On Philanthrocapitalism – Part Two

To return to where I left off in Part One, we had just passed the introduction in the book. An introduction that Walmart’s owners would have been very pleased to read.

The book continues in a similar vain and soon introduces a concept of the “good billionaire”. In order to make this concept a reality it is suggested that a social contract needs to be formed so that billionaires have knowledge and have committed to how they should act. As I was reading this concept for a social contract for good billionaires I was reminded about something that I had seen regarding JK Rowling. In 2011 JK Rowling featured on the Forbes billionaires list, but since that time she has failed to do so again, and this is despite the continued successes of the Harry Potter franchise. The reason that she no longer features on the list is that she has given so much of her wealth away she can no longer be classified as a billionaire. Perhaps then the first rule for any “good billionaire” is not to be one.

There are mentions of the growing inequality in the world, but it is not expanded upon or criticised. What is condemned by the book and its authors, however, is the “rejection of philanthropy”. A strange thing to focus on as I doubt anyone would argue that giving away money to those less fortunate is a bad thing. Even I don’t reject philanthropy, I just advocate a situation where such philanthropy is not needed. This rejection, so the authors believe, was “extreme” in post World War Two Britain.

What the book then fails to tell the reader is that during this time of “extreme” philanthropy rejection, the welfare state was being created and expanded. Investments were made across a wide number of social services and the standard of life began to improve. Philanthropy wasn’t so much rejected as superseded. With a functioning welfare state large swathes of what is now seen as philanthropy were not needed as the state delivered.

Under the leadership of Clement Atlee, a man we have mentioned in Part One, a host of laws were introduced which were designed to improve society for those within. The 1944 Education Act raised the school-leaving age; the 1945 Family Allowances Act introduced child benefit to families, the 1946 National Insurance Act introduced a comprehensive system of social security; the National Health Service Act created a system of free healthcare; the National Assistance Act of 1948 provided a social safety net for those unable to pay National Insurance contributions; the Children Act of 1948 established a comprehensive childcare service; and the Housing Act of 1949 improved housing opportunities across the country. Truly the only thing “extreme” about the post World War Two period in Britain was the resolute determination of the government to help those worse off.

In stark contrast to these measures are the political actions being taken by the Prime Minister today. Rather than build up, invest, and support, he instead chooses to dismantle, cut, and abandon. When David Cameron came into office one of his first measures was to lower the income tax for those earning over £100,000 each year. It is now at a figure of 45% and arguments are put forth that higher taxation for the wealthy in fact leads to a lower number of wealthy people paying tax.

Charlotte Church, a millionaire with a moral compass and some integrity, recently said that she would be willing to pay 70% taxes so that social services could be kept. It is refreshing to hear such an opinion, but unfortunately such opinions seem to be few these days. With a decrease in taxation, a cutting of services and welfare, there would be, or so it is hoped, a greater investment by philanthrocapitalists. We would not see the “extreme” period of World War Two Britain, but instead a “golden age” of philanthropy. Or so the authors hope.

What I took from the book was that such advocacy and growth in philanthropy is the reason for the lowering of taxes in the first place. But the reality is that taxes are lowered on the wealthy not because governments feel social and global problems can be better solved by philanthropy, but because governments have been bought and are in almost complete control of the wealthy and elite of the country. Taxes are lowered in order to benefit those at the very top not in aid of helping those worse off, but in spite of them.

Quite obviously the authors of Philanthrocapitalism are no fans of the welfare state, but even a casual glance at the measurements, indicators, and statistics available show that countries with a strong welfare system fare better than those without. Scandinavia has long been known for its model, and Iceland and Switzerland have similar models in place. It should be of no surprise then that countries like these dominate all international measurements of a society’s standing. In the 2014 Human Development Index, after inequalities have been taken into account, Norway ranks first, Switzerland fourth, Iceland sixth, Sweden seventh, and Denmark eighth. The United Kingdom, with its welfare state eroding, comes in at 16th, and the United States, who have next to no welfare system, rank 28th, below the likes of Estonia, Slovakia and Malta.

The recently released Social Progress Index figures for 2015 paint a similar story. Norway, Sweden, Switzerland, and Iceland take the top four places respectively, with Finland and Denmark coming in at seventh and eighth. The United Kingdom places 11th, and the United States 16th. The 2013 rankings on the Where-To-Be-Born Index, previously called the Quality-of-Life Index, continues the trend. Switzerland are first, Norway third, Sweden fourth, Denmark fifth, and Finland are 11th. The United States are 16th, and Great Britain finds itself in a not so great 27th.

It is difficult to swallow the fiction that billionaire philanthropists are to be the world’s saviours when there is so much evidence against such an occurrence. It may be possible that some billionaires encourage the government to lower taxation so that they are able to invest more money into philanthropy, but a far more likely story is that billionaires encourage the government to lower taxation so that they are able to keep more money for themselves.

