Privatizing Paternalism: Social Impact and Unaccountable Authority in For-Profit Social Enterprise

• In Event: Political Sociology Section Roundtables
  In Refereed Roundtable (60 minute): Organizational Politics (Table 8)

Abstract

As welfare state retrenchment expands the space for private actors to address social problems, social enterprises have emerged as a voluntaristic extension of the delegated welfare state, constituting businesses that pursue profit while incorporating a social impact mission into their business model. Drawing on the concept of neoliberal paternalism, this paper asks: How do social enterprises conceptualize and produce social impact, and what forms of authority do they exercise over the workers and communities they claim to serve? I draw on 37 semi-structured interviews with prosocial small business owners in Illinois, conducted between August 2024 and May 2025. Findings reveal two distinct orientations to social impact, each characterized by a different form of paternalism. First, employee-focused enterprises define impact through internal employment practices, e.g. higher wages, equitable hiring practices, career development, and exercise instrumental paternalism, meaning entrepreneurs unilaterally design “good work” justified by business sustainability rather than moral claims about workers’ needs. Second, client-focused enterprises define impact through services or products provided to external populations, exercising moral and transformative paternalism by constructing target populations as possessing deficient values or behaviors the enterprise is positioned to correct. Both types maintain market primacy while rejecting pure profit maximization, and in both cases unaccountable private actors exercise authority over workers or clients without democratic governance or meaningful power-sharing. These findings extend existing accounts of neoliberal paternalism to its market endpoint as social enterprises share the logic of constructing beneficiaries as requiring correction by those who know better, but legitimate that authority through entrepreneurial design and market outcomes rather than legal coercion or democratic mandate. This ultimately raises urgent questions about accountability and democratic governance in an era of market-based social provision.

Author

• Devin Kaiser, University of Illinois at Chicago