The trouble with charitable billionaires

More and more wealthy CEOs are pledging to give away parts of their fortunes – often to help fix problems their companies caused. Some call this ‘philanthrocapitalism’, but is it just corporate hypocrisy? By Carl Rhodes and Peter Bloom in The Guardian


In February 2017, Facebook’s founder and CEO Mark Zuckerberg was in the headlines for his charitable activities. The Chan Zuckerberg Initiative, founded by the tech billionaire and his wife, Priscilla Chan, handed out over $3m in grants to aid the housing crisis in the Silicon Valley area. David Plouffe, the Initiative’s president of policy and advocacy, stated that the grants were intended to “support those working to help families in immediate crisis while supporting research into new ideas to find a long-term solution – a two-step strategy that will guide much of our policy and advocacy work moving forward”.

This is but one small part of Zuckerberg’s charity empire. The Initiative has committed billions of dollars to philanthropic projects designed to address social problems, with a special focus on solutions driven by science, medical research and education. This all took off in December 2015, when Zuckerberg and Chan wrote and published a letter to their new baby Max. The letter made a commitment that over the course of their lives they would donate 99% of their shares in Facebook (at the time valued at $45bn) to the “mission” of “advancing human potential and promoting equality”.

The housing intervention is of course much closer to home, dealing with issues literally at the door of Facebook’s Menlo Park head office. This is an area where median house prices almost doubled to around $2m in the five years between 2012 and 2017.

More generally, San Francisco is a city with massive income inequality, and the reputation of having the most expensive housing in the US. Chan Zuckerberg’s intervention was clearly designed to offset social and economic problems caused by rents and house prices having skyrocketed to such a level that even tech workers on six-figure salaries find it hard to get by. For those on more modest incomes, supporting themselves, let alone a family, is nigh-on impossible.

Ironically, the boom in the tech industry in this region – a boom Facebook has been at the forefront of – has been a major contributor to the crisis. As Peter Cohen from the Council of Community Housing Organizations explained it: “When you’re dealing with this total concentration of wealth and this absurd slosh of real-estate money, you’re not dealing with housing that’s serving a growing population. You’re dealing with housing as a real-estate commodity for speculation.”

Zuckerberg’s apparent generosity, it would seem, is a small contribution to a large problem that was created by the success of the industry he is involved in. In one sense, the housing grants (equivalent to the price of just one-and-a-half average Menlo Park homes) are trying to put a sticking plaster on a problem that Facebook and other Bay Area corporations aided and abetted. It would appear that Zuckerberg was redirecting a fraction of the spoils of neoliberal tech capitalism, in the name of generosity, to try to address the problems of wealth inequality created by a social and economic system that allowed those spoils to accrue in the first place.

It is easy to think of Zuckerberg as some kind of CEO hero – a once regular kid whose genius made him one of the richest men in the world, and who decided to use that wealth for the benefit of others. The image he projects is of altruism untainted by self-interest. A quick scratch of the surface reveals that the structure of Zuckerberg’s charity enterprise is informed by much more than good-hearted altruism. Even while many have applauded Zuckerberg for his generosity, the nature of this apparent charity was openly questioned from the outset.

The wording of Zuckerberg’s 2015 letter could easily have been interpreted as meaning that he was intending to donate $45bn to charity. As investigative reporter Jesse Eisinger reported at the time, the Chan Zuckerberg Initiative through which this giving was to be funnelled is not a not-for-profit charitable foundation, but a limited liability company. This legal status has significant practical implications, especially when it comes to tax. As a company, the Initiative can do much more than charitable activity: its legal status gives it rights to invest in other companies, and to make political donations. Effectively the company does not restrict Zuckerberg’s decision-making as to what he wants to do with his money; he is very much the boss. Moreover, as Eisinger described it, Zuckerberg’s bold move yielded a huge return on investment in terms of public relations for Facebook, even though it appeared that he simply “moved money from one pocket to the other” while being “likely never to pay any taxes on it”.

The creation of the Chan Zuckerberg Initiative – decidedly not a charity organisation – means that Zuckerberg can control the company’s investments as he sees fit, while accruing significant commercial, tax and political benefits. All of this is not to say that Zuckerberg’s motives do not include some expression of his own generosity or some genuine desire for humanity’s wellbeing and equality.

What it does suggest, however, is that when it comes to giving, the CEO approach is one in which there is no apparent incompatibility between being generous, seeking to retain control over what is given, and the expectation of reaping benefits in return. This reformulation of generosity – in which it is no longer considered incompatible with control and self-interest – is a hallmark of the “CEO society”: a society where the values associated with corporate leadership are applied to all dimensions of human endeavour.

Mark Zuckerberg was by no means the first contemporary CEO to promise and initiate large-scale donations of wealth to self-nominated good causes. In the CEO society it is positively a badge of honour for the world’s most wealthy businesspeople to create vehicles to give away their wealth. This has been institutionalised in what is known as The Giving Pledge, a philanthropy campaign initiated by Warren Buffett and Bill Gates in 2010. The campaign targets billionaires around the world, encouraging them to give away the majority of their wealth. There is nothing in the pledge that specifies what exactly the donations will be used for, or even whether they are to be made now or willed after death; it is just a general commitment to using private wealth for ostensibly public good. It is not legally binding either, but a moral commitment.

