This just in...D&S reads the news (#7)

by Dollars and Sense

The seventh in a series of blog entries by D&S collective member Larry Peterson.

Usually one can expect The Financial Times to stay clear of the more flamboyant rhetorical and editorial excesses characteristic of the Wall Street Journal, but today a headline so crass struck my befuddled morning eyes that I thought I had my continents mixed up (the FT is published in the UK): Philanthropy Steps In Where The State Failed. The article itself consists of little more than jargon-fogged ("This is not an investment that will pay immediate dividends, and very much fits in with our risk tolerance as this kind of investment is risky"), at times syntactically confusing ("people are so disenfranchised with the political system") and ultimately self-serving testimonials to the superior value of private charities on the part of three specific organizations, by their own officers or other, often bizarrely titled denizens of the humanitarianism industry ("principal and director of tactical [sic] philanthropy"; "job vendor"). And some of the claims made about philanthropy in general, particularly its use and abuse in society, are so disingenuous that it almost beggars belief. A good example is the one referred to above, this time in full:

"The role of philanthropy in our culture is exploding right now because people are so disenfranchised with the political system that they are viewing philanthropic donations as another way to vote on issues that are important for them."

And then there's this, shockingly repetitive piece of gibberish:

"We have, by and large in American society, lost our conviction that government is the place where solutions to social problems occur. From the time of the Reagan revolution forward, we have gravitated to the view it is the private sector that is going to create innovative and effective solutions. The only viable solution we see now is private enterprise and private philanthropic action, so we look to it to solve problems."

One really wonders whether or not these "professionals" can possibly know what they're talking about if they feel confident enough to express themselves in this way to perhaps the most renowned financial newspaper in the world. And it's odd that a publication like the FT would reproduce such comments without some sort of snarky comment; if sentiments critical of free trade had been voiced in similarly awkward tones, that would almost certainly happen. But, regarding the content of the statements, it does not take much reflection to realize just how wrong they are, and how they serve an almost purely propagandistic purpose. The social programs instituted only a decade and a half before Reagan, and some long before that, were, and still are in some instances, extraordinarily successful and popular: Social Security, Medicare, Medicaid, Head Start. And if an inordinate amount of the aggression directed by the Reagan administration fell on public services, it was often precisely because the particularly successful and popular programs were becoming too expensive, partly due to demographic factors; so the gutting of other social programs did not reflect inefficiency so much as the fact that they were simply crowded out (remember the role of deficit-military spending here, too). And the fact that many of the philanthropic enthusiasts who berate the public sector have been the beneficiaries of hugely skewed tax cuts-the very same cuts that have eviscerated the public sector, whilst forming a part of the capital formation which would eventually be applied to the formation of the private charities-over the years elaborates the mockery.

One of the charities mentioned in the article is called the "Coalition To Salute American Heroes." (And here I remember the wise words of Berthold Brecht: "When they start talking about heroes, it’s time to emigrate.") Its mission is to check up on the severely wounded veterans of the recent wars in Iraq and Afghanistan and help them rebuild their lives. To use this kind of operation to illustrate how private charities clean up the mess in the wake of public failure is particularly revolting: the Bush administration has not merely gutted remaining public services when given the opportunity, but has been—probably to a criminal extent—neglectful of fulfilling the legal responsibilities it has in public provision.

The fact that a private charity is filling the gap here is a sign not so much that a more efficient way of dealing with a social problem has been found as a frank admission that we have allowed politicians to go much farther in cutting public services than the great majority of us are prepared to countenance. The failure of Social Security "reform" is another sign that not all of us are willing to bet the farm that some private charity will be there for us if we find ourselves in need. And then there's a heavy dose of irony at work here: a private charity is caring for victims of a war that was foisted on the American people not least because the mainly private media almost consciously spoon-fed the lies of the Bush administration and created an atmosphere in which divergent opinions were actively silenced. Public media, both here and abroad (I'm thinking mostly of the BBC) didn't do much better on this score, but their performance was several orders of magnitude better than that of the major private media outlets.

As for the efficiency of charities, it is common knowledge that many have huge overhead expenses (some of around 60%); and that marketing costs continue to take a larger bite of donations as more and more charities enter the field and compete with each other (though the donor bases are growing, mostly at a much lower level). And as for the donors themselves, a recent study (I can't remember where I saw it: I think it was commented on in Slate) revealed that the wealthy and very wealthy give far less as a proportion of their earnings than do the middle and lower-middle classes. This redoubles the effect of the super-regressive Bush tax cuts, and condemns these classes to pay a larger share for less public services. This may be the actual reason why people are "disenfranchised with the political system"; but rather than simply abandoning a political vote for a vicarious humanitarian, the situation seems to call on us to simply reclaim the political one.

In spite of this, the business press and its acolytes continue to gush embarrassingly about private charities: In the FT piece, philanthropy is seen as a viable successor to the state in the funding of medical and other forms of research. But given a situation in which much subsidized basic research is basically given away for free to the private sector, and paid for again by consumers, this claim is just as disingenuous as the others. A couple of years ago (right before the dot.com bubble burst, I believe) the Economist did a piece on the new crop of philanthropists who were supposed to push the state out of the way and get on with the real business of solving social problems. An astute reader wrote in at the time that it would be strange indeed to entrust such a task to cutthroat businessmen who are all too prone to use good deeds to insulate themselves from public criticism about tactics that all too often involved the gutting of entire communities for profit. His final words to the new philanthropists? "Let them fix hell when they get there."

Labels: charities, Financial Times, philanthropy, Ronald Reagan

 

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4/24/2007 03:59:00 PM