Showing posts with label Philanthrocapitalism. Show all posts
Showing posts with label Philanthrocapitalism. Show all posts

Saturday, April 4, 2026

Material World: The closed world of billionaire power (2026)

The Material World column from the April 2026 issue of the Socialist Standard

You can’t throw a brick these days without hitting one… philanthropic billionaires. One of them has been in the capitalists’ news cycles: Bill Gates has been in the news recently not so much for the atrocious spyware-laden Windows 11 operating system, but for his business ties and friendship with serial child exploiter Jeffrey Epstein. Yet Gates is still treated by the media as a kind of global saviour. A benevolent technocrat. A trusted voice on health, population, food, and development.

Philanthropy or social currency of ‘soft power’
Gates’s relationship with Epstein reveals the closed world of billionaire power. According to recently released documents, Epstein first contacted Gates in 2013 to propose a ‘donor-advised fund’ that would serve as ‘cloud computing for the giving world’, a vehicle to attract ‘the most money any charity has ever had’. Over 18 months, Gates’s family office head and foundation general counsel engaged in extensive correspondence with the convicted sex offender about this charitable vehicle.

But here’s the thing: why did the world’s second wealthiest individual require introductions to wealthy donors from a registered sex offender? The answer lies in understanding that billionaire philanthropy operates not as charity but as a mechanism of class consolidation an exclusive club and you’re not in it. Where the extraction of surplus value is celebrated through tax advantages. Barry Josephson and Epstein revelling through criminal interactions. Bill’s conundrum: what to do about the poor.

And we know exactly what they discussed. In an email exchange, Epstein wrote to an associate: ‘I’ve been thinking a lot about that question that you asked Bill Gates ‘how do we get rid of poor people as a whole’ and I have an answer/ comment regarding that for you’ (from the document provided, dated 3 February, 2011, showing correspondence between Jeffrey Epstein and Barry Josephson). This is what they talk about on the island. This is what billionaire philanthropy really means.

The population … problem?
Gates believes that the problem isn’t over-extraction, capitalism or the profit motive. Greed or billionaires don’t concern him, instead he sees African birth-rates as a threat to global capitalist progress. He has stated in a TED talk that he wants to reduce global population by 15 percent.

The Gates Foundation’s 2024 budget totals $8.6 billion, with family planning separate from the $8.3 billion for ‘fertility management’. Gates pledged $100 billion for this on World Population Day, not International Women’s Day. Fertility management in the Gates Foundation has its own budget and targets: $150 million for 2024 and $143 million for 2025. Not through maternal care or with improving material conditions like clinics that could continue afterwards. The money does not flow from charity to women; it flows from tax sheltered wealth to pharmaceutical corporations.

The Depo-Provera scandal
The Bill & Melinda Gates Foundation (BMGF), backed by hundreds of billions, claims moral authority to influence the health, agriculture and family lives of millions across Africa and the global south. This is about Sayana Press, Pfizer’s injectable contraceptive, a reformulated version of Depo-Provera that was previously subject to over 2,000 brain tumour lawsuits in Florida. The UK and US government both subsidise the use of this drug.

A 2024 study in the British Medical Journal revealed that women using Depo-Provera face a 550 percent increased risk of developing intracranial meningiomas, AKA brain tumours, requiring invasive surgery, radiation, and often causing permanent neurological damage. Pfizer knew of these risks for decades while failing to warn patients. European and Canadian labels now carry meningioma warnings; the US label was only updated in December 2025 after litigation began.

The Maxwell precedent: intelligence and institutional power
Robert Maxwell, press tycoon, scam artist, and former Labour MP too knew how to create institutional power. He had intelligence contacts in Mossad and with the KGB and did work for British intelligence. He also hobnobbed with the queen, (prince) Charles, Thatcher, Mother Teresa, George Bush and so on. He was the go-to guy for dirt on the lifestyles of the rich and famous.

The Epstein-Gates nexus is modelled on these earlier networks of elite control. Epstein’s own operations, his ‘black book’ of contacts, his mysterious wealth, his lenient 2008 prosecution, suggest similar intelligence community protections. The ‘Lolita Express’ flight logs and island visitors represent not merely criminal activity but the mechanisms through which ruling-class loyalty is ensured through mutual incrimination.

The socialist alternative
Socialists do not oppose access to contraception, nor deny the importance of reproductive choice. On the contrary, we insist that women must be free from economic compulsion in deciding whether and when to have children. The Gates Foundation model, in which pharmaceutical corporations, backed by billionaire ‘donations’ and government co-funding, experiment on vulnerable populations, represents the antithesis of reproductive freedom.

True reproductive freedom requires the social ownership of pharmaceutical production, democratic control over healthcare priorities, and the elimination of economic coercion in all its forms. When contraceptives are developed through producer-controlled research, distributed through publicly accountable health systems, and provided as genuine choices rather than population control measures, then we will have achieved something worth calling family planning.

Until then, we must recognise billionaire philanthropy for what it is: the velvet glove of the ruling elite sanitising exploitation while the iron fist of king capital maintains its grip.
A.T.

Monday, December 4, 2023

Cold as charity (2001)

From the December 2001 issue of the Socialist Standard
A brief look at the Guardian’s recent ‘Giving List’
The Guardian (5 November) issued a supplement entitled “The Giving List” detailing which companies in Britain gave most and least to charity. It comes as no surprise that business donated £0.68bn whilst the general public gave £4.3bn. The business of business is making money, after all – not giving it away.

Charity is big business in Britain with over 180,000 registered charities, but compared to the US it is petty stuff. In the US last year charities grossed $200bn. Foundations gave 12 percent, corporation 5.3 percent. Why such generosity? Well, it is not as great as it seems. Corporate giving was only 1.2 percent of pre-tax profits and on examination the apparent generosity has ulterior motives. In 1889 Andrew Carnegie, robber baron and philanthropist wrote in his essay Wealth, on the need for charity:
“The problem of our age is the proper administration of wealth, that the ties of brotherhood may still bind together the rich and the poor in harmonious relationships.”
More up-to-date though, the writer Mark Dowie in his recently published book American Foundations, An Investigative History says:
“The sad facts is that a majority of America’s 50,000 or so private foundations are mindless lawyer-ridden tax dodges that accomplish little beyond the transfer of riches to already wealthy institutions.” 
“Some capitalists do value private philanthropy because it creates countervailing force against socialism, others because it quells social unrest.”
Having quoted earlier that arch-hypocrite and exploiter Andrew Carnegie let us end with the words of Oscar Wilde, from a socialist perspective the definitive words on charity:
“They try to solve the problem of poverty, for instance, by keeping the poor alive; or in the case of a very advanced school, by amusing the poor. But this is not the solution; it is an aggravation of the difficulty. The proper aim is to try and reconstruct society on such a basis that poverty will be impossible.”
To give or not to give? 
Among all the league tables and the sport of naming and shaming there is a comparative newcomer – the Giving List. In the US since 1996 a league table known as the Slate 60 of the top American philanthropists has been published on the internet. An earlier list of Millionaire Givers ran into legal problems of confidentially and has not been published since 1994. The Guardian‘s Giving List offering us an insight into the generous and the stingy among the top corporations quoted on the London stock exchange.

Much effort is devoted to giving capitalism an acceptable face. A new industry has grown up around the idea and the practice of corporate social responsibility (CSR). Better to give back to the victims part of the proceeds of exploiting them than to be too greedy and to get a bad name.

It seems there are two views among supporters of capitalism about the best way to run it and secure its future. We may call these views hard-line and soft-line, although those terms are rarely used by the protagonists. The hard-liners date themselves back to Adam Smith, with extensions to his “invisible hand” by such as Margaret Thatcher, Milton Friedman and lesser-known luminaries in the “new liberalism”.

The basic proposition of the hard-liners is that the business of business is making money, not employing people or giving them charity. The task of companies is to maximise profit for their owners, the shareholders. Appeals for companies to feel responsibility for the welfare of other “stakeholders” – their employees, the local community, the environment—can only detract from the bottom line. It is argued that widespread adoption of CSR would undermine the foundations of the market economy.

The advocates of the CSR – the soft-liners – don’t want to abolish the market economy. They want to make it stronger by giving it a better image. Their basic motive is still the promotion of “wealth creation” – capitalist code for profit-making. Digby Jones, writing on behalf of the CBI, is frank about this: “Actions that affect beneficially on society create an environment where people feel safer, and this helps business” (Guardian, 6 November).

Socialists don’t take sides in any conflict between those who want “business” to accept more CSR and those who don’t. CSR is just one among many ways of reforming capitalism. Time and energy spent on discussing the pros and cons of CSR is, from a socialist point of view, wasted and deserves to be put in the dustbin of failed reforms alongside nationalisation, public-private partnership, “fairer” taxation, and so on.

