Are Philanthropic Plutocrats Helping or Making Things Worse?

Ten years ago, Matthew Bishop and Michael Green published their book: Philanthrocapitalism: How the Rich Can Save the World. They believed by applying the wealthy’s moneymaking acumen to social investing, they could help to solve society’s problems. Have they changed the world? Look at the graph below:

Source: https://inequality.org

Income inequality in U.S. has become worse over the past 20 years. The U.S.’ top 10 percent now average more than nine times as much income as the bottom 90 percent.

Anand Giridharadas points out in his book “Winners Take All: The Elite Charade of Changing the World” how the plutocratic class are perhaps the biggest part of the problem. He outlines the idea that elite philanthropy is only treating symptoms, not root causes. In his book, he uses the concept of ‘MarketWorld’, a ‘culture or state of mind’ where people want to do well and do good, to change the world while also profiting from the status quo.

“These people love to ask what they can do instead of what they have done,” Giridharadas said on the latest episode of Recode Decode, hosted by Kara Swisher.

Does ‘win-win-ism’ exist? The business elite believe that capitalist activity can be both personally profitable and socially beneficial. Giridharadas however argued that in order to make real changes to the world, they must be willing to “take a little bit less”. For example, instead of telling women to “lean in” and constantly chase “innovative” solutions, he said, they should accept the costs of giving everyone maternity leave and paying them more.

Joseph Stiglitz, the Nobel Prize winning economist, describes the business elite “like the dieter who would rather do anything to lose weight than actually eat less”. The business elite refuses to pay high wages or high taxes, but still want to be appreciated. They would rather act as ‘change agents’ through social impact investing, entrepreneurship, sustainable capitalism, philanthro-capitalism, artificial intelligence, market-driven solutions. They would fund a million of these buzzwordy programs instead of fundamentally question the rules of the game — or even alter their own behaviour to reduce the harm of the existing distorted, inefficient and unfair rules.

In order to really have an economy with the greatest opportunity for all, according to Joseph Stiglitz, the MarketWorlders would have instead paid high levels of corporate and personal income tax, offered decent wages to their workers, allowed unions, funded public schools (instead of pet charter projects) and supported some form of single payer health care and campaign finance reform.

Philanthropic plutocrats perhaps should rethink about their ‘win-win-ism’ thinking or approaches. One such plutocrat is Nick Hanauer (a billionaire) who believes in "pitchfork" economics compared to "trickle down" economics. He thinks raising taxes on the rich will help correct structural deficiencies in the economy. 

“One simply can’t arrive at a more economically equal reality when the rungs of the ladder are so far apart,” said Stiglitz. It is for Governments to tax at 70% those earning USD 10mil and above and fund social concerns like education and healthcare. Leaving it to the private sector and “moral conscience” is like the cliché ‘pie in the sky’ approach with consequential street riots like in Hong Kong and Chile.

Reference:

1. Edward Luce, Is wealthy philanthropy doing more harm than good? https://www.ft.com

2. Eric Johnson, Elites like Amazon’s Jeff Bezos think they’re being philanthropic. But they could do so much more https://www.vox.com

3. Joseph E. Stiglitz, Meet the ‘Change Agents’ Who Are Enabling Inequality https://www.nytimes.com
4. Richard Feloni, Wealthy investor Nick Hanauer says the US economy mints billionaires while many Americans are struggling, and there’s no excuse for it www.businessinsider.my