Unless you have been spelunking for several days, you have heard a lot more about Google recently than you ever wanted to know. (Of course, if you want to know even more, I invite you to check out my other blog where I have been writing about Google ever since the filing.) This event has attracted so much commentary because Google has provided so much fodder. Most importantly, the founders wrote a letter — “‘An Owner’s Manual’ for Google’s [Future] Shareholders” — that has struck a chord with many who fancy themselves as part of a “corporate social responsibility” movement. And no line in that letter has attracted more attention than this one: “Don’t Be Evil.”
Oddly, this line is applied to a fairly narrow aspiration — keeping search results untainted by advertising. That is not to say that Google is an ad-free zone, just that the ads are “relevant” and clearly labeled. When most people hear about the “Don’t Be Evil” line, however, I suspect that they think of bigger issues than untainted internet searches. They think about what comes in the next paragraph of the letter:
MAKING THE WORLD A BETTER PLACE
We aspire to make Google an institution that makes the world a better place. With our products, Google connects people and information all around the world for free. We are adding other powerful services such as Gmail that provides an efficient one gigabyte Gmail account for free. By releasing services for free, we hope to help bridge the digital divide. AdWords connects users and advertisers efficiently, helping both. AdSense helps fund a huge variety of online web sites and enables authors who could not otherwise publish. Last year we created Google Grants—a growing program in which hundreds of non-profits addressing issues, including the environment, poverty and human rights, receive free advertising. And now, we are in the process of establishing the Google Foundation. We intend to contribute significant resources to the foundation, including employee time and approximately 1% of Google’s equity and profits in some form. We hope someday this institution may eclipse Google itself in terms of overall world impact by ambitiously applying innovation and significant resources to the largest of the world’s problems.
Commentators have oohed and ahhed over this passage, but I am more jaded. The first part — the part about Google’s products “bridg[ing] the digital divide” — is not distinctive at all. Every corporate manager knows that the corporation benefits when people feel good about using its products and that people feel good about using the products when those products seem to be helping the poor or downtrodden.
The rest of the passage prompts two thoughts. First, every corporation gives substantial sums to charities. Second, the suggestion that Google is doing more of this than other corporations makes me wonder why people think this is a good thing. Presumably it isn’t because Larry Page and Sergey Brin (Google’s founders) are more adept at picking worthy charities than Google’s shareholders. Maybe people like the idea of Google’s money going to charity because they think that more money will flow to charity this way than through private donations? I have never heard anyone articulate this rationale for corporate giving. Then again, I don’t talk to people about this all that much.
When I do speak with someone about this, however, I sense a much different rationale for their support of corporate giving: somehow, this form of giving takes the edge off profit-making. Just as politicians who appear to care about the poor are more appealing than those who do not, so corporations that appear to be about something greater than profits are more appealing than those who are not.
There is another side to all of this. When politicians or corporate executives spend money on their favorite charities, they deprive each of us of the opportunity to use a share of that money in pursuit of our own sense of good. Now, it is possible that many or most of us would use our share for selfish purposes rather than for the benefit of the poor and afflicted, but isn’t it also possible that people would become more generous, more charitable, if given personal responsibility? Isn’t the erosion of community about which we hear so much in recent times at least partly due to the abdication of responsibility by individuals? Google’s founders may be noble and loving and good, but why should they have all the fun?
Yup. Of course, you will probably be sandbagged by those saying that you are just making the same tired argument againts FDR (who may/may not have destroyed individual accountability & community organizations with the corporate welfare state).
Ben & Jerry’s sure makes a big to do about their social responsibility. Of course, apparently they solde out some time ago.
Or…check out the corporate social responsibility report of Talisman Energy of Canada. They have taken 100s of millions of dollars in oil profits out of the Sudan. The cost? Eyes wide open to the fact that the Sudanese government killed its own citizens to clear the land for oil development & uses its share of the oil profits to kill even more non-Muslim Sudanese (i.e. Darfur).
Gordon, two responses, beginning with your second point:
“When politicians or corporate executives spend money on their favorite charities, they deprive each of us of the opportunity to use a share of that money in pursuit of our own sense of good.”