There is a long list of people and families who have made the pledge. Mark Zuckerberg and Priscilla Chan are there, and so are some 174 others, including household names such as Richard and Joan Branson, Michael Bloomberg, Barron Hilton and David Rockefeller. It would seem that many of the world’s richest people simply want to give their money away to good causes. This all amounts to what human geographers Iain Hay and Samantha Muller sceptically refer to as a “golden age of philanthropy”, in which, since the late 1990s, bequests to charity from the super-rich have escalated to the hundreds of billions of dollars. These new philanthropists bring to charity an “entrepreneurial disposition”, Hay and Muller wrote in a 2014 paper, yet one that they suggest has been “diverting attention and resources away from the failings of contemporary manifestations of capitalism”, and may also be serving as a substitute for public spending withdrawn by the state.

 

Warren Buffett announces a $30bn donation to the Bill and Melinda Gates Foundation, 2006. Photograph: Justin Lane/EPA

Essentially, what we are witnessing is the transfer of responsibility for public goods and services from democratic institutions to the wealthy, to be administered by an executive class. In the CEO society, the exercise of social responsibilities is no longer debated in terms of whether corporations should or shouldn’t be responsible for more than their own business interests. Instead, it is about how philanthropy can be used to reinforce a politico-economic system that enables such a small number of people to accumulate obscene amounts of wealth. Zuckerberg’s investment in solutions to the Bay Area housing crisis is an example of this broader trend.

The reliance on billionaire businesspeople’s charity to support public projects is a part of what has been called “philanthrocapitalism”. This resolves the apparent antinomy between charity (traditionally focused on giving) and capitalism (based on the pursuit of economic self-interest). As historian Mikkel Thorup explains, philanthrocapitalism rests on the claim that “capitalist mechanisms are superior to all others (especially the state) when it comes to not only creating economic but also human progress, and that the market and market actors are or should be made the prime creators of the good society”.

The golden age of philanthropy is not just about benefits that accrue to individual givers. More broadly, philanthropy serves to legitimise capitalism, as well as to extend it further and further into all domains of social, cultural and political activity.

Philanthrocapitalism is about much more than the simple act of generosity it pretends to be, instead involving the inculcation of neoliberal values personified by the billionaire CEOs who have led its charge. Philanthropy is recast in the same terms in which a CEO would consider a business venture. Charitable giving is translated into a business model that employs market-based solutions characterised by efficiency and quantified costs and benefits.

Philanthrocapitalism takes the application of management discourses and practices from business corporations and adapts them to charitable work. The focus is on entrepreneurship, market-based approaches and performance metrics. The process is funded by super-rich businesspeople and managed by those experienced in business. The result, at a practical level, is that philanthropy is undertaken by CEOs in a manner similar to how they would run businesses.

As part of this, charitable foundations have changed in recent years. As explained in a paper by Garry Jenkins, a professor of law at the University of Minnesota, this involves becoming “increasingly directive, controlling, metric-focused and business-oriented with respect to their interactions with grantee public charities, in an attempt to demonstrate that the work of the foundation is ‘strategic’ and ‘accountable’”.

This is far from the benign shift to a different and better way of doing things that it claims to be – a CEO style to “save the world through business thinking and market methods”, as Jenkins puts it. Instead, the risk of philanthrocapitalism is a takeover of charity by business interests, such that generosity to others is appropriated into the overarching dominance of the CEO model of society and its corporate institutions.

The modern CEO is very much at the forefront of the political and media stage. While this often leads to CEOs becoming vaunted celebrities, it also leaves them open to being identified as scapegoats for economic injustice. The increasingly public role taken by CEOs is related to a renewed corporate focus on their wider social responsibility. Firms must now balance, at least rhetorically, a dual commitment to profit and social outcomes. This has been reflected in the promotion of the “triple bottom line”, which combines social, financial and environmental priorities in corporate reporting.

This turn toward social responsibility represents a distinct problem for CEOs. While firms may be willing to sacrifice some short-term profit for the sake of preserving their public reputation, this same bargain is rarely on offer to CEOs themselves, who are judged on their quarterly reports and how well they are serving the fiscal interests of their shareholders. Thus, whereas social responsibility strategies may win public kudos, in the confines of the boardroom it is often a different story, especially when the budget is being scrutinised.

There is a further economic incentive for CEOs to avoid making fundamental changes to their operations in the name of social justice, in that a large portion of CEO remuneration often consists of company stock and options. Accepting fair trade policies and closing sweatshops may be good for the world, but is potentially disastrous for a firm’s immediate financial success. What is ethically valuable to the voting and buying public is not necessarily of concrete value to corporations, nor personally beneficial to their top executives.

Many firms have sought to resolve this contradiction through high-profile philanthropy. Exploitative labour practices or corporate malpractice are swept under the carpet as companies publicise tax-efficient contributions to good causes. Such contributions may be a relatively small price to pay compared with changing fundamental operational practices. Likewise, giving to charity is a prime opportunity for CEOs to be seen to be doing good without having to sacrifice their commitment to making profit at any social cost. Charitable activity permits CEOs to be philanthropic rather than economically progressive or politically democratic.

