Sanitized corruption via privatized aid, charities and foundations

[links and book suggestions at the bottom]
The idea of MNC CSR (whether direct or via special purpose vehicles like charity “foundations” or “initiatives”) is increasingly coming under scrutiny because it has been observed to have the net effect of capturing power away from governments and society to private (often majority foreign-owned) corporations, with regard to local social impact issues, social accountability, government priorities and policies.

When private sector sets the social impact agenda, they change the narrative from “large multinational corporations should be accountable for their long and short term impact on the indigenous society – at both micro and macro levels – and must not do intentional evil” to something more broad and ambiguous like “do well by doing good”. The second phrase might look like a concise version of the same thing, but it isn’t.

New insights reveal that what MNC CSR really does is:
1. Diverts attention (and more importantly, accountability)  away from the much more costly and widely spread out social harm (or undesirable effects) of private sector multinational companies (e.g. pollution, exploitative products / pricing, physically or mentally harmful products/services, poverty-sustaining labor practices, aggressive tax avoidance, resource diversion / extraction, macro-economic destabilization or damage etc.)

2. MNC use CSR to sanitize their harmful activities: “our technology is designed to turn millions of your children to mentally unstable addicts and narcissists but, hey look over there, our foundation is building a school / dispensary in the slums for 100 students, or offering free Wi-Fi in rural areas, so we can’t be that bad”.

It’s amazing that policy makers and the public actually fall for this chicanery… which is one reason why our education system needs a closer re-look.. is the core curriculum designed to stifle critical thought?

3. Enables back-door lobbying and rent seeking by allowing corporate entities to indirectly influence policies through their “charitable” foundations (indirect rent seeking). These policies make it easier for their sister MNCs:

i. to unfairly take control, win government tenders or dominate the targeted sectors;
ii. it dissuades government officials from taking meaningful action against the harmful activities (or responding to public outcry with sustainable solutions);
iii. it also helps the MNC’s country of origin entrench its geopolitical influence (or activities) over the country – e.g. to facilitate resource extraction; among other undesirable / negative effects.

4. The “charity” cover allows MNCs to mine indigenous data (with minimal government oversight) for numerous commercial purposes (e.g. behavior manipulation to boost product consumption – without regard to long term effects) as well as, in some case, non-commercial (or possibly unethical / illegal) purposes (including industrial / economic espionage or political subversion) with less risk of suspicion from governments and/or society.

Because they have global reach, they can steal indigenous intellectual property on one continent and make millions from it in another continent (or their home country) with subdued risks of PR blowback.

5. The charity cover also enables them to unethically brainwash young innovators in poor countries to freely hand over their intellectual property “to charity” (or more accurately, to them / their affiliated entities) – in exchange for “hope” – yet these same companies (and their close affiliates) have *thousands* of patents and other IP which they defend vigorously and consistently.

Several reputable authors like Anand Giridharas and Linsey McGoey have robustly challenged the motives behind privatized philanthropy and posited that if the parent companies of these MNC (or MNC founder) owned foundations did less (or no) evil / exploitation /harm to society, they would have less (or no) need for CSR and would achieve a positive net-impact within the societies in which they operate.

For example, sector or niche-dominant companies (price setters) could:
1. Deliberately structure the profit margin of their products or services to try match their quarterly gross profits as closely as possible to the median gross profit of a basket of at least ten of the largest indigenous corporations in the country of operation. This is possible with modern-day real-time pricing and analytics technology which many (if not all) of these companies already have. This is how you make ethical profits.

2. Increase wages to stimulate economic growth directly, boost the economic growth headroom (growing a robust middle class) and a have net-positive economic and social impact. The idea that people in poor countries deserve to struggle (or are “used” to low quality lifestyles – so they should not be uplifted) is racist and abhorrent.

3. Pay people according to the job – not according to passport/origin. This is racial nepotism and ought to be called out for what it is.
4. Actively reject technology that is purposely designed to divert public attention in an addictive way from meaningful economic (or learning) activity due to the long term macro-level dangers and exponentially high macro-economic costs which cannot be justified in any way (a great area of research for indigenous policy makers and current graduate students in African Universities).

5. Reject transfer pricing arrangements, incorporate locally to show full commitment, hire local staff for responsible and key roles, avoid tax havens, stop lobbying for rent deals or undeserved concessions when you already have so much financial power and resources at your disposal (instead lobby for indigenous empowerment), and diligently pay taxes in host countries.

6. Practice and promote conscious capitalism as a core philosophy and policy (instead of CSR).

There are many more ideas if you think in terms of “doing less evil” because that perspective shifts the power of setting the agenda / policies away from the private corporations and back to the people (society).

Have a great day and week, as you hopefully ponder these thoughts!
Patrick A. M. Maina.[Independent Public Policy Analyst – Indigenous Innovations]

Further reading:
1. Well-Funded Non-Profits Pave the Way to Privatization – Living in Dialogue

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Well-Funded Non-Profits Pave the Way to Privatization – Living in Dialogue

By John Thompson. David Callahan’s The Givers begins with the first politicized think tanks of the 1960s and 197…
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2. Lesson 2: Introduction to Conscious Capitalism

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Lesson 2: Introduction to Conscious Capitalism

WPSU – Penn State Public Media
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3. No Such Thing as a Free Gift: The Gates Foundation and the Price of Philanthropy

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No Such Thing as a Free Gift: The Gates Foundation and the Price of Phil…

Philanthro-capitalism: How charity became big business The charitable sector is one of the fastest-growing indus…
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4. Winners Take All: The Elite Charade of Changing the World

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| $22.91 |
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Winners Take All: The Elite Charade of Changing the World

An insider’s groundbreaking investigation of how the global elite’s efforts to “change the world” preserve the s…
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5.  Facebook says it is committed to Uganda despite social media tax to quash ‘gossip’
Ever wondered why companies without an official local presence (possibly in contravention of business registration & licensing laws) can have so much power and influence over Africa? Are social media protestors defending their addiction habit or are they defending “human-rights”? Food for thought.

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Facebook says it is committed to Uganda despite social media tax to quas…

Justina Crabtree

Facebook has confirmed its commitment to Uganda as a row rumbles on over a recently imposed tax on social media …
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