Philanthropy and Profits. (1907)

From the March 1907 issue of the Socialist Standard

The real nature of the pretendedly disinterested benevolence of some large employers is at times laid bare even in the journals of the enemy; and capitalist “philanthropy” is then found to have a very material basis. The Berlin correspondent of the Daily Chronicle has, for example, after a visit to Essen, the following to say regarding the famous firm of Krupp :—

“Krupps are honourably known for the patriarchal benevolence which they display towards their workpeople Their model dwellings, their sick-clubs, their co-operative stores, and a great variety of other institutions to alleviate the lot of their workers, have often been described, and always in terms of adulation. For my part, I carried away a different impression. I felt that all the mature thought bestowed by the famous firm on their benevolent institutions was the result of sound business principles, tinctured by despotism, rather than the manifestation of any special leanings towards philanthropy. This is the opinion of a large body of their own employees who regard the many admirably-conducted institutions as so many chains binding the men to the firm. The chains are covered with cotton wool, but that does not impair their strength ; it only makes them less galling. A concern like Krupp’s could not afford to have a large body of their workmen disaffected ; a strike could have most disastrous consequences.

“With my Socialist friend I visited several of the model dwelling-houses, and found much to admire, but a good deal also to criticise. Rents on the whole were high, and I found a far larger proportion of the tenements than I had expected anything but comfortable. Indeed, in too many cases the dwellings looked gloomy, forbidding, and absolutely devoid of homeliness and comfort. The colonies known as Schederhof and Nordhof were dreary and squalid in the extreme. An incessant guard, moreover, is kept over the men that they do not live a life outside the works which is displeasing to their employers. Their political activities, for example, are very narrowly scrutinised. Every workman on entering Krupp’s employ must sign a document of portentous length, in which his work and his play are both regulated. He must, for example, sign that he will not attach himself to any political organisation which has as its object the upheaval of existing social or political institutions. As Socialism in the eyes of Krupp is synonymous with revolution, this means that any workman known as a Socialist is summarily dismissed.”

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.

The Rear View: KISS (2020)

The Rear View Column from the October 2020 issue of the Socialist Standard

KISS

‘The traditional class war has been waged between wage-earners (who sell their labor) and their employers (owners of capital and the means of production). These classes have been assigned various names (proletariat, bourgeoisie, capitalists, etc.) but these broad class definitions don’t describe all the class conflicts emerging in the modern U.S. economy…. Six years ago I took a stab at defining America’s Nine Classes: The New Class Hierarchy (April 29, 2014), to which I would now add a tenth class, gig economy precariat, …’ (charleshughsmith.blogspot.com, 27 August). 

We should clarify that workers sell labour power, and capitalists extract surplus value. Smith’s ten ‘classes’ – the Deep State, Oligarchs, New Nobility, Upper Caste, State Nomenklatura, Middle Class, Working Poor, State Dependents, Mobile Creatives and Gig Economy Precariat – add further confusion. All people are either workers or they are capitalists and if they are in the former class they are robbed and they are relatively poor and they have a world to win, if they are in the latter class they are exploiters and they are relatively rich and the world is theirs, literally: ‘Study Shows Richest 0.00025% Owns More Wealth Than Bottom 150 Million Americans’ (Common Dreams, 10 February, 2019) and every 38 seconds a US citizen dies of poverty and poverty-related social conditions. Warren Buffett, whose 82 billion dollar fortune makes him the 6th richest person on Earth, once stated: ‘there’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.’ Winning worldwide.

Pie in the sky

‘…Anna Howard Shaw, an American Methodist pastor and suffragette, became the first clergywoman to preach in Sweden. That was in 1911, at an international women’s suffrage conference, and long before women could be ordained in the Church of Sweden, in 1958’ (yahoo.com, 23 August). Today female priests there outnumber men, but earn less: ‘…around 2,200 kronor (213 euros, $253) less a month than their male counterparts…’ It should not be imagined that the mundane campaign for equal pay is new – it was , for example, commented on in The Socialist Standard of December 1904. And according to a report from 2017, women will have to wait 217 years for wage equality! Yet believers are in conflict over the status quo. Consider, ‘Christian fundamentalist Stacey Shiflett insisted that Trump was sent by God himself to govern the U.S..’ (alternet.org, October 21, 2019) v. ‘Right now, in America with this movement there is love and truth and justice breathing, the American people are resisting the suffocation and resisting the death. And thank God it is happening’ (alternet.org, June 19). Neither campaigns for wage equality or to abolish religion will end exploitation. The supreme aim of the workers must be their emancipation from wage-slavery, and the fight against superstition is but one phase of this great fight. But it must never be forgotten that since religion is always used as a weapon by the ruling class against the workers, no socialist in the struggle for working class emancipation can honestly avoid the religious conflict.