There is an even more straightforward financial consideration at play in some cases. Charity can be an absolute boon to capital accumulation: corporate philanthropy has been shown to have a positive effect on perceptions by stock market analysts. At the personal level, CEOs can take advantage of promoting their individual charity to distract from other, less savoury activities; as an executive, they can cash in on the capital gains that can be made from introducing high-profile charity strategies.

The very notion of corporate social responsibility, or CSR, has been criticised for providing companies with a moral cover to act in quite exploitative and socially damaging ways. But in the current era, social responsibility, when portrayed as an individual character trait of chief executives, has allowed corporations to be run as irresponsibly as ever. CEOs’ very public engagement in philanthrocapitalism can be understood as a key component of this reputation management. It is part of the marketing of the firm itself, as the good deeds of its leaders come to signify the overall goodness of the corporation.

Ironically, philanthrocapitalism also grants corporations the moral right, at least within the public consciousness, to be socially irresponsible. The trumpeting of the CEOs’ personal generosity can grant an implicit right for their corporations to act ruthlessly and with little consideration for the broader social effects of their activities. This reflects a productive tension at the heart of modern CSR: the more moral a CEO, the more immoral their company can in theory seek to be.

The hypocrisy revealed by CEOs claiming to be dedicated to social responsibility and charity also exposes a deeper authoritarian morality that prevails in the CEO society. Philanthrocapitalism is commonly presented as the social justice component of an otherwise amoral global free market. At best, corporate charity is a type of voluntary tax paid by the 1% for their role in creating such an economically deprived and unequal world. Yet this “giving” culture also helps support and spread a distinctly authoritarian form of economic development that mirrors the autocratic leadership style of the executives who predominantly fund it.

The marketisation of global charity and empowerment has dangerous implications that transcend economics. It also has a troubling emerging political legacy, one in which democracy is sacrificed on that altar of executive-style empowerment. Politically, the free market is posited as a fundamental requirement for liberal democracy. However, recent analysis reveals the deeper connection between processes of marketisation and authoritarianism. In particular, a strong government is required to implement these often unpopular market changes. The image of the powerful autocrat is, to this effect, transformed into a potentially positive figure, a forward-thinking political leader who can guide their country on the correct market path in the face of “irrational” opposition. Charity becomes a conduit for CEOs to fund these “good” authoritarians.

A protester outside the Nasdaq headquarters in New York marks Facebook’s IPO, 2012. Photograph: Alamy Stock Photo

The recent development of philanthrocapitalism also marks the increasing encroachment of business into the provision of public goods and services. This encroachment is not limited to the activities of individual billionaires; it is also becoming a part of the activities of large corporations under the rubric of CSR. This is especially the case for large multinational corporations whose global reach, wealth and power give them significant political clout. This relationship has been referred to as “political CSR”. Business ethics professors Andreas Scherer and Guido Palazzo note that, for large corporations, “CSR is increasingly displayed in corporate involvement in the political process of solving societal problems, often on a global scale”. Such political CSR initiatives see organisations cooperating and collaborating with governments, civic bodies and international institutions, so that historical separations between the purposes of the state and the corporations are increasingly eroded.

Global corporations have long been involved in quasi-governmental activities such as the setting of standards and codes, and today are increasingly engaging in other activities that have traditionally been the domain of government, such as public health provision, education, the protection of human rights, addressing social problems such as Aids and malnutrition, protection of the natural environment and the promotion of peace and social stability.

Today, large organisations can amass significant economic and political power, on a global scale. This means that their actions – and the way those actions are regulated – have far-reaching social consequences. The balanced tipped in 2000, when the Institute for Policy Studies in the US reported, after comparing corporate revenues with gross domestic product (GDP), that 51 of the largest economies in the world were corporations, and 49 were national economies. The biggest corporations were General Motors, Walmart and Ford, each of which was larger economically than Poland, Norway and South Africa. As the heads of these corporations, CEOs are now quasi-politicians. One only has to think of the increasing power of the World Economic Forum, whose annual meeting in Davos in Switzerland sees corporate CEOs and senior politicians getting together with the ostensible goal of “improving the world”, a now time-honoured ritual that symbolises the global power and agency of CEOs.

The development of CSR is not the result of self-directed corporate initiatives for doing good deeds, but a response to widespread CSR activism from NGOs, pressure groups and trade unions. Often this has been in response to the failure of governments to regulate large corporations. High-profile industrial accidents and scandals have also put pressure on organisations for heightened self-regulation.

An explosion at a Union Carbide chemical plant in Bhopal, India in 1984 led to the deaths of an estimated 25,000 people. James Post, a professor of management at Boston University, explains that, after the disaster, “the global chemical industry recognised that it was nearly impossible to secure a licence to operate without public confidence in industry safety standards. The Chemical Manufacturers Association (CMA) adopted a code of conduct, including new standards of product stewardship, disclosure and community engagement.”

