Drawing on the world of commerce

When I discovered the field of social innovation through reading Getting to Maybe, I got very excited. So much of what I read in that book about complex adaptive systems resonated with my observations about how the Learning Exchange was unfolding. In addition, what the authors said about how complexity science can be applied to social change efforts affirmed the decisions my team and I had made about the way we wanted to do our work.

For example, the authors offer four orienting assumptions to guide the exploration of the fundamental tension between intentionality and complexity—the question of how to take deliberate action to effect change in contexts where so much cannot be controlled.  These assumptions are:

  1. Questions are key.
  2. Tensions and ambiguities are revealed through questioning and must be engaged with, not just managed.
  3. Relationships are key.
  4. A certain mindset is crucial—one that embraces paradox, diversity, and uncertainty (Westley, Zimmerman, and Patton 2006; page 21).

As another example, the authors make a distinction between social innovators having a blueprint and having an instinct. They observe that the energy of others gives the innovator’s instinct form and substance (Westley, Zimmerman, and Patton 2006; page 141). Readers of this website will recognize the alignment of these ideas with the Learning Exchange story as well as the vision and practices that underpinned our work.

It was both affirming and inspiring to discover a frame of reference that made sense of my experiences as a leader and practitioner. Using living systems as guiding metaphors was more fruitful than using the more familiar mechanistic metaphors. I am very grateful to those who are building the social innovation discourse. I believe they are making a profoundly important contribution to efforts to bring about social change, to bring more justice, peace, and well-being into the world.

But I have begun to have some misgivings about the way the social innovation discourse is being used to guide social change. Using complexity theory to inform social change opens the door to radically new ways of thinking about social issues and how organizations and individuals might respond to them. However, I fear the door has not been opened wide enough.

Drawing on the world of commerce

Many people seem to see an infusion of business-oriented thinking as a way to enliven the social domain, a domain that for many years has been dominated by government and the non-profit sector. The application of concepts, ideas, and practices from the world of commerce to the alleviation of social problems has generated a lot of excitement. The concept of social innovation itself draws on the cachet that innovation has in the business world. Social innovators are called social entrepreneurs or institutional entrepreneurs and expected to demonstrate the kind of creativity and drive associated with individuals who start new businesses. Social enterprises that achieve social objectives while sustaining themselves financially are seen as the new way to address social problems. Social innovators talk about “rapid prototyping” of new ideas for social programs and try to find new ways to “segment the market” (what used to be thought of as categorizing needs for services).

IKB interiorPhilanthropists, after seeing that their past efforts have not resulted in the elimination of social problems like child poverty and violence against women, are turning away from attempts to “meet needs” and towards the goal of “investing for collective impact.” For example, in November 2014 the J.W. McConnell Family Foundation funded a number of Canadian universities, including UBC, to create opportunities for students to learn about social issues and establish social enterprises. The Foundation’s $10 million investment was intended “to ’recode’ our culture’s operating systems in order to achieve a more just, sustainable and beautiful world.”

In many ways I applaud these efforts. Having worked in small businesses as well as in various government entities and non-profit organizations, I know that the culture of business is faster, more dynamic, and more open to creativity and innovation than the cultures of government or the non-profit sector. The feedback loops in business are more clear and direct: your balance sheet tells you whether what you are doing is working or not. The motivation to perform is more immediate and personal: if your business does not succeed, you will not eat. I think the social sector will benefit if the people involved are expected to be creative, ambitious, and responsible for results. But I worry that an uncritical merger of the world of trade and commerce with the social domain might inadvertently weaken the social fabric of communities and societies by changing the nature of our social relations.

Mutual indebtedness

John McKnight tells a story about a time during the Depression when the father of the family who lived next door lost his job. John’s mother responded by making dinner for her neighbour’s family. Every day she made dinner for nine people: four next door and five in her own family. She did this for three years, until the man got another job. Many years later, when John asked his mother why she did this, she said, “They were my neighbours. They would have done the same for me.”

