employment is largely stagnant.

 

Where is value created in the digital economy and what part do workers play in it? Value in the digital economy is created in the manufacture of ICT hardware, in the creation of software and services that use software, and in the collecting, processing and disseminating of data and information.

 

Regarding the manufacture of ICT hardware, it is not too hard to see full automation in production and logistics. But in the research, development and design phases we humans will still be critical for success. Regarding the creation of software and software-based services, is it not too far-fetched to contemplate software writing software? Where designers set the input and output requirements for new software or a new service, and the computer creates and tests the complete set of algorithms and interfaces. Finally, regarding the management of data and information. Apart from employees performing regulatory oversight, it is possible to imagine the only other scenario in which human involvement is necessary is where faulty data collection sensors need to be replaced. Given this, what then is the response to the headline question?

 

The answer is a qualified yes. While there are many factors that should be taken into consideration, and which are being ably explored by my Emerging Fellow colleagues, the foundational truth is that an economy is there to serve society. For we grow things, we produce things, we teach things, we regulate things and so on for our individual and collective benefit.

 

Even though you may accept the propositions that (a) we are moving to an economy that is dominated by bits and, (b) just like production involving atoms having become more automated, so too will bits-based production. We will still be human. And even though what we value and how we pay for it will more than likely change, there will still be economic production to serve the needs of the population. So yes, the factory will still be around to produce physical goods, but the types of work that are open to humans are those that are less automated. And yes, the office-desk job will still be around, but it too will involve non-automated people and thinking skills.

 

Even though what will be available and how it is produced will be different from today, basic economic theory will still apply. No matter the industry sector, in a fully digital economy people will still have roles as productive links somewhere in the value chain.

 

 

© Paul Tero 2019

Tags:  economics  production  work 

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Could social entrepreneurs do better than capitalists?

Posted By Administration, Sunday, February 24, 2019
Updated: Wednesday, February 27, 2019

Esmee Wilcox has published her second blog post in our Emerging Fellows program. She believes social entrepreneurs are succeeding where they understand how to make use of the creative capital. The views expressed are those of the author and not necessarily those of the APF or its other members. 


It’s easy to think of social entrepreneurs as providing the antidote to modern capitalism. Seen from this perspective, social entrepreneurs are likely to remain at the margins of unreformed capitalism in the latter half of this century. The production of social value out of balance with the primacy of the economy. But hidden within the creative means of producing social goods lie the opportunities to tackle complex global challenges. So where are there hints of these new social norms that could displace how we value economic capital? How might this help us transition towards a world rich in creative capital?

Looking back, there are examples of nineteenth and twentieth-century capitalism that shifted the organising model towards greater social benefits. The Co-operative movement is well known. Public enterprise perhaps less so, but particularly influential in the USA in shifting popular perceptions of what was important for society at large. From the distribution of ice for food safety in rapidly growing municipalities in the early twentieth-century, to the building of ships to keep supply lines open during the second world war. They required a level of social co-operation to displace private gain.

They were distinct from charitable activity that is dependent on philanthropy and separate from the means of economic production. Not only did these co-operative enterprises challenge the imbalance of economic and social value. What they also did through a co-operative model was to demonstrate a more creative means of enterprise.

The social values that were necessary to engage workers in producing social benefits, were what enabled the production of economically valuable goods to be more efficient and innovative. It’s the same empathy, generosity and inclusivity that enables us to work across disciplines and organisational siloes in our modern creative enterprises. We need these organising principles to be widespread to tackle the complex, interconnected issues of our times. We live with hyper-connectivity in our age of the internet. The social, political and environmental challenges we face exist within complex systems.

Co-operative enterprises are more akin to self-organising systems, which we know are capable of co-evolving with changes in the external, operating environment. This self-organising model challenges the existing economic order that links power and status with capital and hierarchies. We no longer need ‘rent-seeking’ managers that disconnect those thinking about the problem from those experiencing the problem. People are able to think and solve problems in dynamic systems themselves. Human capability and ingenuity is released in unexpected places.