The impetus for this was corporate self-interest, rather than generosity, as industries and corporations globally “began to recognise the increasing importance of reputation and image”. Similar moves were enacted after other major industrial accidents, such as the Exxon Valdez oil tanker spilling hundreds of thousands of barrels of oil in Alaska in 1989, and BP’s Deepwater Horizon oil rig exploding in the Gulf of Mexico in 2010.

 

The Deepwater Horizon oil rig ablaze in the Gulf of Mexico, April 2010.
Photograph: Handout/Getty Images

Another important case was the involvement of the clothing companies Gap and Nike in a child labour scandal after the broadcast of a BBC Panorama documentary in October 2000. Factories in Cambodia making Gap and Nike clothing were shown to operate with terrible working conditions, involving children as young as 12 working seven days a week, being forced to do overtime, and enduring physical and emotional abuse from management. The public outcry that ensued demanded that Gap and Nike, and other organisations like them, take more responsibility for the negative human social impacts of their business practices.

CSR was introduced in order to reduce the ill effects of corporate self-interest. But over time it has turned into a means for further enhancing that self-interest while ostensibly claiming to be addressing the interests of others. When facing the threat of corporate scandal, CSR is seen as the vehicle through which corporate reputation can be boosted, and the threat of government regulation can be mitigated. Again, here we see how corporations engage in seemingly responsible practices in order to increase their own political power, and to diminish the power of nation states over their own operations.

The idea that organisations adopt CSR for the purposes of developing or defending a corporate reputation has put the ethics of CSR under scrutiny. The contention has arisen that, rather than using CSR as a means of “being good”, corporations adopt it merely as a means of “looking good”, while not in any way questioning their basic ethical or political stance. Even Enron, before its legendary fraud scandal and eventual demise in 2001, was well known for its advocacy of social responsibility.

CEO generosity is epic in proportions – or at least that is how it is portrayed. Indeed, on an individual level it is hard to find fault with those rich people who have given away vast swaths of their wealth to charitable causes, or those corporations that champion socially responsible programmes. But what CSR and philanthrocapitalism achieve more broadly is the social justification of extreme wealth inequality, rather than any kind of antidote to it. We need to note here that, despite the apparent proliferation of giving promised by philanthrocapitalism, the so-called golden age of philanthropy is also an age of expanding inequality.

This is clearly spelled out a 2017 report by Oxfam called An Economy for the 99%. It highlights the injustice and unsustainability of a world suffering from widening levels of inequality: since the early 1990s, the top 1% of the world’s wealthy people have gained more income than the entire bottom 50%. Why so? Oxfam’s report places the blame firmly with corporations and the global market economies in which they operate. The statistics are alarming, with the world’s 10 biggest corporations having revenues that exceed the total combined revenues of the 180 least wealthy nations. Corporate social responsibility is not making any real difference. The report states: “When corporations increasingly work for the rich, the benefits of economic growth are denied to those who need them most. In pursuit of delivering high returns to those at the top, corporations are driven to squeeze their workers and producers ever harder – and to avoid paying taxes which would benefit everyone, and the poorest people in particular.”

Neither the philanthropy of the super-rich nor socially directed corporate programmes have any real effect on combating this trend, in the same way that Zuckerberg’s handout of $3m will have a negligible effect on the San Francisco housing crisis. Instead, vast fortunes in the hands of the few, whether earned through inheritance, commerce or crime, continue to grow at the expense of the poor.

In the end, it is capitalism that is at the heart of philanthrocapitalism, and the corporation that is at the heart of corporate social responsibility, with even well-meaning endeavours serving to justify a system that is rigged in favour of the rich.

What is particular about this new approach is not that rich people are supporting charitable endeavours, but that it involves, as sociologist Linsey McGoey explains, “an openness that deliberately collapses the distinction between public and private interests, in order to justify increasingly concentrated levels of private gain”. 

In the CEO society, corporate logic such as this rules supreme, and ensures that any activities thought of as generous and socially responsible ultimately have a payoff in terms of self-interest. If there was ever a debate between the ethics of genuine hospitality, reciprocity and self-interest, it is not to be found here. It is in accordance with this CEO logic that the mechanisms for redressing the inequality created through wealth generation are placed in the hands of the wealthy, and in a way that ultimately benefits them. The worst excesses of neoliberal capitalism are morally justified by the actions of the very people who benefit from those excesses. Wealth redistribution is placed in the hands of the wealthy, and social responsibility in the hands of those who have exploited society for personal gain.

Meanwhile, inequality is growing, and both corporations and the wealthy find ways to avoid the taxes that the rest of us pay. In the name of generosity, we find a new form of corporate rule, refashioning another dimension of human endeavour in its own interests. Such is a society where CEOs are no longer content to do business; they must control public goods as well. In the end, while the Giving Pledge’s website may feature more and more smiling faces of smug-looking CEOs, the real story is of a world characterised by gross inequality that is getting worse year by year.

The need for an Indian Grand Narrative

Rajiv Malhotra

Talk at the UK Parliament

Is Capitalism Devouring Democracy?

