Optimist Report cont’d:
8 July 2014
¶ And now, here’s David Brooks taking up the “B Company.” A fad? A fad that sticks?
This creative process is furthest along, I’d say, in the world of B corporations. There are many people today who are disillusioned both with the world of traditional charity and traditional capitalism. Many charities have been warmheartedly but wastefully throwing money at problems, without good management or market discipline. Capitalists have been obsessed with the short-term maximization of shareholder return without much concern for long-term prosperity or other stakeholders.
B corporations are a way to transcend the contradictions between the ineffective parts of the social sector and myopic capitalism. Kyle Westaway, a lawyer in this field and the author of the forthcoming “Profit & Purpose,” notes that benefit corporation legal structures have been established in 22 states over the last four years. The 300 or so companies that have registered in this way, like Patagonia or Method, can’t be sued if they fail to maximize profits in order to focus on other concerns. They are seeking to reinvent both capitalism and do-gooder-ism, and living in the contradiction between these traditions.