Soviet Union first burst out beyond their own borders, they were a Marxist caricature of the nouveaux riches: purchasing yachts and sports teams and surrounding themselves with couture-clad supermodels. Fifteen years later, they are exploring how to buy their way into the world of ideas.
One of the most determined is the Ukrainian entrepreneur Victor Pinchuk, whose business empire ranges from pipe manufacturing to TV stations. With a net worth of $4.2 billion, Pinchuk is no longer content merely to acquire modern art. In 2009, he launched a global competition for young artists run by his Pinchuk Art Centre in Kiev, conceived as a way of bringing Ukraine into the international cultural mainstream. Pinchuk hosts a regular lunch on the fringes of Davos (Chelsea Clinton was the celebrity moderator in 2012) and has launched his own annual “ideas” forum, a gathering devoted to geopolitics that is held, with suitable modesty, in the same Crimean villa where Stalin, Roosevelt, and Churchill conducted the Yalta Conference. The September 2010 meeting, where I served as a moderator, included Dominique Strauss-Kahn, then head of the International Monetary Fund; Polish president Bronislaw Komorowski; and Alexei Kudrin, then the Russian deputy prime minister and finance minister. At a gala dinner, keynote speaker Bill Clinton addressed, ironically enough, the economic consequences of growing inequality.
As an entree into the global super-elite, Pinchuk’s efforts seem to be working. On a visit to the United States in 2010, the oligarch met with top Obama adviser David Axelrod in Washington and schmoozed with Charlie Rose at a New York book party for
CHARITY STARTS AT HOME AND WHERE IS THAT?
One of the tensions in the life of the plutocrat that philanthropy lays bare is how hard it can be figuring out where to give back. If you are a global nomad, do you direct your charitable efforts at the place where you were born, the place where you live now (if that is even possible to define), or the place where you do the most business? Or perhaps the right approach isn’t to think about tribal or emotional connection; rather it is to use the same objective logic you would apply to a business investment and to try to find the place in the world where you can make the biggest difference.
I listened to a couple of members of the global 0.1 percent think through these issues over supper in Dar es Salaam. We were there, appropriately enough, thanks to the World Economic Forum, which was hosting one of its regional summits over a few muggy days in May 2010 in the Tanzanian city. One participant in the conversation was an Australian who lived in Hong Kong and had made a career largely working in Southeast Asia and China. The second was an Asian-born technologist who had earned a fortune working in Silicon Valley.
The Australian had no doubts about where it was best to target one’s philanthropy, and that was neither birthplace nor adopted city: “I always focus on where you have the biggest impact and where people need it the most—so that is always, always poor, uneducated girls in the developing world.” The Asian entrepreneur felt a greater obligation to the communities with which he had a personal connection, so his philanthropy was directed in two places: building schools in his native country and supporting the education of poor children in California.
This dual focus, working with the poorest of the poor abroad and also doing something for the people at the bottom in your own neighborhood, is the balance a lot of the plutocrats strike. You could see another example on the lawns of Kensington Palace. The redbrick mansion was once home to Princess Diana and today is a home for her sons, but the most lavish celebration held on its grounds in the summer of 2011 was the annual gala auction hedge fund manager (and supermodel-dater) Arpad Busson organizes to raise money for ARK, the children’s charity he founded.
Busson is a vocal proponent of philanthro-capitalism. ARK stands for Absolute Return for Kids, a play on the language of the hedge funds and their pursuit of absolute returns, often using aggressive techniques such as short selling, in contrast with generally more conservative mutual funds and their pursuit of relative returns, which is to say they aim to keep abreast of the wider investment pack. Busson thinks ARK needs to be run like a hedge fund. “If we can apply the entrepreneurial principles we have brought to business to charity, we have a shot at having a really strong impact, to be able to transform the lives of children,” he told
When it comes to picking which children, Busson, a true global nomad—he was born in France of a French father and an English mother, he has worked in New York and Paris as well as London, and his own two boys are the sons of Australian model Elle Macpherson—targets his efforts at the children of the world. ARK has projects in eastern Europe, Africa, and India, as well as in the UK. That mix would not have occurred to philanthropists of a previous generation, for whom poor neighbors belonged to a very different category from the poor of the third world. But to the globe-trotting plutocrat, there isn’t much difference between the poor child in the London estate (Britspeak for housing projects) and the New Delhi slum.
PHILANTHRO-CAPITALISM
Busson’s belief in applying business techniques to philanthropy is characteristic of the global super-elite’s approach to doing good. No one does this more effectively than Bill Gates, whose foundation, with its $33 billion war chest and rigorously analytical mind-set, has transformed charity, and sometimes public policy, around the world.
Within the plutocracy, the Gates Foundation has had a decisive cultural impact. Gates and his co-donor Warren Buffett—not accidentally two of the world’s most visible and most admired billionaires—have made it de rigueur not only to give away a lot of your money but to be actively engaged in how it is spent. Gates has become an evangelist for this idea that capitalism must do good, and do-gooders must become more capitalist. He even has a name for it, “creative capitalism,” a term he unveiled in a speech at Davos—where else?—at the 2008 meeting of the World Economic Forum.
Marx famously observed that early generations of philosophers had sought to describe the world; he wanted to change it. Gates and his plutocratic peers are having a similarly dramatic impact on the world of charity. They don’t want to fund the social sector, they want to transform it. One example is their impact on education in America. With their focus on measurable results, Gates and his fellow education-focused billionaires have spearheaded a data-driven revolution. The first step was to put tests at the center of education, so that the output—student learning—could be measured. The next step is to try to make the job of teaching more data- and incentive-driven. As Gates said in a speech in November 2010, “We have to figure out what makes the great teacher great.” That effort includes videotaping teachers in the classroom and paying them based on how they perform.
Strikingly, the ambition of the philanthro-capitalists doesn’t stop at transforming how charity works. They want to change how the state operates, too. These are men who have built their businesses by achieving the maximum impact with the minimum effort—either as financiers using leverage or technologists using scale. They think of their charitable dollars in the same way.
“Our foundation tends to fund more of the up-front discovery work, and we’re a partner in delivery, but governmental funding is the biggest,” Gates told students at MIT on a visit there in April 2010.
“Take delivering AIDS medicine. We did the pilot studies in Botswana to prove that you could deliver ARBs [angiotensin II receptor blockers] in Africa, and then PEPFAR [the U.S. President’s Emergency Plan for AIDS Relief], the U.S. government program, which is five billion [dollars] a year, which is way more than our whole foundation, just that one U.S. government help program—just one country—came in and scaled up based on some of the lessons from that.”
It is a measure of the financial and intellectual power of plutocrats in the world economy that their goal is to guide the state. Indeed, the muscle of the philanthro-capitalists is such that they can sometimes unintentionally
