Who will build a more efficient marketplace?

Well Charles, I guess someone has to start.

My own interest in a social market was aroused about a decade ago and it came from discussing the concept with Terry, P-CED's founder and what he'd been doing in Russia. My real participation began in 2003/4 when we incorporated in the UK, as a business for social purpose.

There are two elements of funding which affect us. First is the revenue which drives core operations and second the seed funding which puts the ideas into action. In the Russian instance, I understand that the latter came from USAID.

The great obstacle in the former are the differing perceptions of a social economy. I offer an illustration in a social enterprise which had need of a software product like our own. What they saw as something which should be opem source, we saw as something to yeild revenue for social objectives.

With a profit for social purpose model, we need referrals and recommendations as a reputable supplier also delivering social outcomes, though typically the experience is one of denial.

So, skipping the questions about funding as regards this revenue element, I'll continue by saying that yes, others have access to our research. The economic paradigm being posted online in 1997, free to use and rather difficult to imagine how it could be ignored in any conception of social business.

Theory of collaboration doesn't translate into practice unfortunately. I've approached countless organisations over the last 5 years with nil response. We've been obliged to go it alone.

Software certainly eases some of my burdens. I develop it after all. I see many attempts at online social directories, most promoting just a select few, some going further in their selectivity.

In a recent experience I encountered Royal Bank of Scotland soliciting input from social businesses. As is often the case, they seem to have their own interpretation of social business, measured in terms of accumulated fund and have no response to offer.
    
http://www.se100.co.uk/
    
Tragically, the interpretation of a social capital market seems typically to be one in which organisations compete to imprint just their own approach and brand. On that basis, social capitalism simply will not work.

   

Thanks for getting things started, Jeff.

I wanted to add a quick note to my intro - just to say that Jill Finlayson will be representing SocialEdge at SOCAP, at the panel she describes here:

http://www.socialcapitalmarkets.net/[…]/p,511

Jill's also hoping to live blog some of the proceedings, as time allows - you can
follow her on twitter @socialedge - providing a third strand, along with the conference itself and this online event, for this miuch needed conversation.

I agree with Jeff, Charles. In the continuum of the conundrum, competing organisations simply cannot create the social capital needed to bridge the gaps. Given that markets are driven by self-interest, I think what it's going to take for impact and action, in creating more efficient markets and cross-sector collaborations, is the partnerships themselves - in seeding innovation in new marketplaces, (ie. in the developing world, the bridge building of the poor themselves, in creating their own markets by connecting their products and services to other markets with better transparency and metrics) and in finding new ways to do business (driving mainstream capital to social capital markets -giving the poor the resources they need to create their own markets.) I think the time is really ripe for seeing new ways of looking at, what markets can do to unleash the potential in human beings - and in human nature - because what's needed now is a new vision-based, values-based kind of capitalism.

I've got another Einstein quote for you, "today's problems cannot be solved if we still think the way we thought, when we created them."

Hi Jo,

This is where P-CED came in as you know, by defining a model in which a social business would compete in the existing free market system alongside conventional business with the output of these businesses modified to deliver social outcomes at the same time as a financial ROI. One social objective would be to provide a "social investment fund" to seed both conventional and P-CED type businesses.

In the first instance of applying it in 1999, P-CED capital was used to research and source an initiative for USAID which yielded 10,000 new businesses and 36 spin off social projects. From a few thousand dollars own investment, 6 million more were leveraged with full cost recovery over 4 years.

This was Siberia, where application of the "Chigaco school" doctrine preceded Russia's 1998 economic collapse.

Now Skoll's proposal is to identify social entrepreneurs who are "vetted", those who've won awards. That doesn't address the problem I describe above of the UK Third Sector, where recognition is highly selective.
      
At SOCAP, I understand there's to be a presentation of PULSE, a software product designed to assess social metrics. This may be a step in the right direction.

As a software business with social objectives, I'd been interested when Acumen had been seeking a PULSE Manager. A brief exchange with Brad Presner enquiring as to whether there were opportunities for smaller businesses like ours in local collaboration revealed that they wanted a global support organisation with "partners who can provide the support, as well as the ongoing product development and sales and implementation role", something I've been doing for several decades, coincidentally.

Now imagine the possibility of a different approach to distribution, where small social business like ours could take on such a support role for their local region and add value through their own experience. A network of collaboration rather than a competition for major suppliers. Acumen could stimulate a social capital market over and above its microfinance work and we all win.

Jeff

     

"In the first instance of applying it in 1999, P-CED capital was used to research and source an initiative for USAID which yielded 10,000 new businesses and 36 spin off social projects. From a few thousand dollars own investment, 6 million more were leveraged with full cost recovery over 4 years."

This needs to be clarified. I proposed only three components: a community development bank, assistance for childcare reform, and emergency food relief. Tomsk was awarded the fourth and final US regional development initiative in Russia through USAID. The proposal went via the White House. I never had any contact with USAID. Their project was ready to go and needing only a suitable location. The components I proposed were added into the RDI, which already had 33 components focusing mainly on civic development/rule-of-law initiatives. Tomsk turned out to be a good match, The project design meshed with a shift in US policy from big-money top-down development aid to smaller-money, bottom-up in carefully selected locations. It was also a fundamental shift away from what Naomi Klein later referred to as 'disaster capitalism'. That isn't to say disaster capitalism doesn't still hold sway. It does, by a wide margin. (For those who haven't read her book 'The Shock Doctrine: The Rise of Disaster Capitalism', it is a must-read.

