Philanthrocapitalism – all the power that billions can buy

BY Joan Baxter

Bill Gates hobnobs with elected leaders at COP21 in Paris. Copyright DW/ N. Pontes

Bill Gates hobnobs with elected leaders at COP21 in Paris. Copyright DW/ N. Pontes

In many places and among many people, he’s revered, a man whose charitable giving accords him selfless, almost saint-like status. But it’s not as if Bill Gates, founder of Microsoft, is actually shedding any of his vast wealth, no matter how much noise is made about his generosity.

This year, for the sixteeth time in just 21 years, Bill Gates tops the Forbes list of the richest people in the world. With 1,826 billionaires on that list in 2015, worth a total of US$ 7.05 trillion, it’s no small feat to be Number One.

Gates (unlike genuine saints) is very good at making money from money; according to Forbes in the past six years he has almost doubled his fortune and is now worth nearly $80 billion. That’s a good deal more than the Gross Domestic Product of 46 of the 49 countries in sub-Saharan Africa.

This despite his reputation as the world’s number one giver-of-money and “philanthropist”, determined to “help thousands and millions” out of poverty.

This version of Bill Gates the ultimate do-gooder is at odds with the businessman profiled by Linda McQuaig and Neil Brooks in their book The Trouble with Billionaires, as an unsympathetic man who started to amass his fortune in 1980 by “pushing aside a far more talented computer innovator (and friend) to convince IBM to use his (or rather, another company’s) inferior operating system”. And, oh yes, in doing so, creating an IBM-Microsoft hegemony that delayed multi-tasking on computers by a decade and turned the computer into a money-making machine for himself rather than a vehicle for the public good, as some of his contemporary computer developers intended it to be.

Forbes grants Gates an 8 out of 10 on the self-made scale, suggesting that he “truly made it on his own”.

But did he? Shouldn’t credit be given where it’s due? To the billions of dollars that the public, through their taxes, invested over decades to research that led to computers? To government funding of infrastructure and all the accoutrements of the advanced and privileged society in which Bill Gates grew up, able to study and flourish? And mostly to the cumulative learning and discoveries made by countless human beings that have brought our species from the Stone Age to the 21st century, which we have all inherited?

“This group inheritance,” write McQuaig and Brooks, “is implicitly acknowledged in the tax system which collects a share of each person’s income … for the general use of society.”

But when it comes to billionaires, does the tax system collect enough to make up for the enormity of the technological inheritance? And should philanthropy be seen as a legitimate way for the super-rich to pay their immense debts to society, especially in the context of rampant and growing inequality on the planet and the prevailing system of neoliberal capitalism that has allowed just 1% of the population to amass nearly as much wealth as all the rest of humanity?

Philanthropocapitalism – charity for profit?

Cover of 2015 report by African Centre for Biosafety, critical of Gates and Monsanto maize project.

Cover of 2015 report by African Centre for Biosafety, critical of Gates and Monsanto maize project.

The Oxford English Dictionary defines a philanthropist as “a person who seeks to promote the welfare of others, especially by the generous donation of money to good causes”.

Initially, it looks as if Bill Gates and his fellow billionaire, Warren Buffet, third on the Forbes list, would qualify. Both have also argued that the wealthy should pay higher taxes (although it is curious that Microsoft works through such a complex network of tax havens and subsidiaries to keep its tax burden low). And compared with many other ultra high net worth individuals in the world, they are remarkably visible and transparent.

They have both put billions of dollars into the Bill & Melinda Gates Foundation, the largest private foundation in the world and one of the world’s largest funders of what look like charitable causes such as fighting infectious diseases, reducing poverty and agricultural development.

But does that make their philanthropy benevolent? An effective, efficient or ethical way to redistribute wealth?

The devil, as always, is to be found lurking in the detail and semantics. Who, for example, should decide how best to “promote the welfare of others”? Or what constitutes a “generous” donation, if one’s wealth continues to grow and grow, despite all that “generous” giving? And what constitutes a “good cause”? Who is giving what to whom and why? What power do billionaire philanthropists wield when they decide which causes they will support – and those they won’t?

