What Good is Charity?

The earthquake in Haiti has prompted a deluge of public support. As of the beginning of February, US charities have raised $644m (£413) from dozens of organisations. That shows people care about each other – particularly in the face of racist apathy from some right-wing commentators.

Corporations and governments have been pillaging Haiti’s natural resources and working class for more than 200 years. In the US GDP per capita is currently some $635 per year; in the Dominican Republic next door, it’s $4,774. In 2005, 58 per cent of the population was undernourished whilst 80 per cent of the rural population lives in poverty.

The Haitian government pursues a neoliberal, debt-cutting agenda. Whenever Haitian people protest, western powers makes a mission of involving themselves in the country’s internal politics. It seems that charity is the least we can do to help.

But charity is not a consistent source of wealth for Haiti. That comes from Haitians themselves. International aid amounts to approximately $1bn a year: this is the same as the remittances Haitian workers send home every year. Poor Haitians being super-exploited overseas account for nearly half of Haiti’s billion annual foreign exchange earnings.

Charity can’t begin to redress these structural inequalities. At best it’s a lifeline. Some say charity keeps poor people from taking action – but having nothing doesn’t guarantee a revolt. Political action needs organisations to harness that anger, and the left has been beaten back around the world. But looked at structurally, rather than ideologically, charity becomes a transfer of wealth from the poor to the very poor.

To understand this, we have to look at the economy. Adam Smith thought different classes contributed to social wealth: workers gave their labour, capitalists gave their capital and landlords gave their land. David Ricardo saw workers’ labour creating wealth, but he assumed there had to be capitalists around to direct it. It was left to Karl Marx to show that wealth is produced by workers, but it is appropriated by the capitalist class – stolen, essentially, when workers are paid for less than the value they produce in a given day. All wealth is produced socially but taken privately. A portion of that is then returned to workers to meet their needs; the remainder is profit.

The capitalist economists who came later could not challenge this critique, so they ignored it. Instead, they said people gain from production what they put into it, and profit is a temporary accident. A surplus, and the power that flows from it, doesn’t exist. Economics’ focus should be exchange and distribution, not production. This type of neoclassical economics remains dominant today, and it forms the ideological basis of all charity.

This kind of economics puts private spending beyond democratic control. It might be obscene that in the US General Electric earns more then $6bn in profits every four months selling military jet engines. You personally may not like Europe’s top 16 banks making E50bn in 2009 during massive bailouts. Too bad: you have no say over what is produced or where the surplus goes. It’s taken privately. Well-meaning liberals ask for redistribution: for example, Stephen Lewis, as United Nations envoy for HIV/AIDS in Africa, has demanded governments devote 0.7 per cent of GDP for foreign aid. But even assuming this money doesn’t have neoliberal strings attached, it’s still a redistribution of a part of the social wealth governments have managed to claw back through tax. It’s not the surplus.

After profit, and tax, all that’s left is wages. In 2004, US wages formed 45 per cent of GDP, profits more than 10 per cent. That figure doesn’t include corporate revenues and the anti-social investment decisions they go towards; and remember that wages are not ‘payment for a good day’s work’ but for only a portion of the value generated. But even these rough estimates show workers can dispose of less than half of total social wealth. From that we have to buy shelter, food and all the other things a private system doesn’t provide for us. And from the small portion left over – that’s where charity comes from.

Even so, poor people give more to charity than the rich. US households earning above $100,000 give only 2.7 per cent of their income to charity, while those earning under $25,000 give 4.2 per cent. This makes sense: if you live closer to the edge, you know what it feels like. Charity is the working class taking some of its own wealth the ruling class has returned to it, and giving that to even poorer people. It’s thus both a testament to the generosity of workers who have little to begin with, and an insult to the poor who are truly suffering and must make do with a pittance while corporations and governments gorge themselves.

As a bed-fellow of neoclassical economics, charity assumes that wealth can at best be redistributed, not democratically controlled. Until workers control the economy to meet social need, we will never create long-lasting change for the poor in the global north or south. So what can we do now?

We could pressure our governments to stop interfering with Haitian democracy and promoting neoliberal aid, and halt the plans of greedy sweatshop capitalists to redevelop Haiti. There are also plenty of grassroots, left-wing political groups that also need your money. Charity remains important, but it’s no substitute for political action. Your donation can be a chance to learn about the class struggle in Haiti, and act in solidarity, not charity.

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This post was written by Daniel Serge