Priests, police and politicians

The Rev. Dr. William J. Barber II, quoted above in opposition to the Trump-supporting Christian, is president and senior lecturer of Repairers of the Breach and co-chair of the Poor People’s Campaign: A National Call For Moral Revival. With regard to the killing of George Floyd, he ‘…experienced a range of feelings. Derek Chauvin, that white police officer, the way he posed was something I have seen a hundred times — it was how people pose over dead animals’ (op. cit.). Barber blames the President: ‘Trump is fundamentally against the things that would help all Americans. Trump may have started talking about Latinos and Mexicans being rapists, but he will not even protect the country from COVID-19 which is killing everybody.’ If Trump is removed next month, it will be business as usual: the capitalist system which robs, slaughters and degrades will continue. To be clear, police are workers. They, like the vast majority of society, need to work in order to live. Yes, they have been used to break strikes but some have used the strike weapon themselves. The nature of their work does not exclude them from other members of their class. This is also true of those who form the vast bulk of the military. Should they leave, these workers need to find employment elsewhere, in order to support themselves, one of many problems not experienced by the 1 percent.

The chutzpah of philanthropy

 ‘Li Lu says he walked into a lecture Buffett was giving years ago at Columbia University and “…was instantaneously taken by him. What he basically taught me in that course was that somebody with high moral principles and integrity can make a lot of money off the market by being wise and smart and moral,” Lu says. …Says author Miles: “He’s transformed my life personally, more than anyone else in terms of modeling good behavior and having fun. He’s made me a better person, made me rethink my own philanthropy, in terms of helping those who through no fault of their own were born on the wrong side of the track” (finance.yahoo.com, 29 August). The capitalist class is charitable out of self-interest; it gives nothing outright, but regards its gifts as a business matter, and makes a deal with the poor saying: ‘If I spend this much upon benevolent institutions, I thereby purchase the right not to be troubled any further, and you are bound thereby to stay in your dusky holes and not to irritate my tender nerves by exposing your misery. You shall despair as before, but you shall despair unseen, this I require, this I purchase with my subscription of twenty pounds for the infirmary!’ (Engels, The Condition of the Working Class in England, 1844). Such chutzpah – the capitalists suck out our very life-blood and then place themselves before the world as mighty benefactors of humanity when they give back to us a mere fraction of the wealth generated by our class.

Art—for whose sake? (1984)

Getty.

From the October 1984 issue of the Socialist Standard

A spectre, to paraphrase one of the world’s most paraphrased sayings, is haunting the upper-upmarket auction rooms of England. The Getty factor threatens to deprive anyone with ambitions to buy a masterpiece of art of their sleep at night. The very mention of it is, apparently, enough to send prices rocketing away out into the great unknown where records are broken for the splashing out of huge amounts of money on a picture or a piece of sculpture. Broken sleep does not, of course, trouble the auctioneers, whose commission flourishes under the higher prices induced by the Getty factor.

This powerful influence operates from across the Atlantic, from the museum in Malibu. California endowed out of the riches of the late Paul Getty. It is an enormously wealthy museum, with an unprecedented amount of money available for building up its collection. If it shows any interest in a sale the bidding takes on a new force. This is much in Getty’s style for he was one of those capitalists who reap so much profit from their capital, and own so much wealth, that the accountants hardly know what it all adds up to. His money came from the oil industry; not that he actually drilled the wells, or pumped the oil himself—that was the role of the workers. So, to be more exact. Getty’s money came from the exploitation of the oil industry’s workers. In the time honoured tradition, having screwed vast amounts of surplus value from the useful, productive people. Getty assured himself a place in their affections as a public benefactor by giving a fraction back in things like the museum. That affection was mixed with some sympathy, for Getty was an embodiment of the theory, a popular comfort for penniless workers, that riches do not make for happiness. Clearly, Getty did not hold with the theory himself, to the end of his days preferring the misery of riches, living in lugubrious seclusion at a large Elizabethan manor in Surrey to the joys of poverty in a council high rise flat in somewhere like Hackney.

