In the fall of 2008, The Project for New Philanthropy Studies hosted a colloquium intended to advance our understanding of philanthropy as a selforganizing system of human interaction and to explore the integral role of the philanthropic order in the extended network of social cooperation that Adam Smith called the “great society of mankind.” Robert Garnett, associate professor of economics at Texas Christian University, generously served as codirector of this program.
Of particular interest to us was to reexamine the relationship between “the world of gift” (to use the title of a recent work by Jacques Godbout and Alain Caille) and the world of modern commerce, conceived in the broad, Smithian sense of Nobel Laureate Friedrich Hayek’s “extended order.” What, if anything, distinguishes gifts from commerce? Can we still speak meaningfully of a “commercial sector” as distinct from a “philanthropic sector,” or a “market economy” as distinct from “gift economy,” or even a “commercial transaction” as distinct from a “gift”? How might the theory and practice of contemporary philanthropy be advanced by such a rethinking of the commerce/philanthropy relationship?
A guiding premise of our conversation was that commercial societies have always exhibited a complex dance of gift and commerce, contrary to formulations that juxtapose the personal, altruistic realm of the gift to the impersonal, self-interested sphere of the market. Economic modernity did not drive out the role of gift but saw it transformed, first into widespread habits of civil association and later into new philanthropic foundations organized voluntarily to weave the wealth of industrialists back into the social fabric. As we explored this integrated view of Smith’s Great Society as a complex network of commercial activity and voluntary benefaction, we continually asked ourselves: Does such a vision enhance our ability to understand and enact a society that is both free and humane? Or is the philanthropic enterprise better served by the conventional distinction between commercial and non-profit sectors?
The four featured essays in this volume of Conversations on Philanthropy, by Steven Grosby, Paul Lewis, David Ellerman, and Laurent Dobuzinskis, grew out of that colloquium. Taken with the comments we have invited, these four conversations offer the reader a delightful and challenging garden of forking yet recursive and intersecting paths. Indeed, the themes of these essays not only entwine with one another but return to issues previously explored in the pages of this journal. In the introduction to Volume IV, which featured a symposium on the work of economist Kenneth Boulding, I noted that Boulding alluded to the grant as “a sacrifice we may make in the interests of our identity, for our identity depends very largely on the community with which we identify.” Our current contributors, writing from diverse disciplinary backgrounds, grapple with these very issues of identity and identification in modern philanthropy and in the formation of commercial corporations, states, and other social institutions. The reader who selects one essay, one conversation, or reads the volume cover to cover will be provoked to think in new ways about these important questions.
Steven Grosby’s essay sets the stage by tackling a critical problem in modern economic thought which depends heavily on rational choice theory: how to account coherently for human action that seems to benefit others more than self. Grosby offers a supplement to rational choice theory in the possibility of what he calls action on the basis of “disinterested interest.”
While Hayek argued that beneficence in the “extended order” was best fostered and preserved by impersonal interaction in markets in pursuit of one’s own interests, Grosby argues that a unique human capability for disinterested interest may also act as a complementary catalyst for the flourishing of society by enabling “an expansion of the understanding of the self.” Grosby’s approach allows us to consider anew the pervasive criticism that market activity diminishes us as persons and imagine that in fact it is in extended commercial societies where we most have opportunity to become truly philanthropic.
Grosby’s commenters engage fruitfully with different parts of his argument. Extending Grosby’s attention to expansion of the self along a temporal axis, Jonathan Imber reminds us that one function of philanthropy has traditionally been to assist in the forging of collective memory. Imber thus meditates on the streams of generosity and cultural tradition that flow through philanthropic action over time. James Otteson asks us to test whether Grosby’s analysis is compatible with the self-understanding of Andrew Carnegie and elaborates the latter’s concern with problems of responsibility and indiscriminate giving in philanthropy. Gordon Lloyd elucidates the American Founders' solution to "Das Adam Smith Problem," particularly as it found expression in James Madison's meditations on the extended republic. Paul Schervish finally points us beyond the narratives of memory, responsibility, and self-government to introduce anarrative of care. Alongside history, ethics, and national biography, Schervish suggests that philanthropy is also a process of writing our own moral biographies, and that reflection on the process of identification of self with others through philanthropic care may deepen our understanding in ways that the concept of self-interest, even disinterested interest, may not allow.
