From Ethical Politics
Philanthrocapitalism is a word that was invented by Mathew Bishop of The Economist magazine to describe the use of business thinking and market mechanisms to achieve social and environmental goals – to use capitalism, in other words, for philanthropic ends. This word is sometimes used to describe the activities of mega-wealthy philanthropists like Bill Gates and his foundation, and at other times it is used to indicate a general attitude of mind among social entrepreneurs, venture philanthropists and others who may not be personally wealthy, but who still see value in deploying the lessons and methods of the market to the social challenges of their day.
Arguments for and against philanthrocapitalism
For its proponents, philanthrocapitalism is a boundary-breaking movement that promises to provide new solutions to global poverty, health, agriculture and environmental degradation. The market can be used to get innovations to a scale and level of sustainability that is impossible for conventional foreign-aid projects or privately-funded NGOs, and because they face fewer political constraints, the philanthrocapitalists can act as ‘hyper-agents’ in taking bigger risks, and getting things done more quickly and efficiently.
For its critics, this movement is another ‘emperor with no clothes’, at best a way of getting useful goods and services to lower-income groups and at worst a self-serving attempt to preserve an unjust economic system by giving a little more back to social causes. There is no evidence that philanthrocapitalism can tackle entrenched social problems more effectively than government and civil society activism, in part because it ignores or eschews support for politics, social movements and other essential components of social transformation.
In terms of ethical politics, philanthrocapitalism poses a particular challenge for democratic accountability and public policy formation, because rich donors may have undue influence over debates and decision-making in crucial areas like health and the reform of public education. In these areas, the hyper-agency of the philanthrocapitalists must be balanced by the agency of ordinary people, expressed through their elected representatives and through the civil society associations to which they belong.
The best argument in favor of this movement is Philanthrocapitalism: How the Rich Can Save the World by Mathew Bishop and Michael Green (Bloomsbury 2008). The counter-arguments are explored in Just Another Emperor? The Myths and Realities of Philanthrocapitalism by Michael Edwards (Demos/Young Foundation, 2008).
Author: Michael Edwards