The Getty factor was active recently when the Duke of Devonshire—who is not renowned for being unhappy about his riches—sent a collection of ancient drawings for auction at Christies. This firm is in the top drawer in the trade; their staff are discreetly dinner-jacketed and, if requested, conceal a successful bidder’s identity in a civilised mumble. In this urbane atmosphere the Devonshire drawings were sold for over £21 million, of which at least £13½ million went to the Duke after he has paid tax and, of course, a commission to the suave auctioneers. The Getty museum shelled out some £7 million for seven items. Works of art are not typical of capitalist production; not being reproducible they are not commodities and do not, therefore, conform to the economic laws, such as the law of value, which govern the mass of capitalism's products. When they are exchanged, there are other influences at work.

The “loss” of the Devonshire drawings to overseas buyers was greeted with a predictable sigh of regret from the sort of people who worry about Paul Getty’s and the Duke of Devonshire’s happiness. The Guardian (5 July 1984) wailed:

The auction, with its crazy prices, has exposed the fickleness of the market and the country’s weakness in protecting its heritage.

This was predictable because there is usually a protest when some member of the British ruling class sells a work of art for export. No matter that it may have lain in some closely private collection, unseen by anyone apart from a privileged few; its export is regarded as a "loss to the nation". Some years ago the state set up a machinery designed to delay such exports, with a government-backed agency—the National Heritage Memorial Fund—which is supposed to intervene. But even by their own standards those who worry about this "national heritage" are talking nonsense. Very few works by British artists figure in the big sales: Devonshire, for example, sold pictures by Raphael (Italian). Van Dyck (Flemish). Rembrandt (Dutch). Holbein (German). It is stretching the sensible meaning of patriotism, nonsensical as it is, to attach a British nationality to a work which was wholly produced in another country by a foreign artist. The protests were in fact based on the crudest form of patriotism, the sort of madness which demands that British people should not only win all the wars and all the games of football, cricket and tennis and run the fastest races but should also make the best films and monopolise world trade and also, somewhere, own all the most coveted pieces of art.

Well one person who might agree about the wars, the sport and the trade is the Duke of Devonshire himself. A man of substance, he is the eleventh in a line of Dukes who began in 1694; before that they were not exactly on the breadline, being mere Barons, Earls and Marquesses. The Devonshire's—their family name is Cavendish—are interlocked through marriage with many other ancient tribes of the British ruling class. The present Duke went to Eton and Cambridge and during the war he did his appropriate bit to protect his riches in a fashionable regiment of the Guards. At a bad time for the Conservative Party, he was their unsuccessful candidate in Chesterfield. (The parliamentary seat of West Derbyshire had been held by a Cavendish, with one short break, since 1885 until a by-election in 1944. The then heir to the Dukedom was dutifully adopted as the Tory candidate but the voters perhaps misunderstood all that wartime propaganda about equality of sacrifice and decided that the Cavendishes had to sacrifice West Derbyshire. They elected a Labour Independent instead.)

The present Duke held some minor jobs under Harold Macmillan (another relation—he married the 9th Duke's daughter) and he is president of a number of depressingly titled charities like the Royal Hospital and Home for Incurables. He possesses huge houses at Chatsworth in Derbyshire and Lismore Castle in Co. Waterford and belongs to the traditional exclusive London clubs. He should be—and probably thinks of himself as—a stout patriot. Except that, not untypically, the blood of money runs for him rather thicker than the waters of patriotism. Devonshire could have done the patriotic thing and sold his drawings to "the nation” for about £5½ million, which would have satisfied the average pools punter. But he preferred to go to auction on the chance that this would bring in more than "the nation" were prepared to pay. This is not the first time the ruling class have shown that for them patriotism has a price and that it is the working class who are expected to accept all that nonsense without question or concern for their own interests.

The Cavendishes should know a thing or two about this particular confidence trick for they are among the oldest of British ruling class families. One of them killed Wat Tyler, which caused his father, who as a Chief Justice was not popular among the desperate peasantry of 14th century England, to be dragged revengefully from his home in Suffolk and beheaded. The family really took off in the 16th century, when William Cavendish was Gentleman-Usher to Cardinal Wolsey. The title is misleadingly urbane; the foundations of what Burke’s Peerage coyly calls his "greatness" were laid when Cavendish got his cut from the Dissolution of the Monasteries, an episode which promoted the fortunes of many a murderous feudal bandit.

The pictures sold by the present Duke were part of an enormous, vastly valuable collection—he still has about 2.000 of them—which his ancestors made in the 17th and 18th centuries. That was the time when the British ruling class were rising towards the world's dominant power. It is customary for such a class to buy, or plunder. works of art as an investment, or as expensive showpieces, or simply to assert their dominance. The stately homes of this country became crammed with art treasures from all over the world; as Britain declines as a world power they are draining away—to the regret of ignorant workers who think that their interests are involved in the power of their masters and mistresses.