Launched thus fully into the complexities of identity, interests, and philanthropic commerce, we come to Paul Lewis’ essay, which introduces us to the thought of Nobel Laureate Amartya Sen. Employing Sen’s concepts of sympathy, commitment, and collective intentionality, Lewis provides cogent—and arguably Smithian—grounds for fresh thinking about the nature of philanthropic action. In addition, Lewis uncovers a fruitful consilience between Sen’s and Hayek’s respective conceptions of rule-guided action and uses it to broach a promising dialogue on voluntary association between two of the great Smithian liberals of our time. Lewis’s framework suggests a philanthropic interpretation of Hayek, showing how Hayek’s emphasis on the emergence and evolution of formal and tacit social rules elucidates an important locus of non-self-regarding commitment in modern societies. Through Lewis’ interpretation of Hayek, we see how a willingness to constrain our behavior in conformity to social rules and norms may be regarded as a fundamental act of philanthropy in the modern extended order. Taking Lewis’ analysis of Sen a step deeper, commenter Kevin Quinn questions the priority of identity or commitment and concludes that commitment gives rise to identity rather than vice-versa. The importance of this point should not be overlooked, for Quinn suggests that it is commitment-based normativity (which cannot be explained by materialist naturalism) that forms the basis of collective intentionality. Shaun Hargreaves Heap also addresses the problems plaguing not only economists but also evolutionary psychologists searching for grounds for normative social preferences. He highlights a critical issue in Lewis’ analysis, which is whether we can arrive at a science of human behavior that allows us to attend seriously to the meanings that people attach to their actions. These essays suggest that some sort of phenomenology of purposefulness is necessary if we are to explain the processes humans go through to make sense of both their individual actions and to establish social norms.
Lest we become entangled in an analytical hall of mirrors of interest, disinterest, commitment and intentionality, David Ellerman brings us back down to an institutional level and asks us to think less about how and more about where people form and give expression to their commitments. Ellerman provocatively forges Nobel Laureate Herbert Simon’s attention to organizations within markets with A. O. Hirschman’s typology of the horizon of choices individuals face in engaging with organizations (exit, voice, loyalty). Taken with the assertion that “beyond the family, most people have thick day-to-day participation in only one organization: their workplace,” this results in a suggestion that the widely-held model of the modern American corporation (versus the more traditional closely held firm or perhaps some of the emerging employee-held models) poses an obstacle to effective collective action within communities with which people identify. Ellerman thus hints that modern corporate organization may tend to work against the expansion of self, identification, and interests our other contributors have thus far commended as a critical foundation of philanthropy.
While lamenting Ellerman’s unfamiliarity with the growing attention to theories of the firm emerging from scholars inspired by Austrian economics, David Prychitko on the whole welcomes Ellerman’s analysis and finds in it an invitation to a host of questions that might guide future research into the relationships between market, state, and philanthropic institutions. Roger Lohmann, on the other hand, takes issue with Ellerman’s seeming reductionism in omitting serious consideration of the logic of voice from Hirschman’s original typology of exit, voice, and loyalty. For Lohmann, this omission leads Ellerman to mischaracterize one important function of the philanthropic commons, which is the exercise of voice, or participation in the discursive process not only of defining and redefining social norms but also of discovering innovations in human services, some of which may ultimately transcend their philanthropic roots and be brought to market. A critical question lurking beneath the surface of these essays is whether the theories of market failure and government failure do much positive work for us in understanding the genesis and role of philanthropic action in modern society.
The last conversation in this volume takes shape around Laurent Dobuzinskis’ examination of French scholarship that takes seriously the role of gift and altruism in modern society. Dobuzinskis recounts the work both of Marcel Mauss, the seminal anthropologist of gift, and Serge-Christophe Kolm, a contemporary French economist who has written provocatively on the role of altruism and reciprocity in modern economies. In a broad ranging essay that draws upon such diverse sources as the work of Emile Durkheim and modern theories of social production of knowledge (Yochai Benkler), Dobuzinskis suggests that our effort to discover a foundation for philanthropy in Anglo-American-Austrian classical liberalism may be complemented and assisted through serious attention to a living French tradition that has dwelt on similar issues.
Christine Henderson commends Dobuzinskis’ drawing of parallels between the work of Kolm and Adam Smith, but expresses surprise that Dobuzinskis does not draw more upon the native French tradition of civil society analysis that can be found in thinkers such as Tocqueville, Montesquieu, and Benjamin Constant. She also cautions that Dobuzinskis may not take seriously enough the tendency of Mauss and Kolm to look more to ad hoc legislation than to evolved law to foster philanthropic ethics and outcomes in modern societies. The tension between law, legislation, and liberty is also addressed by Jack Birner, who articulates a critical question lurking across all the essays in this volume: “Is it better to have a market society in which all transfer payments are defined by law in terms of rights and obligations, or one in which they are gifts that depend exclusively on the benevolence of individuals?” Birner notes that we may not be able to work toward a fruitful resolution of this question until we have as thorough an analysis of the legal order of philanthropy as Hayek provided us for the legal order of the market.
Our conversations conclude with a comment by Jacques Godbout, whose book was one of the texts originally informing the reflections of our four lead authors. Godbout’s comments relate not only formally to Dobuzinskis’ essay but reprise themes addressed by all of our contributors. Godbout suggests that, in the end, our analysis of gift in modern society is not served by viewing gift as an individual action (whether moved by individual identification or collective intentionality), but rather by seeing gift as a relationship. Viewing gift as relationship allows us to see in a new light many of the aspects of gift raised in these essays, as well as to reflect anew on the relationships between philanthropic, commercial, and governmental means of pursuing “the general welfare.”
