A Fred’s University Business School Professor Rants on B-Corps
First: What is Alt-Capitalism?
Alt-Capitalism is understood by do-gooders to be doing good while making money and then talking about it on the TED stage.
As espoused by nettle tea farmers and trust fund hippies, Alt Capitalism is a lifestyle complete with the fashionable banners of environmentalism: expensive green gadgets destined for landfill, luxury goods manufactured with cheap labor, and homemade items that are resource-intensive.
In the glamorous, high-status Benefit Corporation stakeholder model, fancy corporations must meet an official standard of social and environmental performance, public transparency, and legal accountability to balance profit. Instead of merely benefiting shareholders, the benefit corporation should take into account all stakeholders including employees, consumers, and the earth.
The best-case scenario is that the most effective aspects of the prestigious Benefit Corporation concept slowly become the law of the land through reforms like Elizabeth Warren’s Accountable Capitalism, and eventually everyone has the prestigious mushroom-based gadgets BCEOs have.
In the meantime, we hope the corporate world is inspired to imitate the leadership of blue chip B companies and recycle to the curb.
The worst-case scenario is that the civic energy put into benefit corporations stalls other attempts at reform. Instead of following the lead on best B-corp practices, the corporate world adopts only the empty PC promises of the trend of the day and uses virtue signaling as a cynical sales driver.
To its detractors, Alt-Capitalism is yet another marketing ploy and an ingenious exercise in greenwashing and dodging public oversight. In this critique, our capitalist guilt is for sale to the highest bidder and makes our society into a kleptocracy of false patronage.
In the process of congratulating ourselves and others on Alt Capitalism, we pump up the egos of the super-rich and assuage the guilt of the CEOs destroying our planet. The hipsters at Dingleberry Farm feel good about themselves while the planet burns in an inferno of “green” trash.
There is a model for this scenario that is already baked into much of what drives Alt Capitalism and that is our private college and university system.
Universities as Alt-Capitalism
Private colleges and universities have been laundering the money of the very rich since their inception. The value extracted from slavery, sweatshops, strip mines, and factories was funneled into the seemingly virtuous institutions which propped up the predatory Planter, Slave and Robber Baron capitalism that funded it.
Now the rich remove from the mines the conflict minerals that fuel our devices and the child labor that assembles them and can bask in the reflected glory of an academia that teaches the coding, trains the scientists and produces the executives who will continue to crack the whip.
All magic comes at a price–Rumplestilskin
Like the B-corp model, universities are based on stringent gate-keeping evaluations and the high prestige of imagined meritocracy.
Like the B-corp model, the emphasis is supposed to be on doing good, but in reality, huge amounts of money change hands. Universities benefit from their purported philanthropic activities while exploiting their adjunct, technical, clerical, and janitorial workers. Universities provide the industry with cut-rate research while students are left with crippling tuition debt and degrees with declining value.
The government subsidizes university research for the industry which then charges taxpayers for our intellectual property in the form of exorbitant drug costs and other grifts.
What looks like a virtuous circle is really a vicious one. The rich get richer and richer while congratulating themselves for their acts of academic patronage.
What is most insidious about the university system is its false promise of education and uplift for all. After almost 400 years we struggle with illiteracy and ignorance. Education is still highly segregated. All the endowments, scholarships, and gifts have only succeeded in making education more expensive and out of reach.
B-corp alt capitalism styles itself on the elite world of the Ivy League with its intangible prestige and tangible profits. Beware of the bad example of our compromised institutions of exclusion.
I like a pair of compostable alpaca slippers as much as the next person, and I prefer my chocolate slavery-free as well. In fact, my favorite way to enjoy a delicious bar of ethically sourced chocolate is under the elms of the beautiful quadrangle at Fred’s University while reading a 19th-century novel I first learned about in Freshman English.
But neither my slippers nor my education is solving the problems of the world.
Either every corporation should be a B-corp or none. Every candy bar should be slavery-free and if not they should be banned. And as for college, it should be free for all.
Also Read: What I Learned About Alt Capitalism from My Internship at Dingleberry Farm