Well, my worries were misguided. Ghonim’s new book, Revolution 2.0, is a revelation. Go buy it, read it, and then share it with a friend. It is a careful and thoughtful retelling of the roots of Egypt’s uprising and the nuts and bolts of Ghonim’s online organizing, as well as an inspiring illustration of a trend. That is, how a new generation that is growing up networked keeps spawning “free radicals”—people who teach themselves how to use technology to build community, share powerful messages, and ultimately weave movements for social change. Ghonim is just the most famous of a list of net-native activists who have figured out how this Internet thing can tip the scales their way.

Ghonim is quick to admit that the Internet changed his life. In 1998, as he was starting his studies at Cairo University, he created a website called IslamWay.com, “to help Muslims network with one another.” It was a hub for sharing audio recordings of religious sermons, “featuring a complete range of moderate Islamic opinions.” Two years after its launch, the website had tens of thousands of daily users and was curated by more than 80 volunteers. Ghonim eventually donated it to an American Islamic foundation to maintain. I mention this bit of biographical history for only one reason: It shows that a full decade before Ghonim turned his challenging the Mubarak regime, he was already an online community organizer.

Ghonim’s first foray into Facebook organizing was to support Mohamed ElBaradei, a former top UN official who became an outspoken critic of Egyptian President Hosni Mubarak. Ghonim created a fan page for ElBaradei that grew to more than 150,000 members, but ElBaradei’s reliance on mainstream media and cautious approach to opposition politics also left Ghonim frustrated by the pace of change.

Then, on June 8, 2010, he writes, “while browsing on Facebook, I saw a shocking image that a friend of mine has posted on my wall.” It was an image of Khaled Said, a 28-year-old who two days earlier was pulled from an Internet cafe and beaten to death by the secret police. Ghonim found himself in tears and decided he could not “stand by passively in the face of such grave injustice.” Instead of publishing the news of Said’s killing on ElBaradei’s Facebook page, which he felt could be seen as exploiting the death for one politician’s gain, he decided to create a new Facebook page devoted to Said.

And here is where Ghonim’s tale starts to get really interesting for Net activists. He quickly discovered that there already was a page called “My Name is Khaled Mohamed Said,” but it was run by political activists whose discourse Ghonim found too confrontational to become mainstream. Instead, Ghonim called his page “We Are All Khaled Said” and started writing in colloquial Arabic, avoiding language that average Egyptians wouldn’t use. Within a single hour, the page had 3,000 followers. By its third day it had 100,000.

Ghonim details several strategies he employed to engage page members directly and convince them to become more active. One was to ask people to photograph themselves holding a paper sign saying “Kullena Khaled Said”; hundreds did so, helping personify the movement. Another was to rely on page members to promote protest events, like a series of “Silent Stand” rallies that were designed to be visual evocations, not provocations.

Ghonim’s story eventually moves from the virtual world of Facebook, to the tumultuous days of the Jan. 25 revolution, to his arrest by the secret police. The memoir culminates with the heady night in Tahrir Square when Mubarak finally stepped down from power, touching only glancingly on government efforts to trick and co-opt Ghonim and other members of Egypt’s youth movement, and saying little about the unfinished business that remains.

But even if Ghonim’s (and Egypt’s) story is unfinished, the value of online organizing seems conclusively settled by the events of last year. As he writes in an epilogue, “thanks to modern technology, participatory democracy is becoming a reality. Governments are finding it harder and harder to keep their people isolated from one another, to censor information, and to hide corruption and issue propaganda that goes unchallenged. Slowly but surely, the weapons of mass oppression are becoming extinct.”

At the same time, Ghonim is not a techno-utopian. After a recent talk at Harvard University, I asked him whether activists should trust Facebook, which shut down the Khaled Said page at a critical moment. “I don’t personally trust any tool,” he said. “I trust the people behind the tool.” And that remains the most important lesson of Revolution 2.0. Technology is just an enabler. It is what people decide to do with it that matters most.

Let’s start with the definition he provides early in the book.

ZERONAUT, n. 1. An inventor, innovator, entrepreneur, intrapreneur, investor, manager, or educator who promotes wealth creation while driving adverse environmental, social, and economic impacts toward zero. 2. Someone who finds, investigates, and develops breakthrough, footprint-shrinking solutions for the growing tensions between demography, consumerist lifestyles, and sustainability. 3. Political leader or policymaker who helps to create the regulatory frameworks and incentives needed to drive related “1-Earth” solutions to scale.

Although Darth Vader would not aspire to join this club, many other people would like to be part of the solution. In a world of 7 billion people, there are a huge number of potential producers of game-changing ideas. Some work on discovering medical breakthroughs, while others focus on creating Facebook-like Internet startup companies. How do such ambitious, talented people choose which hard problems to work on? Put simply, when would the profit motive alone—without any virtuous Zeronauts—be sufficient to give us the “green capitalism” that Elkington argues is on the horizon?

Consider the challenge of male baldness. As a 46-year-old man without much hair, I have thought about this issue. If I were the only bald man in the world, then no for-profit drug company would spend a cent researching a solution to my problem. But when millions of people have this problem, there is huge aggregate demand and a jackpot for the company that can develop a solution (i.e., Rogaine). Old-fashioned capitalist price signals direct this entrepreneurial activity. Although some efforts will fail, some firm will succeed, and millions of men will smile again. This example highlights that anticipated desperation creates a profit opportunity and then triggers efforts to find a solution.

So what’s the difference between baldness cures and innovations that enhance sustainability? Elkington argues that status quo capitalism lacks imagination and ambition. Zeronauts, he writes, “aim to get our competitive juices fl owing with a ‘Race to Zero’ framing of their initiatives—whether it applies to toxics, greenhouse gases, or poverty. They start from the assumption that there is a fundamental design fault in capitalism—both in its prevailing paradigm and in the linked mindsets, behaviors, cultures, economic formulae, business models, and technologies.”

As a University of Chicago-trained economist, I see no “design fault” in capitalism. Instead, I see un-priced externalities. Despite the fact that the US House of Representatives passed in June 2009 the American Clean Energy and Security Act that would have introduced incentives and regulations for de-carbonizing the economy, the Senate chose not to vote on this legislation and President Obama did not resuscitate it. In the absence of federal legislation, auto manufacturers and power plants have little incentive to economize on greenhouse gas production. Higher fossil fuel prices would nudge them to do so, but the recent discovery of vast amounts of accessible natural gas in the United States and Canada suggests that “peak oil” may be far away. We would not need to celebrate the rise of the Zeronauts if the United States had introduced carbon pricing.

