Anarcho-Social-Capitalism

If you couldn’t guess by the last post, I was teeing up to something greater.

Previously I discussed anarchism and some of the possible reasons to at least consider anarchism as a legitimate political thought. You may remember, I also wrote a mini-series of posts on capitalism, critiques and potential ways to address those critiques. One such post was on Social Capitalism – the idea of business structures under a capitalist economy that provide products or services not for profit maximization, but for social benefit. This differs from a traditional non-profit in that the social business is not reliant on the constantly fundraising because it has a self-sustaining business model and generates enough revenue to cover its overhead. Any excess “profit” is recycled back into the business to further promote the social business’s social cause. Essentially, if the Wire’s Omar Little is to be believed when he says “Money ain’t got no owners, only spenders”, social businesses differ from non-profits by increasing or maintaining money velocity, instead of halting money velocity as in a non-profit.

I propose that both of these thoughts, anarchism and social capitalism, can be used in conjunction as a third way forward, one not (hopefully) entrapped by false equivalences.

In my previous excursion on social capitalism, I mentioned briefly the idea of a social stock exchange, a method to trade social business, cooperatives, B Corporations, venture philanthropists or any other social enterprise. Also in the previous post, I wrote about how “social-business persons” would theoretically make better politicians than those currently holding office because the skills necessary to be good pro-social business person are more relevant for providing for public welfare than the skills necessary to run for office. But I reflect on that thought now bearing in mind the conservative quip “If we were to move voting day after tax day…”

I think it is generally pretty well accepted on both sides that Congress is more dependent the bribery power of lobbyists than of its constituents. This is endlessly frustrating to both sides of the aisle, and drives in part the increasing polarization in the American political landscape. What’s frustrating is that the average citizen has to pay a large portion of their check (if they are working at all in this economy), with little to no say as to how best appropriate those funds. If we were to view a classical vote as having purchasing power, we would say that a lobbyist or policymaker has greater purchasing power than the average American. If this sounds overtly right wing, I assure you it isn’t because both the left and the right must address issues of scarcity and social demand.

In my opinion, this is one of the few structural issues that can be changed. Racism, Sexism, bigotry, etc all require mass culture changes, but economic and political systems can be reformed and induce the necessary culture changes for a society that reflect our aspirations and not our base nature.

This is where a social stock market comes into play. It serves as an economic democracy, where citizens can invest in social causes themselves, in methods the citizen believes to be most important and most effective. This gives the citizen real choice, not the illusion of choice that voting once every four years gives. One can invest as much or as little they wish, and the opportunity to invest in profit maximizing businesses exists in parallel, but investing in a social business with no expectation of profit purely for the purpose of social advancement speaks to the citizenry of the populace.

Vote with your wallet.

Because if you think about it, that’s what social businesses do – they provide functions that have been traditionally thought of as governmentally regulated and offer the same argument as to why to trust that particular institution. Theoretically (ahem,  red flag, ahem) the reason to trust government and social business is that they don’t make a profit which would mean neither are coerced by the corrupting power of money and are thus “objective”.

Now the obvious caveat to a social stock exchange is that you need money to be able to “vote” so wouldn’t this simply be a feel-good, vanity project of the rich and wealthy to seem like they are doing their part? The idea of a social business was developed specifically to address issues of increasing inequality by creating an institution to close the gap between the rich and the poor. This isn’t your usual rising-tide-lifts-all-boats, trickle-down economics for two reasons.

A) the market place is open to all social classes which, yes, seems to exclude the poor, but opens itself to the upper-middle and middle class which offers an institutional, operationalized method to meaningfully contribute without having to fall into the myth of “Only the winner of the Game can make a contribution” that is central to rat race of the American Dream.

B) Social businesses, by design, are meant to not trickle-down wealth, but create a full-fledged wealth irrigation system. What I mean here is that, if you look at the success rates venture capital or angel invested funding or even a traditional bank, you realize that there is a strong chance that those lending institutions will never see that money ever again. The reason they roll the dice is because it’s a one-time expenditure that could pay off big. Compare that to foundations, who realistically have to continually supply funding to a money-velocity-retarding non-profit. If you are going to philanthro-pimp that hard, you best get your money’s worth, which means you will most likely setup strings or impose milestones onto the nonprofit. This also means radical solutions nonprofits propose will be ignored in favor of more conservative, easier to sustain solutions. Operating off the startup model allows companies to take risks and divides funding a business from sustaining a business. This allows a wider investment of capital, which would ideally create diverse solutions to allow the so-called lower class to enable themselves.

Granted, what I’ve mentioned above really doesn’t answer “How would an impoverished or less fortunate even afford social business stock?”, it just provides a method to reduce poverty and open economic choice across social classes. As I’ve stated previously, minarchism is probably the most likely best-case-scenario outcome, but achieving that requires an anarchist framework.

Anarcho-Social-Capitalism (ASC) offers that framework with a mechanism for achievement of that goal, a self-regulating, sustainable society that can be entrusted to act in the best interests of itself and its surroundings. ASC can draw power away from hierarchical structure of power and theoretically redistribute that power to many diverse hands to create necessary institutions and infrastructure for societal welfare.

Notice one word I’ve used repeatedly: institutions. The reason capitalism is under fire these days, according to Yunus, is that we are operating with one hand tied behind our back. Capitalism in its current form works entirely off of greed and makes no room for other human responses, like sacrifice and selflessness. Capitalism has taken this a step further by institutionalizing itself according to this ethos and developing an entire infrastructure because of and for greed. I would posit that this is ecosystem of modern capitalism; Institutions exist in, and because of, infrastructure that was developed to meet incentives. Social capitalism seeks to do the same, develop institutions and infrastructure, but to meet altruistic incentives.

I feel it is important to say again that a social capitalistic infrastructure does not need to be mutually exclusive to a modern capitalistic infrastructure. The anarchism bit is there mostly to mitigate complexity issues I brought up in the previous post and maximize choices available to citizens. Choice is the operative word here. Freedom to decide which system to opt in to, maybe even both. I’ve noted before that I believe we are all already free, and that the only constraints the bind our actions these days are economic or incentive structures. The unfortunate thing is that there is no analogue for altruistic purposes, hence the proposal for a social stock exchange. If you are free to make a profit (possibly at the expense of someone else) you are equally free to reject profit (for someone else’s sake). There is no legal barrier that I know of that would stop a group of investors from starting a business and signing away their rights to a profit for some higher cause, but even if such a thing happens there is no way to publicize or expand upon such a sacrifice. The fortunate thing is we are free to create the institutions and infrastructure we need.

I’m often thought of as cynical, but even I am pragmatic and data-driven enough to realize that good things happen day-to-day. My issue is that they happen in a vacuum with no method to scale these solutions to the heights of, say, neoliberal reform or austerity policy. So often we concern ourselves with demanding our freedoms and maintaining our freedoms that we forget to ask “What should we do with our freedoms?”

I understand the desire to turn away from greater society, from all the idiots and downright malicious crowds, to retreat into individualism and use the failings of the populace as a reason to invest in yourself and your family and leave the rest to their own.

But at the same time, you have to give respect to those who see the suffering and pain of others, who may even by hated by whom they serve, for making sacrifices and acting altruistically in an apathetic world. Being so selfless speaks volumes to one’s character, and if we are asking ourselves how to best use our freedoms, the betterment of others is a fine answer.

I think my feelings on the subject are best exemplified by the closure to the movie Seven when Morgan Freeman’s character William Somerset says

Hemingway once wrote, ‘The world’s a fine place and worth fighting for.’ I agree with the second part.

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