PHILANTHROPY: PRAISEWORTHY OR PROPAGANDA?
How will Bill Gates be remembered?
If this question had been asked in the 90s, I suspect most people would say the answer is obvious. He would be remembered as the co-founder of Microsoft, a feat of entrepreneurialism that resulted in him becoming one of the richest men in the world.
But there is another noteworthy thing that can be attributed to Bill Gates. For, as well as being extraordinarily rich, he can also be credited with remarkable acts of charity. In 2010, for example, he put $10 billion toward vaccines, which was the largest pledge ever made by a charitable foundation to a single cause. Also in 2010, Gates and Warren Buffet announced the ‘Giving Pledge’, so called because the wealthy people who sign it pledge to give away half their fortune to philanthropic and charitable causes.
So, there are two ways in which Bill Gates might be remembered. Chiefly as a businessman who accumulated great wealth or as a philanthropist who made big donations to worthy causes.
That last legacy of being a great philanthropist sounds like an achievement that could only be viewed in a positive light. But, as with most things, there are two ways of looking at philanthropy. On the one hand, it can be seen as a justification for the social structures that enable some people to acquire disproportionate wealth, for it turns out that, however ruthless such people might have been in gaining their fortune, they ultimately had a significant altruistic side to their character, generously giving to worthy causes.
But, on the other hand, a more cynical way to look at it would be to say that it is really nothing but a band-aid to cover up the exploitative conditions that cause so many to need charity. If society was structured in such a way as to not allow the extent of inequality extreme wealth necessitates, those people would not have required charity in the first place. In short, these so-called philanthropists are just using a portion of their vast wealth in propaganda and token gestures while not really doing anything much to alter the structures they took advantage of.
Those opposing viewpoints have existed since the beginnings of modern philanthropy. By ‘modern philanthropy’, I mean large-scale philanthropy based in the private rather than the public sector.
There is general agreement among contemporary historians that modern philanthropy was invented by the great industrialists whose names are now synonymous with extraordinary wealth. John David Rockefeller, Andrew Carnegie, Cornelius Vanderbilt and people like that. These were legendarily ruthless businessmen whose rapaciousness earned them the title ‘Robber Baron’.
Rockefeller, for example, acquired his extraordinary wealth partly through industrial espionage. He sent spies into his competitors’ businesses in order to ascertain their financial situation. His own company (Standard Oil) would then lower the price of its own oil, making his rival hopelessly uncompetitive. Meanwhile, in other parts of the country, the price Standard Oil charged was increased in order to make up the difference. According to Dylan Ratigan, “in this way, the company charged its customers a premium to drive the competition out of business, which left those same customers even more dependent on Standard Oil. Rockefeller referred to this approach as ‘sweating the competition’”.
By 1882 Standard Oil controlled up to 90 percent of the oil refining capacity in the United States. Seven years later its monopolistic grip had extended to retail, wholesale and oilfields as well. In Short, Rockefeller’s tactics changed what had been a free market in oil with fluctuating prices adjusting with competitive supply and demand, to a rigged market where prices were stabilised at artificially high prices. That’s why people like him were called ‘robber’ barons. They used the free market mandate of increasing one’s wealth via whatever method you can get away with to ultimately end the free market and impose a monopoly that effectively took wealth away from people through rent extraction.
Like Bill Gates, Rockefeller went on to become the world’s richest man. Also, like Bill Gates, he went on to build a foundation-the Rockefeller Foundation-dedicated to philanthropic ventures. It was set up in 1910 from $50 million in Standard Oil stock and, by the time of his death in 1937, half of Rockefeller’s fortune had been given away. This legacy, along with the philanthropic acts of other 19th century American industrialists, can be seen in cities like New York. You would be hard-pressed to find a museum, art gallery, university, concert hall or charity that cannot trace its origins back to some such businessman.