The Devonshire sale was quickly followed by an anonymous buyer paying over £7 million for a Turner painting which had been owned by the late Lord Clark of television fame—another man who disappointed that popular working-class theory by apparently finding no inconsistency between riches and a contented, fulfilling life. A couple of days later a painting by a relatively minor 17th century artist brought £900,000 at Christies. Does this mean that, spurred on by the Getty factor, there will now be a rush of record-breaking sales? A slump is not an inappropriate time for the world's capitalists to invest their millions in some static articles rather than in speculatively dynamic production. At all events it shows that there is a section in society who are able to survive the recession in a style rather different from that of Social Security claimants. But of course there are some consolations for the workers: they do not have to worry about the Getty factor, which does not influence the price of prints of blue-faced Chinese women or of stampeding elephants or of a flight of plaster ducks climbing up the wall away from the stereo. What should worry the working class—indeed it should do more than worry them is the restriction and the distortion of their talents and their tastes which that represents. Their acquaintance with, and access to artistic experience is cruelly confined to the terms set by the ruling class and hampered by their need to spend almost all their time, their energy and their resources on the basic matter of getting a living. They should also concern themselves that it is from their labour alone that the wealth comes to be monopolised by a small group of world parasites, providing for them a lifestyle which thinks little of paying a fortune for a single work of art.

The smooth operators in the auction rooms, talking of money in millions, say it in another way. For the workers there is misery and exploitation and a poverty of access to the best things in life. For the capitalists it is different: not so much a pretty picture, more a way of life.

Ivan

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

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

Saving Capitalism (2018)

From the May 2018 issue of the Socialist Standard

We begin a four-part series on the ‘philanthrocapitalism’ of billionaires such as Bill Gates

What do you do if you are billionaire and run out of ideas about what to spend your money on? Increasingly, it would seem, the answer is to indulge in philanthropy. ‘Philanthrocapitalism' has today become big business.

In the blurb to Matthew Bishop and Michael Green’s book, Philanthrocapitalism: How the Rich can Save the World, this comment appears:

  ‘For philanthropists of the past, charity was often a matter of simply giving money away. For the philanthrocapitalists – the new generation of billionaires who are reshaping the way they give – it’s like business. Largely trained in the corporate world, these “social investors” are using big-business-style strategies and expecting results and accountability to match. Bill Gates, the world’s richest man, is leading the way: he has promised his entire fortune to finding a cure for the diseases that kill millions of children in the poorest countries in the world.’

That book was published way back in 2008; on 1 January 2018 – that is, approximately ten years later – Bill Gates was listed on the Forbes list of the richest people of the planet, as having a ‘real time net worth ‘of $91 billion, playing leapfrog with Amazon’s Jeff Bezos to become the richest person on the planet. Seemingly, if we are waiting for Mr Gates to put his money where his mouth is, we will be waiting forever.

On the Forbes Website, incidentally, there also appears a quote attributed to Gates as follows: ‘Money has no utility to me beyond a certain point. Its utility is entirely in building an organization and getting the resources out to the poorest in the world’. What that ‘certain point ‘might be he fails to disclose but, presumably, there is still some way to go before he reaches it.

So what exactly is going on here? Why this alleged concern for the fate of the poor by the super-rich and paradoxically in an era that has witnessed a veritable explosion of extreme wealth? According to an OXFAM press release (16 January 2017) a mere eight individuals, almost unbelievably, now ‘own the same wealth as the 3.6 billion people who make up the poorest half of humanity.’ You would think, on the face of it, that global inequality must by now be set on a trajectory of steep decline with all this loose talk of billionaires, stricken by some unaccountable sense of moral angst, giving away their fortunes. But then you would be sorely mistaken.

The truth of the matter is that philanthrocapitalism is not at all what it seems and the disgustingly elitist suggestion that the ‘rich can save the world ‘is as condescending as it is patently absurd. ‘Saving the world’, at the very least, implies some kind of fundamental structural transformation permitting a radical change of direction. Why would ‘the rich ‘want to restructure the world in a way that would prevent this minuscule minority from continuing to enrich themselves at the expense of the vast majority? For it is precisely this class monopoly on the means of producing and distributing wealth that the world needs saving from. That, in essence, is what underlies the multiple problems that afflict it and prevents their effective resolution.

Philanthrocapitalism is predicated on the denial that this is how capitalism operates. Denying it helps to ensure the system’s continuation. In sociological jargon, it deflects attention away from ‘structure ‘– the particular pattern of class relationships linking individuals that defines the social system we live under – to ‘agency’, meaning the individuals themselves, their personality profiles and the inner motives that drive them. The difference between these approaches was rather neatly summed up by the Brazilian Archbishop and ‘liberation theologist’, Dom Hélder Pessoa Câmara: ‘when I give food to the poor, they call me a Saint. When I ask why they are poor, they call me a communist.’

