Philanthrocapitalism and the Bottom Billion- Part 4

RECIPE FOR SAVING THE BOTTOM BILLION:

MIX 1 PART PHILANTHROCAPITALISM & 2 PARTS..

Finally, bake in an oven at global warming temperatures for two or three decades..

If there is one word that is associated with Africa and the plight of most of its nations, it is corruption. A fact that is not known to many however and that Collier reveals is that developed and powerful countries typically play a role in the continuation of this problem. It is disappointing to hear that China which more than any other developing/developed country is given credit for adequately preparing for globalization and grasping the opportunities provided, is part of this despicable practice. This booming country is responsible for bailing out many unworthy individuals and institutions in exchange for natural resources which it does not possess. Bishop & Green speak about the effectiveness of philanthropy against political and social factors such as corruption which lie within the receiving nations. At one point, the two authors speak about the redundancy of these countries receiving aid only to have it robbed back in less perceptible and publicized ways.

Countries which are exploiting the three development traps discussed by Collier should be held accountable to their actions and exposed for the robbers that they are. This brings to mind a statement by Bill Gates, whereby the billionaire philanthropist promises to increase the level of transparency within his foundation in order to increase the honesty of its business. The same level of transparency should be the objective of all policymakers in the global community, beginning the most influential leading as role models. It is possible that the corruption between governments is just as detrimental, if not more than that which is occurring within governments, because inter-governmental affairs involve high-stakes contracts which barter millions of people and billions of dollars.

Collier confirms the damage that the robbers are doing, when he says, “Don’t count on trade to save the bottom billion” (87). This is a surprising admonishment, given the history that trade has for converging nations and stimulating the global economy. Given the revelation of corruption in Collier’s book, perhaps trade will be useless to the bottom billion because instead of nations trading commodities, the bottom billion who have already been robbed of their social, political and entrepreneurial freedoms will be robbed again, as they are now, when their corrupt politicians are once more paid to keep the state of affairs away from the international eye. In regards to trade policy, he states, "It is stupid to provide aid with the objective of promoting development and then adopt trade policies that impede that objective"(160). This is a stark reminder that trade agreements are negotiations. Wealthier nations are more influential and thus can negotiate terms that are more favorable to them. This seems like it would be the situation in any to party negotiation, but global trade agreements have immense consequences and will never be useful if they are created to demean the efforts of developing nations.

Collier proposes two notable solutions to lifting the bottom billion out of their predicament; ‘breaking the natural resource barrier’, and ‘breaking the reform impasse’ (177). In reference to breaking the reform impasse, one suggestion would be to offer protection to those who are brave enough to confront the corrupt and unjust individuals and institutions that govern their nation. As outsiders, influential countries should impose serious sanctions to enforce the human right to a better life as well adjudicating the transgressors in the International Criminal courts. Concerned global citizens must hold their policymakers accountable to representing the honest intentions of the majority. Citizens of developed countries who are able to attain higher level educations and social welfare protections can speak up for the bottom billion, where philanthrocapitalism is yet to affect, and celanthropists are yet to call attention. The global issues discussed by the two books will require freeing the bottom billion from their traps, the tools of philanthrocapitalism and most importantly, the attention of the other five billion.

Hope you have enjoyed my review.

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Paul Collier

Philanthrocapitalism and the Bottom Billion- Part 3

RECIPE FOR SAVING THE BOTTOM BILLION:

MIX 1 PART PHILANTHROCAPITALISM & 2 PARTS..

Collier goes on to state that “Ethnic minorities are just as likely to rebel with or without discrimination" and that two Stanford scientists who conducted research on 200 ethnic minorities also found that the same is the case of inter group hatreds (20). This statement rests on the assumption that the previous one which finds no relation between political repression and civil war, is true. In this train of thought, if civil war was not incited by political repression, then it was not necessarily affected by discrimination either. There is a connection between civil war and discrimination which is missed however, because of the disassociation between political repression and discrimination. Typically and most recently, ethnic discrimination is viewed as a social issue, despite the fact that it was historically a politically based as well. The political component of society- the government- is then involved in either promoting or denouncing discrimination; the former choice is effectively a form of political repression. Civil war or regional conflict is inevitable after prolonged ethnic discrimination and political repression.