So, yes, there were a total of 36 project components. I spent $2500 on project research and design, plus two years time pro bono leading up to the actual field research. USAID added $6 million in funding, $1.5 million in tranches over four years, to get the community development bank started. That became Tomsk microfinance bank. It became self-sustaining within three years. It was then replicated in other locations in Tomsk oblast, in nearby Novosibirsk, and in Tbilisi, Georgia. For the record, I gained no income whatsoever. My profit was measured in people, with an eye to financial sustainability to ensure long-term viability. It was and is the complete opposite of disaster capitalism.

Terry, what you started is a new economic platform for the world. Using a bank to assist with a society's needs is the ideal, especially since we've seen what disaster capitalism can do. It's definitely time for the new, and by the way you're a hero too.

You're right Jeff, a network of collaborations - within global support systems - would beat competitions.

In the last few days I was rather interested to see the subject of peace building crop up on the Beyond Profit site.

http://beyondprofitmag.com/?p=258

So I thought it relevant to introduce our own efforts and I'd be interested if anyone else can see my comment. I added the same comment to the Ashoka Peace blog that the article refers to. I can't see that at all.

To me, there's the impression that conversation isn't actually welcome, in the same way perhaps as one might expect in responding to a corporation by commenting that you have a similar product.

Is this where social enterprise is headed I wonder? Corporations for doing good, I'm all for, but do they see us as competitors, rather than wanting to colaborate, I wonder?
      

Hi, Jeff:

Yes, I can see your comment on Beyond profit, and no, not on the Ashoka Peace page. I hypothesize that might be because your comment contained 2 URL links, an many kinds of blog software refer comments with links to moderation, since posting URLs to blogs is a major device of spammers...

Or their software may not be configured to show comments (yet) - to my mind, a less likely possibility.

Jo - you just know how I love it when you throw me those Einstein quotes! ; )

I think there's a pretty simple explanation for why the world as a whole, and perhaps social entrepreneurial orgs too to quite an extent, lean towards competitive rather than collaborative strategies in some circumstances. I suspect that majoring in competition with a side of collaboration works all the way up Maslow's hierarchy until you get to "self actualization" -- where majoring in collaboration with a side of competition would work better. In that sense, competition is a low risk strategy, and moving to collaboration a higher risk leap.

Taking that leap from profit into social entrepreneurship is already a big hurdle, and takes considerable courage. A further leap from competitive to cooperative strategy within the smaller market of a particular social entrepreneurial problem area may seem even riskier...

Worth thinking about? Hope it helps...

Yeah Charles, Einstein was on to something, saying we have to evolve (our thinking) to confront our behavior as human beings on a living planet.

Maslow's hierarchy reminds me of one of those food pyramid charts from the 50's. It could do with some updating, he's right though, the next level in evolving is "self-transcendence." So those entrepreneurs working for very little, while solving societal problems locally, have already "self-transcended" - which is a self-sustaining state, right?

I think THE cause for the 21st century is, freeing women - from oppression, violence and discrimination - to your question, who will build a more efficient marketplace - I'd say, for large scale, long-term impact, it's those with social capital who empower access for women.

Jo, One excellent outcome from SOCAP has been the publicity raised on the new L3C structure which has gathered 500 members on Linkedin. It's been a welcoming experience to join them.

http://www.linkedin.com/groups?gid=1971652

I'd come up on their radar recently when describing the ethical roots of the concept of a business for social purpose Terry (above) created, including that of Maslow.

http://www.ecademy.com/node.php?id=134346

With the kind of weight that comes with the foundations who are now taking interest, there's a possibility that what you describe in terms of freedom and empowerment will have substantial funds behind it. I think there good reason to be hopeful on this one.

"I think THE cause for the 21st century is, freeing women - from oppression, violence and discrimination - to your question, who will build a more efficient marketplace - I'd say, for large scale, long-term impact, it's those with social capital who empower access for women."

Hi Jo,
In that vein I think it's worth noting that in the Tomsk community bank mentioned above, during the first three years some 15,000 loans were made. By then, loans were being made at a rate of about 700 per month. Some were second and third loans based on successful performance of the first loan round. Some were to small groups who joined together for joint enterprise. Overall, 90% of all borrowers were women.

According to remarks from USAID director Henrietta Fore one and a half years ago, USAID is thinking along those lines.

"We are quietly revolutionizing the way we share what we know. At the website "Global Development Commons dot-net," you can now search all USAID-funded project websites and all USG development information. That is over one thousand websites with over one million documents, and growing."
http://www.usaid.gov/press/speeches/2008/sp081209.html
http://www.usaid.gov/about_usaid/gdc/about.html

However, the solution she proposed and how GDC is apparently proceeding appears to be internally inconsistent.

"In the years to come, USAID would double its foreign service ranks again-to 4,800 Foreign Service officers-adding more depth and breadth in leadership, and more technical and language skills."
Section: The Future of Foreign Assistance
http://www.usaid.gov/press/speeches/2008/sp081209.html

versus

"We would anticipate and avert duplication of effort; break down sector silos through country-based planning and incentives for cross-sector work; and build more partnerships with new technical expertise to make us demonstrably more effective on the ground."
Ibid, previous paragraph

They're evidently trying to break down sector silos and build more partnerships while limiting work primarily to US foreign service officers. Which in turn will be (and already is -- I checked) more of the same old same old. USAID finds projects they like, then sends their own people in to take them over. People who actually did the ground work for a project to get it started are not necessarily included.

A Global Development Commons is a good idea in concept, as described by USAID on the GDC website. But how much good can it achieve if the practice of trampling people is still their modus operandi?

Moreover, it's filled with bureaucrats/careerists who really have no stake in whether or not a project is successful. If it happens to work out, they can replicate it. If it happens not to work, they can just try again with something else. Either way, they still get paid and move up within the bureaucracy and in pay grade. If they come in and take over a project, then blow it, they lost nothing. But the people who came up with the project, if excluded, have their own project crashed and burned.

