The crisis of capitalism. These are clearly tough times for capitalism, what with some of the world’s leading financial institutions failing and the American government, with a Wall Street capitalist as its Treasury secretary, busily nationalising the commanding heights of the global economy as if he were an old-style socialist.
But does a bad time for capitalism spell trouble for philanthrocapitalism? Not necessarily.
Certainly, a few wealthy philanthropists have taken a nasty hit, most notably Dick Fuld, the erstwhile billionaire boss of Lehman Brothers, and Hank Greenberg, the former boss of AIG, who claims that most of his $3 billion net worth has been wiped out.
But we are betting that when the dust settles – and assuming the powers that be do not repeat the huge policy errors after the 1929 Crash that led to the Great Depression – most of today’s super rich will not be much worse off, and many of them will be considerably richer. Not for nothing is one of the most dependable laws of finance “invest when the blood is in the streets”. There is plenty of blood today, and this will represent a golden buying opportunity for those that have liquid funds and the right connections.
This will be a testing time for philanthrocapitalism for a different reason: it will be a test of whether the recent fashion for philanthropy among the superrich is for real. The temptation when times are tough is to cut down on discretionary spending; the next couple of years will reveal whether the new philanthropists regard their giving as discretionary or, as many of those featured in our book claim, fundamental to how they now live their lives.
One thing is certain: the need for their philanthropy will be greater than ever. Having spent so much saving the financial system, government budgets for meeting society’s other needs are likely to be under greater pressure than ever. And the perception that taxpayers’ money is bailing out fatcats is turning the public mood against the wealthy, even in America. Time for the superrich to dig even deeper into their pockets for humanitarian and more self-interested reasons.