The Wall Street Journal, it seems, has issues with philanthropy. Just the other day it ran a piece called “The Folly of Philanthropy”, reviewing a new book called The Good Rich by Robert Dalzell, that raised a familiar conservative argument against philanthropy that we find rather peculiar. “Charity is a sideshow”, concludes the reviewer, Amity Shlaes. “What matters about the rich, if we are considering the public good, isn’t their charity but their investments – their ideas about what to do with “slimey petroleum” and microchips – and the jobs and activity they create.”
We first came across this argument when we were researching Philanthrocapitalism in an op ed piece in the Journal written by economics professor Robert Barro, who argued that Bill Gates is “kidding himself if he believes that the efforts of the Gates Foundation are likely to provide society anything like the past and future accomplishments of Microsoft”. Ms Shlaes’ twist is to abjure heaping more conservative coals on the head of Bill Gates but, instead, to sing the praises of the late Steve Jobs for sticking to the business of business and not wasting his time on giving. But the thrust of the argument is the same. It is also an argument that we hear frequently at seminars and conferences with conservative audiences.
We are, on the whole, enthusiastic champions of the role that business plays as a creator of value in the world. (With the caveats that not all profit is socially valuable – think of the profits that Lehman Brothers earned before it crashed, which at the time seemed to indicate that the investment bank was well managed, rather than the reality that it was gambling recklessly – and that not all billionaires are equal, as how they have earned their money and whether they have paid their fair whack of taxes are important questions in judging whether someone is a ‘good billionaire’ or, perhaps, a tax dodging monopolist.) Indeed, we would even accept that, in some or even many cases, a dynamic entrepreneur may have more to add to the world through business than through philanthropy. But the judgement on whether any particular billionaire’s philanthropy is worthwhile or waste must be based on an analysis both of what he contributes through business and what he contributes through philanthropy. It cannot be assumed a priori, as the Journal seems to do, that business is always, necessarily better.
For what it is worth, Bill Gates seems to have felt he had taken Microsoft as far as he could and was ready for a fresh challenge, and that he may well have some sort of comparative advantage in tackling the diseases of the poor world. Equally, perhaps it was best for Mr Jobs to stick to what he knew best, leaving the task of giving away his surplus wealth to his widow, who seems to have given the matter plenty of thought.
Strikingly, the debate seems moot for many of today’s young billionaires, such as the men behind e-Bay (Pierre Omidyar and Jeff Skoll), for whom it is not an either or question, as they explore for-profit investing as a tool of their philanthropy, in tandem with their grant-making.
We can’t help noticing that when conservatives trot out the ‘philanthropy is less important than business’ argument they always seem to cite liberal philanthropists as examples of such wasteful behaviour. Funny that! We would be more inclined to take the argument seriously if they were slamming the philanthropy of the Koch brothers or other major donors to conservative causes.
(P.S. Mr Dalzell’s book, according to the Journal, argues that much of the philanthropy in America doesn’t do a lot of good. We haven’t seen a copy of The Good Rich yet but will read Mr Dalzell’s discussion of philanthrocapitalism with interest.)