The financial industry has an image problem; capitalism functions by creating both wealth and poverty. But for financiers, the problem of poverty might just be reimagined as an investment opportunity.
“I’m looking at how – the way that finance works in cities is to create a lot of inequalities [and this] is starting to be incorporated back into finance; as people who are in control of capital are looking for both new things to invest in and also looking at a lot of bad PR from this [capitalist] process”.
Dr Emily Rosenman
Dr Sophie Webber is talking to Dr Emily Rosenman from Penn State University about how social finance investment works, and whether it is actually possibly to reduce poverty while making money. Social finance claims to solve social problems emerging from impoverishment and inequality; while spinning a profit at the same time.
So what is social impact investment? It’s a way for governments to outsource and incentivise the services that are provided to address social disadvantage, such as poverty. Under this model of social service provision, the government draws up a contract with an investor to address a social issue, say, housing poverty, outlines a set of social targets, and if the social program meets these targets, then the investor gets paid.
Dr Emily Rosenman is an Assistant Professor in the Department of Geography at Penn State University. She is an urban and economic geographer who researches relationships between finance, impoverishment, and urbanization. Her current work focuses on philanthropy and other financial instruments that work to counteract urban sociospatial inequalities reinforced or created through the financialization of urban space.
Read more about Emily’s work here:
Rosenman, E. (2019). The geographies of social finance: Poverty regulation through the ‘invisible heart’ of markets. Progress in Human Geography 43(1), 141-162.
Rosenman, E. (2018). Capital and conscience: poverty management and the financialization of good intentions in the San Francisco Bay Area. Urban Geography.
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