So I just finished reading a succinct rebuke of philanthrocapitalism by Michael Edwards. Edwards, in his 80 page manifesto (Just Another Emperor?) presents a fairly compelling challenge to all those optimists out there who believe the likes of Bill Gates, Warren Buffet and Jeff Skoll can leverage "business" insights and resources to make significant social change. Edwards doesn't fault these folks for their efforts, he just believes them to be naive and ultimately ineffective.
The book is a good primer on some important issues: To summarize Edwards conclusions:
- Inequities in our system are the result of our economic system and our political inabilities to solve them;
- Economic theory (especially as outlined by Adam Smith) suggests there is some motivation (through the "Invisible Hand") to solve these inequalities as doing so will ultimately help our own interests (whether they be individual or corporate);
- There have been some small scale philanthrocapitalist initiatives that have created social good, but all major efforts (with the possible exception of MicroFinance) have failed;
- The reasons for failure are many, but include a) trying to solve a symptom rather than a root cause; b) the benefits of continued inequity overwhelm the opportunity to drive long term change (i.e., invisible hand); c) competition is a prime driver of success in capitalistic markets, yet it does not hold the same appeal when applied across social enterprises.
The bottom line for me: Edwards makes a interesting case. Yet, we also don't want to understate the complexity of the problem or the entrepreneurial spirit and innovation that "capitalists" are trying bring the table. That said, the theme is becoming fairly clear. Whether it be government spending (see post on 3.2 Trillion Dollars lost) or philanthrocapitalism - success most often doesn't lie in central planning and established official (government or business) organizations. The most telling quote from the book was not by Edwards, but rather a statement he pulled from a Stanford Business School study that "concludes social movements are most effective when they are purest, most radical and most disorganized".
Now that sounds like a start of a prescription: local change agents, not managing but rather encouraging risks, and providing purity of purpose. No wonder Microfinance has worked so well. The emphasis has not been on massive dollar and driving change through a prescribed plan or strategy, but rather providing the structure (and opportunity) for local entrepreneurs to create sustaining change that can be built upon, rather than built over.
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