Imgaine that a true market for virtuous capital emerges and that billions of dollars are at stake. The biggest flow goes to firms who "objectively demonstrate" that they are good for the world. Into this need for "objective demonstration" will flow who and what? I submit that the need for "objective proof" of a firm's positive impact will be met by the usual unsavory crew of Highly Educated Knaves:
- Think tank thinkers
- Public relations experts
- Academics for hire
We will have rating services, metrics, and balanced scorecards - and we will have hype, mendacity, kickbacks, favor trading, and secret deals. Who will rate the raters?
Why am I so sure that metrics and scorecards will be largely bogus? Because at the heart of the issue are several conceptual flaws. You cannot rate items objectively for "goodness" without agreement about the good - and what do philosophers, critics, politicians, and consumers disagree about most violently? The nature of the good, the true, the beautiful and the just. What we kill each other over are precisely warring definitions of the good. So, who gets to make up the scorecard? Second, even if we all agreed on a view of the good, it would almost certainly make reference to imponderables, such as long term consequences, moral rules, or motives and intentions. No one, save God, can look into the entrepreneur's heart to find good intentions. No one but God can survey all the effects of a firm, both intended and unintended to rate the goodness of the consequences. Also, perhaps only God could penetrate the veil of corporate secrecy to find out what is really going on, behind the protection of attorney client privilege. Finally, while moral law may be laid down by Nature or by God, there is always room to dicker when it comes to cases.
Look, I work in training. From time to time I am asked to provide metrics proving that training pays. So, in return for a $50,000 training budget, I am supposed to prove that sales went up $2,500,000. Well, what drives sales are recruitment of qualified salespeople, economic conditions, sales management, product design, advertising, competition, and even the weather. Those effects swamp training. So, what does one do in real life? One "dummies up the forms." Right? Given a senseless demand, you provide a senseless proof of results, or a balanced scorecard or a bogus spreadsheet.
What I am saying is that balanced scorecards or social good metrics could amount to dummying up the forms on a massive scale with potentially billions of dollars at stake. What we may well end up with is bull market in bs among those whose job it is to do the impossible - measure how much a firm contributes to the public good.
Given my glibness, my gift for casuistry, and my pressing need for cash to pay off my gambling debts, I am hard at work developing my own balanced scorecard for social good. If you want your business rated, or greenwashed, just write me. I am sure we can work something out - a win win situation all around.