Of course, in cases in which the good pursued by the politician or corporation is identical to, or at least complementary to, the good pursued by the individual, then no opportunity has necessarily been lost; just because a particular vision of the good happens to be a large, collective, even majority vision, doesn’t mean that the individual’s participation in such has been necessarily compromised or circumscribed. (Generally speaking, for example, I don’t see how my desire to support the establishment of an egalitarian school system could be harmed by the government’s stated intention to establish such a system.) That said, you have a point about how large bodies (whether political or private) can mitigate against the formation of what Burke called “the little platoons”–local groups acting independently on behalf of society–by allowing responsibility for such pursuit-of-goods to be displaced. All the more reason to work against “bigness” in the abstract, and maintain, as much as possible, popular access or control over both government and corporations.
“Just as politicians who appear to care about the poor are more appealing than those who do not, so corporations that appear to be about something greater than profits are more appealing than those who are not.”
You seem to be cynical about this. Why? It seems to me to be perfectly obvious and correct. All other things being equal, politicians who care about the poor, or at least appear to care about the poor, are (generally speaking) to be prefered over those who don’t. This is because wanting to alleviate the burdens of poverty is a good thing. Similarly, corporations who express an institutional interest in something besides profit are (again, generally speaking) to be preferred over those that don’t. This is because mere profiteering is a bad (or at least a crude and irresponsible) thing.
Maybe this is naive, but I would like to think that, by making charitable donations, they are establishing their corporate culture. Just as ‘we celebrate diversity’ things are expected to trickle down and be reflected in the average corporate drone’s behavior, my hope would be that the average Googlite (or whatever they call themselves) would absorb the vibes that charitable giving is just what we do around here.
Plus, if they structure it with matching donations for employees, that would help. Our NPR beg-for-money-thon always points out that if you work for certain companies, your employer will match your donation.
I think it’s good to be cautious about this, but it doesn’t seem that different from what lots of companies are doing. I think corporations in control of large chunks of money may sometimes be able to do things individuals can’t, so I think there is an important role for that, and I don’t see that Google is reducing how much *I* can give by giving away some of its money, since I don’t pay them, and they don’t pay me.
Plus, as someone (LaRochefoucauld?) once said, hypocrisy is the tribute that evil pays to good! Even if (and I mean the “if”) Google is hypocritical, or partly so, their nod toward idealism is worth something, if only because they are acknowledging the importance of more than profit, in a public way. It is like an advertisement for idealism, and idealism could use more good advertising!
It’s difficult (and perhaps, I think, somewhat pointless) to extricate sincere, “idealistic” corporate morality from marketing. Isn’t it possible, after all, to pursue a socially magnanimous “corporate culture” for BOTH reasons under discussion here (a genuine sense of corporate responsibility AND a concern for corporate image)? And especially within a culture (that is, among loyal employees and shareholders), isn’t it difficult to draw a line between the two?
Gordon says: “Presumably it isn’t because Larry Page and Sergey Brin (Google’s founders) are more adept at picking worthy charities than Google’s shareholders.” In fact, I think that’s precisely (though not exclusively) what the Google people hope to convey. Modern marketing is much more sophisticated than “Here’s why you want this product.” Take the Mitsubishi commercials, for example. They have great visuals, and they introduce some great new music, with the hope of resonating with potential buyers on a more intimate level: “So, you like this music we found for you? See, we’re LIKE you. We KNOW you. So you should trust us when we say you’ll like THIS CAR, even though we haven’t said anything about its features.” If this kind of relationship is established fully enough, people start going to the Mitsubishi website to aid them in their music purchases. Same with the eye-candy ads for Target.
And the same thing, I think, goes for Google. They’ve created a product that people use so much, for so many different things, that it seems like Google KNOWS us. So I think they do, in fact, hope that the public will think that the resonance people feel with the product suggests a certain trust or shared thinking in making philanthropic choices as well.
I was reading something on corporate branding not too long ago, in which someone said something like this: ITT gives $10 million to charity X, and, because it doesn’t have a particularly resonant “brand,” and has a reputation for being a kind of cold, mechanical organization, people say “They’re just doing it for the PR.” But Apple gives the same amount to the same charity, and because they brand successfully, people see the donation of as further evidence of why Apple is such a great company–because, judging from their marketing, the people that run it seem to like things that I like. The difference here, then, is that regardless of the impetus for the donations (charity, PR, or, more likely, and inextricable combination of the two), one company is better at leveraging it to build brand identity.
