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The Trouble With The Trouble With Billionaires

A new book called The Trouble With Billionaires, by the “feisty social critic” Linda McQuaig and Neil Brooks, is getting a lot of play in Canada at the moment. We have not seen a copy yet, but an excerpt in the The Star contains an attack on the philanthropy of the rich that is worth examining.

McQuaig and Brooks report on the fundraising programme of the University of Toronto, which has pulled in $120 million a year over the past five years. That’s not Harvard-scale fundraising, but it is a tidy sum.

The first problem, it seems, is that the university has so many donors that want to stick their names on buildings that they have cornered the naming rights market, meaning that the university is unable to honour those who have contributed to the country in other ways with a sign above a door. This is a problem that we find it pretty hard to get worked up about. Moreover, it doesn’t seem beyond the wit of man to come up with some way to honour donors and public servants equally. (Sticking your name on things can also backfire – for a brilliant take on the perils of ostentatious philanthropy watch this episode of Curb Your Enthusiasm).

A more substantive concern is that the influence of donors is not just cosmetic; they are actually influencing the university’s agenda. “This seems certain to undermine the role of universities and colleges as places of critical thought, where the prevailing policies and dogmas — championed by those wealthy business interests — are carefully scrutinized and debated”, McQuaig and Brooks protest. Academic independence is an important issue. Their book suggests that donors might be able to influence the university’s research without citing examples.

Whilst we must hope that a respected insitution like the University of Toronto is protecting its staff from any undue influence from donors, the real question here is whether donors should set the agenda. Many philanthrocapitalists do so unashamedly. Bill Gates gives to research into malaria because, as he sees it, there has been a ‘market failure’ in public and commercial funding for this disease of the poor world. Real estate and insurance billionaire Eli Broad, as we describe in the book, has deliberately twisted arms with his funding to get Harvard and MIT to set aside traditional rivalries and work together on genome research. So too the Irish-American philanthrocapitalist, Chuck Feeney, a big funder of universities in America, Ireland and Australia.

These and other examples suggest that philanthropists can enrich academia by supporting research into neglected issues, as well as with over-coming institutional barriers to research collaboration. McQuaig and Brooks’ argument suggests that billionaires have a common agenda (the ‘prevailing dogma’ as they call it) but, in the excerpt available to us, do not explain or show what this is (they simply observe that one donor is right wing). As we have argued recently, billionaires are in fact quite a diverse group, who spend a lot of time funding competing causes.

The final criticism is that the billionaires are simply being self-serving. Stage one of this argument – that the tax breaks on giving mean that the true cost of a gift to a billionaire is less than the headline figure that is given away – is sort of fair but it does seem a bit odd, as the authors do, to dismiss a gift of $35 million because it ‘only’ cost the donor $19 million.

Stage two of the argument is that the donor got $25m match funding from the Ontario and federal governments – although that is presumably only because these public bodies thought this was a good investment in the first place. (In the book, we describe how Feeney’s match funding deal with the Irish government boosted the country’s university research capacity.)

Stage three is that the donor, mining tycoon Peter Munk, gets some PR benefit from the gift, which helps burnish a reputation that, they say, has been tarnished by Munk’s companies’ impact on the environment. Well, maybe. But we suspect that the Canadian public and media are not so easily tricked.

Writing in the “Wealth Report” section of the Wall Street JournalRobert Frank responds to the McQuaig and Brooks book by asking: “Would universities be better off if the wealthy spent their money only on yachts and planes rather than global-studies programs?” This is the nub of the problem with their argument – like many liberal critics of philanthropy, McQuaig and Brooks just want higher taxes on the rich and more public spending. Well, we are about to get higher taxes in most countries, but probably less public spending, too, for the next decade at least – so their solution is a bit of a non-starter.

It is right that we should be vigilant about the power of the rich. We support McQuaig and Brooks in their efforts to stir up a wider debate about philanthropy, which should be scrutinised. But surely the time has come to move on to discussing issues of substance, rather than resorting to the same old insinuation and knee-jerk rich-bashing?

0 replies on “The Trouble With The Trouble With Billionaires”

Her comment that billionaires will continue to toil for “fun and country” is likely wrong, and smacks of slavery. She should be made to read Ayn Rand’s Atlas Shrugged again and again until she’s de-programmed, (or should I say, re-programmed?). She sounds like an angry ex-wife, bashing her ex with one hand while demanding money from him with the other, and doesn’t even see her own duplicity, much less know enough to be embarrassed by it!!

I wonder if I might suggest reading the book. I would not raise a criticism of co-author Neil Brooks as “he sounds like an angry ex-husband, bashing his ex with one hand, while demanding money/sex from her with the other, and doesn’t even see his own duplicity, much less know enough to be embarrassed by it!!” I wonder who is programmed with what, in actuality.
I am reading The Trouble with Billionaires now. It is definitely thought-provoking. One issue it takes on is that, for example, the CEO of Coach handbags defends his unique ability to make it on his own, to succeed brilliantly in this technological age: that is the reason he feels completely entitled to earn billions. The uber rich maintain that they make it on their own, and that government has no right to interfere (through taxation becoming higher); McQuaig/Brooks point out that the civil system and laws of society create a stable market, one that supports and allows for the amassing of wealth. Yet the very wealthy don’t mind or mention this type of ‘government interference’. They take for granted the very society and market the people/government create that allows them to collect wealth; they balk at contributing a fairer share back into society.
I highly recommend the book, based on the couple of chapters I’ve read thus far. It will get you thinking.

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