Elkington is 100 percent correct to focus on experimentation and to celebrate the power of game-changing ideas. The Zeronauts will succeed in achieving large-scale sustainability improvements in cases where there is a market price signaling scarcity. For example, if consumers face higher prices for resources such as water and electricity, this would stimulate more entrepreneurial activity focused on economizing on these resources. But I am pessimistic that the Zeronauts will succeed in de-carbonizing our economy. In the absence of carbon pricing and in a growing world economy, global greenhouse gas emissions will rise. Can the Zeronauts figure out how to convince China not to burn its coal endowment? Anticipating that the answer is “no,” I published my 2010 book, Climatopolis, in which I optimistically argue that profit-seeking entrepreneurs will figure out many new strategies to help us adapt to climate change.

Elkington’s book is a valuable contribution at the intersection of business and sustainability. He is right to emphasize that human ingenuity, passion, and experimentation will play a crucial role in helping us to avoid the nightmare scenarios predicted for the 21st century and beyond.

The term “reverse innovation” was coined by Dartmouth College business professor Vijay Govindarajan and GE CEO Jeffrey Immelt to describe innovations that go in the opposite direction of what traditionally has been observed. Until recently, innovation seemed to be reserved for industrialized nations. Reverse Innovation, co-authored by Govindarajan and Dartmouth colleague Chris Trimble, digs deep into the work of corporations at the frontier of emerging markets and offers guidance and understanding of this rising phenomenon.

Govindarajan and Trimble could not have timed their book better. Tales of innovation from emerging markets are now reported daily—from Kenya’s mobile banking miracle M-Pesa to Tata Motors’ ultra low-cost Nano. We have transitioned from a time when emerging markets were ignored completely by multinational corporations, to a period when firms turned their attention toward the “bottom billion” as a group of potential consumers, to a new era in which innovation flows from these regions. The authors tell detailed stories that leave you convinced of a rising trend in innovation from this previously ignored market.

At the book’s core are the intricacies and struggles faced by Western firms that were the first to experiment in and successfully enter emerging markets. One example shows how GE realized that the electrocardiograms it was manufacturing were too expensive, were not portable enough, didn’t have batteries, and were too complicated to maintain. After turning the design process upside down, GE eventually produced the MAC400, whose product line has now been deployed in the rest of GE Healthcare markets. (This is a story Govindarajan knows intimately, as he spearheaded GE’s energy and health care innovation efforts from 2008 to 2010.)

The section on Deere & Company is just as captivating, detailing how an organization can learn that its high-quality products may be unsuited for new global markets. Deere’s high-end tractors have, in the authors’ words, “tires taller than an NBA center, loads of high-tech gadgetry, and fully enclosed air-conditioned cabins big enough to have friends in for lunch.” These specs were at odds with the tractors Indian farmers sought: ones that could clock 10 times as many hours and be used to “carry friends and family to the movies, markets, and other social events.” Deere’s team pressed the reset button and successfully applied smart design practices to produce a new utility tractor called Kish for the Indian market—and did so in record time.

Although some of the stories in Reverse Innovation may seem familiar, most were not widely reported and offer far more detail than the usual newspaper article. The book also provides a useful addendum in a “Reverse Innovation Playbook,” which spells out nine rules that enable successful innovation in emerging markets. The playbook is a first of its kind and the closest thing available to a 10 commandments for reverse innovation. Two examples of rules are “To capture growth in emerging markets, you must innovate, not simply export” and “Move people, power, and money to where the growth is—the developing world.” For those hungry for detailed steps to becoming practitioners, the authors also provide a “Reverse Innovation Toolkit.” It is an ideal diagnostic tool for those brave enough to seek out reverse innovation in their own organizations.

Although the book provides compelling evidence of innovation in emerging markets, it leaves one wondering about the role of local firms. The examples in Reverse Innovation are all large Western firms. Is the conclusion that these firms are learning how to interpret and act on the needs of poor consumers? Will innovation be truly reversed only when firms in India, China, or Mexico take the lead in innovation, as has happened with Tata or G-Cash in the Philippines? Maybe it is just a matter of time.

That said, Reverse Innovation is a must read for anyone seeking to participate in emerging markets, be they CEOs of multinationals, leaders of NGOs, or government policy makers.

Abundance is techno-utopianism at its worst. The outlook of the book can be summed up by a discussion of the advent of 3-D printers—machines that can form three-dimensional objects much as an inkjet printer forms words. Soon, the authors suggest, “everyone” will have one of these amazing machines. They approvingly quote an innovator of 3-D printing technology: “And once that happens it will change everything. … Instead of placing an order and waiting 24 hours for your FedEx package, just hit print and get it in minutes.” Although you may be wondering how solving a 1 percent problem will change the world of the billions of people without easy access to electricity, clearly the authors aren’t.

Why? Because no matter what the symptom, the authors see a technological Band-Aid. They describe a future in which something like Google is directly connected to our brains so that when we think of something we don’t know, the answers are instantly supplied to us. Clearly this technology innovation is not working yet, as the authors didn’t automagically learn that they have devastatingly mistaken symptoms for problems. In the few places where they begin to acknowledge that the problems that keep much of the world disenfranchised, impoverished, and unhealthy are not technological in origin, they quickly explain that we already “know” how to deal with those issues. For instance, we “know” that “community support is the most critical component for any water solution” and “maintenance workers need to be incentivized.” Now that we know these facts, a technology breakthrough is all that’s needed to fix global water problems. I wonder what technology will fix global justice problems now that we know all people are created equal.

Abundance is meant to be an optimistic antidote to the world’s doomsayers, but it left me deeply depressed. If bright and innovative minds are still completely captured by technological fixes to social problems, we have much further to go in solving those problems than I believed.

After throwing Abundance across the room, I found Philip Auerswald’s The Coming Prosperity a breath of fresh air. Auerswald’s focus is on human beings and the way they solve problems. Technology matters only insofar as it enables the people solving their own problems to outpace the people creating them.

Auerswald’s term for people who solve problems is a familiar and dear one to readers of this magazine: entrepreneur. His main concern is that entrepreneurs, a term he uses quite expansively, are not receiving enough attention from policymakers, economists, political scientists, and philanthropists. These groups all come in for criticism for their habits of patting entrepreneurs on the head before getting back to the serious business of picking winners and driving policy from the top down.

Ultimately though, he argues, this habit is irrelevant. The world’s entrepreneurs are now numerous enough, free enough, and, yes, have access to sufficient technology, to innovate and succeed in spite of the powers that be. Auerswald writes not to convince the powerful and influential at the top of the pyramid to change as much as to inform them that they are no longer relevant—and that’s good news for everyone.

