Business thinking is not always best

The “business-is-best” philosophy is powerful and seductive, but it is a dangerous mirage when applied to social change, according to Michael Edwards in his book Small Change: Why Business Won’t Save the World. The book takes aim at “philanthrocapitalism”, the followers of which are said by the author to believe that business thinking and market methods will save the world, while making some people a fortune along the way.

Unfortunately the exact scope of the term “philanthrocapitalism” seems to be a moving target as the book progresses. Sometimes it seems to refer to entrepreneurs who try to make a profit and create social good at the same time. At other times, it seems to refer to people who become wealthy through business and then donate that money to charity. At other times, it seems to refer to donors who require measurable results before they will donate. At other times it seems to refer to amateurs who try to provide charitable services directly without working through established charities.

Presumably the author was motivated to write the book to rebut the perception that Bill Gates will save the world so we can stop worrying about funding established social service entities. If the author had confined himself to defending the good work conducted by existing charities, he might have ended up with a convincing argument. However, he is on dangerous ground, for example, when he attacks donors who insist on measurable outcomes in Africa when previous poverty relief efforts which have not had measurable outcomes have failed to achieve positive results.

The author sees the aim of philanthropy as being the thorough and comprehensive transformation of the world, but the nature of that transformation is not clear. He seems to assume that the reader will share his vision for radical transformation of the economic system and redistribution of wealth, as well as a range of political changes to provide rights for minority groups. The author says that broad-based citizen action is required to effect true change, and perhaps he is correct when dealing with US issues, but in the poorest countries that are the prime concern of the Bill and Melinda Gates Foundation civil society is too weak to take effective action on its own behalf.

While I enjoyed reading the book and thought it contained many good points, I thought it contained too many logical inconsistencies and I was left with the impression that the Bill and Melinda Gates Foundation’s money is more likely to be effective in the hands of Bill Gates than it would be in the hands of Michael Edwards.

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