GDC is a potentially good idea in building a more efficient marketplace, but is something like USAID suitable for carrying it out? Trampling people -- which they do -- is in direct conflict with helping people.

Here, very recently is John Duncan the UK Ambassador for Multilateral Arms Control & Disarmament. He's blogging about the aoolication of web technology

http://blogs.fco.gov.uk/[…]/what_does_government_2_0

"If net-based communication is changing the way we all access information and opinion, the impact on diplomacy and government affairs may well be equally profound; perhaps most significantly in terms of transparency and democratic accountability."

I had a direct and somewhat ironic experience in posting a comment to introduce what we'd been doing along these lines, while paying taxes to support their musings. I'd apparently exceeded the limit of 1000 characters and been dubbed a spammer. The 'Digital inclusion, except for you' society, which has become more than familiar when those same bureaucrats would prefer not to know where the ideas came from.

 

"UK Ambassador for Multilateral Arms Control & Disarmament"

That has to be a comparatively closed loop.

Also remember that the entire purpose of the Internet was originally to ensure communications among officials in case of nuclear war, via a system of multiple redundant computers in an interconnected network of computers speaking the same language: Internet Protocol. And, it was a US government project from DoD's DARPA from 40 years ago. A new econ paradigm, for example, is made possible by the Internet and the instantaneous global communications made possible by the Internet. The Web was a c. 1989 layer invented by Tim Berners Lee. Those two sources -- DARPA/US Gov for Internet and Lee for the WWW -- are the main progenitors of the Internet/Web. Digital inclusion -- the digital haves and have nots -- were indeed addressed as a looming problem as soon as the Web took off in '95-'96. It was apparent that those left out would be in deep economic trouble versus those who had access (digital divide.) Alvin Toffler made the theoretical case very persuasively in PowerShift at the same time Lee was inventing the Web. So, it's hard to say exactly 'where the ideas came from', but any recounting without mentioning those basic factors would be incomplete at best.

Just an all purpose thank you for your various posts.

On the origins of ideas: The very great "original" ideas, it seems to me, often come from peering very closely at the most "obvious" basic presuppositions of a field, and "seeing" them freshly.

To all but the person doing the peering, this will seem like a fruitless occupation -- "that's obvious" or "that's a tautology" or "don't you think we've already thought of that" being typical responses.

Organizations, and the people chosen to have influence on decision making in organizations, will *by definition* not be able to see what the person peering is able to see.

That's why banks could not see what Yunus was seeing: the need for microfinance. Even after he had seen it.

IMO, we need some funding sources that understand that the next significant breakthrough, too, will be all but invisible -- and who therefore look specifically for projects that are categorized by their radical rethinking of the seemingly known and obvious.

I like the way you think Charles.

Sorry to hear of your troubles with the loop Jeff. I guess John Duncan was explaining why - "for government officials, engagement with this new virtual community is a challenge." And because government officials have the reputation of being the opposite of risk-takers, it causes them to "underestimate (their own) opposition to change."

Terry, I think that trampling comes from the unfortunate fact that, officials often feel the overwhelming need to establish their own importance.

Hi Charles,

In response to this question, "Who is stepping up to help make the whole sector more efficient rather than trying to solve only part of the problem internally just for their own organization?"

I feel that those organizations, like the Tutor/Mentor Connection, who are building knowledge libraries, are stepping up to meet the needs of an entire sector, or segment of the sector. Follow the links on this Strategy Map and you'll find an extensive set of resources.
http://cmapspublic.ihmc.us/[…]30231&partName=htmltext

However, the T/MC is a small innovator in this process. We may have a great idea, but we don't have the size, or capitalization, to take the idea to scale. This blog article illustrates our role, and our challenges. http://tutormentor.blogspot.com/[…]/keeping-tmc-mostly-free-service.html

I read an article titled Catalytic Philanthropy recently. You can find it here: http://www.fsg-impact.org/[…]/catalytic_philanthropy.html

This article puts the responsibility on donors, or investors, to step forward with big visions, big responsibility, and creative involvement. If some of the people at SOCAP are taking this role, most of us who post articles here would probably like to get to know them.

Thank you, and Amen.

From the Catalytic Philanthropy link http://www.fsg-impact.org/[…]/catalytic_philanthropy.html (goes to PDF file, after registration):

"Each nonprofit functions alone, pursuing the strategies that it deems best, lacking the infrastructure to learn from one another’s best practices, the clout to influence government, or the scale to achieve national impact. A majority of the very largest nonprofits that might have the resources to effect national change are hospitals, universities, and cultural organizations that focus primarily on their own institutional sustainability. ***Collaboration throughout the sector is almost impossible, as each nonprofit competes for funding by trying to persuade donors that its approach is better than that of any other organization addressing the same issue.*** Very few systematically track their own impact.

"However generous the donors or hardworking the nonprofit staff , ***there is no assurance — nor even any likelihood — that supporting the underfunded, non-collaborative, and unaccountable approaches of the countless small nonprofits struggling to tackle an issue will actually lead to workable solutions for large-scale social problems.*** The contributions of conventional donors and the good work of effective nonprofits may temporarily improve matters at a particular place and time, but they are unlikely to create the lasting reform that society so urgently requires.
(Emphasis *** added.)

Which summarizes, to me:

-there is very little collaboration so far
-it's dog-eat-dog in the competition for funding. That is self-defeating for progress in social development, but effective in case of managed opposition
-(is Skoll really using the awards-test to decide on funding? If so, that is bound to perpetuate the problems outlined in 'Catalytic Philanthropy')

I’m ready to try, and I’ve got a plan - and a lot more to say in direct response to Mr. Cameron's question at http://internet4change.com. Let's discuss both here and there.

