Charity or honesty

Two arti­cles in the Dutch news­pa­per Trouw caught my eye this week. The first was titled “Bill Gates and the British tack­le malar­ia with mega-fund”, about the fact that gov­ern­ments do not have enough bud­get for inter­na­tion­al devel­op­ment and are increas­ing­ly look­ing for pri­vate mon­ey. I have noticed that too in my own work; more and more of our projects are fund­ed by the Bill & Melin­da Gates Foun­da­tion. This phe­nom­e­non is called phil­antro­cap­i­tal­ism.

The sec­ond arti­cle was about tax eva­sion in the Euro­pean Union. “If you buy an Ikea wardrobe, you con­tribute to tax eva­sion”, says MEP Paul Tang. Large com­pa­nies such as Apple and Google divert their prof­its to tax havens. The Nether­lands is attrac­tive for large com­pa­nies due to low busi­ness tax­es, accord­ing to this guide.

Tax-Rich

Why is it a prob­lem if com­pa­nies do not pay their tax­es? The Oxfam report An Econ­o­my for the 1% cites tax eva­sion as a major rea­son for the large glob­al inequal­i­ty. Com­pa­nies like Apple increas­ing­ly man­u­fac­ture their prod­ucts in devel­op­ing coun­tries. In this way, they ben­e­fit from the edu­ca­tion and health care in these coun­tries. But they do not con­tribute to it through tax­es. Instead they pay their work­ers slave wages and divert the mon­ey to tax havens.

Almost a third (30%) of rich Africans’ wealth – a total of $500bn – is held off­shore in tax havens. It is esti­mat­ed that this costs African coun­tries $14bn a year in lost tax rev­enues. This is enough mon­ey to pay for health­care that could save the lives of 4 mil­lion chil­dren and employ enough teach­ers to get every African child into school. (Oxfam, 2016)

Hear­ing the first sto­ry about Bill Gates, the read­er might be inclined to think: What a gen­er­ous man; he may be rich but at least he uses his mon­ey for a good cause. First­ly, this gen­eros­i­ty may be less impres­sive than it looks. Gates con­tributes 1 bil­lion dol­lars to this fund, from his net worth of 79 bil­lion. That is com­pa­ra­ble to me giv­ing away 60 euro’s from the 5000 on my bank account.

_MG_6978

But what is more impor­tant is the way in which this all mon­ey end­ed up with these pow­er­ful com­pa­nies. The cur­rent eco­nom­ic sys­tem is geared toward mak­ing the rich even rich­er. The rich­est 62 indi­vid­u­als in the world have now as much mon­ey as the poor­est half of the pop­u­la­tion and this inequal­i­ty is grow­ing rapid­ly. This is what Thomas Piket­ty wrote in his book Cap­i­tal in the Twen­ty-First Cen­tu­ry (I haven’t read it yet). The fact that there are poor peo­ple is no coin­ci­dence; it is a direct result of the neolib­er­al­ism that allowed Gates and his asso­ciates to become rich. And phil­antro­cap­i­tal­ism will not change this sys­tem. Like Jaap Tiel­beke notes in De Groene Ams­ter­dammer:

The wealth of the phil­an­thropists and the injus­tices they fight are both excess­es of the same eco­nom­ic sys­tem. Gates and Zucker­berg will not bite the hand that feeds them: they want to relieve the pover­ty of oth­ers with the same men­tal­i­ty that has made them rich.

The impact of the Bill & Melin­da Gates Foun­da­tion on projects in agri­cul­ture is very not­i­ca­ble. The focus shifts from small­hold­ers to busi­ness, with the assump­tion that improve­ments in the mar­ket will lead to a bet­ter life for farm­ers. Issues of gen­der equal­i­ty and the improv­ing life for the poor­est peo­ple take a back­seat. I think that a demo­c­ra­t­i­cal­ly elect­ed gov­ern­ment is the des­ig­nat­ed insti­tute to invest mon­ey in things like health care, edu­ca­tion and food secu­ri­ty. In that way, the pub­lic inter­est is served, and not the wal­lets and the egos of the priv­i­leged few.

Ref­er­ences