Obama, social enterprise and state power

President Obama's historic Cairo speech this morning highlighted the latest in a series of federal initiatives aimed at promoting social enterprise, namely

a Summit on Entrepreneurship this year to identify how we can deepen ties between business leaders, foundations and social entrepreneurs in the United States and Muslim communities around the world.

On one level this is, of course, a heartening development, as social enterprise offers some real opportunities for connection between American and global Islamic ventures. Just as Islam spearheaded the revival in math, science and philosophy that laid the intellectual foundations of the modern West, Islamic business and charity embodied social enterprise long before the concept was a gleam in the eyes of today's so-called social innovators.

However, from a broader perspective, Obama's support for social enterprise should also spark some serious reflection about the relation between the movement and the state. It's an issue that goes beyond the definitional matter of whether a movement long defined primarily in reference to business should be looking for government handouts grants investments. The deeper question concerns how the government gets the money it uses to support social entrepreneurs.

In the U.S., we tend to view tax money as something of a benign abstraction. It's money that most employees never see, automatically collected from our paychecks by human resources and paid to invisible bureaucrats who send it on its merry way. But as tax law itself reminds us, one of the defining features of the state is its authority to exercise police power--or in more Hobbesian terms, to enforce obedience to the sovereign's laws through the threat of institutionalized violence.

Every tax dollar received by social enterprise--whether to take a venture to scale or to eat a canape at a confab in DC--comes with a price. Each expense increases the pressure on tax rates and collection, thereby increasing the possibility that certain taxpayers are going to struggle with surrendering their money to the state as they face the threat of arrest, imprisonment and confiscation of their property.

This adds a new dimension to what is ostensibly a voluntary sector. Asking people to give or to invest is one thing; ordering people--and in this case, most likely our descendents--to fund our projects at the point of a not so metaphysical gun, quite another. Rather than seeing an increase in government support as a moment to celebrate, perhaps we should instead try to find ways to make taxpayer funding redundant.