Sickness in Indian Democracy did not start with Modi

Tavleen Singh in The Indian Express


Three words that I got sick of hearing as the Karnataka drama unfolded last week were: democracy, secularism and Constitution. Nearly everyone who spoke them meant only one thing, and this was that the Bharatiya Janata Party must be kept out of Karnataka at all costs. Perhaps, by the time you read this, the BJP juggernaut will have been stopped from finding a toehold in southern India, but it is important that we remember that whatever happens, it will have nothing to do with those three words. 

It is important also to remember that the post-election drama in Karnataka had everything to do with the Congress party’s desperation to keep its own little toe grounded in the state they have ruled for five years. Without Karnataka, our oldest political party has only Punjab and Puducherry left, and this is very bad news. How will Rahul Gandhi continue to dream of becoming prime minister in 2019? How will there be enough funds to fight the Lok Sabha elections if one of India’s richest states slips away? So even the most humiliating compromise with a party derided by Rahul Gandhi as the B-team of the BJP is better than losing power altogether. You realise what a sham ‘secularism’ has become if you remember that during the campaign the (S) in the party’s name was mocked by Congress leaders as standing for Sangh and not secular.

Now let us talk about democracy. Even as B S Yedyurappa was taking his oath of office last Thursday, the president of the Congress party tweeted this: ‘This morning, while the BJP celebrates its hollow victory, India will mourn the defeat of democracy.’ He clearly forgot that if there was one conclusive thing that came out of the election results, it was that it was a mandate against the incumbent Congress government.

On constitutional proprieties the less said the better. They were stretched and moulded last week by most politicians and political commentators to make whichever case they wished to make. What can be said for certain is that the men who wrote our Constitution never envisaged a situation in which the verdict of governors would be challenged by violent thugs on the streets. Or that newly elected legislators would need to be locked up in fine hotels to prevent them from selling their souls for filthy lucre.

It is not as if they need the money. The Karnataka Election Watch and Association for Democratic Reforms analysed the assets of 221 newly elected MLAs and found that 97 per cent were ‘crorepatis’. Of these, 16 had assets worth more than Rs 100 crore. You do not need me to tell you that the main reason why Indians fight and sometimes kill for a ticket to contest elections is because there is no easier way to become very rich very quickly.

This sickness in our democracy did not begin after Narendra Modi became prime minister. But, it is this storyline that has been sought to be disseminated by secular, leftist political commentators in order to disguise their loyalties to the Congress party. It is this ‘secular’ caboodle that uses words like democracy and secularism most often. Sadly, they see the weaknesses in our democracy through tinted lenses. So what happened in West Bengal’s panchayat elections last week has been almost ignored by liberal, leftist commentators. In these village elections, ballot boxes were torn out of polling booths and thrown in ponds, and gangs of armed thugs wandered about violently preventing people from voting. These events escaped the notice of ‘secular’ politicians and commentators who moan endlessly about how democracy has died in the past four years. Rahul went so far as to say in Chhattisgarh that India has become a dictatorship.

To support this ludicrous charge, the Congress president has exalted disgruntled judges who actively harmed the Supreme Court by going public with their disgruntlement. Disgruntled public intellectuals have also sided with the judges and the ‘secular’ media has done its best to provide a platform for their views.

Having lived through that time when there really was a Dictator ruling India, I can report that journalists, writers and poets were jailed for speaking out. It was also a time when disobedient judges got the sack. So the Supreme Court obsequiously went along with the Dictator’s diktat when she ordered them to suspend even the right to life. When the Dictator’s grandson now makes reckless charges, he needs to be reminded of that one period of Indian history when democracy nearly died.

Modi is no match for the powerful elite who lost their vast influence in the public square when he became prime minister. So now when he appears to have lost some of his magic, they have taken charge of the narrative and their message is clear: democracy is doomed if Modi remains in power.

Why the 'Right to Believe' Is Not a Right to Believe Whatever You Want

Daniel De Nicola in The Wire.In



Do we have the right to believe whatever we want to believe? This supposed right is often claimed as the last resort of the wilfully ignorant, the person who is cornered by evidence and mounting opinion: ‘I believe climate change is a hoax whatever anyone else says, and I have a right to believe it!’ But is there such a right?

We do recognise the right to know certain things. I have a right to know the conditions of my employment, the physician’s diagnosis of my ailments, the grades I achieved at school, the name of my accuser and the nature of the charges, and so on. But belief is not knowledge.
Beliefs are factive: to believe is to take to be true. It would be absurd, as the analytic philosopher G.E. Moore observed in the 1940s, to say: ‘It is raining, but I don’t believe that it is raining.’ Beliefs aspire to truth – but they do not entail it. Beliefs can be false, unwarranted by evidence or reasoned consideration. They can also be morally repugnant. Among likely candidates: beliefs that are sexist, racist or homophobic; the belief that proper upbringing of a child requires ‘breaking the will’ and severe corporal punishment; the belief that the elderly should routinely be euthanised; the belief that ‘ethnic cleansing’ is a political solution, and so on. If we find these morally wrong, we condemn not only the potential acts that spring from such beliefs, but the content of the belief itself, the act of believing it, and thus the believer.

