Free «Compassionate Capitalism» Essay Sample

In the business world, there are challenges and one of them is the market failure which means failure of an idealized system of pre-market institutions to sustain desirable activities to cover consumption and production.  Market failures normally occur when the production of goods or services by the market is suboptimal. Which such failure, there was a need to have a solution and one of those who helped are David Green, who is quoted in Kreps (1990), who came up with a multifaceted solution that he generally referred as compassionate capitalism. With this solution, he emphasizes on utilizing production capacity and surplus revenue to serve all economic strata in a way that both affordable to all members of the society. This normally bypasses middlemen, and this makes the profit to be the means to ending problems affecting people in the market.

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In every society, there are social enterprises that promote social changes in a society through innovative ventures. Its aim is to alleviate poverty through income generation, housing, education and health among others. They might not be there for making profits, but they need some funds to run its day to day operations. Sometimes they are supported by the government and other businesses through corporate social responsibility. Since they form part of the businesses, they deal with competitors who are somehow expensive. One of the social enterprises is a school that is owned by the government and its competitors are private investors who have schools operating in the same location. These private investors will face stiff competition from the government owned school since the government owned ones normally tends to be cheap as they have the sole purpose of providing such important social amenity. This affects competitors, and where such social enterprises exist well competitors are scared away. What makes the private ones competitive is the quality that is normally associated with motivation given to teachers. 

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