Paradox: New attacks on corporate social responsibility, mega philanthropists

Posted on Sep-05-2018 by Michael Paluszek

Why skewer people, as corporate leaders or as individuals, who devote billions of dollars to socio-economic progress and charitable causes?

Apparently, because many of the problems being addressed — especially those of inequality, in its many forms, persist even in the face of that progress.

And so, in just the last few days, three influential critics have taken their published shots at the many corporate social responsibility/sustainable development and personal philanthropic commitments that have generated macro socio-economic progress in recent years.

Winner of a Nobel Prize in Economics Professor Joseph E. Stiglitz struck the first blow in The NewYork Times Book Review with “Meet the ‘Change Agents’ Who Are Enabling Inequality” .

Professor Stiglitz, no friend of the current stage of capitalism — in reviewing “Winners Take All – The Elite Charade of Changing the World”, Ananad Giridharadas’ just-published systemic indictment of “merchants of fake change”– went for the jugular:

” … Prepare for a new genre: books gently and politely skewering the corporate titans who claim to be solving such problems …

“Like the dieter who would rather do anything to lose weight rather than actually eat less, this business elite would save the world through social impact investing, entrepreneurship, sustainable capitalism, philanthro-capitalism, artificial intelligence [and] market-driven solutions … Doing the right thing — and moving away from their win-win mentality — would involve real sacrifice; instead, it’s easier to focus on their projects and initiatives. As Giridharadas puts it, people want to do ‘virtuous side projects instead of doing their day jobs more honorably.’ “

“In order to really have an economy with the greatest opportunity for all, the kind of economy they seem to champion, the MarketWorlders [Giridhadaras’ term] would have to pay high levels of corporate and personal income tax, offer decent wages to their workers, allow unions, fund public schools (instead of pet charter projects) and support some form of single payer health care and campaign finance reform.”

Giridhadaras himself, offered no less a trenchant analysis and prescription in his New York Times op-ed, “Beware Rich People Who Say They Want to Change The World” https://nyti.ms/2OXx61e :

“… even as they give back, American elites generally seek to maintain the system that causes many of the problems they try to fix — and their helpfulness is part of how they pull it off. Thus their do-gooding is an accomplice to greater, if invisible, harm …

“Aggressive policies to protect workers, redistribute income and make education and health [care?] affordable would bring real change. But such measures could also could prove expensive for the winners …

“Changing the world asks more than giving back. It also takes giving something up.”

In the current issue of The New Yorker, Elizabeth Kolbert has focused her criticism on political inequality — on current mega-donors and how they “play” the current U.S. tax code to influence public policy “Gospels of Giving For the New Gilded Age”. In that regard, Ms. Kolbert quotes David Callahan, founder and editor of Inside Philanthropy, a website devoted to high-end living: “‘An ever larger and richer upper class is amplifying its influence through large-scale giving in an era when it already has too much clout. Things are going to get worse, too.’ “

Thus Kolbert’s own extrapolation: “It is difficult to say what fraction of philanthropic giving goes toward shaping public policy. Callahan estimates that the figure is somewhere around ten billion dollars a year. Such an amount, he says … is more than the annual contributions made to candidates, parties, and super-PACs combined.

“The result is doubly undemocratic. For every billion dollars spent on advocacy tricked out as philanthropy, several hundred millions in un-captured taxes are lost to the federal treasury…

“It is possible that in the not too distant future philanthropic giving will outstrip federal outlays on non-defense discretionary programs, like education and the arts … Is that the kind of future we want?”

It might be tempting to toss off these criticisms as representing just another chapter of temporary social sparks that will soon exhaust their newsworthy-ness. But over time, societies evolve from such sparks. The current political scene is roiling in the U.S. and elsewhere: Many in the millennial generation are searching for a political system better than the one inherited; “socialism” (understood or not) trends on social media; and some of the most fundamental pillars of society — “truth”, for example — are being shaken.

Of course, the fundamental change being advocated above is much more complicated. Capitalism has evolved over many decades in different cultures, and in fits and starts, with varied concentrations of power and influence. Now, many companies are finding that social objectives can be compatible with, and often even enhancing, profitability via corporate social responsibility (CSR) and sustainable development (SD) commitments. And the achievements of mega-donors such as the Gates Foundation and the Clinton Foundation among many others are not to be minimized.

However, at the moment, in the U.S. Administration has moved the needle decidedly toward shareholder-primacy corporate governance merged, somehow, with extreme populism.

To accomplish anything like what Dr. Stiglitz, Mr. Giridharadas and Ms. Kolbert prescribe will require nothing less than a long-term national political U-turn.

In the meantime, let’s recognize and encourage socio-economic progress wherever, and however, it occurs — even if, in the judgment of critics, it’s “not enough”.

Business in Society Blog

Paradox: New attacks on corporate social responsibility, mega philanthropists