Thus does philanthrocapitalism fail to see the wood for the trees. ‘Saving the world’ from its ideological standpoint, boils down to a handful of individuals being sufficiently motivated and economically empowered to undertake such a project. The focus shifts from those who are ‘given’ to those who ‘give’. The latter’s empowerment is predicated upon the former’s disempowerment and their dehumanisation in becoming the mere objects of charitable display.

We should not be surprised by this. It’s the same kind of top-down arrogant thinking that permeates and informs mainstream politics. Career politicians market and preen themselves on the pretext that they possess certain key qualities that their rivals lack and that electing them will somehow make a difference to the lives of the electors themselves. We all know what becomes of such wishful thinking. The widespread apathy and corrosive cynicism that pervades contemporary society is the direct outcome of the folly of putting your faith in political leaders to lead.

Like the political establishment, philanthrocapitalism is driven by a kind of saviour complex. To that end, it bathes itself in an aura of moralistic self-righteousness and smug do-goodery. That is its defence mechanism, its own way of disarming criticism. How can you possibly criticise your Zuckerbergs and your Bonos when they so obviously mean good? Shame on you.

Why Philanthrocapitalism?
The interesting question is why are the likes of Zuckerberg, Bono and others now so intent on thrusting themselves into our collective consciousness and piously promoting their pet causes? Is there really such a big difference between the philanthropy of the past and modern philanthrocapitalism as Bishop and Green’s book suggests and, if so, how come? According to the philanthrocapitalism.net website:

  ‘Part of the explanation is the surge in entrepreneurial wealth in the last thirty years. Self-made billionaires tend to be more willing to give their money away than those who inherit their fortunes. Entrepreneurs are also, by nature, problem-solvers and relish the challenge of taking on tough issues: for Bill Gates, it is malaria and other infectious diseases, for George Soros it is political change. There’s also a growing recognition that big global problems cannot be left to government alone. Philanthrocapitalists can do the risky, innovative things that government cannot, to find new solutions to problems’ (http://philanthrocapitalism.net).

Let’s take this last point first. The assumption here seems to be that the reason why those ‘big global problems’ persist basically has to do with the particular mix of agents involved in tackling them. Only create a larger space in which our enterprising philanthrocapitalists can bring to bear their own particular brand of ‘innovative’ problem-solving and you are likely to see a good deal more progress being made. What is conveniently overlooked is that the ‘problem’ these entrepreneurs are supposedly skilled in solving is how to make money and augment a corporation’s profits.

It is no concern of theirs that, for instance, the workers made redundant in the pursuit of these profits are now confronted with the problem of how to pay the mortgage and avoid being made homeless. Corporations are obliged to take a narrow self-interested point of view in a competitive market environment – as indeed, to an extent, are charities too in their scramble for funding – but this provides a very poor grounding in which to set out to ‘save the world’. That, one would have thought, minimally implies the joined-up thinking of a holistic approach to ‘problem solving’ that fully takes into account the wider external costs (externalities) of one’s decisions and this demonstrably is not something that the application of ‘big-business-style strategies’ lends itself to.

Criticism
There are other grounds on which these strategies have been criticised.

Firstly, while charities are increasingly forced to compete for funding there is a problem in that you cannot really apply to charities the same criteria as you might in choosing between, say, two different brands of soap powder on the basis of comparative price and quality. Charitable causes are not so easily substitutable. Is combating HIV/Aids more important than building a school or sinking a well in some remote rural village? Who is to say? The application of business strategies to charitable causes tends to override this qualitative issue by subjecting the performance of charities to the same pseudo-quantitative metric that businesses apply to themselves, permitting them to make a choice on the basis of what offers the greatest return on their money. But people remain loyal to their particular pet charities for reasons that don’t necessarily apply when choosing between soap powders.

Secondly, philanthrocapitalist business-style strategies tend to focus on technical fixes, ignoring the socio-economic roots of the problems they seek to ameliorate. Addressing the latter is a much more costly, complex, and time-consuming process and costs are precisely what businesses are intent on cutting. This ‘technicist’ bias is sometimes linked with promoting certain technologies in which the philanthrocapitalist concerned might have a vested commercial interest. In fact, a lot of what is called ‘foreign aid ‘is provided on this basis – to induce a sense of commercial dependency in the recipient country upon the donor country with an eye on future market growth in the former.