This is a message that needs to be delivered. Unfortunately, The Coming Prosperity doesn’t do the best job of delivering it. The book wavers between popular and academic modes, between personal anecdote and global sweep, between explaining the deficiencies of current elites and telling them they don’t matter. As a result, chapters tend to ramble and it’s easy to lose the plot. The best way to read the book is probably to read the last page of each chapter first. Then you’ll be in a better position to appreciate the many interesting anecdotes and data.

Despite its weaknesses in execution, Auerswald’s fundamentally humble message is both cheering and worth hearing. You and I don’t have the answers to the world’s problems, and we don’t need to. There are now enough smart people in every corner of the world with access to the ideas, tools, and resources necessary to ensure the coming of a new and truly global prosperity no matter what the 1 percent or anyone else does. I’m a skeptic by nature and by no means convinced by Auerswald, but I’m more hopeful than I was before picking up the book. Maybe the failures of Abundance’s authors to appreciate what it truly takes to solve problems simply don’t matter after all.

Abundance is techno-utopianism at its worst. The outlook of the book can be summed up by a discussion of the advent of 3-D printers—machines that can form three-dimensional objects much as an inkjet printer forms words. Soon, the authors suggest, “everyone” will have one of these amazing machines. They approvingly quote an innovator of 3-D printing technology: “And once that happens it will change everything. … Instead of placing an order and waiting 24 hours for your FedEx package, just hit print and get it in minutes.” Although you may be wondering how solving a 1 percent problem will change the world of the billions of people without easy access to electricity, clearly the authors aren’t.

Why? Because no matter what the symptom, the authors see a technological Band-Aid. They describe a future in which something like Google is directly connected to our brains so that when we think of something we don’t know, the answers are instantly supplied to us. Clearly this technology innovation is not working yet, as the authors didn’t automagically learn that they have devastatingly mistaken symptoms for problems. In the few places where they begin to acknowledge that the problems that keep much of the world disenfranchised, impoverished, and unhealthy are not technological in origin, they quickly explain that we already “know” how to deal with those issues. For instance, we “know” that “community support is the most critical component for any water solution” and “maintenance workers need to be incentivized.” Now that we know these facts, a technology breakthrough is all that’s needed to fix global water problems. I wonder what technology will fi x global justice problems now that we know all people are created equal.

Abundance is meant to be an optimistic antidote to the world’s doomsayers, but it left me deeply depressed. If bright and innovative minds are still completely captured by technological fixes to social problems, we have much further to go in solving those problems than I believed.

After throwing Abundance across the room, I found Philip Auerswald’s The Coming Prosperity a breath of fresh air. Auerswald’s focus is on human beings and the way they solve problems. Technology matters only insofar as it enables the people solving their own problems to outpace the people creating them.

Auerswald’s term for people who solve problems is a familiar and dear one to readers of this magazine: entrepreneur. His main concern is that entrepreneurs, a term he uses quite expansively, are not receiving enough attention from policymakers, economists, political scientists, and philanthropists. These groups all come in for criticism for their habits of patting entrepreneurs on the head before getting back to the serious business of picking winners and driving policy from the top down.

Ultimately though, he argues, this habit is irrelevant. The world’s entrepreneurs are now numerous enough, free enough, and, yes, have access to sufficient technology, to innovate and succeed in spite of the powers that be. Auerswald writes not to convince the powerful and influential at the top of the pyramid to change as much as to inform them that they are no longer relevant—and that’s good news for everyone.

This is a message that needs to be delivered. Unfortunately, The Coming Prosperity doesn’t do the best job of delivering it. The book wavers between popular and academic modes, between personal anecdote and global sweep, between explaining the deficiencies of current elites and telling them they don’t matter. As a result, chapters tend to ramble and it’s easy to lose the plot. The best way to read the book is probably to read the last page of each chapter first. Then you’ll be in a better position to appreciate the many interesting anecdotes and data.

Despite its weaknesses in execution, Auerswald’s fundamentally humble message is both cheering and worth hearing. You and I don’t have the answers to the world’s problems, and we don’t need to. There are now enough smart people in every corner of the world with access to the ideas, tools, and resources necessary to ensure the coming of a new and truly global prosperity no matter what the 1 percent or anyone else does. I’m a skeptic by nature and by no means convinced by Auerswald, but I’m more hopeful than I was before picking up the book. Maybe the failures of Abundance’s authors to appreciate what it truly takes to solve problems simply don’t matter after all.

Sandel’s mode of operation is straightforward: he tackles large and important questions in clear, engaging prose, examining a feature of contemporary life in which ethical boundaries have been transgressed or where an important ethical concern has been leached from debate. In previous work, Sandel has expressed anxiety about a diminishing capacity to talk about moral issues in American politics and civil society, and has sounded an alarm about the quest for perfection in biomedical research and genetic engineering.

Sandel’s new book takes up the large and undeniably important question: What, if any, are the moral limits of the marketplace? What shouldn’t money buy? True to form, he worries that things have gone too far, that we have “drifted from having a market economy to being a market society.” His aim is to show the moral cost of what happens when everything is for sale, when any good can be commodified.

Far from an academic treatise, the book consists mainly of short case studies of surprising new commodities and labor forms. The first chapter is about the line jumping market— people who are paid to stand in line at airports, Congressional hearings, or amusement parks, as well as those who work as ticket scalpers and so-called concierge doctors. The second chapter is about encouraging or limiting various behaviors through market incentives, such as tradable pollution permits, cash for good grades, payments for human organs, or a marketplace in accepting refugees. The third chapter examines how markets can crowd out desirable moral norms, such as hiring friends, purchasing wedding toasts, auctioning college admissions, and buying rather than donating blood. The fourth chapter takes up markets in life and death, covering Internet death pools, a terrorism futures market, and death bonds. The final chapter questions the proliferation of naming rights, such as the Falik Men’s Room at Harvard, endowed by and named after alumnus William Falik. Truth is indeed stranger than fiction!

Examples abound in Sandel’s book, which makes for a good, even rollicking read. And as the examples accumulate, one begins to appreciate just how deeply markets and market behavior have rooted themselves in virtually all aspects of our lives. The claim that we are a market society, as opposed to having a market economy, seems not far-fetched.

Yet Sandel is not arguing against markets per se. Rather, he proposes that markets should have limits. He identifies two moral concerns. First, when markets exist everywhere, he argues, we need to worry more about inequality. If money can buy more and more, including political influence and better health care and education, then having money matters more and more. Second, making certain goods into commodities can corrupt the very value of these goods; market norms can crowd out valuable non-market behavior.