In the discussion of rebel recruitment, Collier names professor Weinstein of Stanford University whose findings indicate that rebel leaders find themselves in a position where they must choose between two types of recruits. There are those who are driven by a mission to actually bring out (perceived) social justice versus psychopaths on a path of destruction. According to Collier, an alarming 3% of the general population in any society are estimated to have psychopathic tendencies. Presumably, a large portion of the 3% is lining up to be recruited in the bottom billion countries during the seemingly never-ending cycles of civil war. These facts lead one to infer that the conflict trap creates its own web of institutional entrapment. For example, the psychopathic 3% of the population hoping to be recruited could otherwise seek medical care, rather than suffer the deterioration of their disease; but the conflict-bound region in which they live does not allow for hospitals to qualitatively serve the community. The portion of the remaining 97% that is in line is easily attracted by rebel theories likely due to the lack of employment and other positive social reinforcements in the community which stem from the inability to attract business owners and developers to a conflicted region.

After analyzing the conflict trap, the natural resource trap, the land lock trap and the governance trap, Collier asserts that the bottom billion have missed the boat of opportunity that was brought by the current wave of globalization. Unfortunately, he also surmises that the bottom billion will have to wait until the next wave in order to ride it and reap the benefits. Collier estimates that this wave will hit the shores of the bottom billion when the gap between Asia and the bottom billion is wide enough to attract business to the latter. Though no one can guess just how long this will take, instead of waiting for this next wave, the book might explore whether it is possible to induce the next wave faster so that the bottom billion may begin to catch up. The process could begin with the extensive review of the unsuccessful tools used previously in philanthropy combined with heightened awareness of the bottom billion, hopefully leading to a focused and united transition to philanthrocapitalism. The two books connect in this way; Collier identifies the bottom billion and why are they are who they are, and Bishop & Green discuss the people and methods capable of making a huge impact on uplifting the billion.

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Paul Collier

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Philanthrocapitalism and the Bottom Billion- Part 2

RECIPE FOR SAVING THE BOTTOM BILLION:

MIX 1 PART PHILANTHROCAPITALISM & 2 PARTS..

Philanthropists today, celanthropists especially, have the ability to bring important world issues to the attention of the average American, in a way that politicians and lobbyists have not compete with. Despite the advantages of media such as the internet, business and entertainment rock stars have a quality about them that sets them apart from the integral congressman. I believe that part of this is the slightly reduced faith of American citizens in their politicians, which has led them to seek role models elsewhere. The successful investment banker who had meager beginnings and now executes board meetings of his/her own Fortune 500 company is appealing to the average aspiring, hardworking employee.   

Popular celebrities simply have their own ways of casting their fans under enchanting spells which compel them to pay attention to whatever the celebrity agenda may be. Bishop & Green note that throughout history, the responsibility for social welfare has been shared both my citizens and their governments. In the Victorian era, generous philanthropists endowed hospitals and universities some which are world-renowned to this today. There is no express statement in the book confirming the authors’ opinion on whether philanthrocapitalists will solve today’s world issues, although there is certain assertion that he current era of philanthropy surpasses the previous ones in opportunity.

In my opinion, philanthrocapitalism is the best proposition for solving global issues such as poverty, hunger and disease. While capitalism and democracy have uplifted some countries, some have been left behind, even sunk lower into destitution. The bottom billion that Collier refers to need more than just the traditional philanthropy to catch up. The funds provided by philanthropists combined with the financial tools of capitalism and armed with the far-reaching influence of celanthropists form a three-pronged weapon that can begin to have effect today and arm the citizens of developing countries on their way out of the bottom billion.  

