Markets - Social, Environmental and Economic

The triple bottom line is a great selling point for social enterprise.

The social and environmental value generated is what attracts so many people to the sector, both from the public sector, where they often feel constrained by a risk averse culture and from the private sector, where folk often feel used as a commodity to generate money. Even if they get well rewarded financially, many people from both sectors see the limits to material rewards, especially in a world where poverty still exists alongside obscene wealth, not to mention a world that is consuming finite resources at an unsustainable rate.

The corporate world has adopted the triple bottom line too.
The cynical might suggest that this is mostly about marketing.
Certainly, private and public companies have a primary duty to shareholders.
And most shareholders want the best financial return balanced against the risk of losing their stake.
Social and environmental value in this context are a long way behind economic value and mostly only considered inasmuch as they contribute to the primary bottom line.

Recognising this reality and aware that the survival of the planet is becoming critical, governments and others have created artificial markets, where environmental values are monetised.

This is the world of carbon trading. It may be spurious, it may even be cynically exploited by the rich and powerful, but it is an attempt to change behaviours in a way that does not depend on people acting morally, but recognises that most of the world is currently amoral and acts in a rather narrowly defined, self interested way.

Social reformers are missing a trick by focusing on the consciences and moral values of people. That is generally coped with by charity and legislation that mostly focus on ameliorating the symptoms of injustice.

If charities start talking about the causes, the Charity Commission jumps on them for being "political" and if parties, even governments get serious about causes, they are accused of being "socialist" or even worse!

One answer is to create monetised social markets.
This is much easier to do than the creation of monetised environmental markets.

The effects of social dislocation are clear for all to see and a lot of work has already been done on identifying the financial costs, whether in policing, social work, health - mental and physical, prison or other budgets.

The key to the creation of the monetised social market place is whole life costing versus early intervention.

A clear example is a child who has been born with disadvantage. Depending on the nature of the disadvantage and the resilience of the child, the support available and so on, the disadvantaged child has a greater than average chance of entering the criminal justice and mental health system. The costs of early intervention, timely intervention and opportunities for intervention at every stage will almost invariably be less than costs of not intervening.

This is not new, of course. It is the rationale for schemes like Sure Start.
However, the monetised social values are not usually made specific and therefore a financial market is not created for social or private enterprise to enter. This leaves the scheme in the hands of the public sector, either through direct delivery or procurement mechanisms.

The potential for a monetised social market place is exciting, but not without pitfalls. For example, if the invest to save rationale really works, then jobs in the sectors dealing with the casualties of social injustice will decline.

This is where a new level of sophistication will be required - the linking of the social markets with the environmental markets. Fewer jobs is generally seen as a bad thing in an economic context. But if the necessary work is shared around, then a reduction in economic activity can have a positive environmental and social value.

And having more time to reflect and enjoy the simple things in life will surely generate spiritual value. I am not sure we want to monetise that though!

steve