Publication State / Democracy - Economic / Social Policy Incorporate Or Mobilise?

Making sense of the social turn of finance and the rise of impact investing



Online Publication


Emma Dowling,


January 2017

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Is it love that makes the world go round, or should we all just tend to our own business? In Lewis Carroll’s famously absurd tale, Alice’s Adventures in Wonderland, the Duchess wants to suggest that these two maxims mean pretty much the same thing, even if what she is saying does not really make much sense at all. Funnily enough, her assertion is actually not that dissimilar from the kind of argument that has emerged in the wake of the global financial crisis of 2008 and in response to the charge that it was ‘greedy’ and ‘reckless’ bankers who caused the financial meltdown.

While the American film industry keeps supplying the popular imagination with reminders – most recently with films such as 99 Homes or the Big Short, each in their own way pointing to the alleged selfishness and disregard for the welfare of others engulfing the financial industry – proposals for a new kind of philanthrocapitalism have emerged as a way of seeking to address such criticisms while also creating new markets for investment. The idea of investing with a social – as opposed to merely a financial – purpose holds out that concern for others can indeed be harmonised with concern for one’s own business. This report investigates this case and provides an overview of the development of the emerging global social investment market (or simply impact investing) and outlines the actors, organisations and institutions involved. Focussing predominantly on the case of Britain, as both a leading force and a laboratory for these developments, it offers a critique of the specific policies and mechanisms involved and examines how the pursuit of financial yield is in the process of being embedded in the welfare state, local municipalities and communities.

With the rise of the social investment market new areas of social life are subsumed under financial markets through the development of new instruments and products, while the public purse is once again enlisted to provide returns on investment, just as with private finance initiatives and public–private partnerships. Where governments are looking for new ways to curb welfare spending, the creation of a social investment market is supposed to lead to a ‘win-win’ for all. Following an examination of the mechanisms of social and impact investing, in conclusion this report places these developments into the wider context of global restructuring in the wake of economic crisis, and suggests some possible responses to these developments.