Thanks to everyone who commented on Against Against Billionaire Philanthropy. For whatever reason, the comments there were exceptionally good. In particular, I’m happy that our usually-quiet leftists finally showed up with some strong (and interesting) pushback.
I usually highlight good comments with short responses, but it was hard for me to avoid debating some of these. I realize that’s complicated, because I can’t quote most long comments in their entirety, and I realize I have more of a platform than other commenters who may feel I misrepresented them or who just want to reply to me. I don’t have a great solution to this, but if you’re annoyed at how I featured/responded to your comment, please tell me, so I can calibrate how serious a problem this is for next time.
Matt Yglesias writes on Twitter:
I think this whole post from @slatestarcodex and, indeed, most of the dialogue on the subject of “billionaire philanthropy” actually misses the bulk of what it is billionaires do with their philanthropy.
In their great book “Billionaires and Stealth Politics” what Page, Seawright, and Lacomb find is that most billionaires don’t seek publicity for their activities & mostly donate to right-wing causes like regressive tax cuts & lower government spending.
Which is to say both sides of this debate are making clever arguments but mostly missing the big picture as to what billionaire philanthropy actually is — not complicated reputation laundering that helps people, but quiet lobbying for libertarian economics.
If we want to debate whether Bill Gates, personally, is Good or Bad it would probably be better to do it on those terms (he seems pretty good to me) rather than talk broadly about billionaires — he is very unusual.
I think Matt is misunderstanding the thesis of Billionaires And Stealth Politics.
(I haven’t read the book. But I’ve read the the original paper it was based on, plus some book reviews that confirm the book is saying the same thing as the paper)
Stealth Politics doesn’t argue that billionaires spend more on right-wing causes than on altruistic ones. It argues that on certain issues relating to wealth and inequality, billionaires spend more on right-wing causes than on left-wing ones. Its methodology is terrible in a bunch of ways, but I assume something like that is probably true, so whatever.
The key finding in the paper (also cited in reviews of the book) is that:
[From 2011 – 2012] most billionaires (65% of those who made partisan contributions) contributed primarily or exclusively to Republicans, and the bulk of their money (averaging $53,227) went to Republican rather than Democratic ($21,411) parties or candidates.
Okay. Over the same period (2011-2012), Bill Gates donated $6,070,000,000 to global health. That is 100,000 times as much as $53,227. Please don’t cite this book to show that “the big picture” is right-wing spending, and that altruistic spending is irrelevant by comparison.
But this is a cheap shot, and the book isn’t designed for these kinds of comparisons, so I want to try my own analysis to see how much billionaires spend on right-wing vs. altruistic causes.
I started with OpenSecrets.org’s list of the 100 top contributors to “federal candidates, parties, political action committees, 527 organizations, and Carey committees”. In order to make the list, you had to donate at least $1.7 million. Of the 100 people who donated at this level, 55 were Democrats and 45 Republicans. The Republican contributions totalled $346 million.
This doesn’t count various sneakier ways of influencing the political climate – for example, the Koch brothers didn’t even make the list! Koch-affiliated groups probably spent $400 million on the 2018 election (some sources say they “planned to” spend $900 million on the 2016 election, but I think they held back because they didn’t like Trump). “Koch-affiliated groups” are complicated, and although they’re not 100% funded by the Koch brothers – one of their groups boasts 90,000 donors! – we can probably round up here. This doesn’t mesh well with claims that the Koch foundation donated $196 million over ten years, but my guess is the lower claim is just what they did openly, so let’s stick with the higher one. I am nervous about how many Koch-like things there are that we don’t know about, and this is a possible source of error in this estimate, but the Kochs are clearly the biggest.
What about non-election-related spending, like think tanks and college professorships? I looked at this list of the top 50 think tanks and added up their budgets. Total budget for all conservative/libertarian think tanks is about $350 million per year. I don’t know how much of this is funded by billionaires, but let’s say all of it.
Add all these numbers up, and divide the election-related ones by two since there’s only an election every two years, and order of magnitude it looks like maybe the budget for conservative politics is around $1 billion per year.
Some basic sanity checks – this site says the 2018 election involved $5 billion of donations, of which $2.5 billion went to the Democrats, $2.0 billion to the Republicans, and $0.5 billion to third parties. If billionaires fund about 30% of the Republican war chest, that would match my estimates above. There’s also this Forbes article, whose author estimates “that if we combine the budgets of these and other conservative free-market think tanks…the entire U.S., Canadian and U.K. market of pro-free society [ie conservative/libertarian] groups is approximately $500 million”. That meshes well with my estimate of $350 million for the US alone.
I can’t emphasize enough that I’m just eyeballing these figures and I can’t find anyone who has done really good work on this question – but I think I have the order of magnitude right. So how does $1 billion for right-wing causes compare to the overall billionaire philanthropy budget?
I’m leaning pretty heavily on this Vox article, but it says that the top 50 billionaires gave $15 billion to charity in 2017 and $8 billion in 2018. If we average this out to about $11 billion/year, only 9% of billionaire philanthropy goes to right-wing causes.
This is actually way too generous to Yglesias, because the Vox article admits it’s only talking about the top 50 US billionaires (out of 500 or so), but I’m comparing it to everyone (billionaire or not) who donated to a think tank or gave $1.7 million+ to campaigns. Probably the real number is much lower.
And we don’t even need to bring in all of the top 50 billionaires! Bill Gates alone averaged $2.5 billion in donations during those two years. One person gave more to global health than every billionaire combined gave to right-wing causes.
So I think Matt is wrong when he says that right-wing causes are where the real money is, and genuinely good philanthropy is just a distraction. The truth is the opposite.
Some commenters agreed that I had demonstrated to their satisfaction that the Gates Foundations was really great, but were concerned I was overusing it as an example. m50d wants us to picture a very different kind of spending when we think of donations:
Imagine a community with a handful of rich people. Winston buys nice suits and fancy dinners, spreads his extra money around the town’s shops and businesses. Geoffrey puts all of his extra into an opera house (or a polo club, or a church he likes, or…). To my mind it’s absurd to say that Winston owes a larger (tax) contribution to the town’s community expenses than Geoffrey does – Winston’s spending already supports the rest of the town, whereas Geoffrey has directed his funds towards his own specific interests. (Which is fine and dandy with your own private money – but only once you’ve paid your share of taxes like everyone else).
Ultraximus agrees:
You could end up in a situation where more and more decide to donate their income towards their favored (but very specific) cause / charity, which in turn decreases tax revenues at a governmental level, which reduces the level of public goods, which in turn leads to lower morale among citizens, which in turns leads to higher amount of people taking advantage of donation deductions, which in turn… soon you end up in a situation where rich donors give large donations to their favored schools and universities to get an entrance for their children. And get a tax deduction for it! From Nordic POV, this kind of situation is simply unfathomable.
Is it unfair of me to keep saying Gates Gates Gates Gates Gates and not talk about the polo clubs, churches, and underhanded trades with colleges?
I think the most important defense is: this isn’t being graded on a curve. If one person saves ten million lives, and everyone else fritters away their money on stupid stuff, the end result is you’ve saved ten million lives.
This is the principle behind “hits-based investing”. Suppose I invest $100 in the Safe Fund, which buys shares in 100 companies guaranteed to go up at market rate. You invest $100 in the Crazy Fund, which invests in 100 crazy startups; 99 will crash and burn, and one will be the next Facebook. Using real-life returns from Facebook vs. the Dow Jones over the same period, the Safe Fund would net me $270, and the Crazy Fund would net you $40,000. If you argued “Yeah, but that one startup that did really well was an exception, the Crazy Fund still mostly failed”, you are missing the point of hits-based investing.
