What a revolting word ‘philanthrocapitalism’ is! It is the ‘newspeak’ of the ‘staycation’ generation! But, let me be clear, my concern is not purely linguistic. Recently the number of independent charities has ballooned. ‘Philanthrocapitalism’ is on the rise! Should we be pleased or concerned?
Perhaps some, like me, have been more than a little repelled by the hint of self-promotion in the photograph of the Zuckerberg’s posing with loving looks at one another alongside their new born baby daughter, as they announce a gift from FaceBook of around $50 billion to charitable causes. We might, nonetheless, be tempted to give them the benefit of the doubt, and to heap praise on the loving couple, for their generous efforts to, in their own words, ‘make the world a better place for their newborn child to live in’. Except that it turns out that not one red cent has actually been given away!
What has happened instead is that the couple have established a new investment company, the Chan Zuckerberg Initiative. This company is simply a way of making even more money with the wealth the couple has already acquired, wealth on which, through clever accounting practices, very little tax has been paid, and wealth that they will continue to pay very little tax on, thereby denying funds to the many collective goods that ordinary tax payers have to pay for, such as roads, police forces and schools.
Instead the Zuckerbergs get to keep their money and to decide for themselves what to spend it on. This gives them a lot of leverage and, as we know, leverage is power and status. Power and status gives access to places of privilege, and to finance, and that means the possibility of even more income and yet more wealth. For the Zuckerbergs it is a win-win situation.
The term ‘philanthrocapitalism’ was coined in 2006 to describe the professionalisation of charitable giving. Matthew Bishop and Michael Green wrote a book about it in 2008, entitled ‘Philanthrocapitalism: How The Rich Can Save The World’. But so far the world has not been saved despite the great increase in the wealth of the super-rich, and despite the rising number of ways in which the super-rich can avoid tax by establishing private charitable foundations.
Philanthrocapitalism, amounts to little more than an accounting process. It is a means by which individuals manage to retain full control of their personal fortunes while appearing to be generously giving them away. It enables these individuals to use wealth to buy things that mere money alone ordinarily can’t buy. Things like status, gratitude and power.
Rather than contributing to already established charities, the super-rich now favour creating their own new charitable foundations, and they employ themselves, on very high salaries, to administer them. Though the causes may seem worthy enough, the reality is that these charities are a means of denying rather than promoting a transfer of wealth and income from the super-rich to the less well off.
Philanthrocapitalism says, more or less, the opposite of what it means! Just as a ‘Middle East Peace Envoy’ may prosper more in promoting war then in achieving peace, with consequences all too readily and unappetisingly apparent on the ground, philanthrocapitalism thrives in conditions of extreme inequality. We should be cautious, therefore, in celebrating it.