Hi Christina:

QUOTE: Let's discuss both here and there. :UNQUOTE. I just love that! I've gone to your Internet4Change site and posted a comment there -- here I would just like to invite, encourage and cajole others to do the same, and to post connecting threads on your own websites, too -- keeping us in the loop here with links and further comments.

Once again, we have the opportunity to turn a single-site conversation into a mini-viral one, letting the dry tinder of our common wish for good catch fire.

One of the biggest differences we can make is to turn our isolated sites into a working network of friendships, knowledge of each other as people and project facilitators -- and active collaborations!

Here here, Charles. You pick up on one of the finer points I was hoping to make.

One of the things I hope to do with Internet4Change is serve as a demonstration model for how to encourage and manage multi-site conversations and collaborations. I will also be feeding my discussions from the blogosphere into the internet4Change group discussions at the http://ned.com wiki-enabled collaborative space for Better World Building. I would sincerely invite others in the Sector-level discussion space to bring your own discussions to ned.com as well.

Ned.com runs on the old Omidyar.net community software, and still offers the best set of collaborative governance and content creation tools tools I've worked with in my 10 years of collaborating online. It is my hope that we can use the ned tools as a starting point for constructing a web2.0 compatible collaboration system that casts a wider net for us through social media.

I'm working on feeding the ned.com content and my twitter stream back into the Internet4Change blog to create a kind of information loop to manage a set of multi-site discussions about the various parts of the puzzle many of us are thinking about and working on.

Thanks for embracing an advance to the starting blocks with me through connected discussion. It's the best response I could have hoped for.

Christina, I went to your front page --> mind map --> mind mapping --> http://en.wikipedia.org/wiki/List_of_mind_mapping_software --> VUE http://vue.tufts.edu/

then back to your front page again --> http://www.mind42.com/ --> 42 --> the answer to Life, the Universe, and Everything (==> Douglas Adams [Hitchhiker's Guide to the Galaxy]) --> http://www.youtube.com/watch?v=W35SYkfdGtw

which is a model of the universe, strictly speaking, but looks like a tour inside the human brain <==> synthesis that inspired P-CED conceptually (c. 1983) before it was possible to see it so easily on YouTube, but Fritjof Capra's advancement of General Systems Theory in his books "Tao of Physics" and "The Turning Point" began to make comprehensible way back then.

Thanks :)

FYI Charles,

After a long search I have found a tool at http://cocommenter.com that lets one follow conversations on multiple sites. Testing it out here with this comment... it also allows you to import an RSS feed of those conversations into any website, so that others can see which conversations you are participating in.

Thought you might find it of interest - I certainly do, and am hoping it works well!

C

"Who is stepping up to help make the whole sector more efficient rather than trying to solve only part of the problem internally just for their own organization?"

We are at http://dogoodr.org The "market" will build itself with the right tools and FREEDOM OF INFORMATION". Markets are not built by "gatekeepers."

Read more:
http://www.socialedge.org/[…]/dogoodr-helps-donors-npos-meet-and-mate

Thanks for the pointer, Bob.

It's good to see your project surfacing on Patrick O's blog here as well as in this event - a mild "in house" example of the multiple-site conversation idea that I discussed with Christina above.

I'm impressed with my first glimpse of what you're up to, expect that over time I'll have some questions, but for now just wanted to welcome your response to my question and the care and thought you have obviously put into finding a solution to what has indeed been a pressing problem.

A panel of experts, set up by Sarkozy to work on a set of proposals for a new system to measure economic growth, presented its findings in Paris on Monday ahead of next week's G-20 summit in the United States.

The new report, chaired by the American Nobel Prize-winning economist Joseph Stiglitz, has recommended a shift away from using Gross Domestic Product, or GDP, as the sole focus for gauging prosperity.

GDP measures a country's total output of goods and services at market prices. It has often been criticized as an overly narrow indicator that ignores wider factors, such as environmental degradation, people's health, workplace safety, job security, vacation time and a population's general degree of happiness.


...


Professor Jean-Paul Fitoussi, one of the 37 economic experts who worked on the Stiglitz report, summed up the problem with the GDP measurement, saying that "when numbers tell us we are doing well, while people feel the floor collapsing under their feet, then either the measurement standard is wrong, or we are using the wrong numbers."

This is why Sarkozy wants to see the recommendations made by the economic panel implemented in France immediately and put on the G-20 agenda.

All economic data in future would be weighted according to environmental and social welfare criteria. The production of goods and services would no longer be the standard for measuring a country's well-being, but would include the development of personal and family incomes, the state of roads and other infrastructure, energy use, public safety, education, and the overall quality of life.

Full article:
http://www.dw-world.de/dw/article/0,,4692507,00.html

Sounds like the beginning of a better day Terry. As the antiquated standards of measurement fall away for a more meaningful system of metrics, it's true "a new econ paradigm is made possible by the internet" - if the market builds itself with the right tools.

The new measurement could turn reality on it's head, and be what is needed ie. for climate change, if there's no change it becomes a direct threat to life on the planet as we know it. Even though it's urgently needed, change could be slow in coming, because of what Charles had mentioned - competition prized over collaboration, (as a low-risk strategy) -it could also stall the process of measuring happiness, inside quality of life.
 
I agree with you Christina "the old global systems are crumbling," I like the idea of the compatible collaboration systems with your internet4change.

When we risk the leap, for freedom and empowerment, anything is possible.

I love the new metrics in the dialogue about prosperity. In so many ways, the time is ripe - a tipping point is near.

Jo I love how you write. "When we risk the leap... " As I see things now, we have to leap.

