Peter Buffett’s criticism of modern philanthropy in his New York Times op-ed “The Charitable-Industrial Complex” is a provocative essay on the obvious contradictions built into the relationship between philanthropy and capitalism. Like many others, he calls for a dismantling of the system of unfairness perpetuated (accidentally or not) by colonialism, Western capitalism, and philanthropic hegemony. Idealism has its place, but Peter Buffett’s approach of refusing to play along with a broken system while offering no sensible solutions is old news, gone the way of the hippies. Business and philanthropy have started to work together in a new wave of pragmatism exemplified by organizations like Industrial Revolution II. In the spirit of Bill Gates, Bill Clinton, and Peter Buffett’s own father, Warren, Industrial Revolution II knows that we must work to find practical solutions wherever we can. We cannot snap our fingers and instantly change power structures that have evolved over thousands of years. Doing away with trade and all its impacts is an absurd notion, but we can certainly work to change the way trade functions by humanizing capitalism one place at a time. Done correctly, this can actually increase economic benefits for everyone along the chain, not just a few.
Industrial Revolution II decided to start in Haiti, one of the worst victims of four hundred years of colonialism, mercenary capitalism, and most recently, philanthropic hegemony. Generous but unsustainable and poorly allocated donations have helped alleviate some of the acute suffering caused by the devastating Earthquake of 2010, but as Haiti has sadly demonstrated for decades, charity and international aid programs accomplish little sustainable improvement by approaching chronic problems with the same impotent formulae. As a capitalist organization—a garment factory—Industrial Revolution II is uniquely designed to help Haiti build a stronger future precisely because it is unlike the race-to-the-bottom garment factories we read about in the news too often these days. Because IRII provides a safe, supportive work environment, and because IRII carefully invests 50% of profit distributions into employees and their families, many Haitians will now have the tools to build more stable communities with strong foundations in education, training and wellness, logically leading to social advancement and economic development.
Peter Buffett has a valid point: philanthropy and social entrepreneurship are rife with contradiction and hypocrisy. But if we reject everything containing contradictions, and automatically rail against all imperfect solutions to poverty and inequality, there will be nothing left to accept. Peter Buffett is not wrong to be skeptical of philanthropy’s latest incarnation and the new wave of social enterprise, but in the 21st century we need more than skepticism. We require both philanthropists and bold social entrepreneurs to help us reimagine the future sensibly. We need pragmatists who want to be judged by their results rather than the purity of their ideas.