On Philanthrocapitalism – Part Three

To continue with our analysis of Philanthrocapitalism we will return to the book, and a character who appears more than a few times throughout its pages.

Bill Gates compares his Foundation and his charitable endeavours to government and big business. He structures it in such a way that it mimics that of governmental agencies, and such is his dedication that he now works for the Foundation in a full time capacity. However, he believes that his Foundation is not big enough to solve certain issues, malaria being one that he mentions.

Quite rightly he recognises that The Bill and Melinda Gates Foundation alone cannot solve all of the world’s problems, and he realises that in order to tackle such global issues one would need global organisations and cooperation. Curiously though he does not recognise, or at least admit, that such organisations already exist. The United Nations (UN) has existed since 1945, UNICEF since 1946, and the International Red Cross with its 97 million volunteers since 1885. If such organisations are to be the ones that help tackle global issues would it not be better if Gates gave his time, money, and support to them instead of establishing his own Foundation. A Foundation, which even by his own admission, has its limitations.

As well as tackling poverty, disease and health issues in the developing world, The Bill and Melinda Gates Foundation are also committed to improving the lives of those less fortunate in the US. In Philanthrocapitalism Gates specifically focuses on the state of the American education system. Although undoubtedly set to improve many American’s lives, it begs the question of why philanthropy needs to be conducted in the country which has the world’s largest economy. Surely the education of the next generation should be the responsibility of the government rather than that of billionaires and their foundations.

“In fiscal year 2015, the federal budget is $3.8 trillion. These trillions of dollars make up about 21 percent of the U.S. economy… It’s also about $12,000 for every woman, man and child in the United States.” With such a vast amount of wealth you would think that education would be sufficiently covered, but once again we see that philanthropy is simply filling a gap that should be plugged by state provision. Combining the discretionary, mandatory and interest spending budgeted by Congress in 2015 we find that education in the United States ranks seventh in its list of priorities. It is below Social Security, Unemployment and Labour, below Medicare and Health, below Military, below Interest on Debts, below Veteran’s benefits, and below Food and Agriculture. And it receives just 2.67% of Total Federal Spending.
(facts and statistics to be found here)

US Total Federal Spending 2015

In Philanthrocapitalism, Gates says that his Foundation has “restructured its activities into three main areas: global health, global development, and inequalities in the US”. But again, although the desire to help is admirable it is a fight that should never have fallen to the Gates Foundation. Inequality in a society is primarily the responsibility of the government, and thus the duty of the government to rectify. Even though Gates has taken on the fight, would his efforts be better suited to reapportioning his vast wealth through paying a higher income tax? Or through lobbying politicians? Or supporting grassroots political and democratic movements? Or would not campaigning for higher wages decrease inequality in the US, or a higher corporation tax on businesses? All of this would surely lead to a more equal society.

As it is, Gates has stated that raising the minimum wage can “cause job destruction”, he has voiced his disagreement with French economist Thomas Picketty’s suggestion that we need a global wealth tax, and let’s not forget that his company Microsoft has been widely criticised for not paying corporation tax. An issue Ian Birrell focused on in an article for The Guardian in January 2014.

I have mentioned previously that there is a hierarchy of priorities when it comes to charitable giving, saving lives would place above renovating an old building for example, but it seems that Gates does not fully share this view. Philanthrocapitalism highlights the time when he spent $320 million dollars on bringing internet to libraries around the US. As well as the obvious criticism that would rightly state that this money would be better spent elsewhere, there is also the criticism that Gates was “simply lubricating future sales”. The installation of computers with internet access was seen as a marketing tool, and unsurprisingly all of these computers were fitted with Microsoft technology and software.

Though not as frequent as Gates’ positive stories, Philanthrocapitalism does include criticisms. Not quite showing the complete other side of the coin, but at least suggesting that not everything is rosy in the world of billionaire’s charitable giving. One of the criticisms placed on Gates was that his Foundation, and others like it, causes a brain drain in the countries where they operate. Many skilled health workers and academics leave government and national institutions in order to take up roles within the Gates Foundation. This movement then deprives the nation of vital thinkers and actors.

It is important to note here that we should not downplay the phenomenal achievements that have been conducted by foundations such as the one owned by Bill and Melinda Gates. Their success at tackling poverty and disease is undoubtedly worthy of our praise. The reason I am painting such an unfavourable picture is because Philanthrocapitalism fails to do this. We should not be lulled into believing capitalism holds the answers to the world’s problems, and that those with the most money are our saviours. They are not the saints that we are led to believe that they are. The billionaires have the money and the PR to paint an image of themselves to the world, it is our responsibility to deconstruct this image and see just how far from reality it falls.

