Search Results - michael edwards
- Topic: "Just Another Emperor," by Michael Edwards
- apitalist-dominated world that increasingly views the orthodox charity model as inefficient and ineffective, ‘philanthrocapitalism’ has come to the rescue. This new movement brews up a concoction of business thinking and rigour, mixed with market-based approaches and philanthropic money to treat social and environmental problems where charities have fallen short. But is there anything novel here, or just a lot of hot air?
In this fresh and provocative short book published by Dēmos and the Young Foundation in the US and UK respectively, Michael Edwards leans towards the latter. His argument is best summed up using his own words:
“Philanthrocapitalism has seized on an important part of the puzzle of how to square democracy with the market, but is in danger of passing itself off as the whole solution, downgrading the costs and trade-offs of extending business and market principles into social transformation” (8).
Edwards supports this notion by first looking at the empirical evidence – or rather lack of it. He reasons that large scale initiatives, such as the Gates Foundation’s investments in global health and serious Multinational Corporation campaigns to reach the ‘bottom of the pyramid,’ demonstrate that markets can and do extend useful goods and services to the poor and marginalised. Nonetheless, few of these efforts “have any substantial, long-term, broad-based impact on social transformation, with the possible exception of microcredit” (37). Turning to smaller scale initiatives, such as social enterprises seeking to blend social and financial missions, the evidence suggests that trade-offs between these missions are often downplayed and perhaps more common than the win-win solutions their founders (and funders) often advertise.
Moving into the political economy realm, Edwards argues that philanthrocapitalism is detrimental for democracy because its increasing concentration and control of resources has adverse effects on civil society. “Civil society works best when its ecosystems are healthy and diverse” (47), yet there are warning signs that philanthrocapitalism tends to constrain this diversity and possibly the subsequent social transformation that it can bring about. Furthermore, applying business thinking, premised on achieving competitive advantage, to civil society can be problematic – especially where “giving things away, diffusing ideas and values through networks and movements, and cooperating with many best providers” (66) are necessary for results.
In response, Edwards calls for more humility, more accountability, and the reassertion of independent global citizen action. He concludes that there are two areas where philanthrocapitalism has a role to play: social and environmental service delivery and strengthening the financial management of civil society organisations (especially those trading goods and services in the market place). This requires a new approach of appreciating, learning from, and collaborating with civil society. But first, philanthrocapitalists should commit to transparency and accountability, democracy, modesty, devolution, and funding the structural and systemic change that should be the common goal for all actors in this space.
Review
This paper was a breath of fresh air. As an MBA student studying social entrepreneurship, my civil society roots have often left me surprised at the lack of empirical evidence and critical thought that accompanies any case study on social innovation or social enterprise from the philanthrocapitalist perspective. Even when critical literature exists – such as with the case of microfinance – it seems that few people are aware of it. Sure this is an emerging movement, but isn’t the whole point of ‘philanthrocapitalism’ to introduce rigour into the social sector? Edwards is absolutely right to point out the need for more humility and for philanthrocapitalists to practice what they preach.
Edwards is also right that social transformation is much more complex than the tangible outputs that philanthrocapitalists are often obsessed with. A poor woman in rural Africa will experience improved health with access to safe drinking water, but this will not solve the underlying problems of dysfunctional political institutions that caused her to be ignored in the first place. In fact, if she has never had safe drinking water before, she might not even draw the causal link between her child dying from diarrhoea and dirty water, and will subsequently value this improvement less than an outsider would think. People on the front lines in civil society realise this, and have a continuing role in addressing root causes of poverty. It would be a shame if they were ignored or marginalised themselves.
The most provocative proposition of Edwards’ paper is made in response to the philanthrocapitalist’s assertion that failures of civil society are their own doing. In contrast, he asks, “…how come citizens’ groups achieve so much when they are poorly paid, under resourced, and up against the toughest problems facing our societies? What would happen if civil society had access to the resources and opportunities that are available to business?” (50).
This, I believe, is where Edwards drifts too far. I empathise with his point, having witnessed so many heroic and selfless acts by dedicated participants of civil society organisations in Canada, England, Ghana, and Zambia who are underpaid, underappreciated, and are constantly making things happen with nothing. But one cannot escape that much of the public backlash against the charity model is precisely a result of the mismanagement of the marginal resources that these groups are entrusted with. Also, the truth is that civil society enthusiasts are equally as likely as philanthrocapitalists to be found at the bar sharing frustrations about the ineffective use and often complete squandering of resources. I cannot help but cringe at the thought of the resource wastage that would occur if Edwards got his wish.
But here lies the win-win. The skills learned in business school and in the private sector do have real relevance – and not just for the “financial management” of civil society organisations, as Edwards argues. In fact, these organisations often need an infusion of business-trained strategic thinkers and managers at all levels who can help to more effectively target the few resources that they are able to get their hands on, rigorously assess what actually happens on the ground, and do better next time. All organisations say they do this already, but my sense is that there is a large gap, exacerbated by a lack of accountability. Perhaps civil society also needs the humility to recognise where it needs certain expertise and admit that it is underfunded at least partially because of its own mismanagement of resources.
I would also argue that the need for efficient service delivery models, where philanthrocapitalists hold a comparative advantage, is more acute than Edwards admits. Returning to the example earlier, it is hard to argue that a poor woman in rural Africa does not have a right to the safe drinking water that the rest of us take for granted. If philanthrocapitalists can figure out how to bring it to her, we should applaud them and recognise, as Edwards does, that these two different groups working together in complementary ways may be better than trying to blend them together.…
- Added by Mike Quinn to The Book Club at 11:18pm on May 28, 2008