As a sector, we have seen our actions make enormous strides in how we are able to influence people's thinking and behavior and disposable spending habits. As a sector we are eager to find ways to fund ourselves, and in case we need help there are donors AND investors galore with like-hearted motivations who want to be part of the new global equations we are creating. Things have never been better for kicking the social change sector's output into overdrive. It's time to leap.

In a new entry at http://internet4change.com/?p=56 I have posted a specific call for collaboration on the development of a multifunctional profile page for social entrepreneurs who are collaborating with others online. It's a starting point. Some folks are already rolling up their sleeves at the Internet4Change group on http://ned.com. Everyone is welcome to join in on that design project if you feel the potential product would be useful to you.

ned.com (as does this web site) gets into a sticky wicket straightaway: copyright and ownership of material posted. For those reasons, I have to say there is approximately zero possibility that I'd be willing to post anything of any substance toward revenue production.

I did that with Ukraine's 'Marshall Plan' as a marketing strategy for the Internet component. That merely came down to Business Planning Lesson 1: Know Thy Market. In Ukraine -- and not only Ukraine -- Market Rule Number One is this: if it can be stolen, it will be stolen. Between Ukraine and USAID minions, one side or the other was bound to do it. Turns out they both did. Ukraine took the Internet component and dumped in nearly $200 million (PeopleNet), and USAID took the bare bones of the social enterprise component. I'd not really expected the SE component to be lifted, but, I typically 'misunderestimate' USAID's practices. It was in this case at least a pleasant surprise. I knew the Internet component would be stolen, so I put up a lot of precautions and noise about not stealing it to make it more tempting. It's not much different than bass fishing, really. The SE component, being social and all, struck me as something I'd really have to push forward.

Then there's the matters of the various orgs running SE competitions for pitifully small funding to a lucky half dozen or so per cycle. Those orgs get -- and then own -- hundreds of operational biz plans and only have to pay out for half dozen or so. The rest of the plans can be used for-profit, stripping out the social outcome part entirely. I'm not saying that happens, but I am saying there's no way to know. The funding org just bought a few hundred biz plans around the world for the cost of a half-dozen. If I were on Wall Street, I'd be buying up these plans and packaging them into financial instruments with AAA Moody ratings.

Yes, we are at a tipping point, in the same sense at cow tipping. That's when someone hurls his (always a he, AFAIK) torso across the legs of a grazing cow and causes it to tip over. It's a sucker punch, and cows aren't noted for their intelligence. In the Real World of conventional business, anyone studying what's gone on and goes on takes nothing at face value, prima facie.

So far, I've rarely (<1%) found enough basis to establish real trust and solidarity in cybersapce to do more than plan to have good plans and ideas stolen. The countermeasure is to be sure that when something is stolen and put to use, the outcome is large and is what I wanted. Frankly, it's an ultra-cheap marketing strategy of things that absolutely positively need to happen. But, it would be possible to do so much more with greater solidarity for which there is very little basis to date, IMO.

I should add here that it is rarely a problem with activists themselves that makes things difficult, in my experience. God alone knows who lurks, and why. As in the conventional world, it takes only one or two malevolent people in a group of a few hundred to wreak havoc. Terms like cybercriminals and cyberstalkers have worked their way into the cyber lexicon.

Some orgs, such as USAID, are a mixed bag but with enough demonstrable history as to be clearly abusive at will. They're supposed to be the good guys. Some are, some aren't. Then there's orgs like World Bank and IMF, good guys on paper but lethally devious in the real world, in some cases. Those are three major orgs of supposedly good and noble social purpose, but all which have a dark, even spookish, history (clearer now, admittedly, thanks to the web). They also have political purpose. If it's a question of political versus social purpose, political usually takes precedence.

All of which makes open collaboration risky and difficult.

Sorry to bring up these considerations. I know this is uncomfortable. I know. But I'm quite certain that we cannot proceed without a hard, clear reckoning of facts and issues that affect all SEs regardless of feelings about it. We're inventing a new economics paradigm, against formidable odds, and the status quo does not take any conceivable threat to their grip on finances and the world lightly. We have to at least understand that much.

Terry raises issues about the risks of idea theft involved in open collaboration, stating:

 I'm quite certain that we cannot proceed without a hard, clear reckoning of facts and issues that affect all SEs regardless of feelings about it.

Terry, while I agree it's useful (even essential) to understand risks, I disagree with your conclusion that we should not proceed. The increasingly open source world we live in is very fluid, and we will never - ever - be able to foresee all the risks that we face. Most social entrepreneurs I know do not do what they do for fame or money, but to see change happen. We accept the risks (including low $$ pay and relative anonymity) and proceed, because we see what needs doing in the world and have the courage to leap, inspite of our fears and the status quo.

Quite frankly, if someone else were to build a collaborative space and system that was useful to me personally, then I wouldn't have to initiate the building of one... and I could be really thrilled with that. I am not afraid that someone will take up my idea and try to do it better - the bigger fear is that nobody will! At the end of the day, the space is large enough to accommodate incentivized collaboration happening in many shapes, sizes and forms. There is no doubt in my mind that whatever we set out to do now will look very different 10 years from now.

Yes, we're inventing a new economics paradigm, against formidable odds. It's not for those who fear status quo norms, or who are proprietarily attached to the outcomes they seek to lead that fight. For your own sakes, Terry (and Jeff) I would hope that you can eventually come to peace with what you feel was taken from you, and embrace what you can gain through collaborative sharing.

Keep up your strong hunches Christina, you're right, it is going to take all of us coming together to create change. I like your idea of collaborations working together to level global playing fields, using a standardized format, it's a good idea.

