On Corporate Power | Of Ideology and Philanthropy
New in Ceasefire, On Corporate Power - Posted on Tuesday, December 13, 2011 9:09 - 5 Comments
Massive not-for-profit corporations, like the Carnegie, Ford, and Rockefeller foundations, created by the world’s leading capitalists, have “gone to great lengths to rationalise the contradiction between democratic principles and elite dominance.” Seen through the eyes of their executives, democracy only functions when it is run by the few for the many.
Education thus takes a key place in the successful promotion of elite governance both on domestic and international planes of action; and although not well known, Edward Berman, professor emeritus at the University of Louisville, has written an important book that examines just this subject.
By briefly reviewing Berman’s study The Influence of the Carnegie, Ford, and Rockefeller Foundations on American Foreign Policy: The Ideology of Philanthropy (State University of New York Press, 1983), this article aims to publicise his vitally important, though oft neglected, ideas on the anti-democratic nature of liberal philanthropy.
While the history of elite governance is long and troublesome, in Berman’s book we are invited to study the honing of such management strategies from the early twentieth century onwards. Today of course the Gates Foundation is the most financially powerful philanthropic body in the world, but until its relatively late arrival on the scene, the Carnegie, Ford, and Rockefeller foundations (the “big three”) had dominated the philanthropic arena.
Indeed, exporting the ideology of the capitalist state has been a key function of these foundations, a duty of care that fell securely on their shoulders as they “represented one of the few sources of unencumbered ‘risk’ capital available during the period from 1945 to 1975.”
As Berman acknowledges, the interest shown by these foundations in creating and financing “various educational configurations both at home and abroad cannot be separated from their attempts to evolve a stable domestic polity and a world order amenable to their interests and the strengthening of international capitalism.” Their simultaneous promotion of elite governance and massive levels of worker exploitation consequently required the forging of a “liberal consensus” among the ruling class and their allied functionaries, which would actively pre-empt radical structural alternatives, and legitimise capitalism – by fostering public acquiesence to elite priorities.
To successfully facilitate the building of this consensus, the creation of right-thinking educational institutions was essential in generating a “worldwide network of elites whose approach to governance and change would be efficient, professional, moderate, incremental, and non-threatening to the class interests of those who, like Messrs, Carnegie, Ford, and Rockefeller, had established the foundations.”
Far-sighted elites evidently recognised the popularity of alternatives to capitalism, so in turn advocated progressive reforms which attempted to find the “middle ground between the extremes of oligopoly on the one hand and socialism on the other, while encouraging an atmosphere congenial to increased levels of productivity.”
This is not to say that the individuals who launched foundation “education” programs during the Progressive Era were not seriously concerned with improving the lot of the poor and downtrodden: just that many of these people with “a deep and abiding concern for the plight of the poor” failed to tackle the root cause of injustice, that is, industrial capitalism.
Therefore, as many “charity workers refused to recognise the roots of this mass misery, their palliatives focused more on attempts to reform the existing system and to adjust their clients to it, than to search for alternative organisational structures that might result in a more equitable society less destructive of the immigrants’ communities”.
Many people, even during the Progressive Era, did however challenge the growing power of foundations to define the parameters of legitimate discussion, but the foundation world’s success in fending off such attacks has meant that today far fewer people are aware of the co-optive nature of liberal philanthropy. This is in large part because “[v]iewpoints and perspectives that support the position of the dominant class are funded by the foundations, while those that are seen to threaten that position are not.”
Books critiquing liberal foundations, tend not to fit comfortably within a society whose educational structures prioritise capitalist growth imperatives. Consequently, the strategic funding of certain causes enables major foundations “to legitimate particular viewpoints while simultaneously devaluing others.”
Berman suggests that one of the key projects supported by the major foundations to evolve a consensus for US foreign policy elites was the War-Peace Studies Project, which ran between 1939 and 1945, and whose “conclusions… present in outline form the basics of United States foreign policy after World War II.”
Two “major recommendations” from this project were integral to the propagation of US global hegemony: the first “involved American financial support for and control of” the World Bank (which along with the International Monetary Fund “grew from seeds planted in War-Peace Studies Project recommendation P-1323 of July 1941”); and the second foresaw the need for the development of bilateral assistance agreements, currently operated by the US Agency for International Development.
The ideology of liberal imperialism, that is “modernisation” theory, was “summed up succinctly” in W. W. Rostow’s book The Stages of Economic Growth: A Non-Communist Manifesto (Cambridge University Press, 1960) – a book which was written “during a ‘reflective year’ away from his academic responsibilities, made possible by a grant from the Carnegie Corporation.” And as Berman observes: “An important aspect of this developmental model emphasized the role of the leadership cadres in the new nations.”