But, as I said earlier, there has always been a more cynical way of looking at this. Businessweek highlighted this fact when they wrote, “John D Rockefeller became a major donor-but only after a public relations expert, Ivy Lee, told him that donations could help salvage a damaged Rockefeller image”. Put another way, according to this cynical view, Rockefeller was not actually interested in Philanthropy. After all, a true desire to promote social welfare necessarily seeks to fundamentally change the preconditions that are the root cause of social problems. What Rockefeller was doing was simply placating an angry public by throwing a bit of money at some public service or other, while not really doing much to alter the structures that enabled the few to gain so much at the expense of the many in the first place.
In the last chapter, we talked about the 19th century industrialists who earned the dubious title of robber baron and who can be credited with inventing modern philanthropy. When Warren Buffet wanted to make a philanthropist out of Gates, his first move was to give him a copy of an essay by Andrew Carnegie (the greatest of all the 19th century industrialist/philanthropists), called ‘The Gospel Of Wealth’. Incidentally, we see here (and also with the case of Rockefeller, who we talked about in part one) a curious observation, which is that these billionaires do not seem to consider using their wealth for the common good until somebody else points out that this is an option. And we can add a third billionaire to that list, for Paul Allen, the co-founder of Microsoft, is quoted as complaining “I’ve spent money on jets, boats. I don’t know what to do next”. Notice that it never occurred to him that a portion of his billions might be put to philanthropic use and once again this had to be pointed out to him (by the author Douglas Adams in this case). It could be that there are some very wealthy people who did not need any persuading to turn to charitable acts, but given that these are, almost by definition, mostly selfish, greedy, ruthless and ethically dubious individuals (it is, after all, kind of hard to acquire that kind of fortune by being a nice guy) I am willing to bet they are few and far between.
That might sound like a harsh assessment, but it was one echoed by the economist Jeffrey Sachs, who reckoned, “They are tough, greedy, aggressive, and feel absolutely out of control in a quite literal sense, and they have gamed the system to a remarkable extent. They genuinely believe they have a God-given right to take as much money as they possibly can in any way they can get it, legal or otherwise”.
I should point out that this was his view of City traders on Wall Street, so it should not be considered applicable to everyone who is very wealthy. Probably J.K Rowling is not like this, since she owes her fortune to the astonishing success of the Harry Potter franchise, making her more like a lottery winner than somebody who fought their way to the top of business.
Anyway, in Carnegie’s essay, the great iron and steel magnate posed the question, “what is the proper mode of administering wealth after the laws upon which civilisation is founded have thrown it into the hands of the few?”.
Such a question seems aligned with the findings of Thomas Piketty. In ‘Capital In The 21st Century’ (which is actually concerned with capitalism up to the 21st century) the French economist put together the most exhaustively researched analysis of market capitalism and its consequences so far assembled, and drew the following conclusion. When allowed to unfold in its natural, ‘financially liberalized’ state, capitalism will very likely result in those who hold significant wealth gaining far greater returns compared to those who rely primarily on labour income. There are various reasons for this. For example, if you are very wealthy you can afford to hire the very best financial advisors who know how to skirt around the law and squeeze every drop of value out of your assets while avoiding the tax man. The poor, meanwhile, cannot afford any financial advice and are constantly being targeted by fraudsters, predatory bosses, authoritative bureaucrats and marginally legitimate debt sellers. Also, the owner classes can gain access to high-level capital investments that are simply unavailable to those of us lacking significant wealth in the first place. Technically, this is known as the ‘wealth to income ratio’.
Pinketty’s study showed what Carnegie thought was true, which is that wealth tends to grow much faster for the already wealthy. That wealth can then be used to further alter the structure of social systems so as to further increase the tendency for wealth to flow toward the elite minority. The behaviour of Rockefeller (talked about in part one) aligns with Pinketty’s view of meritocratic competition making sense only when one is trying to establish a fortune. However, once wealth is acquired it makes more sense to turn anti-competitive so you can live off of the rent extraction to be had from a market rigged in your favour. Why strive to make a fortune when you can just protect the fortune you (or your ancestors) have already amassed?