Sandel’s first point is really an argument about fairness, and it is a familiar concern. If money is the necessary means to obtaining certain goods, or a certain quality of goods, then the poor will be systematically disadvantaged in the marketplace. Should obtaining a life-saving organ transplant depend on the ability to pay a market price for the organ? Should admission to a selective university ride on the wealth of a student’s parents? When goods such as these are commodified, we rightly worry about unfairness.

The second argument about market norms displacing valuable non-market behavior, however, is Sandel’s main preoccupation. For Sandel, markets not only allocate goods, they “express and promote certain attitudes toward the goods being exchanged.” Paying cash for good grades may corrode an intrinsic desire to learn. Auctioning off college admissions can corrupt the integrity of higher education.

A famous example of this general phenomenon, twice discussed by Sandel, is a study of childcare providers in Israel. The day care centers were having a problem with parents arriving past closing time to pick up their children. Several providers opted to introduce a fine for late pick-ups. The result was an increase in late pick-ups, where parents treated the fine as a fee they were willing to pay rather than construing on-time pick-up as a norm they were expected to uphold. For Sandel, this demonstrates how attaching a price to certain moral or civic goods can diminish or corrupt those very goods.

Like the worry about unfairness, corruption is a reasonable concern. But Sandel never delivers an argument about exactly how to determine whether or when market norms will displace non-market behavior. Or more importantly—since markets can promote efficiency and liberty and agency—Sandel offers no resource to referee whether the benefit from commodifying certain goods is worth the cost to non-market norms.

Sandel’s talent is for identifying and asking important questions about the place of markets. But the book fails—indeed, does not really try—to answer these questions. Even in the many examples Sandel describes, the reader is left unsure whether he believes that some moral limit has actually been transgressed. So while Sandel is expert at assembling worrisome examples and challenging readers to puzzle through their own intuitions and views about markets, he could have accomplished more.

First, Sandel could have conveyed a more sophisticated view about markets. Not all markets and marketplace exchanges are alike, or have the potential to corrupt valuable non-market norms. Take for instance the simple distinction, familiar to any reader of SSIR, between goods offered for sale by for-profit versus nonprofit organizations. Commodification looks different if the marketplace is populated by nonprofit organizations, but this distinction is lost in Sandel’s undifferentiated treatment of markets.

Second, Sandel could have offered a more sophisticated framework for thinking about the limits of markets, a framework capable of delivering more guidance about where the limits are. It would not have been difficult to do so; a growing literature on this topic is inexcusably ignored by Sandel. Books by philosophers Elizabeth Anderson and Debra Satz or by economists Kenneth Arrow and Amartya Sen, among others, all provide a more sophisticated account of the limits of markets.

Sandel, however, is operating in public intellectual and provocateur mode: to raise important questions for public debate. What Money Can’t Buy is neither original nor deep, but if it stimulates a wider public discussion about the emergence of a market society, it will have succeeded on its own terms.

Schmitz should know. As CEO of Public Allies in Milwaukee, he and his organization have worked tirelessly to strengthen communities, nonprofits, and civic participation by training young leaders across the country. Since 1992, Public Allies has supported more than 2,800 up-and-coming leaders in 18 communities.

Schmitz writes of leading as something one does to benefit communities rather than just one organization or group of individuals, defining leadership through three threads. First, leadership is an action many can take, not a position only a few can hold. Second, leadership is the means through which one can take personal and social responsibility to work for common goals. And last, leadership is the practice of values that engages diverse community members and groups in working together effectively.

Let’s take that first point. Schmitz lays out a passionate and compelling argument that leadership is not reserved for the minority, but is a responsibility that we all must embrace. This is a principle I have seen demonstrated many times in my work in communities across North America. Schmitz uses a combination of personal stories and Public Allies’ time-tested techniques to illustrate this principle. For example, Public Allies walks each leader through 10 principles of personal responsibility and the consequences of not accepting that responsibility. This can be a sobering exercise for a young leader, and one that prepares him for the challenges that lie ahead.

Although Schmitz provides a blueprint for individual leadership, the deeper value of his book is that it reframes leadership as a collaborative endeavor. Schmitz debunks the notion that one must be a founder or have a cultish following to create meaningful change. True social transformation has never been realized by one person’s vision, but by a group of people coming together for a common cause.

For Schmitz, the process of leading and building a community requires three elements: the leadership and engagement of residents; the services and support that neighbors provide to neighbors; and the coordination and collaboration toward common goals among citizens, associations, nonprofits, schools, houses of worship, and businesses in a neighborhood. The most successful community projects do not come from the top down, but from the ground up. People from local neighborhoods must work shoulder to shoulder to reach their goal—and without that deeper level of engagement, argues Schmitz, goals will not be reached.

Schmitz also advises how one should lead—through recognizing and mobilizing all of a community’s assets, connecting across cultures, facilitating collaborative action, continuously learning and improving, and being accountable to ourselves and others. I find Schmitz’s first point powerful. Communities often do not identify their assets. When you help community members recognize collective resources, you give them the confidence they need to take action for the greater good. After the first win, they are empowered to set their sights on bigger, longer-term goals.

Schmitz believes that to solve our most pressing societal problems we need to look for new leaders in our communities—whether they are students, parents, or local business owners—and enable these leaders to excel in collaboration and team building.

Schmitz is a master at taking what he has gleaned from his two decades at Public Allies and turning that knowledge into practical advice for all leaders, whether you are the head of a nonprofit organization, a college student looking to get involved in a campus cause, or a neighborhood activist. Everybody Leads is chock full of inspirational examples of people who have taken this path and with practical examples of how to get farther down the path. It is well worth reading if your aim is to be an effective leader or to develop new leaders for the societal issues and challenges of tomorrow. Timeless and evergreen, Everybody Leads provides crucial insights to navigating a world of constant change.

Left to consider this mystery, two economists, predictably, arrive at opposite explanations. Tyler Cowen’s The Great Stagnation argues that we are living through the consequences of a dramatic decrease in the rate of innovation. To illustrate his point, Cowen compares his life to that of his grandmother. Between the 1910s and 1950s, she went from not having indoor plumbing or electricity to owning a stove, refrigerator, and other appliances, whereas the only machine in Cowen’s kitchen is a microwave. Nice innovation to be sure, but hardly the radical change his grandmother experienced. The consequence of slowing innovation, argues Cowen, is fewer new industries and less creative destruction. Hence, no new jobs.