Finally, as I posted on BCC a while back, I personally have a problem with placing to much emphasis on what the giver gets from charity, which seems implied by the phrase “…they deprive each of us of the opportunity.” Would it be all that implausible for Page and Brin to be more concerned with the end result of their philanthropic efforts rather than its effect on on “us”? Plus, if I were a Google employee (or shareholder) with philanthropic desires, I’d rather have a teeny bit of my teeny share of company profits go directly to charity, rather than into my pocket to increase my personal giving capacity, because it would be part of a broader and more powerful effort. It builds a sense of community, and shared participation in something larger. And when it comes right down to it, of course, all of this merely orbits around what I think is the most important element: if ITT and Apply both donate $10 million dollars each to charity X, charity X is $20 million dollars better able to help people. Wouldn’t the benificiaries of those funds think it a little ostentatious to be arguing virtue too far beyond that?
“Oddly, this line is applied to a fairly narrow aspiration — keeping search results untainted by advertising…When most people hear about the ‘Don’t Be Evil’ line, however, I suspect that they think of bigger issues than untainted internet searches. ”
I think you’re selling the impact of this severly short. Google’s owners decided from its inception that they had principles they would not put second to profit. Incredibly important, and quite a contrast to the alternative view that profits are a corporation’s highest (if not sole) responsibility — a view that will inevitably lead to the commission of some kind of evil behavior (if not outright crime) because there are so many opportunities to make money by misleading others or cutting corners.
It’s interesting to note that there are other manifestation of principles operating… you may or may not know that Google refuses ads for alcohol or tobacco products. How effective this is could be another argument, since you can still come up with an effective search for online distrubutors using Google, but I think it’s an interesting line: they won’t take money from purveyors those products (something which even a Mormon Senator can’t resist, apparently).
This isn’t to say I think Google comes up squeaky clean. I’ve had a dozen conversations with the founders of the company I currently work for about our grievances with Google. We’re very succesful in our niche, but have had trouble getting up in the search engine rankings, while looking on at competitors who are spamming guestbooks on sites but still appear higher in the rankings. Is Google doing their job well? And there was a Wired article (http://www.wired.com/wired/archive/11.01/google_pr.html ) which took a close look at their influence and the kinds of decisions they have to make back in 2002 — when the PRC decides they want searches for Falun Gong blocked, what do you do? Cooperate and compromise results, or refuse and have the entire resource blocked to people?
So I agree Google’s not unspotted. And I agree that their intent to donate to charitable causes doesn’t set them appart. But I am impressed that they made a simple decision to put their principles before profit, and there’d be a lot less evil in the world if most everybody did the same. The news that one of the world’s new biggest, profitable, and influential companies has tried to make it a part of who they are from the start is absolutely huge.
Oh… I should probably add some kind of supporting reference after the Mormon Senator dig:
http://www.opensecrets.org/diykit/DrunkDriving/Money/senate_alcohol_recipients.htm
There are two Mormon senators on the list: Orrin Hatch (R-UT) and Harry Reid (D-NV).
Ditto everything Julie, Ben, Jeremy, and Weston have said. What I wrote above was a response to Gordon’s broad concern about the conceptual consequences of a corporation taking on a certain amount of “responsibility” for charity; even aside from the fact that I don’t see how such corportate action need necessarily undermine other charitable choices, it should go without saying that, if you’re going to have a world filled with rich and powerful corporations, it’s a wonderful thing for them to have standards in advertising, be committed to good works, and otherwise be good citizens, since there’s a lot such corporations can do (both directly and through the “trickle down” effect on other corporate actiors) that individuals cannot.
I suppose I’m generally persuaded by the comments here. What I find objectionable more than anything is the strong scent of moral superiority. The whole thing seems so immodest and ghastly.
Clarification:
the smell is coming from Google, not the commenters. All apologies.
Adam: is there a way it could be said without the same smell? Or is it that it shouldn’t be said at all?
I can’t help but think it’s essential they put this information in their filings and prospectus and anywhere else they can. It’s essential the potential investors understand this is how they intend to operate — they would need to know they’re buying a company that might forego a revenue source to do what they think is right. As it is many people wonder if there will be trouble down the road about this.
Then there’s the whole question of being a light vs. being self-righteous…
I definitely prefer the scent of moral superiority to the aroma of moral indifference that often hangs in the air of the business world. Perhaps Elder Maxwell’s (?) admonition to individuals could apply to corporations (and I paraphrase): we shouldn’t be more afraid of appearing to be pious than appearing to be wicked.
There may be several reasons why I, as an individual, prefer to have Google (or some other corporation I own stock in) make charitable contributions in my behalf. For example:
(1) Google’s contributions escape corporate taxation, so I can give more that way.