The more positive way of looking at this might be to say that it is OK to amass a great fortune, even one that involves ethically-dubious practices, if one then uses that money in charitable ways. Those who adopt this way of looking at philanthropy tend to prefer to cast charitable donations in monetary terms, probably because the donations seem so amazingly generous when so presented. For example, Peter Diamandis and Steven Kotler, in a chapter devoted to technophilanthropists in their book ‘Abundance’, wrote, “by 2004, charitable giving in America had increased to $248.5 billion, the biggest yearly total ever. Two years later, the number was $295 billion”.
By everyday standards, such sums of money are almost unimaginably large, way beyond anything most people could earn in several lifetimes. It therefore seems that those who donate such amounts must be superhumanly charitable and worthy of the highest praises society can bestow.
As for the cynics, they tend to prefer percentages. For example, the Chronicle Of Philanthropy’s study found that households earning between $50,000 and $75,000 a year gave an average of 7.6% of their discretionary income to charity. 7.6% of a pretty paltry amount if you ask me. Shouldn’t a society founded on Christian values be giving away more like 40% of discretionary income? Worse still, the figures are even more dire when we turn to those who earn over $100,000. Even though such folk are obviously in a position to be much more generous, in percentage terms they are less so, giving a paltry average of just 4.2%.
Several studies have come to similar conclusions, which is that those who can least afford to donate to charity actually donate the greatest amount in percentage terms, while those who are most financially advantaged give away the least. Ken Stern, writing for the Atlantic, reckoned that America’s bottom 20 percent donated 3.2 percent of their income to charitable causes, while the top 20 percent gave away a minuscule 1.3 percent. Of course, if you have billions to begin with, then 1.3 percent of that would be a lot of money, more than most of us can ever dream of having let alone giving away. But when expressed in percentage terms it comes across as a tiny amounts, a mere gesture intended to paper over the fact that society is rigged against the many. A 2011 study from the University of California, Berkeley, found that upper class individuals are more likely to “exhibit unethical decision-making tendencies, take valued goods from others, lie in a negotiation and cheat to increase their chances of winning”. They also have a disproportionate ability to mould a society so heavily dependent on the pursuit of money into a shape of their liking, so unsurprisingly our societies work to reward them at the expense of so many others.
There is a tendency for rich philanthropists to become patrons of things that primarily interest the upper classes, while ignoring issues affecting the poor even though such issues are usually much more urgent. We saw this attitude in part one, when we talked about the philanthropic ventures of the 19th century Robber Barons. As you may recall, they mostly donated to elite schools, concert halls, museums and stuff like that. People like Carnegie also showed zero interest in tackling issues outside of their own city.
Given the period in which these men lived, they can be forgiven for being so localised in their philanthropy. After all, this was long before the age of smartphones and global communications networks, so people were nothing like as aware of issues like poverty in Africa as we are today.
But while we might forgive such blinkered philanthropy back then for the reason given, it’s much harder to justify it now. And yet it still occurs. According to Ken Stern’s article in The Atlantic (“Why The Rich Don’t Give To Charity”), in 2012 “not one of the top 50 individual charitable gifts went to a social-service organisation or to a charity that principally serves the poor and dispossessed”.
It would be incorrect to say philanthropists never turn their attention to such issues, because they sometimes do. There is, for instance, the Omidyar Network (brainchild of EBay founder Pierre Omidyar), pursuing such things as microfinancing which could potentially unlock opportunity for people who cannot access traditional financial and banking outlets. Another example would be the Rockefeller-backed Acumen fund, which is a for-profit company that only invests in businesses that manufacture and sell, at affordable prices, products and services needed in the developing world (things like mosquito nets and reading glasses). Of course, the Bill and Melinda Gates Foundation’s multibillion dollar commitment to tackle malaria can also be counted among the charitable ventures focused on problems that really matter.
All such examples of worthy causes should of course be commended. But the emphasis on charity as the means to deal with the fallout from the negative consequences of market competition arguably evades the more pressing question, which is ‘why is such intervention necessary to begin with?’. A cynic might say that throwing money at those affected by the negative externalities that are virtually inevitable when people are engaged in a competition to selfishly their own fortune via whatever method can be gotten away with, operating within social structures that already disproportionately favour a minority of greedy, ethically-dubious people, is akin to giving up and managing the symptoms of a socioeconomic disease rather than seeking out its root and curing it outright. It is sort of like having an engine that is leaking oil and you choose to constantly add more oil rather than fix the engine.
