The Charitable Side of Capitalism
Matthew Bishop is American Business Editor and New York Bureau Chief for The Economist. Philanthrocapitalism, his 2008 book (with Michael Green) on the business of philanthropy was described as "terrific" by the New York Times, and called "the definitive guide to a new generation of philanthropists who understand innovation and risk-taking and who will play a crucial part in solving the biggest problems facing the world," by New York Mayor Michael Bloomberg.
"Economics A to Z", the official Economist layperson's guide to economics, was published in 2009. He is now writing a book about the current economic crisis, and what must be done to improve how capitalism works. He was previously The Economist's London-based Business Editor. Matthew is the author of several Economist special survey supplements, including "The Business of Giving", which looks at the industrial revolution taking place in philanthropy; "Kings of Capitalism", an influential analysis of the private-equity industry; and "Capitalism and its Troubles", an examination of the impact of problems such as the collapse of Enron in 2002 which highlighted many of the flaws in the system that led to the current crisis.
Before joining The Economist, Matthew was on the faculty of London Business School, where he co-authored three books for Oxford University Press. He has served as a member of the Sykes Commission on the investment system in the 21st Century. He was also on the Advisors Group of the United Nations International Year of Microcredit 2005. He has been honored as a Young Global Leader by the World Economic Forum. He is a graduate of Oxford University.
Question: What is philanthrocapitalism?
Matthew Bishop: Philanthrocapitalism is about the different forces in society, government, business, social entrepreneurs, and above all philanthropists coming together around solving society’s problems and doing it in a new way which is about really achieving results by bringing best practices from the business world and from the entrepreneurial world, as well as the traditional people who have made it their mission to do good in society. So, it’s about doing good in a way that is actually about results rather than about feeling better about yourself because you are trying to do something right. It’s about bringing the head and the heart together around solutions for the world’s biggest problems.
Question: What’s an example of successful philanthrocapitalism?
Matthew Bishop: Well, one of the really interesting examples at the moment is how the Bill and Melinda Gates Foundation has got together with a number of the world’s governments and organizations like the World Health Organization to attract a vast amount of money towards vaccination of people in developing world. So, a lot of people are now being given basic immunization against some of the main diseases that kill poor people. And they brought down the cost of those vaccinations by a very large amount because they’ve managed to marshal a lot of capital behind innovating and behind getting the companies that wouldn’t otherwise have produced these vaccinations and to do them at a very low cost. So, that’s one very notable of example.
Question: Can philanthrocapitalism make up for the inequalities generated by capitalism?
Matthew Bishop: So, inequality is one of the big challenges that we face as a planet and it’s not a simple matter. I think some inequality is the result of people being wonderfully innovative. The people – the Google guys, Larry Page, Sergei Bren—have become fantastically rich in their early thirties by doing something that has clearly benefited everybody and hasn’t exploited anybody in any serious way. Some inequality is the result of the people actually being monopolists and expropriating assets and treating workers cruelly. But between those two, there is quit a lot of difference. And so, philanthrocapitalism is I think a way that the wealthy can give back and I think it’s in of the rules we have in the book, a good Billionaire’s Guide that we said there are four things that a billionaire needs to do to be well thought of by the public. The first thing is they need to make their money in a way that is non-exploitive, that they need to make it in a way that is fair and honest. The second is that they should pay a reasonable amount of taxes. It’s basically possible as a billionaire to pay virtually no tax and that I think is wrong. I think they clearly should be paying a higher percentage of their wealth in taxes than people who are poorer than them. The third is they should be committed philanthropists. They should be giving more than the average person. And I think this is a world where I think all of us are going to give more in the future because we all see the problems in the world, but the billionaires really should be giving much more than the rest of us. And lastly, it shouldn’t be just about writing a check. The philanthropy they do should be focused seriously on achieving change on genuine impact rather than just showiness. And so the fourth test is that they are serious about making a difference with their giving rather than simply trying to get headlines.
Question: Is this charity-based yet highly stratified economy sustainable?
Matthew Bishop: Well I think we are, as I say, in a new world which is very dynamic, where there is a lot of potential to innovate and if you do innovate successfully because of the economy being so big and things spreading so fast, you can get very, very rich, very fast and I think that system is a very good system in many ways because it actually creates a lot of wealth that we all benefit from. But it does leave the situation where you are getting people who are fantastically wealthy. I am less worried about that system than I am worried about a system that you might find, in say Russia after the fall of the Soviet Union, where a small group of individuals basically seized control of all the country’s assets, the oil and so forth and made themselves very rich in a way that didn’t benefit the population as a whole. So, I think we have to differentiate between those two models. But the model which is, “I am going to create an innovation that is benefiting everybody, and in the process I get very rich,” I can’t see a real problem with that. It just comes around to sheer jealousy if we don’t like people who win from that situation. That’s very different from a situation where people are getting rich by stealing from us.
Recorded on: September 24, 2009
Depending on whom you talk to, philanthrocapitalism is either a much-needed revolution in the way that charity is delivered, or yet another depressing symptom of our increasingly stratified society. Matthew Bishop, who wrote the book on the subject, defines and discusses the contemporary need for this new brand of aid.
What do we see from watching birds move across the country?
- A total of eight billion birds migrate across the U.S. in the fall.
