Cold as charity

Charity is big business in Britain with over 180,000 registered charities, but compared to the US it is petty stuff. In the US last year charities grossed $200bn. Foundations gave 12 percent, corporations 5.3 percent. Why such generosity? Well, it is not as great as it seems. Corporate giving was only 1.2 percent of pre-tax profits and on examination the apparent generosity has ulterior motives. In 1889 Andrew Carnegie, robber baron and philanthropist wrote in his essay Wealth, on the need for charity:

“The problem of our age is the proper administration of wealth, that the ties of brotherhood may still bind together the rich and the poor in harmonious relationships.”

More up-to-date though, the writer Mark Dowie in his recently published book American Foundations, An Investigative History says:

“The sad facts is that a majority of America’s 50,000 or so private foundations are mindless lawyer-ridden tax dodges that accomplish little beyond the transfer of riches to already wealthy institutions.”
“Some capitalists do value private philanthropy because it creates countervailing force against socialism, others because it quells social unrest.”

Having quoted earlier that arch-hypocrite and exploiter Andrew Carnegie let us end with the words of Oscar Wilde, from a socialist perspective the definitive words on charity:

“They try to solve the problem of poverty, for instance, by keeping the poor alive; or in the case of a very advanced school, by amusing the poor. But this is not the solution; it is an aggravation of the difficulty. The proper aim is to try and reconstruct society on such a basis that poverty will be impossible.”

To give or not to give?
Among all the league tables and the sport of naming and shaming there is a comparative newcomer – the Giving List. In the US since 1996 a league table known as the Slate 60 of the top American philanthropists has been published on the internet. An earlier list of Millionaire Givers ran into legal problems of confidentially and has not been published since 1994. The Guardian‘s Giving List offering us an insight into the generous and the stingy among the top corporations quoted on the London stock exchange.

Much effort is devoted to giving capitalism an acceptable face. A new industry has grown up around the idea and the practice of corporate social responsibility (CSR). Better to give back to the victims part of the proceeds of exploiting them than to be too greedy and to get a bad name.

It seems there are two views among supporters of capitalism about the best way to run it and secure its future. We may call these views hard-line and soft-line, although those terms are rarely used by the protagonists. The hard-liners date themselves back to Adam Smith, with extensions to his “invisible hand” by such as Margaret Thatcher, Milton Friedman and lesser-known luminaries in the “new liberalism”.

The basic proposition of the hard-liners is that the business of business is making money, not employing people or giving them charity. The task of companies is to maximise profit for their owners, the shareholders. Appeals for companies to feel responsibility for the welfare of other “stakeholders” – their employees, the local community, the environment—can only detract from the bottom line. It is argued that widespread adoption of CSR would undermine the foundations of the market economy.

The advocates of the CSR – the soft-liners – don’t want to abolish the market economy. They want to make it stronger by giving it a better image. Their basic motive is still the promotion of “wealth creation” – capitalist code for profit-making. Digby Jones, writing on behalf of the CBI, is frank about this: “Actions that affect beneficially on society create an environment where people feel safer, and this helps business” (Guardian, 6 November).

Socialists don’t take sides in any conflict between those who want “business” to accept more CSR and those who don’t. CSR is just one among many ways of reforming capitalism. Time and energy spent on discussing the pros and cons of CSR is, from a socialist point of view, wasted and deserves to be put in the dustbin of failed reforms alongside nationalisation, public-private partnership, “fairer” taxation, and so on.