Sunday, October 5, 2008

Blending Value and the Unity of Human Life

This is a big idea post w/ off-the-cuff arguments, I would love some feedback as this is something I have just recently started thinking about...

First I explain two important ideas, then I discuss why these ideas matter in tandem-

1) Blended Value

Generally speaking, businesses operate on a single bottom-line (profit generation) which is a paradigm that ignores the environmental and social impact of their actions. The creation of economic wealth and long-term financial value are widely understood as the purposes of business. However, thinking about value in this way is not only incomplete; it is incredibly dangerous to human livelihood. We can see the outcome of this misconception of value in that some corporations have record years and huge performance bonuses despite their widespread use of sweatshops/child labor, exploitation of marginalized communities, degradation of the environment, and abuse of human rights around the world.

Jed Emerson, a prominent figure in the social entrepreneurship space, has developed and advanced the idea of blended value. Emerson argues that all organizations, whether for-profit or nonprofit, create value that consists of economic, social and environmental value components. Thus, value should be conceived as fundamentally indivisible and measured utilizing a triple-bottom line approach that accounts for economic, social, and environmental impact. In this framework, organizations would have record years and huge bonus payouts when they protect the earth, promote social equity, facilitate economic empowerment, and make a profit. Emerson’s blended value is a more whole way of thinking about how organizations should engage our world.

2) Unity of Human Life

I want to briefly explore some thoughts of Alisdair MacIntyre, one of the most influential thinkers of our time, on the “unity of a human life.” MacIntyre asserts that we live in a world where our lives are wrongfully partitioned into easily digestible segments and categories, each with its own norms and modes of behavior. Understanding life in this way, there is a clear separation of work and life (work/life balance), public and private, childhood and old age, school and the real world, etc. In this fragmented system, each discrete realm is torn away from the rest of human life. MacIntyre argues that in order for our lives to be intelligible and for us to answer basic questions about how we ought to live, we must instead think about our lives as unitary and whole. We are not actors in discrete worlds, but co-authors of whole narratives.

MacIntyre goes on to argue that virtue should not be dependant on the ways we segment our lives. Instead, virtues infuse all aspects of our lives. For example, it is the same virtue of courage that is exhibited by a person’s courage as a parent, activist, friend, lover, believer, soldier, etc. However, in order for this unity of virtue to be lived out, we must also believe in the unity of life. MacIntyre writes, “I can only answer the question “What am I to do?” If I have first answered the question of what Story or stories do I find myself a part?” Our lives are whole narratives in which we live out unsegmented virtue.

3) Why might these ideas matter in tandem?

Is it possible that corporations’ widespread failure to incorporate a blended value approach stems from our failure as individuals to see our lives as whole and our virtues as unitary? Think about it, people run corporations. Compassion may be the most universally accepted virtue among human beings, but why then has it not been integrated into the way we structure and run our businesses? Greed is wrong at home, but at work it’s perfectly fine to pursue profit at the price of dignity, equity, and empowerment. We volunteer with young kids every weekend and buy from companies that exploit very similar young people across the world.

I would argue that the failure of businesses to consider themselves producers of blended value stems from our failure as workers and consumers to understand our lives and virtues as unitary. We need to consider ourselves not only as consumers and employees but as whole beings with unitary virtues creating blended value in every facet of our lives, especially the places we spend much of our adult lives. Only when we break down these partitions of modernity in our own lives can the blended value paradigm be integrated into the consciousness of mainstream business.

4 comments:

GD said...

Dave,

I would like to thank you for the above blog entry. Indeed, it explored what I think are some pressing socioeconomic issues as well as issues that have been near and dear to me as of late.

In addressing the former half of your post, that concerning businesses as social institutions existing to generate blended value, I am compelled to first express sympathy with such a perspective. Blended value, as defined by Emerson, seems to me to be an intuitively appealing conception of business function that plays to our "fundamental" drive towards compassion. Further, as an individual who strives to consider the implications of most all of my actions in a holistic, multidimensional manner, to run an organization that is narrowly focused (and often myopically so) on the generation of "economic wealth" seems, prima facie, to be inconsiderate at best and imprudent at worst, not to mention the fact that it adopts an overly constrictive definition of wealth (i.e., one of immediate command over consumer resources rather than generally sustainable well-being). Nevertheless, the arguments for the sole responsibility of business as a profit-generating institution are almost irrefutably persuasive (see Friedman's "The Social Responsibility of Business is to Increase its Profits"). Capitalists invest their funds to earn a return, to in turn reinvest more elsewhere; presumably the "invisible hand" of the marketplace guides these investments to those ventures that are most profitable. As Friedman notes, for a corporate executive to exercise discretionary authority over those investments and redirect their employment from the end originally dictated by those investors would, in essence, be to exact a tax and, consequently, an arbitrary wealth redistribution on those investors.

This leads me to the latter half of your post, that concerning MacIntyre's notion of the "unity of a human life." The dichotomization of life attendant on the prevailing modern mentality of "work-life" balance is a paradigm that I find quite repelling. I am not that familiar with the academic literature on the topic, but I am sure that there have been volumes written and much investigation conducted on both the short-term and the long-term psychological consequences of such compartmentalization.

Having established some semblance of agreement on the foregoing two concepts, I would like to respond to some of the questions you pose towards the end of your post. You inquire as to the possibility that the failure of businesses to incorporate a blended value approach into their operations stems from the fact that consumers and workers fail to see their lives as unitary, however, I would posit that this dichotomization is by design, not failure. Indeed, I believe that humans have an innate tendency to eschew liability and/or culpability, and, as a consequence, have devised the corporation (a "legal" person rather than a "natural" person) as a vehicle through which to accomplish this. Therefore, while the problem is inherently and historically a human one, it is currently a legal one.

With the protection of the corporate liability shield, the individuals who comprise and constitute stakeholders in various business entities are able to "externalize" costs on society at large. Being that this legal/natural person dichotomy is deeply woven into the very fabric of society (and has been for quite some time), not to mention the undeniable benefits that it does afford society in the form of incentive for investment, I think the question is not whether the current system is askew, but whether its costs exceed its benefits. Given the impracticality of such an assessment, I would agree that there needs to be a reassessment of those values central to the human experience so as to enable the reengineering of social institutions as such to hopefully ensure the attainment of and alignment with those value objectives.

Becca Hartman said...

seems like you hit the almost comical contradictory/paradoxical world of US financially privileged culture on the head. any good examples of alternative companies living the integrated style you propose?
Becca

Katie Chelminski said...
This comment has been removed by the author.
Katie Chelminski said...

Well first of all Miss Keegan Baur sent me to your blog so you can thank her for increasing your readership ;) Very thought provoking post! But I just have to say that while the whole bottom-line drive is global, I think that the movement is led by the U.S. It's something I've encountered as I interview green businesses--their clients are most concerned about the bottom-line before they care whether about integrating sustainable design. I'd venture to say that it's a very American sentiment. This "frontier mentality," if you will, is innate to our culture, whereas sustainability seems to be readily integrated into European culture for example. Americans seem to think that natural resources are limitless, whereas Europeans tend to embrace sustainability. Historically it makes sense, but why do Americans (esp. businesses) refuse to see their impact on the world? I concur that in our society greed is an acceptable virtue for business, but I think it's specifically encouraged in a capitalist economy and not necessarily innate to business in general. Just look at the Netherlands!

Anyways, just thought I’d share my thoughts on your thoughts! Cheers*