The belief that you can “do good while doing well” has entered the mainstream. Evidence of the trend ranges from the popularity of certifications like B Corp and the institutionalization of social enterprise as an academic field to the popular appetite for critiques of the concept—like that of Anand Giridharadas, in his best-selling book Winners Take All.1 In fact, the idea that merely scaling these solutions can solve society’s most intractable problems is, at best, an incomplete theory of change. The most successful capitalist firms understand that competition within markets alone is a failing strategy. Politics and culture determine the winners of the economy, and the winners of the economy dictate politics and culture. Corporate allocations for lobbying, political action committees (PACs), and advertising are examples of this logic at work.

The outcome of this system is a rigged competition in which social enterprises are up against Walmart, Amazon, and other monopolies of the modern era. Here, economies of scale are fortified by subsidies and tax breaks, trade policies and supply chain interventions, regulatory and contractual favoritism, and a myriad of other proverbial fingers on the scale.

Countervailing Capital

In a practical way, business associations of color and social enterprise alliances that engage in public policy advocacy actively seek to counterbalance the monopolistic market terrain. National networks like the American Sustainable Business Council, the Business Alliance for Local Living Economies, and the U.S. Federation of Worker Cooperatives all propel these strategies.

Additionally, a growing number of grassroots organizations and social movement networks are putting their political weight behind a more radical subset of the social enterprise sector. Groups like the Restaurant Opportunities Center United and the National Domestic Workers Alliance have incubated worker-centered enterprises in the historically exploitative sectors of food service and care work. The Movement for Black Lives platform, the national Right to the City Alliance, and the New Economy Coalition have all articulated a vision for taking land out of the market by tapping into cooperative and community-owned real estate structures.

Often under the banners of new economy, solidarity economy, economic democracy, and “Just Transition” strategies, these efforts advance specific private sector models that can exist in the capitalist economy while also subverting it. Movement Generation—based in Oakland, California—posits that “the heart learns what the hands do.” This formulation calls upon movement activists to “show, not tell” the possibilities for the future.

Building momentum from small, successful models, the social justice ecosystem builds our collective muscles for economic self-governance and leverages grassroots political power to win policy solutions that disrupt the “race to the bottom economy” in order to help grow alternatives. Rather than bending to the system, we bend the system to us.

Origins of Social Justice Enterprise

At a local scale, this approach is manifested through the Boston Ujima Project (Ujima), a nationally recognized economic democracy pilot launched in 2017. Ujima is a start-up business and finance ecosystem governed by Boston’s working-class communities of color that includes over two dozen local businesses.Ujima’s ecosystem also includes the nation’s first community-controlled loan fund where every member has an equal vote on investment decisions, regardless of their personal financial stake.

Led by Boston’s grassroots organizations, Ujima is also creating a “Good Business Certification” to reflect the community’s demands for better policies, such as “Fight for 15” and “End the subminimum wage.” The “top tier” of Ujima’s Good Business Certification not only reflects the labor, ecological, and social standards that are expected from community-oriented companies, but also enrolls these firms as centers for building political power in a movement for racial, gender, and economic justice. Ujima calls these businesses “social justice enterprises.” The idea is that SJEs operate in relationship with and supported by grassroots networks, while also playing a protagonist role in the political and cultural struggle for transformative change.

Read the rest of Aaron Tanaka’s article at Nonprofit Quarterly