The book by Michael Edwards, an authority on civil society, philanthropy and social change, and who was a senior advisor to World Bank on civil society from 1998 to 1999 and also director of the Ford Foundation’s Governance and Civil Society Program in New York from 1999 to 2008, is a stingy criticism on the involvement business(where profit is the all important driving force) in trying to remove some of those ills that affect a large percentage of the population. According to him very few have seriously tried to question or find out whether business can make a real difference and alleviate the innumerable problems that society faces. He squarely feels that at a time when businesses and markets themselves are under severe criticism for many of the economic ills of the recent past and have not been able to fix their problems, it is highly irrational to assume or believe that businesses can solve problems that the society and its other institutions face. He asserts that one of the concerns that arise is that businesses try to transform society by bringing in norms that they are familiar with(guided by markets, scale, profits etc) while the real transformation will occur when businesses behave more like civil society, not the other way round. By narrating substantial evidence, Edwards clearly lead every one to believe that social transformation is not a job to be left to market forces or to the whims of billionaires.
The business’s initiatives for the alleviation of society’s problems, nicknamed philanthrocapitalism by Mathew Bishop and Michael Green, is echoed by people like Oracle founder Larry Ellison: “the profit motive could be the best tool for solving the world’s problems, more effective than any government”. The author provides supporting evidence that the money that is contributed by the non-business institutions and public to society is far higher than that is provided by business: about 70% of US households contributed about $307 billion in the year 2008 while Google has promised to spend over $175 million over three years and the Gates Foundation’s promise to give away $1oo billion over its life time.
Yet again, philanthrocapitalism, seems to be biased towards certain high profile areas when it comes to health care initiatives. Most concentrate on diseases like TB, malaria and AIDS. But more deaths happen due to diarrhea, pneumonia, and intestinal parasites etc.
According to the author, one of the issues that contribute to the pitfalls is the drift in the mission. He asks a pertinent question: How can philosophy rooted in money and self-interest give rise to societies that are ruled by love? Businesses have profits as the bottomline; philanthrocapitalism also looks at even the basic needs of the society from a market pint of view. Expositions by management experts like Prahalad-to look at the market at the bottom of the pyramid-also is purely market-oriented. The concept is founded on the business aspect of how the businesses can exploit the huge mass of poor at the bottom of the population pyramid and not necessarily from the society’s well-being point of view.
The hitch with the market approach to solve society’s problems is that while markets require business to deliver at a price dictated by customers, civil society deals in friends and neighbours, who is expected to support the needy, whatever comes or at any cost. According to Edwards,” market norms are impersonal, characterized by the freedom to disconnect, to switch to a different supplier whenever and wherever I may want. This is not a convincing basis for a healthy and successful society, which requires a commitment to each other and to the public good, and the loyalty to hang in there for the long haul of social transformation even when the going gets tough and things turn against you. There is no responsible exit from society and the duties we hold in common”. Also, at the core of markets is individualism and the role of the entrepreneur as the major force for growth and change whereas at the heart of civil society is collective action and mutuality.The author quotes Sanjay Sinha, MD of Micro-Credit Rating International Ltd.in support of his arguments: “The new philanthropists believe that there must be a magic bullet for everything, an instant cure for poverty.They are not willing to believe that poverty reduction is a far more complicated matter than the idea of eBay”.Author feels that billionaires have little experience of not having power,of not being in control, and not being able to predict what is going to happen to prices, sales and profits.
The problem with the philanthrocapitalists is that they consider the world as a giant machine in which levers can be pulled to achieve the desired outcome, not as an organic entity which is constantly evolving and hence unpredictable and uncontrollable and where there are no straight solutions and past success is not necessarily a reliable guide for future. Social transformation requires humility, patience, and the determination to hang in there for the long term as against the impatience and short-term thinking of markets and entrepreneurs. Also, the metrics and measures of performance for business favour size, marketshare etc whereas quality of interactions between people and the capacities and institutions they create are what matters in doing good to the society. Opinion polls indicate that public is favouring authenticity over professionalism among the qualities. The author uses a quote from Jim Collins,” we must reject the idea –well-intentioned, but dead wrong- that the primary path to greatness in the social sectors is to become more like a business” to sum his concerns of using market-related arguments and initiatives for social good.
In conclusion, author says that while philanthrocapitalism is an interesting idea, it lacks evidence to support the claims that are made about its impact and also provide little logic in why business thinking should be more effective than other approaches in bringing about social change. Citizen philanthropy –broad based, deep rooted, bottom up, passionate and uncontrolled-would provide a much stronger foundation for social transformation than reliance on business and the market.Edwards provides a road map for reforming philanthropy for social transformation:
Step 1:Involve as many people as possible so that everyone can share in defining which problem get addressed, and how, as is required in a just and democratic society.
Step 2:The deprived and poor shall be brought to the centre and made the prime movers in identifying where additional resources can be helpful and implementing solutions.
Step 3: Reduce bureaucracy so that securing of resources is made easier
Step 4:Direct maximum resources to the most difficult and entrenched social problems, where business/government fear to tread.
Step 5:Strengthen transparency, accountability, and learning , so that peer and public pressure can encourage innovation without the need for too much government intervention.
And to conclude, Edwards asserts that any foundations/non-profits trying to do good to the public, shall be accountable to the beneficiaries(ie public) rather than to the board of the foundations or to the philanthrocapitalists.
The book describes lots of concerns on philanthrocapitalism and aligns with lots of our concerns in India especially in the wake of the recent issues concerning microfinance companies.
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