It is a sad irony that the one thing that the critics of capitalism and some of its most dogmatic supporters seem to agree on is that the only value that guides business is that ‘greed is good’. It was this blinkered, short-term view of capitalism that drove the banks and world economy into the current crisis. Greed has been bad for shareholders as well as the rest of society. At the core of Michael Edward’s argument is this assumption – that business and civil society are necessarily opposed to each other.
What we argued in Philanthrocapitalism is that even before the crisis a growing number of successful entrepreneurs understood that the winners of our economic system have a responsibility to the rest of society and that visionary business leaders had realised that their firms could ‘do well by doing good’. For some, like Bill Gates, this has meant mega-philanthropy to fix the failure of the market to find cures for diseases that kill millions. For others, like Nike or Coca-Cola, it’s about using their supply chains to tackle deprivation.
We think that these interventions have the potential to save and improve millions of lives and should not be lightly dismissed, as Michael does. Indeed, Bill Gates’ biggest achievement so far has been to breathe new life into the fight against malaria, so that the world is talking seriously about ending the million needless deaths that this disease causes each year within the next decade.
Moreover, in the fight against malaria, Gates and other philanthrocapitalists understand that it’s about more than vaccines. That’s why Gates, along with Rupert Murdoch’s Newscorp and other businesses, is backing the Malaria No More campaign, which will use the World Cup in 2010 to put pressure on developing country governments to do more for their citizens. Philanthrocapitalists understand that citizen mobilisation is crucial to tackling many problems – that’s why George Soros backs pro-democracy groups around the world [editor's note - including openDemocracy's Russia section], Mo Ibrahim has created his political leadership prize in Africa and Jeff Skoll has funded campaigning films like Al Gore’s "An Inconvenient Truth".
Social change is often political and this is drawing philanthrocapitalists into public controversy, particularly for Bill Gates over his work to reform education in America. Michael is right to raise the concern about plutocracy, which we discuss at length in Philanthrocapitalism. His solution is to keep the philanthrocapitalists out of social change. This would be an enormous waste. It is better, we argue, to have clear rules about the need for philanthrocapitalists to be open and transparent about what they do and be open to challenge.
Nor must is philanthrocapitalism necessarily about wealthy individuals and rich corporations. In the paperback edition of the book we have added a new chapter charting the rise of online giving sites like kiva.org, globalgiving and donorschoose. These organisations, succeed by connecting people and tapping into the wisdom of crowds, just like their for-profit predecessors like eBay.
The old black and white world of greedy business and do-gooding civil society was always a myth. As we emerge from the economic crisis, one of the lessons that more businesses need to learn, as we argue in our new book The Road from Ruin, is that values are crucial to real, long-term success. We need a better capitalism that respects society and the environment. That is philanthrocapitalism.