Governments simply cannot cope. The demands from an increasing world population are just too great.
Too much for healthcare; for social services; for education; for security in the face of terrorism.
The modern, government led, societal model is broken, whether capitalist, communist, dictatorship or monarchist. It is inevitable that the model needs to change and radically, especially in this little, overcrowded but ever so attractive island.
Inequality is at a higher level than ever before. Over the last 30 years, in the UK, the share of national income afforded to the lower 50% of earners, has fallen by 25%. The share to the top 1% has risen by 50%.
Turning to the USA, in 1976, the top 1% of households attracted 8.9% of all pre-tax income. By 2012 that had risen to a staggering 22.46%
Back in the UK, only 28% of higher rate tax payers claim relief on charitable donations. In the USA, the same figure is 98%.
The total inflation-adjusted net worth of the Forbes 400, an annual listing of America’s richest individuals, rose from $507 billion in 1995 to $1.62 trillion in 2007, before increasing again to $2 trillion in 2012.
Estimates from the Credit Suisse Research Institute, released in October 2010, show that the richest 0.5 per cent of global adults hold well over a third of the world’s wealth. (Source; inequality.org).
The gap between the rich and the poor is growing and at an alarming rate.
Government spending has reduced. Capital is free to roam, so not as relatively constrained to local communities as in Victorian times. Communities have radicalised and the internet offers a loud and unchallenged voice for the disenfranchised.
All creating increasingly unequal, disenfranchised and polarised groupings within society, which are in turn dangerous societies, threatening the status quo, even in the very short term.
Everywhere we turn, commentators harp back to Victorian Britain, which saw philanthropy thrive. Surely then all we need to do now, to redress this vicious downward spiral, is to replicate Victorian investment, bestowed by wealthy paternalists (and indeed maternalists) on their fellow man?
We need a society that will unearth the Montague Burtons, who, cogniscent of their Jewish immigrant beginnings, established a beneficent model of corporate social welfare and worker well being, whilst (or perhaps as a result) driving profits.
We need more Dame Cecily Saunders; pioneering, strong and empathetic women, who worked tirelessly and selflessly for others and invested all their savings (themselves the result of a bequest) into palliative care and end of life hospices for those in need.
Or we need to unearth the likes of John Reynolds, perhaps Manchester’s first multi-millionaire, who not only invested to support his local Stretford community but also saw the need to support foreign citizens in need (in this case Italy) as part of global care.
Furthermore, we need to rekindle the heavily documented, foresighted, religious fervour of families such as the Cadburys and the educational foresight of the Alleyns.
Citizens who prospered and then reinvested their prosperity for the future well being of their fellow man.
Without asking for permission, or relying on the government.
Surely then, with all the wealth generated today, it is just a case of unearthing, rekindling or, in digital terms, rebooting, modern day philanthropic values?
Despite the fact that most of London still flushes its woes down Victorian philanthropy to this day, history tells us it is just not that simple.
The creation of the Charitable Organisation Society in 1869 unearthed the deep divisions, which existed then and subsist today, in attitudes towards philanthropy and towards helping the perceived “needy”.
Crudely, there were five reasons why those with helped those without. Why they tried to bridge the gap between the “two nations”, whilst government turned an “open” eye to the problems.
First, there was a real fear of social agitation. Best controlled by making conditions comparatively more bearable. This of course carries with it the implicit threat of removal of benefaction if agitation increases. Much the same way that Al Qaeda and ISL provide food and water for the needy, or the Gulf monarchies remove taxes, so long as citizens commit either to fundamentalism or status quo, respectively.
Then there is religion itself. There is little strategic difference (of course without the horrific repugnant violence) between the Victorian zeal of the devout, saving souls through evangelical Christian proselytism, and the radical conversions of Islam today. By offering tangible assets (food, water) alongside eternal benefits (heaven and virgins), not only is the convert saved, but the converter bestowed with Deistic gratitude.
Third, the ever present “social attachment theory”. If you have money and you want to be associated with the good, the great and the feted, then attach yourself to their chosen causes: financially. Again, there is little difference between the largesse bestowed upon those who helped in Victorian times, through peerages and parties, and those who help (financially) vogue causes of current times through, oh, peerages and parties. I have no doubt that readers will quickly choose their own list of the most deserving recipients.
Not that there is anything wrong with donations being associated with having fun, nor with the donors receiving intangible gratitude, such as naming rights. It just needs to be recognised for what it is and not as an enduring model for societal change.
Fourth, there is an unspoken need by those in power to control the behaviour of the “lower” classes. If there is an assumption that poverty is, as still endures today, a personal failing, then the best way to impose the “correct” values (sobriety, piety, cleanliness) is through conditional giving.
And finally, there is of course the genuine, selfless and laudable belief that those who are fortunate, have a duty to “put back”. If, given the four reasons above, we doubt this still endures, then look no further than the values instilled by great British institutions such as Eton College. These values are alive and well, just in perhaps short supply. Statistically, by themselves, the lucky Eton scholars and their like are unlikely to be sufficient to solve the imminent global societal problems.
