In a Letter to the Editor of The Chronicle of Philanthropy, Philanthropy Roundtable’s Adam Meyerson Distinguished Fellow in Philanthropic Excellence Joanne Florino responded to a recent article entitled “Can Philanthropy Remake Capitalism?” In light of efforts to transform the economy, Florino reminded philanthropic leaders that generosity flourishes in a free market system – and, in fact, capitalism remains the most effective way to reduce poverty.
Read the Letter to the Editor, published in The Chronicle of Philanthropy, below:
“In his recent piece for the Chronicle of Philanthropy, “Can Philanthropy Remake Capitalism?” (June 23), your reporter Marc Gunther notes that the philanthropists featured in the article have been asking that question for several years now. While their work has taken different paths, he adds, they have ‘largely coalesced to advance goals that include a bigger federal government, higher taxes on business and the wealthy and an active regulatory state. …’
The piece cites a 2018 memo written by Hewlett Foundation President Larry Kramer sent to his board requesting the initial funds to rethink and replace ‘the neoliberal paradigm.’ Economist Milton Friedman looms large in this memo as does activist philanthropy. How, Kramer asked, did the United States move from a shared faith in Keynesian economics in 1971 to the belief by 1985 that liberty and prosperity are best achieved with limited government in a free-market system? His answer had two parts: changed circumstances and concerted efforts.
These changed circumstances included ‘stagflation’ — slow economic growth combined with high inflation and unemployment — and, Kramer wrote, the uneasy sense that ‘society felt like it was coming apart at the seams, particularly as these economic disruptions were intensified by social and cultural anxieties associated with race and gender and radical politics.’
Meanwhile, the concerted efforts involved the frequently told story of the philanthropy-fueled growth of conservative institutions. Kramer and his allies, namely the Ford Foundation and the Omidyar Network, hope to duplicate that role, albeit in an economic and social climate that in mid-2022 looks much like the one that served neoliberalism so well.
The obvious counter to this undertaking is to remind these philanthropic leaders that they are the direct or indirect beneficiaries of the disruptive innovation that flourishes in a free-market system. Pulling out the very ladders climbed by the Ford family, Bill Hewlett, and Pierre Omidyar appears less than generous.
This deliberate focus on the nation’s largest corporations also ignores those entrepreneurs we meet every day in our communities. The Fortune 500 coexist with the 32 million small businesses that employ close to half our labor force. Does progressive philanthropy actually believe the latter will benefit from the increased taxes and regulations that come with so-called remade capitalism?
In fact, it is the intrusion of government in our economic system that has warped its outcomes. Crony capitalism is real and is one of the few practices that can claim enthusiastic bipartisan support even though it hurts the average taxpayer, consumer, worker, and small-business owner. Crony capitalism stems from political wheeling and dealing, not from the free market Friedman espoused. Capitalism remains the most effective way to reduce poverty. Ironically, it also supplies the wealth that fuels its critics.”