 

Paul Collier sets about the goal of introducing the bottom billion and explaining the factors that have contributed to placing them in this predicament. It is impossible to discuss any subject in the global arena without denoting globalization, and Collier duly acknowledges this, yet also explores other reasons why the some countries have diverged away from development, while others have converged. Generally, Collier speaks of various traps which have either physically or symbolically entrapped the citizens of the countries comprising the bottom billion. The conflict trap refers to the stagnation in growth which certain countries seem unable to escape due to constant regional conflict. While exploring the conflict trap, Collier states that “There is basically no relationship between political repression and the risk of civil war"(20). I disagree with Collier’s statements because they likely consider the effects of political repression when present during the examined conflict. 

Realistically, people are repressed for many years before any large scale, violent signs of public outcry are made. The actual repression itself may have ceased by the time a civil war is incited, but the state of affairs once the protagonist has ceases still serves as a form of repression to the people. As well, it seems extremely unlikely that a society living in political harmony could suddenly erupt in conflict without repressive provocation.  

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Paul Collier

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Philanthrocapitalism and the Bottom Billion -Part 1

RECIPE FOR SAVING THE BOTTOM BILLION:

MIX 1 PART PHILANTHROCAPITALISM & 2 PARTS..
 

Philanthrocapitalism by Matthew Bishop and Michael Green examines the new wave of philanthropy, characterized by wealthy entrepreneurs and influential icons using the resources and catechisms of capitalism to aggregate the products of philanthropy as we know it. Featured philanthrocapitalists such as Bill Gates and George Soros treat their exercise in philanthropy more like an enterprise, than an extra-curricular activity.

The Bottom Billion by Paul Collier brings to attention the forgotten citizens of the world who reside in 5/6 of the world population classified as developing countries. The bottom billion are impoverished and live in resource-poor nations, where conventional development strategies have failed. Collier identifies how the bottom billion have come to be and aims to propose solutions outside of the failing methods in place today.

One book focuses on the external fight for the poorest world citizens,based on the resources being transferred in, while the other speaks from within that destitute realm, conceivably providing a more intimate analysis of the resource management post-transfer. In my analysis, I hope to extort the assumptions and disparities in their evaluation of the issues plaguing developing countries and to perhaps arrive at comprehensive solutions.

Like my review of Thomas Friedman's The World is Flat, I intend to post my reviews in several parts.

Part 1
I was thoroughly excited to begin the reading and especially to hear Matthew Bishop and Michael Green outline just how the rich could save the world. According to Bishop & Green, philanthrocapitalists are different from their precedents in that they give in ways that utilize the benefits of a capitalist society, in order to give a gift that keeps on giving. They have amassed their fortunes, large and small, and now can leverage various factors which they enjoy as a result of their success. Today, philanthropists and celanthropists are giving to myriad causes, and Bishop & Green discuss the possibility of measuring the true effect of the generosity.

Consistently throughout the book, philanthropists of the 21 st century are compared to those of previous ones, such as Andre Carnegie and Andrew Mellon. One particular subject that is germane to any period of philanthropy is the arts. Admittedly, most of the major artistic institutions of our era are the direct result of the contribution of a generous philanthropist, and without them, our education would be lacking. Briefly, Bishop & Green question the necessity for philanthropic contributions to subjects such as the arts, during the simultaneous demise or larger social establishments such as public schooling. This is an issue that was under-emphasized in the book especially given the large donations quoted as having been assigned to artistic causes. One of the endowments of democracy is the freedom to do whatever one wishes with their money, however in times of widespread economic disaster, whether in our nation or abroad, philanthropists should be encouraged to donate to those causes which protect and prolong the most worthy cause of all- basic human life.

Here the two authors could have performed a theoretical comparison of the effects that donation to the arts versus to famine for example, has on human life. In the long run, the arts are indeed an important part of life, but it can be objectively argued that in the short run, one is more important or at least productive than the other. For instance, a $200,000 donation may purchase one work of art for a museum, which will then have to attract patrons to its gallery, who over time will develop an appreciation for the work and its artists. At the same time, the same amount of money could be used to provide groceries to several poverty-stricken families for an entire year and furthermore, the advantage of a favorable exchange rate can be used to multiply the benefits to a disadvantaged in developing countries. If the goal is to describe ‘how the rich can save the world’ one effective method would have been to highlight the most productive expenditures from philanthropy.

