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James M. Russell

James M. Russell

Posted: October 26, 2010 01:44 PM

Chris Rabb Talks Invisible Capital

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When asked about the overriding concept of his new book, Invisible Capital: How Unseen Forces Shapes Entrepreneurial Opportunity, Chris Rabb put it in five simple words: "why Donald Trump is evil." Though he says this with a laugh, Trump nonetheless represents to Rabb "how we view entrepreneurship, transcendent of political ideology" and why "a lot of people still believe there's a meritocracy within [entrepreneurship]." This well-researched and argued book digs deep into the unseen privileges evident in even the most equitable business models.

Rabb and I met recently to discuss this and other concepts in his new book.

James M. Russell: So what is invisible capital?
Chris Rabb: Essentially, invisible capital is human, social and cultural capital and the ways in which they manifest: human capital being your skills, credentials and experiences; social capital being your network and what they think of you; and cultural capital being how you operate in different environments and your ability to communicate in ways that inspire confidence and create opportunity. Though the top predictors for success in business are not race, class or gender that doesn't mean that the most successful elements of an entrepreneur aren't related to one's race, class, or gender. If we talk about invisible capital and how it is manifested, we will be directly dealing with race, class and gender in a meaningful way.

JMR: Why did you choose entrepreneurship as the topic?
CR: A lot of people simply don't have the literacy about American entrepreneurship that can actually help them start and run a business or even be an advocate for people who start enterprises, whether for profit or non-profit. But because we do not have that literacy, we do not have the structure nor the capacity to help people in meaningful ways. Right now, it is about rugged individualism. The people we could help, as well as the entrepreneurs, believe this notion that, regardless of background, they'll just work harder. Because you know, if you watch Oprah and you have that positive attitude, you can do anything. There's no evidence that proves this myth - because that is what it is: a myth. So the book tries to have us understand that there are different ways of defining entrepreneurship.

JMR: Is there a correlation between your solution and social entrepreneurship?
CR: Yeah, this overlaps the social entrepreneurship but a lot of advocates of social entrepreneurship do not talk about invisible capital.. Social entrepreneur's projects require massive resources and a select group of consumers to buy the stuff they sell and often times, leverage pre-existing privileges that by definition excludes others. So if you don't come to talk about the structural issues that create this invisible capital, then you're doing a good thing, but you're not really changing anything structurally.

While my solution, commonwealth enterprises, create community assets for shared prosperity, that's not necessarily the case with social entrepreneurship. Ben and Jerry's is a good example of a social enterprise. They make great ice cream in a country that is obese. They gave more money to good causes than most corporations of the same size - before they sold out to multinational that is. But at the end of the day, they had a conventional product that was not particularly healthy. Ultimately if you talk about entrepreneurship as a vital part of the economy, you talk about creating businesses that will be self-sustaining and sustain communities and local economies

JMR: What kind of existing enterprises are considered "commonwealth"?
CR: We need to innovate entrepreneurship. The co-op model is one way which commonwealth enterprises can be facilitated but there are also other forms like low profit limited liability companies, l3cs or certified B corps Benefit corporations, as they're called. These are just a few of the structural ways to look at building shared prosperity and community assets.

JMR: You mention in the book that entrepreneurship transcends political ideology. Explain.
CR: Politically, those of us who care about these issues in the terms of how progressive it is, are not invested. Mostly because many people who self identify as progressive or left feel that you have to French kiss capitalism to talk about entrepreneurship. You don't. Entrepreneurship predates capitalism and there's nothing inherent in entrepreneurship that is about profit maximization.

JMR: Any final thoughts about your book?
CR: It's like the two fish: two fish were swimming along in the ocean and one fish looks at the other and says, "I love the water." And the other fish looks at him and says, "What's water?" At some point, somebody is going to have to acknowledge the obvious thing, that we're surrounded by water and air. But if you don't ever think about breathing nor the composition of air nor how the lungs work, you can make a lot of bad decisions. And the same thing is true with regard to entrepreneurship.

Thank you to Natalie Trujillo for her help with this interview.

 

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