Grassroots, community solutions to social problems…

You may have seen this article last week –

NEW JERSEY CITY OF EVESHAM TO USE UBER TO CURB DRUNK DRIVING

And it’s organized but not funded by the city:

Funded entirely by local nonprofits and businesses, Evesham clearly embodies the “love thy neighbor” ideal, and so far, things are looking up.

Short term, average DUIs were down from 25 to 8 in September.

I’ll keep watching this one. It will be interesting to see if it’s sustainable and what kind of impact it has long term. Love to see local people getting creative with solutions.

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Worth a read: How CircleUp Is Filling The Void Left By Banks That Won’t Lend To Small Business

Worth a read: How CircleUp Is Filling The Void Left By Banks That Won’t Lend To Small Business

I ran across this article today – don’t you love seeing people solving problems, creating new models and causing upheaval?  Kiva.org, Indigogo, Grameen America… These are some of the ones that come to my mind. (And all of these are individual people, groups, getting together voluntarily, whether they are non-profits, for profits. Government solutions would take years and would be bureaucratic before they even started. It’s the voluntary sector, the ‘freer’ market that allow problems to be solved ultimately. More pressure to replace what no longer works!)

Here’s a quote from the Forbes piece: 

“No banks want to give a company like mine a loan – we’ve got great growth rates but profitability’s not there yet,” he says. “They have a box and we don’t fit into it.”

In fact, big banks approved less than a fifth of all requests for small-business loans they received in January. Small banks approved about half of applicants, according to a survey by Biz2Credit, an online platform that matches businesses and lenders.

Another reason to prefer voluntary solutions to social problems.

“The more you give the watchmen to do, the more tempting it becomes to corrupt them, and for them to let themselves be corrupted.” from recent Reason article by Tucille: What Do I Know About Corrupt Cops? My Family Owned a Few.”

And I think I’ll tune in for the upcoming Al Jazeera America piece on the militarization of our police in the US.  When I was growing up (in a smaller, relatively peaceful town), I perceived the police as being there to ‘serve and protect.’ But now I’m very aware that they can pretty much find a reason to arrest whomever they want, and they treat every encounter with a ‘citizen’ as a threatening one. Either there’s been a shift in the past 30 years or I’m just older and more cynical and more aware…

What a cool, cool non-profit – teaching to fish, long lasting change

What a cool, cool non-profit – teaching to fish, long lasting change (World Mag article about Beltline Bike Shop)

what a great grassroots non profit

what a great grassroots non profit

The link above will take you to a story about the Beltline Bike Shop in Atlanta, GA, a non-profit where kids can go to fix up bikes and earn their way to a new bike.

Here’s a summary from Beltline’s website:

A kid hears about the shop.  He comes to the shop because he’s been told he can learn how to fix bikes.  As he learns how to fix bikes he also learns how to work hard along side other people while earning a bike of his own.  Through the shop, he realizes that hard work pays off.  This leads to him seeing opportunities in his neighborhood where he is able to leverage his skills to earn money.   As his skills grow, he gains confidence and improves his ability to shape his future.

It started with one couple helping one neighbor child fix his bike, and grew from there.  Isn’t this a fantastic story about two people over time building something that makes a lasting difference in the lives of kids nearby. Love the idea that the kids have to earn their bikes – so simple, but there is so much pride in earning something. Once you have that feeling that your actions led to something good, it sort of sticks with you

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Three objections to free market solutions

Mark Pennington’s book cover

I’m reading Mark Pennington’s book Robust Political Economy, and he sums up in his conclusion 3 main objections to Classical Liberalism, (which is essentially a belief in the ‘free markets’ and a minimal state). This is something that any libertarian leaning person should understand!

Here is my paraphrased, layman’s term interpretation of what he’s written (p. 264)

The three main reason people dismiss Classical Liberalism are

1. the crazy idea that people make rational decisions in the free market and get to optimal outcomes that way (invisible hand, or the idea that individual actions and choices in a voluntary market benefit everyone.

2. Classical Liberals are so individualistic they dismiss “the communal identifications that shape human lives,” or individuals’ need for connection with other human beings and being part of a wider community or group.

3. Classical Liberalism doesn’t care about or solve problems of social justice and the unequal distribution of power and social status.

Mark Pennington’s book is essentially a collection of arguments seeking to show that none of these stand up to scrutiny.

Looking at the free market and compassion, I’ll keep all 3 in mind. When it come to efforts to help people out of poverty, I see these common arguments:

1. Voluntary solutions aren’t enough – people wouldn’t give enough; they’d be selfish. There wouldn’t be enough help. There would be an undersupply of help. 

2. Private welfare organizations and safety nets are gone – if we were to ‘privatize’ the welfare state, the mutual aid societies, the churches, the grassroots organizations and extended families, they just wouldn’t be there to fill the gap.  There’s an undersupply of alternatives; It’s too late to change it.

3. Everyone should help their neighbor, and making it mandatory through government action is the moral thing to do…

I’ll start with that!