The power that those with money have is not only vulgar, but dangerous, especially within societies that seek to class themselves as free, fair, and democratic. Lobbying is no secret, but it is perhaps the most overlooked issue in the Western world when it comes to the issue of obstacles to democracy. Voter turnout, the voting age, and the system of voting are all secondary when the fact is that a company can pay to influence governmental decisions. Cases of this are too numerous to mention, but one that sticks in my memory is that of Domino’s Pizza.

Though Domino’s is an American company, its vast sums of money even have the power to effect laws in the UK. Eager to cash in on the fast food market for young children Domino’s shareholders donated over £55,000 to Conservative MP Michael Gove. When Gove achieved success in the elections and became Education Secretary he was accused of having “torn up nutrition rules for schools” after allowing schools and academies to set their own menus rather than subscribe to government nutrition standards. Junk food returned to the schools menus adding to the worsening obesity levels in the country.

As well as this Channel 4’s Dispatches found that Domino’s was notorious for opening stores in very close proximity to schools and colleges, with some being opened directly opposite educational institutions. A Domino’s store in Brighton originally had its planning permission rejected, but following an appeal they were allowed to open.

Unsurprisingly, Domino’s is another company that features in Philanthrocapitalism, and I feel it is a prime example of how philanthropy can be nothing more than bribery and a means to push a hidden agenda. “Thomas Monaghan, who made his fortune from Domino’s Pizza, is a devout Catholic whose “philanthropy” has included a new computer system to help the Vatican organise it’s finances.” This is the same Vatican that the International Business Times said had a “vastness” of wealth. They continued by saying: “What we do know is that Vatican Bank, officially titled the Institute for the Works of Religion, manages €5.9bn ($7.3bn, £4.64bn) of assets on behalf of its 17,400 customers. And it manages €700m of equity which it owns. Another titbit to emerge is that it keeps gold reserves worth over $20m with the US Federal Reserve.”

Clearly this is hardly a needy recipient of philanthropy. Thomas Monaghan also uses his tremendous wealth to support and promote other causes he feels strongly about. He is said to support both anti-abortion and anti-trade union campaigns and organisations. Monaghan also financially supported the 2008 Presidential campaign of Republican Sam Brownback. Brownback a man who opposes abortion, advocates a flat rate income tax, supports oil drilling in the Arctic and the Gulf of Mexico, disbelieves in evolution, opposes a national health system in the US, holds right-wing views on the issue of Palestine and Israel calling for the complete annexation of the West Bank and the deportation of all Palestinians to Jordan, and opposes both same-sex marriage and gun control.

Although by and large the book does grovel to the world’s wealthy, there are instances, though few and far between, whereby the reader is presented with an opposing view, or a statement which causes you to pause. On the issue of inheritance we can imagine that many of the world’s billionaires will simply hand their money down to their children, with the world being thankful for the creation of more people like Paris Hilton. However, Ken Fisher, the CEO of a US money management firm, said that his gift to his descendants will be his inspiration. “The main thing you want your children to realise is that if you can become rich and successful, so can they.” In my opinion, the perfect legacy to leave behind.

As well as “golden ages of philanthropy” Philanthrocapitalism also frequently uses the term “centres of philanthropy”. These are promoted to the world’s elite as Earthly utopias where billionaires are welcome and where philanthropy is encouraged. Coincidentally, these areas are also essentially tax havens. Monaco, Luxembourg, and the Cayman Islands are often spoken of with the highest of praise.

Richard Branson again features and receives praise for his charity work, but it is worth remembering that Branson chooses to reside on Necker Island in the British Virgin Islands rather than in the United Kingdom. He states that this is because of health reasons, but a much more likely reason is the incredibly low tax that he pays whilst living on his island. Though Branson does donate large amounts of money to charitable causes, primarily through the Virgin Foundation, we should question how much he is actually helping. Afterall the first rule of charity is that you do no harm, and yet Branson has a fleet of jumbo jets and invests a lot of time and money into making commercial space flight a reality. More recently he has also been criticised for profiting from selling trips to SeaWorld and other sites which hold marine wildlife in captivity.

It is crucial that we remember that millionaires, billionaires, or indeed anyone making a profit, does not achieve such success within a vacuum. This is perhaps a statement that should have been made earlier. The likes of Branson and Monaghan are reliant on their staff and their customers, and their wealth is dependent on them. It is for precisely this reason that strikes and boycott movements are so powerful. Without the thousands of people working for them, and without the tens if not hundreds of thousands of consumers buying their products, Branson and Monaghan would have nothing but an idea.

Bill Gates is fully aware of the role that society plays on his success. He says that he was lucky in his circumstances: “That I could write the best code and hire the best people was in part, due to the time and country I was born in.” He continues to say that because of this stroke of luck, and because of what society he has given to him “there is a responsibility to give something back”.


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