But there is one thing about CSR that can be of use to socialists. The practice of social responsibility is at best an “add on” within capitalism (the system is more recognisable for its social irresponsibility). With socialism, social responsibility – concern for those doing the work, the local community, the environment – won’t be an “add on” to the system – it will be a central feature of it. With the pursuit of profit and the subservience of workers to capital off the agenda, we shall be responsible for the kind of world we want to build and live in.

Monday, September 18, 2023

From each according to their ability (2007)

From the September 2007 issue of the Socialist Standard 
“I don’t want to take £1 billion pounds to the grave with me.”  (Sir Tom Hunter, Daily Telegraph, 18 July 18).
Andrew Carnegie, Bill Clinton, Bob Geldof et al would no doubt agree that there can be only a small percentage of financial, business, sport or artistic successes in any one generation. There just isn’t space at the top of any profession or vocation for the majority of the population. The system doesn’t work like that. A pyramid requires a very broad, solid base made up of multitudinous blocks rising in successively smaller layers to the apex. The financial structure of the world is the same; the many enabling the few to amass their fortunes. In sport or art, whether through talent or promotion, a similar structure exists.

Whilst the super-rich can afford to give away much of their monetary wealth without hardship or set up trusts, charities, concerts and the like to alleviate some of the world’s worst conditions (and the rest of us can donate much smaller amounts according to our individual situation and whim), the plain facts are that each year, year in, year out, millions more around the world find themselves in abject poverty. Whatever is given in aid, grants or donations is never, and will never be, sufficient to “make poverty history”.

Sir Tom Hunter appears not at all gloomy about the world situation and claims “he gets a bigger buzz from a successful philanthropic venture than from his businesses”. There is an obvious satisfaction to be gained from personally being able to bring positive solutions to problems of those less fortunate than oneself; however, even supposing all the world’s billionaires were to prove as altruistic in ministering to the world’s needy, it would only result in a partial cure of humanity’s sores rather than total elimination of the disease.

The Daily Telegraph article ends with Carnegie’s assertion that “all personal wealth beyond that required to supply the needs of one’s family should be regarded as a trust fund to be administered for the benefit of the community.” Which is not all that different from Karl Marx’s dictum “from each according to their ability, to each according to their need”. However, the poor of the world don’t need a hand-out. They simply need to be a part of a world system that doesn’t exploit them and with the universal right to nutritious food and clean water, shelter, responsibility for self-determination, all long recognized as prerequisites for a fulfilling life.

With “from each according to ability, to each according to need” applied globally it will not only be possible but achievable in the foreseeable future to eliminate poverty, malnutrition and the other ills inherent in global capitalism.

When doctors, teachers, musicians, scientists, technicians, farmers, entrepreneurs use their expertise solely for the benefit of the (world) community; when the Earth’s rich resources are used for people, not profit; when all citizens of the world are seen to have equal, intrinsic worth regardless of background, intelligence or class; when our collective aims are truly altruistic rather than accumulative then there would be no worries about taking money to the grave. Wealth would be real, not virtual; the Earth’s resources would belong to all, not to be pillaged for profit for the minority; talent, skills and human endeavour would be the wealth to be spent by all for the benefit of all.

How satisfying to go to the grave fully used up with absolutely nothing going to waste.
Janet Surman

Thursday, October 13, 2022

Material World: Why they keep piling up manure: the psychology of wealth accumulation (2009)

The Material World column from the October 2009 issue of the Socialist Standard
Money is like manure.  If you spread it around, it does a lot of good, but if you pile it up in one place, it stinks like hell.
I can’t trace the original author, but it seems to be a popular motto among rich “philanthropists”. It has been attributed, in slightly variant wordings, to steel magnate Andrew Carnegie, oil tycoon J. Paul Getty, New York “socialite” Brooke Astor, Clint W. Murchison (chairman of Tecon Corporation) and Kenneth Langone (founder of The Home Depot).

Two questions spring to mind.

First, if these people so hate the smell of manure, why do they keep piling it up? After all, they are free to stop at any time.

Second, what do they want all that money for anyway? Surely a few hundred million should suffice to buy all the luxuries anyone could want? So why chase after the billions?

An addiction to extravagance
One answer is offered by Eric Schoenberg of Columbia Business School (on the site of Forbes magazine). Driving your first Rolls Royce is a fantastic experience, he explains, but as you get used to it you no longer enjoy it so much. So you have to look for new experiences, which for some reason are always more and more expensive.

 Presumably, an obsession with money spoils the enjoyment of anything that does not cost a lot of it. The result is an addiction to extravagance that reinforces the drive to make more money.

Kudos
Besides addiction to extravagance, the most common motive for accumulating wealth appears to be simply the desire to be admired by others. Kudos, however, depends less on absolute wealth than on place in the pecking order, as indicated by lists like the Forbes 400. Only Number One can feel fully confident of his superior status – and even he must beware of rivals overtaking him.

 Astonishing but true: many people honestly think – indeed, assume – that being rich is something worthy of pride and admiration. They consider having more money than anyone else the greatest of all conceivable human achievements. Never mind where the money came from, how it was acquired. To be a “winner” is glorious, to be a “loser” shameful and pitiable. They were brought up to think so, and can hardly imagine that anyone might be sincere in thinking otherwise.

 We might expect there to be an element of subtlety or mystery in the driving impulse at the core of a dynamic that spawns so much evil. Instead, we find something insufferably boring and trivial, the ultimate in banality.

The “philanthropists”
And yet the worship of wealth need not wholly exclude other social values. Many people feel that just being rich is not sufficiently glorious in itself: in addition, one should “do good”. As a result, some wealthy individuals wish also to be “great humanitarians and philanthropists”.

 There is actually a special business that makes money by selling “philanthropic” fame. For a fixed sum you can have a concert hall, museum, hospital, college or whatever named after you (or a relative of yours). For example, Brown University named its Institute of International Studies, where I used to work, in honour of Tom Watson of IBM in exchange for $25 million.

 The publicity given to large “philanthropic” donations suggests that in certain circles kudos may now depend on how much money you give as well as how much you have. It is like the potlatch among the Kwakiutl of western Canada, where the wealthy gain kudos by making generous gifts.

Guilt feelings?
While “philanthropy” is often just a means of cultivating a favourable public image, some wealthy people may be sincere in wanting to “do good”. Some authors even attribute the giving of certain individuals to guilt feelings about how their fortunes were made.

 Thus, it is claimed that Brooke Astor was ashamed of her family’s reputation as New York’s biggest slumlords. Carnegie, we are told, felt guilt over the workers killed in the suppression of the Homestead strike of 1892. Yet he also wanted “Carnegie Steel to come out on top” – and that feeling proved stronger than any sense of guilt.

 Ashamed or not, Astor gave nothing to the victims of her family’s rack-renting. Instead, she gave $200 million to cultural institutions. Similarly, Carnegie endowed the arts and academia, but gave nothing back to the workers who slaved in the heat of his steel mills at poverty line wages – twelve hours a day, every single day of the year except 4 July
 
 The ruthless capitalist precedes, makes possible and is vindicated by the “generous philanthropist”. The capitalist drives the system that causes the misery; the “philanthropist” then does a little to ameliorate that misery. Strangely enough, the capitalist and the “philanthropist” turn out to be one and the same person.

Piling up and spreading out
Why keep piling up manure just to spread it out again? It seems senseless – even if the manure does not end up exactly where it was before.

 Yes, it seems senseless when we focus on outcome. But when we shift our attention to process, it starts to make more sense.

 Piling up brings one sort of kudos, then spreading out brings another. One sort does not cancel out the other.

 Both piling up and spreading out give the satisfaction of exercising power, making decisions that affect millions of lives – on the sole qualification of the possession of wealth.

 So it all makes perfect sense. From a certain point of view.
Stefan

Wednesday, July 13, 2022

The Rockefellers (1960)

From the July 1960 issue of the Socialist Standard

On the 11th of May there died in Tucson, Arizona, John D. Rockefeller, Jnr., son of that notable father, John D. Snr, a man well-known in the early American capitalist era as one of the Robber Barons, with a finger in many pies—coal, iron ore, but chiefly remembered for his control of Standard Oil (New Jersey). In fact, according to Victor Perle in his book American Imperialism, in 1949 Standard Oil handled one-fifth of the oil produced in the western hemisphere, and its marketing areas covered countries in which some 72 per cent. of the world’s population resided. The control of oil throughout the western world is in the hands of seven oil trusts, of which Rockefellers control three.