Likewise, if you argue “that one charitable foundation that did really well was an exception, billionaire foundations still mostly fail”, you are missing the point of hits-based giving. And if you use this as an excuse to weaken billionaire foundations in general, you will weaken the exceptional hits along with the many misses. If you decrease the amount of money available to billionaire charities by 37% (the natural consequence of removing tax-deductible status, assuming billionaires neither donate more to compensate, nor manage to evade your taxes), then a charity that saves 10 million lives will only be able to save 6.3 million lives, meaning your policy has killed 3.7 million people. The fact that you also sabotaged a bunch of idiots’ plans to spend money on their polo clubs seems kind of irrelevant.
I think that’s the most important defense. But a secondary defense, and one that I’m less confident in, is that actually a lot of billionaire charity spending is like the Gates Foundation.
One reason a lot of billionaire charity spending is like the Gates Foundation is because a lot of billionaire charity spending is the Gates Foundation. From eyeballing these two pages, the Gates Foundation looks like about 15% of US billionaire charitable spending. This is partly because Bill Gates is really rich, and partly because other billionaires like Warren Buffett donate to the Gates Foundation instead of setting up their own charities. I’m not just using the Gates Foundation as an example, I’m saying it’s a big chunk of what we’re talking about.
But even non-Gates billionaire charity seems pretty good. Moving down the list of largest charitable foundations, the second biggest in the US after Gates is the Howard Hughes Medical Institute, funded by the fortune of aviation tycoon Howard Hughes, which invests $825 million per year in medical research. Its homepage says that “as one measure of success, to date, 28 current or former HHMI scientists have been awarded a Nobel Prize”. That seems absurd to me – surely they must be cheating by giving $1 to every scientist in the world, or something like that? But if we’re going to critique billionaire philanthropy as useless, we should probably skip the people with 28 Nobel Prizes.
The third-largest billionaire foundation on the list is George Soros’ Open Society Foundation. They get a lot of flak for their US political activities, but according to their website, they also fight HIV and tuberculosis in Central Asia, provide prenatal vitamins to Roma in Hungary, help refugees in Jordan run small businesses, promote good nutrition in Liberia, help prosecute war crimes in the Congo, and build libraries in Haiti. Also, it did some amazing work propping up the social system in Eastern Europe after the collapse of communism, including giving $100 million to impoverished Russian scientists to keep doing science instead of going off and selling their nuclear secrets to rogue states. I am honestly pretty okay with this one too.
The next five foundations on the list are more questionable. Eli Lilly’s foundation mostly funds seminaries. The Ford Foundation used to do some amazing stuff, but is a recent victim of wokeness; the most heavily-advertised project on their site is about funding “social justice storytelling and the 21st-century arts infrastructure that supports it”. The Silicon Valley Community Foundations supposedly supports Silicon Valley communities, though for an organization that spends $1.3 billion per year, it’s surprisingly hard to find a single specific thing they’ve done. The Getty Foundation does art. The Robert Wood Johnson foundation does US health care, and it seems pretty good at it; I provisionally pronounce them okay.
Number 9 is the Hewlett Foundation, previously cited as briefly outspending the US government on climate change; it also helped make Creative Commons, secure nuclear weapons, save the rainforest, and spends about $100 million/year on global health.
Number 10 is the Kellogg Foundation, which mostly works on children’s health in the US (especially dental care for low-income individuals), but has also worked to fluoridate water in Latin America. I was kind of unimpressed by their Wikipedia page, but:
I retract my objection.
These seem like an even mix between really impressive Gates-like work, and things that are a little less important but still not absolutely useless. The next few dozen on the list look similar, with some highlights (the Moore Foundation helps fund PLOS, Jupyter, Julia, and R) and some lowlights (the George Kaiser Family Foundation has decided the best use of its $4.4 billion is to pay techies $10,000 each to move to Tulsa, Oklahoma). But overall a lot of this seems really good.
subb4k writes:
The Koch brothers are not quite on Hitler’s level, but they are definitely funding policies designed to hurt members of the outgroup which includes most of humanity. They’ll fund things that are likely to cause people to be hurt (from pollution, for example), rather than things actually likely to save people. I am ready to believe some of their donations fall under the traditional definition of charity/philanthropy, but those probably aren’t the ones people are mad about.
The hits-based giving model cuts both ways. If a small amount of spending goes to very good causes, it doesn’t matter how much poorly-targeted spending there is. But if a small amount of spending goes to very bad causes, it matters a lot, even if it’s only a tiny fraction of the whole. So is it possible that, even though right-wing spending is low in absolute number of dollars, it’s still very bad?
Although it would be hard for this to be more harmful than Gates’ ten million lives are helpful, it wouldn’t be impossible. If the Koch brothers’ spending on climate change denial makes the world significantly worse at fighting climate change, that could potentially cost ten million lives or more. One can (with a little more of a stretch) come up with ways other misguided political causes could do this.
I think in this case this worry probably doesn’t apply. It looks like the Kochs spend about $10 million per year on climate-denial related causes (remember, this is like 1% of what Gates spends on health). This is trivial in comparison to the amount of climate denial spending by corporations (even though corporate spending and billionaire spending may seem morally similar, they occupy different places in the tax code, which is what’s relevant for my argument). It’s also trivial in comparison to how much some billionaires spend supporting the fight against climate change, eg the Hewlett Foundation’s $600 million – although this is a dangerous argument, since the marginal dollar spent on climate denial might have more of an effect.
So this specific area is probably not so big a deal. But maybe the general concern is still valid. I personally doubt it’s true, but I can’t rule it out.
I think my answer is that, when I said the Gates Foundation etc saving ten million lives shouldn’t be collateral damage, I seriously meant it shouldn’t be collateral damage. If it’s important to stop the Koch brothers from lobbying against climate change, it’s worth a few extra moments’ thought to figure out some way to do this that doesn’t also prevent Bill Gates from fighting malaria. For example, have stricter rules saying political spending isn’t tax-deductible, but global health spending is. I realize it will be hard to figure out how to do this exactly right. But for ten million lives, please just do the hard thing.
This objection actually applies to a lot of the “this kind of billionaire philanthropy might be wasteful” or “this kind of billionaire philanthropy might be harmful” arguments. Even if you are right, I think it’s worth finding a way to separate the good from the bad, even if it’s hard, rather than throwing out baby and bathwater alike.
An Fírinne writes:
The thing about billionaire philanthropy is that people like Jeff Bezos and Bill Gates don’t care about people. Billionaire philanthropy is nothing but a PR stunt in order to get the public off their backs about wealth redistribution and to distract from how dreadfully they threat their employees.
Gates (along with 203 other billionaires) has signed a pledge promising to donate half his wealth. Isn’t donating half your wealth kind of a weird step in a plot to keep all of your wealth? Hedge fund billionaire Jeremy Grantham has pledged to donate 98% of his wealth to fight climate change. Isn’t that a pretty dramatic way to prevent your taxes from going up 10% or something?
More fundamentally, even if donating money to ward off redistribution would be a good move for billionaires as a class, you would have to solve a really hard coordination problem to make any individual billionaire do it. If you have $10 billion, and your motivations are entirely self-interested, you shouldn’t donate $1 billion unless that single donation makes the government 10% less likely to appropriate billionaires’ wealth. No single donation will make that much difference, so self-interested billionaires shouldn’t act this way.
fluorocarbon writes:
I don’t think this has to do with how they earn their money, but how they spend their money. Mark Zuckerberg didn’t just give $100 million to Newark schools, he gave the money on condition that the school district “welcome more independently run charter schools [and] close low-performing schools.”
