Welfare Markets? A Thing Of The Near Future…

By Lois Gilhooly, GLOBUS Correspondent

Our public services in the UK have undergone some huge transformative changes over the past century. From being virtually non-existent pre-1945, to the birth of the NHS post-1945 and the complete erasure of the voluntary and private sector. But, by the 1980’s, things began to change; institutions in the public sector starting to come under fire for prioritising growth of their own budgets, responsibilities, status and job security, (Finn, 2019) and soon these institutions were viewed as stagnant monopolies representing poor value for money, which were wholly insufficient in providing for public needs. So, ‘third way’ policies followed, which set state withdrawal as standard and reintroduced privatisation into our public services – for better, or for worse.  

State withdrawal continued throughout the end of the 20th and into the 21st, opening up debate and putting the effectiveness of our public services at the heart of British politics – for example, the NHS came under huge scrutiny in the past 2019 election due to the strain the service is under. Unsurprisingly, many people have been left feeling disillusioned, which begs the question – have those who wield power become so out of touch that policy is no longer effective in addressing the needs of a population? If so, is it time for a change in another direction?  

A possible solution to this dilemma could stem from the idea of ‘Philanthropic-Capitalism’ and ‘Corporate Philanthropy’ two concepts which ‘involve the idea that capitalism and the private business model provide the solution to a whole range of societal and global problems’ (Ephemerajournal.org, 2019). Many argue that these revolutionary ideas have the theoretical potential to remedy the significant drop in the effectiveness, quality and amount of welfare available to people, one person being Bill Gates, who has stated that ‘we need a more creative capitalism… so that more companies can benefit from doing work that makes people better off.’ (Gates 2008).  

The thinking behind this new ‘creative capitalism’ is that business is organised rationally and pragmatically, which is in contrast to current political and private institutions. For example, within corporate philanthropy lies the radical idea that traditional politics should be dismissed, due to the fact that they are often unresponsive to social change, or in business terms, consumer demand – in short, this business-like way of thinking finds needs and satisfies. This may be an appealing concept for the British public with their rising demands of transparency and ethics in their services – in 2015, the UK reached 8 Billion in terms of ethical spending (Raconteur, 2019). State withdrawal and the perceived gaps it leaves behind might mean that for many, there is a substantial and growing gap in the market for a philanthropic based welfare market. 

The Economist has its own spin on this concept, with the idea of leverage (Economist.com, 2019). Within their article they state that it well known that despite the assets of corporate philanthropy, they are currently dwarfed by the staus quo of state welfare. Therefore, in order to be effective, they must focus of the areas unaddressed by the state – and many would argue this is an area that is only getting larger.   

A legacy of ineffective philanthropy and charity sector various scandals may stand in the way of corporate philanthropy ever taking off. But, clever marketisation of philanthropy could be a solution.    

Already companies promoting corporate philanthropy are becoming successful through reflecting the needs of the public. A clear example of this would be Elon Musk’s involvement with the Flint water crisis (Barrabi, 2019). When the state tested the water levels for lead after the contamination of the water, they deemed it safe. The public disagreed. Enter Musk, who donated 480,000 dollars to pay for an ultraviolet flirtation system for the city and philanthropy delivered where the state could not.  Organisations even exist to encourage more success stories like this; the CEP (Centre for Effective Philanthropy), a non-profit organisation works to develop data to help philanthropists perform more successfully and thus improve their impact (The Center for Effective Philanthropy, 2019). This institution helps maximise the social returns of philanthro-corporations, and success stories such as Musk’s involvement in Flint could become commonplace in the UK.

There is a simple reason why ‘creative capitalism’ seems to be doing a more effective job than the state. Politics. The state is restrained by voters, terms and funds. Policy is often short term in order to win elections, and the budget is not a bottomless bag of money. Philanthro-corporations are conversely not bound by voters and have the financial freedom to take risks to find new solutions, or risk technology that might not work.   

Therefore, the benefits of this new emerging system of private, philanthropic sector dominance in the philanthropic business seems to hold some promise. The UK’s welfare system has always been evolving since its inception, and with the rise of anti-bureaucratic sentiment and the ongoing pattern of state withdrawal from public services, it doesn’t seem implausible that radical changes could be coming for the UK welfare sector. Will philanthro-capitalism to be the next chapter in the UK’s public service story? Only time will tell. 

References:  

Economist.com. (2019). [online] Available at: http://www.economist.com/sites/default/files/special-reports-pdfs/5517588.pdf [Accessed 30 Dec. 2019]. 

Barrabi, T. (2019). Elon Musk donates $480K to help solve Flint water crisis. [online] Fox Business. Available at: https://www.foxbusiness.com/business-leaders/elon-musk-donates-480k-to-help-solve-flint-water-crisis [Accessed 30 Dec. 2019]. 

Raconteur. (2019). Ethical commerce is in demand and on the rise – Raconteur. [online] Available at: https://www.raconteur.net/retail/ethical-commerce-is-in-demand-and-on-the-rise [Accessed 30 Dec. 2019]. 

The Center for Effective Philanthropy. (2019). Mission, Vision, and Values – The Center for Effective Philanthropy. [online] Available at: https://cep.org/about/mission-vision-values/ [Accessed 30 Dec. 2019]. 

The Aspen Institute. (2019). Our Mission – The Aspen Institute. [online] Available at: https://www.aspeninstitute.org/our-mission/ [Accessed 30 Dec. 2019]. 

Ephemerajournal.org. (2019). Pro Bono? On philanthrocapitalism as ideological answer to inequality | ephemera. [online] Available at: http://www.ephemerajournal.org/contribution/pro-bono-philanthrocapitalism-ideological-answer-inequality [Accessed 30 Dec. 2019]. 

Finn, D. (2019). [online] Researchportal.port.ac.uk. Available at: https://researchportal.port.ac.uk/portal/files/32192/7_USS_DF_Chapter_ver_2_March_2008.pdf [Accessed 31 Dec. 2019].

Image by Tbel Abuseridze via Unsplash

1 comment

  1. You are right to show how philanthropy is grpowing in importance. Who can be critical or against philanthropy-right? However, is it as neutral, benign and original as some of its supporters suggest? For an alternative view look at Edwards, M. (2008) Just another emperor? The myths and realities of philanthrocapitalism. London: Demos.

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