But the Rockefellers, according to the obituaries of “Junior,” were noted for their “beneficence." It is reputed that between them they gave away some £350 million, and were still able to leave, as reports have shown, £200 millions (senior) and £150 millions (junior). These are staggering sums of money. And “Junior’s” will make no mention of any settlement for his six children and their various offspring, so it must be presumed that they have been well provided for. Some readers may say, but at least they gave some away, for the Daily Telegraph, May 12th, reports that “He devoted himself to furthering the schemes for human betterment initiated by his father after establishing his fortune." What from our point of view is important, however, is to whom it was given and why. Part of the answer to the first point is contained in the Telegraph of the 12th. “Educational Organisations benefited the most.” It seems highly probable that Marxian economics and the Labour Theory of Value plays no significant part in these “Educational Organisations,” for remember, education as taught today is primarily to fit workers into the productive and administrative organisation of capitalism and not to teach them Socialism.

Next comes “Religion,” another barrier to working class emancipation. Then “Public Parks, Roads, and the restoration and historic structures and antiquities.” No doubt the workers of the slum dwellings of all the major cities in the U.S.A. will appreciate that they can walk in the parks and pray in a well-restored church. Lastly, “Great sums to youth.” How this was distributed was not mentioned, but it is unlikely that these funds were used to propagate Socialist ideas. They were obviously spent to eulogise and bolster the capitalist system.

So, as commendable as some people may think was his “beneficence,” it is interesting to note that the people from whom this wealth was expropriated, his own workers, received little or nothing of what was rightfully theirs. Why he gave away these vast sums of money is a matter of some conjecture. One reason surely was to avoid taxation, but possibly also to buy immortality.

Socialists hope that in the not too distant future, people will see these so-called philanthropists in their true light—of leeches who grow fat on the mental and physical energies of the working class. Although “Junior” is dead, the Rockefeller Empire will continue, for neither father, son nor children ever took part in the production of things for use. At least it will continue to flourish until workers decide to own and distribute the fruits of their labour themselves.
Johnny Edmonds

Tuesday, September 17, 2019

Pathfinders: Heavenly Gates (2012)

The Pathfinders Column from the September 2012 issue of the Socialist Standard

It must be a great feeling for anyone with a social conscience to be so ridiculously rich that they can spend their entire time doing something to alleviate a major global problem and actually feel that they are achieving something lasting and significant. Talk about the buzz, it must be a high that those seedy Russian oligarchs can never experience no matter how many yachtfuls of champagne they swim in or campaigning journalists they have knocked off by their hit-men. Cash-with-conscience philanthropists with billion dollar bank accounts must feel like the messiahs of the hi-tech age, second only to the great saints but without the unpleasantness of a stake-burning  or a crucifixion to earn their place in the pantheon of the Blessed.

Bill Gates, through his charitable Foundation, is one such saint, who has poured billions into agricultural R & D, malaria, polio and a host of other third world problems and who is a leading light in the Giving Pledge, a club of super-philanthropists dedicated to giving up the lion’s share of their wealth to solve problems of poverty, starvation and preventable disease among the world’s poorest ‘bottom billion’. Just last month the Bill & Melinda Gates Foundation hosted a Reinvent the Toilet fair at their Seattle campus, a successful competition to find a design of lavatory that operates without running water, electricity or a septic system, at a running cost of no more than 3p a day and which captures or recycles energy. The applications of such a non-water-based design in many of the world’s poorest and resource-starved countries are too obvious to need spelling out. Poor sanitation kills 1.5 million children a year, and causes 50 percent of hospital admissions across the developing world. Bill Gates has the Midas touch. Every social ill he turns his attention to instantly sprouts solutions. He can even turn poo into gold.

How could even the most jaded and cynical socialist find anything to criticise in the activities of such a man? Churlish in the extreme to whinge about the often ruthless methods by which St Bill got to be so rich in the first place. Here’s a man who cares, really cares about the world’s poor, and is so stupifyingly rich that he has no need to impress anyone by pretending fake concern. Ditto Warren Buffett, possibly the most class-conscious benefactor in the super-philanthropist club and famous for complaining that he pays less tax than his secretary. Ditto Mark Zuckerberg, the billionaire owner of Facebook who is barely out of his teens but whose ability to wield an economic power fifty countries would go to war to possess is mitigated, mercifully, by an apparently decent character and youthful save-the-world idealism. Arguably the force behind the super-philanthropy of the Giving Pledge is the ghost of Andrew Carnegie, in whose essay The Gospel of Wealth are to be found the arguments most influential in the thinking of these plutocrats. Carnegie’s view was that of the enlightened plutocrat, the sort who knows he can’t take it with him, the sort who has ceased to yearn for loot and now yearns for legacy. Carnegie, it must be said, meant well, and indeed even implied at one point that a future society might be built along egalitarian lines which would render his conception of top-down charity redundant. Given such a mentor, how could anyone gainsay the efforts of the 81 members of the billionaire club of the Giving Pledge, apart from perhaps suggesting mildly that all their money combined still won’t go as far as they hope or achieve as much as they think?

To return to the poo competition, a team from the London School of Hygiene and Tropical Medicine submitted an entry which uses a black soldier fly larva to eat the organic waste and turn it into environmentally-friendly animal feed. This toilet is now being field tested. The winning design from Caltech is solar powered and generates hydrogen fuel and electricity. These and other designs are fantastically useful and there is no question that with implementation they will improve the lives of millions across the world. Bill and Melinda score another home run.

But there is a sense in which Bill’s public-spirited generosity has an insidious dimension. It’s the sense in which he functions as capitalism’s PR agent, always accentuating the positives, the successes, the achievements, the progress. Is it an achievement, for instance, to get 81 of the world’s billionaires to join the Giving Pledge? Undoubtedly, and the best of luck to them. But what are we to make of the other 1145 billionaires (at 2012 estimates) who have not signed up? Some are perhaps hesitating. Many will have simply turned their noses up at the chance to give a little back. Socialists are always pointing out that the enemy of humanity is a system, a set of abstract social agreements, not any real living individual. However that doesn’t alter the fact that many of the super-rich are evil, squalid little shits who, if there turned out to be a Hell, fully deserve to rot in it. Bill can’t very well admit this in public since he acts as unofficial ambassador for these manicured Mafiosi. He’s like Cliff Richard trying to front a death metal band. You only have to browse through the Forbes list (www.forbes.com/billionaires) and compare it to the Giving Pledge list (LINK) to see how the vast majority of these paper princelings tend to regard the pressing issues of world poverty and hunger – they couldn’t give a flying shite into a Bill Gates organic supertoilet.

But Bill’s PR work doesn’t simply consist of putting a nice face on a lot of nasty bastards. He also has ringing praise for the social system which put him where he is today: ‘Capitalism is a phenomenal system because it’s generated so much innovation.  Other systems don’t allow that to happen. There is no other system that’s improved humanity, whether on a hundred year scale or a ten year scale. The world is better off…’ (http://www.bbc.co.uk/news/business-16738888).  Compared to what, feudalism? That’s like saying that the NHS is better than witch-burning.  Compared to Soviet ‘communism’? That was nothing but state-run capitalism in disguise, like British Rail on a bad day but with show trials. What are these ‘other systems’ against which capitalism has performed so miraculously? Bill doesn’t say and of course Bill doesn’t know. It’s just a rhetorical device. The only reason capitalism looks like a winner is because capitalism is the only horse running, a sure-fire bet that Bill and his friends won their money on. The real talent, the one that will make capitalism as obsolete as the Hansom cab, the future system Carnegie suspected might be possible, remains locked in the stables while Bill’s earnest propaganda helps to keep it there.

What, to a socialist, is the real indictment of capitalism behind the Poo Competition in Seattle is the fact that any of these university teams could have come up with any of these designs without the Gates Dollar to spur them to heights of inventiveness, but they didn’t. Why didn’t they? Because scientists don’t care? No. Because science has to do what money says and, except for the rare occasion when someone like Gates comes along with a wad of it, money doesn’t care.  Bill Gates thinks that money solves problems, but these are problems all created by money in the first place. Capitalism creates an apocalypse and then picks its way across the corpses rescuing the odd orphan, trumpeting its own philanthropy as it goes. Bill Gates surely knows this. They all do.  Though it isn’t nice to speak ill of the dead well off, in this sense, Bill and his friends are as full of shit as his toilets.
Paddy Shannon

Sunday, April 21, 2019

Rebutting Capitalism’s Apologists (2013)

Book Review from the December 2013 issue of the Socialist Standard

Managing Democracy Managing Dissent, (subtitled ‘Capitalism, Democracy and the Organisation of Consent’, published by Corporate Watch), consists of a collection of essays mostly authored by academics from sociology and related departments working in a variety of British and American Universities.  From the nature and scholarly style of the writing, the target audience is expected to come from a similar background and it seems unlikely that the book will become a left-wing popular classic.

