Social Capitalism – Fusing Capitalism and Socialism to Change the World

A key philosophy underpinning the ambitions of our DigitalScot.social initiative is the concept of “Social Capitalism” – The fusion of both capitalism and socialism.

This may seem like an oxymoronic combination, but resolving that paradox is key to massive societal change.

The biggest challenge and opportunity we face today in the 21st century is hanging on to the 19th century mental models we’re programmed with; that politically we must define ourselves distinctly as either “Left” or “Right” wing and vote accordingly.

A by product of this is that we persist myths like the idea we can only have a Socialist or a Capitalist society with associated stereotypes – We can care for people but it will bankrupt the government, or we can have a prosperous economy but only if we punish the disadvantaged for their crime of being poor and force them to eat from food banks.

Social Business

While the business world and our current form of capitalism gives rise to the “1%”, it doesn’t have to be that way. Social Business offers a new path that blends the best of entrepreneurial drive and organizational structures with civic socialism that benefits all, the poor and business people alike, a rising tide that floats all boats.

Social Business will flourish hand in hand with an evolution of our democracies that rejects these ill fitting models, and instead recognizes the obvious factor of a ‘rising tide that floats all boats’. Every one prospers more when every one prospers.

In short Social Business is the fusion of Socialism and Capitalism, an operating model where we combine the best of both worlds to better achieve the goals of both aka “Social Capitalism”.

For example, without sound business practices that robustly manage finances social organizations go bust too, but equally if we allow the personal greed aspect of capitalism to run amok unfettered without social due diligence then there will be consequences there too.

Generating a profit isn’t inherently immoral. For any organization to succeed they need to invest in infrastructure, staff and so forth and this all costs money. An example of the business practices is that the more capital they can leverage the more social benefit they can achieve, what is defined as ‘Social Impact’.

Similarly you don’t need to set up a charity if you have a will to do good, and doing so can limit how much you achieve. Especially for smaller ones they have to spend most of their life in endless grant application writing cycles trying to raise the funding required to operate their organization, meaning they spend little of their time on their social goals.

While steps have been taken, such as creating CICs – Community Interest Companies, to enable a hybrid commercial/charitable organization type, there’s no law that says a business must generate profits solely for the personal financial benefit of its owners, in a form that demands they generate their personal wealth at the expense of building a better society.

In short you can set up and grow an entirely commercial company that makes you personally wealthy AND greatly improves the lives of others. That is Social Business. The ideal that some must lose for others to win is one of those 19th century myths, as is the concept that you must live a life of hardship to help others.

Social Tech Innovations

The role technology can play in helping accelerate these initiatives comes under a banner of ‘Social Tech’.

Where GovTech refers to startups pioneering new solutions for the public sector, CivTech for similar innovations for participative democracy, Social Tech focuses on its potential to address deep social needs like homelessness and poverty.

A great example is this use of banking technologies from Monzo, deployed in partnership with the Big Issue:

As it demonstrates a relatively simple reuse and new application of their technology facilitates an extremely powerful business model, one that could generate a massive revenue stream AND play a very significant part in helping those in need.

Synthesis – Ecosystem Service Design

So a key activity of our program will be to work with the many social organizations doing this type of great work, with a view to helping them identify and apply these types of tech innovations.

As part of this we will also be looking to understand and map the overall ‘ecosystem’ – Frequently social services are achieved through a number of different organizations collaborating, from across government and third sector, and often the biggest challenge is the systems complexity that arises.

A simple example is ‘sign posting’ and referrals, just knowing who does what so that front line staff are informed and knowledgeable and able to involve their right partners into their client case work.

So we can think of each as one piece of an overall jigsaw, and helping them to see and act at a level of this overall jigsaw is the objective.

No Wrong Door Chatbots

Thus the larger goal is one of industry synthesis – Not only helping one organization at a time but also helping to transform the overall sector so that it can work more efficiently as a single system.

An example of how this synthesis might be achieved is the rationale of our idea of ‘No Wrong Door Chatbots‘.

Shelter Scotland developed a Homeless Help button, and similarly an enterprising teenager set out to apply chatbot technology to the homeless challenge.

What it can achieve and how it is ‘programmed’, highlights the purpose of the exercise:

“Most commonly, this means drafting a legal letter that the person using the chatbot can send to their local council to apply for emergency housing.”

“Browder says he used data gathered via the Freedom of Information Act to figure out trends in why public housing applications are approved or denied, as well as from a team of volunteer lawyers. This is so the bot can create the best possible application for each individual.”

In the case of the Shelter Scotland, and these chatbots, the question to explore is what body of knowledge are they based upon? How does that knowledge accurately reflect all of the ecosystem, the many partners involved and the services they all offer?

The more these interface points are based upon data that reflects this networked and interconnected industry, the ‘smarter’ they will be in terms of being able to respond with effective responses and help.

Scotland Can Change the World

As Alastair Davis writes in his Scotsman article, Scotland is ideally placed to become a world leader in this field, combining a history of world-changing innovations with an intrinsic passion for social justice, and already boasts exciting thought leaders and real-world success stories.

A headline example is Social Bite, inspired entirely as a Social Business and founded by Josh Littlejohn who received an MBE for this pioneering work, dedicating it to the homeless community they help.

As the Guardian writes the experiences have led Josh on to a second Social Business project, the Social Bite Village, a purpose built village for the homeless intended to help break the vicious cycle faced by by those who are homeless.

They are now setting out to scale up their efforts and tackle the situation entirely, through their Housing First initiative, leveraging their momentum to roll out a national program to provide the most practical help to the homeless – A home.

As Scotland’s tech sector, our opportunity is to demonstrate we have both the expert innovators and also the deep progressive ideals that has seen Scotland lead worldwide change for centuries, and apply it in such a way that we are able to make possible what might seem like an impossible goal – To entirely eradicate homelessness.

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