This is a note my brother wrote and I found it really interesting so I'm stealing it:
I understand the logic behind Free Market Ideology. Although I am far from being an apologist for capitalism, it makes sense to me that business should prosper in a competitive environment – striving as it does to produce goods/services of low cost and high quality – and that the consumer, acting as judge in deciding upon which goods/services to spend his/her money, benefits as a direct consequence of this. The profit-motive, in modern society, is what drives organizations to improve efficiency, increase quality and drive down costs, and its effectiveness in doing so results in better quality of life and more freedom of choice.
I do not, however, accept the premise that all human activity is and should be motivated by profit, especially given that the profit-motive has a tendency to degenerate into greed. Even the most ardent capitalists are willing to make certain exceptions in their quest for a Free Market. How, for example, can healthcare be reconciled with this model? No cost-reducing measures should ever affect the quality of healthcare, nor should those unable to pay the maximum (in insurance premiums or tax) ever be subjected to anything less than their more wealthy counterparts.
In the pre-Obama era in the United States, people who had paid health insurance premiums, consistently and over a long period of time, were victim to a series of legal ‘tricks’ designed by health-insurance companies to minimize their costs and increase their profits (i.e. those refused coverage on account of ‘pre-existing conditions’). The health of our fellow human beings was at risk because of Free Market Ideology.
And to be frank, I think there are few among us who would deny that, in such cases, human beings are and should be motivated by ideals other than self-improvement. Certain universal services are funded by high-earning taxpayers, not because it is in their interest but because their culture and the society in which they live make certain moral demands of them which, even if they want to, they cannot ignore.
I am not writing to argue in favour of a set of universal services; this has been done already by people far more competent than I am. I am looking to increase the profile of capitalist abuse in another area entirely unsuited to Free Market Ideology: charity. More than anything else, people’s willingness to donate money to those less fortunate than they are is evidence that compassion and empathy, among others, are human characteristics that fly in the face of self-interest, and are therefore anomalies in the capitalist Free Market model.
At this point, I must draw attention to one caveat. Those who believe that charitable donors are paying for a ‘service’ that alleviates their conscience can stop reading here. The assumption has its own internal logic, but it could only be promoted by a cold-hearted cynic and the type of person for whom I have no time.
Those, on the other hand, who believe that the vast majority of the world’s population have a significant selfless streak within them must agree that our charitable instincts are admirable, and must be preserved and protected. These are the traits that make us human – these are the feelings that make life worth living – these are the ideals to which we would like our children to aspire. They are and have always been in direct conflict with the self-seeking forces of capitalist enterprise. Do I keep £10 to improve my life even further, or do I donate it to someone who needs it more than I do?
So let us separate charity and NGO work, once and for all, from the capitalist machine. The personal generosity of one individual should never translate into another’s extreme wealth. Nobody should be allowed to take advantage – as a capitalist would, for personal gain – of the charitable instincts of the human population. Those instincts should be harnessed only and entirely for the sake of the poor, the vulnerable, the sick, the disadvantaged and those who genuinely need help.
Take (RED), for example. (RED) is a brand which is marketed to corporations including Apple, Armani, Gap, Converse, Dell, Hallmark, Microsoft, American Express, and Starbucks, as a means by which they can make themselves even more wealthy than they already are. When the (RED) brand is attached to a product, it makes the product more desirable and so increases demand for that product. This is achieved by publicizing the fact that 50% of the profits for each product sold will be donated to charity.
So, in one possible scenario, Gap pays a sizeable fee to (RED), whose shareholders and employees consequently become wealthier. A consumer buys a (RED) product from Gap for £120 which he/she would not otherwise have bought, motivated mainly by a sincere wish to improve the livelihoods of those suffering from HIV/AIDS in Africa. The product cost £50 to produce, so Gap find themselves £35 better off and – as a spin-off of this transaction – £35 is donated to The Global Fund to Fight Aids, Tuberculosis and Malaria.
