Kicking off the 20th annual Social Enterprise Conference at Harvard, Anand Giridharadas was interviewed by Jason Furman, who now is a Professor of Practice at Harvard University’s John F. Kennedy School of Government. Furman previously chaired the Council of Economic Advisers during the last three-and-a-half years of Barack Obama’s presidency.
Furman began by asking why Giridharadas wrote his recent book, Winners Take All. Giridharadas, 37, said he was driven to write by his irritation at “watching my generation, many people, succumb to what felt like a fraudulent story.” He noted that he saw too many in his generation “getting derailed in their idealism.” The false story implies that “you can change the world by adding ‘impact’ to the front of whatever word that you are doing…You can change the world by taking money that people like the Sacklers made…and giving it to arts museums. Someone who lost a loved one to the opioid crisis may at least see a Rembrandt one day.”
At its core, his book is not about wealth or the economy or even the accumulation of wealth at the top, although it certainly covers those themes. “This is a book about culture,” Giridharadas insists, and it is “about how a cultural story was sold to a great many young people.”
Giridharadas hopes to displace that culture by reclaiming an older tradition, one that is about “movement, politics, policy and law. And in ways that don’t necessarily please and flatter power.”
According to the book, the dominant culture is that you “make as much money as you can in whatever way you can—preferably pay as little as possible and pay as little taxes as possible.” The result is that the wealthy have more wealth in their bank accounts, and the government has less.
Giridharadas focuses his attention on the rise of billionaire philanthropy, or what is sometimes called the “megadonor.” Some megadonors are easy to critique: there are people like the Sacklers who make money by causing a social problem. But even for those like Bill Gates, who earned their billions making useful, rather than socially destructive, products—there is still, Giridharadas observes, “a democratic problem.”
The most obvious way to see this is to look at what megadonors do not fund. For example, one of the most useful interventions that could be made to increase economic mobility would be to stop financing education based on property-tax values, a system that reinforces wealth and privilege because wealthy schools end up with more resources than poor ones. “There are lawyers who aim to end property tax-based education,” Giridharadas noted, but “I’ve never come across a plutocrat who funds those efforts.”
Or take tax evasion. “There are trillions of dollars off shore,” Giridharadas pointed out. “A lot of it is tax avoidance, [but] I don’t know a lot of plutocrats who ask: ‘why don’t we spend a billion to rein that in?’” He contended that reining in offshore assets “might get us a trillion,” which he quipped would be a “pretty good ROI [return on investment].”
“Power, justice, rights,” Giridharadas remarked, “all of the old words are missing. It is very difficult for those who benefit to dismantle those parts of the status quo that work for those people.”
One question from Furman asked Giridharadas to assess whether, even considering these limitations, it was better for plutocrats to donate than to not donate. Giridharadas wasn’t so certain. He observed that philanthropy helps the rich get away with bad behavior much longer than if they didn’t donate.
“It is reasonable to suggest that if Mark Zuckerberg didn’t have the glow of philanthropy…if we saw him the way we see a chemical industry executive, or a person who makes wheelchairs, or any other people who makes some useful thing, I think his opportunity to damage democracy would have been reduced,” he said. President Obama would never be seen on the same stage as a chemical industry executive, but Obama “would do events with Mark Zuckerberg. Mark Zuckerberg got a free pass. And did more damage.” Giridharadas concluded that if Zuckerberg “had bought a yacht” rather than donate to charity, “I actually think we would be better off.”
The same is true, Giridharadas contended, with the Sacklers: “If they hadn’t spent 20 years buying up museum wings, it is a reasonable probability that the government and journalists would have come after them faster,” and thousands might have lived.
Giridharadas added that he is not saying that every large donation is bad; it’s just complicated, and we have to think about it.
Another cost of megadonors is that they push structural change issues off the table: “Deeper things like corporate law, whether a company should maximize profit or by law have to consider the ‘commons,’ those issues disappear from the public square. And that is “the heart of the problem. There is an expectation that if I do this private do-good, I want it to come with a reduction in public scrutiny and less taxes,” he said.
David Rubenstein, a Democrat who works for the Carlyle Group, served as another example. When Washington, D.C. was hit by an earthquake in 2011, Rubenstein donated $7.5 million toward the $15 million it cost to restore the Washington Monument. The public was told that private folks had to pick up the tab because “the government doesn’t have the resources anymore.” But David Rubenstein, Giridharadas pointed out, is one of the reasons why the government doesn’t have those resources. The carried interest loophole alone—which allows hedge fund owners to pay lower tax rates less than their secretaries, as Warren Buffett famously once put it—costs the federal government $18 billion a year, enough to repair the Washington monument 1,200 times a year.
There are, Giridharadas emphasizes, “more people who are fighting on two sides of the war than we realize.”
On trade, he recalled the irony that he took Economics 101 at the University of Michigan, in a place where “if you drove seven minutes in any direction, it was very obvious that the textbook was missing a pretty big piece of reality.” The story we are told is that what is good for the winners is good for all. Likening free trade rhetoric to gaslighting, Giridharadas said, “That was the story on trade. You’re not seeing what you’re seeing. It may seem to you that no one in your community works anymore. But everybody gains from trade in the long run.”
But of course, “People’s lives were really distressed. They were not transitionally distressed. Communities were out of luck forever.”
The discourses “essentially ignored 40 years of red flags, until we got an orange dictator. Part of what I want to urge people to do is reclaim a heritage of changing the world,” he said, a world marked by “regular people acting through movements and policy…and not have change be something that is thrown down from the top of the mountain.”
Furman then opened up questions to the audience. Giridharadas was asked his opinion on basic income. He expressed skepticism, largely because he sees that many of the folks who are supporting basic income are doing so as a way of giving tech titans free reign to create a world of mass unemployment, under the guise that “artificial intelligence made me do it.”
One thing that gives me concern about it, one of its premises is accepting as a foregone conclusion that life is not going to be good forever and treating that as a given. And, therefore, we are going to have pay a very large number of people—bribing them not to revolt. I don’t think that should be a foregone conclusion. One of the lines of rhetoric that is dominant in Market World is to try to treat social choices as inevitable products of forces. These are not inevitable products of forces. We should make those choices. We should make better choices.
Responding to a question about how to change the narrative about the economy, Giridharadas observed that many of the problems he identifies stem from the dominant interpretation of corporate law, that corporations should maximize shareholder value. He explained,
Corporations are a legal fiction with tremendous privileges, starting with limited liability which we give people. We are giving people a legal structure that we built. We created courts to protect that, as well as an SEC [Securities and Exchange Commission] and a patent office to protect that. We did all of that. We can set the price for the privilege of using that.
One change Giridharadas explicitly endorsed was a proposal by Senator Elizabeth Warren (D-MA) that “if you happen to make it to a certain size, you have to have labor and environmental reps on the board.”
The last audience question concerned the presidential aspirations of former Starbucks CEO Howard Schulz. Paraphrasing the Russian novelist Leo Tolstoy, Giridharadas quipped, “Every unhappy plutocrat is unhappy in his own way.” He noted that within 24 hours of floating the idea of his campaign, Schultz “began discrediting every idea that might cost him money. The mask was revealed. He could only be himself.” Schultz was “unable to sequester his enormous vested interest in there being the kind of change that doesn’t affect him too much. He was unable to lock that up and think about what is good for the country.”
“Plutocrats are going to plute,” Giridharadas noted, “and he pluted…It is our job, as the demos, to democracy.”