Incidentally, in stark contrast to Richard Branson’s view in the opening of this On Philanthrocapitalism series Bill Gates states: “capitalism alone can’t address the needs of the very poor. This means market-driven innovation can actually widen the gap between rich and poor.”

The language of Philanthrocapitalism makes it clear that the book is more interested in capitalism and wealth than it is in philanthropy and charity. Along with the anecdotes and praise for billionaires throughout the book there are buzzwords which regularly feature. I have already mentioned the “golden age of philanthropy”, but there is also “scale up”, “profitability” and “economically viable”. Words that one would not expect to find in a book about solving the world’s problems, and words that I find awkward to read.

When the emphasis is placed on such buzzwords and topics, and repeated page after page, it can be easy to view solutions to the problems in a very narrow framework. As if these are the only solutions that we have available to us, and that “profitability” is essential in the fight against poverty. I don’t agree that it is. Essential healthcare does not need to be profitable, as the NHS in the UK has proved recently being voted the best healthcare system in the world. Cuba is one of the most anti-capitalist states in the world and they have recently become the first country in the world to eliminate mother-to-baby HIV transmission. As well as this, welfare has been proven to lower poverty rates across the world when it is implemented. These all show that profitability and economic viability need not be a factor when we discuss solutions to some of the world’s greatest problems.

Richard Branson is again mentioned, and when asked about what his Foundation is doing, he states: “we are using our business skills to create solutions to issues we care about”. One of these issues is that of climate change which he recognises as one of the greatest threats to our existence at present. Unfortunately his dedication to creating a solution seems like an empty promise when it stands against the fact Branson’s Virgin has a fleet of planes and continues to work on commercial space travel. Both of which are immensely polluting activities.

Branson has recently been criticised by Naomi Klein in her book This Changes Everything where Klein illustrates that Branson has failed to deliver on his pledge to spend $3 billion (£1.8 billion) to develop low carbon fuel. She states that seven years after making the pledge Branson has only delivered some £300 million of investment. Scottish comedian Frankie Boyle has also criticised Branson recently for the hypocrisy he shows when commenting: “”Shocked to read that sea ice in the Arctic Ocean has fallen to the lowest recorded level for the winter season.” In none-too-friendly a way Boyle reminded Branson of the fact he owned an airline.

As The Guardian report, “Klein uses Branson and other so-called green billionaires – such as the former New York mayor, Michael Bloomberg – as case studies for her argument that it is unrealistic to rely on business to find solutions to climate change.” I share Klein’s view on this issue and I would argue that business is not able to find solutions to a whole host of other problems which exist in the world today.

What concerns me, and to return to a point I made earlier, is that in order for business to find solutions, these solutions have to be profitable. Otherwise business has no incentive to intervene. Addressing the issue of climate change is unlikely to ever bring increased profit to a business or an economy, indeed it is the pursuit of profit that has caused such disastrous climate changes in the first place. For this reason we should all be worried and wary of people such as Branson who comment that “climate change is one of the greatest wealth-generating opportunities of our generation”.

What is shocking to me is the fact that many people, the large majority of people it seems, are blind to the fact that there may exist certain problems which business simply cannot solve. Healthcare is one that we mentioned earlier, climate change is another, Gates himself admitted that capitalism can create worse inequality in societies. Profit is not a panacea, and it may well be that the pursuit of it is what is actually making us sick. A disease masquerading as a cure.

Both Gates – with his computer installations across the US – and Branson have been accused of using charity as nothing more than marketing and PR. A term called Corporate Social Responsibility (CSR) is often the side of a business which is pandered to in order for them to conduct charitable work. Through charitable activities, foundations, and donations a business can improve its public relations and its image. Without having to change its business practices too much, it can then be seen as more ethical by consumers and the public at large. In my own line of work I have seen how major multinational companies that cause untold damage to the environment attempt to clear their name through small annual donations to charities that attempt to alleviate climate change.

Ever since his disastrous, and illegal, decision to invade Iraq, Tony Blair, a man we are to encounter again later, has attempted to improve his reputation and image on a number of occasions. One such instance that sticks in my mind was the decision to donate all proceeds of his autobiography to the Royal British Legion. The proceeds from the book were to be donated to the Legion’s Battle Back Challenge centre which catered for injured troops coming back from the frontline. Unsurprisingly many saw through this act of PR and saw the donations as guilt or “blood money” as Blair was the man largely responsible for sending the troops to war in the first place.

A year after making the pledge, an article in The Telegraph questioned whether Blair had even stuck to it. After looking at the accounts for the Royal British Legion for the 12 months that ended in September 2010 they found no record of it “having received any money from the former prime minister.”


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