Is Philanthrocapitalism Truly Altruistic?

The term ‘philanthrocapitalism’ itself is just under ten years old but can arguably track its true roots to just before the turn of the millennium in Porter and Kramer’s 1999 Harvard Business Review article entitled ‘Philanthropy’s New Agenda: Creating Value’. They outline how ‘free from political pressures, foundations can explore new solutions to social problems with an independence that government can never have.’ (Porter & Kramer, 1999). Altruism on the other hand, coined by one of the founders of Sociology Auguste Comte, is ‘a theory of conduct that regards the good of others as the end of moral action’ (Britannica, no date). This ‘antithesis’ to egoism and natural propensity to do good for the sake of it has underpinned the traditional definitions of philanthropy, thus making the advent of ‘philanthrocapitalism’ somewhat of a dichotomy. Linsey McGoey describes this new term as ‘oxymoronic’, with ‘the former a realm of ‘pure’ altruism and the latter a realm of ‘pure’ profit maximization’ (McGoey, 2012). Matthew Bishop effectively coined the term in an article for The Economist entitled simply ‘The birth of Philanthrocapitalism’. With the help of Michael Green he then wrote the seminal book on the topic named ‘Philanthrocapitalism: how giving can save the world’. Despite its critical acclaim and even later foreword by Bill Clinton, Robin Rogers notes how a later edition of the book swaps ‘save the world’ for ‘change the world’, suggesting that even Bishop may be questioning the effectiveness of this new form of giving (Rogers, 2011). This essay will explore whether seemingly deep-seated conflict between philanthropy and capitalism means that the high-profile generous work carried out by non-governmental organisations (NGO’s) and corporations can truly be altruistic. Furthermore, in a society dominated by capital, profits and incentives how much does this pure altruism matter; and how does this affect the usefulness of the work being done?

Defining philanthrocapitalism is relatively easy, it relates mostly to the idea of individuals behaving ‘more like investors’, ‘allocating their money to make the greatest possible difference to society’s problems’ (Bishop, 2006). However, altruism is a more difficult concept to define, with the advent of philanthrocapitalism making this process even more problematic. Although the term itself has only been in use since the 19th century, many thinkers before and indeed after this have attempted to define this idea of selflessness. In his Rhetoric, Aritsotle uses ‘pity’ to explain the drive to give. He describes this pity as ‘a feeling of pain caused by the sight of some evil, destructive or painful, which befalls one who does not deserve it, and which we might expect to befall ourselves or some friend of ours, and moreover to befall us soon’ (Aristotle, 1954). This definition does stress the fact that we feel most pity towards issues or people close to us, such as friends or people of the same age. However, the advent of mass internet, media and television arguably allows all issues to seem relatively close and deserving of our pity. Dennis Krebs examines the work of psychologists Batson and Shaw who outline that the motivation to help ‘cannot be both altruistic and egoistic’. Krebs disagrees and believes ‘no motive is purely altruistic’ and that actually ‘self-sacrifice’ is a factor that should be used in defining altruism (Krebs, 1991). Peter Singer also outlines the need to consider the self, highlighting in his infamous essay ‘Famine, Affluence and Morality’ that ‘if it is in our power to prevent something bad from happening, without thereby sacrificing anything of comparable moral importance, we ought, morally, to do it’ (Singer, 1972). Again, there is the acknowledgement of potential gain or in this case inconvenience or loss that both believe is engrained in the idea of giving and altruism. In response to McGoey’s comment that philanthrocapitalism is ‘oxymoronic’, Krebs may argue that this is actually a ‘false dichotomy’, relating to the perceived polarization of egoism and altruism. Instead, Krebs defines altruism ‘quantitatively along a continuum defined by anticipated net gains for another, relative to anticipated net gains for the self’ (Krebs, 1991). Returning again to the idea of pity, Aristotle and later Nietzsche would agree at least with the inevitable self-serving aspect of altruism or at least human nature, with Nietzsche explaining in The Dawn ‘If, in accordance with the present definition (of altruism), only those actions are moral which are done for the sake of others, and for their sake only, then there are no moral actions at all!’ (Nietzsche, 1881). Altruism truly is, as Peacock and Shefczyk describe, a ‘thick concept’ and one that is ‘generally purchased beyond its value, by the obscurity arising from the conflict between new and old associations’ (Peacock & Shefczyk, 2010) It is these perceived ‘levels’ of altruism along with the apparent disparities in definition that cause the issue in relation to this essay question, if Krebs is to be believed and there is no such thing as a purely altruistic act, how much altruism is enough? Furthermore, with philanthrocapitalism being such a new and ‘revolutionary’ concept, possibly the classic definition of altruism needs revising.