Communities that are poor in capital and consumptive power threaten those that steadfastly hold onto it. Government institutions need to stop seeing socially inclusive enterprises as replacements for welfare programmes. Government Innovation Prizes could hint at a shift in practice, making it easier for new social enterprises to find a way in to organising around a myriad of complex societal issues. But it’s Social Innovation Incubators that are countering the institutional bias against people from poor places, who have been held back from accessing their own creative capital. Acknowledging and bridging the gap between those that know the rules of the game and those that want to create new ones.

Vested interests will give up economic power where the alternative is more compelling in the present. However much we may foresee the redundancy of capitalism as it stands, social enterprise will only displace it where it can also be resonant now.

Social entrepreneurs are succeeding where they understand how to make use of the creative capital that is more evenly distributed amongst us. The economic capital we have now won’t be meaningful in the age of scarcity at the end of the twenty-first century. What will matter is how we self-organise around the complex challenges of our times. Empathetic, inclusive, and generous social entrepreneurs can show us how to make this transition.

© Esmee Wilcox 2019

Tags:  capitalism  economics  entrepreneurship 

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Is growing inequality sustainable?

Posted By Administration, Tuesday, February 19, 2019
Updated: Wednesday, February 27, 2019

Felistus Mbole a member of our Emerging Fellows program warns about the increased inequality in her second blog post. The views expressed are those of the author and not necessarily those of the APF or its other members. 


Economic inequality is growing globally. The richest one percent of society owns 45% of global wealth and are on track to owning two-thirds of the world’s wealth by the year 2030. In 2017, the wealth of the world’s poorest 50% was equal to that of only 42 billionaires compared to 380 of them in 2009 according to OXFAM. What does this mean for society? Is this level of inequality sustainable?

Society largely comprises owners of capital and the providers of labour. Governments regulate the relationship between these two parties and provide public goods and services. Today, the global economy is larger today than ever before. The growth is far from proportionately distributed. The incomes to workers have not increased as fast as returns on capital, widening the inequality gap. The situation has worsened since the 2008 financial crisis. This trend will be sustained based on the current trajectory.

Income is a key component of economic inequality. Since around 1980, income inequality has been increasing in almost all regions globally but at different rates. The same variances are also evident within the regions and countries. The core twin drivers of this change have been education and technology. The gap between skilled labour and unskilled labour wages has been growing for decades. Advancement of technology has led to increased demand for skilled labour, putting a premium price on it. Variances in levels and types of education can account for as much as 60% of the difference in wages. A higher level of education leads to increased productivity and indirectly to faster diffusion of technology through innovation. Both factors contribute to faster economic growth. The higher the divergence in levels of education, the greater the income inequality.

The World Inequality Report looks at the proportion of the national wealth held by the top ten percent of society. It ranks Europe as the most equal society today at 37% and Middle-East the least equal at 61%. Sub-Saharan Africa, Brazil, and India are in-between at 55%. The rate of growth in inequality is decreasing in Europe but rising in the USA. It has remained relatively constant in Sub-Saharan Africa, Brazil, India and Asia in the last three decades. The rapid increase in income inequality in the USA is due to massive educational inequalities and a non-progressive tax system.

Is growing inequality sustainable? Based on the current trajectory in the use of technology and divergence in access to education, inequality could rise to alarming levels. It could lead to precarious levels of distrust between the wealthy and the poor. Globalisation will allow capital to flow across tax jurisdictions. It is likely to make redistribution of income through heavy taxation untenable. Advanced inequality could result in polarisation of society into wealthy elites and the poor in future. It could lead to a highly dissatisfied class within society and cause political, economic and social upheavals.

How can this potentially volatile situation be avoided? Public and social institutions, and policies shape inequality. Progressive tax systems and public investments in human development such as quality education and healthcare have shown promise to minimise further widening of the economic inequality gap. Their impact is amplified by creation of employment opportunities. Strong labour unions and government regulations are crucial in ensuring that these factors work in harmony to decrease inequality.

Two key questions beg answers: Will governments be able to develop and implement the right policies? Would higher taxation levels be acceptable to capitalists whose core motive is to maximise returns on capital? The time to fix inequality is now rather than when political, economic, and social catastrophes set in. Tackling inequality will require the political will of governments and the good will of capitalists.

© Felistus Mbole 2019

Tags:  economics  education  inequality 

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