Such judgments can imply that believing is a voluntary act. But beliefs are often more like states of mind or attitudes than decisive actions. Some beliefs, such as personal values, are not deliberately chosen; they are ‘inherited’ from parents and ‘acquired’ from peers, acquired inadvertently, inculcated by institutions and authorities, or assumed from hearsay. For this reason, I think, it is not always the coming-to-hold-this-belief that is problematic; it is rather the sustaining of such beliefs, the refusal to disbelieve or discard them that can be voluntary and ethically wrong.

If the content of a belief is judged morally wrong, it is also thought to be false. The belief that one race is less than fully human is not only a morally repugnant, racist tenet; it is also thought to be a false claim – though not by the believer. The falsity of a belief is a necessary but not sufficient condition for a belief to be morally wrong; neither is the ugliness of the content sufficient for a belief to be morally wrong. Alas, there are indeed morally repugnant truths, but it is not the believing that makes them so. Their moral ugliness is embedded in the world, not in one’s belief about the world.

‘Who are you to tell me what to believe?’ replies the zealot. It is a misguided challenge: it implies that certifying one’s beliefs is a matter of someone’s authority. It ignores the role of reality. Believing has what philosophers call a ‘mind-to-world direction of fit’. Our beliefs are intended to reflect the real world – and it is on this point that beliefs can go haywire. There are irresponsible beliefs; more precisely, there are beliefs that are acquired and retained in an irresponsible way. One might disregard evidence; accept gossip, rumour, or testimony from dubious sources; ignore incoherence with one’s other beliefs; embrace wishful thinking; or display a predilection for conspiracy theories.

I do not mean to revert to the stern evidentialism of the 19th-century mathematical philosopher William K Clifford, who claimed: ‘It is wrong, always, everywhere, and for anyone, to believe anything upon insufficient evidence.’ Clifford was trying to prevent irresponsible ‘overbelief’, in which wishful thinking, blind faith or sentiment (rather than evidence) stimulate or justify belief. This is too restrictive. In any complex society, one has to rely on the testimony of reliable sources, expert judgment and the best available evidence. Moreover, as the psychologist William James responded in 1896, some of our most important beliefs about the world and the human prospect must be formed without the possibility of sufficient evidence. In such circumstances (which are sometimes defined narrowly, sometimes more broadly in James’s writings), one’s ‘will to believe’ entitles us to choose to believe the alternative that projects a better life.

In exploring the varieties of religious experience, James would remind us that the ‘right to believe’ can establish a climate of religious tolerance. Those religions that define themselves by required beliefs (creeds) have engaged in repression, torture and countless wars against non-believers that can cease only with recognition of a mutual ‘right to believe’. Yet, even in this context, extremely intolerant beliefs cannot be tolerated. Rights have limits and carry responsibilities.

Unfortunately, many people today seem to take great licence with the right to believe, flouting their responsibility. The wilful ignorance and false knowledge that are commonly defended by the assertion ‘I have a right to my belief’ do not meet James’s requirements. Consider those who believe that the lunar landings or the Sandy Hook school shooting were unreal, government-created dramas; that Barack Obama is Muslim; that the Earth is flat; or that climate change is a hoax. In such cases, the right to believe is proclaimed as a negative right; that is, its intent is to foreclose dialogue, to deflect all challenges; to enjoin others from interfering with one’s belief-commitment. The mind is closed, not open for learning. They might be ‘true believers’, but they are not believers in the truth.

Believing, like willing, seems fundamental to autonomy, the ultimate ground of one’s freedom. But, as Clifford also remarked: ‘No one man’s belief is in any case a private matter which concerns himself alone.’ Beliefs shape attitudes and motives, guide choices and actions. Believing and knowing are formed within an epistemic community, which also bears their effects. There is an ethic of believing, of acquiring, sustaining, and relinquishing beliefs – and that ethic both generates and limits our right to believe. If some beliefs are false, or morally repugnant, or irresponsible, some beliefs are also dangerous. And to those, we have no right.

To Save Western Capitalism - Look East

The East could have something to offer the mighty West, where we are seeing glimpses into capitalism's true nature. Antara Haldar (The Independent) on the rise and fall of civilisation as we know it

 

Photos Getty


Once upon a time, not so long ago, there was a place where peace and prosperity reigned. Let’s call this place the West. These lands had once been ravaged by bloody wars but its rulers had, since, solved the puzzle of perpetual progress and discovered a kind of political and economic elixir of life. Big Problems were relegated to either Somewhere Else (the East) or Another Time (History). The Westerners dutifully sent emissaries far and wide to spread the word that the secret of eternal bliss had been found –and were, themselves, to live happily ever after.

So ran, until very recently, the story of how the West was won.

The formula that had been discovered was simple: the recipe for a bright, shiny new brand of global capitalism based on liberal democracy and something called neoclassical economics. But it was different from previous eras – cleansed of Dickensian grime. The period after the two world wars was in many a Golden Age: the moment of Bretton Woods (that established the international monetary and financial order) and the Beveridge report (the blueprint for the welfare state), feminism and free love.

