Sir Howard Seeks Angelina

Angelina Jolie should call Sir Howard Davies, director of the London School of Economics. “I guess it’s true that I would answer the phone if Angelina called the LSE,” he confesses, before noting that “Sadly, my resistance has not been put to the test.” Go on, Angie, put the poor man out of his misery.

Sir Howard makes this revelation in a positive review of our book in Saturday’s Guardian. “Bishop and Michael Green clearly have a point,” he says of Philanthrocapitalism’s “clarion call.” His mind turns to Jolie because of her comment that “people take my calls” – which is a test we use to judge if somebody is a “celanthropist” (nasty word, for celebrity philanthropist, but don’t blame us, blame Time magazine, which coined it. We are responsible for coining philanthrocapitalism, however, for which, many apologies).

Sir Howard accuses us of a “category error”, as he thinks that we should clasify Virgin entrepreneur Sir Richard Branson as a celanthropist, and not as a philanthropist, because, as we write, “he has promised to invest, not give, the future profits [of the Virgin transport businesses] for the next 10 years (an unspecified sum).” As we quote Sir Richard saying that “I can pick up the phone to anyone in the world and get through”, clearly he is a celanthropist (as are Bill Clinton, Tony Blair and Prince Charles, for example). However, Sir Richard is also a philanthrocapitalist in the sense we mean it, even if he is not an especially generous philanthropist. Philanthrocapitalism is not just about giving money away, it is about effectively using all sorts of assets you control, including your networks, access, businesses etc, to do good. By this measure, Sir Richard clearly qualifies – through, among other initiatives, his climate change prize and especially his pivotal role in creating The Elders.

Sir Howard reviews Philanthrocapitalism alongside Michael Kinsley’s Creative Capitalism, in which articles by Matthew also appear. He is uncomfortable with the concept of creative capitalism, proposed by Bill Gates at Davos last year: “On the arguments presented by Kinsley and his team, the Big Idea needs further work.” As evidence of this, he cites one of the silliest articles in the book, by Larry Summers, who is now Barack Obama’s chief economic advisor.

Summers claims that two giant mortgage lending agencies, Fannie Mae and Freddie Mac, whose reckless lending contributed mightily to the current economic crisis, are the most salient examples of Gates’s ideas in action. That is because “the illusion that [the] companies were doing virtuous work made it impossible to build a political case for serious regulation.” Yet Fannie and Freddie were both (badly) regulated institutions, implicitly and now actually backed by the government, whereas Gates’s ideas, which we discuss in our chapter on the Good Company, are not about regulation but about truly private companies taking more seriously their opportunities to improve society. Gates is proposing a voluntary private solution (if not a wholly convincing one) to an existing market failure; Fannie and Freddie went disastrously awry primarily due to regulatory failure.