Tag Archives: Social Democracy

Philanthropy! What is it good for? Almost absolutely nothing

Think of the planet’s best human being. Who are you thinking of? Pope Francis? Your parents? Justin Bieber? According to Business Insider, it’s Mark Zuckerberg. Why? Because he’s planning to donate $1 billion (less than 5 percent of his massive fortune) to charity. While it’s certainly welcome, philanthropy is far more insidious than it appears at first sight. It tends to lead to fawning press coverage, but little in the way of good reform. Worse, it perpetuates the myth that society’s problems can be solved by the rich and powerful.

In the gospels, there is a story of Christ watching as the wealthy deposit large amounts of their money into the church coffers. Then a poor widow gives two mites, an incredibly modest sum. Jesus turns to his disciples and says, “Verily I say unto you, That this poor widow hath cast more in, than all they which have cast into the treasury. For all they did cast in of their abundance; but she of her want did cast in all that she had, even all her living.” The story is intuitive, because we reward people for their effort; to whom much is given, much is expected.

There’s a very real sense in which it would be hard for Zuckerberg to have done less for the poor. After all, he and his rich Silicon Valley friends regularly use their wealth to lobby for policies that would make them even richer — even if in the guise of social responsibility.

As Chris Rock notes, “behind every great fortune, there is a great crime,” and behind Zuckerberg’s wealth is the relentless monetization of privacy (or, more accurately, the lack thereof). A cynic would be forgiven for wondering if his acts of charity are actually a strategy to placate critics. But, according to Business Insider’s Nicholas Carlson, these recent acts of charity should completely silence the critics.

But Carlson’s obsequious flattery is nothing like the unctuous adoration festooned by Matthew Bishop and Michael Green in their book,”Philanthrocapitalism” — which bears the Orwellian sub-header, “How the Rich Can Save the World.” The authors write approvingly that, “Today’s Philanthrocapitalists see a world full of big problems that they, and perhaps only they, can and must put right.” Maybe, but there could also be a more insidious motive.


As H.L. Mencken writes, “The urge to save humanity is almost always a false front for the urge to rule. Power is what all messiahs really seek: not the chance to serve.” While some philanthropists support good causes (like Bloomberg’s fight against Big Tobacco), other pet causes are not so humanitarian. While we may applaud the work of Bill Gates, many philanthrocapitalists, like the Adelsons and the Kochs, have decided that their philanthropic venture will be empowering the Ted Cruzes of the world to wreak havoc. Wealth is power, and concentrated wealth is concentrated power. The most benevolent inventions are also the cruelest.

Even when philanthropy is benign, it is inefficient. In every other developed nation (and the U.S. until recently), everyone, including the rich, pays lots of money in taxes and that funds education, healthcare and daycare. In the U.S., the rich pay significantly less, and charities must beg them for money in order to treat the poor. Hospitals and homeless shelters must dedicate time and energy to wooing billionaires for a pittance.

In his book “The Brothers Karamazov,“ Fyodor Dostoyevsky notes this paradox about liberalism, “The more I love humanity in general the less I love man in particular. In my dreams, I often make plans for the service of humanity, and perhaps I might actually face crucifixion if it were suddenly necessary. Yet I am incapable of living in the same room with anyone for two days together.” Social democracy, like that practiced by other developed nations, is the solution to the Dostoyevsky problem. Social democracy allows us to love humanity with our taxes and then work on loving each individual person throughout our lives.

Although many on the right (and the sycophantic center) long for the good old days of charity, such dreams are exactly that — profoundly unrealistic. Conservatives, who distrust human nature so profoundly most of the time, place far too much weight on human benevolence when it comes to charity. There simply is no way to ease poverty with charity. For one, charitable contributions in 2011 were only about $300 billion, far below the $707 billion that the government spends on income security and healthcare for the poor. Given the relative weakness of the U.S. safety net already, one funded entirely on charity would be abysmal. And $300 billion is all charitable donations; many donations aren’t aimed at helping the poor, but instead religious or cultural endeavors. One study finds that of the $250 billion given to charity in 2005, only about 30 percent went to aid the poor. Often, “charity” is simply a means to evade taxes. The Walton family, for instance, uses complex “charitable” trusts that end up sending more money tax-free to their heirs than charitable causes.

While government programs like food stamps face strict and rigorous oversight from both the government (GAO) and media (Fox News), private charities face little scrutiny. Government welfare programs are, contrary to popular belief, incredibly successful at reliving poverty and have incredibly low rates of fraud. And these programs must represent the will of the people, rather than a small elite. Social democracy is a huge project, and requires large portions of GDP. (U.S. government revenues as a percentage of GDP is 10 percent lower than the OECD average.) Churches, foundations and other private organizations are simply too decentralized and inefficient to ever provide that level of aid.

Philanthropy has moral problems too. It assumes that those who earn money have the right to keep it, and do with it as they please. We may like it if Bill Gates gives away a few billion, but are we not also forced to accept that he would be equally right to not give away his wealth? The philanthrocapitalist ethos assumes that since markets are good, Gates could only have made the money justly. Wealth is equated with virtue.

