Suzanne Vita Palazzo of Grocery Headquarters wrote an article surveying some of the leading food companies with a social mission and mentioned KIND and PeaceWorks as a pioneer "revolutionizing the business model for an ethical brand."
Mike Edwards questions whether the trendy concept of philantrocapitalism exemplified by Bill Gates is as effective as the uncritical buzz it is generating. And he raises questions worthy of consideration, including this one in his q&a:
…what are the actual effects of business involvement in activities that are intended to promote social change? Where is business involvement useful, where might it be damaging, and do we have the evidence to separate one from the other? Here’s a list of things that business could usefully do:
- pay your taxes
- don’t produce goods that harm people
- pay decent wages and benefits
- stop subverting politics
- obey regulations in the public interest
The problem is, philanthrocapitalism does none of these things.
Well, business actually has a pivotal role to play beyond the basic code of decency Mike Edwards lists above. As the primary force in the 21st century, the private sector can make enormous positive contributions into our lives.
I am a strong advocate of engineering market forces to achieve positive change, marrying the business model to the social mission, as we’ve endeavored to do for the last fifteen years at PeaceWorks.
And I am similarly an advocate of using entrepreneurial and creative practices commonly found in the private sector to maximize impact in civil society, as we try to do at OneVoice.
But beyond critical appraisal of "philantrocapitalism’s" effectiveness advocated in Mike’s article, what most resonates and troubles me about the unexamined noise with this and the broader concept of "corporate social responsibility" is that often it is used to mask dishonest or noxious behavior from corporations, to create bland appearances about business contributions to society while hiding under the carpet abhorrent behaviors that may be the primary driver of a business.
Certainly, a company cannot justify or sugarcoat ruthless practices, or an underlying business model that harms people just by affixing the "csr" motto to its ads. Unlike when people purchased indulgences from the medieval Church to swiftly absolve them for abominable sins, you cannot (or should not be able to) donate your way into brand heaven in the 21st century.
In sharp contrast to Mike’s provocative article, take a look at this piece in TIME Magazine where Bill Gates discovers the field of social entrepreneurship for humanity, dubbing it "creative capitalism." Gates first announced this discovery in Davos back in January, where he was given 45 minutes to share how he conceived a utilitarian servile version of social responsibility. It struck me he had just discovered and repackaged a field long in existence, just as he appropriated the netscape browser and apple’s operating system.
Social contributions should have a soul, a sentiment, and a sincerity of purpose. Corporations are driven by human beings, so hopefully they will be driven to make our world better because this too is their world. I have yet to meet a business person (or a human being) that does not care about the world. But the trouble is that sometimes some corporate business models or junctures present people with concentrated profit-maximizing opportunities that cause harm to society overall. And no amount of "CSR" should exculpate taking the wrong path - whether by lobbying the government to help a specific industry at the expense of the community or the environment, or by undermining competition, or any of the items in Mike’s list.
In the end, consumers will see through corporate efforts to manipulate causes just to make them look hip and responsible. Alas, along with the unscrupulous corporation so too will fall the credibility of this important space - the sincere intersection between doing well and doing good.
Thanks to Stacy Perman for a profile about PeaceWorks, KIND, and OneVoice in BusinessWeek yesterday.
Two articles recently posted on PeaceWorks and OneVoice and our efforts…
JEWCY.COM: 
Peace Through Pesto: Daniel Lubetzky Schools Us on Building Bridges and Empowering Moderates, 
by Helen Jupiter, July 11, 2008
and
JERUSALEM POST, Don Quixote comes to Israel, Jul 24, 2008, by Heather Robinson
I was struck at this Fancy Food Show at how many companies are starting to tie their new products to commitments to give donations to social causes.
You’d think that is great and to be encouraged, but I was quite turned off, because it was so clear that to a lot of these companies it was not a true mission with sincerity of purpose, but a shallow gimmick.
The concept of "we donate X% of our profits to Y Cause" is being manipulated to the detriment of efforts that are sincere and real. I wish some third party organization fostering transparency in socially responsible business behavior would audit/inspect claims in this field.
I asked a few of them which organizations they donated to, or how much they had donated, and most said, "well, we are not profitable yet, so we haven’t donated anything." [And some had been in business for a few years already]
Isn’t it unethical to claim you are donating something when you are not? Ok, you are not profitable yet? And you can’t find it logical to donate something? Then you are not entitled to make the claim that you are donating!
David Ricardo introduced the theory of "comparative advantage" - advising that each country has the ability to produce a good at lower cost, relative to other goods, compared to another country.
Ricardo’s theory advises countries to specialize in the production of goods and services they can produce most efficiently - or with lowest relative costs.
Complementary Comparative Advantage involves identifying countries (or parties or companies) where each has a comparative advantage over complementary areas of production - so that partnering will bring both economic benefits.
This was the language I used in my college thesis and law school work to explain the economics of peacemaking.
When we started PeaceWorks in 1993, we relied on this theory to encourage Israeli food manufacturers to purchase their olives from Palestinian growers, their sun-dried tomatoes from Turkish growers, and their glass jars from Egyptian manufacturers.
Another requirement of PeaceWorks is to ensure symmetry in economic relations, which is another prerequisite to ensuring or maximizing the chances of positive impact from economic cooperation. Besides the agricultural field, where Israelis and Palestinians and other Arabs can make symmetrical contributions, other areas in the Middle East where there are symmetrical complementary comparative advantages include the textile sector, and the area of Dead Sea cosmetics, where we dabbled in 1993. Furniture (where Palestinian craftsmanship from Gaza has a lot to offer) is another area ripe for collaborative cooperation, as is construction, and of course tourism. Business leaders like Dov Lautman have spearheaded cooperation in the textile industry between Israel and Jordan, between Israel and Egypt, and within Israel between Jews and Arabs cooperating side by side.