As to the root causes, those who have researched the systemic causes of today’s problems have traced the root back to incompatible assumptions that have held since the Neolithic period. We find one of these assumptions contained within the definition of the word ‘economics’, which is the ‘study of the allocation of scarce resources’. Along with the assumption of scarcity there is a potentially incompatible assumption applied to growth, which is that it is infinite.
The reason why the assumption of scarcity is incompatible with the assumption of infinite growth should be so obvious as to not need spelling out. But as our current consumerist lifestyles are using up vital resources far beyond sustainable rates, the obviousness must not be all that graspable, so perhaps we should express the contradiction between assumptions of scarcity and assumptions of infinite growth. Growth cannot be sustained indefinitely in an ever-accelerating fashion if it relies on something of finite supply. Eventually that supply will be exhausted and the growth must come to a stop. It is worth noting that it really does not matter how large that finite supply is, infinite growth is always by definition infinitely greater. Therefore, people who dismiss concerns about how unsustainable our economic systems based on infinite consumption are, because we can try and gain access to the much larger resources of the solar system or the galaxy or the visible universe (assuming that is even remotely practical an aim to begin with), miss the crucial point that infinite growth in consumption will exhaust any physical resource. Only infinite resources can sustain infinite growth, but then we would have to abandon the assumption of scarcity, returning us to the essential point of scarcity and infinite growth being incompatible beliefs.
For most of human history since the Neolithic period, it did not much matter that we operated under such contradictory assumptions, because we lacked the practical ability to do much harm. Up until the Industrial Revolution, populations were caught in a ‘Malthusian Trap’. It was named after Thomas Malthus, who argued that population growth would outrun the ability to provide enough essential resources to sustain that growth, leading to famines and other calamities that would reduce the numbers of mouths to feed to more sustainable levels.
Going back beyond the Neolithic period, we are talking about a period of time when human populations consisted of small groups of tribes and bands. When populations are small and their capacity to take is restricted, Earth’s resources can seem endlessly bountiful, as indeed they are if the capacity to take is restricted to levels below that of the Earth’s ability to replenish resources. Hunter-gatherers fishing with rods and nets couldn’t even begin to affect fish stocks in an impactful way.
But it’s quite a different story when your pursuit infinite growth in consumption of fish in the interest of ever more profit has resulted in fish-catching technologies that can capture hundreds or thousands of tons of fish. There was about 1.8 million tons of spawning cod in the Grand Banks when the first commercial fishing ships capable of capturing such prodigious amounts appeared in 1951. By 1991, it was down to 130,000 tons and a year later the Canadian government had to step in and close the Grand Banks to cod fishing, or else the species would have been fished to extinction. But that decision came with consequences too, because it meant that 32,000 fishermen were thrown out of work and required billions of dollars in aid to support their families. You can see in this sorry tale how dangerous the assumption of infinite growth is when subjected to a finite resource. I would also point out that the pursuit of more profit could well have been fed by the dwindling supplies of cod, for the more scarce this in-demand resource became, the more expensive and worth pursuing it would be. That would incentivise more profit-seeking fishermen to pursue and catch the prized fish, in a positive feedback loop that either ends in the extinction of cod or government/social intervention to halt this unsustainable consumption.
Another root cause has to do with how societies have been structured since the Neolithic period. I have covered this in detail in my series ‘This Is What You Get’, so search for that if you want more details, but suffice to say that societies have tended to be ‘redistributive’. That is, they are societies in which the populace can be divided into two groups: A non-producing elite who wield great political power and social influence, and who receive ‘tribute’ and get to disproportionately determine how it should then be redistributed to the rest of the populace (hence ‘redistributive’ societies). And, on the other hand, everybody else, the producing masses, toiling for minimal reward and who wield comparatively little social influence and political power.