At my old school, a business professor used to challenge her students by asking, “Who did more good, Bill Gates or Mother Theresa?” We may be inclined to say Gates, but as Slajov Zizek writes, “The catch is that before you can give all this away you have to take it.” He notes correctly that, “According to [philanthrocapitalist] ethics, the ruthless pursuit of profit is counteracted by charity: charity is part of the game, a humanitarian mask hiding the underlying economic exploitation. Developed countries are constantly ‘helping’ undeveloped ones (with aid, credits etc), and so avoiding the key issue: their complicity in and responsibility for the miserable situation of the Third World.” Philanthocapitalism assumes the justice of a market distribution and thereby further legitimates the system.

Philanthropy is also profoundly undemocratic. Social programs based in democratic principles work by creating a sense of shared concern for the poor and middle class. We’re all in this together. Like the early church, social democracy is premised on the idea “from each according to their abilities, to each according to their needs.” Philanthropy assumes a far different relationship between the rich and poor.

Oscar Wilde writes, “Charity [the poor] feel to be a ridiculously inadequate mode of partial restitution, or a sentimental dole, usually accompanied by some impertinent attempt on the part of the sentimentalist to tyrannise over their private lives.” In charity, the rich approach the poor not as equal citizens but rather benefactor and serf. It perpetuates a class society, where the poor and middle class are dependent on the wealthy.

This is the most insidious part of the Davostype conferences (where the rich are surprised to discover inequality exists) and the slavish way Business Insider/Forbes/Fortune treat Gates and Buffet. It is the belief, the disgusting and entirely ill-founded belief, that rich people matter. That we need them. It is they who need us. The rich actually give far less of their already outsize income to charity than the middle class. This shouldn’t surprise us; as G.K. Chesterton noted, “You will hear everlastingly, in all discussions about newspapers, companies, aristocracies, or party politics, this argument that the rich man cannot be bribed. The fact is, of course, that the rich man is bribed; he has been bribed already. That is why he is a rich man … a man who is dependent upon the luxuries of this life is a corrupt man, spiritually corrupt, politically corrupt, financially corrupt.”

Paul Piff confirmed this with research showing that wealth is corrupting, that the rich are more unethical than the poor (in his words, they are “assholes”). It’s no wonder Paul warned that, “the love of money is the root of all evil.” Lenin illustrated the concept with a Bible verse from Thessalonians, “For even when we were with you, this we commanded you, that if any would not work, neither should he eat.” Republicans use the verse to chastise welfare cheats, but it’s worth remembering that the rich exist as parasites in our society, extracting far more for themselves than they could ever put in. It is their silly ideas and pet interests that are preventing true reform, their greed poisoning the atmosphere and their love of finance that caused the financial crisis. Philanthropy is predicated on the idea that we need them. Like an emotionally abusive and rapacious lover, they want us to love them because we are dependent on them. Nothing could be further from the truth.

Originally published on Salon.

The free market case against philanthropy

My most recent Salon piece argues against philanthropy because it makes waaay more sense for the government to provide these services (like virtually every other developed country). But there is also a free-market against philanthropy. If you believe markets are awesome and perfect and sacrosanct and what not, than it makes way more sense for Bill Gates to be working at Microsoft than doing philanthropy. Ditto for all of the other philanthropists. If you are a market fundamentalist, you think market activity is superior to non-market activity. So why not delegate non-market activity to bureaucrats, and leave Bill Gates to create wealth with Bing? (lolol).

To put this another way, it seems like having Bill Gates spend his time fighting malaria is like having Tom Brady mowing the field.


Will Racism Kill Social Democracy?

Over the weekend I read Lane Kenworthy’s Social Democratic America, a fantastic book that touches on a broad range of material in an academic, but brisk and readable fashion. It also has a fantastic bibliography for anyone who wants to dig deeper into the issues he discusses. Matt Bruenig has already touched on the general thesis, with which I have broad agreement. I want to dig into one objection that Kenworthy subtly misunderstands: how racial heterogenity could hamper social social democracy.

Throughout the book, Kenworthy dismisses the importance of racial homogeneity in the Nordic countries which he frequently cites as examples of successful social democracies. In his recent Foreign Affairs article he writes,

Some observers, even many on the left, worry about the applicability of Nordic-style policies — which have succeeded in the context of small, relatively homogeneous countries — to a large, diverse nation such as the United States. Yet moving toward social democracy in the United States would mostly mean asking the federal government to do more of what it already does. It would not require shifting to a qualitatively different social contract.

Before diving into the implications for the U.S., it’s worth noting that racial animosity is already threatening social democracy in Nordic countries. Reuters reports that,

Consensus around the post-war Nordic model of high taxes and generous welfare was long sustained by a homogenous society. But immigration, global competition and fear for jobs have put that ideal of equality based on civic trust under strain… Rising immigration has been coupled with economic troubles that have seen iconic Nordic companies such as Ericsson and Nokia shed jobs. Worries about the affordability of welfare have put the once taboo subject of immigration high on the agenda.

