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How “social” is social entrepreneurship?

Social entrepreneurship is a sexy term. It entails gaining profit and helping a certain group of marginalized people at the same time. We’ve heard this story more than once – here comes a hopeful start-up that aims to create accessories and merchandise out of upcycled scrap cloth, organic materials, and indigenous fabrics by working with disadvantaged artisans living in poor communities across the country. By doing so, social entrepreneurs believe that they are providing these poor communities with access to the free market and skills training to maximize their so-called career potential.

Whereas social entrepreneurs may have the good intention of lifting people from their disadvantaged position, it is difficult to ignore that they are still operating as capitalist ventures, which extract cheap labor and raw materials from the poor in order to accumulate profit.

While the wages of laborers in a social enterprise may or may not be higher compared to those of workers in regular businesses, there is no doubt that the company profits more from the laborers, of whom the maximum surplus value, as Karl Marx points out, would most likely be extracted. It is also difficult to believe that these laborers can afford the products they make, given that these products usually cater to people of different tastes and a higher class position. As such, workers in a social enterprise also illustrate Marx’s notion of alienated labor.

The effort to train these people to “maximize their career potential” is merely an effort to train them to be better laborers rather than fellow capitalists. Is that really the most their potential can achieve?

Many social entrepreneurs are trained to be capitalists and more often than not, they come from a well-off background that enables them to start their own social enterprise. Being a capitalist requires both skills and resources; the marginalized people are only being trained as laborers to create profit for the capitalists. Laborers usually do not have a voice in the production process, so they cannot be considered partners. It is not likely that these people are being trained to gain more control of their own production process. The unequal relations between the laborers and the capitalists are what allow the capitalists to earn much more than the laborers.

Employment of marginalized groups become the core area of economic activity. This is indeed strategic for profit generation because the costs of circulation and turnover times are minimized if they are sourced from the core and sold to the wealthier market located there. This supports the concentration of a mass and capital in the area, thus excluding even poorer communities found in the peripheries.

It is easy to fall in love with the buzzword that is social entrepreneurship, but such a phenomenon is merely a manifestation of the global expansion of capital driven by the desire to accumulate. As such, it seeks to find new markets and increased profits by adding a social value to its products, marketing itself as a social fix to the inequality and social unrest created by capitalism. However, as many social enterprises operate nonetheless like other businesses, they also perpetuate social inequality.

Featured image is “Spring Hoeing” by Li Feng-lan.


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