I also agree with the new metrics in the report for prosperity, measuring people's well-being instead of GDP, is a good place to start as well-being is as multi-dimensional as societal values are) and "the more informed we are about what is happening in our society(s) the better will our democracies be able to function." It's probably going to take lots of bold collective collaborations "to adapt our system of measurement...to better reflect the structural changes characterized (by) the evolution..." of our times.

Good luck with the configuring.

Christina, let me offer the perspective of being on the revenue creating end of this new paradigm. What Terry conveys above is an example of out social output, stripped of its component parts to be served up as the one-off concept of others.

This might in its own right be seen as a social output in that it leveraged action. Fair enough, but I suspect few would disagree that being credited for the achievement completes the circle where reputation and credibility yeilds further business which in turn can render profit to social purpose.

We are persistently stonewalled and obstructed by those within the social enterprise movement who don't want to hear our news. in some cases blocked from participating in discussion, in others our contribution even deleted. We find ourselves featured on Google, who themselves proposed the concept of what was described as a "for profit charity" in 2006, in relentless defamation which aims to drive us into the ground.

That there's little solidarity in the sector is in itself bad form and were it not for our current objective it might well be time to call it a day. The real tragedy is that of another plan component aimed at some of the most vulnerable, disabled children being harmed while in state care.

In climate terms, we may talk of the impact of a butterfly's wings, in the impact of economics the creature is more a pterodactyl. We can measure a direct consequence of economic and social breakdown in Eastern Europe to the wide availability of AK-47 stocks which have wreaked havoc in Africa, and the consequences with which you are very well acquainted.

It's now been a decade since Terry began his pioneering practical work in social enterprise for peace in Tomsk Russia, a former centre for weapons research. For the mainstream world, it's something which began yesterday under their banner.

Enterprise which aims to airbrush others working toward the same aims out of the picture, cannot be considered in any way contributory in th context of a social economy.

Hi Christina,
I didn't conclude that we must not proceed. I concluded that we can only proceed with eyes wide open.

"Quite frankly, if someone else were to build a collaborative space and system that was useful to me personally, then I wouldn't have to initiate the building of one... and I could be really thrilled with that. I am not afraid that someone will take up my idea and try to do it better - the bigger fear is that nobody will! At the end of the day, the space is large enough to accommodate incentivized collaboration happening in many shapes, sizes and forms. There is no doubt in my mind that whatever we set out to do now will look very different 10 years from now."


"Yes, we're inventing a new economics paradigm, against formidable odds. It's not for those who fear status quo norms, or who are proprietarily attached to the outcomes they seek to lead that fight. For your own sakes, Terry (and Jeff) I would hope that you can eventually come to peace with what you feel was taken from you, and embrace what you can gain through collaborative sharing."

So, if we're inventing projects that we know will be stolen, there are at least two problem areas.

First, if stolen, it's stolen. It's not unlike an architect having a building design stolen. The architect/designer is in best position to understand exactly how it works and how to assemble what they've designed.
If someone wants to use a project design, it's the same as any other project design. The design comes after an in-depth research phase, which in my experience tends to be extremely difficult not least from danger involved in shining light under rocks where the core problems are to begin with. That is, corrupt bureaucrats and officials. When I finish the research part -- which I always do so far (Russia/Crimea/Ukraine) -- I know exactly what the problems are, what solutions are needed, and how to navigate. Possibly someone else could take over and manage things from there on -- implementation. I have no problem with someone else implementing a project, and usually prefer that. Even if they do, it's still a matter of stolen property in which we've invested unilaterally to produce. Almost always, however, there may remain critical components that the implementer just doesn't want to bother with. Maybe it's too dangerous. Maybe there are political considerations and conflicts. In that case, the designer is likely the only person(s) to know how to get those done. That's when it's time to consult with the architect.

Second, even if the project outcome, after theft, is what was envisioned by the designer(s), how does the venture qualify as a social enterprise? Sure, we can slowly design projects one by one as income from our funding side permits. We can do it a lot faster if we get paid for our R&D output, just like any designers.

Finally, is it acceptable to build projects with stolen property? What sort of results would that lead to? Can be build an ethical system based upon unethical behavior (such as violations of Intellectual Property Rights)?

If we invent such a system, is it anything new? Or is it just a twist on the old system?

One thing that can be collaborated openly is this: a Code of Ethics. But, whose ethics? What org(s) will enforce them, and how? Who decides who gets in, how, and why?

Which gets back to this June '09 thread/discussion:

Ethics for social entrepreneurs
http://www.socialedge.org/[…]/weblogentry_view#1254099188

Jo,
It is the beginning of a better day. That part of the discussion mustn't get lost or overshadowed.

The question posed in this discussion is "Who will build a more efficient marketplace?" The best case scenario is that governments will do that. But why governments?

Because governments control economies and markets worldwide. Friedman/von Hayek/Vienna School/"free market" -- Chicago School economics -- died in September 2009. Government intervention was required to prevent complete collapse of Vienna/Chicago School economics that denounced government intervention. But, government intervention a la Keynesianism fell on hard times before that, which opened the door for Chicago School to start with. So we're back to Keynesianism, knowing that it doesn't work either. Both lead to bust, just from different directions. Neither is sustainable.

So where is the expertise that governments need going to come from? Not from inside the box. It isn't there. And: the same filters used to select government employees hired to figure things out simultaneously preclude and block the very talent they're looking to employ to start with. Which is to say, governmental bureaucrats are by selection not equipped to invent or even repair an economy. The Peter Principle. On that count, the Chicago School was correct in keeping government out as much as possible. Then CS adopted the Disaster Principle, with a school dominated by predators and parasites.

Now, choosing between Keynes and Friedman is an exercise in logical fallacy -- the fallacy of false choice. Who wants to choose between being slow-broiled and roasted? It's the same sort of choice.