This kind of response to a neighbour’s need occurs in small communities and indigenous cultures where everyone knows everyone else. It has been called “everyday communism”—community members respond according to the principle of “from each according to their ability, to each according to their need” (Graeber 2011). Such social relations characterize cultures or communities where people are embedded in networks of mutual indebtedness. Someone with a cow gives milk to the shoemaker who gives shoes to the shepherd who gives fleece to the weaver who gives a wool blanket to the person with the cow.

link-cover2-copyThis is not barter. None of these community members negotiated a trade. They gave what they could to those who needed it knowing that the community’s informal system of gift-giving and indebtedness would ensure that everyone was taken care of. When the flow of gifts continues, the continuation of the community is assured. In these kinds of social systems, indebtedness is not a burden. It is a mark of your belonging. Individuals do not aspire to be free of their mutual indebtedness because to clear the debt would signal that you do not need the other person and do not want to sustain the relationship or the community (Graeber 2011; Hyde 2007).

In some cultures, the practice of gift-giving is not just a way to ensure the material well-being of the community. It can become a central element of the culture and serve ceremonial or spiritual functions. The traditional potlatches of the aboriginals on the West coast of Canada are an example (Hyde 2007).

Gift economies are distinct from market economies. Gift economies thrive when people know each other and embrace their interdependence. People recognize that they need each other. In contrast, trade is something that occurs when strangers enter the picture. When you do not know whether you can trust another person or whether you will ever see him again, that is when goods or services must be given an agreed-upon objective value, prices must be negotiated, and the terms of the exchange must be formalized (Graeber 2011; Hyde 2007).

Relations of care

The informal networks of mutual support through which communities care for people who cannot fend for themselves are versions of gift economies. John McKnight’s story of his mother’s generosity is an example. In times before the advent of formal “social safety nets,” in communities without formal supports, and in circumstances where people do not choose to rely on formal agencies (e.g., the need is not extreme), these informal systems of mutual support intervene when someone needs help. The effectiveness of these systems is one indicator of a community’s cohesiveness and strength.

It is important not to be overly romantic about these informal systems of care. These systems do not always ensure everyone’s well-being. There are countless examples of communities neglecting poor people and abandoning disabled or old people. Nor are gifts neutral. They entail obligations. They can activate complex social dynamics. But most social or cultural groups have informal systems whereby members of the community take care of the “needy” among them. Care is not bought or traded, it is given. The assumption is that the recipient has in the past or will in the future also give to help others. He or she is part of the social web of mutual indebtedness. (For more on the dynamics of gift economies and relationships, see The logic and magic in relationships.)

homelessBut individuals can get disconnected from these webs. This happens for a variety of reasons (e.g., war, famine, urbanization, or industrialization). When this happens, systems of mutual gift-giving, support, and indebtedness break down. In the Western world, in the aftermath of the Second World War, a variety of social disruptions resulted in the breakdown of informal systems of care. Many people moved to new countries or communities where they did not know anyone. Many women joined the workforce permanently and were no longer available to give informal care to family, friends, and neighbours. As a result, in Canada at least, governments and non-profit organizations stepped in to take care of society’s “needy” people. Formal systems that provide health and social services were established.

These formal systems are not gift economies. The professionals who provide health and social services and the clients who receive these services are more like strangers than members of the same community. This is true even in cases where the client-service provider relationship continues over a long period of time. In fact, the ways in which professionals are expected to “maintain professional boundaries” prohibit these relationships from ever becoming the kind of relationship that is central to gift economies. Personal information is not shared, so people do not know each other as people. Their roles limit the scope of interaction. The relationship is not reciprocal. The professional provides the service; the client receives it. No exchange of gifts is allowed. These relationships are not ones of mutual indebtedness. Nor are they of indefinite duration: if the professional leaves his or her job, the relationship ends.