This meant that a new Third World elite had to be developed and courted by the foundation world via the use of educational exchange programs, “whereby students benefiting from their fellowships studied certain subjects at universities whose faculties could be counted on, minimally, to provide the ‘correct’ perspectives.”
While an occasional ‘radical’ viewpoint (e.g., [Barrington] Moore or Robert Heilbroner’s) might be funded, generally through the Social Science Research Council, there was little chance that his isolated voice could be of consequence as it competed with the more numerous voices of developmental orthodoxy. (p.121)
Early programs bringing African students to the United States were organized in the 1920s by the Phelps-Stokes Fund and by the Rockefeller philanthropies International Education Board, the latter providing funding for bodies like the International Institute at Teachers College, Columbia University. “Such programs provide effective, but generally unrecognized, mechanisms to further the foundations’ cultural hegemony”; thereby “complement[ing] the cruder and more overt forms of economic and military imperialism that are so easily identifiable.”
Berman points out that subsequent contributions to this important side of the cultural cold war like the Congress for Cultural Freedom included the Ford Foundation’s Foreign Student Leadership Program, which was initiated in 1955 and “designated the National Student Association [which already “worked closely with the CIA”] as the agency responsible for the selection of ‘responsible’ foreign student leaders to participate.” However, it is important to emphasise that:
There was no apparent coercion involved in these fellowship programs. The foundations have not overtly manipulated potential fellowship recipients. Such blatant methods are unnecessary because of the understanding on the part of fellowship aspirants that their identification with certain methodological approaches or areas of investigation or their demonstration of certain behaviors will serve to stigmatize them as ‘irresponsible’ among the funding agencies, thereby eliminating any possibility of receiving a grant. (p.95)
Foundations also played a major role in shaping academic research agendas in the United States (and overseas). Berman, for instance, explains how: “The Ford Foundation almost singlehandedly established the major areas-studies programs in American universities.”
Likewise, other foundation-backed educational institutions that worked closely with universities included the Institute of International Education, the African-American Institute, and Education and World Affairs (which was founded in 1961 with $2 million from the Ford Foundation and $0.5 million from the Carnegie Corporation). In 1971, Education and World Affairs “was absorbed into yet another foundation-created organization, the International Council for Educational Development, [a group] whose key officers were former Carnegie vice-president James Perkins and former Ford officer Philip Coombs.”
By way of supplementing and extending the influence of educational exchange programs foundations quickly moved on to provide direct support for “trusted” Third-World intellectuals, “enabling research to be conducted in Third-World countries on socially and/or politically sensitive topics that United States Policy makers considered important.” In some instances these researchers worked in the US but, more often than not, the foundations extended their philanthropic reach to the Third-World countries themselves by financing local research centers. Research findings generated by such regional research networks were then used to better manage those in Third-World periphery states for the benefit of the imperial home state, or metropolitan center.
These networks serve to encourage the production and dissemination of ideas and data deemed important by universities and agencies in the metropolitan centers. At the same time, this arrangement helps to deflect Third-World researchers from concerns that these same agencies are less anxious to have investigated. This is a conscious foundation policy. (p.174)
Despite the evident success that foundations have had in shaping ideology in the twentieth century their power is “not monolithic” and they “do allow differing points of view to be expressed, although these never or only infrequently form the basis for policy.” Indeed, most of their power is simply derived from the fact that their hegemony remains unchallenged, even from anti-capitalist activists. Yet with the spread of the internet it is now much easier to break the ideological clout of foundations, and while in the past many criticisms of foundations have been rendered inaccessible to most people, this is no longer the case.
Last but not least it is important to note that many of the organisations that regularly challenge the legitimacy of (for-profit) corporate power are in fact funded by foundations, and many such groups would actually cease to operate without foundation support. This problematic state of affairs has led some people to describe this domination of the non-profit sector by not-for-profit corporations as resembling a non-profit industrial complex.
Yet in spite of these serious obstacles it is vital that concerned citizens break through the humanitarian rhetoric shielding the foundation world from valid criticism, because as Berman concludes, if their motives are “repeatedly questioned by those for whom these were ostensibly designed… the influence of these institutions could be seriously challenged.” Although powerful it is certain “that they are not omnipotent, nor is their continuing influence as purveyors of capitalist hegemony assured or unassailable.”
 Edward Berman, The Ideology of Philanthropy, p.6.
 Berman, p.38.
 Berman, p.16, p.15, p.16.
 Berman, p.19.
 Berman, p.30.
 Berman, p.43, p.50, p.51.
 Berman, p.67, p.93.
 Berman, p.3, p.94.
 Berman, p.102, p.137, p.173.
 Berman, p.178.
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