Social Impact Bonds: The Next Stage of Casino Capitalism

Social Impact Bonds come from the same dark place in the financial world as complex derivatives, the trading of which lead to the great financial crisis. They are a way for the great gamblers of financial markets to place bets on 'success,' in this case betting on the delivery of social services on the cheap. It is a disaster in the making for anyone who actually needs support.

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Funding social programs is not and does not need to be exhilarating, on-the-edge-of-your-seat excitement, leveraging the latest innovations in finance. Most social services are simple, people-focused and people-delivered services. All they require are well trained, adequately paid workers dedicated to their trade of support with the focus of making people’s lives better.

Social Impact Bonds, “tapping into private sector capital and innovation” and other repackaging of privatization and commercialization of public services are a distraction from real solutions to social ills. The reasons for homelessness, poverty, addiction, crime, etc. are vast and are generally understood as products of the current social economic system. Public social programs have been developed through history to try to deal with these problems and are already among the most efficient of delivered services.

We have long understood that, as a hyper-individualized society promoted by capitalists has a variety of negative impacts on the rest of us. One of the responses to these ills has been found through the redistributive process of progressive-tax funded social services that make those that reap massive profits to pay their fair share to address some of the damage the system has caused.

However, it now seems even a mild tax is just too much for the bankers and top owners of financial capital to bear. Instead of playing by the rules demanded by the public, these wealthy barons are leaning hard on our governments to cut public services further under the propaganda of the Austerity agenda. This program is trying to convince us that social programs provided through taxes are now, even though they are reaping higher profits than ever before, too expensive for the super rich to support any more.

Unfortunately for us, finance capitalists have found an additional benefit of cutting all these public services. Not only are they paying almost no taxes, they are now lobbying to be able to bet on, like they did on mortgages and debt that lead to the recent financial crisis, and profit from those providing public services to those most in need.

The new investment scheme of Social Impact Bonds brings casino capitalism to the social services sector. It does not take much of a history lesson to understand how this is going to play out for those who use these services.

It is a cruel analysis, but many in Western society have been socialized to think of those that are in need of social programs as somehow deserving the fate that they endure. But, have we really sunk so low as a society to turn social support of the most disenfranchised and unlucky into a gambling game at a casino? These are people’s lives we are talking about and we, as a society, should be morally if not socially obligated to support those most vulnerable in this Hobesian system through at least a serious, long-term and  stably-funded public support services.

While we are not talking about a lot of money, the ideologues cannot stand that there are still public services.

Have the denizens of corporate boardrooms not caused enough misery in the world through their insatiable appetite for more investment vehicles to bet with? If the bankers and private financiers really do want to help those in need of social programs they can start by paying their fair share in taxes so that the experts in social service delivery can do their jobs.

Do not believe the hype from the corporate propaganda machine and their shills in government, the greed motive cannot be “leveraged” to help those most in need. To help people, we simply need progressive tax-funded public services delivered by adequately compensated and trained social service professionals.