Gates & Buffett pledge half their wealth to charity
The pledge of William Buffett, Bill Gates, and a growing number of multi-million and billionaires has received a great deal of press in the last couple of weeks, as Mr. Buffett has made efforts to enlist the super-wealthy from around the world. According to a report in The Washington Post by Donna Gordon Blankinship (5 August, 2010), the giving of the American wealthy could mean some $600 billion in giving. That is double the $300 million given to US charities in 2009. The reception among a number of online established media of such philanthropy has been quite positive, but some considered voices are starting to raise questions about the structural problems that such über-donations might create. Are the challenges valid?
Heather Horn of TheAtlanticWire.com has compiled a useful compendium of thoughts by such economists and pundits as Robert Reich of UC Berkeley, Even Newman of The Wall Street Journal, and Peter Wilby of England’s left-of-center Guardian newspaper. One takeaway is that none of the commentators, save perhaps WIlby to whom we shall return, want to be read as besmirching the generosity of the participants. Their concerns pertain largely to the economic space and power around these individuals that has allowed them to grow so rich, despite (or ‘because of’?) the Great Recession. Robert Reich pointed out on his blog, for example, the wealth accrued over the last year, wages stagnated as unemployment rose to nearly 10%:
Most telling is how much wealthier the richest have become over the past year. Forbes magazine’s list of the world’s billionaires (40 percent of them Americans) show them with an average net worth of $3.5 billion — and an average increase of $500 million in the last 12 months. America’s median hourly wage, meanwhile, dropped last year, and it continues to drop. That’s not even counting the 15 million Americans still out of work.
Evan Newmark at the Wall Street Journal draws on metaphors from the classic movie, It’s A Wonderful Life (Hey, why didn’t we think of that?), to argue that both the billionaires and the Obama Administration are trying to play out self-serving stereotypes for their target constituencies:
The debate over the interplay between taxes, jobs and growth can get pretty nuanced and convoluted. Too bad, most of America’s other 113 million families [not defined as ‘wealthy’ by the IRS] will never understand that. All they read are the headlines about billionaires giving away their billions. And the White House shapes this drama, reducing life down to simple class warfare images: Don’t Tom Steyer and Warren Buffet speak for America’s “wealthy”? Isn’t President Obama simply “fighting” for “working families?” In the short run, many Americans will like this movie. But over the longer run, it won’t play.
His complaint is that the US in 2010 is not the US in 1933, so we should not either await the largess of our moneyed aristocracy nor toss around class-war rhetoric when speaking to unions. Instead, he believes we should focus on redesigning the Bush tax cuts that are so beneficial to the top 2% of society.
This charge is taken up with that oh-so-English combination of literate politeness and cutting analysis by Peter Wilby of The Guardian:
The filthy rich, or some of them, have shown they have a heart. But let’s be clear. Money paid to charity is exempt from tax; the US treasury already loses at least $40bn (£25bn) a year from tax breaks for donations. So billionaires, not the democratically elected and (at least theoretically) accountable representatives of the people, get to decide on the good causes. Those who already wield enormous economic power can [thus] determine social priorities too. …
There is another danger: that the poor are written out of their own story, that business tycoons, accustomed to getting their own way, do things to the poor, rather than with them.
Giving to those less fortunate in circumstances has long been an ethical expectation for much of the world, and each of these pundits want to stress the fact that the giving of those in the “Giving Pledge” should not be dismissed or diminished. Yet, however strident the challenge to the pledge, all statements are open for political debate in an election year. The points raised by these thinkers are worth consideration if only they keep us from the complacency of allowing, and expecting, a few superwealthy individuals to save the day, occasionally, for the rest of us. A similar economic system existed between about 400 and 1789 in much of the west, and it was called ‘feudalism.’