As my prior post notes, Zvi Schreiber has now also proven that even in the hi-tech world you can achieve worthwhile synergies between Israelis and Palestinians.
About two and a half years ago I was approached by Zvi Schreiber with a dream he had: to build a hi-tech joint venture between Israelis and Palestinians. I had started joint ventures in the food industry between Palestinians and Israelis and we had a mutual friend, Alvaro Aguirre, who had encouraged Zvi (who was a very successful internet entrepreneur) to exchange notes. I believe we spoke briefly and I tried to share a couple thoughts, but in the back of my mind I frankly was worried about his project and a bit skeptical whether he’d succeed, given all the obvious challenges during the political and economic environment, but also the prospect of cooperation in the tech space given the overall disparities between Israelis and Palestinians in high-tech skills. After all, economics of peacemaking that PeaceWorks bases itself on require complementary comparative advantages.
Well, Zvi more than did it. G.ho.st is a hot start-up with a hot product and great potential. The New York Times just wrote about it. And in Ramallah, G.ho.st is the pride of the town. It is also winning rave reviews from Wall Street to Sillicon Valley. And it is at the forefront of efforts where Israelis and Palestinians are cooperating on a daily basis to build a business platform and in the process build understanding.
What most excites me about this is that my pessimism was proven wrong. So many times people have ideas and are discouraged from pursuing them. Yes, it is healthy to have someone to question all your assumptions and to ask the tough questions. But it is also important for people to JUST DO IT some times. And Zvi is doing it! Read the NYT article…
We are very proud and grateful of SKOLL’s generous and energizing support of our social entrepreneurship, as detailed here.
Thanks to Janera Soerel for an exceptionally explicit and precise interview and article tackling a lot of issues revolving OneVoice, PeaceWorks, and the philosophy underlying them.
At an event in Washington DC earlier in the week hosted by the Aspen Institute to launch the US-Palestinian Economic and Educational Public-Private Partnership, US Secretary of State Rice highlighted the role the private sector needs to play to help bring an Israeli-Palestinian agreement about. Here is a question I asked her and her response, as transcribed by the State Department (edited to fill in the "[inaudible]" words):
QUESTION: Secretary Rice, one of the most encouraging things about Annapolis was the Heads of State’ commitment to strike an agreement within a year, which demonstrated brave and courageous leadership. We’re very concerned about trying to not lose that window of opportunity. The red lines from each side are pretty clear. What is normally not said is that they’re not incompatible with the red lines of the other side. So it’s just about sitting down and just striking an agreement instead of endless Mideast bargaining. What can we in the private sector, business sector and the civil society and the citizens do to make sure that we really do try to accomplish an agreement within that year frame?
SECRETARY RICE: Yes. Well, let me start with what I think the broader community can do. And part of that is supporting leaders who have taken this broad — this bold choice. And I know that there’s a lot of skepticism and so forth. But you know, skepticism doesn’t get you anything but skepticism. That’s what it buys you. (Applause.)
Sometimes you have to, against all odds, be optimistic. And I would say to populations and to citizens and to the international community as a whole, this time let’s try and give a sense of optimism to these leaders who have taken these bold steps.
It is going to require, and I see — I know there are several members of the Diplomatic Corps, but I particularly see the Ambassador of Egypt is here. And Egypt was extremely helpful in the run-up to Annapolis in helping us, as was Jordan and others.
What we need to do is to say to the leaders, if you make difficult choices for peace, you are going to be supported, not criticized. People are not going to nitpick and say, well, you, Ehud Olmert, you gave up a little bit more here than you should have or you, Abu Mazen, you gave up a little bit more here than you should have. If people are willing to make tough choices — everybody is going to have to compromise. Look, there’s a reason that we haven’t had an agreement. And some of it has to do with unrealistic aspirations that at the last moment crashed past efforts to make agreements. That’s going to require at some point people saying, all right, these leaders have made realistic compromises and we’re going to support those realistic compromises.
I do think that the time that President Abbas and Prime Minister Olmert spent in their discussions on the so-called political horizon have given them a pretty good sense that there is a place that everybody could land here. And I think that’s why they eventually decided to move to actual negotiations. I will tell you that two months ago, maybe even six months ago, I did not think that they were going to actually launch negotiations. I hoped they would, but I didn’t think that that’s where they were going. I think it’s only because they’ve had these conversations about some of the most difficult issues that they have a feel for where the other side is. But it’s going to take persistence and, again, it’s going to take the — it’s going to take the international community not nay saying everything that they do. (Applause.)
Walter Isaacson, the head of the Aspen Institute, did a phenomenal job at organizing the working group that aims to foster economic development and build some positive facts on the ground in parallel to the Post-Annapolis negotiations process to build momentum for an agreement.
Several OV Board members were present also in this effort, including George Salem, Ziad Asali, Walid Najjab, and friends and supporters like Lester Crown. The impressive co-chairs for the Aspen Institute’s undertaking - Lester Crown, Sandy Weil, Jean Case and Ziad Asali - met with President Bush that afternoon and got his blessing and support for their efforts.
After the meeting I also approached Rice and told her about OV’s work. She mentioned she knew about OneVoice and the OneVoice Mandate that was signed by the 620k citizens and was very appreciative and emphasized it was very important work that needs to continue.