A new report examining the power of modern philanthropists in shaping global development notes that decades of globalization and the dramatic increase in finance capital have accelerated wealth concentration and led to a proliferation of foundations.

It traces the roots of the phenomenon to the beginning of the last century, when US oil magnate John D. Rockefeller and steel tycoon Andrew Carnegie set up the first large private foundations, “primarily as a way to shield some of their income from taxation but also as a way to garner prestige and influence in the US and world affairs”.

The prestige and tax advantages are still there.

Take the recent news that Facebook co-founder and sixteenth richest person on earth, Mark Zuckerberg, had pledged to “give” 99% of his and his wife’s net worth, their Facebook stock values at $45 billion, to a vague “mission” to make the world a better place for their newborn daughter. Some in the media broke this good news PR story with headlines praising the world’s “most generous” billionaires. Others, however, pointed out that this had little, if anything, to do with charity. What Zuckerberg had done was set up a limited liability company as an investment vehicle, which could invest in anything and then donate appreciated shares to charity and never, ever have to pay any taxes on the immense Facebook fortune.

Mega-money and a mega-foundation

Warren Buffet and the Gates, who top the Forbes list of America’s top givers, channel their mega-money through the Bill & Melinda Gates Foundation. In 2014, the Foundation gave out grants worth $3.9 billion, more than $30 billion since it was founded in 2000. Most has gone to global health, with a great emphasis on vaccines and technologies, and education work in the United States.

Since 2006, much has also gone to Africa for the Alliance for a Green Revolution (AGRA) and other agricultural ventures with high levels of corporate involvement that fit with Gates’ neoliberal and technological biases. And behind the mask of altruism, these tend to place “African agriculture in the hands of big agritech for private profit and strategic control under the pretext of helping the poor”.

In 2006, the Foundation’s three trustees – Bill and Melinda Gates and Warren Buffet – created a separate entity called the Foundation Trust that holds and invests the Foundation’s immense US$ 41.3 billion endowment.

Following the money

Bill Gates, Melinda Gates and UK Prime Minister David Cameron at 2011 World Economic Forum. Copyright by World Economic Forum by Remy Steinegger

Bill Gates, Melinda Gates and UK Prime Minister David Cameron at 2011 World Economic Forum. Copyright by World Economic Forum by Remy Steinegger

In a 2014 report, the non-government organization GRAIN analyzed where the Bill & Melinda Gates Foundation grants have tended to land and how the Trust invested the endowment.

GRAIN noted that Africa-based NGOs got “a meagre 4% of the overall agriculture-related grants to NGOs”. Of the more than $3 billion that the Foundation gave in food and agriculture grants, just 5% of funds went to African groups besides AGRA and the African Agricultural Technology Foundation (AATF). Of its agricultural grants to universities and national research centres across the world, 79% went to grantees in the US and Europe, and only 12% went to recipients in Africa.

GRAIN also found a startling and worrisome disconnect between what the Bill & Melinda Gates Foundation said they were doing to help smallholder farmers and malnourished people with their charitable giving, and the investments being made by the  Foundation Trust.

The Trust has billions of dollars in fast food and soft drink companies (that harm human health and nutrition), in fossil fuel corporations (that are driving climate change that so harms poor farmers in Africa), a billion in Walmart (the world’s largest supermarket chain that is driving so many small farms out of the market), and $23 million in shares in Monsanto, the world’s largest producer of genetically modified crops that threaten food and seed sovereignty.

The only clearly defined no-go area for investment, according to the Foundation’s website, is tobacco.

The GRAIN report concludes that the Bill & Melinda Gates Foundation focuses too much on science and research in Western countries, and not enough on helping small farmers in food-insecure countries adopt techniques that work for them.

