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Corporate Philanthropy and its Discontents

Not a day goes by without an article, interview, or op-ed fawning over the world’s billionaires, and practically salivating over their “philanthropy.” However, one must exercise restraint over labelling them actual philanthropists, because that word is supposed to indicate someone who is “loving [of other] people,” but the way the ultra-rich have become ultra-rich in the first place suggests a vastly different disposition. It is not a coincidence that grandiose public acts of charity have increasingly hogged the media limelight precisely now that the richest people on the planet are hoarding more wealth than ever before. The thrust of this article, therefore, is to try to lay out how elite charity is business-as-usual – the rich gain at the expense of the poor.

One might be tempted to defend billionaire philanthropy: don’t the rich face opportunity costs when they decide to donate their money? That is, couldn’t they have chosen to use money for personal or business purposes as opposed to handing it away? If they do face these costs and trade-offs, but still choose to donate, they must be doing so from the goodness of their hearts . . . right? This argument merits closer inspection, so let us (try to) answer two important questions. First, who really faces the opportunity costs for philanthropy? Second, might philanthropy be profitable to capitalists despite opportunity costs?

As to the former question; when someone spends, they obviously reduce their ability to deploy money to other, different, ends. But it is easy to see that the concept of an opportunity cost doesn’t apply to everyone uniformly. It makes sense for a salaried worker to think an extra dollar on dining out is a dollar less going to rent, fuel, or bills. The same, however, cannot be said for people who are worth more than the annual revenues of all except 25 countries. The magnitude of wealth involved here is unspendably large – one would not run out of it if one tried. The ultra-rich have so much money that they can veritably have their cake and eat it too, so the question of their opportunity costs becomes quite insignificant.

There is, however, a group of people that can reasonably be argued to face opportunity costs when rich businesspeople choose to give money away – workers. Presumably, it won’t take much convincing for anyone to see that the way any of these billionaires collect money is by making workers labour at high productivity, while keeping their wages and other benefits to a minimum. Surely, no one thinks Jeff Bezos would be as rich as he is without his employees working in inhumane conditions for poverty wages? This makes it clear that every dollar spent by these ultra-rich – including on philanthropy – is not lost from their bottomless coffers, but more fundamentally snatched from the workers. It translates to a dollar less for wage increases, a dollar less for improved working conditions, a dollar less for better healthcare, a dollar less towards mending the broken systems that necessitate something like philanthropy to ensure some people’s survival in the first place. Corporate philanthropy is not a practice in radical equity, it is a process of giving to the poor only an infinitesimal fraction of what has been taken from them. This is where the first query leads us.

Now, the second question – whether philanthropy is beneficial for the ultra-rich even if they face some monetary cost. There is a host of examples to show that it is well worth the trouble. Bill Gates, for example, has completely laundered his reputation from a corporate shark to a messiah. He receives vastly positive coverage, especially due to the Covid-19 pandemic. However, this same coverage that tends to overemphasise his goodwill (and his work against Covid), glosses over things like his role in convincing Oxford University to privatise its vaccine instead of giving it away publicly. His ability to control the conversation around himself is a direct result of charitable giving – all of this influence derives from his strategic deployment of wealth, made all the more suspicious by the fact that even though their stated function is giving away money, the assets of both Bill Gates and the Gates Foundation keep growing! The amount of benefit he is deriving is clearly above and beyond the small financial cost of occasionally donating scraps of money.

Both of the paradoxes discussed above – poor workers bearing the brunt of charity, and ruthless businesspeople claiming the mantle of “philanthropy” – are not new. A century ago, the steel magnate Andrew Carnegie was one of the most generous and philanthropic people on the planet, with a legacy that endures to this day. But this very same Andrew Carnegie proudly described the working conditions in his factories as such:

[E]very ton of pig iron . . . is made by men working in double shifts of twelve hours each, having neither Sunday nor holiday the year round. Every two weeks the men change to the night shift by working twenty-four hours consecutively.

Just like with Mr. Gates, however, this side of his history does not find mention nearly as frequently as his supposed goodwill. This is because charity is misunderstood as a dispersal of money and capital. Instead, charity is how the ultra-rich convert their financial capital into social capital; charity becomes a public relations campaign best achieved through flashy lump-sum donations that do little to help working people. Billionaire philanthropy has an “economic basis . . . disguised under a veil of moral relations.

And so, answers are found to both our questions – philanthro-capitalism functions firstly at the expense of workers, and secondly to the benefit of the already rich. Charitable giving at this level is a simple attempt to maintain the status quo. Without doing much at all, it allows the capitalists to portray themselves in a positive and humane light, even while prolonging the misery of their workers. The inevitable takeaway here is that billionaire philanthropy is doomed to fail – throwing money at problems cannot fix them, when the people throwing the money are the problem.

(Written by Aditya Tiwari and Edited by Aarushi Kataria.)

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