Conflicts of interest within philanthrocapitalism? *
The term philanthrocapitalism is used to describe a growing movement which aims to harness the power of the market in order to achieve social outcomes, to increase economic growth in impoverished regions, and to make philanthropy more cost effective.
Philanthrocapitalism has indeed had an increasing influence on global health and nutrition governance and decision-making.
It is the sheer scale of the Gates Foundation resources (and its obligation to spend at least $1.5 billion each year in order to stay within the law as a charitable foundation) that has led the Economist to brand it as an example of ‘philanthrocapitalism’ (Economist 2006). It pointed out the ‘need for philanthropy to become more like the for-profit capitalist markets’ and that today’s mega-philanthropists ‘need to behave more like investors’: “Mr Gates’s big idea is to overcome the market failure afflicting poor consumers of healthcare by deploying his money on behalf of the poor to generate the supply of drugs and treatments they need. For instance, the money provides market incentives for drug companies to put some of their resources to work for the needy”.
As such, the Gates Foundation has become a key partner for the big pharmaceutical corporations, which may well engage with charitable projects when it suits them, but always with their own distinct agenda: they are eager to establish favourable credentials and to retain their control of the development of new drug technology on a global scale.
The Bill and Melinda Gates Foundation clearly aligns corporate interests and
philanthropic investment and this does have adverse effects on the policy of recipient countries. Philanthrocapitalism challenges progressive tax measures that could generate government revenues earmarked for global health. Focusing on the multiple conflicts of interest of these philanthropies is a useful starting point for public health nutrition professionals concerned about their monstruous?? influence. (ref to Feb letter) It is true: we have thus far had difficulty, as a result of the immense scale of these foundations’ influence, in more vocally denouncing its controversial policies. These series in WN is doing so.
The Gates Foundation’s influence on global health and nutrition, we had argued, has become increasingly controversial among policy-makers. The Foundation directs the bulk of its grants towards organisations housed in high-income countries thus exacerbating unequal research and development infrastructures between poor and rich countries. The Foundation has heavily prioritised funding for malaria and HIV/AIDs, while importantly omitting funding for chronic, non-communicable diseases. Grants made by the Foundation do not reflect the burden of disease endured by those in deepest poverty’ (Lancet 2009: 1577; McCoy, Chand and Sridhar 2009; McCoy et al. 2009; Sridhar and Batniji 2008).
The attraction and interest of philanthrocapitalist donors to noncommunicable diseases seems to include the limited use of costly drugs or high-tech whizzy medical treatments; they have a lack of any high-paid CEO and board jobs on projects with the public health focus preferably resulting in few headline-grabbing stories.
A second concern is the lack of public accountability at the Foundation which is governed by three co-chairs – Bill Gates, his father, William H. Gates Sr and his wife, Melinda Gates.
Sadly, the Foundation has acquired a reputation for not always listening to its
friends.
A third concern is that the Foundation both invests-in and champions corporate actors that have had a detrimental impact on health outcomes. (reference first WN piece on Gates)
Historically, it is no secret that enterprises such as foundations have helped to increase the political salience of economic movements such as neoliberalism by furthering partisan viewpoints or by lobbying for partisan interests while maintaining a veneer of academic and
political impartiality (Guilhot 2007; Mirowski and Plehwe 2009).
The Gates Foundation’s endowment has two main revenue sources: Gates’s
personal fortune and the stock in Berkshire Hathaway given as a gift to the
Foundation by Warren Buffett. How the Foundation’s endowment is
invested was covered earlier in WN. Berkshire Hathaway owns an additional 8.7 per cent of Coca-Coca and has considerable stakes in leading pharmaceutical companies, including GlaxoSmithKline, Sanofi-Aventis, Johnson & Johnson, and Procter & Gamble.
These investments raise a number of concerns not least linked to the global obesity crisis (Schulze et al. 2004).
A Foundation’ partnership with Coca-Cola suggests that it may have used its influence to help financially bolster a company that has been linked to an increase in obesity and diabetes.
A further concern is the human rights record of Coca-Cola, which has faced allegations that its company executives have conspired in the murder of union workers at its bottling plants in Colombia. In India, the company has been accused of contaminating groundwater and soil, causing water shortages, and having high levels of pesticide in its drinks.
In 2007, the Foundation faced censure for investing in Dutch Shell, Exxon Mobil
Corp., and Chevron Corp., companies responsible for polluting developing countries, such as Nigeria, beyond levels permitted in Europe and North America (Piller et al. 2007).