What’s Wrong with Selling a Product? For Profit?

Random thoughts – forgive me if my logic/reasoning is flawed. Just going to put this out there to the 3 people who read my blog! (Thanks, Steve, Mom, Karla).

So I have a company that provides a particular software, that does certain things other software doesn’t. We tell people about it, we show it to them, we find out what their problems are and talk about how our software might help. We let them USE it. We tell them how much we will sell it for. If they want it, then we discuss a bit more, sign a contract. We send them the software to use. They send us some money.

We are a “for profit” company, meaning that we sell the software for more than it costs us to produce/market, etc. the software. Are we evil? Are we less noble than government or non-profits?

Who are we exploiting?

Employees?  I cannot coerce someone to work for me. They can give notice at any time. They voluntarily contract with us to be an employee and do certain work, in exchange for certain benefits/payments/value.

Customers?  We tell them what we’ll sell it for, and they choose to buy or not. We have a contractual agreement on what we provide, what each party’s responsibilities are. I don’t see any exploitation there.

I can tell can tell you that I’m VERY keen to make a profit. Making a profit means: we may be able to buy a house in Santa Barbara some day, we may be able to finance our kids’ university education, and we may be able to pay for my husband’s heart valve replacement surgery in 8-9 years (yes, we have insurance, but I’m expecting  by then the deductible would still bankrupt us:). From our share in the business.

What if the business is a roaring success, and my net worth ends up in the millions?  Is this evil? Unethical? Would I somehow be destroying the community/the world? Exploiting someone?  Is there a line somewhere to what’s an OK amount of profit and what’s too much?  If you knew that the company was going to give  10% of all profits to the Salvation Army, would that make it all better?  If you were a shareholder, would you be angry that the company was giving away profits to a charity rather than to you? Maybe you hated the Salvation Army and loved the ALS Association?

Are we less noble than a Non-Profit or Government entity?

We provide a software that helps large organizations communicate better than they could before. Our software helps call center reps get last minute info about power lines being down faster than before, which improves how knowledgeable they are during their service calls.  Our software has helped reps on the road find out about price drops before they go into call on customers. Our software has helped executive teams find out how well employees are taking the restructure, or if they really understand the new processes. This is good stuff, and I’m proud to work for a technology company that provide tools that enable these kinds of things. Profits reward the people who started the company, dumped in a pile of money to see if anyone else out there thought the software was as good and as useful as they did. These are the people who also risk LOSING the pile of money they gave to the company in exchange for shares/part ownership.  This is innovation. This is what creates economic growth – people figuring out how to do things BETTER, FASTER, for less money/time than they used to do it.  This is how we ‘grow the pie’.

Non-Profits:

Their survival depends on whether they get enough donors to support their cause/project/goal. They are part of the private sector as much as for-profits. I love them! They are valuable and necessary to our community, to positive change in society, to humanity.  Do they grow the pie? I think YES – they provide products and services voluntarily that people and entities want. If people/entities decide they don’t want them, they can stop donating. People who take the risk in setting up a non profit, dumping in a pile of money do not expect to get it back. They transfer it to the non-profit essentially – non-profits cannot be owned like for-profits and thus can’t be ‘sold’ or exchanged, right? The reward and benefits from creating a non-profit are somewhat non-tangible. What do you think – frankly I’ve never ran a non-profit or researched the sector.  Of course, non-profits that survive on government grants are sort of in the next category, my least favorite.

Government:

Did you ever say- “hey, I’m not happy with the state of our schools, and I know that $XXX of my tax dollars is given to schools. I’m going to switch carriers – cancel my service with the local School District and send it instead to the Montessori.”

NOPE, you can’t opt out or go to the competition when it comes to government. If politicians vote to take more from you in tax to pay for a skateboard park behind your home and the public agrees – you HAVE to pay or you’ll be fined/jailed/wages garnished. There is no voluntary contract here.

I’m not a fan of government taking over non-profit functions or for-profit functions, in case you couldn’t tell.  Government exists to provide rules, guidelines, consequences so that everyone plays the game fairly. Government is there to stop bad guys who steal, kill, harm,  lie, cheat, right?  I don’t think gov’t’s job is to pick winners or losers or stack the deck for certain groups and ignore others. Right now, government acts for whomever lobbies the loudest, right? It’s all about special interest groups competing for dollars/rewards taken from someone else and given to them.

Last thought for the day. I’m not a fan of large corporates who provide a service or product not on its own merits in a fair trade and open market but instead get in bed with government to

  • pass favorable rules to keep out other companies
  • receive subsidies, propping up products and services that DON’T actually provide enough value to stand on their own,
  • get special tax breaks for their company or their region or their industry (that others do not get)
  • buy off politicians with special pricing, perks, charity donations, community project

This is corporatism, where the elites in gov’t and the elites in private organizations stack the deck. Worst sort of game.

I’m on the tip of an iceberg here, clearly. This keeps getting longer and longer. Next time I’ll get into the value of government – some of the great things it provides.