Four arguments against the illusion of philanthrocapitalism

Excerpt from Michael Edwards in Open Democracy:

“There are four key points in my argument:

First, neither philanthrocapitalism nor transformative approaches to social change are monolithic. Both contain many different strands, and they engage and overlap in the middle, sometimes with positive effects and sometimes not. These various strands and hybrids have different costs and bene?ts, so rather than tilting at windmills by writing off one approach or the other, it is more useful to identify where business thinking can advance social change and where it can’t, separating out the use of business tools from the underlying ideology of the market.

Second, the hype that surrounds philanthrocapitalism runs far ahead of its ability to deliver real results. There is little hard evidence that these new approaches are any better at reducing poverty and injustice than the governments, foundations, and civil society groups that have been working away more quietly in the background for a generation and more. Yes, they get much-needed drugs, microcredit loans, solar-rechargeable light bulbs, and the like to people who really need these things, but they don’t change the social and political dynamics that deny most of the world’s population the hope of a decent life.

Third, among the reasons for these disappointing results, one seems especially important: the con?icts and trade-offs that exist between business thinking and market mechanisms on the one hand, and civil society thinking and social transformation on the other. There have always been areas of life that we deliberately protect from the narrow calculations of competition, price, pro?t, and cost — such as our families and community associations — but in the rush to privatize and commercialize social action and activity, there is a danger that these ?rewalls will be forgotten. Lasting damage can be done to society if these distinctions are eroded.

Fourth, the increasing concentration of wealth and power among philanthrocapitalists is unhealthy for democracy. When the production of public goods like health and education becomes the province of private interests, fundamental questions of accountability apply. Why should the rich and famous decide how schools are going to be reformed, or what kinds of drugs will be supplied at prices affordable to the poor, or which civil society groups get funded for their work? “I remember a day,” lamented Robert Reich in American Prospect Online, “when government collected billions of dollars from tycoons like these, and when our democratic process decided what the billions would be devoted to . . . I don’t want to sound like an ingrate or overly sentimental, but I preferred it the old way.” He has a very important point. Weak accountability is the Achilles’ heel of all systems for ?nancing social change — new or old, public or private — and philanthropy of all sorts needs to be reconfigured so that it can be more useful and supportive to long-term structural change.

One clear message emerges from these four points: Social transformation is not a job to be left to the whims of billionaires. Perhaps if we supported the energy and creativity of millions of ordinary people, we could create a foundation for lasting progress that will never come through top-down planning by a new global elite, however well intentioned. When this principle is accepted and philanthropy is recon?gured to be less technocratic and more supportive of people’s own self-development efforts, then change will come — larger than we can control, quicker than we can imagine, and deeper than we could ever hope for by reducing everything to market forces.”

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