As with any work, consisting of 20 separate pieces from more than ten different authors, the result is quite mixed. However, the four page foreword by Gerald Sussman is succinct and excellent and in many respects the reader will get the gist of the book from this alone. He neatly summarises developments in capitalism over the past 20 years and discusses the resulting ever increasing alienation of the working class from the system. Unfortunately from a socialist viewpoint, this alienation manifests itself in a widespread apathy rather than any active oppositional politics.

Regarding the main body of the book, there are some interesting observations amongst a voluminous mass of left-wing sociological jargon and analysis. A major part of it is an examination of the evolution of capitalism over the last hundred years though really the focus is a critique, specifically on American and to a lesser extent British capitalism. This gives the whole book a decidedly ‘anti-imperialist’ flavour in terms of politics and culture. The book is laden with clichéd terminology and the time-honoured denunciation of neo-liberalism, neo-colonialism, globalisation, ruling-class hegemony, etc. The usual villains in works of this sort are well represented and receive the customary castigation: the Pentagon and CIA, the World Bank, Wall Street, The City, Rupert Murdoch, the Freedom Association, Messrs’ F. Hayek & M. Friedman, etc. Some of the well-known incidents of American foreign interference since World War Two  are retold; the CIA’s role in the overthrow of Mossaddegh (Iran, 1953) and Allende (Chile, 1973), the attempted suppression of the Viet Cong in the 1960s and later the Sandinistas in the 1980s.

The problem with this analysis is that global capitalism is conflated and confused with American imperialism and the implication is that if America could be changed or reined in by some means, a better global society and socialism would naturally evolve. This ignores the fact that the workings of capitalism are independent of whatever country happens to be pre-eminent at any time in world history. As an aside, that man of the moment, Ralph Miliband, puts in an appearance too and there is a good quote from him where he states that as capitalism produces great inequality in the distribution of wealth then inevitably great inequality in political power results, irrespective of any egalitarian claims of the governments that administer the system.

The book is better where it explores the mechanisms by which the elite (the capitalist class or in contemporary parlance the 1 percent) control society. There is detailed analysis of the role of the media, the advertising and entertainment industries, in promoting acceptance of the status quo. Most of this is true but is old news. More interesting is the exploration of celebrity philanthropy (Bob Geldof, Bono, and so on), the role of western NGO’s in the developing world and their connection with the activities of the large charitable foundations (Ford, Carnegie, Rockefeller and more recently the Bill & Melinda Gates Foundation). The book claims that by choosing which reformist movements to fund at home and abroad, these foundations act to marginalize what they deem to be movements dangerous to world order while sustaining safe and non-threatening movements for social change. The history of the various protest movements that have arisen over the past 50 years or so around the world is discussed and how these have either fizzled out or been co-opted into the mainstream.  So in this context the book examines the recent Occupy Movement and the Arab Spring and more locally in England, the Student Demonstrations of Winter 2010 and inner city riots of Summer 2011.

Concentration of power
The book does have useful information on how power in capitalism is much more concentrated than people might generally think and the enormous influence that very wealthy individuals such as the Koch Brothers and alternatively George Soros can yield in the political system. It examines how the same people can hold senior positions in western governments and when their political careers are over move seamlessly into heading up large multi-national businesses or significant NGOs and think-tanks to continue their defence of capitalism. There is also discussion of the criminalisation of direct action movements against certain unpopular manifestations of capitalism; nuclear energy, field sports, animal testing, the arms trade, environmental pollution and the legal response by governments and resulting police tactics (surveillance, infiltration, etc. of the groups involved).The activities of bodies including the American National Endowment for Democracy (NED) and the British government supported Westminster Foundation for Democracy (WFD) are explored. These non-profit organisations have stated aims such as the promotion of democracy and western values around the world but who the critics claim impose a soft, western oriented neo-colonialism in the countries that they operate in.

Whatever its drawbacks, the book is motivated by a fundamental question that real socialists have faced and debated amongst themselves for many years. According to our view, society is based on capitalism which is inimical to the interests of the vast majority of the people of the world (who are the working class). However, in large parts of the world, workers have access to political power through the democratic structures (parliamentary elections based on an almost universal adult franchise) that exist in many countries. Of course this ‘democracy’ is limited and partial, to greater or lesser degree depending on the country. But nonetheless in principle workers in many countries have the option of replacing capitalism with socialism.

This clearly hasn’t happened so the question is why not? Apologists for capitalism will claim that workers are in fact broadly happy with their lot, identify themselves more by gender, race and nationality than class and do not ‘buy into’ the socialist analysis. Supporters of socialism (in the many ways that is defined, meaningfully or not) have a harder task rebutting this thesis and this book is one attempt, if not a very good one. We in the Socialist Party do not claim to have a definitive answer to this conundrum either. All that can be said is that when a majority of the world’s workers understand the nature of current society and realize that a much better society is possible, that dissent will produce real and fundamental change rather than more tinkering with the existing system.
Kevin Cronin

Wednesday, April 17, 2019

The Top of the One Percent (2014)

Book Review from the March 2014 issue of the Socialist Standard

Plutocrats: the Rise of the New Global Super-Rich by Chrystia Freeland  (Penguin £9.99.)

Chrystia Freeland has no objection to the current social system and those who benefit from it: ‘we need capitalists, because we need capitalism’, she writes. And she is now a Liberal MP in Canada. But her book does have some interesting things to say about the very wealthiest people in society and the increase in inequality. 

It is quite common nowadays to refer to the 1 percent who form the top of the class pyramid. But even within this 1 percent there is a distinction between a plutocratic super-elite (which is overwhelmingly male) and those who are ‘merely wealthy’. In 2005, for instance, Bill Gates and Warren Buffett had a combined wealth of $90bn, not far short of that of the 120 million people who formed the bottom 40 percent of the US population. In 2008, the top 2 percent of the 1 percent in Britain, which must be only about ten thousand people, received almost one-seventh of the income of the 1 percent. The super-elite set up ‘philanthropic’ foundations, such as the Gates Foundation, as status symbols.

Also, the higher echelons of the elite mostly operate at a truly global level, with English as their lingua franca. Its members may have been born in one country and educated in another (quite likely at a university such as Harvard or Oxford). They may own a multi-national company with its headquarters in a third country and have homes on two or three continents. So possibly the biggest capitalists are becoming less tied to particular countries and identify less with a national capitalist class. But many of them make sure to attend top British social events, such as Ascot and Wimbledon.

More controversially, Freeland claims that many plutocrats are the ‘working rich’. They are chief executive officers or top bankers or lawyers, rather than just people who own masses of shares. Though few come from truly impoverished backgrounds, their enormous wealth is not inherited, so they are supposedly ‘self-made men’. They mostly work in newish industries such as computing or other kinds of technology, or else in finance. Perhaps it is more accurate to say that these ‘alpha geeks’ often had some idea for a website or a piece of software, but they were just lucky in getting into a position where they could exploit others, and that is what really made them so fantastically wealthy.

So Freeland’s book does have some interesting things to say on ways in which capitalism is changing, and on how it is not.
Paul Bennett

Saturday, March 30, 2019

Not Changing the world (2019)

Book Review from the March 2019 issue of the Socialist Standard

‘Winners Take All: The Elite Charade of Changing the World’. By Anand Giridharadas. (Alfred A. Knopf, 2018)

‘The Ideas Industry’. By Daniel W. Drezner. (Oxford University Press, 2017)

‘The Givers: Wealth, Power, and Philanthropy in a New Gilded Age’. By David Callahan. (Alfred A. Knopf, 2017)

The capitalist class controls not only the means of production but also many other important spheres of social life. The authors of these books give us close-up views of how capitalists, aided by servitors of various kinds, control two of these spheres: the formulation and dissemination of ‘new’ ideas and the activity that goes by the name of philanthropy (from the Greek words for ‘love’ and ‘human’). Drezner examines the ‘ideas industry’ and Callahan philanthropy; Giridharadas provides an overview of both.

By and large, these authors focus on just one of the two wings of today’s capitalist class – the so-called ‘globalists’ – cosmopolitans who constantly move around the world, believe in open borders and the free movement of goods, capital and labor and profess liberal views on issues like race, gender and religion. For corresponding portrayals of the other – nationalist, protectionist or ‘conservative’ – wing it is necessary to look elsewhere.