There is another option now. The expertise? Us.

correction: "Chicago School economics -- died in September 2009" should be September 2008

Love the cow tipping description Terry. Did you read the latest piece in the New York Times from Paul Krugman? Though it's not just the economic arena that has two camps of tunnel vision thinkers, it's also the model of the universe - in an existential battle, between the forces of light and darkness.

You know, I don't think it's governments that control economies and markets worldwide. Oliver Stone wrote (a recent piece in July) musing over what happened to JFK, he was saying that the world as a whole is controlled by the shadowy forces (of a dark brotherhood.) "Only by unmasking these forces and confronting the truth...can we restore the promise of democracy...and vision of peace."

The only thing that comes to mind right now, is a quote from Joseph Campbell - "the black moment is the moment when the real message of transformation comes, at the darkest moment comes the light" although it's not easy to take a leap in the dark.

I agree with you, social enterprise is the option to bridge the gap from darkness to light, in a world painted with shadows and grey. Light is knowledge and has the power to penetrate darkness, so it will win.

Jo,
First of all, I sort of doubt that unspeakable is in your spoken vocabulary :) That is, nothing is off-limits as a sacred cow. Sometime sacred cows need tipping, esp. when they're only grazing and manuring.

I went off for the hunt for the Krugman/NYT piece. He writes so much that it's hard to ID his latest. Haven't found it yet, but this came up in the search, from WaPo:
So, If an Economist Falls in the Forest . . .
http://www.washingtonpost.com/[…]/AR2009091801142.html?hpid=opinionsbox1

Don't know if login is needed to read it. If so, it's free registration.

Reform or Bust
http://www.nytimes.com/[…]/21krugman.html?_r=1&hp

Going after banksters' loot and clipping their wings.

Then there's this bank from the '80s, a Company Bank:
http://www.fas.org/irp/congress/1992_rpt/bcci/11intel.htm

PS
Guess who has a $$ stake in Facebook?
( According to The Guardian, http://www.guardian.co.uk/technology/2008/jan/14/facebook )

Just some field notes, that's all.

Terry, I was vague (not the latest, opps) Paul Krugman's article was in the last week's magazine section titled How did economists get it so wrong? Your comments reminded me of it, I already knew you were ahead of the game, so I make no apology.

The reference to the unspeakable, wasn't just about how the East views the cow but to a book - James Douglass's JFK and the Unspeakable. I'm a poet, so I like double- meanings.

I really do applaud your and Jeff's bravery and efforts to shine the light under rocks, even though it requires putting yourselves in difficult situations. Strong institutions, strong democracies and the likes of you both, are a counter-force to the world's dark and ruthless people. I'm sure the lack of recognition has more to do with tunnel vision thinking of any field than anything more personal. Pioneers often have the hardest road, right?

One of the great leaders in the post-Soviet transition is a poet and writer -- Vaclav Havel, former president of Czech Republic. I wonder how much different this world might be if we had more poets and artists and less (poison)-Ivy-educated MBAs and such running financial markets, economies, nations, and their various aid agencies. The only thing the latter could put up to defend "their" turf is that poets and artists are ill-trained to run finances, markets and nations. In which case, they've checkmated themselves, end of argument.

I agree in part with the comment about tunnel vision. I see it is linear thinking, as contrasted with holistic thinking. But there's a little more to it than that, I suspect. It's the boy-looking-for-the-lost-dime metaphor. He looks for it within safety boundaries with plenty of light, even though it's not there because it was lost someplace else, someplace more dangerous. But he won't go there, and will continue looking under the light where the dime isn't.

PS
from Dr. Krugman's article 'How Did Economists Get It So Wrong?':

"And in the wake of the crisis, the fault lines in the economics profession have yawned wider than ever. Lucas says the Obama administration’s stimulus plans are “schlock economics,” and his Chicago colleague John Cochrane says they’re based on discredited “fairy tales.” In response, Brad DeLong of the University of California, Berkeley, writes of the “intellectual collapse” of the Chicago School, and I myself have written that comments from Chicago economists are the product of a Dark Age of macroeconomics in which hard-won knowledge has been forgotten."

http://www.globalresearch.c[…]0090906&articleId=15083

"As I see it, the economics profession went astray because economists, as a group, mistook beauty, clad in impressive-looking mathematics, for truth ... as memories of the Depression faded, economists fell back in love with the old, idealized vision of an economy in which rational individuals interact in perfect markets, this time gussied up with fancy equations"

Nice to hear it said by Krugman.

I shalt not gloat or demagogue.

PS
Original source for the article is NY Time magazine, as Jo indicated. Here's the URL:

http://www.nytimes.com/[…]/06Economic-t.html?_r=1

That's the main reason why folks like Jeff and I are "overlooked", and why most SEs are overlooked. This is an issue across the spectrum of social enterprise: turf war. Those with plenty of funding coming into the SE sphere feel and believe they control it at their whims because w/o funding critical start-ups, there won't be many others to say otherwise.

Charles asks, "How does collaboration work in a competitive market?"

I would love to see funders start to value collaboration in their grantmaking policies. For years now, large aid agencies like the World Bank, the EU and USAID have encouraged consulting firms to form consortia in order to meet terms of reference on assignments all over the world.

While certainly there are huge issues with the overall aid delivery policies of such organizations that are extraneous to this conversation, it seems to me that social investors could do this sector a favor by borrowing a page from the larger agencies on this subject.

"For years now, large aid agencies like the World Bank, the EU and USAID have encouraged consulting firms to form consortia in order to meet terms of reference on assignments..."

Any reliable feedback data on how that's worked out?