The politics of philanthrocapitalism
Private foundations do engage in political or corporate lobbying while appearing to adopt apolitical or non-political stances. This problem is not unique to private foundations. It is also a marked feature of the new philanthrocapitalism, a movement that presents itself as operating outside of formal political channels, while actually wielding considerable influence over them. (The term philanthrocapitalism was coined in 2006 by Matthew Bishop, an
editor at The Economist).
Gates, in a 2008 article in Time magazine said he applies the tools of the market for meeting social and economic needs, i.e., ‘creative capitalism’ – an effort to ensure that individuals earn a financial return on their investments in social programmes aimed at improving sanitation, nutrition, and urban and rural infrastructure, and expanding access to financial credit.
He problem is that the concentration of wealth and power among philanthrocapitalists may be having a negative influence on the non-profit sector both in the United States and internationally, with civil society groups reporting increasing constraints on their flexibility and independence as a result of an obsession with performance reviews. (Edwards 2008).
The philanthrocapitalist movement has a conflictive relationships with traditional political channels. Political institutions such as the US federal government and UN organisations are publicly scorned yet privately lobbied, thus weakening public regard for the efficacy of governmental bodies while ensuring that the same bodies are receptive to furthering the interests of leading philanthrocapitalists. (When Warren Buffett announced his donation to the Gates Foundation in 2006, he quipped that the money would do more good than the money dropped into the US treasury. His sentiment is common among philanthrocapitalists. This, in their own view, allows them ‘to focus on problem solving and getting things done’. (Marten and Witte 2008: 15) Foundations look towards success. In the end, it is always about impact. They don’t need to worry about politics’ (ibid.: 15).
The problem is that perceptions of foundations as apolitical entities limit the ability (i) to question tacit political or ideological stances within foundations that are less open and recognisable; and (ii) to understand the ways in which
Conclusions
We have examined philanthrocapitalism from a perspective that emphasises the role of conflicts of interest while focusing on the Gates Foundation’s investment in companies such as Coca-Cola. We also wish to draw attention to links between philanthropies and government initiatives, and the contradictions that characterise these links. An oft-voiced refrain of the new philanthropy is that private-sector investment fills the void left by cash-strapped governments.
A key objective for public health nutrition activists could be highlighting the ways in which government revenues are strapped through private-sector support and through a reluctance to embrace tax measures that are disparaged by philanthropists who purport to be operating outside the realm of politics.
*: Elements of this column taken from the People’s Health Movement’s Global Health Watch 3, 2012.
References
Bishop, M. and M. Green (2008). Philanthrocapitalism: how the rich can save the world.New York, Bloomsbury.
Edwards, M. (2008). Just another emperor? The myths and realities of philanthrocapitalism. New York, Demos/The Young Foundation.
Guilhot, N. (2007). ‘Reforming the world: George Soros, global capitalism and the philanthropic management of the social sciences’. Critical Sociology, 33(3): 447–77.
Lancet (2009). ‘Editorial: What has the Gates Foundation done for global health?’ The
Lancet, 373(9675): 1577.
Marten, R. and J. M. Witte (2008). ‘Transforming development? The role of philanthropic foundations in international development cooperation’. GPPi Research Paper Series No. 10.
www.gppi.net/fileadmin/gppi/GPPiRP10_transforming_Development_20080526final.pdf
McCoy, D. and L. McGoey (2011). ‘Global health and the Gates Foundation – in perspective’. in Rushton, S. and O. Williams (eds), Health Partnerships and Private Foundations: New Frontiers in Health and Health Governance. Palgrave.
McCoy, D., S. Chand and D. Sridhar (2009). ‘Global health funding: how much, where
it comes from and where it goes’. Health Policy and Planning, 24(6): 407–17.
Mirowski, P. and D. Plehwe (eds) (2009). The road from Mont Pèlerin: the making of the
neoliberal thought collective. Cambridge, Mass., Harvard University Press.
Piller, C., E. Sanders and R. Dixon (2007). ‘Dark cloud over good works of Gates Foundation’. Los Angeles Times, 7 January. www.latimes.com/news/la-na-gatesx-07jan07,0,2533850.story
Schulze, M. B. et al. (2004). ‘Sugar-sweetened beverages, weight gain, and incidence of type 2 diabetes in young and middle-aged women’. Journal of the American Medical Association, 292(8): 927–34.
Sridhar, D. and R. Batniji (2008). ‘Misfinancing global health: the case for transparency in
disbursements and decision making’. The Lancet, 372(9644): 1185–91.