Adam Smith didn’t think so.
“For while Smith might be publicly lauded by those who put their faith in private capitalist enterprise, and who decry the state as the chief threat to liberty and prosperity, the real Adam Smith painted a rather different picture. According to Smith, the most pressing dangers came not from the state acting alone, but the state when captured by merchant elites.
“Political actors, Smith claimed, were liable to be swept up by a ‘spirit of system’, which made them fall in love with abstract plans, which they hoped would introduce sweeping beneficial reform. Usually the motivations behind these plans were perfectly noble: a genuine desire to improve society. The problem, however, was that the ‘spirit of system’ blinded individuals to the harsh complexities of real-world change.
“What Smith is saying is that … the ‘spirit of system’ infects politicians with a messianic moral certainty that their reforms are so necessary and justified that almost any price is worth paying to achieve them.”
The Real Adam Smith, Aeon Magazine (January 16, 2018).
Smith had little faith in the free market’s altruism:
“Smith was, however, deeply pessimistic about the stranglehold that the merchants had managed to exert over European politics, and despaired of it ever being loosened. Accordingly, he labelled his preferred alternative – of liberal markets generating wealth to be passed on to all members of society – a ‘Utopia’ that would never come to pass.”
Today’s “philanthrocapitalists” would beg to differ. Their social and economic charter originated in the 1990’s, under President Clinton’s leadership. Post-WWII neoliberalism had begun to fatigue in the 70’s, and the tide had turned against the 80’s social conservatism. Clinton and his U.K. counterpart Tony Blair offered a mix of conservative economics with social liberalism:
“As much as possible, they preferred a progressive politics that channelled private initiative, and the logic of philanthrocapitalism was pleasingly straightforward. Since the rich were getting richer, they had more money to throw around. The lure of yet more lucre could now be used to steer them into sinking some of this new wealth into the poorest communities, something touted by Clinton late in his presidency when he went on a four-day ‘new markets’ tour of deprived American neighbourhoods. Urging the super-rich to do some good with a portion of their rapidly growing prosperity, Clinton told them that a better world would make them richer yet. ‘Every time we hire a young person off the street in Watts and give him or her a better future,’ he said, ‘we are helping people who live in the ritziest suburb in America to continue to enjoy a rising stock market.’”
The rich and famous jumped on board, and the rest of the 90’s into the 2000’s, private foundations were a growth industry. The Economist’s Matthew Bishop and development pro Michael Green wrote the book on the topic, with a foreword from Bill Clinton: Philanthrocapitalism: How Giving Can Save the World (2009). The book blurb captured the spirit of the approach and the times:
“For philanthropists of the past, charity was often a matter of simply giving money away. For the philanthrocapitalists – the new generation of billionaires who are reshaping the way they give – it’s like business. Largely trained in the corporate world, these “social investors” are using big-business-style strategies and expecting results and accountability to match. Bill Gates, the world’s richest man, is leading the way: he has promised his entire fortune to finding a cure for the diseases that kill millions of children in the poorest countries in the world.
“In Philanthrocapitalism, Matthew Bishop and Michael Green examine this new movement and its implications. Proceeding from interviews with some of the most powerful people on the planet―including Gates, Bill Clinton, George Soros, Angelina Jolie, and Bono, among others―they show how a web of wealthy, motivated donors has set out to change the world. Their results will have huge implications: In a climate resistant to government spending on social causes, their focused donations may be the greatest force for societal change in our world, and a source of political controversy.”
Maybe philanthrocapitalism’s greatest appeal was that it offered a fresh, inspiring story:
“At heart, philanthrocapitalism offered not a new science of development, but an old-fashioned moral tale – one in which a hero, who would reveal himself by some magnificent achievement, would come along to save us from some peril.”
Everybody loves a great story, but does this one have a happy ending?
We’ll look at that next time.
 Id. For more, journalist and social commentator Chris Hedges thoroughly and adamantly deconstructs and debunks secular and religious utopian thinking in his book I Don’t Believe in Atheists, which he wrote after debating Sam Harris and Christopher Hitchens — two of the “four horsemen” of the “new atheism.” His analysis explains why utopias invariably crash into dystopias. If that topic interests you, I’ve been writing about it in my Iconoclas.blog, and you might like to check it out.
 The author is John Rapley, academician, world development expert, journalist, and government advisor. His latest book is Twilight of the Money Gods: Economics as a Religion and How it all Went Wrong (2017).