A lot of people disagree about the best way to run public schools. In a democracy, these kinds of conflicts over public institutions should be resolved through voting—every citizen should have the same say. The argument against Zuckerberg is that he’s subverting this process. Because he has more money, he can tell the school district how it should be run.
Bill Gates, on the other hand, is spending money fighting malaria through the Gates Foundation. He’s not offering money to the CDC on condition that they have to run it the way Bill Gates wants.
There will always be some people who are negative about everything, loud on Twitter, and who hate billionaires. But the reason Mark Zuckerberg and Jeff Bezos are getting so much pushback for their giving but Bill Gates is not is because Zuckerberg and Bezos are (or at least seem to be) using their money to commandeer public democratic institutions. Even if good comes out of it on the whole in a utilitarian sense, there’s something a lot of people find unsettling and un-American about using money in this way.
And from Freddie deBoer:
I was utterly flabbergasted when you approvingly cited the Newark disaster. “How could he possibly think this helps his cause?” I wondered. Control of Newark’s school system naturally and by right belongs to the people of Newark. That’s what democracy requires. Zuckerberg’s explicit intent was to helicopter in and use his sacks of money to violate that sacred principle of local control. And it failed. It failed catastrophically. Because the people have the right to control their own local institutions.
I don’t really care about Mark Zuckerberg or donations like his – I would be happy to throw them under the bus if doing so would help expand my coalition against sabotaging Gates and Moskovitz and Tuna. I would happily support some clarification of tax laws saying donations like Zuckerberg’s aren’t okay, or aren’t tax-deductible. As long as it doesn’t do collateral damage to the important stuff, whatever.
But I’m still confused by this perspective. My understanding (backed by sources like this), is that Zuckerberg didn’t impose conditions for his donation. Cory Booker, Mayor of Newark, wanted to reform Newark schools. Someone connected him to Mark Zuckerberg, who thought Booker’s ideas were great. So Zuckerberg donated the money to Booker, an elected mayor democratically vested with the legitimate authority to reform schools the way he wanted, and Booker enacted the reforms he wanted to enact anyway.
It’s hard for me to see Zuckerberg as commandeering anything here. It’s true that if he hadn’t come around, Booker might have been forced to gnash his teeth and not do anything. And it’s true that Zuckerberg made the decision to donate to Newark instead of some other city whose mayor wanted some other plan. But giving a city slightly more ability to do the plan it had decided on (I say “slightly” more because this source says Zuckerberg’s gift was only 4% of the school system’s budget) seems really different from “commandeering it” or “sabotaging democracy” or anything like that.
Even if Zuckerberg had absolutely told Cory Booker to change all of his plans to Zuckerberg-approved ones or else he wasn’t going to donate, it still seems to me like the democratically elected mayor of a city has the right to decide that it is vs. isn’t worth it. I mean, what would be a better alternative? That every billionaire donation (and only billionaire donations, and no other policy) has to be approved by a popular referendum before it’s accepted? Or that you, a person who doesn’t live in Newark, gets to dictate that the city of Newark can never accept billionaire donations, even if everyone in it wants to, while using Orwellian language about how this is to “respect the will of the people of Newark”?
Weirdly, I can’t find any polls or even guesses about how much support Zuckerberg had among Newarkers, or how popular the school reforms were. Conventional wisdom is they were really unpopular. But conventional wisdom also says they failed, and the most recent studies really challenge that perspective, so I don’t know.
It’s hard for me to see this as a giant problem, but if it is, I think my preferred solution is that if governments don’t want billionaires’ help, they shouldn’t ask for it or accept it. Destroying the power of billionaires to offer help to anyone seems like overkill.
Hackworth writes:
On your point 4, you don’t really refute the argument. You’re just saying why it’s ok for large-scale philanthropy to be anti-democratic because you can point to what you perceive to be success stories of billionaire charity. You’re essentially saying that the end justifies the means or, less charming, might makes right. That doesn’t sit right with me, because it can easily be turned around on your position. So, street violence against peaceful protesters, or gerrymandering, or voter suppression is anti-democratic? Tough luck, we still do it because we can.
I probably did err in how I described this.
I think it’s good (as argued in the section being referred to) for some spending to remain outside the power of the government. I think “anti-democratic” means something more sinister than just “outside the power of the government”, and I don’t think billionaire spending qualifies.
That is: is me spending $2 on a slice of pizza anti-democratic? Is it just me saying “might makes right, I can do whatever I want with my own money, you can’t stop me” without even asking the government whether my pizza-buying is the will of the people? Am I committing a crime against the public?
If not, what is the difference between me spending $2 on a pizza, me giving $2 to a beggar, and a billionaire giving $2 million to the Save The Beggars Foundation, as far as democracy goes? None of them represent a significant amount of money compared to the government. None of them represent an authoritarian-level concentration of power – there are 500 billionaires, supporting a wide variety of causes. They’re all just people spending small (compared to government budgets) change on stuff they want, which is a known Okay Thing You Can Do In A Democracy.
Maybe Hackworth is referring only to the small percent of billionaire spending which is an attempt to influence the democratic process, like election donations or something? If so, I think it’s important to say that explicitly, since I don’t care about that kind of billionaire spending and am not really focusing on it. Also, because that mostly isn’t tax-deductible and so Reich’s argument doesn’t apply to it.
Or maybe he’s referring to the small percent of billionaire spending which eventually influences elections despite being tax-deductible, like donations to partisan think tanks? Again, don’t care much about this, and agree it’s less good than real charity and that we should try to discourage it. But I still don’t think it’s equivalent to voter suppression or whatever.
Like, what does it mean for something to be “anti-democratic”? Is founding a newspaper anti-democratic? Is it just “I’m the guy with the printing press, so my opinion matters more than yours, might makes right”? Is peaceful protest itself antidemocratic? “I have some free time and am good at organizing people, therefore I’m going to try to use shame and harassment to override the will of electorate who voted in the government I’m protesting”? Is all of this basically equivalent to beating people up in the streets?
I would counter that fighting for what you believe in isn’t anti-democratic, it’s the essence of democracy. Telling the government “Fuck you, you are wrong and bad and we’ll see which of the two of us is still standing at the end of this” is continuing the legacy of Martin Luther King, Gandhi, and other people who are considered paragons of democratic society. The whole point of democracy is that individuals are supposed to try to change government policy! The examples given above – voter suppression, gerrymandering, street violence – are bad not because they’re attempts by individuals to change government policy, but because they’re attempts to prevent individuals from changing government policy.
And I don’t think we can limit “trying to change government policy” to voting only. Putin’s Russia has elections. As far as I know they are “fair” in the sense of not lying about the vote count [EDIT: Apparently sometimes they do]. The [EDIT: other] difference between them and a true liberal democracy is that the democracy is more permissive of attempts to change the government outside of a once-per-several-years election. I think these other attempts are basically about coordination. You can oppose Putin in your heart, you just can’t coordinate large-scale effective opposition to Putin. Newspapers and protests help coordinate a bunch of powerless atomic individuals into a useful counterweight to government power.
One could defend billionaire foundations on the grounds that they do the same. For example, George Soros famously helped kickstart the Black Lives Matter matter movement. He did not create it out of thin air, and he is not a puppetmaster for it – it is composed of real and genuinely committed black people. But there’s a difference between those black people sitting around feeling committed at home vs. going out and effecting change, and Soros helped make that happen. Dustin Moskovitz and Cari Tuna’s animal advocacy work has done the same: there are lots of Californians who are against factory farming, but they couldn’t make anything happen until Moskovitz and Tuna solved the logistical work for them of getting a proposition on the ballot.