(2) As Jeremy pointed out, Google might be better equipped to investigate possible recipients of gifts, or to follow up to make sure the money is used wisely.
(3) If I give as an individual, much of the money will probably be spent mailing me personal letters asking me to give even more.
Sorry to have been away for most of the day, but the discussion so far has been great. Here are a few responses and thoughts …
Jeremy remarks on the close association of marketing and charity. This is surely right. Most corporate charity can easily be rationalized as marketing, and I really have no qualms about that. I expect corporate officers and directors to market their products and whether they do that by contributing to charities or by purchasing television commercials is a matter of indifference to me.
The debate sparked by Google’s prospectus, however, goes beyond mere marketing. Many people, including some of the commenters here, expect corporations to pursue this or that social goal at the expense of profits. (I assume that marketing is done in service of profits, so it is qualitatively different than the sort of expenditure that interests me.) So what is the problem?
For present purposes, I am not interested in whether charitable giving is good corporate policy, but rather in our reaction to charitable giving by corporations. Why do we think it is a good thing? My sense is that many people like to outsource charity. We outsource it to governments, to corporations, and to Churches. If we can take solace in paying taxes, sacrificing profits, and making fast offerings, then maybe we don’t need to volunteer our time or make an emotional investment in another individual. I don’t mean to point any fingers at people here, except perhaps myself, because I have noticed this tendency. Bottom line: corporate social responsibility feels like cheap charity to me.
Gordon:
I think we might be talking past each other here. You ask “Why do we think [corporate giving] is a good thing?” For the same reason ANY kind of giving is a good thing: simply, because _it helps people in need_. Like I said, it drives me nuts when, in Sunday School discussions, people answer the “why do we serve others” question with all sorts of ancillary answers: “because it blesses US,” “because it gives US an opportunity to grow,” etc. No, no, no, NO. We serve because there are people who need help, and God wants them to get it. Isn’t it a little presumptuous to think that God puts the needy in OUR path because he wants to help US, as if he weren’t just as concerned about putting us in THEIR path because he wants THEM to get the help they need?
Also–and I’m not accusing you of this–but isn’t there a danger that the warm fuzzy one gets from making “an emotional investment in another individual” might in some cases actually be a feeling of self-importance, magnanimity, or even assurance of superiority? And frankly, I don’t think the efforts of Google or anybody else is going to result in a dearth of opporunities to exercise charity. If “outsourcing” results in more efficient use of resources, I’m all for it (couldn’t the “wisdom and order” gospel clause be invoked here?). And if I give through, say, United Way, and giving in this convenient manner makes me disinclined to help the widow next door shovel her walk or drive my blind friend to the store each week, the sin’s on my head, not the United Way’s.
“Corporate social responsibility feels like cheap charity to me.”
But frankly, if it feels like a warm blanket or a full stomach or a safe place to stay to the person benefitting from corporate responsibility, I don’t see how it matters how it “feels” to me or you.
Gordon, good read over at Venturpreneur. ZD is very convincing.
The question of whether or not the “charitable giving” should be mentioned is – yes. Google’s decision to use social conscience to help intro their IPO is pure genius. They have evaluated and indentified their target market as young, saavy, professionally educated, and socially aware investors. In the spirit of marketing – the Google IPO team has placed this in the top tier to get noticed by those looking for a statement of social resposibility. The real key is the article speaking of the formation of the Google Foundation. Most investors are familiar with foundation tax reporting requirements, thus making Google’s choice of a foundation versus corporate giving appear even more fiscally responsible because the foundation books will be open for all to review.
You may not be convinced, but others will be because they won’t dig any further than the first couple of pages of any investor information available. (which we know won’t be available in any form other than media hype until after the IPO). Red herrings give you the legalese and nothing more, as you know.
Gordon, I couldn’t put it better than Jeremy. You may say that you’re primarily interested in “our reaction to charitable giving by corporations,” but to even ask if it is a “good thing” implies that we ought to consider whether or not it might be a “bad thing.” Insofar as the sociological and/or psychological consequences of having large entities involved in charitable giving are concerned, I think that’s a valid and interesting question. But the way you frame your question points it in the direction of “policy”: that is, whether we (and by extention the good folks at Google) are right to endorse corporate giving. To which the obvious answer is, all other things being equal, “yes.” There are people who need help, and a business that uses its profits to help them is better than one which doesn’t.