The ‘globalist’ plutocrats and their sidekicks inhabit an ‘intellectual cocoon’ that Giridharadas dubs MarketWorld. In MarketWorld there is endless and mostly vacuous chatter about ‘changing the world’ that never contemplates changing the world (at least not in any very significant way). ‘You can talk about our common problems, but don’t be political, don’t focus on root causes, don’t go after bogeymen’ (i.e., don’t blame anything on anyone in particular). For instance, you can talk about poverty but not about inequality.

MarketWorld elevates to stardom charismatic ‘thought leaders’ whose superficial mantras supplant the debates of public intellectuals. Their ‘charade’ fills a space that might otherwise be infected with systemic criticism. At the same time, it salves the consciences of the ‘winners’, encouraging them to ‘feel that they are change agents, solutions rather than the problem’. MarketWorld also provides a few jobs to young careerists who want not just to make money but to feel good about themselves while doing so.

The image that emerges of the capitalist is decidedly one of dual-identity, with abrupt alternation between Dr. Jekyll the benevolent philanthropist and Mr. Hyde the ruthless and rapacious tycoon. The theoretical basis of this mental disorder was first presented by steel magnate Andrew Carnegie in his 1889 essay The Gospel of Wealth. According to Carnegie, the ideal capitalist accumulates as much wealth as he can, using whatever means may be necessary, but he accumulates that wealth not for his own benefit – he himself lives modestly – but rather in order to redistribute it in the best interests of society – interests that he is uniquely equipped to judge (after all, he has proven himself a brilliant organiser). That is why Carnegie made his workers toil such long hours at such low pay in the heat of his steel mills – in order to fund public libraries.

Capitalists evidently do not mind being told to do more good. What they do not like is being told to do less harm. Some of the most celebrated philanthropists do the most harm in their role as businesspeople. One example is the Sackler family, owners of Purdue Pharma, whose highly profitable painkillers allegedly fueled the opioid addiction crisis (they also stand to profit from addiction treatment).

Perhaps, however, these authors place too much blame on capitalists as individuals and focus too little on capitalism as a system. As Giridharadas points out, a company that is not run solely in the interests of shareholders risks lawsuits from its investors. Even in the handful of jurisdictions where new corporate laws have been passed to permit the creation of ‘socially responsible’ firms (B companies), such firms have difficulty in attracting and retaining capital and remain few and far between.
Stefan

Saturday, December 29, 2018

Philanthrocapitalism IV: The Messianic Rich (2018)

From the August 2018 issue of the Socialist Standard


The concluding article of our series on ‘philanthrocapitalism’

No such thing as a free gift
A significant motive driving philanthrocapitalism has to do with the tax incentives involved in charitable contributions. In most countries in the world, taxes constitute the primary source of government revenue (government borrowing, mainly through the bond market, is another important source). Paying less tax may be good for the businesses concerned but it obviously impacts on government revenue and, hence, the state’s capacity to finance reforms such as social welfare programmes. That in turn has consequences for private charity and the scale of the task it faces.

Some philanthrocapitalists appear to have grasped this point well enough. An example of this is the Boston-based project, Responsible Wealth – a ‘network of business leaders, investors, and inheritors in the richest 5%’ of the US population. It lists amongst its supporters Warren Buffet and Bill Gates Snr and is an offshoot of the aforementioned ‘United for a Fair Economy’ which it describes as ‘an organization that supports workers to organize and advocate for policies that make our economy more fair and equitable’ (www.responsiblewealth.org).

Amongst other things, it calls for higher taxes on the very rich and an increased level of public investment. However, the bizarre spectacle of billionaires taking up apparently left-wing causes might not be all that it seems. There is undoubtedly an element of self-interest involved, based on a recognition that the way things are panning out might not be good for the long-term stability and prosperity of capitalism itself. Though a system of cut-throat competition tends to foster ‘short-termism’, that does not rule out the possibility of sections of the capitalist ruling class rising above their circumstances to take a longer-term perspective.

Given that the state, famously described by Marx as the ‘executive committee of the ruling class’ has more leeway than capitalist corporations in what it is able to do within the context of market constraints, it is not surprising that such a longer-term perspective has tended to be associated with, and organised around, a more statist-oriented prescriptive approach. An example of this would be the kind of thinking that led to the setting up of the modern welfare state.

Germany under its distinctly non-left-wing chancellor, Bismarck, in the late 19th and early 20th centuries, was the first country to truly implement this idea of a welfare state. As Germany began to overtake Great Britain as an industrial power around this time, sections of the British capitalist class, alarmed by this development, began to take a serious interest in Germany’s state welfare programme. They began to see a connection between this and Germany’s growing industrial strength. Years later, in 1943, the millionaire Tory industrialist, Samuel Courtauld, articulated such thinking when he strongly endorsed the Beveridge Report’s proposal to set up a welfare state in Britain too on the grounds that ‘Social security of this nature will be about the most profitable long-term investment the country could make. It will not undermine the morale of the nations’ workers: it will ultimately lead to higher efficiency among them and a lowering of production costs’ (Manchester Guardian, 19 February 1943).

However, there is always that current of short-term thinking, generated by market competition, against which this longer-term perspective has to do constant battle. Economic boom conditions can, to some extent, shore up the latter perspective, by making state welfare programmes more affordable and, also, by empowering workers in their bid to increase the social wage. But when boom turns to bust as it did in the 1970s, ushering in an era of neoliberal austerity, philanthrocapitalism was then able to play a more prominent role, filling the vacuum created by the retreat of the welfare state. Philanthrocapitalism came to be increasingly identified as the bearer and nurturer of this longer-term perspective which the neoliberal state appeared to have abandoned in its bid to cut costs and restore national ‘competitiveness’. Hence the title of Bishop and Green’s book, Philanthrocapitalism: How the Rich can Save the World, referred to earlier. The thinking behind this was that enormous fortunes of the super-rich to some extent cushioned them from the short-term exigencies of cut-throat competition, giving them the freedom to spend their money on whatever they chose

The economics of philanthrocapitalism    
Though philanthrocapitalists may profess to adopt a long-term perspective of wanting to ‘save the world’, their actions all too often belie the image they are intent upon projecting. Take the case of taxes. While some philanthrocapitalists such as those involved in ‘United for a Fair Economy’ seem intent upon advocating higher taxes for people like themselves, this does not apparently prevent them trying to run their own businesses in a manner deliberately designed to avoid paying taxes as far as possible, knowing full well the fiscal impact of this on a state’s budget and on the state’s ability to fund social welfare programmes.

This incongruity might seem puzzling but it is quite predictable in terms of game theory. Our ‘selfless’ philanthrocapitalists are quite willing to pay more taxes providing everyone else – meaning their market rivals – does as well. Until then, they will strenuously seek to avoid paying taxes as far as possible just like their ‘selfish’ counterparts in the capitalist class (who they will also try to emotionally blackmail through such stratagems as the ‘Giving Pledge’ to ensure the costs of philanthropy are shared more evenly). After all, taxation is ultimately a burden on the capitalist class, not the working class, and the squabble over that burden essentially boils down to a conflict of interests and perspectives between different groups of capitalists over how a capitalist economy ought to be administered.

Tax avoidance, unlike tax evasion, is of course perfectly legal under current legislation. The higher the taxes the stronger the incentive to avoid them, since taxation eats into profit margins and impairs the ability of businesses to compete on an increasingly globalised market. The significance of this to philanthrocapitalism lies in the fact that charitable donations are one of the ways in which the payment of taxes can be avoided.

In America, perhaps contrary to impressions, corporate taxes have been historically amongst the highest in the world (although Trump’s recent tax reform bill will cut these to a level just below the global average as well as reducing some personal taxes). Large US-based transnational corporations are particularly adept at tax avoidance, engaging in such sharp practices as transfer pricing and intra-corporate loans, and being able to employ expensive legal terms to ensure everything appears hunky dory and above board. Huge sums of money are offshored into tax havens or reinvested in other foreign operations. As Farok Contractor notes: ‘The accumulated, but unrepatriated, profits of American multinationals’ foreign subsidiaries—which have legally escaped US taxation—are estimated between $2.1 and $3 trillion’ (Rutgers Business Review, Vol. 1, No. 1, pp. 27–43).

As stated, making charitable donations is just another form of tax avoidance. Indeed, some of the most notable philanthrocapitalists are associated with businesses with a notorious record of tax avoidance. One example is Bill Gates. According to a report by The Independent: ‘Microsoft has reportedly avoided up to £100m a year in UK corporation tax by routing its sales through Ireland’ (19 June 2016). Over £8bn of revenues from computers and software bought by customers in the UK has been diverted to Ireland since 2011, under an arrangement agreed with HM Revenue & Customs.