If billionaire foundations were evenly distributed across the political spectrum, they would have a nondistortionary effect of improving general coordination power and making it more possible to change the system. Since they’re not, they coordinate some parts better than others, which produces a genuine distortion. I agree this is bad. So it matters a lot whether you think a general increase in coordination power is worth the risk that the other side gets more of it than you do.
It sounds like Hackworth thinks the tradeoff is billionaire power vs. people power. I think there’s also state power, special interest power, corporate power, and (especially) Moloch. All of these actors are naturally well-coordinated and ordinary people’s success or failure in fighting them depends a lot on whether they can overcome their coordination handicap. This means I care more about coordination power, and think increasing it is good enough to be worth some distortion in the process. It’s still not as good as people donating to actually effective causes, but could be positive on net.
NocD writes:
It doesn’t address what I’d consider one of the prime arguments against Billionaire Philanthropy which is the tax subsidized nature of it. Charity is tax deductible and those deductions need to be accounted for somewhere. So we really get a system where a select few get to underwrite their personal causes with governmental resources, building up their personal influence and capacity to enact very political choices. Gates’ support of charter schools and Zuckerberg’s own particular thoughts when it comes to education are not neutral endeavors and the profile they get to build being labeled as “Billionaire Philanthropists” lets them launder ideas and spend influence while being indirectly supported by government backing.
First, a terminological quibble: I don’t like summarizing this as “using government resources”. If you claim a child tax credit, are you diverting government resources to raise your child? Sounds pretty corrupt. If I heard that a senator was using government money to raise their child, I’d want them indicted. This seems like a deliberately inflammatory misrepresentation of the real situation, which is that the government has specifically decided not to claim those resources, and given donors its blessing to keep them.
Putting the semantic dispute aside, I interpret the concern as: should charitable donations be tax-deductible or not?
This is a hard question because I don’t have a coherent philosophy of tax deductibility. Lots of things are tax deductible, including mortgage interest on your house, medical costs, home offices, taking business clients out to lunch, gambling losses, retirement savings, and some state and local taxes. Most of these cost the government more money than charitable tax deductions – according to this website, the charitable deduction isn’t even in the top ten.
If I had to weave all these together into a coherent narrative, I would guess that the government usually gives tax deductions when people are doing something sympathetic that results in them not getting to use the money anyway. For example, if you have to spend a lot of your money on catastrophic health problems, there’s a sense in which you never got to “enjoy” the money or spend it on what we usually consider personal consumption. Even if you spend your money on business expenses, that’s different from enjoying it and buying luxury goods with it. Retirement savings don’t get enjoyed immediately, plus we want to encourage people to save for retirement.
Charity donations seem to fit into this model. We want to encourage people to give to charity, plus money you give to charity isn’t being spent on personal enjoyment and consumption.
All of this seems kind of vague to me, but given that there are hundreds of other similar tax deductions, and charity is both an especially prosocial one and an especially cheap one in the grand scheme of things, I’m not sure why anybody would consider it their first target for attacking. If you hate the very idea of tax deductions because it’s “stealing from the government”, fine. If you point to the charitable activity tax deduction in particular, while ignoring a bunch of much costlier and less beneficial ones, then I’m confused.
hls2003 writes:
My natural inclination is to think that the people Scott is responding to are so wrong as to be nearly incomprehensible. But I feel like it is a failure of charitable imagination to simply accept the gulf is unbridgeable. So trying to put myself in their shoes, I think that Scott’s rebuttal does not engage with the idea of philanthropy as wartime propaganda.
Take someone like Tokyo Rose or Lord Haw-Haw. If one constructed a careful analysis of what they could be doing with their time – committing atrocities, fighting as a common soldier, or serving a shift in a munitions factory – it is clear that materially speaking, talking on the radio is probably the least physically damaging thing they could be doing against Allied soldiers. But yet they were despised as much or more than anyone in those other jobs, because their role in propagandizing for their evil regimes helped the Axis war effort by boosting Axis morale and damaging Allied morale. They were the pleasant face (or voice) hiding an evil regime. If one starts from the premise that the capitalist system (or whatever systemic bogeyman you blame) is the enemy, then billionaire philanthropists like Gates are capitalism’s Lord Haw-Haw. They hide the true nature of the regime, prolong the war, and sap the will of the people to fight. Or take Potemkin villages, for a non-WWII example. Presumably a Russian peasant was legitimately better off (temporarily) for living in a clean, idyllic Potemkin village than continuing in their base-state filthy squalor. But just analyzing whether a few people were slightly better off clearly misses the main point that the Potemkin villages were hiding the truth and preventing change. Philanthropic billionaires are the Potemkin village, hiding the true impact of the capitalist bogeyman.
While I don’t share the starting opinion of capitalism, it seems like – under this Conflict Theory rubric – Scott’s essay misses the point of the critics. Why get more angry at charity than extravagance? The same reason you hate Lord Haw-Haw more than an ordinary German soldier; the soldier is just doing what you expect, and is mostly neutral to the broader effort of wartime morale, while Lord Haw-Haw is an underhanded traitor eating away at the emotional war effort. And why ignore the good work that charity does? Because the “seen” charity is simply a prop masking and perpetuating the “unseen” squalor of the system. In either case, micro-analyzing on a purely material level (Tokyo Rose versus Tokyo factory worker, who makes more bombs?) doesn’t make sense because it omits the larger effects.
Ironically I think the lesson of “seen” and “unseen,” per Bastiat, is more commonly missed by the revolutionary Utopians. But if one starts with unrealized Utopia as a postulate, then even charity can be propaganda, and propagandists are plausibly reviled.
I find this one of the most sympathetic and comprehensible of the arguments I’ve read so far.
aashiq writes:
Accelerationists might say philanthropy is wrong because it is a bandaid that keeps the existing fundamentally flawed system chugging for longer than it would otherwise. I do not believe this, but I was hoping to see it addressed in this article. These people might argue that we should oppose philanthropy exactly because it makes the world better. By letting conditions naturally get worse as capitalism pursues its own inhuman ends, a necessary revolution becomes more likely. Thus, we should eliminate policies like tax deductability of charitable contributions.
I understand accelerationists want to make the world worse, because that could cause a communist revolution, which would make the world much better. But what if there were something even better than a communist revolution? Then holding a communist revolution might alleviate enough suffering to prevent us from doing that even better thing! I think the only ethical choice is to promote billionaire philanthropy, which will prevent a communist revolution, which will cause the even better thing to happen. I realize this will be controversial, but I think sometimes you have to be willing to do a good thing for the greater bad if that greater bad contributes to an even greater good.
Luispedro writes (based on the estimate that the Gates Foundation may have saved ten million people):
This means that if the combined effect of Reich et al. is a 1% probability of discouraging the next Bill Gates (i.e., one of the billionaires agrees with them that the “yachts and parties with paid supermodels” route is better than the evil “science and malaria cures” route), this still implies an death toll of 100,000 in expectation from their efforts.
We can do better! If the effect of me writing this blog post complaining about it is a 1% probability of discouraging the next Rob Reich, this implies I have saved 1,000 lives. And if the effect of you writing this comment is a 1% probability of encouraging the next me to write that article, you’ve saved 10 lives with this comment alone! Unless you’re a trauma surgeon or something, writing this comment is by far the most important thing you’ve ever done!
This is why I hate numbers like “ten million lives” and really hate Pascalian reasoning. I’m not saying it’s trivially wrong, just that I really hate it. It’s too crazy and too self-serving.