Gordon: I suspect that to a certain extent your concern about corporate giving comes out of your interest with fiduciary duties. Furthermore, I think that a great deal of the of-course-corporate-giving-is-good-dah attitude that one finds comes from the mistaken perception that managers somehow own a corporation’s assets, and that they are simply being good stewards with their wealth.
It seems to me, however, that if we take the notion of a corporation as a nexus of contracts seriously, that both of these attitudes are mistaken. Google has clearly announced its goals, and those who purchase Google shares do so with the knowledge that some of the corporate profits are being used this way, so it seems to me that they consent and at least partially participate in the giving. Furthermore, provided that securities markets are even moderately efficient, even a person who buys Google looking only at the bottom line is not going to be “surprised” by corporate giving.
A final point about the value of corporate giving: If you are raising money from donations, it requires that you spend money to make money. It is more expensive to get money through lots of little donations than through a couple of big donations. Hence, a corporate donation not only leverages through the tax code, but it also leverages through diminished transaction costs.
Jeremy and Russell,
Two words: opportunity costs. You assume a static world in which corporate giving simply adds to all other giving and where that other giving remains the same, regardless of the level of corporate giving. If that were the world that we lived in, I might favor corporate giving, but frankly, I haven’t thought about that much since our world is dynamic, not static.
This is probably naive, and I can imagine you rolling your eyeballs, but I imagine a world in which less government and corporate “charity” results in more private action and better communities. You are both concerned about outcomes, so I will talk about outcomes: when government and corporate “charity” displaces personal charity, we have more poor.
You (at least Russell … not sure about Jeremy) say that you are communitarians, but can you honestly say that the sense of community in the U.S. is stronger today than it was before government (mainly) and corporations (to a lesser extent) took over the charity business? Admittedly, causation is impossibly noisy here, so none of us can make definitive claims, but I believe that the erosion of community is directly related to the creation of public welfare institutions.
Those who oversaw this development had good motives, but they labored under the utopian fallacy that they could eradicate poverty. To be sure, we seem to live in a world in which a smaller percentage of our population (US) lives at subsistance level than 100 years ago, but I believe that much of this improvement is a natural outgrowth of advances in medical technology and the increased industrialization of the country and would have resulted without the New Deal, the Great Society, etc.
Finally, I will simply disagree with Jeremy’s emphasis on outcomes alone, though I admire the sentiment. Life does not make sense to me if outcomes are the only metric. I can only make sense of this world if the process for achieving outcomes matters. For the best talk ever on this topic, see Jeffrey R. Holland, The Inconvenient Messiah (given while he was BYU’s President).
Nate, I have become less of a contractarian with the passage of time, but there is some resonance to the argument in this context. I am not really worried about fiduciary duties since these transactions are not self-serving in the sense required to trigger a duty of loyalty claim. We would be in business judgment rule land (i.e., no liability for officers here).
“I believe that the erosion of community is directly related to the creation of public welfare institutions.”
I believe that the erosion of community is directly related to the propogation of a growth-centered ethic which undermined the formal and informal restrictions which once limited social and economic choices and thereby enriched and deepened communities’ ties to the remaining ones. In other words, to be indefensibly simplistic about it, modern capitalism. So I guess we’re pretty far apart on this point.
I don’t see BYU refusing to accept the 122k from ExxonMobile as a 3:1 match from their employees to BYU.
However, that doesn’t really prove much.
Russell: Are you and Gordon really so far apart. Isn’t the rise of the modern welfare state part and parcel to the rise of modern capitalism. Indeed, it is modern capitalism that led to the rising expecations about material well being that gave rise to the modern welfare state. Without capitalism-inflated expecations would everyone be contented with their impoverished (but deep) communities and the limited choices that they offered?
Oops: Meant to write “WOULDN’T everyone be contented yadda yadda yadda”
Russell, Believe it or not, I have a lot of sympathy for your view, and I think Nate is right about the linkage. My point is that the modern welfare state was not the only plausible response to modern capitalism, and I don’t think that it has been a very effective response.
“My point is that the modern welfare state was not the only plausible response to modern capitalism…”
True. What is your preferred response? (I assume, from the way you respond, that you recognize the need for one.)
Russell, One of the things I have been struggling with during this conversation is the fact that the topic is SO BIG. Then again, I started it, so I feel an obligation to follow through. But I hope you will understand if this response is pretty cursory.