Bishop & Green’s “Philanthrocapitalism” comes at a timely juncture in relation to the increasing harvest of the seeds of capitalism and heightened necessity for dynamic philanthropy. Dynamic philanthropy is different from traditional giving in that it takes advantage of valuable economic, political and social situations in order to maximize or at least attempt to maximize, the rewards of donation. In fact, this book would have relevant during the late 90’s when many young millionaires were made almost overnight in the glossy skyscrapers of Silicon Valley. There is a marked difference in the significance that this book would have had shortly following the dot com boom(before the bust) and the past four to five years , encompassing the period during which the book was written. The variance is the fact that in the time since then, globalization has flattened the world, exposing more global citizens to capitalism and democracy. As a result, philanthropy can now be transformed into philanthrocapitalism and globalization can serve as the platform through which philanthropists can be reached and their donations can be mobilized.

The global community is constantly changing in social, political and economic aspects, but the one trend that seems to be increasingly popular is the trend towards capitalism, albeit on different levels. Therefore, not only is the discussion in this book relevant today, it is pertinent to future philanthropists residing throughout the global community.

More on Mathew Bishop, Michael Green and Philanthrocapitalism
Paul Collier

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The World is Flat- Part 3 of 6

GLOBALIZATION; A SUCCESS OR FAILURE? 

And so..
Compared to the sober, earnest voice of Joseph Stiglitz beguiling his readers to view the world through the forgotten lens of the have-nots, Thomas Friedman’s tone is a striking contrast of the same topic; globalization. Friedman conjures up an image of a child at an amusement park, amazed to see all sorts of new, thrilling rides that are nothing similar to the familiar backyard swing; this young child sees many opportunities for unexplored fun before him, and begins to visualize just how much ‘fun’ is to be had as he skips through the park. On the other hand, Stiglitz conjures up the image of an older child, an early teen perhaps, who although excited about being at the park, has already been on many of the rides and is read to offer suggestions as to how to make the rides more fun. Stiglitz takes a completely different approach to globalization; he speaks as a former Chief Economist of the World Bank and Chief of Council of Economic Advisors during the Clinton administration. 

Albeit the fact that both books likely relied heavily on research, The World is Flat is written more in the character of a educating charge, while Making Globalization Work reads like the analysis of a veteran amidst a long mission, after exposure to both sides of a conflict. The most striking element of Stiglitz’ writing voice is his sincere concern for the citizens of developing countries; those who have been bypassed by globalization. These are global citizens whose corners of the world were either not flattened by Friedman’s forces, or who have not had a chance to reap the benefits of the flattening.  

             

Stiglitz determines that globalization began about 150 years ago when nation-states across the globe began to strengthen in identity and boundaries. In the U.S. this strengthening was realized as the government took a more central role in the regulating the economy and developing the country’s infrastructure and young technologies. This ‘version’ of globalization seems to stem from a mostly economic necessity for the nation-state to assert its position, and then evolving to accommodate the changing societal and political spectrums. In effect, as we are able to look back over more recent years, Stiglitz proclaims, “ Economic globalization has outpaced political globalization” (20).   In following Stiglitz’ discussion of globalization, it is extremely important   to note one component of his discourse; that there is a serious problem with the way globalization had played out so far, and the clock on reform is ticking. The general problem with globalization as Stiglitz sees it, is that it is producing “unbalanced outcomes both between and within countries…and these global imbalances are morally unacceptable and politically unsustainable” (8).

                

Having first-hand experience in making economic and political assessments allows Stiglitz to pinpoint the problems in globalization. He identifies the unfair rules of the global ‘game’, stating that they are specifically designed to benefit the advanced industrial countries (the U.S. & Europe).In distinguishing between developed and developing countries as they are affected by globalization, Stiglitz notes that the sovereignty of developing countries has been taken away…and as a result, democracy has been undermined. 