It was post-colonial, post-racial, post-gendered. It felt like you could have it all, material abundance and the moral revolutions; a world infinitely vulnerable to invention – but all without picking sides, all based on institutional equality of access. That’s how clever the scheme was – truly a brave new world. Fascism and class, slavery and genocide – no one doubted that, in the main, it had been left behind (or at least that we could all agree on its evils); that the wheels of history had permanently been set in motion to propel us towards a better future. The end of history, Francis Fukuyama called it – the zenith of human civilisation. 

Austerity in Athens: the eurozone crisis hit Greece not once but twice (Getty)

While liberal democracy was the part of the programme that got slapped on to the brochure, it was a streamlined paradigm of neoclassical economics that provided the brains behind the enterprise. Neoclassical economics, scarred by war-era ideological acrimony, scrubbed the subject of all the messy stuff: politics, values – all the fluff. To do so it used a new secret weapon: quantitative precision unprecedented in the social sciences.

It didn’t rest on whimsical things like enlightened leadership or invested citizenship or compassionate communities. No, siree. It was pure science: a reliable, universally-applicable maximising equation for society (largely stripped of any contextual or, until recently, even cognitive considerations). Its particular magic trick was to be able to do good without requiring anyone to be good.

And, it was limitless in its capacity to turn boundless individual rationality into endless material wellbeing, to cull out of infinite resources (on a global scale) indefinite global growth. It presumed to definitively replace faltering human touch with the infallible “invisible hand” and, so, discourses of exploitation with those of merit.

When I started as a graduate student in the early 2000s, this model was at the peak of its powers: organised into an intellectual and policy assembly line that more or less ran the world. At the heart of this enterprise, in the unipolar post-Cold War order, was what was known as the Chicago school of law and economics. The Chicago school boiled the message of neoclassical economics down to a simpler formula still: the American Dream available for export – just add private property and enforceable contracts. Anointed with a record number of Nobel prizes, its message went straight to the heart of Washington DC, and from there – via its apostles, the International Monetary Fund and the World Bank radiated out to the rest of the globe. 

It was like the social equivalent of the Genome project. Sure the model required the odd tweak, the ironing out of the occasional glitch but, for the most part, the code had been cracked. So, like the ladies who lunch, scholarly attention in the West turned increasingly to good works and the fates of “the other” – spatially and temporally.

One strain led to a thriving industry in development: these were the glory days of tough love, and loan conditionalities. The message was clear: if you want Western-style growth, get with the programme. The polite term for it was structural adjustment and good governance: a strict regime of purging what Max Weber had called mysticism and magic, and swapping it for muscular modernisation. Titles like Daron Acemoglu and James Robinson’s Why Nations Fail: The Origins of Power, Prosperity and Poverty and Hernando de Soto’s The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else jostled for space on shelves of bookstores and best-seller lists.

Another led to esoteric islands of scholarship devoted to atonement for past sins. On the US side of the Atlantic, post-colonial scholarship gained a foothold, even if somewhat limp. In America, slavery has been, for a while now, the issue a la mode. A group of Harvard scholars has been taking a keen interest in the “history of capitalism”.

Playing intellectual archaeologists, they’ve excavated the road that led to today’s age of plenty – leaving in its tracks a blood-drenched path of genocide, conquest, and slavery. The interest that this has garnered, for instance Sven Beckert’s Empire of Cotton, is heartening, but it has been limited to history (or worse still, “area studies”) departments rather than economics, and focused on the past not the present. 

As far back as the fifties ... the economy was driving the society, when it should have been the other way around (Getty)

Indeed, from the perspective of Western scholarship, the epistemic approach to the amalgam of these instances has been singularly inspired by Indiana Jones – dismissed either as curious empirical aberrations or distanced by the buffer of history. By no means the stuff of mainstream economic theory.

Some of us weakly cleared our throats and tried to politely intercede that there were, all around us, petri dishes of living, breathing data on not just development – but capitalism itself. Maybe, just maybe – could it be? – that if the template failed to work in a large majority of cases around the globe that there may be a slight design error. 

My longtime co-author, Nobel Prize winner in Economics and outspoken critic, Joseph Stiglitz, in his 1990 classic Globalisation and Its Discontents chronicled any number of cases of leaching-like brutality of structural adjustment. The best-selling author and my colleague at Cambridge, Ha-Joon Chang, in Kicking Away the Ladder, pointed out that it was a possibility that the West was misremembering the trajectory of its own ascent to power – that perhaps it was just a smidgen more fraught than it remembered, that maybe the State had had a somewhat more active part to play before it retired from the stage.

But a bright red line separated the “us” from the “them” enforcing a system of strict epistemic apartheid. Indeed, as economics retreated further and further into its silo of smugness, economics departments largely stopped teaching economic history or sociology and development economics clung on by operating firmly within the discipline-approved methodology.

So far, so good – a bit like the last night of merriment on the Titanic. Then the iceberg hit.

Suddenly the narratives that were comfortably to do with the there and then became for the Western world a matter of the here and now.