As you undoubtedly know, the late 1800s and early 1900s were a time of great social upheaval in the United States. In addition to creating the institutions of modern capitalism (including the modern corporation), people created institutions of charity. Many of these were connected to churches, but others were not. The assistance was local and motivated by a desire to provide temporary assistance during transition periods. My impression is that the charities did not engage in vocational training per se, but did require work in exchange for assistance.
What prompted the creation of the modern welfare state? Two important motivations: (1) Existing charities were not reaching everyone. (Extended families were still important, too, but increased urbanization often meant separation from family.) Reformers found it offensive that any poor would exist alongside Rockefellers, Morgans, etc. (2) Many social reformers argued that the existing charities were immoral for demanding work in exchange for assistance. They viewed food and clothing as fundamental human rights (modern language, but that’s the idea).
In my view, these localized charities were noble and good. They served and received support from local people. They were important cementing mechanisms in urban communities. They were far from perfect, but I assume that they would have evolved and improved had they been given the chance. The poor will always be with us, and this a case where the axiom — the perfect is the enemy of the good — has application.
Gordon asks: “…can you honestly say that the sense of community in the U.S. is stronger today than it was before government (mainly) and corporations (to a lesser extent) took over the charity business?”
That depends on what you mean by “sense of community.” It seems to me that it might be very easy to hold a romanticized and idealized picture of “the good old days” in this regard–grandma leaving sandwiches on the porch for the men riding the boxcars, neighbors lending grandpa a hand when he broke his leg and couldn’t bring in the hay, bucket brigades putting out the barn fire, etc.–while underarticulating, from a non-anecdotal, demographic point of view, the widespread and crushing poverty suffered by so very many people in previous eras.
Plus, “community” in the sense that you use it seems to limit opportunities to serve. Some problems simply transcend the strength or weakness of the “sense of community,” and solutions to them can only be orchestrated on some higher institutional level. Imagine the chaos if, during the African famine in the mid-80s, President Kimball had said “The people in Africa are starving to death. Everybody send over a couple of sandwiches, would you? Here’s the address.”
Furthermore, I remain unconvinced that “organized” giving through corporations, churches, charities, and even governments, is to be blamed for dimming our sense of community. Obviously, you don’t mean that “big” giving has solved all the problems and leaves no unmet need for us plebs to tackle individually; one certainly doesn’t have to look hard to find ways to help people. And I think the argument that institutionalized giving diverts resources from individual giving is weak as well, given the amount of discretionary money that people tend to devote to things that grandma and grandpa would have considered outrageously indulgent or frivolous–especially, to bring it back to the original thread, the kind of people that I imagine will be getting in on the Google IPO :) No matter how few demands are made of us by institutional givign programs, there are still plenty of things for us to blow our money on if we aren’t inclined to use it philanthropically.
Though my father rather than I was a child of the depression, its effects on our family lasted well into the 50s and 60s. Jeremy is right: we must be careful about romanticizing the good old days. The Mennonite farmers across the road from my grandfather’s 5-acre farm were wonderful people and they helped him a great deal. In other words, the community he lived in was good, and something has disappeared with it. But he lived in bone-crushing poverty nonetheless.
Without things like the WPA road crew on which he worked, it is not clear how he and his family would have survived, much less how he would finally have bought that 5-acre farm when he retired. Even with the WPA and, later, Social Security, he was very poor. I’ve spent enough time with him milking cows for the 10-15 gallons a day he got and sold, and with my grandmother selling in town the few eggs her hens laid (I now believe to people who didn’t really need them, but wanted to be kind) to know that my grandparents genuinely understood the non-metaphorical meaning of “penny-pinching.”
Much as I mourn the loss of almost any bolster to local community, there is a certain logic to meeting certain effects of the mass-production economy with mass-production aid.
Gordon, you write, in defense of disorganized and localized charitable activities, that while it was manifestly clear as early as the turn of the century that such expressions of charity were not successfully dealing with the massive dislocations and urbanization of modern capitalism, you nonetheless believe that “they would have evolved and improved had they been given the chance.” Two points. One: how many people would have suffered–perhaps died–while the American people as a body awaited that evolution you speak of? (Would Jim’s grandfather have been one of them?) Two: are you certain they weren’t “given the chance” already? There was hardly any organized social insurance whatsoever in the U.S. until the advent of the New Deal in the 1930s; there wasn’t even the rudiments of a complete welfare state in place until well into the Great Society of the 1960s. In the meantime, there’d been a explosion of productivity; modern American capitalism benefitted enormously from WWII, and there was a similar growth in patriotism and other civic virtues. Yet where was the “evolution” you assume would have taken place? Look at poverty rates, infant mortality rates, etc., for the 1950s, especially in the rural south or in minority communities. The evidence for the sufficiency of independent charity in the face of an unfortunately corporatized world is scanty, at best.