The Economist reports that,

High immigration is threatening the principle of redistribution that is at the heart of the welfare state. Income inequalities in the Nordic countries are generally lower than elsewhere… but Matz Dahlberg, of Uppsala University, reckons that immigration is making people less willing to support redistribution.

All of this is worrying if you believe, as Kenworthy does, that social democracy is inevitable. Last week I noted how increasing inequality tears at the social fabric and causes a decline in support for universalistic welfare programs. But as the Nordic countries shows, there’s another factor at work, and our newest fellow Ian Haney Lopez has a book about it: dog-whistle politics. Lopez’s book is specific to America, and traces dog-whistle politics from Wallace, through Goldwater and Nixon to its apotheosis with Reagan. Lopez shows how racial prejudice undermines universalistic welfare programs. Here’s a short excerpt showing how the right, particularly Reagan, used racial prejudice to attack poverty:

Reagan also trumpeted his racial appeals in blasts against welfare cheats. On the stump, Reagan repeatedly invoked a story of a “Chicago welfare queen” with “eighty names, thirty addresses, [and] twelve Social Security cards [who] is collecting veteran’s benefits on four non-existing deceased husbands… Beyond propagating the stereotypical image of a lazy, larcenous black woman ripping off society’s generosity without remorse, Reagan also implied another stereotype, this one about whites: they were the workers, the taxpayers, the persons playing by the rules and struggling to make ends meet while brazen minorities partied with their hard-earned tax dollars.

Here we see the trick to undermining any universalistic program: creating an “us against them” narrative. The program thereby loses its universality and therefore its support. That being said, to a casual observer, and particularly a white one, this narrative may seem like a weak collection of anecdotes, rather than a trend. But as Republican political consultant Lee Atwater famously admitted,

You start out in 1954 by saying, “N-, n-, n-.” By 1968, you can’t say “n-” — that hurts you. Backfires. So you say stuff like forced busing, states’ rights and all that stuff. You’re getting so abstract now [that] you’re talking about cutting taxes, and all these things you’re talking about are totally economic things and a byproduct of them is [that] blacks get hurt worse than whites. And subconsciously maybe that is part of it. I’m not saying that. But I’m saying that if it is getting that abstract, and that coded, that we are doing away with the racial problem one way or the other. You follow me — because obviously sitting around saying, “We want to cut this,” is much more abstract than even the busing thing, and a hell of a lot more abstract than “N-, n-.”

He actually admitted that. But politicians and strategists don’t talk that way anymore (for the most part; see below). So the the second objection to this narrative is that it’s not nice to throw out the race card. “The Republicans aren’t racists,” we’re told, “so don’t bring it up.” And most aren’t. They are not “racist” in the vein of late-Wallace or Lott or Thurmond. Rather, they refuse to acknowledge the structural racism in our society. They don’t notice the fact that the mainstream media shows poor blacks when it talks about welfare cheats and poor whites when they talk about the “working poor.” They don’t know that all of those great New Deal programs were designed to keep out blacks.

I noted in my last post how our belief in a “just world,” causes us to impute negative qualities on the poor. Our history is not one that is particularly just. From exterminating the native population to enslaving another to colonization and neo-colonialism we have failed to uphold our values. But instead of critically examining our past and how it shapes our future, we make excuses. Frances Fox Piven explains how that works in a segregated society:

When a racial group is kept at the bottom of the labor system and excluded from its social and political and political institutes, the result may be to create, or at least to nourish, the racist popular culture that is then said to be the cause of labor market and political discrimination.

That is why this melding of race and poverty is one of the most sadly durable memes in U.S. politics. It cropped up numerous times in the 2012 campaign, and has been expanded to include other out-groups, such as Hispanics (implications that “illegal immigrants” take from the welfare system).  As Lopez told me in our interview, “Dog-whistle politics is not fundamentally about race. It’s fundamentally about attacking liberal government, attacking New Deal government, which is good for the country as a whole, but bad in the perception of some of the very rich.”

There is also empirical support for Lopez’s thesis. A 2005 study by Woojin Lee, John Roemer and Karine van der Straeten finds that, “the conservative economic agenda has been given new life because of racist and xenophobic views of polities.” In the UK, France, and Denmark they find a similar trend, but the effect is not as strong.

Kenworthy’s book is valuable, if for no other reason, it explodes an argument recently put forward by Kevin Williamson in The National Review that, “the fact is that as a practical matter we are running out of ways to spend money on the needy.” If Williamson truly believes this, Kenworthy will serve as an antidote. But creating social democracy will not be easy, nor should it be considered inevitable.

Kenworthy’s proposals will require the government to take in more than 10 percent of GDP in increased revenues; not an easy task in the current political climate. The past two years have brought vicious attacks on some of the most important (and successful) parts of our weak social democracy, often in the guise of racially-charged language. It’s unlikely those will abate in the future. Nevertheless, Kenworthy shows that it can be done, if we just get the political will to do it.