But I still wouldn’t recommend poking the thing that saves ten million lives with a stick to see if it breaks.
Gwern writes:
While we’re listing billionaire examples: to a greatly underappreciated extent, the whole Reproducibility Crisis and its very expensive replication efforts like the Many Labs projects, are bankrolled by a billionaire, John D. Arnold. You’d think the federal government would be more interested in this problem, but it’s not.
This is a really interesting example I didn’t know about, thanks.
Conrad Honcho writes:
Also, timely tweet/article.
“Only 22 percent of U.S. adults are on Twitter, and 80 percent of the tweets come from 10 percent of users. If you rely on Twitter for political information, you are being informed by ersatz pundits residing within 2.2 percent of the population.”
So I’m not sure how well a sampling of tweets about billionaire philanthropy represent public mood.
Many people objected to me using tweets to try to gauge public mood.
I may write another post soon defending my choice. But the short version is, all the time I hear people saying ridiculous things about what “everybody believes”. “Everybody believes veterans are evil murderers who deserve to be shamed, but I am going to be a bold contrarian and say we should support the troops” or whatever. I wish I could cite polls to tell these people they live in a fantasy world, but there aren’t polls available on everything. I don’t think Twitter perfectly matches public opinion, but it’s not infinitely different from it, so I think it represents a useful corrective to letting people claim anything they want.
georgioz writes:
If I am to steelman the critique of billionaires I think it really is about institutional integrity. As a comparison I calculated the total net worth of top 25 Putin’s oligarchs according to this list. The result is somewhere around 270 billion dollars. Which is a lot but comparable to the power of all american billionaires relative to the economy – these oligarchs could finance Russian government budget also for around 1 year. And yet Putin and his oligarchs have a very tight grip on the whole Russian state and they have much more power than the net worth numbers suggest.
So I’d explain the anti-billionaire philanthropy as just a gut feeling that it is a dangerous development. Maybe the danger lies in a fact that billionaires – at least as a class if not individuals – use the charity as a PR front in order to sway public opinion in their favor. Which is catastrophic as the concentration of power in their hand can pose a real threat to democracy prepping the stage for complete institutional takeover by more ruthless and ambitious among them. If this is the endgame then spending a few hundreds of billions of dollars on charity is nothing – not only monetarily but also compared to the damage caused longterm.
From this standpoint spending on philanthropy is much more dangerous than spending on yachts. Because buying yachts is what billionaires are supposed to do and it leaves them prone to mundane criticism in standard political struggle.
Or to use another example imagine you are Cato the Younger and you see Caesar spending his fortune to give bread and circus to the plebs of Rome. It is very hard to argue feeding the poor on the object level. But still Cato sees this as a ruse for the ultimate endgame of Caesar which is capture of the state at which point he will get his investment back with astronomical interest. Needles to say Cato was correct in his paranoia.
Good point. I guess I would be more worried about this if a completely repulsive billionaire known for never making the slightest attempt to do good in his life hadn’t just captured the state using a completely different method, but maybe this one might happen sometime too.
Viliam writes:
As a survivor of socialism, I can assure you that the sentiment is much deeper than that. Rich people giving gifts is a problem, but after that problem is solved, poor people giving gifts becomes a problem, too. Afterwards, simply “people doing something on their own” becomes a problem.
The actual problem is doing things without the government approval. As a former socialist once said: “Everything within the state, nothing outside the state, nothing against the state.” This is exactly how it worked in socialism of my childhood. Individual initiative was a bad thing, regardless of its actual aims. The only good thing was to do what you were told.
The journalists argue that rich people’s philanthropy is “against democracy”, but what they really mean is that it is “against the state” or rather “without the state”. This is why Scott’s argument that people actually trust billionaire philanthropy more than government spending, so in that sense it is kinda more democratic, isn’t going to convince anyone. It’s not about being more democratic in the sense of “plebs being happy about what happens”. It’s about someone acting on their own, which threatens those who identify with the state.
Erusian makes a similar point:
Not to be overly cynical, but I think there’s a simpler explanation here than any real principle. Certain people have a class interest in empowering the state and shrinking the private square. These people will oppose billionaire philanthropy because it complicates their narrative that concentration of wealth is inherently bad. Zuckerburg buying a huge mansion doesn’t disrupt their narrative. Zuckerburg curing cancer does, especially because that concentration of wealth is a necessary precondition for curing cancer. Likewise, due to their interest in growing government power they will very, very pointedly overlook any possible downsides to increased government power.
I wanted to highlight these because some people accused the anti-billionaire-philanthropy side of being overly fanatical conflict theorists. But it looks like there are some conflict theorists on both sides. I am skeptical of this. It’s hard for me to imagine people having “crush individual initiative” as their goal, and I imagine these same people would support other kinds of outside-the-state individual initiative (like anti-Trump protests).
I was leaning towards this position before, but I find some of these comments sympathetic and convincing. I think the potential argument against billionaire philanthropy is that a lot of billionaires use it for vapid, personal, or even sinister causes, and it’s weird that they can get a tax deduction on it. If people are getting their college to make a vanity building with their name on it, or promoting their own politics, it does seem disturbing that this is costing the government money that it could use for potentially-valuable government business. I am sympathetic to people who worry about this.
But I think a more quantitative look shows that the good in billionaire philanthropy outweighs the bad, and that as a whole it more than meets our (low, confusing) standards for things that should be tax deductible. I am sympathetic to arguments that we should more carefully word the tax deduction, to make sure it only applies to genuinely altruistic ventures and not to vanity projects or lobbying. But I think this needs to be done with the understanding that the valuable parts of billionaire philanthropy are extraordinarily valuable, that they are not acceptable collateral damage, and that protecting and promoting them should be one of the most important goals for any policy on this issue.
Highlights From The Comments On Billionaire Philanthropy
Thanks to everyone who commented on Against Against Billionaire Philanthropy. For whatever reason, the comments there were exceptionally good. In particular, I’m happy that our usually-quiet leftists finally showed up with some strong (and interesting) pushback.
I usually highlight good comments with short responses, but it was hard for me to avoid debating some of these. I realize that’s complicated, because I can’t quote most long comments in their entirety, and I realize I have more of a platform than other commenters who may feel I misrepresented them or who just want to reply to me. I don’t have a great solution to this, but if you’re annoyed at how I featured/responded to your comment, please tell me, so I can calibrate how serious a problem this is for next time.
Matt Yglesias writes on Twitter:
I think Matt is misunderstanding the thesis of Billionaires And Stealth Politics.
(I haven’t read the book. But I’ve read the the original paper it was based on, plus some book reviews that confirm the book is saying the same thing as the paper)
Stealth Politics doesn’t argue that billionaires spend more on right-wing causes than on altruistic ones. It argues that on certain issues relating to wealth and inequality, billionaires spend more on right-wing causes than on left-wing ones. Its methodology is terrible in a bunch of ways, but I assume something like that is probably true, so whatever.
The key finding in the paper (also cited in reviews of the book) is that:
Okay. Over the same period (2011-2012), Bill Gates donated $6,070,000,000 to global health. That is 100,000 times as much as $53,227. Please don’t cite this book to show that “the big picture” is right-wing spending, and that altruistic spending is irrelevant by comparison.
But this is a cheap shot, and the book isn’t designed for these kinds of comparisons, so I want to try my own analysis to see how much billionaires spend on right-wing vs. altruistic causes.
I started with OpenSecrets.org’s list of the 100 top contributors to “federal candidates, parties, political action committees, 527 organizations, and Carey committees”. In order to make the list, you had to donate at least $1.7 million. Of the 100 people who donated at this level, 55 were Democrats and 45 Republicans. The Republican contributions totalled $346 million.