“The likes of Gates revile peasant farming systems as backward and responsible for poverty and starvation in Africa. It’s as if there’s a concerted effort to make these systems obsolete, to do away with them,” writes activist Simone Adler. “But 80% of our population live in rural areas and about 70% of income is generated from agriculture, so what is going to happen when they empty out our rural areas? Where are all these people going to go?”

Bill and Melinda Gates support research in GMOs, and lean very heavily towards neoliberal market solutions, chemical fertilizers and pesticides, purchased seeds, patents, big pharma and big agriculture, and just about anything that looks like a technological fix, silver bullets that can increase profits for some very big corporations, big money and big banks. Indeed, the entire Gates fortune and the endowment of the Bill & Melinda Gates Foundation depend very much on neoliberal Business As Usual.

An inconvenient history

To read the Bill & Melinda Gates Foundation website, one might be excused for thinking that history itself began in 2000 when the Foundation was established. There is certainly no analysis of the ugly crimes committed against Africa and other tropical lands in the past few centuries by European nations, which have contributed to the suffering, poverty, disease and hunger of today.

No mention of the slave trade that made America wealthy and decimated Africa, the colonialism and neo-colonialism that permitted the pillaging and plundering of Africa’s natural and human resources, the horrors and slaughter of millions in King Leopold’s Congo, the proxy wars and propped-up dictators during the Cold War, wrong-headed development that harmed African agriculture, structural adjustment programs that starved health, education and other public services, the odious debts, unfair trade, the denigration of Africa’s own accomplishments, history, knowledge, customs, cultures and belief systems.

Undermining democracy?

In 2010, following discussions that the Gates and Warren Buffet had with other “philanthropists” around the world, the “Giving Pledge” campaign was launched. It invited the world’s wealthiest people to give away half of their wealth in their lifetimes or in their wills. Many signed up. Others didn’t.

Asked about the campaign, Peter Krämer, a German shipping magnate who had already donated millions of Euros to UNICEF, described such philanthropy as a “bad transfer of power from the state to billionaires”.

“That’s a development I find really bad,” he said. “What legitimacy do these people have to decide where massive sums of money will flow?”

In his view, those wishing to donate to charity should donate to established organizations that are accountable. He argued that elected governments should determine what is good for people, not the rich.

“You can write donations off in your taxes to a large degree in the USA,” said Krämer. “So the rich make a choice: Would I rather donate or pay taxes? The donors are taking the place of the state. That’s unacceptable.”

As the 2015 report on philanthropic power notes, the Gates Foundation doesn’t just shape priorities in agricultural research and policy-making. It also exerts a great deal of influence over governments and international organizations, including UN agencies such as the Food and Agriculture Organization and the United Nations Development Program.

Bill Gates himself meets regularly with heads of state, wielding with his billions more power than do many leaders democratically elected by millions of people, and a regular at lofty global events.

Of course other billionaires are also in the business of promoting their own agendas through philanthropy. Former political leaders such as Bill Clinton and Tony Blair also channel their own ideologies and neoliberal agendas through their own foundations, rather than through multilateral agencies and international charities, while also siphoning off funds that should support them.

The 2015 report on philanthropic power and development concludes that the growing power of philanthropists results in “fragmentation of global governance, the weakening of representative democracy and their institutions (such as parliaments), the unpredictable and insufficient financing of public goods, the lack of monitoring and accountability mechanisms, and the prevailing practice of applying the business logic to the provision of public goods”.

Philanthropic foundations awash in untaxed billions have immense power to shape discourse, and the agenda for global health and the direction of agricultural research and development.

Insiders tell me that the Gates Foundation never liked the findings of the World Agriculture Report, the largest ever international assessment of agricultural knowledge, science and technology for development undertaken over three years by 400 experts. It concluded that the only sustainable form of agricultural production and land use is agro-ecology and not corporate agro-industries that Gates tends to favour. As a result, governments, agricultural researchers, NGOs and any development agents starved for funding are hardly likely to pursue the agro-ecological approach, even if it’s the one they know is best.

And that makes this kind of big philanthropy, which is perpetuating the neoliberal capitalism that engenders it, very problematic indeed.





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