Thirdly, there tends to be a marked preference for big organisations in the world of charity, (reflecting the dominance of the large corporation in the business world and their preoccupation with increased market share) in the belief that this makes for economies of scale. As a result many small charities operating on a shoe string get overlooked and starved of funds.

Finally, the provision of financial incentives to volunteers, turning charitable work into paid employment, ironically tends to exert a corrupting or debilitating influence on volunteering. There is also a tendency for philanthrocapitalism to weaken and undermine civil society itself. Grass roots citizen organisations highly dependent on external funding can find themselves subject to a process of ‘co-optation’ and disempowerment. Like the saying goes: ‘beggars can’t be choosers’. Rather, the function of the beggar from this standpoint is simply to passively consume and to exude gratitude for the privilege of being able to do so.

The utter inappropriateness of applying business strategies to social transformation when these different things are each driven by a qualitatively different kind of dynamic was revealingly borne out by Peter Buffett, the second son of billionaire investor, Warren Buffett. Buffet expressed concern that the state of philanthropy in America ‘just keeps the existing structure of inequality in place.’ At meetings of charitable foundations, he averred, ‘you witness heads of state meeting with investment managers and corporate leaders. All are searching for answers with their right hand to problems that others in the room have created with their left’ (New York Times, 26 July, 2013).

But let us be clear on one point. Criticising philanthrocapitalism does not mean the state is any more capable of solving these problems and, in any event, that is not what socialists are advocating. We argue instead that the problems themselves arise from the very nature of capitalism itself and will persist irrespective of the agents involved in tackling them. Piecemeal welfare reforms enacted by the state will never be enough but nor will private charity. What’s more, there does appear to be an inverse, or zero sum, relationship between these two things. One tends to expand at the expense of the other.

Philanthrocapitalism has often been characterised as a peculiarly American phenomenon. There is some truth in this but we should not imagine that, as a phenomenon, it is confined to the United States. There is a saying that, when the latter sneezes, others catch a cold. America’s cultural hegemony on the world stage may now be on the wane but it is still insidiously powerful and pervasive. This, along with global developments in recent decades – in particular the emergence of neoliberalism since the 1970s and its austere policy prescriptions for pruning back on state spending – have opened up more opportunities for the philanthrocapitalists to muscle in, acting under their own initiative or in concert with their government host.

Free market lobby
According to Mike Konczal, there is in America a powerful free-market lobby that favours private charity not just as a means of filling the obvious gaps in the threadbare safety net provided by state welfare but as part of a wider programme entailing the denationalisation of welfare provision (‘The Voluntarism Fantasy’, Democracy Journal, Spring 2014). We can see how this might serve as a pretext for slashing Federal budgets and by extension, the tax burden on American capitalists. However, the argument, suggests Konczal, is grossly misinformed. It appeals to a rose-tinted vision of America’s past but there never was some golden age of voluntarism, which free market libertarians wish now to reinstate, where society functioned perfectly well without state intervention.

In this context, ‘voluntarism’ denotes not just the charitable act of freely offering time and money to assist others but also the capacity of individuals to take responsibility for their own welfare by exercising choice in the market. This is an extension of the dogma that since we are free to choose whether or not to enter into a particular market transaction, the market itself must, by definition, be a non-coercive or voluntary institution. Workers freely choose to sell their working abilities to their capitalist employer and consequently cannot be considered ‘exploited’. Their labour is voluntary and thus not coerced.

This is yet another example of the failure of a ‘methodological individualist’ approach to see the wood for the trees. Society is seen as simply the sum total of its parts and nothing more. This same approach which vests in a tiny handful of super-rich individuals the power to ‘save the world’ neglects to consider the individual worker as a member of an economic class. For it is the class to which they belong – the working class – that has, as a class, no choice but to sell its working abilities to the tiny minority who own the means of living. That is why the system of wage labour is fundamentally coercive and non-voluntary – not because individual workers do not have the option of choosing which particular capitalist enterprise should exploit them.

The ‘Voluntarism Fantasy’ of the American free-market lobby hinges on what Konczal calls the ‘myth of a stateless nineteenth century’.To the contrary, he argues, the footprint of the state was everywhere in evidence. Not only has the state always been an active player in providing social security but had to expand its role in the face of the clear failure of private initiatives to do the job. This was particularly true in the case of the 1930s Great Depression and also more recently in the case of the 2008 recession and its aftermath when ‘overall giving’ in the US fell away quite significantly – by 7 percent in 2008, with another 6.2 percent drop in 2009 – precisely at a time when it was most needed. In spite of itself and its fundamentally competitive nature, capitalism needs a state to do what is functionally required in order for the system to operate relatively smoothly on its own terms.

