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How Billionaires Use Non-Profits to Bypass Governments and Force Their Agendas on Humanity
As wealth becomes concentrated in fewer hands, so does political and social power via foundations and non-profits.

As wealth becomes concentrated in fewer and fewer hands, the billionaire class is increasingly turning to foundations and non-profits to enact the change they would like to see in the world. Amid the rise of philanthrocapitalism, growing numbers of critics are raising serious questions about whether this outsized influence is doing more harm than good.

In the January issue of the New York Review of Books, veteran journalist Michael Massing noted that, in the past 15 years alone, “the number of foundations with a billion dollars or more in assets has doubled, to more than eighty.” The philanthropic sector in the United States is far more significant than in Europe, fueled in part by generous tax write-offs, which the U.S. public subsidizes to the tune of $40 billion a year.

As Massing observes, billionaires are not just handing over their money, they have ideas about how it should be used, and their vision often aligns with their own economic interests. For this reason, the philanthropy industry deserves rigorous scrutiny, not a free pass because it is in the service of good.

Massing’s argument followed a study released in January by the watchdog organization Global Policy Forum, which found that philanthropic foundations are so powerful they are allowing wealthy individuals to bypass governments and international bodies like the United Nations in pursuit of their own agendas. What’s more, this outsized influence is concentrated in the United States, where 19 out of the top 27 largest foundations are based. These 27 foundations together possess $360 billion, write authors Jens Martens and Karolin Seitz.

Such dramatic wealth accumulation has disturbing implications. "What is the impact of framing the problems and defining development solutions by applying the business logic of profit-making institutions to philanthropic activities, for instance by results-based management or the focus on technological quick-win solutions in the sectors of health and agriculture?" the report asks.

These questions are not new, as social movements have long raised the alarm about the global impact of the ever-expanding philanthropy sector. In 2010, the international peasant movement La Via Campesina blasted the Bill and Melinda Gates Foundation’s acquisition of Monsanto shares as proof that its role in privatizing the global food supply and exporting big agribusiness, from Africa to North America, should be viewed through a commercial rather than humanitarian lens.

“It is really shocking for the peasant organizations and social movements in Haiti to learn about the decision of the [Gates] Foundation to buy Monsanto shares while it is giving money for agricultural projects in Haiti that promote the company’s seed and agrochemicals,” said Chavannes Jean-Baptiste of the Haitian Peasant Movement of Papaye and Caribbean coordinator of La Via Campesina at the time. “The peasant organizations in Haiti want to denounce this policy which is against the interests of 80 percent of the Haitian population, and is against peasant agriculture—the base of Haiti’s food production.”

The Gates Foundation more recently fell under scrutiny from the advocacy organization Global Justice Now, which released a report in January raising concerns about the institution’s track record on education, food and health care policies.

“The Gates Foundation has rapidly become the most influential actor in the world of global health and agricultural policies, but there’s no oversight or accountability in how that influence is managed,” said Polly Jones of Global Justice Now. “This concentration of power and influence is even more problematic when you consider that the philanthropic vision of the Gates Foundation seems to be largely based on the values of corporate America. The foundation is relentlessly promoting big business-based initiatives such as industrial agriculture, private health care and education. But these are all potentially exacerbating the problems of poverty and lack of access to basic resources that the foundation is supposed to be alleviating.”

Facebook CEO Mark Zuckerberg and his wife, Priscilla Chan, raised eyebrows in December when they announced they would give away 99 percent of their wealth. As it turned out, this was not a giveaway at all, but a shifting of funds into their own limited liability company (LLC). Just weeks later, Zuckerberg lashed out at Indian media justice advocates who raised concerns about his company’s efforts to undermine net neutrality protections in their country.

Like many others, Massing is calling for greater transparency, not only for foundations but for think tanks, Hollywood, Silicon Valley and universities. Pointing to the website Inside Philanthropy, whose stated purpose is to “pull back the curtain on one of the most powerful and dynamic forces shaping society,” Massing argues that far greater and better-resourced scrutiny is needed. “There remains the question of how to pay for all this,” writes Massing, posing: “Is there perhaps a consortium of donors out there willing to fund an operation that would part the curtains on its own world?”

But some argue that we already have all the information we need to be concerned. In December, Vandana Shiva, an ecofeminist and activist, wrote in response to Zuckerberg’s move in India that a “collective corporate assault is underway globally. Having lined up all their ducks, veterans of corporate America such as Bill Gates are being joined by the next wave of philanthro-corporate Imperialists, including Mark Zuckerberg.”

“It is an enclosure of the commons,” she continued, “which are ‘commons’ because they guarantee access to the commoner, whether it be seed, water, information or internet.”

How Billionaires Use Non-Profits to Bypass Governments and Force Their Agendas on Humanity

Police say they were 'authorized by McDonald's' to arrest protesters, suit claims
Fight for $15 chapter in Memphis alleges that officers engaged in surveillance and intimidation of fast-food worker organization

Police claimed they had “authorization from the president of McDonald’s” to arrest protesting fast food workers, according to a civil rights lawsuit filed on Wednesday against the city of Memphis, Tennessee.