Erik Brynjolfsson and Andrew McAfee analyze the same bleak jobs reports and conclude that the root cause is not a decline in innovation, but an acceleration of innovation. Technological advancement has moved so fast that many people are losing the “race against the machine.” Computers are rapidly performing tasks that used to require humans, but workers are not adding new skills fast enough to find new jobs. The authors call the innovation that is occurring “skill-biased technical change,” in that it hurts workers with skills that can be automated and dramatically increases the productivity of the few high-skilled workers who can access and manipulate more information more quickly. Hence, no new jobs.

These opposite beliefs can be reconciled more easily than is immediately apparent. Brynjolfsson and McAfee focus on the technology sector, where it appears that innovation is happening more rapidly than ever. Cowen looks at the entire economy and sees stagnation, or regression, in large sectors, such as health care, education, and government—indeed any sector that deals more with managing people than with managing things, the former being more complex and less conducive to innovation and job creation. As general innovation opportunities have slowed, businesses turn to the next activity with the highest return: cutting costs by using technology advances to automate processes and eliminating the need to hire more workers to produce more output.

Both arguments are compelling, yet the frightening thing is that both books predict the jobs crisis will not end soon. Cowen, in keeping with his libertarian views, writes that relatively little can be done until conditions naturally evolve for another era of rapid innovation. Brynjolfsson and McAfee, buoyed by their technological view of the world, are more activist. But their prescriptions fail to induce much confidence. They note, for instance, that current conditions demand “hyperspecialization” from workers. But our educational systems are built to create large numbers of generalists, few specialists, and very few hyperspecialists. Brynjolfsson and McAfee also invoke entrepreneurship and the greater ease today’s entrepreneurs enjoy starting new businesses. This enables “parallel experimentation by millions of entrepreneurs,” which they believe is where new jobs will come from. But again, there are no successful formal mechanisms in place to train entrepreneurs—and millions of those entrepreneurs will fail and perhaps hyperspecialize so far that they will have trouble starting over. It would take a much longer book to explore these prescriptions, but the feeble ones presented here—to fix education, make more entrepreneurs, and invest in infrastructure—rehash ideas that have been around for decades. They are ideas whose execution, to use Cowen’s phrase, has stagnated.

Still, all the authors fervently believe that things eventually will get better. The open question is how bad things will get in the meantime. As President Franklin D. Roosevelt noted, and Brynjolfsson and McAfee quote, “demoralization caused by vast unemployment is … the greatest menace to our society.”

The uninspiring nature of Brynjolfsson and McAfee’s prescriptions should serve as the latest wake-up call to the social sector. For years, we’ve been talking about our inability to provide an affordable, quality education to a larger slice of the population. For years, we’ve been talking about the glories of entrepreneurship, social or otherwise, without any measurable progress on improving the success of—or providing the necessary skills and capital for—aspiring entrepreneurs outside of the elite. The cost of these failures is no longer a future problem. It is a present problem. If we are to escape the great stagnation and win the race against the machine, urgent action is needed. To fight the greatest menace to society, we’ll need a lot more experiments in education, regulation, retraining, and social programs for those left behind in the race against the machine and job-shedding innovations.

But that alien would be wrong, suggests a new book by spouses Claire Gaudiani and David Graham Burnett. In Daughters of the Declaration: How Women Social Entrepreneurs Built the American Dream, these authors argue that American women actually invented social entrepreneurship. The women’s inspiration, moreover, was not just softheartedness or maternal instinct; it was the Declaration of Independence and its rigorous philosophical underpinnings. And their results were nothing less than a nation that balances self-interest with collective well-being, ambition with virtue, and independence with interdependence.

In their attempt to prove both that 1) social entrepreneurship is the realization of America’s founding principles, and 2) women have been the primary stewards of that realization, the authors succeed in bringing to light many inspiring historical figures whom time threatens to obscure—a valuable contribution. Yet they fall short of capturing the motivations of these remarkable women.

To make the case that women were social entrepreneurs when social entrepreneurship wasn’t cool, Gaudiani and Burnett profile dozens of female abolitionists, suffragists, educators, researchers, philanthropists, and other reformers across centuries, ethnicities, classes, and avocations. The arrows in their quiver range from the unjustly obscure to the almost famous.

For instance, the authors relate how in the 18th century Katy Ferguson, a freed slave, established one of the nation’s first systems for educating poor black and white children. From the 19th century, they profile Elizabeth Seton, a well-heeled white woman, who established the first American religious order, the Sisters of Charity, and Mary Elizabeth Lange, a black refugee from the Caribbean, who created the first black religious order in the world, the Oblate Sisters of Providence. And from the 20th century, they retell how Florence Kelley, the daughter of an abolitionist, helped create the National Consumers League and how Mary McLeod Bethune, the daughter of slaves, founded Bethune-Cookman College and advised President Franklin D. Roosevelt as part of his Black Cabinet.

Gaudiani and Burnett pepper these profiles with tasty historical tidbits and clarifying context, which make for a fast and enjoyable read. They share the lament of Mary Livermore, suffragist and editor of the Woman’s Journal: “Is it not pitiful that we rear young girls as if they were human lobsters which, when stranded on the rocks or the shore, must wait for some friendly wave to float them again?” They quote Bethune: “What then does the Negro want? He wants opportunity to make real what the Declaration of Independence and the Constitution and Bill of Rights say.”

Unlike Bethune, however, most of Gaudiani and Burnett’s protagonists do not explicitly cite founding documents as their modus operandi, nor do they speak the business lingo of social entrepreneurship. This does not prevent the authors, however, from conjecturing that they did. “In her deep and careful conservatism,” they write of philanthropist Caroline Phelps Stokes, “she believed that the argument of the Declaration of Independence would prove correct when opportunities for all were equalized.” Perhaps. But the authors offer no quotes or sources to support this inference. And although the authors acknowledge, “Perhaps neither Katy Ferguson nor Grace Dodge [an education reformer and founding funder of Teachers College at Columbia University] would approve of our defining their work as human capital development,” they nevertheless conclude, “No matter.”

Yet it does matter. These women spent their lives resisting other people’s attempts to put words in their mouths and thoughts in their heads. In addition, this application of business metaphors obscures the possibility that these women intervened precisely because they had not adopted the prevailing business wisdom of their day. As mothers, teachers, nurses, and women of the cloth, they sat outside dominant economic and political institutions. From this outsiders’ perch, they could see the damage that laissez-faire capitalism, slavery, disenfranchisement, unregulated labor practices, and other early blights wrought on their communities. And it is from this position that they acted.

