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A lesson for investors: Real change involves the loss of power


13 May 2021 at 8:15 am
Wendy Williams
Anand Giridharadas poses a challenge to responsible investors to think about their power and what they’re really doing to achieve systemic change.


Wendy Williams | 13 May 2021 at 8:15 am


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A lesson for investors: Real change involves the loss of power
13 May 2021 at 8:15 am

Anand Giridharadas poses a challenge to responsible investors to think about their power and what they’re really doing to achieve systemic change.

There is no win-win when it comes to social change, says best-selling author Anand Giridharadas.

The former McKinsey consultant-turned New York Times columnist, was speaking at RI Australia 2021, run by the Responsible Investment Association Australasia, in a session addressing the question of how investors can use their power to address structural inequality.

At the heart of the discussion was the uncomfortable question of whether the responsible investment community is complicit in the charade of working to change the world only in ways that don’t jeopardise individuals’ own standing.

Giridharadas, who has cultivated a reputation for telling “inconvenient truths” to people in power, was unequivocal in telling the audience that real change involves the loss of power. Something he said we should embrace, and be honest about.

“Business people generally like positivity. Like win wins. I don’t think there is a win-win on social change,” he said.

“I think if you were to look around at your own society and think about what were the major gains that made society more decent and more humane, ask yourself, were they win-wins? Or did they actually involve the loss of power?” 

The theme is one he explored in his book, Winners Take All: The Elite Charade of Changing the World.

He said the impetus for writing came from watching a paradox emerge where rich and powerful people and institutions were bending over backwards to change the world and give back philanthropically, while at the same time, the same people were benefiting from growing inequality and a concentration of wealth and power. 

“I began to wonder as a reporter, what’s the relationship between the extraordinary elite helping of our time, and the extraordinary elite hoarding of our time,” he said.

What he found was that elite helping, generally functions in ways that are limited to forms of change that don’t threaten the privilege and prestige of those on top.

“In other words, it is a form of change that does not change structures, does not change systems. In fact, it staves off such change,” Giridharadas said.

“We live in this time in which generosity has come to function as a wingman to injustice in many cases, in which giving back has come to function as a wingman to taking too much, and in which talking about changing the world is all too often serving as a wingman of keeping your world at the top, the same.”

In the context of ethical investing, Giridharadas said it was essential to look at the full picture, and understand the totality of how investors or institutions are showing up in the world. 

“Are they still lobbying for the kinds of tax policies that have driven extreme inequality around the world, are they still lobbying to have unions be weaker than they are, for labor to have less power than it does, are they still lobbying against the social safety net, are they still lobbying to make health care less accessible in countries where that is an issue,” he asked. 

“Correct me if I’m wrong, but in virtually no society that I’ve heard of, virtually no impact fund that I’ve heard of, has there been any change in what the large pool of money, connected to that good money, is doing.”

He said it was quite revealing that investors actually delineate when they’re being “responsible”.

“If you drop your kids off at school and there was one room that was like the responsible teachers room, you’d be quite alarmed about what was going on in all the other rooms. So I’m interested in what’s going on in all the other rooms,” he said.

The concern is not only that the impact of the “responsible room” is dwarfed by what is going on in all the other rooms, but that what is happening in the responsible room, is being weaponised by the people in those other rooms. It serves a function of allowing them to do another thing on a much bigger scale, out of view. 

“In other words, a Goldman Sachs or a TPG can point to the impact work it does and say ‘look, investing can change the world’, ‘look we’re working on the racial wealth gap’, ‘look we’re empowering 10,000 women’ and then that story, which is relentlessly advertised… actually distracts people, it distracts legislators, from those other things,” Giridharadas said.

“So that side room isn’t just overwhelmed by the effects of other things, it is creating permission for those other things to happen.”

This argument doesn’t mean businesses shouldn’t try to have a positive impact.

Giridharadas acknowledged there was a role for investors and business to play in moving the public’s mind. But he was emphatic that it shouldn’t stop there.

“I’m not saying invest in tobacco. It’s great to not invest in tobacco. It’s great to not invest in fossil fuels. But keep going,” he said.

“Keep going with that analysis to say where is the root of this problem.”

His advice was to think about a solution that is public, democratic, institutional and universal.

“That solves that problem at the root for everybody,” he said.

When it comes to the world of responsible business and investing, he said there was too much focus on making good easier, instead of making bad harder.

“Part of what I’m here to say, whether you like it or not, is that it is much more important in my view to make bad harder,” he said.

“It requires doing it over people’s objections. 

“It requires kicking and screaming from owners and CEOs and investors. It requires doing things they hate to achieve a fairer society.”

It comes back to the idea of power. Who has it, and whether they are really willing to give it up, without a fight.

In answer to the question of whether it is possible to change capitalism from within capitalism, Giridharadas was emphatic in his answer. No.

“The healthy push back to capitalism is going to come from outside capitalism,” he said.


Wendy Williams  |  Editor  |  @WendyAnWilliams

Wendy Williams is a journalist specialising in the not-for-profit sector and broader social economy. She has been the editor of Pro Bono News since 2018.

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