Philanthrocapitalism arguably steps beyond Andreoni’s theory of ‘warm glow giving’ as the primary contributing factor to the model of ‘impure altruism’ as profit takes precedent instead of the desire to ‘feel good about yourself’; an advertisement technique the Red Cross famously used when encouraging people to give blood (Andreoni, 1989, 1990). Alternatively, the warm glow may manifest itself in the popular belief that philanthropic giving from foundations and corporations is carried out ‘in part to atone for whatever were conceived of as the sins of business’, therefore improving the billionaires public image (Rogers, 2011). Nicole Aschoff furthers this stance by explaining how ‘philanthropy booms, triggered by rapid increases in inequality during periods of massive wealth expansion, serve as a kind of release valve for capitalism by ameliorating some of its worst excesses’ (Aschoff, 2015). The perceived ills of capitalism are somewhat forgotten as there is a public consensus that the richest in society such as the Gates’ are doing positive things with their money. Joanne Barkan of Dissent magazine explains how this critique of philanthropy has been around since the ‘gilded age’ as large-scale giving by the Carnegie Corporation and the Rockefeller Foundation ‘was merely a ploy to secure the wealth and clean up the reputations of business moguls who amassed fortunes’ (Barkan, 2013). This desire to upkeep a reputation in the public eye along with the search for profit and meaningful returns are the two aspects of philanthrocapitalism most challenging to the advent of true altruism.

Linsey McGoey traces the lack of altruism in philanthrocapitalism, a topic she believes is ‘one of the thorniest, long-standing, and divisive tensions in the realms of philanthropy and enterprise’, to 17th century writer Bernard Mandeville. McGoey highlights Mandeville’s early poetry that cites ‘fools only strive to make great an honest hive’, a precursor to his later work in which he believed that reason and selfless motives were merely a ‘post-facto rationalizing force’ used in ‘retrospect to justify decisions made from baser, more animalistic and self-serving instincts’. With proper government control in place, this self seeking would turn ‘private vices’ into ‘publick benefit’; a belief that arguably underpins the philosophy of the modern philanthrocapitalists. However, McGoey believes the Gates’ and Buffett’s of the world praise a ‘bastardized version’ of Mandeville’s theories that effectively omit the crucial aspect of government regulation and therefore accountability. This very neglect for regulation, McGoey feels, further demonstrates the philanthrocapitalists’ selfish tendencies and lack of true altruistic drive (McGoey, 2015). Furthermore, Nicole Aschoff believes that giving ‘private capital an incentive to care’ through profitable solutions leads to ‘undemocratic’ programs and structures primarily in health and education policy alongside the somewhat subordinate donations to for-profit firms (Aschoff, 2015).

Using healthcare as a primary example, an area of policy held highest by many in the ‘Giving Pledge’, Both Aschoff and Pratt note that the Gates foundation alone has an ‘annual grant-making of $3.9 billion’ that ‘almost equals the World Health Organization’s programme budget of $3.96 billion’. Pratt observes that this huge donation gives the Gates Foundation, an independent and unaccountable body, ‘potential to replace the WHO’s position as global health authority’ (Jung & Harrow, 2014). Rogers looked at the implications of this spending in action by speaking to Haiti’s Minister of Health Alex Larsen, who noted that ‘NGOs were functioning in his country as a kind of shadow government without accountability’ (Rogers, 2011). Robert Black for The Lancet explains the issue with this system, explaining that ‘while commendable, these funds might be better provided by national governments and international donors or agencies’ (Black, 2009). A second Lancet article outlines that the Gates Foundation is explicitly ‘driven by the interests and passions of the Gates family’, leading them to question ‘is such a whimsical governance principle good enough?’ (Lancet, 2009). Amongst this criticism there must be an appreciation for the fact that the Gates Foundation as a philanthrocapitalist entity is contributing heavily to saving lives, a fact that Aschoff too concedes. The fact that child mortality rates, for example, have reduced ‘three times faster’ between 2005 and 2015 than between 1990 and 1995 is in great part down to the considerable work done by these foundations (Aschoff, 2015). The question must however still be asked about whether the core driving forces of the Gates Foundation hold them back from achieving more. Is the lack of accountability and self-centered ‘whimsical’ governance model making true altruism and desire to help in the most effective way possibly subordinate or less attractive? David McCoy echoes this point, explaining that the foundation’s desire to create new methods of curing illnesses as opposed to improving existing ones demonstrates a ‘technological bias’ that ‘reflects the priorities of Bill Gates himself’. Whilst also appreciating the fact that the foundation may simply be choosing to ‘fill a gap that has been neglected by the market or other funders’ there is no escaping Gates’ preference for providing commoditized vaccinations as opposed to funding ‘diagnostics’ and improving ‘access to basic needs such as food, housing, water, and safe employment’, two more proven methods of saving lives that McCoy has proved Gates grossly underspends on (McCoy, 2009). This is arguably largely due to the philanthrocapitalist ‘investor’ mindset as explained by Bishop and Green, as the monetary returns for subsidizing and selling vaccines is much greater than eliminating the cause altogether. This quite poignantly demonstrates a key flaw in the capitalist mindset, as the most economically viable option is not always the most effective. Returning to Krebs, the ‘anticipated net gains for the self’ lies dangerously close to the ‘anticipated net gains for another’, demonstrating how a neglect for true altruism can greatly affect the effectiveness of the work done by these philanthrocapitalist foundations (Krebs, 1991).

