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Posts Tagged ‘social investment’

Buddhist Economics

Sunday, February 1, 2009

This past month, SocialEdge hosted a dialogue about how religion can lead us to an alternative economic system. This topic is of a particular interest of mine – in particular the intersection of consciousness and social change. 

I would start by suggesting we look for wisdom in the mystical traditions that underlie religion, rather than religion itself, which has often distorted these essential truths. Among these wisdoms, the most relevant to this discussion might be the simple premise that we all suffer and also that we are all interconnected.  These are, in their simplest forms, the driver of individual behavior and the reason there is an impact of that behavior on the larger eco-system. 

By way of a little more explanation from the Buddhist tradition: The cause of our individual suffering is usually because we want things to be different (we want what we don’t have and we don’t want what we have).  So, we constantly grasp at things or push away or try to avoid our experiences.   This can also be explored through the lens of attachment and detachment. 

Attachment is driven by concepts of “me” and “mine”. This leads to greed, defining oneself by an identity or other social construct, seeking power over others or the desire for wealth beyond need. Extreme attachment to a way of life or power can eventually lead to violence. Even in the social change arena, people can experience attachment to their agenda or solution, causing competitiveness between groups with a common purpose who may better able to collaborate. 

Detachment is the opposite extreme.  This is where people think “this has nothing to do with me” or “that’s not my problem” or “I don’t deserve this”.  In these cases, people abdicate any responsibility for others, the greater whole or the common good.  In the social change world, this arises in the form of burn-out or disillusionment. 

The Middle Way is a path of healthy and conscious engagement. Consciousness is self-awareness.  On an individual level, it means cultivating mindfulness to understand the nature of suffering in oneself and others and acting out of a place of compassion that seeks balance. On a collective level, greater consciousness can guide change agents and leaders towards decisions that create change responsibly and effectively in support the optimal health of an interconnected whole.  

Now what would an alternative economic system look like in a conscious society?

 As one part of a larger conscious economic system, I propose employing a mechanism I call social project finance (SPF).  SPF is a high-engagement financing method whereby the best social innovations globally are replicated on a project basis with the joint participation and investment of the business sector, civil society and local government.

 Quick example. Currently, we leave social value creation primarily up to the citizen sector or government to pursue, often independently.  In particular, that leaves value that is enjoyed by the private sector (often with the greatest resources) that is not paid for by those stakeholders.  Take HIV/AIDS for example – a disease with wide reaching individual suffering and an interconnected web of global impact. This is not just a social issue.  The pandemic has major economic consequences in terms of worker recruitment, retention and productivity, health care costs, the distribution system for drug treatment, etc.  Rather than expecting responsibility to fall on the shoulders of any one nation, one drug company, the choices of each individual, and the activities of a network of civil society organizations often competing for the same pool of resources, what if all stakeholders came together to find an optimal solution, with a shared investment for shared gains? This can be done on a very small or very large project basis.   

Where possible, an SPF approach would bring together all core stakeholders to negotiate and structure a joint investment that (a) ensures an equitable sharing of the total project cost burden, (b) in proportion to the social and economic value each will gain from the project and (c) facilitates social investment on a scale greater than any one entity could pursue alone.

So, instead of a factory in Cape Town creating its own AIDS program, while foreign aid pours into NGO or government AIDS programs with little accountability, and social entrepreneurs struggle for the resources to scale their innovative solutions… Instead, the most productive and innovative solution should be identified and replicated where needed via a joint-investment of resources from all sectors. Companies invest in proportion to the future benefit they will receive from an increase in factory productivity due to healthier workers.  Municipal governments invest in proportion to the fiscal cost savings achieved from a more effective AIDS treatment program. And thus the investment for each stakeholder is structured according to the expected social and economic return.

A somewhat similar approach has been used in the US to create common green space in dark alleyways fraught with violent crime.  The municipality issued a bond to raise the funds to convert the space to a beautiful park-like setting.  The bonds were repaid via the increase in property taxes that resulted as home values increased when crime went down in the area.

Using mechanisms like SPF more frequently would represent a more conscious and equitable approach to creating social change and economic wellbeing.  Importantly, it would incentivize productivity and sustainability as the driver of free market social innovation.  It is a model aligned with the perspective that we are all connected as global citizens and thus we should invest our common resources in that same manner. Finally, it would help allocate resources more effectively towards creating the highest common good for the economy, environment and society.

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