A new book highlighting the positive role that philanthropy by capitalism's biggest winners can play has been released. In Philanthrocapitalism: How the Rich Can Save the World, The Economist's New York bureau chief Matthew Bishop and Michael Green look at how "philanthrocapitalism" can solve some of the world's most pressing problem by filling in gaps left by the limitations of business, government and mass charity/non-profits.
The book analyses the successes and failures of Bill Gates and other leading philanthrocapitalists, challenges other super-rich people to follow their lead by describing what it takes today to be a "good billionaire", and calls for a new "social contract" between the super-rich and everyone else.
Extract from Philanthrocapitalism: How the Rich Can Save the World
Philanthrocapitalism does have the potential to make the world a vastly better place, as the rich play a leading role in tackling some of the biggest challenges facing humanity today. The question is not can philanthrocapitalism achieve its extraordinary potential, but will it?
That will depend on many things, including, crucially, whether many of the wealthy people who have yet to get serious about philanthropy do so. Andrew Carnegie was right: those who benefit the most from economic prosperity have a duty to use their money and talents to make the world a better place. But many of today's rich have yet to rise to the challenge.
The need is all the greater because the world is now a far more complicated place than in Carnegie's day, many of the challenges facing humanity are new and extraordinarily difficult, and traditional providers of solutions do not seem up to the task.
Carnegie was thinking very much about the problems of the industrialised world of America and Europe; the world we live in today faces global problems, from climate change and the threat of pandemic disease to terrorism.
Carnegie's world was one in which government was beginning to flex its muscles and people were increasingly looking to the rational state to solve society's problems; today the state is in crisis, and in some respects big business seems better place to expand its social role.
Carnegie's gospel was a one-sided bargain, an appeal to the rich; but today the wealthy lack the power, and indeed the legitimacy, to act alone.
What is needed instead is a compact, a new "social contract" between the rich and everyone else. Like any contract, this will have two sides. For the rich, there should be a clear set of rules, so that they know what they must do in order to win society's acceptance. Call this the "Good Billionaire Guide".
For everyone else, there should be a clear understanding of how society will behave towards the rich if they abide by these rules (perhaps even including the circumstances in which politicians will refrain from populist billionaire bashing) and a strong, transparent regulatory system so that we can hold them to account.
Such a social contract would provide a basis for figuring out what is the most effective division of labour in solving major world problems, so that philanthropists, business, governments, NGOs, and citizens can form partnerships in which each plays the role to which it is best suited, and stays away from activities where it lacks the requisite talents or incentives.