These formal systems are not market economies either. The distance that exists between service providers and clients is similar to the social distance that characterizes trade relations. But service provision relationships are not ones where goods or services are exchanged for money. In Canada, for the most part, recipients of social services and health care do not directly pay for the service. In fact, for many social services, an inability to pay is a criterion for being eligible to receive the service. So, unlike trade relations where there is a clear and agreed-upon exchange, in the social service and socialized health care systems, the relation is unidirectional. The recipient can feel grateful (or not), but there is no direct exchange in the manner of trade nor is there an understanding that both parties are members of a network of gift-giving within which the gift will continue to circulate.

John McKnight describes the kind of care provided by formal health care and social service systems as “counterfeit care.” (McKnight 1995). He points out that these systems create unhealthy power dynamics between service providers and clients as well as undermining informal systems through which members of the same community take care of each other. These formal systems are socially destructive because they disrupt and distort the kind of social relations that sustain networks of mutual support. In a gift economy, goods (such as food and clothing) or “services” (such as looking after children or doing home maintenance for someone who is disabled) or “care” (such as listening to someone who has a tale of woe to tell) circulate freely. People within the economy or system are seen as trustworthy and capable: everyone will play their part to keep the gifts circulating, thus sustaining the community.

Formal service systems undermine economies where everyday communism is the norm by preventing individuals from playing their part in the cycle of gift-giving. This robs people of their place in the community. Further, formal systems provide services to individuals not communities. Such systems stop the flow of gifts within the community. The professional provides the service to the client; period; end of story. As more aspects of life are subsumed by formal systems (McKnight [1995] gives the example of the growth of grief counselling), the depth and complexity of gift circulation within the community diminishes.

52_SA lineThe unintended negative consequences of the growth of the formal health and social service systems can be seen in high relief in the Downtown Eastside. Here, a significant proportion of the population is dependent on government services such as welfare or disability payments and regularly uses the services of non-profit organizations that provide food, shelter, clothing, counselling and various form of social support.

There are remnants of gift economies operating, enough to justify the perception among some that the Downtown Eastside is “a strong community.” But the influence of formal systems is pervasive. People who rely on government or non-profit organizations for the basics of life are immersed in social relations where their only role is to receive. They are not immersed in a high-functioning, intact gift economy. At best they might be participants in a gift economy that operates on the margins of a social system characterized primarily by one-way service delivery.

Most poor, marginalized residents of the Downtown Eastside are also blocked from participation in the mainstream market economy. In fact, the failure to participate in the economy in the usual ways is often the primary reason people are marginalized. They are not economically “self-sufficient.” In this space where people do not participate in the market in the usual ways, and the gift economy is weak, and the formal service delivery system has no expectation of reciprocity, how can people establish themselves as capable, worthy members of the community? What roles are open to them? How can they give their gifts? Where are the networks of mutual care that are the foundation for social life?

Market thinking is not the answer

As the cracks in the social service and health care systems widen and people who worry about social issues search for new options, I think we need to be careful about looking to the world of commerce for solutions. The fact is that many “vulnerable” people are in this state because of the failure of capitalist market economies. Formal service delivery systems have tried to use one aspect of market relations to solve social problems. Professionals are paid to provide care to those in need. But this is a distortion of trade relations that is proving untenable. Instead of a reciprocal relationship between equals who agree to exchange things of equal value and where both parties can control their participation in the exchange, social service and health care delivery systems create a dynamic where the professional holds all the cards. I agree that radical changes are needed in these systems or they need to be superseded. But I fear that linking social innovation to the world of business will make matters worse not better.

My primary concern relates to the harm that could be done to social relations by applying market ideology and market thinking to the search for solutions to social problems like poverty and marginalization. I think two questions are important: what might be motivating and rewarding the social innovator? And in social innovations aligned with market thinking, what roles are available to key players and how do these roles intersect?

Motives and rewards

Based on my own experiences and observations, I think most people who work in the social domain are motivated by some combination of the following: compassion directed towards relieving suffering; altruism aimed at helping those less fortunate; and anger about social injustice and unfairness. The motivation moves from the self outwards. There is a desire to “give back” or “help others” or “make the world a better place.”

