• Service: Enterprise, Family business
  • Type: Business and industry issue
  • Date: 12/13/2012

A reformed ethic and the new spirit of capitalism 

Spirit of capitalism
Nicolas Hazard is Vice-Chairman of Groupe SOS, a leading social enterprise, and Chairman of Le Comptoir de l’Innovation, an investment and consulting company for businesses involved in developing innovative economic models to maximise their social impact.

Here is his contribution to the 2012 Barometer of Social Entrepreneurship…

"The spirit of capitalism is a system of values that raises the acquisition of wealth systematically achieved through hard work, frugality and savings to the level of a way of life and an ultimate goal", revealed Max Weber more than a century ago in ‘The Protestant Ethic and The Spirit of Capitalism’.

We must therefore work hard to reach the ultimate objective that is so sought after: the possession of wealth. All entrepreneurial aims are thus summarised as the pursuit of profit.”

The victims of the pursuit of profit

“This vision has become an axiom, from which the theorems that have structured our current economic policies have followed: while enterprises have to maximise their profits, no state intervention is required for the natural and virtuous functioning of the market. All public action would end up simply restricting individual entrepreneurial will, thus being counter-productive.

The most fragile populations have been the first victims. The policies of structural adjustments praised by the IMF and the World Bank in developing countries or, nearer to us, the privatisation of some public services, have resulted from the application of this doctrine, a true belief that has even changed our approach to the fight against poverty.

The poorest people, victims of their conditions whom we should assist, have become individuals responsible for their own destiny. It is through “hard work, frugality and savings”, as put by Weber, that they can free themselves. Such a vision, which effectively transforms all poor people into entrepreneurs, tends, however, to avoid crucial questions concerning development, such as education or health, which are unavoidable pillars of all dynamic and durable societies.”

Social enterprises regenerating the framework of capitalism

“Opposing this axiom, social entrepreneurship perfectly reconciles enterprises with development. The idea is not for public authorities to pass on to businesses the responsibility that falls to them in the management of social problems. The focus is rather to make these businesses high-value allies whose contribution will improve the response to the diversity of social needs.

At the same time, social entrepreneurship changes what Max Weber calls the “system of values”

of capitalism. For social enterprises, the sole aim is not to maximise profit; they also pursue a social mission. This involves a complete internal revolution, regenerating the framework of capitalism. To a system running out of steam, social entrepreneurship brings a new impetus.

The current economic model has been an extraordinary system for the creation of wealth, but it has brought with it a significant share of inequality and exclusion.”

Social entrepreneurship inspiring economic development

“Conversely, social enterprises, through their products, services or production processes, adopt a resolutely inclusive approach. They look to reintegrate each individual into the economic development and are constantly searching for solutions to respond to wider societal issues. In this respect, social enterprises play a role as a true stimulus for social and environmental innovation, and this is to the benefit of the whole community.

At a time when we are experiencing an economic, social and moral crisis, social entrepreneurship announces a reformed ethic and a new spirit of capitalism.”

Christophe Bernard

Christophe Bernard
I am a KPMG partner based in the French firm’s Paris office, responsible for encouraging the growth of our firms’ middle markets practice across Europe, Middle East and Africa, a majority of that market comprises of family businesses.

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