By cloaking these women’s pro-social actions in business sector trappings, the authors mask that many of these women were acting not only out of enlightened self-interest or other tenets of the Declaration of Independence, but also out of empathy, compassion, and interdependence.

In the meantime, perhaps Gaudiani and Burnett’s treatment of these female revolutionaries as “social entrepreneurs” will attract a new and broader fan base. If this was their intention, they learned their heroines’ lessons well: to speak your truth to mainstream audiences, you have to use their language. As is always the case in translation, however, original intentions often get lost.

In earlier books, such as Evolution for Everyone and Darwin’s Cathedral, Wilson brilliantly explained evolution to the general public. He managed, as the best scientists rarely do, to demystify the science without dumbing it down. The Neighborhood Project, which likewise celebrates the richness and reach of science, charts Wilson’s efforts to “[use] evolution to improve my city, one block at a time.” But this approach is suspect in two ways.

First, most of the book isn’t about a neighborhood project but rather about Wilson’s larger intellectual agenda: to apply evolutionary science to a host of complex social problems—from Binghamton’s crime, blight, and other urban problems to war and environmental sustainability and even religion and conceptions of the afterlife.

Engaging chapters about how evolutionary processes are reflected in specific biological phenomena—for example, how insects called water striders hunt and reproduce—are interspersed with installments about Wilson’s “discovery” of his hometown. He heads off the State University of New York at Binghamton campus to launch a survey of schoolchildren, gathering their perceptions of their neighborhoods and their interactions with each other and adults, and then exploring correlations between these perceptions and patterns of crime and blight. These local scenes are interspersed with chapters on questions about how to reconcile religious and scientific understandings of reality or why the jolt of the global financial crisis led to soul searching in the world of elite economics.

Think Jared Diamond meets Hunter S. Thompson and Pierre Teilhard de Chardin (who makes an extended cameo). Even for the intellectually adventurous reader, it is a scenic route, with mind-bending digressions that make the main thread hard to follow.

The second problem is with the book’s premise—that we should use evolutionary theory to illuminate and tackle urban problems. This is questionable and far more risky than Wilson seems aware. “If the tools of science are required to see into a city,” he writes, “then the tools of evolutionary theory are required to reflect on it.” But this does not follow. A host of cooperation and conflict patterns and other dynamics in which community organizers, mayors, philanthropists, and others routinely engage may or may not reflect evolutionary processes. It is a complicated question, over which Wilson’s own and related fields are divided. Wilson never makes a convincing case for his premise, and he shows little understanding, for example, of real estate markets and how they shape residential settlement or public and private disinvestment. When he comes across such complexity, Wilson tends to reduce it to “the tangled web” of evolution. Case closed.

As a result, Wilson’s analysis risks becoming a diversion from other ways of understanding what can produce and sustain collective action to improve a block, neighborhood, or entire city—and what strategies should follow. Had Wilson’s analysis included community development and the forms it takes over time, especially in older industrial cities similar to Binghamton, he might have asked whether evolution can teach us something about defining smarter goals. If you’re involved in revitalizing Detroit, for example, it matters whether you’re aiming to return the city to an industrial powerhouse of 2 million people or creatively pursuing a different future, with a smaller and greener human footprint, as the current mayor and many community leaders have decided to do.

In sum, and in spite of how Wilson advertises his book, The Neighborhood Project is not a measured inquiry into what evolutionary theory adds to the many fields that shed light on urban problems or problem solving. Rather, it reimagines our behavior and its consequences as though human evolution were the grand and heretofore missing link, a “panacea for the world’s ills,” as ecologist Jerry Coyne wrote in his New York Times review.

The few parts of the book that examine what social science, as opposed to evolutionary biology, has taught us about effective cooperation—notably, Wilson’s laudatory discussion of Nobel laureate Elinor Ostrom’s findings—is limited to public goods, such as clean air. Many local problems simply aren’t centered on public goods, important as they are. Many problems result instead from intense and highly unequal competition for private goods, such as land or decent wages, and sometimes from market forces and political choices about those goods that are set in motion far away from locals. It’s tempting to boil down local problem solving into a set of small-scale cooperation challenges, but it isn’t wise, certainly not as the sole play in the playbook. And it’s less wise still to project the habits of wasps onto human cooperation before one has made a stronger case.

Left to consider this mystery, two economists, predictably, arrive at opposite explanations. Tyler Cowen’s The Great Stagnation argues that we are living through the consequences of a dramatic decrease in the rate of innovation. To illustrate his point, Cowen compares his life to that of his grandmother. Between the 1910s and 1950s, she went from not having indoor plumbing or electricity to owning a stove, refrigerator, and other appliances, whereas the only machine in Cowen’s kitchen is a microwave. Nice innovation to be sure, but hardly the radical change his grandmother experienced. The consequence of slowing innovation, argues Cowen, is fewer new industries and less creative destruction. Hence, no new jobs.

Erik Brynjolfsson and Andrew McAfee analyze the same bleak jobs reports and conclude that the root cause is not a decline in innovation, but an acceleration of innovation. Technological advancement has moved so fast that many people are losing the “race against the machine.” Computers are rapidly performing tasks that used to require humans, but workers are not adding new skills fast enough to find new jobs. The authors call the innovation that is occurring “skill-biased technical change,” in that it hurts workers with skills that can be automated and dramatically increases the productivity of the few high-skilled workers who can access and manipulate more information more quickly. Hence, no new jobs.

These opposite beliefs can be reconciled more easily than is immediately apparent. Brynjolfsson and McAfee focus on the technology sector, where it appears that innovation is happening more rapidly than ever. Cowen looks at the entire economy and sees stagnation, or regression, in large sectors, such as health care, education, and government—indeed any sector that deals more with managing people than with managing things, the former being more complex and less conducive to innovation and job creation. As general innovation opportunities have slowed, businesses turn to the next activity with the highest return: cutting costs by using technology advances to automate processes and eliminating the need to hire more workers to produce more output.

Both arguments are compelling, yet the frightening thing is that both books predict the jobs crisis will not end soon. Cowen, in keeping with his libertarian views, writes that relatively little can be done until conditions naturally evolve for another era of rapid innovation. Brynjolfsson and McAfee, buoyed by their technological view of the world, are more activist. But their prescriptions fail to induce much confidence. They note, for instance, that current conditions demand “hyperspecialization” from workers. But our educational systems are built to create large numbers of generalists, few specialists, and very few hyperspecialists. Brynjolfsson and McAfee also invoke entrepreneurship and the greater ease today’s entrepreneurs enjoy starting new businesses. This enables “parallel experimentation by millions of entrepreneurs,” which they believe is where new jobs will come from. But again, there are no successful formal mechanisms in place to train entrepreneurs—and millions of those entrepreneurs will fail and perhaps hyperspecialize so far that they will have trouble starting over. It would take a much longer book to explore these prescriptions, but the feeble ones presented here—to fix education, make more entrepreneurs, and invest in infrastructure—rehash ideas that have been around for decades. They are ideas whose execution, to use Cowen’s phrase, has stagnated.