Typically, people who work in the social domain have been willing to receive less remuneration for their labour compared to people who work in the private sector. They are not driven primarily by money but by the rewards of the work itself (e.g., feeling you have helped someone or corrected a condition such as a discriminatory hiring practice that was weakening a community).

These motivations are akin to those that drive gift economies. There is a concern for the welfare of other people and the community itself. Self-interest is by no means absent but there is a recognition that one’s own well-being is bound up in the well-being of the social group. The flow is outward, inward and around. What is circulating is a complex and diverse mix of many things, including goods, behaviours, emotions, and stories.  The system depends on shared histories of previous gift-giving. The system has a memory that sustains it over long periods of time.

My experiences also tell me that many people in the private sector are similarly motivated by a desire to help others and contribute to society. But the imperative to make money changes the dynamic. Instead of the focus being on giving gifts and maintaining the circulation of gifts within the social group, the focus is on how much money is coming in. The flow is inward. In addition, what is flowing is tangible and must be quantifiable. Inevitably, in business, financial viability is what counts. No matter how altruistic or compassionate an entrepreneur might be, the bottom line is what drives her.

Market economies operate according to a very different imperative compared to gift economies. Some believe that the linking of social innovation and business is a way to “infect” entrepreneurs with a social conscience. This may happen to some extent. But the free market system is an increasingly dominant force in the social and cultural life of developed societies. This market promotes the primacy of the individual consumer. I believe the strength of the market is such that it is more likely that market thinking will “infect” the social domain.

Marginalized people in the Downtown Eastside point to the problems associated with the contamination of gift economies by market economies when they refer to social service professionals as poverty pimps. This term suggests that there is something wrong about people profiting from others’ misfortune. If profit becomes even more of a motive in the social domain, this dissonance between the motives and social dynamics of gift vs. market economies could become even more problematic.

Roles and power

The move to link social innovation and business seems to be originating with funders, academics, business people, and some leaders in the non-profit sector. There is an excitement about the possibility that the social domain will become more dynamic, with a wealth of new ideas being tried out. There seems to be a belief that an infusion of energy and drive from the world of business will transform the social domain and finally resolve society’s seemingly intractable problems. The possibility of being a “social or institutional entrepreneur” or “making money while doing good” opens up exciting new roles in the social domain.

But I do not see “vulnerable populations” calling for social and health services to be more market-oriented. This is not surprising since many members of such populations have been excluded from the market. Some poor and marginalized people are suspicious of or actively resist market forces. What will their role be if market thinking starts to dominate the social domain? Will they, too, be social entrepreneurs?

Or having moved from being a citizen to a client with the growth of social service and health care systems, will marginalized people now become simply a consumer of social innovation? How will this work, since they do not have the means to participate as buyers in the market? Will there be some kind of reciprocity involved since this dynamic is central to trade relations? Will the people who are now service recipients be encouraged to give or sell their gifts? Will market-oriented social innovation promote the free and unregulated circulation of gifts within the community?

Or will the people who are seen as having the problem or being the problem once again be relegated to the sidelines? Will the targets of social innovation be further disempowered and marginalized? Will the social innovators have all the power and all the fun? If the answer to these questions is “yes” (and I do not see any sign of “no” being the more likely answer), the promise of social innovation will not be realized. The social fabric will continue to unravel.

For more on this set of issues, see Learning to be a change agent and other articles in the Reflections section.


Graeber, David (2011) Debt: The First 5,000 Years Brooklyn: Melville House Publishing

Hyde, Lewis (2007) The Gift: Creativity and the Artist in the Modern World (second edition) New York: Vintage Books

McKnight, John (1995) The Careless Society: Community and its Counterfeits New York: Basic Books

Westley, Frances, Zimmerman, Brenda, and Quinn Patton, Michael (2006) Getting to Maybe: How the World is Changed. Random House Canada