Nate is, of course, correct that our complaints are linked. I recognize that many of my criticisms of modern capitalism are functions of my having accepted the benefits of such. This pulls me in two directions (directions characterized by real tensions, which are visible in any discussion between communitarians and egalitarians). Practically speaking, I try to strike a balance. I’m perfectly willing to support various protectionist, populist, and other social-oriented policies which are aimed at constraining the growth ethic itself, thereby empowering localities to exercise more influence (including charity) over their own (now more limited) economic communities. But at the same time, I see that the horse has already left the barn, and relatively few people really want to spend the time necessary to chase it down. Consequently, in a world of bigness and mass-mobility, I agree with Ben that getting governments and corporations into the charity business is a moral imperative. Moreover, I’m not convinced that this latter direction must always undermine the former; as Jeremy wrote, the argument that the ability of individuals to conceive and pursue notions of the good is fundamentally compromised by the existence of larger entities (which are themselves arguably or at least potentially communal, depending on how one understands “citizenship” or “stakeholders”) doing the same seems pretty weak.
I don’t know why a defense of private initiative is dismissed as “romantacizing the good old days.” I acknowledged that there were problems with the good old days, but any system would have had trouble coping with the massive social changes happening at the end of the 1800s.
And, of course — to shoot down another straw man — I never said that people could not act collectively. I never suggested that everyone send a sandwich to Africa or anywhere else. Indeed, my better world was based on churches and other local charities.
The problem with this debate is that so much has changed in the last 100 years other than the structure of welfare provision. The world has improved (at least for city dwellers in the US) in many ways that have nothing to do with the issues we are discussing. You see the improved world and conclude that the welfare state deserves credit. I see the improved world, but wish that the welfare state had not held us back.
Supporters of the privatization of welfare services seem to put a lot of faith in the effectiveness of a market that offers very few incentives to actually do the kind of thing charity requires – giving selflessly. Markets work best when there are lots of incentives for individuals to take action, the primary incentive being the ability to reap a profit. Charity though essentially requires that do-gooders put their personal interests aside in order to meet some other collective good. As Mancur Olson famously noted, people aren’t likely to engage in that kind of collective action unless selective incentives are given. Perhaps this is why church-run charities also require that the recipients of their service also receive some sort of religious treatment (they get preached at) in order to qualify? If the church is going to provide a charitable service, the least they can get out of it is a good sermon to the wicked and thereby enhance their prospects of bringing in new converts.
There are other experiments in the privatization of welfare provision that provide evidence that good-heartedness isn’t enough to meet the collective demand for welfare service. Karl Polanyi’s The Great Transformation deals with this issue. When society was marketized in Great Britain in the Nineteenth Century, private charities weren’t enough to quell the surge of poverty and social disruption. The social experiment was abandoned.
Brayden, Given that the welfare state has not been “enough to quell the surge of poverty and social disruption,” maybe we should abandon that?More utopian fallacy at work.
Gordon – I believe there’s been a great deal of historical research on this subject. I don’t have any good citations now but I think that you’ll find that during the years of the British social experiment with privatization the infant mortality rate or deaths due to hunger increased and that they subsided somewhat when the government instituted some sort of safety net.
Brayden, Sorry if that came off as snippy. I am trying to write a report on a student’s paper for the LLM committee, and I am getting frustrated reading the student’s paper. Anyway, I would be interested in hearing more about the collective action problem in Church service. Is the Mormon laity an exception to the collective action problem? How do we get around it? Seems like the Church should just collapse in on itself.
Brayden: I would be interested in this research. My understanding is that while the institution of social safety net type programs helped to ameliorate some of the problems of early industrialization, the main causal agents for increased standards of living were falling costs and rising wages due to rising industrial efficiency and output and increasing demand for labor. Also, in Britain during the early years of the industrial revolution, you had really screwy food prices. The Napoleonic wars and the Continental system inflated domestic food prices which decreased the purchasing power of the poor and created incentives for enclosures which then led to huge migrations to urban areas. With the end of the war, the barriers on imports of cheap food from abroad dropped and parliament responded with the Corn Laws, which restricted imports and increased prices again. Hence, much of the malnutrition of early-Industrial England seems to have been caused at least as much by the last gasps of mercantilism as by the rise of free-market capitalism. This is not to say, of course, that 19th-century industrial Britain had anything close to a flawless record in dealing with poverty and hunger, e.g. the freakishly callous reaction of Parliament to the Irish Potato famine. My only point is that the causal mechanisms of both poverty and increasing standards of living are very complicated and it is far from obvious that welfare state triumphalism is justified.
