B Corps and the American Dream

Lately, I’ve been thinking about the cracks in the American Dream. The idea – founded on capitalism – is that anyone with some ingenuity and a willingness to work hard will be able to make it in our country. We are supposed to be a “meritocracy” – a place where individual merit matters more than family background. But the latest news is that it’s “Harder For Americans to Rise From Lower Rungs,” that there is in fact more social mobility in countries like Canada, Britain, and Denmark. This – along with so much of the news of the past few years (Citizens United, the financial fiasco, the privatization of schools and prisons, the Occupy movement) – have me convinced that the wealthy have grown far too powerful in America.

How did we stray so far from our ideals? Why are we letting the middle class shrink? Why is this graph (part of a study published last spring) so ridiculous?

Is the American Dream crumbling? Has capitalism gone too far? Is America at the end of its rope?

Despite my temptation to entertain apocalyptic scenarios, I do think there’s some hope. And today, it comes from an unlikely source – The Economist – where I read a recent article on B Corps.

I first learned about B Corps (short for benefit corporations) last spring from a New York Times article called “A Scorecard for Companies with a Conscience”. Basically, B Corps are a new type of legal entity – a corporation that is not only beholden to its shareholders but also to its social and environmental mission. It allows corporations like Patagonia to make decisions that benefit its workers and the environment even if it means their profits won’t grow as quickly.

I was psyched. Ever since then, Steve and I have been buying our coffee from One Village, a certified B Corp. I haven’t seen a lot of other products bearing the B Corps label. Apparently, there are only six states that have passed B Corps legislation. California is the latest (the new legislation there is what prompted the Economist article), but legislation has been introduced in five other states (including my very own PA!).

For me, B Corps represent a step forward in reconciling capitalism and our responsibility to humanity. Some folks that I’ve talked to (or raved to in an idealistic frenzy) about B Corps have suggested that because they don’t rely on “pure” capitalism, they actually mess with the economy and could end up doing more harm than good. My two thoughts on this are: 1) Tax breaks and subsidies for big corporations aren’t “pure” capitalism either, and 2) Even if it turns out hard to prove B Corps’ direct benefit to society and the environment, I will still believe that they are a step in the right direction. They represent an effort to divorce capitalism from greed and unite it with social and environmental responsibility, to combine business savvy with ethical intelligence. This kind of thinking is what our economy needs in order to begin to mend the cracks in the American Dream.

P.S. Cool Philly side note: While checking out the B Corps website, I came across this: "In December 2009, the City of Philadelphia passed legislation creating the country's first tax break for certified sustainable business." Yeah Philly! Apparently, the non-profit behind B Corps, B Lab, is based in Pennsylvania. And apparently, Mayor Nutter was serious about distinguishing Philadelphia as a forward-thinking green city. And apparently, we're awesome.