We need to create conditions for success. We can no longer rely on government.
There are two clear options for society, and a third which may take longer but which, we propose, is the only way.
The first is to invest in barbed wire. Create local, sealed communities for the wealthy. Keep investing in more and more security and isolation, using the dividends accrued from continued investment into this asset class, personal defence, that is surely set to grow. Then hope that the fence is strong enough and lasts long enough for your children to benefit as well.
Second, paternalistic dictatorship. Recognise that modern democratic models do not produce sufficiently strong, foresighted or long lived politicians and therefore, along with other like-minded elite, conspire with the military to seize all the wealth creating assets. Topple governments and subdue individuals who seek to oppose the model. Keep the masses in check with largesse, military power and patronage, in equal measure. Historically, an undesirable but relatively successful model for at least the first few years of the first ruler. Rarely lasts very long, results eventually in extreme violence and often stifles the very freedom of expression, free will and civil liberties so beloved of modern societies.
Third, a root and branch, values based, reformation of society.
We would propose that this has longevity, protects liberalism and is genuinely achievable. It requires five principal and concurrent reforms, built upon a radical reformation of societies values. Not “motherhood and apple pie” sound bites, but the reinstallation, over time, of true values, underpinned by an investment in the core capabilities, which will allow the beneficent spirit that made this nation once a world leader to re-emerge.
The reforms would be as follows;
Corporations and their shareholders agree to invest 5% of capital value, or cash on balance sheet, each year for the next 20 years, into areas that benefit both society and (unashamedly) the businesses themselves. As an example, if all the businesses in gambling and gaming invested in schooling and academies focused on producing the world’s top mathematicians, then our society would benefit. We compete in the digital world with the likes of Singapore and China. We need to generate top class mathematicians, which would benefit society generally, whilst simultaneously benefiting the businesses that would have access to improved models (and therefore profits). The businesses could have the pick of the crop. Students would be streamed to focus their talents (statisticians, theorists, modellers). General standards in society would rise. So long as all businesses within the sector joined in and all shareholders acknowledged the long term benefits, then there is no competitive advantage nor comparative economic loss. Shareholders should remember that a society in chaos will see a total reduction of capital value, as businesses are privatised and then eroded.
Individuals must enjoy real and public economic and social benefits for philanthropy. Give them massive tax breaks. Create a new class of honour for philanthropy. Have a national parade for the top 1000 philanthropists through The Mall every year. Provide inheritance tax breaks for the next generation to bestow the inherited wealth of the former. Just make it so that giving is a transparent pleasure and a real benefit to both donor and society.
Reform the House of Lords. Just imagine a Lords filled with the best scientific minds, the greatest jurists, the most constructive engineers, the strongest philosophers, the boldest military generals, the greatest entrepreneurs and even those with or without religious belief. Experts in every field that a flourishing and passionate society needs to thrive. All focused on one single task. To determine the best strategy for the country for the next fifty years, on a rolling basis. Then, to present it to the people and to require the government of the day to execute against it or explain to society why not. To succeed, this vision needs a focal point that is here for the long run. The Lords, redesigned as a transformation Specific Purpose Vehicle, designed, constructed and focused only on fundamental reformation.
Charities; consolidate them into fewer, bigger, more focused, more effective, delivery mechanisms, run by incentivised professionals, publicly accountable to professional boards. Require them to publicise targets and business style KPIs that deliver true change. Require them to focus both on delivery now and on a long term vision. Require businesses to second star executives to chosen charities for two years, as a requirement for promotion. Where the charities don’t deliver, take them over and get people who can.
Values and culture; probably the least palatable for many, but the most pressing. Society has a duty to help the disadvantaged and those not capable of helping themselves. It also has a duty to instil, through the education and the benefits system, a belief that society helps people who help themselves and who then help others. A values based reformation. Everyone is capable of helping society. Everyone should be helping their society in any way they are able, helping neighbours, visiting those with dementia, putting back, even if unable to work, all as a “condition” of receiving assistance. It is a form of individual philanthropic contract. Benefactors, including society itself, must not shy away from such conditional philanthropy. If you want a “societal hand up”, if you have the means, these are the terms. Perhaps financial, perhaps as simple as when you are on the up, helping others get a leg up. Immigration protocols should engender a pride and unashamed affection for the society into which the person has chosen to live. Schools should engender a sense of duty, pride and passion. Families and communities of all types should reignite the concept of ‘the societal family’. Criticise as constructively and as much as you want, so long as you still help your fellow man to make it better.
We have a stark choice. Reconstruct society and take the burden off government or prepare for a generation of disaffection and violence.
Polarisation is upon us, with the inevitable consequences. A failure to act hands momentum to the radicals, who will mobilise the disaffected in society for their own, often untrammelled gains.
We have to forget five year political cycles. We need a radical, multi-generational approach, or we need to build stronger and sharper barbed wire and much more of it.
Al Insky
June 2016