Anand Giridharadas’ recent book, Winners Take All: The Elite Charade of Changing the World, evoked a common response from many impact investors—the desire to hide under the nearest table. His book calls out, as his subtitle not so subtly implies, that those who have economic power not only have little incentive to implement the type of structural change that will be needed to solve inequality and environmental degradation, but that they intend to profit from the implementation of more palliative reforms that actually serve to cement inequality. Consequently while in the process of looking like heroes for all their commitment to social good, they are simply leveraging these “good works” to amass even more power.
This has long been a critique of impact investors—if the wealthy just get wealthier by investing in the poor, how can the poor ever expect to get ahead? Giridharadas (repeat it three times out loud now, because you’re going to want to know it… he’s one to watch) offers many lessons for impact investors to avoid the trap of fake social change.
1. Ask yourself hard if you’re addressing symptoms, or root causes—and whose behavior you’re justifying in the process. Giridharadas argues that the perpetuation of the McKinsey model into social change efforts leads to the oversimplifications of extremely complex problems. With limited time, an insistence on limiting discourse to lists of threes (as I have done here, in his honor), no accountability to affected communities, and a desire to come up with a cheery “solution” rather than truly address a system, we are rarely scratching beyond the surface of fundamentally complex issues.
The problem is not just that these simplistic interventions only address symptoms—symptoms of course need to be addressed, too. Someone who gets kicked in the head wants an Advil, not to be told they should’ve ducked. But what these interventions more nefariously achieve is a complete letting off the hook of the perpetrator of the crime—these quick fixes simply blame the victim (and in the case of social enterprise, charge them for it). EssentiaSocil lly rather than solving actual problems and holding their perpetrators accountable, we solve what I’ll call the “aftermath problems” forced upon those in the world who have to live with the aftermath of structural societal choices—the “underlying problems”—made by the wealthiest among us.
In the book, Giridharadas gives the example of a (social?) enterprise called Even, which was designed to solve an aftermath problem. Even “helps” low-income workers with unstable income (think an Uber driver or retail worker who can’t get consistent scheduling) smooth out their income over the course of a month by saving and then doling out their income in a more predictable cycle. All for the low fee of several hundred dollars annually, or provided as a “benefit” by employers like Walmart…