Michael Edwards' Case Against Philanthrocapitalism

In "Just Another Emperor?" Michael Edwards challenges philanthrocapitalists to transform the economic system that made them rich, not just address its symptoms.
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"The world wouldn't need to be saved by the rich if their profits were returned to their employees in the first place," one reader responded to my "Philanthrocapitalism" post. Along the same lines, in Just Another Emperor? The Myths and Realities of Philanthrocapitalism, Michael Edwards challenges philanthrocapitalists to transform the economic system that made them rich, not just address its symptoms.

His book has already spawned a lively debate, and I will just summarize some basic points here as a placemark for a later discussion of a couple of them.

Edwards acknowledges that many philanthrocapitalists want to use their wealth for social good, but he is skeptical about importing business approaches into the nonprofit sector. Least controversially, he argues that while market approaches can improve access to goods and services, confronting inequality head-on requires advocacy and system change.

This seems right, and it is something recognized by many philanthropists, new and old alike, who support advocacy on issues as diverse as human rights, educational systems, and global warming. As Edwards himself notes, the Gates Foundation is moving "toward the kind of investments in institution building, policy and advocacy capacities, and governance that older foundations have pursued for decades."

More broadly, Edwards objects to criticisms of civil society organizations as amateurs that need a dose of "business thinking" to become more efficient. "What separates the good and bad performers is not whether they come from business or civil society," he writes, "but whether they have a clear focus to their work, strong learning and accountability mechanisms that keep them heading in the right direction, and the ability to motivate their staff or volunteers to reach the highest collective levels of performance." Certainly, the current global economic crisis calls for considerable humility on the part of the business sector--though the responsibility is widely shared.

Most controversially, Edwards questions the wisdom of mixing civil society and business at all. Since civil society's focus on rights, equality, and collective action and opposes the individualism and competition of business, he suggests that business and civil society organizations "working together but independently may be a better way forward than dissolving our differences in some soggy middle ground." Instead of making philanthropy more like a business, Edwards asks philanthropy to be more accountable to the public.

These are important arguments, and I will return to them in future posts. For now, I'll say that they a premised on a notion of "civil society' that makes it seem much more homogeneous than I think it actually is.

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