In the last 10 years, what economic historian Robert Skidelsky recently referred to as the “lost decade” for the advanced industrial West, problems that were considered the exclusive preserve of development theory – declining growth, rampant inequality, failing institutions, a fractured political consensus, corruption, mass protests and poverty – started to be experienced on home turf.

The Great Recession starting 2008 should really have been the first hint: foreclosures and evictions, bankruptcies and bailouts, crashed stock markets. Then came the eurozone crisis starting in 2009 (first Greece; then Ireland; then Portugal; then Spain; then Cyprus; oh, and then Greece, again). But after an initial scare, it was largely business as usual – written off as an inevitable blip in the boom-bust logic of capitalist cycles. It was 2016, the year the world went mad, that made the writing on the wall impossible to turn away from – starting with the shock Brexit vote, and then the Trump election. Not everyone understands what a CDO (collateralised debt obligation) is, but the vulgarity of a leader of the free world who governs by tweet and “grabs pussy” is hard to miss.

So how did it happen, this unexpected epilogue to the end of history?

I hate to say I told you so, but some of us had seen this coming – the twist in the tale, foreshadowed by an eerie background score lurking behind the clinking of champagne glasses. Even at the height of the glory days. In the summer before the fall of Lehman Brothers, a group of us “heterodox economists” had gathered at a summer school in the North of England. We felt like the audience at a horror movie – knowing that the gory climax was moments away while the victim remained blissfully impervious.

The plot wasn’t just predictable, it was in the script for anyone to see. You just had to look closely at the fine print.

In particular, you needed to have read your Karl Polanyi, the economic sociologist, who predicted this crisis over 50 years ago. As far back as 1954, The Great Transformation diagnosed the central perversion of the capitalist system, the inversion that makes the person less important than the thing – the economy driving society, rather than the other way around.

Polanyi’s point was simple: if you turned all the things that people hold sacred into grist to the mill of a large impersonal economic machinery (he called this disembedding) there would be a backlash. That the fate of a world where monopoly money reigns supreme and human players are reduced to chessmen at its mercy is doomed. The sociologist Fred Block compares this to the stretching of a giant elastic band – either it reverts to a more rooted position, or it snaps.

It is this tail-wagging-the-dog quality that is driving the current crisis of capitalism. It’s a matter of existential alienation. This problem of artificial abstraction runs through the majority of upheavals of our age – from the financial crisis to Facebook. So cold were the nights in this era of enforced neutrality that the torrid affair between liberal democracy and neoclassical economics resulted in the most surprising love child – populism.

The simple fact is that after decades on promises not delivered on, the system had written just one too many cheques that couldn’t be cashed. And people had had just about enough.

 

The Brexit vote in 2016 followed by the election of Trump ... and the world had finally gone mad (Getty)

The old fault lines of global capitalism, the East versus West dynamics of the World Trade Organisation’s Doha Round, turned out to be red herrings. The axis that counts is the system versus the little people. Indeed, the anatomies of annihilation look remarkably similar across the globe – whether it’s the loss of character of a Vanishing New York or Disappearing London, or threatened communities of farmers in India and fishermen in Greece.

Trump voters in the US, Brexiteers in Britain and Modi supporters in India seek identity – any identity, even a made-up call to arms to “return” to mythical past greatness in the face of the hollowing out of meaning of the past 70 years. The rise of populism is, in many ways, the death cry of populations on the verge of extinction – yearning for something to believe in when their gods have died young. It’s a problem of the 1 per cent – poised to control two-thirds of the world economy by 2030 – versus the 99 per cent. But far more pernicious is the Frankenstein’s monster that is the idea of an economic system that is an end in itself.

Not to be too much of a conspiracy theorist about it, but the current system doesn’t work because it wasn’t meant to – it was rigged from the start. Wealth was never actually going to “trickle down”. Thomas Piketty did the maths.

Suddenly, the alarmist calls of the developmentalists objecting to the systemic skews in the process of globalisation don’t seem quite so paranoid.

But this is more than “poco” (what the cool kids call postcolonialism) schadenfreude. My point is a serious one; although I would scarcely have dared articulate it before now. Could Kipling have been wrong, and might the East have something to offer the mighty West? Could the experiences of exotic lands point the way back to the future? Could it be, could it just, that it may even be a source of epistemic wisdom?

Behind the scaffolding of Xi Jinping’s China or Narendra Modi’s India, sites of capitalism under construction, we are offered a glimpse into the system’s true nature. It is not God-given, but the product of highly political choices. Just like Jane Jacobs protesting to save Washington Square Park or Beatrix Potter devoting the bulk of her royalty earnings to conserving the Lake District were choices. But these cases also show that trust and community are important. The incredible resilience of India’s jugaad economy, or the critical role of quanxi in the creation of the structures in what has been for the past decade the world’s fastest-growing nation, China. A little mysticism and magic may be just the thing.

The narrative that we need is less that of Frankenstein’s man-loses-control of monster, and more that of Pinocchio’s toy-becomes-real-boy-by-acquiring-conscience; less technology, and more teleology. The real limit may be our imaginations. Perhaps the challenge is to do for scholarship, what Black Panther has done for Hollywood. You never know. Might be a blockbuster.

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