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Help Wanted – Social Arbitration, No Experience Required

Help Wanted – Social Arbitration, No Experience Required

  • What is your job title?
  • Do you want a new one?
  • Try this one Social Arbitration.
  • Sounds cool, right? What does it mean? What do I have to do?

Alright, let’s start with the concept of a social entrepreneur. These are people who recognize social problems and use entrepreneurial principles to organize and manage businesses to create social change. In other words, they create sustainable companies to address social problems. Perhaps the most famous social entrepreneur is Muhammad Yunus, winner of the 2006 Nobel Peace Prize.

Yunus started a micro-lending bank that provides capital to the poor in Bangladesh. Despite conventional wisdom, Yunus found these borrowers to have good credit risk. Its loans enable micro-enterprises to be started and create job opportunities and economic activity. Social entrepreneurs try to build companies to address social problems. They see opportunities where others see irreconcilable problems.

We don’t all have the ability, vision, time and capacity to build sustainable organizations to address social problems. So what to do? Just sitting on the sidelines? How about taking the moniker of Social Arbitration?

Arbitrage is a financial transaction in which investors take advantage of the price difference between two markets. If a widget sells for $2 in the US and $1 in China, arbitrage will buy the widget in China and sell it in the US. In the financial world, deals happen instantly and take advantage of inefficiencies between the two markets. If prices are lockable and there is sufficient margin for commissions and transaction fees, profits are guaranteed. Arbitrageurs make money from the transaction, and start looking for other opportunities.

Okay, then what is Social Arbitration? Just as social entrepreneurs apply business acumen to social problems, social arbitrage sees opportunities to address social problems by investing at lower market prices. Hah?

Social entrepreneurs run businesses to solve social problems. 

Social arbitrage makes individual investments to bridge the gap between two markets. Social arbitrage engages in a “give to get” philosophy of transferring value from one market to bridge the gap with another.

How about an example? Homelessness is a serious social problem in many cities. A social entrepreneur can raise capital and build housing or seek grants and other funding to provide housing for the homeless. A social arbitrator will focus on the transaction and seek to help a homeless person find a place to live or provide resources to secure a safe place for the homeless to live. Social arbitrators recognize the difference between “two markets of the human condition – those who own homes and those who do not. Social arbitrators invest time or money to rectify the differences.

I did not find the phrase social arbitration. It has been coined by others, most notably, Keith Ferrazzi and Tahl Raz in their book, “Never Eat Alone.” Their use of the phrase applies to social networks and leverages relationships to help members of one’s network. In a sense this is horizontal social arbitrage. Information is shared across professional networks. My application of the concept is about give to get, bridging two vertically aligned markets—two markets that have very different human conditions. “Giving to get” is a philosophy and practice in which a person selflessly gives to another without expecting anything in return. Social arbitrage seeks to address social problems by awarding time, money, interest, or encouragement—one transaction at a time.

A social arbitrator does not have to run a company or build a structure. 

A social arbitrator is an independent free agent who provides to bridge the gap between the two “human condition” markets. It doesn’t have to be about money. A social arbitrator may try to overcome discouragement, lack of confidence, or lack of appreciation. In such cases, kind words or selfless actions can bridge the gap. A social arbitrator doesn’t always succeed, but they always try. They “give to get”. Their reward comes, but is not known at the time of giving and the act is done out of a spirit of service, not with the expectation of a reward.

This is the best part. You can be one. There is no fee to join, no degree required and no experience required. You just started. Identify the social gap—the gap between the two markets of the human condition—then work to correct it—one transaction at a time. It won’t be perfect all the time, but if you try, you’ll most likely convince others to be social arbiters and your efforts thrive. But first you have to get started.

So the next time someone asks what you do, just reply “I’m a social arbitrator.” They will be astonished and impressed. Then, of course, you have to live it. You’ll love doing it. Remember to “give to get”.

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