"While certainly there are huge issues with the overall aid delivery policies of such organizations that are extraneous to this conversation..."

Extraneous how? Rule number one in business is Know Thy Market. We want to collaborate. WB and USAID collaborate within their own box(es). Neither of them have particularly impressive records. Nevertheless, they are not only competitors, they also get billions of dollars annually -- public money, public funding. EU is a political consortium, not exactly a funding agency.

"it seems to me that social investors could do this sector a favor by borrowing a page from the larger agencies on this subject."

Which page?

Hi Terry,

prior to becoming a social entrepreneur I worked in development aid consulting for about 10 years. There is enough to criticize about the big aid agencies to fill books, which many others have written. The question here is who is going to step forward and make the social enterprise sector more efficient. I, for one, do not in a million years believe it's the large aid agencies who are going to do that - thus my assertion that criticizing the aid agencies is extraneous to this particular discussion.

I was responding specifically to Charles' question "how does collaboration work in a competitive market?" My suggestion is simply that collaboration can be funded. If the competition that exists in our sector is for funds, and yet collaboration is desirable, then funders could decide to finance collaborations. In that scenario, we would see collaborative groups competing against each other in a competitive marketplace. So it could be conceptualized that competition and collaboration can co-exist.

As far as data on how aid agencies' track records requiring collaboration between consulting firms has worked out, no, I don't have any. But I don't think it's worth comparing either, since that policy is (in my experience) more motivated and shaped by political expediency than a desire to see developmental challenges really solved.

By the way, I should have been more clear that it's the European Commission who provides over 8 billion Euro in development and humanitarian aid each year, making them the 2nd largest donor among the 22 members of the OECD. When the EU finances the implementation of large scale projects, it's most often consortia of companies representing multiple member states who get those jobs.

What I am suggesting is not that social investors of the SoCap ilk should try to make taxpayers from different nations happy, simply that if they decide to finance collaboration in this sector, then collaboration in the competitive market they are creating can exist.

small correction for clarity:

When the EU finances the implementation of large scale projects (through the European Commission), it's most often consortia of companies representing multiple member states who get those jobs.

Hi Christine,
Thanks for the response.

"The question here is who is going to step forward and make the social enterprise sector more efficient. I, for one, do not in a million years believe it's the large aid agencies who are going to do that - thus my assertion that criticizing the aid agencies is extraneous to this particular discussion."

Yes, we do differ in that respect. Aid agencies need to get public funding annually. It's extracted in the form of taxation. Those providing that money -- the public -- have a right and responsibility to decide how it's put to use. If aid agencies cannot be reformed -- and I am strongly inclined to agree that is likely -- they can be liquidated and replaced with programs that can and are likely to fulfill aid org's core mission: to aid the economic development of the have-nots of the world. That's what they're ***supposed*** to be doing. To the extent they cannot or will not fulfill their function and responsibilities to the satisfaction of those providing their funding -- us -- we can pull their plug. To the extent that they impede innovation they claim to be pursuing -- which USAID, for example, are practically begging for [or else their days could be numbered, and they know it] -- they've crossed the line of the very civility they're trying to foster. They're our employees, and that would be grounds for firing them.

I don't necessarily rule out aid orgs learning how to do their jobs. They have incentive to learn: survival. They can be replaced outright by the people they need to be learning from -- social entrepreneurs, problem solvers, resource organizers. They have the advantage of an auto-funded ready-made bureaucracy. It could be remodeled to our liking ;)

I agree with you both, what is needed from competition and collaboration is - harnessing the duality - to create a higher unity. I want to use an example from the beginning of last century to illustrate a point about how the thinking around collaboration needs to change, moving forward.

Nikola Tesla had a plan to power the world - for free "a world system for the transmission of electrical energy without wires" - over 100+ whatever years ago he was in competition with Edison over the discovery of electricity (Edison with direct current, Tesla with alternating current, Tesla also invented the radio.) Tesla's vision for the world's future was one of free power, it was the linear thinking of the time that stood in his way. JP Morgan was to finance the plan, but the plug was pulled when it was discovered money couldn't be made - thereby letting Edison take the victory for the discovery of electricity and providing us with a century's old model for how competition trumps collaboration in the marketplace.

Imagine if, that kind of thinking (profit-maximization) stops access to solutions for global warming in the coming century, that would really be gambling with the planet.

Who will stop the building of a more efficient marketplace? It will be those who put their own coveted self-interest (over collective interest) first.

Tesla also thought the future would be run by "Queen bees" - not literally, obviously, but by those who would value collaborations over cliff-jumping competitions. I'm with Tesla, the future's free.

"Who will stop the building of a more efficient marketplace? It will be those who put their own coveted self-interest (over collective interest) first."

A population of .1% psychopaths in a world of 6 billion = 6 million psychopaths. Human compassion is unknown to them.

Regarding Tesla, he had to be talking about ambient radio waves for free worldwide electrical power. Nokia just produced this:
http://ca.tech.yahoo.com/[…]/3638

The device (phone in this case) harvests radio wave waste and converts it into electricity. These waste/excess waves have been freely available in the environment since the invention of the radio. A century ago, Tesla was looking to recycle them.

Thanks for the tip Terry, forgive me for not including the URL earlier.

Tesla was right about the supernatural law of increasing - the returns on investment are nothing compared to the returns on giving - he also understood that humanity's inherited lies, about the nature of reality, have dissolved moral fabric - and not just the psychopaths.

Moving forward with some continued action toward developing a useful, collaborative system for the sector, I'd love for this group to consider chiming in on a discussion I'm hosting at ned.com: "Defining "Collaboration" in the Social Change sector" http://www.ned.com/group/i4c/news/3/. Hope to see you there.