- The birds who migrate to the tropics fair better than the birds who winter in the U.S.
- Conservationists can arguably use these numbers to encourage the development of better habitats in the U.S., especially if temperatures begin to vary in the south.
The migration of birds — and we didn't even used to know that birds migrated; we assumed they hibernated; the modern understanding of bird migration was established when a white stork landed in a German village with an arrow from Central Africa through its neck in 1822 — draws us in the direction of having an understanding of the world. A bird is here and then travels somewhere else. Where does it go? It's a variation on the poetic refrain from The Catcher in the Rye. Where do the ducks go? How many are out there? What might it encounter along the way?
While there is a yearly bird count conducted every Christmas by amateur bird watchers across the country done in conjunction with The Audubon Society, the Cornell Lab of Ornithology recently released the results of a study that actually go some way towards answering heretofore abstract questions: every fall, as per cloud computing and 143 weather radar stations, four billion birds migrate into the United States from Canada and four billion more head south to the tropics.
"In the spring," the lead author Adriaan Dokter noted, "3.5 billion birds cross back into the U.S. from points south, and 2.6 billion birds return to Canada across the northern U.S. border."
In other words: the birds who went three to four times further than the birds staying in the U.S. faired better than the birds who stayed in the U.S. Why?
Part of the answer could be very well be what you might hear from a conservationist — only with numbers to back it up: the U.S. isn't built for birds. As Ken Rosenberg, the other co-author of the study, notes: "Birds wintering in the U.S. may have more habitat disturbances and more buildings to crash into, and they might not be adapted for that."
The other option is that birds lay more offspring in the U.S. than those who fly south for the winter.
What does observing eight billion birds mean in practice? To give myself a counterpoint to those numbers, I drove out to the Joppa Flats Education Center in Northern Massachusetts. The Center is a building that sits at the entrance to the Parker River National Wildlife Refuge and overlooks the Merrimack River, which is what I climbed the stairs up to the observation deck to see.
Once there, I paused. I took a breath. I listened. I looked out into the distance. Tiny flecks Of Bonaparte's Gulls drew small white lines across the length of the river and the wave of the grass toward a nearby city. What appeared to be flecks of double-crested cormorants made their way to the sea. A telescope downstairs enabled me to watch small gull-like birds make their way along the edges of the river, quietly pecking away at food just beneath the surface of the water. This was the experience of watching maybe half a dozen birds over fifteen-to-twenty minutes, which only served to drive home the scale of birds studied.
Explore how alcohol affects your brain, from the first sip at the bar to life-long drinking habits.
- Alcohol is the world's most popular drug and has been a part of human culture for at least 9,000 years.
- Alcohol's effects on the brain range from temporarily limiting mental activity to sustained brain damage, depending on levels consumed and frequency of use.
- Understanding how alcohol affects your brain can help you determine what drinking habits are best for you.
If you want to know what makes a Canadian lynx a Canadian lynx a team of DNA sequencers has figured that out.
- A team at UMass Amherst recently sequenced the genome of the Canadian lynx.
- It's part of a project intending to sequence the genome of every vertebrate in the world.
- Conservationists interested in the Canadian lynx have a new tool to work with.
If you want to know what makes a Canadian lynx a Canadian lynx, I can now—as of this month—point you directly to the DNA of a Canadian lynx, and say, "That's what makes a lynx a lynx." The genome was sequenced by a team at UMass Amherst, and it's one of 15 animals whose genomes have been sequenced by the Vertebrate Genomes Project, whose stated goal is to sequence the genome of all 66,000 vertebrate species in the world.
Sequencing the genome of a particular species of an animal is important in terms of preserving genetic diversity. Future generations don't necessarily have to worry about our memory of the Canadian Lynx warping the way hearsay warped perception a long time ago.
Artwork: Guillaume le Clerc / Wikimedia Commons
13th-century fantastical depiction of an elephant.
It is easy to see how one can look at 66,000 genomic sequences stored away as being the analogous equivalent of the Svalbard Global Seed Vault. It is a potential tool for future conservationists.
But what are the practicalities of sequencing the genome of a lynx beyond engaging with broad bioethical questions? As the animal's habitat shrinks and Earth warms, the Canadian lynx is demonstrating less genetic diversity. Cross-breeding with bobcats in some portions of the lynx's habitat also represents a challenge to the lynx's genetic makeup. The two themselves are also linked: warming climates could drive Canadian lynxes to cross-breed with bobcats.
John Organ, chief of the U.S. Geological Survey's Cooperative Fish and Wildlife units, said to MassLive that the results of the sequencing "can help us look at land conservation strategies to help maintain lynx on the landscape."
What does DNA have to do with land conservation strategies? Consider the fact that the food found in a landscape, the toxins found in a landscape, or the exposure to drugs can have an impact on genetic activity. That potential change can be transmitted down the generative line. If you know exactly how a lynx's DNA is impacted by something, then the environment they occupy can be fine-tuned to meet the needs of the lynx and any other creature that happens to inhabit that particular portion of the earth.
Given that the Trump administration is considering withdrawing protection for the Canadian lynx, a move that caught scientists by surprise, it is worth having as much information on hand as possible for those who have an interest in preserving the health of this creature—all the way down to the building blocks of a lynx's life.
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