I hate to admit it, but it’s been a good week for the philanthrocapitalists—the movement that claims that social and environmental problems are best solved by wealthy people working through business and the market.

First up was Bill Gates’ announcement of the “Breakthrough Energy Coalition” at the Paris climate conference, a venture designed to channel investment into new, low-carbon technologies. In fact the greatest need right now is the mass deployment of existing technologies like solar power, but that’s a less attractive proposition to investors who are looking for big returns from R&D.

Then came Mark Zuckerberg and Priscilla Chan’s letter to their new-born daughter, declaring their intention to give 99 per cent of their Facebook shares away during their own lifetimes—around $45 billion for good causes at current prices. Except that ‘holding back’ would be a more accurate description than ‘giving anything away,’ since the new parents are transferring their resources into their own limited liability corporation (LLC) instead of a charitable foundation.

This move will enable them to exercise more control over how their wealth is invested with even less transparency and accountability, but they’ll still get a tax write off if the shares are donated (though not if they’re sold at a profit, in which case capital gains tax kicks in). In their letter, Chan and Zuckerberg are explicit about the benefits they think will grow from weaving social and financial objectives into a single pattern, just as the fates of the LLC and Facebook are intertwined.

The idea that underpins these examples is ‘doing good and doing well:’ there’s no conflict between making money and making change. It’s an old idea that goes back to a misreading of Adam Smith, but one that’s been given new energy by the rise of ‘impact investing’ and socially-conscious billionaires. Smith knew that however efficient it might be in directing money towards its most ‘productive’ use, the market’s ‘invisible hand’ wouldn’t be able to reconcile individual self-interest with collective welfare unless it was guided by some deeper moral force.

“The wise and virtuous man is at all times willing that his own private interest should be sacrificed to the public interest of his own particular order or society,” as he wrote in the “Theory of Moral Sentiments.” That’s an important statement because it reveals the struggles and trade-offs involved in any significant social change—which means there’s nothing automatic about the links between ‘doing well and doing good.’ There may be situations where these trade-offs are deemed acceptable (as in social enterprises at their best), but for anyone committed to social transformation, this slogan is a dangerous mirage.

Being simultaneously rich and radical—the revolutionary who drives a Porsche—is certainly seductive. That’s part of what gives this idea its power and popularity. But the conflicts that have animated history can’t be wished away. Democracy and the market are different organizing principles. The public and the private pull in opposite directions. Your interests are not the same as mine. And self-sacrifice, not self-interest, is central to facing up to the challenges that lie ahead.

In making this critique I’m not suggesting that all activists should wear hair shirts, or that markets have no role to play in certain aspects of social change. Providing everyone with a minimum basic income is a crucial part of any progressive agenda for the future, particularly when more of life’s essentials are being monetized (think health, pensions and education for example).

In the US that means between $60,000 and $75,000 a year in current prices, depending on whose estimates one believes. Above that threshold there are no significant increases in happiness, wellbeing or generosity, though these figures are still higher than the incomes of most Americans. In contrast to the 1 per cent, they are doing lots of good as activists and volunteers and donors, but not so well financially. In fact their median incomes are going down.

Similarly, I have no problem with charities that raise commercial revenue as part of their income, so long as this doesn’t deflect them from their mission for social change. And I’d far rather have ‘socially-responsible’ corporations and products and market signals than ‘irresponsible’ ones. But none of this removes the conflicts that exist between profit-making and the demands of social transformation. Here are three reasons why.

The first is simple mathematics: climate change, inequality, violence, racism and sexism are such difficult and deep-rooted problems that no less than 100 per cent of our energies will be needed to confront them. We can’t build a sharing economy unless people are actually prepared to share, nor combat environmental degradation without sacrificing some of our consumption, nor achieve true equality unless men take up a half of all responsibilities in the home. These are extremely demanding challenges that require major personal, social and economic shifts.

But blending social and financial considerations together automatically reduces the priority that’s given to one side or the other, since one can’t have more than 100 per cent of anything at one time. Is 50 per cent good enough to make real progress on such problems? What if social considerations fall even further below that level? In theory it’s possible to give equal weight to the social and the financial, but in practice that’s very difficult to do because of the second of my three reasons: money nearly always wins.

The mangling of altruism with self interest is supposed to achieve the perfect mix of both, but in reality it usually leads to the erosion of social objectives over time. Social enterprises begin to ignore clients who are more difficult to reach (it’s the same problem with charter schools in the USA); public-private partnerships begin to lean further towards commercial interests and priorities as accountability to the public is diluted; impact investors are more patient than the stereotype of Wall Street suits or those in the City, but they still need to make some money, and that limits what they can support. And I don’t know any philanthrocapitalist who’s willing to transform the system that has put them firmly at the top.

The reason this happens isn’t rocket science: money doesn’t only ‘talk’ as the old saying puts it, it jabbers incessantly in your ears until even the socially-conscious begin to listen, especially in conditions of widespread financial insecurity and corporate domination of politics and the media. There may not be a need to sacrifice financial returns in order to achieve a positive social impact, but there is a need to sacrifice social returns in order to make a profit. And that excludes huge areas of important social action that need more time and patience than can be ‘afforded,’ or that prioritize quality over quantity regardless of the cost, or that simply can’t be monetized.

That takes me to reason number three: social change and market mechanisms aren’t easily interchangeable. They are fundamentally different—more like ‘oil and water’ than the ‘perfect Margarita’ that’s presented by advocates of ‘blended value.’ Take, for example, cooperation and competition. These are not points along the same continuum, but opposing principles and values.  It’s the same for individualism and collective action, or intrinsic and instrumental value, or gifts versus investments.

One of most pernicious effects of philanthrocapitalism is to make gifts and gift relationships somehow seem suspect, second-rate or backward. But these relationships—expressed through community and solidarity and social movements—are the basis of all healthy human interaction. Our imaginations have become so colonized by market thinking that we no longer know or care what it means to be fully human in this sense—to give freely with no expectation of return; to show solidarity without the need for a reward; or to hold a conversation that doesn’t degenerate into a transaction or a deal.

The truth of the matter—demonstrated time and again through the history of privatization and the decline of public or civic values—is that markets have little useful role to play in any humanistic endeavor. That includes health, education, politics, civil society and the arts. As Adam Smith realized, markets are good at some things and lousy at others. They’re not designed to transform themselves or to build new systems based on love and compassion. Both are needed, but each in their place. Resisting such incursions is one of the keys to reformulating society around a radically different rationality than self-interest.

Let’s not shy away from the confrontations that reveal where social and financial considerations can fit together and where they should be kept apart. It’s those confrontations that open the door to deeper-rooted changes in people, values and institutions.

The goal of making money is making money. The goal of social change is social change. Sometimes the two meet in the middle, but usually they don’t, and that’s absolutely fine. For a new generation of Samaritans who need a financial return on their compassion, a new slogan may provide some necessary extra motivation. But the rest of us don’t have to settle for self-limiting, self-promoting and self-interested ‘solutions.’ ‘Doing good and doing well’ is no basis for social transformation. It’s time it was put to bed.

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