Another example is Mark Zuckerberg. His corporation, Facebook, has been severely criticised for its tax avoidance stratagems and, like Microsoft, has resorted to funnelling profits through Ireland. In 2014, Facebook paid only a paltry £4,327 in corporation tax on an annual profit of £1.9bn (though the company has more recently agreed to pay several millions in taxes).

The case of Zuckerberg and Gates epitomises a trend in philanthrocapitalism. Instead of philanthrocapitalists giving directly to charities, they are increasingly setting up foundations of their own as a vehicle through which they can exercise ‘social entrepreneurship’, funnelling money to causes of their choosing. Some like Buffet seem to be the exception to this trend. In his case, his charitable donations have mainly gone to the Gates Foundation, the largest of its kind in the world, thereby amplifying its already enormous power and reach.

Indeed, the Gates Foundation is said to contribute about 10 percent of the total budget of the World Health Organisation which, critics claim, gives it undue influence on policy making. In a special report, the ‘Global Justice Now’ campaign group comment on the nefarious workings of the Foundation: ‘We argue that this is far from a neutral charitable strategy but instead an ideological commitment to promote neo-liberal economic policies and corporate globalisation. Big business is directly benefiting, in particular in the fields of agriculture and health, as a result of the foundation’s activities, despite evidence to show that business solutions are not the most effective’ (LINK.).

How philanthrocapitalism goes about financing various causes, gives us more clues as to its real nature and intent.

While attention is focussed on the huge sums of money involved in charitable giving, it is easy to overlook what all that money is spent on. Quite a significant chunk of it is spent, in the first instance, on administrative costs and fundraising (which is, of course, indispensable in a capitalist money-based economy). According to a report by the Daily Mail (12 Dec 2015), one in five of the biggest charities in the UK are ‘spending less than half their income on good work’ and, in a few cases, as little as 1 percent.

It is difficult to avoid the conclusion that many of these charities are little more than a lucrative gravy train for those employed in them. Indeed, the New York Times, (29 March, 2008) refers to a report on the fraudulent misuse of charitable money for personal gain in the United States. The authors of this report estimated that the overall costs of fraud came to a staggering $40 billion for 2006, or some 13 percent of the money given to charity in the US. In early 2007, another report by the Center on Philanthropy at Indiana University (partnered by Google) provided some revealing data on the subject of what charitable money is spent on. According to the report, less than one third of the money that the American public gave to non-profit organisations in 2005 was focused on the needs of the economically disadvantaged. Of the total of $250 billion donated that year, less than $78 billion explicitly targeted those in need.

While we tend to think of charity as essentially an endeavour seeking to ease the plight of precisely those in need, this can be quite misleading. Ginia Bellafante in the New York Times (Sept 8, 2012) notes that:
  ‘Nationally, 32 percent of the $298 billion given away last year went to religious institutions, 13 percent to cultural organizations and 12 percent to social services, according to a report issued annually by the American Association of Fundraising Counsel. But if giving were conducted with the greatest consideration paid to the most urgent needs of the society, then Yale, a private institution with a $19.2 billion endowment, would arguably never receive another 50 cents.’
According to a Wikipedia entry on the billionaire Koch brothers: ‘Charles’ and David’s foundations have provided millions of dollars to a variety of organizations, including libertarian and conservative think tanks. Areas of funding include think tanks, political advocacy, climate change scepticism, higher education scholarships, cancer research, arts, and science’ (LINK). That climate change deniers and the advocates of free markets should count as the recipients of philanthrocapitalist charity speaks volumes as to the supposed efficacy of such charity in addressing the needs of the poor. It is precisely the poor of the Global South, above all, who stand to lose most as a result of the very climate change which its deniers are unwittingly enabling.

However, it is arguably when charitable donations are funnelled into for-profit enterprises that the very term itself becomes most particularly questionable. As Matthew Reiz notes in his review of Linsey McGoey’s book, No Such Thing as a Free Gift: The Gates Foundation and the Price of Philanthropy (2015), there is a long-standing tradition of donating money to for–profit businesses in America and it has become more pronounced in recent years. McGoey’s book gives examples of this such as the Gates Foundation’s donations to Scholastic Inc, a large publisher of education material. Another recipient of the Foundation’s money was a project called M‑Pesa, for ‘which Vodafone and its subsidiaries built, in Kenya and then Tanzania, a system that allowed villagers access to mobile phone banking’ (LINK).

As an article in The Economist put it, one of the things revolutionising American philanthropy is the ‘blurring of the distinction between the profit and the non-profit sectors. In health care, and even in education, for-profit companies are increasingly doing things that used to be reserved for non-profits. And non-profits increasingly model themselves on profit-making businesses. Business schools put on courses for voluntary workers. Non-profits hire managers from the private sector, and pay them accordingly. Some non-profits even charge for their services or spin-off profit-making subsidiaries’ (28 May 1998).

Though the sums of money involved in charity donations are substantial – in America for example, by 2016, total giving to charitable organisations had risen to $390.05 billion, 72 percent of this coming from individuals compared with 15 percent by foundations and 5 percent by corporations and the rest by bequests – it is still small by comparison with state expenditures on welfare programmes. In America, if you include both federal and local government spending, the latter comes to about $1 trillion per year. Given that only a fraction of charitable giving in the US (which itself represents only 2.1 percent of GDP) is actually targeted on the needy this further underscores the utter absurdity of such brash claims about the super-rich wanting to ‘save the world’.

Philanthrocapitalism is not about saving the world. It is about saving capitalism through a face-saving attempt to justify what cannot be justified. It is about promoting the patronising belief that the poor depend upon the super-rich when the reality is the complete opposite.
Robin Cox

The Rich Stay Rich (2018)

From the July 2018 issue of the Socialist Standard

Part Two

Part three of our series on ‘philanthrocapitalism’

If ‘self-made billionaires’ tend to be ‘more willing to give their money away than those who inherit their fortunes’ as Bishop and Green contend then, seemingly, the prospect of philanthrocapitalism making a larger impact on society depends to some extent on a relative increase in the proportion of wealthy individuals who allegedly made their wealth in this way. In other words, on the degree to which individuals are able to become upwardly ‘socially mobile’. On current trends, however, this seems unlikely. If anything, what seems more likely is that the significance of inherited wealth is going to grow in relative terms.

What helps to sustain the myth of ‘self-made men’ is precisely the belief that we live in a socially mobile society in which inheritance plays only a negligible role. This discounting of the importance of inheritance is a characteristic feature of conservative sociological analysis and its barely concealed aim of wanting to justify the existence of gross inequalities. Such inequalities will tend to be more tolerated insofar as it is assumed they reflect the workings of a meritocratic principle. The rich are rich because of hard work, runs the argument. That’s quite true, of course, except that it omits to mention that it is other people’s hard work that made them rich.

In a sense, then, the argument about the role of inheritance in perpetuating gross inequalities is a distraction. Whether the capitalists inherited their wealth or ‘made’ it, that wealth overwhelmingly derives from that portion of the labour performed by working people that is effectively unpaid or unreciprocated. The only virtue in drawing attention to the significance of inheritance in modern capitalism is that it helps to clarify this point and make it all the more obvious.

How significant a role does inherited wealth play in modern capitalism, then? This is a difficult question to answer. Partly this is because what is called ‘inheritance’ is not simply what it is often imagined to be asLisa Keister and Stephanie Moller explain in their article, ‘Wealth Inequality in the United States’:
  ‘We know very little about how wealth is actually inherited because data on inheritance is virtually nonexistent. Indeed, Menchik & Jianakoplos (1998) estimated that between the 1970s and 1990s, as little as 20% and as much as 80% of total wealth may have been inherited. Those who study inheritance typically refer to three forms of inheritance: inheritance at the death of a parent or other benefactor, inter-vivos transfers of money and other assets, and transfers of cultural capital (Miller & McNamee 1998:3) While we typically think of inheritance as occurring at the death of the benefactor, Kurz (1984) estimated that inter-vivos transfers account for nearly 90% of intergenerational wealth transfers’ (Annual Review of Sociology, August 2000, Vol 26: 63-81).
Study after study has confirmed that, far from ‘social mobility’ in America (and elsewhere) increasing, it is on the wane (and, along with it, faith in the ‘American dream’). This seems to have gone hand in hand with the steadily widening gap between rich and poor. If you are born poor today you are more likely to remain poor than was the case with your parents or grandparents but the corollary of that is that, if you are born rich, your offspring are more likely to remain rich, too. Meaning that the role of inheritance is likely to loom ever larger as an explanation for the extremely skewed distribution of income and wealth. Consequently, if it is true that the ‘self-made’ super-rich give more to charity than those who inherit their wealth, this would seem to imply that a relative long-term decline in charitable donations from the super-rich is in prospect.