Still, all the authors fervently believe that things eventually will get better. The open question is how bad things will get in the meantime. As President Franklin D. Roosevelt noted, and Brynjolfsson and McAfee quote, “demoralization caused by vast unemployment is … the greatest menace to our society.”

The uninspiring nature of Brynjolfsson and McAfee’s prescriptions should serve as the latest wake-up call to the social sector. For years, we’ve been talking about our inability to provide an affordable, quality education to a larger slice of the population. For years, we’ve been talking about the glories of entrepreneurship, social or otherwise, without any measurable progress on improving the success of—or providing the necessary skills and capital for—aspiring entrepreneurs outside of the elite. The cost of these failures is no longer a future problem. It is a present problem. If we are to escape the great stagnation and win the race against the machine, urgent action is needed. To fight the greatest menace to society, we’ll need a lot more experiments in education, regulation, retraining, and social programs for those left behind in the race against the machine and job-shedding innovations.

Yet many contemporary observers have commented on the blurring of these sectors. Nonprofits earn revenue, companies produce environmentally beneficial products, and the government invests in social innovation. We have commercial vendors of charitable giving products, nonprofit producers of some of the world’s most widely used software products, and networks of mobile phone crisis responders who don’t fit into any circle. The creation of new corporate forms for good and the impact investing movement have become standard parts of philanthropy conferences. And the Supreme Court’s 2010 decision in Citizens United v. Federal Election Commission has unleashed a new era of nonprofit activity in campaign politics.

Although all of these examples are contemporary, none of them is fully new. Olivier Zunz’s book, Philanthropy in America: A History, tells a 100-year story of how we got to where we are today, focusing on the political choices we’ve made to shape nonprofit organizations and philanthropic foundations. Zunz braids together the tales of small and large donors. This is not an institutional history of major foundations, though many appear in its pages. Nor is it the tale of workplace giving, federated campaigns, or direct fundraising appeals, although those also make appearances. What Zunz does is to set the story of the Easter Seals campaign alongside the founding of the Carnegie Corporation of New York and encircle them with the public policy decisions that make both possible.

In the years between 1913 and 1920 we fought World War I, amended the US Constitution to allow for a federal income tax, and incorporated several major foundations. The connection among these events is not the one you might expect. The foundations preceded the taxes. The income tax financed some of the costs of the war, but a large part was paid for by the voluntary purchase of bonds. And the sale of war bonds by community groups and the fervor with which neighbors engaged around this cause laid the groundwork for direct mail, workplace giving campaigns, viral fundraising, and many of the other mainstays of today’s charitable world.

Zunz begins his history in the late 19th century, with the ofttold story of Julius Rosenwald financing the construction of schools for blacks living in the South. He is careful to note that Rosenwald enabled the education of hundreds of thousands of blacks, but not by challenging segregationist state governments to change their ways. This relationship between private philanthropy and public policy is the story that really interests Zunz. Through each of his chapters, from the turn of one century to the next and with close looks at community philanthropy, civil rights, the war on poverty, and international giving, Zunz returns to the political questions that surround the use of private resources for public good.

Zunz tells of presidents from Hoover to Kennedy seeking to control, influence, or partner with large foundations to provide social services, health care, and education. Not until the late 1950s do we hear stories of foundations pushing back against government policy. Once again, the issue is the education of blacks in the South.

Zunz makes rich use of a limited resource—foundation archives. So few foundations make their records available that the history of American foundations is drawn from the history of a few dozen organizations. Zunz mixes the institutional sources with biographical material, congressional record, court documents, and media coverage to capture both the contributions and contested nature of American philanthropy.

Zunz ends his book in the late 1990s and doesn’t really look into the role of technology in changing philanthropy. This raises an interesting question about the historiography of organizations. Our current communication technologies will change not only how foundations work but also the public record they leave behind, which will be largely outside of their control.

The author’s interest in the political privileges and limits of philanthropic institutions takes him far beyond grantmaking record and internal memos. He begins with 19th-century probate court decisions and folds in the steadily diversifying cast of regulatory characters from state attorneys general to the halls of Congress to the IRS up to the 1969 Tax Reform Act. What unfolds is syncopated progress toward an ever-elusive definition of public good. The tension comes from a public desire to promote charitable assets, while limiting the use of such assets to influence public policy. This produces what Zunz calls the “arbitrary” divide between political and educational activities.

Zunz includes an illustrative anecdote about Lyndon Johnson. Shortly after championing the political independence of Jewish philanthropists to support Israel against the wishes of the Eisenhower administration, the senator faced a tough election challenge in the 1954 primary in Texas. His opponent, Dudley Dougherty, had the support of two nonprofits backed by an oil millionaire and a newspaper magnate. Upon his return to the Senate, Johnson abandoned his support for the political independence of nonprofits and inserted an amendment into the IRS code forbidding them to “participate in, or intervene in … any political campaign on behalf of any candidate for public office.”

This battle is, of course, ongoing. The political economy we’ve created over the last 100 years is a mixed system in which philanthropic resources, public agencies, and commercial enterprise all contribute to our shared social goods. Zunz shows us that the lines of our imagined Venn diagram were never as clear or static as we thought. With impact investing, social enterprise, and social business we’ve increased the tools we use to apply private resources to public good. If Zunz’s historical arc extends into the future, the battles over the rules for those tools will be a defining character in the philanthropic story of the 21st century.

Lucy Bernholz is a visiting scholar at Stanford University’s Center on Philanthropy and Civil Society and a managing director at Arabella Advisors.

It’s noteworthy when a serious book about education reform makes it onto the bestseller list. Class Warfare weighs in at nearly 500 pages, almost a quarter of it devoted to sources and references. Chapters end on wonk-friendly cliff hangers: “It seemed that private foundation investments were actually going to bring change. Could investments by a government bureaucracy also produce results?” Class Warfare is selling because it’s a good read, presenting the struggle to reform American schooling as a heroic tale populated by real people. But it also poses some juicy innovation questions.

