Why isn't Obama fixing the economy? Why isn't he creating any jobs? That's all we hear about lately, the catechism of the Tea Parties. But isn't job creation the task of capitalists? Isn't business supposed to be our mighty engine of prosperity? So why don't Tea Party types ever march on corporate headquarters and ask them to create some jobs?

There is a reason, actually, but first I want to tell you about a small but growing movement to change the way business does business. It's the struggle to create a new category of company called the "benefit corporation," also known as a "B Corp."

Did you know that corporations are legally prevented from being decent and humane? Say a corporate leader discovers that he can make a higher profit by moving a factory to China and throwing thousands of Americans out of their jobs. If he decides to make profits secondary to the well-being of his workers and neighbors, his stockholders can sue him. That's because corporate laws are written so that a company's "fiduciary responsibility" is to the stockholders. Nothing else matters. If the choice was between the survival of the corporation and the survival of America itself, the law would compel him to pick the corporation.

That seems a little screwy, doesn't it? That's what Jay Coen Gilbert concluded after his own ride through the corporate world. As a college student, Gilbert started a sports-apparel company called And One, which was worth $250 million when he sold it thirteen years later. When he and his partners sat down to plot their next move, they dreamed big.

"We wanted to figure out how we could harness the power of markets to solve social and environmental problems," Gilbert told me. "Our assumption was government and nonprofits are hugely necessary but insufficient to the task — business is three-quarters of the GDP. So we figured that trying to figure out how to remove some of the impediments that prevent business from being part of the solution would be a pretty useful thing."

To find practical solutions that would work in the real business world, they started talking to the leaders of civic-minded business like Shore Bank, Puravida Coffee, and Seventh Generation. "Out of 200 of those conversations, they told us there was infrastructure missing that would be pretty useful. One piece was around standards. The second was around legal corporate structure."

By standards, Gilbert means that there was no objective way to tell if a company was really doing good in the community, which is why the world is rife with companies that make noisy contributions to charity or clean energy without making any meaningful structural changes.

"So the first question was, what the heck should those standards be?"

Their solution was B Lab, a nonprofit that administers an ingenious rating system that includes 180 factors, from how green the corporate buildings are to how well the employees are treated and even how much transparency appears in the corporate report.

Since the summer of 2007, funded by their own money along with contributions from places like the Rockefeller Foundation and USAID, they've been signing up and certifying companies that agree, voluntarily, to respect a "triple bottom line" that includes community and worker benefits along with profits. There are now 330 companies on their roster, mostly small mom-and-pop type businesses but also some of significant size, like Dansko or Method Home Products.

This may seem like small change, yet another example of feckless do-gooderism, but this time it's the cynics who are naïve. As Gilbert points, there are already 40,000 business associated with progressive groups like the Social Venture Network and Balle, the Business Alliance for Local Living Economies. Fully 11 percent of all United States assets under financial management — that's $2.71 trillion — are controlled by the "socially responsible investing" industry that includes mutual funds like the Calvert Investments. One of the less-heralded American innovations, launched 250 years ago by Quakers who didn't want their assets invested in businesses that profited from slavery, the SRI industry is powerful evidence that — before the pernicious idea that "greed is good" took hold in American minds — Americans wanted to do good while doing well. It required a massive propaganda effort from conservative think tanks and Republican politicians to invert our values to the point where decency and even patriotism became an irrelevant distraction.

But since the economic crash of 2008, the B Corp momentum has intensified dramatically. "It's accelerating on a couple of fronts," Gilbert says. "We certified twice as many B Corps in the first half of 2010 as in the first half of '09. That's ripples in the pond — 330 ripples."

In order for those ripples to have impact, B Lab has been fighting to change America's corporate laws. On Wednesday, I'm going to write about their recent victory in Vermont — and try to answer the vexing question of why any sane business would want to hobble the clarity of the bottom line with all this namby-pamby social do-goodism (also, the secret underlying psycho-mystical reason why we ask so little of our corporations). Here's a taste from Will Patten of Vermont Businesses for Social Responsibility:

"I often say, I think it would be hard for a mean-spirited company to prosper in Vermont. We believe there's a better way to create sustained profits and wealth. So it's a huge paradigm shift, going from shareholder capitalism to stakeholder capitalism, but it isn't a revolutionary radical idea here — it's a way of doing business based on Vermont values."

Click here for Part Two >>

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