Gordon,
“Given that the welfare state has not been ‘enough to quell the surge of poverty and social disruption,’ maybe we should abandon that?”
I don’t know nearly as much about 19th-century Britain as Nate, so I can’t respond to your comment as far as that goes. But since you seem to want to apply the same argument to the present-day welfare state in the United States (not nearly a complete welfare state, I should note), I’d have to ask for your evidence. You write that you “see the improved world, but wish that the welfare state had not held us back.” And the support for that particular counter-factual is? I’ll be the first to acknowledge the real failures and negative consequences of redistributive economics–or indeed, to try in vain to connect this thread with your original apparent beef with Google, of an over-reliance on corporate charity. (For one thing, it tends to make civic morality a function of economic equality, which of course it shouldn’t be. These sorts of concerns are real and frequently debated on the left side of the aisle.) But that being said, it seems to me that to say (as I think you are; my apologies if I’m wrong) that the broad political “welfare mandate,” both formal and informal, in the U.S. over the last five or so decades hasn’t in fact resulted in formerly sick people getting treatment, formerly homeless people being housed, formerly ignorant people being educated, and formerly hungry people being fed, is a massively dubious claim. Maybe you’re right, but if so, you’re going to have to explain away more social science data (besides Olson, already mentioned by Brayden, I can think of the work of Nicholas Lemman, Theda Skopcol, Barbara Ehrenreich, James Morone, and more) than I personally can shake a stick at.
“My only point is that the causal mechanisms of both poverty and increasing standards of living are very complicated and it is far from obvious that welfare state triumphalism is justified.”
Nate, don’t count me on the side of those arguing that a welfare state can do a better job than a market at providing for the public good. I’m somewhere in the middle on this point. While markets are generally very effective at allocating resources, information problems and market barriers keep it from equilibrating as the neoclassical model would suggest and for this reason regulation and safety-net provisions help to make the market function more smoothly. The point of the Polanyi citation was to argue that the only experiment with a self-regulating market the world has ever had actually ended in failure. As Polanyi argues, the liberalization of the market consisted of a double movement – the simultaneous implementation of societal commodification and the implementation of protective services to ensure quality of life. The welfare state grew up with the marketization of society (as you recognized in an earlier comment). Polanyi would in fact argue that a market society always needs a safety net in order to make commodification of land, labor, and goods possible. This wasn’t a poor people’s movement; it was the international and local business interests that pushed for the re-institutionalization of protective measures.
If I can find any empirical research that demonstrates that welfare provision in Britain significantly improved quality of life, compared to the quality of life under a the fictionalized self-regulated market, I’ll let you know. I may have spoken too quickly on that point.
Gordon – What kind of incentives do churches receive in offering welfare services? Many. Legitimacy is one. Increased commitment from members who feel it is their Christian duty to provide service is another. A church can’t survive without ideologically committed members.
What ever happened to the large, impersonal, eternally-lived corporate institutions of yesteryear? It’s enough to make me go back to AltaVista. At least they were owned by Digital Equipment (who was bought by Compaq, who merged with HP, who sold a majority of AltaVista to CMGI).
Thanks for the post on Google’s Don’t Be Evil philosophy.
It seems to me that “Don’t Be Evil” is about a heck of a lot more than just being a good “corporate citizen,” or funding some charitable foundation.
I think it’s about enlightened self-interest — the realization that you can do well by doing good.
Google’s IPO should get “Don’t Be Evil” a lot of publicity–and when people dig into it a bit, they’ll find that it’s not just an empty corporate catchphrase.
Google has lived this philosophy, and they’re not just being altruistic — it’s paid off big time. By refusing to let ad dollars corrupt search results, they’ve become #1 in search. Users trust Google not to tamper with their information just to make a quick buck.
It’s about eliminating conflicts of interest so they can deliver quality information that people trust, not corrupted by ad dollars. It’s the same concept that the better newspapers use to keep the news room separate from the business office.
I’m exploring how the Don’t Be Evil ethic applies not only to Google, but to business, politics and the media. I’d be honored to get feedback on my site, http://www.dontbeevil.com.
Thanks!