According to Thomas Piketty, author of the best seller, Capital in the Twenty-First Century (2013), the recent growth in inequality augurs a return to the ‘patrimonial capitalism’ of the Gilded Age and the dynastic wealth of a rentier economy.In America, for example, the share of total wealth owned by the top 0.1 percent increased from 7 percent in late 1970 to 22 percent in 2012. This is approaching levels of inequality to be found in the era of the Robber Barons.

What is driving this process, argues Piketty, is the simple fact that the rate of return on capital has been consistently exceeding the rate of economic growth over the past few decades, meaning the super-rich have been appropriating a steadily growing slice of the economic pie. A kind of positive feedback loop is at work which ensures that, to those who have, shall more be given, simply by virtue of the fact that they have the capital to invest which the rest of us don’t. If you are securing a rate of return that exceeds the rate at which the economy is growing, then, logically, that can only mean you are accumulating wealth at the expense of others who lack capital. Inequalities in the distribution of wealth and income will thus grow. That, in turn, acts to slow down or impede social mobility and thus boost the significance of inheritance. The recipients of this inherited wealth not only benefit directly but indirectly too by capitalising on all advantages that great wealth bestows upon them in terms of social capital, having connections with the right people and so on.

The problem is, as Piketty suggests, that while some of the super-rich might claim to have earned their wealth by the sweat of their brows, plainly the same could not really be said of their offspring inheriting this wealth. The corollary of reduced upward mobility is obviously reduced downward mobility – meaning an increased capacity for the super-rich to hang on to their huge fortunes and thus to pass them on to their heirs.

Inheritance is thus the cuckoo in the nest of capitalist ideological legitimation. With the rich getting increasingly richer at the expense of the rest, more and more discrediting the myth of upward social and intergenerational mobility, it is going to be increasingly difficult to justify their huge fortunes in the face of these stubborn realities. The disconnect between ‘merit’ and ‘reward’, which were never closely linked to begin with, will become ever more apparent.

This is where the ideological significance of philanthrocapitalism comes into the picture. It represents an attempt to shore up a failing mechanism of ideological legitimation by projecting an image of the philanthrocapitalist as a generous benefactor and of capitalism itself, as a system that can be philanthropic, working for the good of mankind  (http://philanthrocapitalism.net/about/faq/). It is the application of a fresh lick of paint on a crumbling façade that barely conceals the stark structural reality of capitalist exploitation.

Exploitation and charity
While philanthrocapitalism focuses on what the rich give to the poor it would be far more to the point to focus on what the poor give to the rich. According to Barbara Ehrenreich the appropriate response to such giving ought to be one of ‘shame’:
  ‘shame at our own dependency, in this case, on the underpaid labor of others. When someone works for less pay than she can live on — when, for example, she goes hungry so that you can eat more cheaply and conveniently — then she has made a great sacrifice for you, she has made you a gift of some part of her abilities, her health, and her life. The “working poor,” as they are approvingly termed, are in fact the major philanthropists of our society. They neglect their own children so that the children of others will be cared for; they live in substandard housing so that other homes will be shiny and perfect’ (Nickel and Dimed: On (Not) Getting by in America, 2001).
However, the problem with Ehrenreich’s way of framing the whole question is that it is seriously misleading. She is focussing only on the lowest paid members of the working class, those who are ‘underpaid’. The presumption seems to be that were they not ‘underpaid’ but paid at the going rate they would have no cause for grievance. Her perspective is the suppressed view of a ruling class which she faithfully echoes in talking of ‘our’ dependency on the ‘underpaid labour’ of others. She ignores completely the unpaid labour that workers in general contribute towards the accumulation of capital even when they are not ‘underpaid’. Her sympathy for the ‘working poor’ is the sentiment of a guilt-ridden liberal trying to eradicate the more unpalatable aspects of contemporary capitalism and to soften some of its rough edges.

What makes the working class – not just Ehrenreich’s ‘working poor’ – ‘the major philanthropists of our society’ is the brute fact of surplus value, the value which our class creates over and above what it receives by way of a wage. As Friedrich Engels put it: ‘It is infamous, this charity of a Christian capitalist! As though they rendered the workers a service in first sucking out their very life-blood and then placing themselves before the world as mighty benefactors of humanity when they give back to the plundered victims the hundredth part of what belongs to them!’ (The Condition of the Working Class in England, 1845).

But even if we look at philanthropy in its more conventional sense as the voluntary donation of money and effort to others, it is quite misleading to portray this as the prerogative of the rich alone. Workers likewise give handsomely in this sense.

Indeed, according to one survey, individuals with incomes below $25,000 gave away around 4.2 percent of their income while those on an income of $150,000 or more gave away around 2.7 percent. Research carried out by Dacher Keltner revealed that ‘lower class people just show more empathy, more prosocial behavior, more compassion, no matter how you look at it’ (LINK.)
Robin Cox

(Next month, concluding article: No Such Thing As A Free Gift)

Friday, December 28, 2018

The Myth of the ‘Self-Made Man’ (2018)

From the June 2018 issue of the Socialist Standard


Part two of our series on ‘philanthrocapitalism’

One explanation offered for the rise of philanthrocapitalism is the recent ‘surge in entrepreneurial wealth’. According to this, the growing number of ‘self-made billionaires’ tend not only to be more inclined to make charitable donations than wealthy philanthropists in the past but are also more pro-actively involved in shaping the very nature of charity itself in line with ‘business principles’.

However, this explanation is based on a complete myth: the idea that there can be such a thing as a ‘self-made billionaire’. Barring winning the lottery or some other stroke of good fortune, there is zero possibility of making a substantial sum of money under capitalism except by investing what money you have in some business and securing a healthy return. To get a substantial return you need a substantial sum to invest to begin with.

Investing it in a business means relying on the contributions of other people working for that business to grow the business and, by extension, what you get out of it by way of a financial return. The apocryphal rags-to-riches story belies the simple truth that the richer you become the less you owe your wealth to your own effort and enterprise and the more you depend on the effort and enterprise of others. A so called self-made billionaire, as much as one who had entirely inherited their wealth, could happily retire to a tropical island and sip Campari on a sun lounger for the rest of their life but still their income stream would remain relatively unaffected. Proof enough, if proof were needed, that their capital can and does reproduce itself without the slightest assistance on their part.

Even some of the very rich do not seem to have bought into this myth of the ‘self-made man’ – though, on the face of it, it would surely be to their advantage to promote it. As Ray B. Williams notes:
   ‘Some of the wealthiest entrepreneurs in North America say there is no such thing as the “self-made man.” With more millionaires making, rather than inheriting, their wealth, there is a false belief that they made it on their own without help, a new report published by the Boston-based non-profit United For a Fair Economy, states. The group has signed more than 2,200 millionaires and billionaires to a petition to reform and keep the U.S. inheritance tax. The report says the myth of “self-made wealth is potentially destructive to the very infrastructure that enables wealth creation.” The individuals profiled in the report believed they prospered in large part due to things beyond their control and because of the support of others. Warren Buffet, the second richest man in the world said, “I personally think that society is responsible for a very significant percentage of what I’ve earned.” Erick Schmidt, CEO of Google says, “Lots of people who are smart and work hard and play by the rules don’t have a fraction of what I have. I realize that I don’t have my wealth because I’m so brilliant.” (‘The myths of the “self-made man” and meritocracy’, Psychology Today, June 13, 2010)
Williams goes on to refer to the meticulous research carried out by Malcolm Gladwell, in his book, The Outliers (2008), that ‘enormously successful people like Bill Gates, The Beatles, and professional athletes, scientists and artists, all had people in their lives that helped them get there’.

It was in the early 19th century in America that this myth of the ‘self-made man’ took off, the term having been coined by Henry Clay. It was a concept that went hand in glove with another – the myth of the ‘American Dream’. The late 19th century ushered in the Gilded Age of the Robber Barons – Vanderbilt, Rockefeller, Morgan, Carnegie, and others – the very epitome of so called ‘self-made men’. These were corporate capitalists ruthlessly bent on amassing huge fortunes by whatever means possible, including outright criminality.

This was also an era in which the doctrine of Social Darwinism became highly fashionable in certain circles – in particular, among the wealthy and the well-heeled. It furnished them with an ideological weapon in the battle of ideas, allowing then to justify their great wealth in terms of the working out of a natural law. According to this doctrine, founded by the British sociologist, Herbert Spencer (who enjoyed the patronage of Robber Barons like Carnegie and Rockefeller), the progress of society depended on the ‘survival of the fittest’. A corollary of this was the weeding out of the weak as a precondition of a general improvement in the human stock. Hence Spencer’s vigorous opposition to the poor laws and any form of state welfare that would impair the workings of this selective process. As he charmingly put it in his 1851 work, Social Statics: ‘Under the natural order of things society is constantly excreting its unhealthy, imbecile, slow, vacillating, faithless members’. Today, Social Darwinism has been completely discredited as a concept though, at the time, it contributed to the rise of the Eugenics movement in America and elsewhere and later served as a cornerstone belief of Nazi ideology.