‘Corporate philanthropy today is about private, tax-exempt donors such as the Gates Foundation giving their charity to corporations’. McGoey here is talking largely about for-profit donations to corporations such as Mastercard which she observes as ‘a freebie’ to corporations that ‘help to reduce corporate overhead, allowing some of the world’s wealthiest companies to offset the cost of expanding in new markets’ (McGoey, 2015). Along with this, companies or ‘corporations’ such as Google have their own foundations attached to their name. The rather cynically named Economist article ‘the good company’ calls corporate philanthropy the ‘sleaziest corner of philanthropy’ and notes how ‘corporate foundations in practice are often treated as a sort of slush fund into which the chief executive can dip to help a pet cause, enhance his status in the community or even cement a business relationship with a donation to a cause close to a business partner’s heart.’ (Economist, 2006). While this may seem unfair, Trisha Wilson of firm Wilson Associates explains how ‘surveys consistently show that people like doing business with companies that give back to others’ while also calling the practice a ‘win-win strategy for all’ in terms of the positive effect philanthropy has on both charities and the interests of the business (Wilson, 2011). Both explanations of corporate philanthropy explicitly highlight the fact that focusing truly on altruistic motives is not only impossible in a capitalist setting but also largely undesirable.

In a TED talk in 2013 Peter Singer, one of the leading thinkers in the advent of ‘effective altruism’, heralded the Gates’ and Warren Buffet as ‘the most effective altruists in history’ (Singer, 2013). For Singer, the trio warrant this title due to the ratio of number of lives saved to dollars spent. This central mantra of effective altruism is arguably taking the core practices and beliefs of philanthrocapitalism and applying to them to the general public. The admiration is also mutual, with the Gates’ providing the foreword to the printed version of Singer’s ‘famine, affluence and morality’ suggesting that the forty-year-old essay’s ‘time has now come’ (Singer, 2015). Singer’s and indeed the effective altruist movement’s basis for philanthropy is interesting in the sense that it lacks any true altruism. This is possibly no more apparent than in the final words of Singer’s TED talk in which he highlights how effective altruism gives you a ‘solid basis for self esteem on which you can feel your life was really worth living’ (Singer, 2013). The argument for helping people while also improving self esteem seems to have been omitted altogether. Sites such as ‘GiveWell’ offer a service in which charities are ranked in terms of the ‘overall quality and cost-effectiveness of the organization’s work’, creating a way for donors to essentially get the most philanthropy that their money can buy (GiveWell, no date). Mathew Snow opposes this singer-philanthrocapitalist culture of effective altruism initially by accusing it of resting on a ‘bourgeois moral philosophy’ that, much the same as philanthrocapitalist ideals, looks to ‘abstract from and thereby exonerate the social dynamics constitutive of capitalism’ (Snow, 2015). He continues by highlighting that capitalism creates the need to ‘put a price on life’, stressing that ‘rather than solely creating an individualized “culture of giving,” we should be challenging capitalism’s institutionalized taking’ (Snow, 2015). This applies to both the small-scale effective altruist and the billionaire ‘giving pledge’ member, if altruism cannot operate within capitalist ideals, it is not the level of altruism that should shift but the level of capitalism.

Philanthropy is often seen as something that cannot and should not be critiqued. Jung and Harrow refer to L’anson and Pfeifer’s term ‘dialectic deafness’ to describe how ‘philanthropy’s proclaimed practices and ideological commitments act as barriers to understanding and engaging with criticisms’ (Jung & Harrow, 2013). Put in a more informal manner, Rogers highlights how ‘proponents of philanthrocapitalism tend to label its critics, even friendly critics, as lunatics who oppose goodness and reason, probably hate apple pie, and maybe kick puppies’, further adding to the demonization of those seemingly outrageous enough to critique someone giving 99% of their multi-billion-dollar empire to charity (Rogers, 2013). However, this essay further demonstrates the need to do just this. While it has been established that true or ‘pure’ altruism is incredibly difficult if not impossible to realise, this essay has established somewhat of a correlation between purer forms of altruism and more truly beneficial results for the receivers of philanthropic donation. This may seem common sense but as has also been explained, the plutocratic side of philanthropy employed by the Gates Foundation and various billionaire pledgers prefers not to employ these purest forms of altruism and instead looks more towards more self-driven motives. Robin Rogers believes the best way to move forward is to not ‘argue over these facts but accept them as given’ and work to help improve the systems in place (Rogers, 2013). In the Kantian perspective, Philanthropy and therefore philanthrocapitalism is still in its purest form a gift and therefore an ‘imperfect duty’ that does not necessarily need to be carried out (Ohreen & Petry, 2011). With this in mind, a gift should surely be first and foremost informed by what will be most beneficial or fulfilling to the receiver, not the provider. This essay suggests that this purer form of altruism should further underpin the ideals of both philanthrocapitalists and ‘ordinary’ people not only because it is more morally just but also because it will ultimately benefit both giver and receiver more than self-driven, profit-led modern charity systems.

 

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