The politics of being really, really rich (Complete post)

In an article for The Atlantic, Chrystia Freeland talks about the new super elite and how America (and perhaps the world) may already be a plutonomy, where “the rich display outsize political influence, narrowly self-interested motives, and a casual indifference to anyone outside their own rarefied economic bubble.” While not entirely convinced on the later two parts of that statement (blame the eternal rose tinge of the optimist’s mind), the first is certainly true. The rich the world over do hold a disproportionate amount of political sway. If a plutonomy is in deed the current (or near-future) state of global politics, herein lies the rub: it renders untrue one of the core arguments in the fight for social justice and equality, that the fate of the rich is inextricably linked to that of the poor.

An economic apartheid

It is estimated that the American 2010 mid-term elections cost US$4 billion. That’s a mind-numbing sum to you and me but for the super rich, the ones who in Ms Freeland’s article say (with no hint of irony) “20 [million] is really 10 after taxes”, US$4 billion is a half a day’s work.

We don’t have a complete picture of election spending in South Africa – only information on public funding of political parties is required to be disclosed. But we do know that in the 12 months leading up to the 2009 national elections, the Independent Electoral Commission, tasked with allocating and disbursing election funding from the public kitty, paid out almost R90 million (approximately US$12.8 million) to 19 political parties based on their representation in the National Assembly and provincial legislatures. The ANC received R61.1 million and the Democratic Alliance, the official opposition, received just R10.5 million, however, based on the spending of both it is clear that private funding does find its way into their coffers.

Campaigning for the 2009 elections, the ANC spent R200 million, most of which it says it raised from selling paraphernalia. Now I fail to see how that’s even possible unless of course they were selling theircustom leather jackets or trademark black, green and gold flags for R20 million a pop. The truth is, some of the funds came from the ANC’s own investments (of which it has plenty) and the rest from private donations from local and foreign (possibly mostly Chinese?) sources. Without information on these private donations, we’re left to educated conjecture to answer our questions. The majority of the US$4 billion spent on the mid-terms came from corporations, rich and super-rich individuals, and advocacy groups, so it stands to reason that the same possibly held true for the R200 million spent by the ANC on the 2009 election campaign.

Sure, there is nothing to suggest that this private funding came with strings attached, but in my eight long years as an auditor, not once did I ever come across an exchange of funds without strings attached. And further yet, there’s nothing to suggest that any conditions, if they exist, are contrary to the interest of the (as in the ANC’s case) 11.7 million people who voted for the party – except of course there is. If strings exist (and I am saying they do), they will almost always be contrary to the election manifesto/policies by which parties and politicians are elected to office, otherwise there would be no reason to make the private donation in the first place (at least not at the disproportionate levels we see being made currently) other than to subvert the said manifesto/policies.

So there it is. The super rich have most of the money and have used it to purchase significant political power, and thanks to globalisation, this applies to developed and developing country alike. The fate of the super rich, is well and truly set apart from that of everybody else, like an economic apartheid of sorts. What links us now is but a strand of common humanity and the fact that we occupying the same hunk of rock, third from the sun.

Is this then enough then to convince the super rich that social justice and equality are worthy pursuits?

When a yacht is not enough

In what was subsequently called a “meeting of colleagues”, Bill Gates, Warren Buffett, George Soros, Oprah, Michael Bloomberg and other luminaries on Forbes 400 rich Americans list got together for dinner in May 2009 and decided to use their wealth to save the world. The organisers of the dinner, Gates and Buffet, gathered their peers with the express idea of convincing them to give away at least 50% of their wealth to charities during their lifetimes or at death. Some quick and dirty maths based on the 2010 Forbes top 10 rich list shows that if Gates and Buffett managed convince their contemporaries on the top 10 list to do as asked, $135.5 billion would make its way to charitable causes. This is almost half of the amount recorded for total private giving by Americans to charitable causes in 2009 – a number which no doubt included contributions from these very people.

Gates and Buffett didn’t stop there. They held two other similar dinners with more of America’s super rich, and jetted across the ocean to host similar events in London, India and China. They also inspired at least one Russian billionaire to also pledge his fortune to charitable causes upon his death.

This deluge of funding, riding in on the seemingly irreconcilable concept of philanthrocapitalism, will go toward charitable causes focused on health, education, poverty eradication, human rights, the environment and other millennium development goal sounding causes. Poor people problems, basically. And most of the organisations dealing with these causes work where they are needed most, in the developing world.

So the rich, it would appear then, get it. They need no convincing further convincing, or something else going on here?

With the amount of money being doled out and assuming that, all things being equal, money buys resources and resources get things done, the super rich have a significant say in which causes receive the most attention and more significantly, how those causes are to reach their objectives (if not what the very objectives should be). That is after all one of the core principles of philanthrocapitalism – to apply business principles to giving including serving on the board to influence policy direction, stipulating business-like performance obligations (failing which funding is redirected or stopped), and that prized cherry, the right to include your name to brand the activities undertaken. Recognising this, Chrystia Freeland writes in her article for The Atlantic, “arguably the most coveted status symbol isn’t a yacht, a racehorse, or a knighthood; it’s a philanthropic foundation—and, more than that, one actively managed in ways that show its sponsor has big ideas for reshaping the world.” She goes on to suggest that more than impacting lives or the environment, the super rich engaging in philanthrocapitalism seek to leave behind an indelible legacy. They seek to achieve the immortality that the likes of Andrew Carnegie and Alfred Nobel have achieved.

At first sight, these may not seem like competing interests but often, they are. Any programme director who works in the third sector will tell you that funding designated toward specific programmes is problematic, mainly due to the funders’ reporting requirements which are admittedly necessary but often inflexible, onerous and far removed from the reality of events at the coalface. Organisations however are seldom in a position to refuse this funding. Even more potentially problematic then would be a funder who not only has a significant say in what the programmes and objectives should be but also in what the programmes should be doing to achieve their objectives.

It may not be an exaggeration to say that the war for the soul of the non-profit sector has gone up a notch thanks to Gates and Buffett, and while not necessarily saying no good will from this, it certainly gives me pause when once again this small sect of the population have, for no reason other than massive wealth, a say that far exceeds their numbers.

It is becoming more apparent that not only is the fate of the rich set apart from that of the poor, the fate of the poor is in the hands of the rich. One can only hope then that the accusation leveled at the super rich – that of displaying self-interested motives and casual indifference to anyone outside their rarefied bubble – is unfounded.


Further reading:


One thought on “The politics of being really, really rich (Complete post)

  1. […] **read the entire biblical post (parts 1 & 2) together —–> here.** […]

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