This brings us back to one of the core questions over which we have puzzled, which is why Hayek seemed to associate charitable giving with the intentional beneficence of the micro-cosmos (family or face-to-face community) and to accord it little role in the emergentbeneficence of the market process. Hayek’s analysis leaves us with the impression that philanthropy can seldom generate general good in the extended order and that the philanthropic impulse in the modern global economy may be counterproductive.
Hayek was hardly indifferent to problems of poverty and privation. His normative defense of the commercial order was explicitly humanitarian, signified by his view of market competition as a superior means of “inculcating conduct that benefits others” and by his proposal to replace use of the term market economy with “catallaxy,” a term whose Greek root (katalattein orkatalassein) means both “to exchange” and “to receive into the community” or “to turn from enemy into friend.” “The morals of the market,” he writes in The Fatal Conceit, “do lead us to benefit others, not by our intending to do so, but by making us act in a manner which, nonetheless, will have just that effect. The extended order circumvents individual ignorance . . . in a way that good intentions alone cannot do—and thereby does make our efforts altruistic in their effects” (81). For Hayek, the observance of abstract rules rather than the pursuit of “known beneficial ends” best allows us “to confer benefits beyond the range of our concrete knowledge.”
It is possible, however, (and Hayek seems to acknowledge this in The Constitution of Liberty) that the desire to do visible good is not simply an instinctual remnant of the pre-modern tribal order but is an inherently human trait that seeks expression in modern social arrangements. If this is the case, then what appears lacking in Hayek’s account is an understanding of the indispensable role of human liberality and beneficence, and the purposeful exercise of these virtues, even on behalf of strangers, in the extended social order. Far from limiting our gifts to those known to us personally, many of us today routinely make gifts that will benefit unknown others now and in the future in ways that we cannot prescribe or predict. When we give to a college scholarship fund, for instance, we give for a variety of reasons and with an expectation that certain guidelines will be applied to the awards, but we may never know the individual who benefits from our gift. What role does such impersonal beneficence, which confers benefits beyond the range of our concrete knowledge, play in promoting social order?
A robust theory of philanthropic commerce might start by attending to the knowledge that individuals acquire, employ, and convey in their varied attempts to practice what Boulding called “the difficult art of doing good.” And, this is the important addendum, such purposefulness should be viewed not merely as individually constructed meaning, but should be examined as it is embedded in and gives rise to evolving formal and tacit social rules, such as “Do unto others as you would have them do unto you,” “First, do no harm,” “Pay it forward,” “Give back,” and many others.
We hope that this volume will deepen our understanding of the fundamental importance and potential of philanthropic giving in modern social orders. If developed along the multiple lines suggested by our authors, a classical liberal theory of philanthropic action might one day take its place within a general theory of entrepreneurial action, such that donor intent could be neither dismissed merely as an instinctual desire to do good for known others nor feared as a rationalized pursuit of utopian good based in theories of general altruism but embraced as a discursive (and intersubjective) discovery process that guides other-regarding human action in local and extended orders of cooperation. Such a theory, to achieve its envisioned potential, would have to specify the epistemic tools and social processes that allow catallactic communities—communities that succeed in coordinating interests and expanding the spheres of mutual identification—to flourish. As these creative conversations continue, however, they are animated by an emerging consensus that centralized redistributions of resources (via the state or even large-scale foundations) cannot readily substitute for, or relieve us of the individual responsibility to partake in, the dispersed discovery processes that continually reveal new opportunities for humane giving.
Our cover art for this volume seeks to evoke the view of gift as a relationship through which we come to identify with one another and establish not only friendships but harmonious social orders. Several of our authors make reference to Marcel Mauss’ examination of Maori practices of gift giving. The photograph on our cover depicts the hongi, the traditional Maori greeting in which the breath of life is exchanged and the stranger welcomed as friend. But there is another equally important part of this photograph represented in the moko, the traditional carved and stained markings borne by the Maori. Each moko is a unique symbolic and sacred work that speaks both to the personal identity and social standing of its bearer. The traditional moko thus conveys a wealth of cultural knowledge to one schooled in its semiotics. Without such meaning inscribed on our faces, however, most of us are left to share our identity with others and forge relational webs of trust primarily through more discursive means. The relationship of gift discussed in this volume clearly remains an important means to this process of self- and mutual discovery, as well as to the formation of both cultural memory and hope.
Conversations on Philanthropy has itself been a beneficiary of the discursive gift relationship this year, as we welcome a new board of contributing editors. We are grateful to each person who has agreed to serve the journal in this role and hope that the relationships we build will improve the substance and style of the journal in the coming years.
Finally, I must note that this volume introduces a Book Review Section. We stumble across one or two books a week that seem relevant to some aspect of our conversations, and we are pleased to offer you a glimpse into some of those titles here. Book Reviews will appear throughout the year on the journal’s new website—www.conversationsonphilanthropy.org—and will be collected annually for the print volume. We hope you enjoy this addition to the conversation.