This hierarchical structure has held (with some modifications, though none that truly affect its essential form) through every form of society since the Neolithic period. From the abject slaves and ruling monarchs of Egypt, to the vassals and lords in medieval feudal societies, to the handicraft merchants and state monopolists of mercantilism and on to our contemporary with the growing numbers of precariat employees and a rapacious elite in the financial and banking sectors, we see broadly the same thing, which is a society in which there are people who work and then there are those other people (always much smaller in number but far more powerful in other ways) who gain the lion’s share of the reward generated by that work. In short, it is a systemic framework that assures the superiority of a minority for whom the temptations of kleptocracy (stealing from the people they rule) is all too often a siren song they cannot resist. Even communism, which was vaguely imagined to operate very differently, turned out not so different in practice. In capitalism you get bossed by business people and in communism you get bossed by bureaucrats. Either way it is a redistributive society comprised of those who do the work on one hand, and the non-producing elites who disproportionately control fruits of that work on the other.
Stanford neurologist Robert Sapolsky, summarised the issue in the following way. “Agriculture allowed for the stockpiling of surplus resources and thus, inevitably, the unequal stockpiling of them. Stratification of society and the invention of classes. Thus it has allowed for the invention of poverty”.
Ever since, the presence of a powerful elite with kleptocratic tendencies, running societies on the incompatible assumptions of scarcity and infinite growth, have worked to sustain poverty rather than truly to eradicate it. This should not be thought of in terms of conspiratorial plotting. Rather, it is the evolutionary outcome of the selfish pursuit of material wealth via whatever method can be gotten away with, let loose in societies with a pre-existing disproportionate advantage for some that changes the psychological makeup of the rest in ways that lead to unsustainable exploitations of the poverty that cannot be eradicated, for to do so would be to bring down the very system that the elites depend upon for their position.
In the last chapter we ended with the following observation:
‘The presence of a powerful elite with kleptocratic tendencies, running societies on the incompatible assumptions of scarcity and infinite growth, have worked to sustain poverty rather than truly to eradicate it. This should not be thought of in terms of conspiratorial plotting. Rather, it is the evolutionary outcome of the selfish pursuit of material wealth via whatever method can be gotten away with, let loose in societies with a pre-existing disproportionate advantage for some that changes the psychological makeup of the rest in ways that lead to unsustainable exploitations of the poverty that cannot be eradicated, for to do so would be to bring down the very system that the elites depend upon for their position’.
Now, one might think that this assertion can be refuted by those examples of the problem-solving capacity of market competition turning a once-scarce resource into an abundant one. Aluminium, for example, was once a rare and expensive thing, but now it is so cheap we use it and discard it without a thought. Such examples really do not refute the claim that market competition seeks to perpetuate scarcity because we are talking about an overall condition that cannot be refuted simply by citing isolated examples of a particular resource that has been made abundantly available.
Ever since our technological capabilities became sophisticated enough to enable us to escape the Malthusian trap, we have seen the rise of various ways of artificially perpetuating scarcity. These have included psychological manipulations intended to mess with the ability to distinguish between genuine needs and frivolous ‘wants’, and the creation of a throwaway culture. Thus, although we still talk about the ‘economy’, what we actually have is nothing like an economy in the sense of what the root of that word referred to. Because, rather than striving to use our resources in as efficient a way as possible, given current technical knowhow (which is what we should be doing if we are really trying to economise) we seem determined instead to turn the world’s resources into junk to be thrown away and repurchased. After all, the goal in a consumerist culture is to sell more stuff, so the last thing you want is for people to be content with what they have (this ties in with the point about our ability to make intelligent choices over what we really need being messed with). We also have services that are less about helping those in need and more to do with extracting rent out of those in need by preying on their financial instability so as to get them more indebted, profiting from their desperation.
This has resulted in two forms of socioeconomic sickness: The existence of needless poverty on one hand, and the existence of wealth obesity on the other. It really should disgust people that anyone should become a multibillionnaire in a world where others must subsist on less than two dollars a day. Sadly, for millennia ruling kleptocrats have used propaganda and other methods to keep the masses from developing revolutionary thoughts, so this complacency is not surprising.