While Friedman talked about the exposure of free-market capitalism to more people after the collapse of the Berlin Wall, Stiglitz highlights that economic systems have been forced upon developing countries- typically the Americanization of economic policy & culture. Part of the problem is also that “globalization advances material values rather than values such as environmental concern or concern for life itself”, and the culmination of these issues results in more losers than winners in the benefits of globalization (9). 

More Friedman

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The World is Flat- Part 2 of 6

GLOBALIZATION; A SUCCESS OR FAILURE? 

As I was saying.. 
The collapse of the Berlin Wall most symbolically represented the collapse of the Soviet Empire and Communist rule, after which democracy would become the dominant political system. The contrasting systems both advocate their own economic policies, supposedly aimed at equality, but as Friedman notes, “Communism was a great system for making people equally poor, while Capitalism made people unequally rich” (52). While the wall was toppling down brick by brick, the United States was making large strides in the information revolution, marked by the introduction of the personal computer in 1985.

It is interesting that Friedman separates the various parts of the information revolution as different forces, rather than clustering two or three into one. In the case of the second flattener, the introduction of the first mainstream internet browser, Netscape, the emphasis is on the transformation of a novel technology used exclusively by scientists and computer experts, to a mainstream technology with a user-friendly interface. Netscape made it possible and easier for the average computer novice to access and use the internet. Symbolically, this indicated the beginning of accessible modern innovations which would typically be restricted to academics and government agencies, to the general public. In fact, this increasing transparency of information is evident is confirmed by an officer in Baghdad who lamented the flattening of the military hierarchy. As a result of the ever increasing use of technology and the respective need for people to monitor the technology, more information is available to lower-level officers than was the case before.

After the introduction of an internet browser that makes the Internet a more useful information channel for the public, it is necessary to take technology one step further, to enable changes that further flatten the globe. Workflow software is extremely sophisticated, and seeks to synchronize business processes with the goals of efficiency, labor cost reduction and capital cost reduction in mind. Friedman credits work flow software with “enabling business processes to flow not only between companies, but between continents as well, with an explosion of experimentation and innovation expected to produce many new products and services, as well as a demand for more tailored, proprietary software and IT systems to drive them forward” (91). A great example of this demand and the response in the form of global, interconnected business processes astounds Friedman when he interviews the CEO of an animation studio in San Francisco. The typical animation project starts with design and direction in the San Francisco where the studio is located, the writers’ network in from their homes (Florida, London, New York, Chicago, L.A and San Francisco) and the animation of the characters is done in Bangalore, with edits from San Francisco (79). At this point, Friedman notes that the first three flatteners create a “rudimentary platform” upon which the remaining seven forces emerge.

‘Uploading’, the fourth flattener, is another marker that Friedman uses to emphasize the ever-increasing accessibility of the Internet’s capabilities to global consumers. While the Internet provided connectivity, and Netscape allowed users to design, display, and manage data, the ‘uploading’ milestone marked the balancing of the producer/consumer scale in terms of information. Where most users had been consumers, utilizing the tools that were presented them on the web, uploading tipped the scale so that consumers could become producers of media as well, uploading their own content to share with their global neighbors. Both in the western world and in Asia’s up and coming countries, this transition has been fronted by malleable and tech-savvy youth. The residual flattening forces represent the tremendous changes in the manufacturing, human resources, and information arenas, each one heralded by a particular country or even company. 

China, the leading beneficiary in both outsourcing and off-shoring, has manufacturing advantages said to have benefited U.S. consumers in the form of billions of dollars in cost savings, and benefiting the Federal Reserve by helping it keep interest rates down longer, thus allowing more capital into the economy. It is unfathomable that China can have such effects on the American economy but these are just the effects of a flatter world; the more we communicate and create inter-dependent social, economic and political systems,, the more it seems, we are likely to sneeze and contaminate another country with our cold.

More Friedman

TBC..