Robin Cox

(Next month: The Myth of the ‘Self-made Man’)

Exhibition Review: Port Sunlight (2018)

Based on ‘The New Frock’ by William Powell Frith

Exhibition Review from the October 2018 issue of the Socialist Standard

It is a truism to say that art and commerce are closely related: under capitalism, artists have to earn enough to live, commercial galleries have to survive, and other galleries often need to attract sponsorship from companies. Rarely, though, is the relationship quite as close as that involving William Lever (1851–1925).

Lever was the son of a wholesale grocer, and he expanded the family business by having soap manufactured in pre-wrapped bars. Then he set up the firm of Lever Brothers, which made the soap itself, initially in Warrington but then at a larger purpose-built factory on the Wirral. He used the brand name Sunlight, and the area where the factory was situated was termed Port Sunlight. As his company expanded, both in Britain and overseas, employing 85,000 workers at its height, he became immensely rich.

His initial interest in art was to buy paintings that could be copied and have the word ‘Sunlight’ and an advertising slogan added, so that they could be used as posters. One of the best-known was based on the painting ‘The New Frock’ by William Powell Frith (who objected to the use of his art for commercial purposes). Later Lever acquired a taste for collecting, and built up a substantial collection of paintings, sculptures, furniture, textiles and porcelain. Much of this can be seen at the Lady Lever Art Gallery, which opened in 1922. There are many portraits, such as one of Emma Hamilton as a Bacchante, and a number of works by Pre-Raphaelites such as Rossetti and Burne-Jones (both associates of William Morris).

Many of Lever’s workers were housed in the specially-built Port Sunlight village. A few minutes’ walk from the art gallery are the Port Sunlight Museum and a worker’s cottage. It is often described as ‘an original garden village’, but it was run in a very authoritarian way: for instance, all the houses had gardens but tenants were not allowed to keep chickens in them, and there were strict rules on taking in lodgers. Houses were rented from Lever Brothers, and losing your job meant losing your home. The ideas behind the village were not just philanthropic, as Lever believed that children who lived in a slum would grow up to be ‘a danger and terror to the State’.

Lever Brothers became part of the giant Unilever company in 1930, and from 1979 houses in Port Sunlight were sold when they became vacant, as Lever’s paternalistic approach to housing his employees had long been unfashionable. The village now looks like a rather anachronistic settlement, though both art gallery and museum are well worth visiting.

Paul Bennett

The passing of a brain-sucker. (1919)

From the September 1919 issue of the Socialist Standard

On the 12th of August the death of Andrew Carnegie was reported, and all the capitalist newspapers united to diffuse an odour of sanctity around the man whose fortune—like all other great fortunes—was built up by the sucking of other men's brains.

It was on the shoulders of others that Carnegie climbed to affluence. Unscrupulous, alike in his dealings with his fellow capitalists and his workmen, he crushed out all who stood in his path, until he came up against a more powerful combination than his own, then he stepped quietly down and out of business, leaving Morgan, Rockefeller & Co. a clear field.

Carnegie came at the first flush of the era of speculation and "high finance" in America, and the tide swept him along with it. The keystone of his success was his ability in appropriating the product of other men's brains (as well, of course, as the product of their hands), or, as he himself repeatedly expressed it in relation to his managers, finding better men to look after his interests.

The man who is set up as a model of "self-help" was helped by others all his life. The only direction in which he exercised self-help was in helping himself to the the product of the work of others.

A quotation from the full-page effusion on Carnegie's life in the "Daily Telegraph" (Aug. 12th) gives in a nutshell the story of his life and the cause of his success.

He began the world without a penny. He retired from business sixty years after one of the richest men in the world—to put it no higher—with a fortune of some £90,000,000 . . . It was won by a man who had no training for his life-work. The greatest of iron masters knew nothing of metallurgy.

(Italics mine.) No money—no knowledge of iron—yet the greatest iron master! How did he do it?

To the progress of the industrial revolution, to the stupendous development of mechanical and scientific methods in manufacture, Andrew Carnegie owed his millions.

Here we have it. Carnegie's wealth was built up by the ingenious brains and hands of working men. In other words, the departed saint stole the product of others' toil. And what of the workers and thinkers whose discoveries brought about the industrial revolution? The main figures in it—Crompton, Cartwright, Stephenson, Kay, Jacquard, Harrington, Lavoisier, Koening, Roberts, Trevithick, Gutenburg, Cart, Bourseul, and a host of others, either died in poverty after lives of struggle against starvation, or—in the case of a very few—gained a niggardly recognition when they were on the brink of the grave.