The suit alleges that local police engaged in a “widespread and illegal campaign of surveillance and intimidation” against a local chapter of the Fight for $15 fast-food worker organization as it campaigned for an increase in the minimum wage and union rights for fast food workers.

Officers followed organizers home after meetings, ordered workers not to sign petitions and blacklisted organizers from city hall, according to the suit. They claimed to have been authorized by McDonald’s, the world’s largest fast food chain, and in one incident a McDonald’s franchisee joined police in tailing protesters.

The suit alleges that a campaign of harassment began after Memphis workers participated in a nationwide day of protest on 4 September 2014. Since then, police officers have repeatedly threatened workers with arrest during protests, at one point telling them they had “authorization from the president of McDonald’s to make arrests”. On “multiple occasions” officers “seemed to take direction from McDonald’s”, the complaint charges.

Last November, police officers stepped behind the counter of a fast-food restaurant to prevent workers from signing petitions calling for better working conditions, the protesters’ lawyers claim. They also allege that officers have enforced local permit laws on the predominantly black workers in the Fight for $15, while allowing protests by mostly white crowds to continue unabated.

The suit, brought against the city, Mayor James Strickland and the police director, Michael Rallings, alleges that the police have violated a 1978 consent decree that banned political surveillance following revelations the department had spied on civil rights activists, war protesters and other “radicals” for years.

McDonald’s was not immediately available for comment. The Memphis mayor’s office declined to comment on “pending litigation”.

The suit, filed in US district court for the western district Tennessee by the Fight for $15 mid-south organizing committee, alleges the Memphis police department [MPD] engaged in “improper and illegal surveillance tactics aimed at having a chilling effect on the freedom of speech and the right to assemble or associate”.

In February, Fight for $15 held a “teach-in” about Andy Puzder, the fast-food CEO who was, at the time, Donald Trump’s pick to be labor secretary.

According to the complaint, four unmarked cars and a patrol car showed up outside the teach-in and followed an organizer at the meeting’s conclusion. When an organizer asked one of the officers why he was being followed, the officer replied: “We’re just trying to make sure everyone stays safe.”

Jerry Martin, an attorney for the mid-south organizing committee, said: “The MPD is engaging in an intentional and illegal campaign to intimidate workers in an effort to prevent them from exercising their constitutional right to speak out ... We’ve read about such behavior in history books, but unfortunately, in Memphis, intimidation and harassment of protesters is not just a thing of the past.”

Ashley Cathey, a Church’s Chicken worker and member of the Fight for $15 national organizing committee, said: “They’re trying to stop us from speaking out, but even though it’s riskier, we know we have a right to protest and we’re not going to be intimidated ... Our Fight for $15 is changing the country and it’s the Memphis police department that’s going to have to change along with it.”

Police say they were 'authorized by McDonald's' to arrest protesters, suit claims

Automation Could Cause America to Lose 35% of its Tax Base in the Next 20 Years

Having a stable tax base is very important for any nation’s well-being but especially important when your budget is constantly running in the red.


The United States is in danger of losing more than one-third of its tax base thanks to increasing automation in both manufacturing and service sectors. Self-driving vehicles, self-serve kiosks, increases in manufacturing and energy production efficiency, and declining retail numbers all contribute to what is likely going to be a significant problem in the coming decades.

It’s not that automation itself is a bad thing, within our lifetimes we will probably see the majority of our day-to-day activities be automated. However, the transition to an economy based on robots more than people is going to affect those who can ill-afford to lose their jobs the most.

20 Million

Conservative estimates put future job losses at 20 million with some estimates going up to as high as 70 million. When someone loses their job, they stop paying taxes, while their employers stop paying payroll and other types of taxes at the same time. Compounding the issue is the fact that many people who lose their jobs start to depend on the economic support of the government, along with their families.

Take a taxi driver in a medium-sized city for example: They may gross about $65,000/year, of which around $15,000 would be paid in taxes. Their employer is also likely paying around $10,000 in taxes related specifically to that one employee. When that person loses their job, the government loses out on $25,000 in taxes, not even counting the positive economic impact coming from that employee spending their income. Now, that former employee has to request government assistance since every taxi company is moving towards an automated model. $1500/month just for that individual and their family to survive equals a $43,000 swing the wrong way in government revenues. The extra profit generated by the taxi company is taxed at a far lower rate and may very well end up sitting in an investment account, not doing much to foster increased economic activity.

Multiply those numbers by 20-70 million and it’s easy to see we have a real problem on our hands. Higher taxes on those making less than $250,000/year from all sources would probably compound the problem. Higher corporate and capital gains tax rates would probably alleviate the problem, but while those types of tax increases are supported by a majority of the population, for some reason lawmakers don’t seem to agree.