As Gillian Tett of the Financial Times said, “most societies have an elite and the elite try to stay in power; and the way they stay in power is not merely by controlling the means of production, but by controlling the cognitive map, the way we think”. We see this ‘control of the cognitive map’ in the way our societies condition us to aspire toward the excesses of the wealthy and to accept many eminently solvable issues as intractable problems we should just accept as “the way it has to be”. It is all to do with the ‘need’ to perpetuate scarcity so the boundless growth of consumerism can continue to extract profit and the elites can maintain the structures that their privileged position depend upon.
Any call to seriously re-engineer society in order to achieve a more equitable distribution of material wealth tends to meet the same retort, which is that it can only lead to Leftist totalitarianism. Such a statement was echoed by Forbes writer Jeffrey Dorfman:
“Once you admit that income redistribution is fair, there’s no logical stopping point short of communism”.
There are a couple of flaws in this assertion. Firstly, it seems to forget that the market economy is itself a process of wealth redistribution. Perhaps Dorfman is one of those market ideologues with faith in the ‘invisible hand’ creating peace and harmony out of the selfish pursuit of competing to gain differential advantage over others? But, as Harvard researcher Jonathan Schlefer explained, “beginning in the 1870s, theorists…wanted to show how market trading among individuals, pursuing self-interest, and firms, maximising profit, would lead an economy to a stable and optimal equilibrium…after a century of work, they concluded that no mechanism can be shown to lead decentralised markets toward equilibrium, unless you make assumptions…regarded as utterly implausible”.
Market dynamics turn human frailty and misfortune into commodities to be exploited for profit. And the competition to find the commodities that can be sold at the most cost-competitive price encourages fraud (because what could be more competitive than successfully making money out of nothing but bogus claims?). This is why a totally laissez faire market operating absent of any kind of regulation will tend to destroy itself. But neoliberalism is driven toward turning everything into a commodity to be bought and sold for differential advantage, and those regulatory bodies are no exception to that rule. They can be corrupted into a means of conferring unfair advantage in the interest of selfish profit maximisation. “Crony” capitalism is really just the likely outcome of free market principles operating in the real world with its historic cases of hierarchical, redistributive societies that are prone to kleptocracy.
The other flawed assumption is that, if the goal is ‘fair’ income redistribution, then the logical stopping point is communism. Presumably, Dorfman means a society in which everybody gets the same income (that is, after all, how most people think communism is supposed to work). But how can that possibly be the logical stopping point if the goal is fairness? There is nothing ‘fair’ about equal pay across the board, given that individuals clearly make unequal contributions toward beneficial and detrimental outcomes. It does not bother me that some people are more materially rewarded than I am, and it does not bother most other people. When asked how wealth should be distributed, most people rightly dismiss full communism and opt instead for some measure of distribution that rewards the most productive while ensuring sufficient wealth at the bottom to alleviate relative poverty (defined as not being able to access the average lifestyle for that society). It’s just that this ideal redistribution is more equitable than what people believe is actually the case (and true wealth inequality is even worse than most people believe).
Despite the fact that there is a public call to bring about greater equitability in wealth redistribution, every policy to bring it about tends to be dismissed by new-liberal ideologies as unworkable solutions that can only end in authoritarianism and the Gulag. For some reason, philanthropy comes out as the only viable means of patching over the harm caused by the selfish pursuit of material wealth. The question is, why?
PHILANTHROPY: PRAISEWORTHY OR PROPAGANDA?
Last chapter we ended with a question:
‘Despite the fact that there is a public call to bring about greater equitability in wealth redistribution, every policy to bring it about tends to be dismissed by neo-liberal ideologies as unworkable solutions that can only end in authoritarianism and the Gulag. For some reason, philanthropy comes out as the only viable means of patching over the harm caused by the selfish pursuit of material wealth. The question is, why?’.
From the positive perspective, it could be because, where philanthropy is concerned, money is being handled by those with a proven track record of making it work to produce value. Whereas governments are known to waste money on unnecessary bureaucracy, the philanthropists are people who have revolutionised retail, or brought computing to the masses, or built rockets that can land on platforms out at sea. Who could be better placed to use money responsibly and build a better future?