Now let us see where the self-help came in. Carnegie's first "start" in life was due to another person. To quote again from the "Daily Telegraph":

And now came the tide in Carnegie's life which, taken at the flood, led on to fortune . . . It was Col. Scott who first taught the youth how to make money earn more money . . . His mother mortgaged their house, into which had gone all the family savings. With the $600 thus raised Andrew bought Adams Express Stock, on his astute employer's advice.

Of course the stock paid well: Scott was in the "swim."

Carnegie's next step was to introduce to the Pennsylvania Railroad, through the agency of Scott (who was president of the company) T. T. Woodruff's invention of a sleeping berth (the forerunner of the Pullman car). He borrowed the money for his shares, and was "let in on the ground floor," "but the cars afterwards paid handsome dividends!" "Thus," he wrote, "did I get my foot on fortune's ladder. It was easy to climb after that."

Thus did he vindicate the glorious principle of self help! I may add that I find no record of Woodruff's name as one of those who got their feet on fortune's ladder. No doubt he went the usual way of inventors.

During the Civil War Carnegie's pal Scott (now Assistant Secretary for War) found him a lucrative job in the service of the Northern wage slave owners, and at the conclusion of the war he utilised the wealth he had acquired to go in for oil and "struck it rich."

Like Mr. Rockefeller, he was in at the start. In 1862, with several associates, he purchase the Storey Farm, on Oil Creek, Pennsylvania for $40,000. It proved what prospectors call a bonanza, and in one year paid $1,000,000 in cash dividends.

Having gained the early plums of the oil trade, the "self-made man" in the making turned his attention to steel. On a visit to England he saw the steel rails that were the result of the new Bessemer process (a process discovered by one of Bessemer's workmen whose name even is  not known!) introduced them into America, and another chunk was added to his fortune.

The process of the Trust in which Carnegie had the preponderating influence was largely due to the valuable patents which they controlled. The men who were responsible for the subjects of these patents, however, were but pawns in the hands of the financiers.

Working men have proverbially short memories, yet the name "Homestead" should suffice to recall to the mind the bludgeoning and shooting of working men that took place at Carnegie's works during the "Homestead" strike, when Pinkerton and his gunmen were called in. Though daily waxing richer Andrew the philanthropist (!) was not satisfied, and laid plans to increase the working hours. The men organised to resist the project, so he retaliated by refusing to employ any but non-union workers. According to the "Telegraph" "the strike was soon the crux of one of the ugliest scenes in all the bloodstained history of American labour quarrels." The military (to the number of some 8,000 soldiers) were eventually sent to the vampire's assistance "to restore order"! And such was the man who professed to be the ardent anti-militarist and apostle of peace, and who presented to the world the "Palaces of Peace." Like others of his kidney, he did not want war when it interfered with his accumulation of wealth, but when it suited his purse (as when he took part in the Civil War) his objections vanished.

By the irony of circumstance, the same day the papers were applauding the incarnation of self-help and genius in the shape of Carnegie, they devoted a few lines to recording the tragic death of poor Blakelocke, the American landscape painter. His life "was the story of genius doomed to poverty," says the "Evening News" (13.8.19). His greatest works were sold by him for a few paltry pounds to keep his wife and family from starvation. The same works were afterwards sold for hundreds of pounds. The same paper further states: "Worry and the hard struggle for existence eventually produced a break-down, and he was removed to an asylum."

Blakelocke is now looked upon as one of the greatest landscape painters of America, but his genius only brought him poverty and the lunatic asylum.

What a contrast! The unscrupulous and slimy Carnegie dies in the midst of vast riches, while the fine artist dies in the asylum! Self-help, forsooth!

After officially stepping out of business (although still drawing his dividends), Carnegie set out to make a name for himself in a new direction. He made arrangements to distribute libraries in various places to assist in the education of working men. It appears strange that one who was such a determined antagonist of his employees should suddenly blossom forth as their benefactor. The strangeness, however, disappears as soon as we look below the surface. Carnegie and his class require workpeople who have sharp brains and a good technical knowledge, as these make the most efficient wage-slaves—hence the library stunt.

Since 1901 Carnegie has been throwing millions away and doing his damnedest to spend his money, but all to no purpose: he dies worth nearly as much as in 1901! What a power of wealth this one man must have robbed the workers of, and yet they try to kid us that we do not produce enough!

Away with dreams and delusions; let us wake up and produce for ourselves. Perish the parasites and vampires.

Gilmac.