Wednesday, December 31, 2008

Philanthropy - Social Responsibility

Excerpts from an article written by Sanjay Subrahmanyam on philanthropy and its role in social responsibility
“European visitors to India in the 16th and 17th centuries usually found precious little to admire here. The climate they deemed too warm and languorous; they rarely liked the food and drink; the gods struck them as frightful and monstrous.
Once in a while, however, something did catch their fancy. Amongst these was the Indian habit of giving often and generously, such as when a merchant at the end of his worldly career decided publicly to part with all his material goods.
Even the Jesuits, behind their general attitude of superiority and condescension, occasionally praised the mass feeding of the poor that was practised both in temples and by princes and magnates. Usually they saw all this as a form of ritual or religious practice rather than an affirmation of social bonds.
The Dutch and the English merchants in their outposts in places such as Surat and Bharuch were less certain of what these acts of giving meant, and noted in puzzlement that they extended beyond generosity to humans to setting up infirmaries for animals and even birds.
Something happened to this tradition over two centuries of colonial rule. It did not disappear but it was transformed in a variety of ways, some subtle and others less so. To be sure, when the great famines of the late 19th century ravaged western and southern India, some acts of generous giving were noted.
The celebrated bird and animal hospitals of Jains in western India did not disappear. But philanthropy was initially not taken very seriously by those who made great fortunes on the back of the colonial trades, whether opium export to China or jute-making in Kolkata.
Trading communities looked after their own up to a point, with richer traders bankrolling their poorer cousins. By the time of the Five-Year Plans of the 1950s, it was the state that was looked up to as the ultimate mai-baap, giver and arbiter of redistribution.
Socialism may have been a nice buzzword in the '50s and '60s, but beneath its surface, it was a dog-eat-dog world. If one did not inherit wealth, it was all a question really of who could get access to the state and its mechanisms for redistribution, rent-seeking and social climbing.
So, some social change did happen, and some new groups emerged to the fore. A handful of robber barons also made great fortunes by dint of their strategic dealings with this or that party and leader.
It was a far-from-ideal world, but one where the state was meant to keep a lid on things when social tensions came to the boil by a mix of populism, coercion and handouts.
Many Indians today, especially among the middle class and elite, want to repudiate that past and its licence-permit-quota raj. One can see why. But it may also be useful to see what the alternative, which has been touted for a decade-and-a-half as something called liberalisation, really means.
Fundamentally, what liberalisation as a process entails is the reduction of the role of the government in economic and social terms.
But what of other tasks the state undertook, and which do not bring with them ready short-term profits as rewards for risk-taking? These include the provision of a whole host of public goods.”
Let’s first take the case of education.

“Some parts of education are well-paying, as anyone who has visited the great public school chains in the metropolitan cities knows. Even teaching shops and cramped spaces where students cram desperately for the IITJEE have been doing a roaring business for some decades now.
But,the market, left to its own, will not educate many of those who do not have the ability to pay and pay amply.
This is where only two alternatives exist: the state or philanthropy. This is undoubtedly true for the primary education of a poor farmer's five-year-old child in Belgaum, but the logic of this runs all the way up and down the system.
One can see how engineering schools, medical schools and management institutes can work in a free market. The same is true for the production of software programmers and others who serve global industries of various sorts.
But what about the social sciences, the arts, the humanities? Why would the market want a social anthropologist or a poet? Should we then imagine an India with crores of software writers and not a single great sarod player or political theorist?”
Sam Pitroda wrote in another article that content needs to be changed.” Our graduates specialize too early. There is no focus on liberal arts. Everyone wants to be an engineer. That's why we can't have good leaders.”
“It is usually imagined that for the reproduction of artists, musicians and the like, we can somehow depend on traditional family-based institutions to do the job. This may be true to an extent of music, but is it true of the visual arts? Is it true of literature?
It seems to me that the only answer here in view of the gradual (and perhaps even justifiable) withdrawal of the state is the growth of Indian philanthropy and private patronage of the arts and education. But how is this to happen, the reader will ask?
There is obviously no simple solution. But one can help to create the conditions for it. First, it should be understood that philanthropy is not altruism or some sort of Gandhian nishkama karma.
It is enlightened self-interest and also carries some bragging rights; no one should think that Warren Buffet got his ideas from the Gita. There are many people in India who have more money than they know how to spend.
So it is a question of making philanthropy something that is valued. Second, the matter requires some fiscal forethought. Almost all those who give large sums in the US-which is perhaps the single most successful philanthropic economy in the world-do so in careful consultation with their tax-planners.
Even in their generosity, they are careful and calculating. So the state has to motivate such activity through its tax policy, and even provide some delicately constructed loopholes for those seeking to transform their wealth from a darker into a lighter shade.
In a society like India, where an affluent class has emerged in the past two decades riding the crest of liberalization, it is a question of whether a new social contract is now not a pressing necessity.
This would not be a contract based on the tricks of the state, but rather on some notion that went beyond mere taxation and redistribution. American conservatives such as Richard Posner have argued that growing income inequality is necessary and even desirable as a condition for a meritocracy.
That they can even dare to make such an argument is because they are confident in the existence of other institutions that will counterbalance such inequality. Chief among such institutions is philanthropy.”