Advocates of philanthropy also cite autonomy as another advantage. This line of reasoning was adopted by Matthew Bishop (author of ‘Philanthrocapitalism: How the Rich Can Save the World’) “They do not face elections every few years like politicians, or suffer the tyranny of shareholder demands for ever-increasing profits, like CEOs of most public companies. Nor do they have to devote vast amounts of time and resources to raising money, like most heads of NGOs. That frees them up…to take up ideas too risky for government, to deploy substantial resources quickly when the situation demands it”. In short, they answer to nobody and if their heart is in the right place nothing can stop them putting life-changing sums of money to good use”.
But, since these are life-changing sums of money the philanthropists are being trusted with, there needs to be assurances that their hearts are, indeed, in the right place. The best way to ensure things are done properly is to have transparency and a democratic process. The problem is, there is often neither transparency or accountability. The World Health Organisation’s head of Malaria Research, Aarati Kochi, compared the Gates foundation to a cartel, claiming the organisation was “accountable to no-one other than itself”. And Dr David McCoy, adviser to the People’s Health Movement”, reckoned “it also operates through an interconnected network of organisations and individuals across the NGO and business sectors. This allows it to leverage influence through a kind of ‘group-think’ in international health”. From this perspective, ‘philanthropic’ organisations have zero transparency, are accountable to nobody, and are really just an excuse to transfer power from the State to billionaires. As Peter Kramer, a critic of the Giving Pledge, said, “it’s not the state that determines what is good for the people, but rather the rich want to decide”. Given that these are often some of the most ruthless exploiters of competitive behaviour and its negative effects, one has to wonder if unaccountable billionaires working without transparency really can be trusted to serve the public’s interests.
The cynical way of looking at philanthropy is to view it as just a PR exercise whose purpose is to justify some having so much to begin with, while throwing token amounts of money at those enduring the negative externalities that inevitably rise when we compete to gain more by whatever method we can get away with. Where the ‘Giving Pledge’ is concerned, there is no legal obligation to do anything. Signatories merely say they will give away half of their fortune; signing the pledge places them under no enforceable commitment to actually follow through on their promise. Now, if there were transparency, so that the public could see what was being donated and where it was going, that might ensure the pledge is indeed honoured. But, guess what? There is no transparency. So how can we ever know what was given away or for what purpose? Really, then, there is nothing to prevent the Giving Pledge from being a PR stunt intended to placate a public grown sick and tired of the excesses of the rich and the gross wealth inequality fueled by a greed is good culture that has brought such harm to people and their communities. As activist Slavoj Zizek put it, “charity is the humanitarian mask hiding the face of economic exploitation”.
Also, when it comes to the establishment of charitable organisations, there are reasons for taking such action that do not necessarily count as altruistic. You see, by setting up such organisations, the ultra-rich can take advantage of tax loopholes as money is passed through them.
Such was the case of the foundation set up by the Walton Family. These five Walmart heirs have a combined net wealth of over $139 billion, meaning they have more money than the bottom 40 percent of Americans combined. An independent audit determined that the Walton Family Foundation-built “at almost no cost to themselves” was “exploiting complex loopholes in order to avoid billions of dollars in estate taxes”.
As to how much of that $139 billion fortune actually went to charity, the answer is…0.4 percent. That is such a paltry amount, it is hard not to agree with Peter Joseph of the Zeitgeist Movement who said, “what they are really doing is bypassing state funding in favour of their own interests. Moving money to charity foundations, effectively consolidating wealth in the hands of private interests rather than government, is a logical method to keep things ‘in the club’ of private business power”.
Philanthropy and charity are either the most viable way of dealing with the problems we are facing, or they are just a PR stunt amounting to a band-aid for problems whose systemic root remains deliberately unaddressed by those with vested interests in retaining the status quo. Obviously, one’s own political ideologies would influence which of these possibilities seems most plausible. Really, though, I suppose all we can do is wait and see if the philanthropist’s pledges really do bare fruit and build a better tomorrow.
“The New Human Rights Movement” by Peter Joseph
“The Survival Manual” by Mark Braund and Ross Ashcroft