This doesn’t count various sneakier ways of influencing the political climate – for example, the Koch brothers didn’t even make the list! Koch-affiliated groups probably spent $400 million on the 2018 election (some sources say they “planned to” spend $900 million on the 2016 election, but I think they held back because they didn’t like Trump). “Koch-affiliated groups” are complicated, and although they’re not 100% funded by the Koch brothers – one of their groups boasts 90,000 donors! – we can probably round up here. This doesn’t mesh well with claims that the Koch foundation donated $196 million over ten years, but my guess is the lower claim is just what they did openly, so let’s stick with the higher one. I am nervous about how many Koch-like things there are that we don’t know about, and this is a possible source of error in this estimate, but the Kochs are clearly the biggest.
What about non-election-related spending, like think tanks and college professorships? I looked at this list of the top 50 think tanks and added up their budgets. Total budget for all conservative/libertarian think tanks is about $350 million per year. I don’t know how much of this is funded by billionaires, but let’s say all of it.
Add all these numbers up, and divide the election-related ones by two since there’s only an election every two years, and order of magnitude it looks like maybe the budget for conservative politics is around $1 billion per year.
Some basic sanity checks – this site says the 2018 election involved $5 billion of donations, of which $2.5 billion went to the Democrats, $2.0 billion to the Republicans, and $0.5 billion to third parties. If billionaires fund about 30% of the Republican war chest, that would match my estimates above. There’s also this Forbes article, whose author estimates “that if we combine the budgets of these and other conservative free-market think tanks…the entire U.S., Canadian and U.K. market of pro-free society [ie conservative/libertarian] groups is approximately $500 million”. That meshes well with my estimate of $350 million for the US alone.
I can’t emphasize enough that I’m just eyeballing these figures and I can’t find anyone who has done really good work on this question – but I think I have the order of magnitude right. So how does $1 billion for right-wing causes compare to the overall billionaire philanthropy budget?
I’m leaning pretty heavily on this Vox article, but it says that the top 50 billionaires gave $15 billion to charity in 2017 and $8 billion in 2018. If we average this out to about $11 billion/year, only 9% of billionaire philanthropy goes to right-wing causes.
This is actually way too generous to Yglesias, because the Vox article admits it’s only talking about the top 50 US billionaires (out of 500 or so), but I’m comparing it to everyone (billionaire or not) who donated to a think tank or gave $1.7 million+ to campaigns. Probably the real number is much lower.
And we don’t even need to bring in all of the top 50 billionaires! Bill Gates alone averaged $2.5 billion in donations during those two years. One person gave more to global health than every billionaire combined gave to right-wing causes.
So I think Matt is wrong when he says that right-wing causes are where the real money is, and genuinely good philanthropy is just a distraction. The truth is the opposite.
Some commenters agreed that I had demonstrated to their satisfaction that the Gates Foundations was really great, but were concerned I was overusing it as an example. m50d wants us to picture a very different kind of spending when we think of donations:
Ultraximus agrees:
Is it unfair of me to keep saying Gates Gates Gates Gates Gates and not talk about the polo clubs, churches, and underhanded trades with colleges?
I think the most important defense is: this isn’t being graded on a curve. If one person saves ten million lives, and everyone else fritters away their money on stupid stuff, the end result is you’ve saved ten million lives.
This is the principle behind “hits-based investing”. Suppose I invest $100 in the Safe Fund, which buys shares in 100 companies guaranteed to go up at market rate. You invest $100 in the Crazy Fund, which invests in 100 crazy startups; 99 will crash and burn, and one will be the next Facebook. Using real-life returns from Facebook vs. the Dow Jones over the same period, the Safe Fund would net me $270, and the Crazy Fund would net you $40,000. If you argued “Yeah, but that one startup that did really well was an exception, the Crazy Fund still mostly failed”, you are missing the point of hits-based investing.
Likewise, if you argue “that one charitable foundation that did really well was an exception, billionaire foundations still mostly fail”, you are missing the point of hits-based giving. And if you use this as an excuse to weaken billionaire foundations in general, you will weaken the exceptional hits along with the many misses. If you decrease the amount of money available to billionaire charities by 37% (the natural consequence of removing tax-deductible status, assuming billionaires neither donate more to compensate, nor manage to evade your taxes), then a charity that saves 10 million lives will only be able to save 6.3 million lives, meaning your policy has killed 3.7 million people. The fact that you also sabotaged a bunch of idiots’ plans to spend money on their polo clubs seems kind of irrelevant.
I think that’s the most important defense. But a secondary defense, and one that I’m less confident in, is that actually a lot of billionaire charity spending is like the Gates Foundation.
One reason a lot of billionaire charity spending is like the Gates Foundation is because a lot of billionaire charity spending is the Gates Foundation. From eyeballing these two pages, the Gates Foundation looks like about 15% of US billionaire charitable spending. This is partly because Bill Gates is really rich, and partly because other billionaires like Warren Buffett donate to the Gates Foundation instead of setting up their own charities. I’m not just using the Gates Foundation as an example, I’m saying it’s a big chunk of what we’re talking about.
But even non-Gates billionaire charity seems pretty good. Moving down the list of largest charitable foundations, the second biggest in the US after Gates is the Howard Hughes Medical Institute, funded by the fortune of aviation tycoon Howard Hughes, which invests $825 million per year in medical research. Its homepage says that “as one measure of success, to date, 28 current or former HHMI scientists have been awarded a Nobel Prize”. That seems absurd to me – surely they must be cheating by giving $1 to every scientist in the world, or something like that? But if we’re going to critique billionaire philanthropy as useless, we should probably skip the people with 28 Nobel Prizes.
The third-largest billionaire foundation on the list is George Soros’ Open Society Foundation. They get a lot of flak for their US political activities, but according to their website, they also fight HIV and tuberculosis in Central Asia, provide prenatal vitamins to Roma in Hungary, help refugees in Jordan run small businesses, promote good nutrition in Liberia, help prosecute war crimes in the Congo, and build libraries in Haiti. Also, it did some amazing work propping up the social system in Eastern Europe after the collapse of communism, including giving $100 million to impoverished Russian scientists to keep doing science instead of going off and selling their nuclear secrets to rogue states. I am honestly pretty okay with this one too.
The next five foundations on the list are more questionable. Eli Lilly’s foundation mostly funds seminaries. The Ford Foundation used to do some amazing stuff, but is a recent victim of wokeness; the most heavily-advertised project on their site is about funding “social justice storytelling and the 21st-century arts infrastructure that supports it”. The Silicon Valley Community Foundations supposedly supports Silicon Valley communities, though for an organization that spends $1.3 billion per year, it’s surprisingly hard to find a single specific thing they’ve done. The Getty Foundation does art. The Robert Wood Johnson foundation does US health care, and it seems pretty good at it; I provisionally pronounce them okay.
Number 9 is the Hewlett Foundation, previously cited as briefly outspending the US government on climate change; it also helped make Creative Commons, secure nuclear weapons, save the rainforest, and spends about $100 million/year on global health.
Number 10 is the Kellogg Foundation, which mostly works on children’s health in the US (especially dental care for low-income individuals), but has also worked to fluoridate water in Latin America. I was kind of unimpressed by their Wikipedia page, but:
I retract my objection.