Brill got interested in education while writing a scathing New Yorker article about “rubber rooms”—holding tanks where New York City teachers suspected of wrongdoing whiled away years at full pay. In doing so, he waded into the hottest debate in education. On one side are “reformers,” who believe that the quality of teaching makes a huge difference in life outcomes for kids and that school systems need to be a lot better at getting good teachers into classrooms and bad ones out. On the other side are those, often associated with teachers unions, who see the role of schools as overshadowed by poverty and other social ills and who see the effort to measure teachers’ and schools’ performance as an excessive faith in testing.

Brill makes no secret of which side he’s on. In his two-year exploration of education, he found voluminous evidence that good teaching matters and argues we need to act urgently on that knowledge. He admires the leaders of the reform movement, from Jon Schnur, co-founder of New Leaders for New Schools, to former Washington, D.C., schools chancellor Michelle Rhee, whose stories he tells in humanizing detail. (Disclosures: my firm supports many of the pro-reform organizations named in the book.) The reformers stand against school districts—“the most lavishly funded and entrenched bureaucracies in America,” he writes—and against teachers unions with “money and playbooks every bit as effective in thwarting the public interest as Big Oil, the NRA, or Big Tobacco.”

Readers can sense Brill’s wonderment at education’s hall-of-mirrors politics. It is the teachers’ own unions that have fought to treat them as a mass differentiated only by years of experience and academic degrees. And it is the left that defends gradualism, arguing that there’s not much that schools can do about poverty. Meanwhile, the right pushes for radical institutional change and for judging school systems by how well they serve poor and minority children. The situation leaves Brill’s heroes, mostly youngish Democrats including candidate Barack Obama, asking, essentially, “Dude, where’s my party?”

Brill’s tale offers Bob Woodward-style close-ups as the nascent Obama administration grabs the reform baton and enacts Race to the Top, a competition that encourages state-based reforms. Yet the focus of reviewer fascination is Brill’s final chapter, where he concludes that reform can’t happen at meaningful scale without the teachers unions. Some have misunderstood Brill’s coda as a repudiation of the previous 400 pages.

So why the last chapter? Brill has said that he was touched, late in the reporting process, by a few incidents that dramatically demonstrated how hard it will be for successful reforms to reach wider scale. Most poignant is the story of Jessica Reid, a teacher in a high-performing Harlem charter school whom Brill follows throughout the book, who quits over fears that the pace of her work is threatening her health and her marriage. Meanwhile, KIPP’s Dave Levin worries about what it would take to give excellent training and leadership to the country’s 3 million teachers. And so Brill arrives at the fundamental social innovation quandary: What will it take to go from islands of excellence to systems of excellence?

Brill ticks off a handful of solutions: paying more in salary to early-career teachers and less for seniority and extra academic degrees; eliminating “last-in-first-out” policies that target recently hired teachers for layoff s; and spending new money to boost teacher salaries. All of these are right, but we’ll need to do much more. We need to do far better at connecting teacher preparation with what teachers actually do in the classroom. We need to ramp up the use of technology that helps teachers tailor instruction to students’ needs and makes better use of teachers’ time. We need broader measures of student learning than today’s standardized tests. We need to get better at recognizing, and reacting to, both strong and weak teacher performance. And we need to get beyond our hall-of-mirrors politics, so that recognizing the impact of teachers can no longer be framed as an attack on them.

Jonathan Schorr is a partner at NewSchools Venture Fund, a nonprofit venture philanthropy firm that supports innovation in education.

The book describes the emerging impact investing field, highlights its pioneers and leaders, and describes the conditions that will drive its growth. But the book also sets up the tensions in this transition. It asks such questions as: Will impact investing chart a smooth evolution or will it be the disruption that happens at major points of inflection and convergence? If the objective is to have impact investing strategies scale up, how will impact investment firms deal with mission continuity and organizational alignment as they transition into mainstream companies? What are the implications of impact investing going mainstream? If the principles of impact investing become accepted as sound investment fundamentals, do we transition simply to “investing for impact”?

A couple of years ago, I asked Emerson if impact investing would undergo an evolution like the one described by Geoffrey Moore in his book Crossing the Chasm. Moore’s central thesis is that market needs shift as early adopters transition from niche to mainstream investments (the chasm), and correspondingly new ranks of providers and leaders emerge to serve them.

Where is impact investing in this process? Bugg-Levine and Emerson do not answer this question directly. Yet during the last 30 years, there have been distinct changes in the underlying assumptions about the relationship between capital and its uses. In the early phase of socially responsible investing, the investor had to make a choice between profit and benefit (returns or impact). Now, with impact investing, there are opportunities where profits and impact are complementary and can coexist within a shared values framework (returns and impact). In the next phase, I believe that a model will emerge in which the outcome of sustainability and community benefit drives value creation and persistent lasting profits (returns from impact).

Bugg-Levine and Emerson examine microfinance’s role in the development of impact investing. They highlight the mission continuity challenges that microfinance firms face as they enter for-profit structures and public markets, and underscore that such transitions have unintended consequences. The authors also present examples of at-scale businesses that have retained their mission, such as Patagonia.And they point to the growth of the B Corp to indicate that growth, scale, and for-profit investment do not need to be at odds with mission.

Impact investing through private equity and venture capital investments are the main focus of the book. Yet impact investing is about much more than social enterprise and venture capital. Although the authors cover the Community Reinvestment Act and the New Markets Tax Credit, two US government programs that have channeled billions of dollars into disadvantaged communities through real estate and infrastructure investment and development, they do not plumb their importance. These programs have transformed decaying urban centers and uplifted distressed rural communities—spurring innovations in scalable impact finance by bringing together private investors, public funds, philanthropic funds, grants, tax incentives, debt, and equity. The programs have defined a powerful concept: Each type of investor wants to be rewarded in a different currency, and each defines returns in a very different way.

Today impact investing is being applied across the asset classes, in some cases reaching institutional scale and delivering institutional results. We have moved from a discussion of “good capital” to capital addressing social and environmental imperatives driven by global population growth and resource constraint. Think of firms like Lyme Timber, Jonathan Rose, Ecotrust Forest, and Bio-Logical Capital. Bugg-Levine and Emerson reference but do not fully explore the roles of these path-breaking firms. Nonetheless, they have written an important book, which defines this critical moment when mainstream investors are starting to recognize the opportunity to invest and make a difference. I look forward to their next book, the sequel that tells the story of the models and leaders in the next phase of impact investing’s evolution.

David Chen is CEO of Equilibrium Capital Group, which brings institutional investors a portfolio of sustainability-driven real asset funds.