A growing population and dwindling jobs will result in much higher levels of unemployment in working-age adults than we see now. To top it off, the number of people on either side of the working-age spectrum (under-18, over-67) are growing substantially. Something has to give at some point, whether that means the advent of a basic income system or substantial corporate/capital taxes, the transitional period we are currently in cannot last forever.

Automation Could Cause America to Lose 35% of its Tax Base in the Next 20 Years
amw 5th-Mar-2017 09:03 am (UTC)
These are three really great articles this time around. I don't know which one I want to comment on. They are all discussing big issues that come up in my industry, which is tech. Let's take the first one.

I have been getting more and more uncomfortable about how tech workers are being paid too much (see my personal journal). What drives me nuts is that these guys wait until they're bazillionaires, and then go, oh yeah, I AM earning too much, guess I better give some of it away. And despite the doom and gloom of the article, they do save a lot of lives. Probably hundreds of thousands of lives. A handful of bazillionaires trying to get mosquito nets and vaccinations to the poorest parts of the world is better than no-one trying do it.

But you gotta ask yourself why they are bazillionaires in the first place. Because the fucking government didn't tax these guys enough! When it's possible for individuals to have several orders of magnitude more money than they could ever hope to spend in their lifetime, that's when you realize the system the broken.

First of all it's broken at the inheritance level. Bill Gates was born into a wealthy family, but he earned his billions through cut-throat business tactics and savvy investing. Many of today's billionaires (like the current president) did not even do that. In my opinion inheritance needs to face significantly more tax. It should be 90% or more. If you were born into a rich family, you already have unimaginable privilege. You do not get to inherit millions when your parents die on top of the privilege you already enjoyed all your life.

Second of all it's broken at the investment level. If a company can rocket up the stock market so wildly that a few individuals holding shares can earn more money than they know what to do with, this is a problem. Capital gains need to be taxed progressively and far more significantly. Your $10 share turns into $100 over a year and you want to cash out instead of leaving it in the company? Slice off $80 in tax. You still doubled your money, which is far better than the rate of inflation.

Third of all it's broken at the corporate level. Even if all the money never goes to individual shareholders and is held ostensibly to reinvest in the corporation and its workers (I'll give them the benefit of the doubt), there should still be a sensible limit. If the corporation has $10 revenue this year and it costs $3 in operating expenses, and it has $6 already in its emergency fund, then it gets a buck for R&D and the rest can go to the government, who can make sure less-fortunate people in the community also share in success of their friends and neighbors. And, if the company isn't profitable at all, well that's a problem dealt with by point number two - investors should not be so rich that they can afford to invest in loser companies.

I mean, I am not a macro-economist and I have done precisely zero academic study on this stuff, but just throwing some ideas out there. What terrifies me about America right now is that a party is in power who believes all three of the above taxation points should be scrapped. And lots and lots of middle class Americans agree that they shouldn't be taxed on their inheritance or their investments or their company profits. Because many Americans have this hopeless delusion that one day they, too, will strike it rich. That that's how the system should work. I cannot eyeroll enough.

amw 5th-Mar-2017 09:03 am (UTC)

But, let's put the issue of fixing the American economic system to the side for a second. How do we help the bazillionaires of today to redistribute their wealth to the world's neediest?

The utilitarian would say that the best way to get money to the poor is to literally give money to the poor - see https://www.givedirectly.org/ But GiveDirectly only works because they already have an infrastructure developed. In one small part of one African country. If you want to help the poor in other countries, the infrastructure has to be there first. So what infrastructure should philanthropists focus on? Making sure there is a banking system so that money can travel from a Western businessman directly to a subsistence farmer? Making sure all subsistence farmers have access to a communications network where they can find out about the fact that there is money waiting for them? Creating a delivery or bus service that can reach the remotest parts of the world so raw goods and/or money can get into the hands of subsistence farmers? Do these things even make sense in some cultures?

I think tackling extreme poverty is a much, much more difficult problem than tackling extreme wealth. They are both noble goals, but I think the latter is something far more difficult because you cannot just make one fix for everyone - each culture is different and each region has different challenges. Even if we agree that in a perfect world each country's government should be lifting up its own poor and not relying on international aid agencies to do so, how do we avoid the problem that many governments in poor countries are insanely corrupt? Do you really think that we should go in and try clean house in foreign governments?

So yeah... extreme poverty in the third world... major problem, no easy answers. I can't fault these bazillionaires too much for giving it a shot. And especially not in America, whose government allocates less than 1% of the budget to foreign aid, and one party wants to slash that even further. We should definitely keep an eye on them, though.

Extreme wealth in the first world? Major problem, much easier answers. It's shameful that we haven't solved this yet. It's shameful that so many conservatives don't feel the slightest shred of guilt at supporting policies that exacerbate the problem. And it's appalling to me that the middle class is too selfish to make any real movement on these issues.
butterthetoast 5th-Mar-2017 05:36 pm (UTC)
I despair that we live in a world where 'philanthrocapitalism' is even a concept.
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