These seem like an even mix between really impressive Gates-like work, and things that are a little less important but still not absolutely useless. The next few dozen on the list look similar, with some highlights (the Moore Foundation helps fund PLOS, Jupyter, Julia, and R) and some lowlights (the George Kaiser Family Foundation has decided the best use of its $4.4 billion is to pay techies $10,000 each to move to Tulsa, Oklahoma). But overall a lot of this seems really good.
subb4k writes:
The hits-based giving model cuts both ways. If a small amount of spending goes to very good causes, it doesn’t matter how much poorly-targeted spending there is. But if a small amount of spending goes to very bad causes, it matters a lot, even if it’s only a tiny fraction of the whole. So is it possible that, even though right-wing spending is low in absolute number of dollars, it’s still very bad?
Although it would be hard for this to be more harmful than Gates’ ten million lives are helpful, it wouldn’t be impossible. If the Koch brothers’ spending on climate change denial makes the world significantly worse at fighting climate change, that could potentially cost ten million lives or more. One can (with a little more of a stretch) come up with ways other misguided political causes could do this.
I think in this case this worry probably doesn’t apply. It looks like the Kochs spend about $10 million per year on climate-denial related causes (remember, this is like 1% of what Gates spends on health). This is trivial in comparison to the amount of climate denial spending by corporations (even though corporate spending and billionaire spending may seem morally similar, they occupy different places in the tax code, which is what’s relevant for my argument). It’s also trivial in comparison to how much some billionaires spend supporting the fight against climate change, eg the Hewlett Foundation’s $600 million – although this is a dangerous argument, since the marginal dollar spent on climate denial might have more of an effect.
So this specific area is probably not so big a deal. But maybe the general concern is still valid. I personally doubt it’s true, but I can’t rule it out.
I think my answer is that, when I said the Gates Foundation etc saving ten million lives shouldn’t be collateral damage, I seriously meant it shouldn’t be collateral damage. If it’s important to stop the Koch brothers from lobbying against climate change, it’s worth a few extra moments’ thought to figure out some way to do this that doesn’t also prevent Bill Gates from fighting malaria. For example, have stricter rules saying political spending isn’t tax-deductible, but global health spending is. I realize it will be hard to figure out how to do this exactly right. But for ten million lives, please just do the hard thing.
This objection actually applies to a lot of the “this kind of billionaire philanthropy might be wasteful” or “this kind of billionaire philanthropy might be harmful” arguments. Even if you are right, I think it’s worth finding a way to separate the good from the bad, even if it’s hard, rather than throwing out baby and bathwater alike.
An Fírinne writes:
Gates (along with 203 other billionaires) has signed a pledge promising to donate half his wealth. Isn’t donating half your wealth kind of a weird step in a plot to keep all of your wealth? Hedge fund billionaire Jeremy Grantham has pledged to donate 98% of his wealth to fight climate change. Isn’t that a pretty dramatic way to prevent your taxes from going up 10% or something?
More fundamentally, even if donating money to ward off redistribution would be a good move for billionaires as a class, you would have to solve a really hard coordination problem to make any individual billionaire do it. If you have $10 billion, and your motivations are entirely self-interested, you shouldn’t donate $1 billion unless that single donation makes the government 10% less likely to appropriate billionaires’ wealth. No single donation will make that much difference, so self-interested billionaires shouldn’t act this way.
fluorocarbon writes:
And from Freddie deBoer:
I don’t really care about Mark Zuckerberg or donations like his – I would be happy to throw them under the bus if doing so would help expand my coalition against sabotaging Gates and Moskovitz and Tuna. I would happily support some clarification of tax laws saying donations like Zuckerberg’s aren’t okay, or aren’t tax-deductible. As long as it doesn’t do collateral damage to the important stuff, whatever.
But I’m still confused by this perspective. My understanding (backed by sources like this), is that Zuckerberg didn’t impose conditions for his donation. Cory Booker, Mayor of Newark, wanted to reform Newark schools. Someone connected him to Mark Zuckerberg, who thought Booker’s ideas were great. So Zuckerberg donated the money to Booker, an elected mayor democratically vested with the legitimate authority to reform schools the way he wanted, and Booker enacted the reforms he wanted to enact anyway.
It’s hard for me to see Zuckerberg as commandeering anything here. It’s true that if he hadn’t come around, Booker might have been forced to gnash his teeth and not do anything. And it’s true that Zuckerberg made the decision to donate to Newark instead of some other city whose mayor wanted some other plan. But giving a city slightly more ability to do the plan it had decided on (I say “slightly” more because this source says Zuckerberg’s gift was only 4% of the school system’s budget) seems really different from “commandeering it” or “sabotaging democracy” or anything like that.
Even if Zuckerberg had absolutely told Cory Booker to change all of his plans to Zuckerberg-approved ones or else he wasn’t going to donate, it still seems to me like the democratically elected mayor of a city has the right to decide that it is vs. isn’t worth it. I mean, what would be a better alternative? That every billionaire donation (and only billionaire donations, and no other policy) has to be approved by a popular referendum before it’s accepted? Or that you, a person who doesn’t live in Newark, gets to dictate that the city of Newark can never accept billionaire donations, even if everyone in it wants to, while using Orwellian language about how this is to “respect the will of the people of Newark”?
Weirdly, I can’t find any polls or even guesses about how much support Zuckerberg had among Newarkers, or how popular the school reforms were. Conventional wisdom is they were really unpopular. But conventional wisdom also says they failed, and the most recent studies really challenge that perspective, so I don’t know.
It’s hard for me to see this as a giant problem, but if it is, I think my preferred solution is that if governments don’t want billionaires’ help, they shouldn’t ask for it or accept it. Destroying the power of billionaires to offer help to anyone seems like overkill.
Hackworth writes:
I probably did err in how I described this.
I think it’s good (as argued in the section being referred to) for some spending to remain outside the power of the government. I think “anti-democratic” means something more sinister than just “outside the power of the government”, and I don’t think billionaire spending qualifies.
That is: is me spending $2 on a slice of pizza anti-democratic? Is it just me saying “might makes right, I can do whatever I want with my own money, you can’t stop me” without even asking the government whether my pizza-buying is the will of the people? Am I committing a crime against the public?
If not, what is the difference between me spending $2 on a pizza, me giving $2 to a beggar, and a billionaire giving $2 million to the Save The Beggars Foundation, as far as democracy goes? None of them represent a significant amount of money compared to the government. None of them represent an authoritarian-level concentration of power – there are 500 billionaires, supporting a wide variety of causes. They’re all just people spending small (compared to government budgets) change on stuff they want, which is a known Okay Thing You Can Do In A Democracy.
Maybe Hackworth is referring only to the small percent of billionaire spending which is an attempt to influence the democratic process, like election donations or something? If so, I think it’s important to say that explicitly, since I don’t care about that kind of billionaire spending and am not really focusing on it. Also, because that mostly isn’t tax-deductible and so Reich’s argument doesn’t apply to it.
Or maybe he’s referring to the small percent of billionaire spending which eventually influences elections despite being tax-deductible, like donations to partisan think tanks? Again, don’t care much about this, and agree it’s less good than real charity and that we should try to discourage it. But I still don’t think it’s equivalent to voter suppression or whatever.
Like, what does it mean for something to be “anti-democratic”? Is founding a newspaper anti-democratic? Is it just “I’m the guy with the printing press, so my opinion matters more than yours, might makes right”? Is peaceful protest itself antidemocratic? “I have some free time and am good at organizing people, therefore I’m going to try to use shame and harassment to override the will of electorate who voted in the government I’m protesting”? Is all of this basically equivalent to beating people up in the streets?
