Sustainable innovation for the base of the pyramid: Perspectives from the Solidarism of Heinrich Pesch S.J.

Over the last two decades there has been heightened interest in what is termed as the base of the pyramid (BoP) market. With about two-thirds of the world’s population constituting this market, it is a segment that cannot be ignored when thinking about sustainability. Comprising the world’s poorest people, the BoP market has traditionally been underserved in the market economy. In the course of these two decades, a growing number of multinational companies such as Unilever, Proctor& Gamble, Danone etc., have ventured into the BoP market. There has also been a phenomenal growth in the field of social entrepreneurship and social innovation. However, most of these forays have been modeled along the lines of the western capitalistic paradigm. Some hold that it is perhaps this paradigm that is responsible for the inequalities that we see today. Nevertheless, neither the individualistic perspective of liberalism and its economic system, capitalism nor the collectivistic perspective of socialism and its economic system of state ownership and control have been able to adequately address the issue of poverty or reduce inequalities. We therefore turn to the solidarism of the Jesuit economist Heinrich Pesch, S.J. (1854-1926) who offers an alternative approach to the individualism of liberalism and the collectivism of socialism. Pesch’s starting point for economics is not the theory of exchange or price formation but instead anthropology and the foundations of human nature. Pesch views the human self as an individual being in relation with others and not just part of the generic humankind or the individual only. Pesch has a teleological view of the economy. He holds that the economy has a purpose and that is to ensure the welfare of all. While the ruling principle of a capitalistic system is of accumulation and profit maximization, in the case of solidarism it is that of satisfying the needs of subsistence. Unlike the traditional western capitalistic model where the self-interest of the entrepreneur or the capital owners is paramount, in solidarism there is consideration given to the vital interests of others. This perspective of considering the interests of others and not just one’s self-interest is becoming more readily embraced in the business world. The growth of conscious capitalism, humane capitalism, conscientious capitalism, social entrepreneurship, the triple bottom line, sustainability, benefit-corporations etc. are indicative of this shift in perspective. We hold that Pesch’s solidarism offers a more sustainable and sustainable paradigm particularly in the base of the pyramid market. In this paper we first give a brief background of the BoP market. We then provide an overview of Pesch’s solidarism economic model and identify some perspectives that have special import to the case of innovating for the base of the pyramid market.