[p2p-research] “Philanthrocapitalism”: An oxymoron with promise?

Tue Apr 29 16:32:12 CEST 2008

Dear colleagues, would love your thoughts/opinions/criticisms/insights about
this:

http://blog.p2pfoundation.net/philanthrocapitalism-an-oxymoron-with-promise/2008/04/29

Writer Micheal Edwards' recent book http://www.justanotheremperor.org/ takes
a critical look at the hype surrounded the emerging phenomenon that some are
calling "philanthrocapitalism": using business and market systems to affect
social change. The main criticism from Edwards can be summed up in his
opendemocracy.net
article<http://www.opendemocracy.net/article/globalisation/visions_reflections/philanthrocapitalism_after_the_goldrush>
:

*"My worry is that the hype surrounding
philanthrocapitalism<http://bookshop.blackwell.com/jsp/id/Philanthrocapitalism_How_the_Rich_Are_Trying_to_Save_the_World/9781596913745>will
divert attention from the deeper changes that are required to
transform
society, reduce decisions to an inappropriate bottom line, and lead us to
ignore the costs and trade-offs involved in extending business principles
into the world of civil society and social change. I'm concerned that these
questions, and the evidence that underpins them, are not being given a fair
hearing. And I want to provoke a conversation in which different positions
can be aired and listened to. The only way that philanthrocapitalism will be
able to fulfill its considerable potential is by moving beyond the hype."*

Mohammed Yunus <http://en.wikipedia.org/wiki/Muhammad_Yunus> has also
recently written a book that looks at how Social Enterprise can affect
change. Yunus argues:

*"The social business dollar is much more powerful than the charity dollar
[..] Whereas the charity dollar can be used only once, the social-business
dollar recycles itself again and again, ad infinitum, to deliver benefits to
more and more people."*

Although, I'll also point out that Social Entrepreneurship is *different *than
"Philanthrocapitalism". Social Entrepreneurship as discussed by Yunus covers
many scales, from small to large business. While, "Philanthrocaptialism" is
defined by Edwards as:

   - * "Resources: very large sums of money being committed to
   philanthropy, mainly the result of the remarkable profits earned by a small
   number of individuals in the IT and finance sectors during the 1990s and
   2000s.*
   - *Methods: a claim that methods drawn from business can solve social
   problems, and are superior to the other approaches used in the public sector
   and in civil society.*
   - *Achievements: a claim that these methods can achieve the
   transformation of society, rather than increased access to
   socially-beneficial goods and services - a noble goal for sure, but
   insufficient to lever deeper changes in the distribution of power and
   resources across the world." *

 Both Edwards and Yunus appear to be right, in my estimation. Yunus is right
that there is much power in entrepreneurship, in the freedom to create
wealth for yourself and others. Yet, Edwards is right that (in my words)
there is also a huge machine, which is a combination of broadcast media
corporations, and a plethora of big businesses and wealthy people around the
world, that seek to co-opt social emergences, so as to funnel money, human
energy, and control over domains *towards their market corrals*.

This is nothing new. With every social movement, from the early 1960's, to
the "creative class" of the early 2000's, there have been people trying to
capitalize on,  and co-opt the symbols and energy of emergent social
movements. (see http://www.press.uchicago.edu/Misc/Chicago/259919.html for a
look at the origins of the phenomenon). Social entrepreneurship, or
"philanthrocapitalism" is really no different. When a social phenomenon
starts out in a "democratized" way (as they often actually do), meaning that
*most, or all of the building blocks are  already present for individuals to
participate in self-sustaining ways, *that would let people bypass or
obsolete their need for mass pre-produced solutions, the big companies must
act to keep people buying something, or risk being obsoleted from their
lives. This basically means that corporate spending of public money is sold
to the public as a project to make it easier for them to be more "creative",
more socially or environmentally responsible, or more philanthropic. This, I
believe is the danger that Edwards is warning us about. That we'll just
leave it up to "business" to take the lead in social enterprise.

The problem is that when we leave social transformation to business, we end
up with a society that is structured by the principles of business
management.  Edwards's book contends that there is evidence that the mission
"drifts" away from social change, and towards profit, efficiency, and
sometimes corruption. What is lacking in these situations is a *social *basis
for *social change.*

The market, and while being a powerful force, is no basis for sustainable
social change. The atomization of business infrastructure to an individual
level is but one building block towards real social change that is enabled
in part by social enterprise. *The next step is the atomization of social
infrastructure. People must learn to cooperate and collaborate together in
equitable ways. People must learn to co-manage common infrastructure, and
common resources in a democratic and transparent way. *Accessing and
employing the efficient production and distribution systems of business and
the market is not enough. *Those who rely on those systems must also have
co-control of them.*

This means that everyone in the "chain" gets a say, from
grower/builder/laborer, to the person that buys a finished product. This
means that a person's "job" is not just to specialize in being a lawyer,
baking bread, or hauling garbage, but also in direct civic participation and
oversight of the systems that feed, clothe, and house you. How can you know
that the companies your are buying from, or are employed by, are working
equitably?  You are involved in making sure that they are. Adam
Arvidsson's Valuing
the Ethical Economy
<http://p2pfoundation.net/Valuing_the_Ethical_Economy>offers some deep
insights into how this is plausible. Adam writes:

*" What creates these ethical values? They are not the direct results of
investments in labor time. You can work as much as you want on your music
and style, that, in itself will not make you a rock star. Rather, suddenly
something happens and then, you've made it. What determines your value are
the quality and quantity of affect (attention) that you have been able to
accumulate. The relation between the productive time invested in a project
and the mass affect that it is able to attract is non-linear, or viral, to
use a popular marketing term.[2] Models could be found in contemporary
mathematical theories of network dynamics, and perhaps in Gabriel Tarde's
theories of the role of public sentiment.[3] Indeed, the logical relation
between value and labor is rather the reverse of that usually associated
with the capitalist economy. Once you have a sufficiently attractive brand,
you will attract an abundance of free labor as well as other resources.
Linux has no problems recruiting new programmers: people want to work for
them for free; people pay to use brands in their everyday life and thus
freely co-produce their ethical value through their constructive consumer
practices. On financial markets, capital flows to the most attractive
brands. More means more in this case, if you have accumulated a significant
stock of ethical capital, people will freely give you their time and further
attention, or, on financial markets, their capital."*

To sum it up, in order for markets to really help change society, we first
need to create social infrastructure that allows us to value the ethical
capital of the companies that we are doing business with. We need to
democratize and equitably control these infrastructures on the level/scale
of voluntarily cooperating and collaborating individuals. This will then
create a conduit of ethics, and social focus, through which we all can
pursue market exchanges. Markets measured against our real social interests,
not just made to appeal to our base needs, or fool us into thinking they
will solve our social problems.