I would counter that fighting for what you believe in isn’t anti-democratic, it’s the essence of democracy. Telling the government “Fuck you, you are wrong and bad and we’ll see which of the two of us is still standing at the end of this” is continuing the legacy of Martin Luther King, Gandhi, and other people who are considered paragons of democratic society. The whole point of democracy is that individuals are supposed to try to change government policy! The examples given above – voter suppression, gerrymandering, street violence – are bad not because they’re attempts by individuals to change government policy, but because they’re attempts to prevent individuals from changing government policy.
And I don’t think we can limit “trying to change government policy” to voting only. Putin’s Russia has elections.
As far as I know they are “fair” in the sense of not lying about the vote count[EDIT: Apparently sometimes they do]. The [EDIT: other] difference between them and a true liberal democracy is that the democracy is more permissive of attempts to change the government outside of a once-per-several-years election. I think these other attempts are basically about coordination. You can oppose Putin in your heart, you just can’t coordinate large-scale effective opposition to Putin. Newspapers and protests help coordinate a bunch of powerless atomic individuals into a useful counterweight to government power.One could defend billionaire foundations on the grounds that they do the same. For example, George Soros famously helped kickstart the Black Lives Matter matter movement. He did not create it out of thin air, and he is not a puppetmaster for it – it is composed of real and genuinely committed black people. But there’s a difference between those black people sitting around feeling committed at home vs. going out and effecting change, and Soros helped make that happen. Dustin Moskovitz and Cari Tuna’s animal advocacy work has done the same: there are lots of Californians who are against factory farming, but they couldn’t make anything happen until Moskovitz and Tuna solved the logistical work for them of getting a proposition on the ballot.
If billionaire foundations were evenly distributed across the political spectrum, they would have a nondistortionary effect of improving general coordination power and making it more possible to change the system. Since they’re not, they coordinate some parts better than others, which produces a genuine distortion. I agree this is bad. So it matters a lot whether you think a general increase in coordination power is worth the risk that the other side gets more of it than you do.
It sounds like Hackworth thinks the tradeoff is billionaire power vs. people power. I think there’s also state power, special interest power, corporate power, and (especially) Moloch. All of these actors are naturally well-coordinated and ordinary people’s success or failure in fighting them depends a lot on whether they can overcome their coordination handicap. This means I care more about coordination power, and think increasing it is good enough to be worth some distortion in the process. It’s still not as good as people donating to actually effective causes, but could be positive on net.
NocD writes:
First, a terminological quibble: I don’t like summarizing this as “using government resources”. If you claim a child tax credit, are you diverting government resources to raise your child? Sounds pretty corrupt. If I heard that a senator was using government money to raise their child, I’d want them indicted. This seems like a deliberately inflammatory misrepresentation of the real situation, which is that the government has specifically decided not to claim those resources, and given donors its blessing to keep them.
Putting the semantic dispute aside, I interpret the concern as: should charitable donations be tax-deductible or not?
This is a hard question because I don’t have a coherent philosophy of tax deductibility. Lots of things are tax deductible, including mortgage interest on your house, medical costs, home offices, taking business clients out to lunch, gambling losses, retirement savings, and some state and local taxes. Most of these cost the government more money than charitable tax deductions – according to this website, the charitable deduction isn’t even in the top ten.
If I had to weave all these together into a coherent narrative, I would guess that the government usually gives tax deductions when people are doing something sympathetic that results in them not getting to use the money anyway. For example, if you have to spend a lot of your money on catastrophic health problems, there’s a sense in which you never got to “enjoy” the money or spend it on what we usually consider personal consumption. Even if you spend your money on business expenses, that’s different from enjoying it and buying luxury goods with it. Retirement savings don’t get enjoyed immediately, plus we want to encourage people to save for retirement.
Charity donations seem to fit into this model. We want to encourage people to give to charity, plus money you give to charity isn’t being spent on personal enjoyment and consumption.
All of this seems kind of vague to me, but given that there are hundreds of other similar tax deductions, and charity is both an especially prosocial one and an especially cheap one in the grand scheme of things, I’m not sure why anybody would consider it their first target for attacking. If you hate the very idea of tax deductions because it’s “stealing from the government”, fine. If you point to the charitable activity tax deduction in particular, while ignoring a bunch of much costlier and less beneficial ones, then I’m confused.
hls2003 writes:
I find this one of the most sympathetic and comprehensible of the arguments I’ve read so far.
aashiq writes:
I understand accelerationists want to make the world worse, because that could cause a communist revolution, which would make the world much better. But what if there were something even better than a communist revolution? Then holding a communist revolution might alleviate enough suffering to prevent us from doing that even better thing! I think the only ethical choice is to promote billionaire philanthropy, which will prevent a communist revolution, which will cause the even better thing to happen. I realize this will be controversial, but I think sometimes you have to be willing to do a good thing for the greater bad if that greater bad contributes to an even greater good.
Luispedro writes (based on the estimate that the Gates Foundation may have saved ten million people):
We can do better! If the effect of me writing this blog post complaining about it is a 1% probability of discouraging the next Rob Reich, this implies I have saved 1,000 lives. And if the effect of you writing this comment is a 1% probability of encouraging the next me to write that article, you’ve saved 10 lives with this comment alone! Unless you’re a trauma surgeon or something, writing this comment is by far the most important thing you’ve ever done!
This is why I hate numbers like “ten million lives” and really hate Pascalian reasoning. I’m not saying it’s trivially wrong, just that I really hate it. It’s too crazy and too self-serving.
But I still wouldn’t recommend poking the thing that saves ten million lives with a stick to see if it breaks.
Gwern writes:
This is a really interesting example I didn’t know about, thanks.
Conrad Honcho writes:
Many people objected to me using tweets to try to gauge public mood.
I may write another post soon defending my choice. But the short version is, all the time I hear people saying ridiculous things about what “everybody believes”. “Everybody believes veterans are evil murderers who deserve to be shamed, but I am going to be a bold contrarian and say we should support the troops” or whatever. I wish I could cite polls to tell these people they live in a fantasy world, but there aren’t polls available on everything. I don’t think Twitter perfectly matches public opinion, but it’s not infinitely different from it, so I think it represents a useful corrective to letting people claim anything they want.
georgioz writes:
Good point. I guess I would be more worried about this if a completely repulsive billionaire known for never making the slightest attempt to do good in his life hadn’t just captured the state using a completely different method, but maybe this one might happen sometime too.
Viliam writes:
Erusian makes a similar point:
I wanted to highlight these because some people accused the anti-billionaire-philanthropy side of being overly fanatical conflict theorists. But it looks like there are some conflict theorists on both sides. I am skeptical of this. It’s hard for me to imagine people having “crush individual initiative” as their goal, and I imagine these same people would support other kinds of outside-the-state individual initiative (like anti-Trump protests).
I was leaning towards this position before, but I find some of these comments sympathetic and convincing. I think the potential argument against billionaire philanthropy is that a lot of billionaires use it for vapid, personal, or even sinister causes, and it’s weird that they can get a tax deduction on it. If people are getting their college to make a vanity building with their name on it, or promoting their own politics, it does seem disturbing that this is costing the government money that it could use for potentially-valuable government business. I am sympathetic to people who worry about this.
But I think a more quantitative look shows that the good in billionaire philanthropy outweighs the bad, and that as a whole it more than meets our (low, confusing) standards for things that should be tax deductible. I am sympathetic to arguments that we should more carefully word the tax deduction, to make sure it only applies to genuinely altruistic ventures and not to vanity projects or lobbying. But I think this needs to be done with the understanding that the valuable parts of billionaire philanthropy are extraordinarily valuable, that they are not acceptable collateral damage, and that protecting and promoting them should be one of the most important goals for any policy on this issue.