The Social Interest of Social Impact Bonds

“We like our victims a certain way”

            This was the comment that Professor Stein left us with after our engaging discussion surrounding the potential benefits and drawbacks of social impact bonds. We ended the discussion on the note exploring if the potential benefits outweigh the potential risk, as people in the status quo need help now. However, big businesses “like their victims” to be complacent, meaning they want to be able to provide them with relief while simultaneously avoiding the stigma of their motives. We broadened this analysis but we also began exploring the significance of advocacy and methods of creating solidarity with the poor. Our analysis was great but I would like to first backtrack a little in order to bring more breath to some of the earlier arguments in the discussion as well as arguments that really framed our inquiry and my overall thoughts.

            Let us first discuss the root cause argument that we could have analyzed further throughout the discussion. In a broad sense, isolating root causes are beneficial because they allow us to explore potential reasons why negative events occur, find solutions for the base problem and prevent the future occurrence of this negative impact indefinitely. To be more specific, if people are consistently dyeing from the flu, we must isolate what the primary cause of the flu is in order to prevent future deaths indefinitely. However, the idea of social interest bonds seems to be prolonging the sickness by simply, as Joseph put it, “clearing the symptoms of the disease.” It amazes me how profit and short-term stability have become our end goal for societies toughest problems in contemporary America. If two people are cold and homeless, we see it fit to find them a shelter to stay in overnight and many feel the problem is solved. If someone has not eaten for days and we feed that person a great thanksgiving meal, we feel that this is enough to help alleviate their struggles. Hilfiker made this point clear that charity and non-profit work does not and can not substitute justice but does it not bridge the gap between the two? Does it not make justice that much closer and achievable for the vast majority when we build our assemblages and fight for what’s right? Even if people are self-interested in participating in these community-mobilized events, the lack of profit motive and fundamental desire to give outweighs the selfish act. These “bandages” are great in the short term but the overarching problem still exist or how to find a long-term solution to these issues. These charity organizations may not alleviate peoples suffering over long periods of time but at least a charity organization has not been co-opted by this profit incentive.

            Charity therefore differs from social impact bonds greatly. Social impact bonds are the epitome of this co-option in my opinion.  Its just another way for business to make profit off of displaced and underprivileged people who have most likely already encountered hardship within our system. Lets take a second to imagine a world where you have to pay in order to eat and survive, medication and healthcare is not universal and the betterment of communities relies on the government decisions and financial interest. Sound familiar? Sally made the great point that health care and the progression of medicine has already become economically optimized. She claims “if they [doctors] found a solution for cancer tomorrow, pharmaceuticals would go out of business” as they would not be able to profit off of people spending money to survive with cancer day to day. This is a product of our greed but lets get back to the issue at hand because social impact bonds supercharge this greed initiative. Put the idea of capital gain in context of prison re-entry. The government and their partners will fund programs for convicted criminals so long as recidivism rates drop next year. Lets assume that recidivism rates stands still or even go up… what now? Do we stop funding the programs and leave former prisoners vulnerable to re-entry? The answer in the context of these bonds is yes.

            Now, lets tackle the opposing argument, as it deserves to have some light shed on its credibility. David firmly believed that this short-term interest heavily outweighs potential long-term drawbacks. He claimed that we can isolate many reasons why the program is potentially hazardous, but at least something will get done. In retrospect it is hard to disagree with this statement but I still have to question the motive behind these bonds. If recidivism mattered to Goldman Sachs why do they have to pursue solvency through the lens of capital gain? What is the difference between distributing ten million dollars to a multiplicity of not for profit organizations aiming to lower recidivism rates and find a solution to the problem? Or why, as Niko pointed out, can’t the money simply be donated? The answer is in the question: NOT FOR PROFIT. If we continue to allow money motives to govern our decision-making, the notion of community turns on its head and money continues to rule us until the gap between the rich and the poor is absolute. Do not misunderstand my skeptiscm for inaction because I too believe that something needs to be done. But when thinking of these bonds in great detail we must wonder, and many of us have started to do so already, if people would actually be worse off in the long term even though they are obtaining short-term relief.

            Now that I have summarized most of our class discussion I would like to discuss my preferred solution. Sylvie’s articulation about Framer’s idea of “preferential treatment for the poor” is the best model for this type of conflict. Framer initially wants to explores methods of creating practical ideas in solidarity with poorer people so that they do not get misplaced in the decision making process, which is something that happens too often. Framer’s ideals have been practiced on a minute scale without our even notice. This solidarity has actually entrenched itself in the mission statements of most not for profit organizations. Ironically enough this includes the organizations we currently intern with and have researched. For example, CASES aims to create solidarity between the workers and the youth offenders in order to prevent their deeper entrenchment into the justice system; Esperanza aims to utilize research and illuminate trends in drop out rates in order to create solidarity between struggling adolescents and the staff who want to help them; HSI attempts to create solidarity between recently homeless individuals and case workers in order to prevent them from reverting back to homelessness and getting lost in the system. The list goes on and remains true through each organization. These organizations are at the forefront of solidarity and yet these social impact bonds stand to eliminate their cause because government would be able to allocate their funds into businesses rather than administering grants to community based institutions. Under the ideology of social impact bonds, the value of poor people, troubled youth and even formerly incarcerated individuals in society starts and stops at their economic stability.

I would like to now open this for discussion.

1         1)   If you believe that the long-term benefits and stability of the disadvantaged matters, than what can we do to assist that group. As future leaders, how do we make a systemic impact in a world where non-profits begin disappearing or where community activism is co-opted by business and government? Where do we find our voice?

2        2)   If you believe that the short-term goals outweigh the long-term interest as a few of us have articulated, than how do you remedy the potential dangers that our colleagues and myself have mentioned? What does the world look like post-social impact bond in your opinion? Why exactly does the “now” outweigh the “then” and do you believe that our voices do in fact become misplaced? Where is the human element in this solution?

3       3)   For all, what is the best approach to societies toughest problems? Is it the integrated model that Niko and Joseph defended or do we need more advocacy and hardcore solutions as Sally and I briefly mentioned?

Ultimately, the final question is this: How do we successfully transfer the power of decision-making and political know-how into the hands of the underprivileged?