It is true that The Global Fund to Fight Aids, Tuberculosis and Malaria is enabled, through this process, to do incredible work for those affected by disease in disadvantaged parts of the world. It is true, also, that this is a direct result of the charitable instincts of the consumer who bought the GAP product in the first place. Is it really so different from a direct donation?
Under the circumstances, it is, because the shareholders and employees of both Gap and (RED) have increased their personal wealth in this transaction, and they have done so by abusing the charitable instincts of the consumer.
Let us, for the sake of argument, consider an alternative scenario, where the consumer spends £55 on a non-(RED) equivalent product at another store and donates £35 directly to The Global Fund to Fight Aids, Tuberculosis and Malaria. In this scenario, the NGO has received just as much as it would have done under the (RED) scheme, but the consumer has saved £30, some of which may subsequently be donated to charity.
Gap is a company that makes profits from commercial activities, and in the extent to which it is able to do so fairly, by producing quality products at reasonable costs, it is welcome to all the profits it receives. It should not, however, be receiving funds from a consumer whose priorities, with regard to clothing, did not necessarily lie in the purchase of a Gap product. If it does so, it is essentially using poverty and disease as a marketing tool. The consumer has no idea what percentage of his money will finally be directed to the charitable cause. There is no transparency.
Another brief example, which makes my blood boil, is that of NGO employees in developing countries. I worked for an NGO in Africa that was funded by the U.S. taxpayer and essentially functioned as a consultancy firm: providing advisory services to rural entrepreneurs for free. The model was a good one, but the allocation of charitable donations was appalling.
The company’s consultants were among the most educated, entrepreneurial and successful individuals in the country in question, and some of them were paid six-figure sums, annually, in U.S. dollars. They were not allowed to involve themselves in business directly, as this would have been interpreted as a conflict of interests. Instead, they became ‘consultants’, advising people less capable than they were, to do things they would have been more qualified to do themselves.
It is no secret that a career in the NGO sector is considered by many in the developing world, especially Africa, as unparalleled insofar as salaries and career development are concerned. It is also acknowledged by many specialists that these NGOs compete unfairly with the private sector by offering phenomenal salaries drawn from the comparatively boundless resources of the developed world, to the detriment of young businesses and entrepreneurial initiatives in the developing world.
Not only is there a ‘brain-drain’ in the relevant countries – whereby talented individuals are taken out of the supposedly ‘free’ job market – but talent is also harnessed for ends that are not necessarily compatible with the business interests of the economy at large. By ill-advisedly hauling the profit-motive – a private-sector tool – into the NGO sector, business suffers a brain-drain and is also subject to increased interference from entities that are ideologically motivated, as all NGOs are.
In short, if an individual wants to work for an organization that owes its existence to the selflessness of charitable donors, he/she should align his/her own objectives accordingly. Money and individual gain should not be motives. Salaries should be sufficiently generous to allow that individual to live a dignified life, free of the constraints of poverty, but not excessive.
On the other hand, if the individual is motivated by self-interest and the prospect of wealth, prosperity, luxury, social status and the like, he/she should use his/her ambitions to promote business and entrepreneurialism in his/her country. He/she will be doing as much, if not more, for the economic development of poor nations as any well-intentioned NGO.
I believe that it is possible to extrapolate, from these examples, that seeking to improve one’s life, beyond a basic and dignified standard of living, by making profits directly or indirectly derived from charity, is to take unfair advantage of human generosity and/or human misery. There is a relationship between a donor and a recipient of charity that cannot be defined within the confines of a Free Market Ideology, or even of capitalism in general. Profit-making individuals and corporations should not make incursions on that relationship but rather, we should all foster its purity and attempt to make it as streamlined and efficient as possible.
Free Market Ideology is a useful tool, but it is not all-encompassing and it is not perfect. Charity is one area to which it should not stray
I'm also currently listening to Waterloo Sunset by the Kinks