Co-opting the poor
It seems paradoxical that, at a time when America’s Robber Barons were exalting in the dog–eat-dog society that had been prescribed by Social Darwinism and that had delivered to them their fabulous wealth, that there should emerge within these self-same circles, a strong tradition of philanthropic giving. How does one account for this?

Centuries ago, in Europe, the harshness of a lowly status would have been somewhat tempered and ameliorated by Christian teaching about the virtue of poverty. The poor were looked upon as an inevitable – not to say, God-ordained – feature of the social landscape. Their purpose in life was to provide the well-to-do with a ready-made pretext to bestow on those less fortunate, a measure of charity that would prove their piety in the eyes of God and their fellows. For the poor, at any rate, there may well have been a crumb of comfort in the biblical expression that it was harder for a rich man to get to heaven than for a camel to pass through the eye of a needle.

With the growth of secularism, however, such religious solace was not so readily forthcoming to those of meagre means. Attitudes towards poverty and its amelioration through charity began to change. The traditional moral economy which bound the rich and the poor together increasingly gave way to the exigencies of a market economy, with the rise of industrial capitalism. Poverty began to be viewed, not so much as ineliminable, but as inexcusable.

In the increasingly harsh moralistic climate of Victorian Britain, poverty came to be attributed to one’s own moral shortcomings and defects, with the ghettoes of the poor being looked upon as hotbeds of vice and depravity. By contrast, the fortunes of the well-off were considered to be divinely ordained with God’s own personal stamp of approval. Alain de Botton quotes a representative voice in this regard – William Lawrence, the Episcopal Bishop of Massachusetts – who wrote in 1892 that ‘In the long run, it is only to the man of morality that wealth comes. We, like the Psalmist, occasionally see the wicked prosper but only occasionally. Godliness is in league with riches’ (Status Anxiety, 2004, p.86).

As usual, the economists weighed in to back up the moralists. The old Elizabethan poor laws which afforded a measure of charitable assistance to the poor were strenuously attacked by David Ricardo and others for diverting money from productive purposes and weakening the incentive to work. If withdrawing such assistance meant the poor would be left to perish then so be it. This was Mother Nature’s ‘final solution’ – culling the poor – with the aid of the eugenicists, of course. Thus did the Social Darwinists, following in the footsteps of the Reverend Malthus, join hands with the economists in calling for a remorselessly competitive laissez faire economy as the very expression of this natural order.

If charity was to be reluctantly rendered – one could not, after all, allow those duly ‘excreted’ by society and driven to the point of desperation by sheer hunger to run riot – then it ought to be made strictly conditional upon the performance of work and from the 1830s onwards ‘charity’ increasingly took the form of workhouses in which the very poor were housed, overseen, regulated and expected to labour. The ignominy and shame of being despatched to the workhouse was, in a way, deliberately cultivated, as was the barrack-like grimness of the physical environment of these institutions. Their purpose was to instil an austere discipline and to provide a powerful disincentive to those not minded to pull themselves up by their bootstrings.

The idea that poverty is something that one essentially brings upon oneself has its corollary in the idea that one can get rich by wanting to get rich and if one is not yet rich that that is only because one is not sufficiently motivated to get rich – an unfalsifiable claim that makes such an assertion downright meaningless.

However, despite the attraction of Social Darwinism to individuals like the Robber Barons, the poor failed to conveniently succumb to Mother Nature’s culling programme. Their numbers grew and, more disturbingly still, they began to organise and fight back. The new unionism of the 1880s was an expression of this rising resistance – a new kind of trades union, differing from the older specialised craft unions in that it sought to widen its appeal and recruit from sections of the working class such as the unskilled that had hitherto been unorganised.

A ruling capitalist class cannot rule by force alone; if nothing else, the sheer costs of coercing an uncooperative population would tend to make this unfeasible. To secure its rule it has also to resort to ideological persuasion and the manner in which it sets about doing that is very much shaped by the prevailing material conditions.

In the 19th century, the growing differentiation within the working class in terms of income and occupation, encouraged a tendency to distinguish between the ‘deserving poor’ and the ‘undeserving poor’. Where the institution of the workhouse was wielded as a ‘stick’ to discipline the latter into submission, the ‘carrot’ of philanthropy was primarily focused on the former. To that end, an ideology of self-improvement and upward social mobility was relentlessly peddled as the route to riches and books such as Samuel Smiles Self Help (1883) which essentially blamed the poor for their own poverty, became best sellers.

This obsessive focus on the individual was, one might say, almost designed to encourage a sense of separateness between worker and worker. At the same time, strenuous efforts were made to direct and channel the collectivist impulses of workers along nationalist lines and to crowd out and replace an emerging working class identity with a sense of national identity. In short, these various tendencies constituted different prongs of a pincer movement in a wider ruling class strategy of ‘divide and rule’.

Philanthropy came to the aid of capitalism not only by presenting the capitalists in a more positive light but, just as importantly, by striving to pour working class aspirations into a particular mould that would help to solidify and buttress the existing capitalist order. This is nowhere better illustrated than in the case of the Robber Baron and steel tycoon, Andrew Carnegie.

Carnegie’s book, The Gospel of Wealth (1889), was enormously influential at the time. In it, he expressed concern over the huge inequalities of that era. Though he regarded inequality as absolutely indispensable to the process of wealth creation, it presented a problem inasmuch as too much of it could potentially undermine the ‘ties of brotherhood’ that ‘bind together the rich and poor in harmonious relationship’ and promote class struggle. Resolving this dilemma, he concluded, had to involve creating ‘opportunities for people to better themselves’.

Condescension and self-conceit
With great wealth, he argued, came the moral duty to put this money to good use through purposeful charitable donations rather than just indiscriminately doling it out to the poor. ‘It were better for mankind’, he declared, ‘that the millions of the rich were thrown into the sea than so spent as to encourage the slothful, the drunken, the unworthy’. The man of stature, Carnegie confided, was ‘the mere trustee and agent for his poorer brethren, bringing to their service his superior wisdom, experience, and ability to administer, doing for them better than they would or could for themselves’.

Taking up Samuel Smiles’ line of argument in Self-Help, Carnegie set about endowing, and putting his name to, institutions like colleges, libraries, museums, and concert halls through which individuals could aspire to ‘improve’ and educate themselves and eventually become self-made men like himself – a degree of self-conceit and self-promotion that has not dimmed with the emergence of modern philanthrocapitalism. Thus were the fortunes of so-called self-made men deployed to bolster and perpetuate the myth of the self-made men.

While the likes of Carnegie might have approved of the efforts of workers to improve their own circumstances via means he had specifically laid down for them, woe betide the worker who sought to do the same by asking for a wage rise or organising within a trade union to press for such a rise. Wage demands were fiercely resisted by him and other Robber Barons who frequently called upon the state to brutally crush organised labour protests or made use of the notorious Pinkerton agents, a private security force, for precisely that purpose.

So much for the myth of the ‘self-made man’. You would have thought, had these individuals actually been the authors of their own financial success, that it would have been of little or no concern to them that their employees should have striven for a modicum of ‘financial success’ themselves in the guise of a higher wage. Their very actions belied the grandiose claim that they had made their own fortunes themselves. Those fortunes were made for them by others and their curmudgeonly and belligerent response to even the most modest wage claim that might erode their profit margins underscores the exploitative nature of their relationship to, and dependence upon, their workforce.

Once again, there is little here to differentiate philanthropists of the past and modern philanthrocapitalists. The same galling patronising attitude is to be found amongst the latter too. They too are all too ready to lecture others on what is good for them and to act without the mandate of the intended recipients of their charity.

Their huge wealth gives them the power to shape the social agenda and determine the priorities of the poor in ways that are transparently, and obnoxiously, undemocratic. Some like Mark Zuckerberg of Facebook would deny this. According to him, ‘When you give everyone a voice and give people power, the system usually ends up in a really good place. So, what we view our role as, is giving people that power.’ But this is delusional. Power has to do with how people relate to one another. It operates in a context of social inequality. You don’t remove that inequality by enabling individuals to access a social network like Facebook (which, by all accounts, is itself becoming more and more intrusive, censorious and authoritarian in its mode of operation). All you do is accentuate the feeling of powerlessness by being drowned out by the voices of millions of others.
Robin Cox