The Problem With Philanthropy

Today forty US billionaires pledged at least 50% of their wealth to charity. The list includes some instantly recognisable names, they are not only some of the biggest names in business but also in culture. A magnanimous, caring, elite who choose, without any compulsion, to use their talents, and the wealth it has helped them to accrue, entirely in the service of others. This is surely the ultimate demonstration of modern humane capitalism. Capitalism works, so the argument goes, because people want the best for themselves but also for others. It is both right and natural to simply let them do so. Trying to force them or staking some claim to what they do not want to give will simply be counter-productive, both economically and socially, as well as being totally unnecessary. This is how inequality corrects itself at the end of history. Except it doesn't work that way...

The problem is not, as some cynical voices might note, that this group represents only around 10% of US billionaires, or that for most/all of them their remaining wealth still far exceeds what the vast majority of people will earn in a lifetime, that many of these pledges will only be fulfilled after they die, or even the suspicion that they are in fact just buying honour, acclaim and a place in history for themselves - not really caring if they actually help anyone or not. No, no, these are just the easy targets. The real problem is that they aren't achieving what we, or they, think that they are. Ask your average billionaire philanthropist why they do it and my guess would be that the answer is something to do with 'I want to make a difference'. I'm not going to dispute this, it seems pretty likely.

The really pertinent question is not about sincerity but about knowledge. Namely, how do you know what kind of difference to make? The aim should of course be to do good, but good doesn't come with a ready definition, so we all do it for ourselves, and we all do it differently. Fortunately there is a method for resolving this, for quite a while now people have usually called it democracy, though people have also said the social contract, government by consent, the general will, its all the same stuff - a binding collective choice, a common aim and a shared means to achieve it. Philanthropy on the other hand requires that the rich individual decides exactly where the money goes, that is the whole point. Of course they will take advice, but they do not have to. They have to act within the law, but at the very least they have hobson's choice - they can simply choose not to give instead. They are the only ones who make the choice. So we have a kind of catch twenty-two, if they make a difference then we are entrusting them with the power to decide what is a good worthy cause, even if we disagree - so we have a kind of oligarchy, and if they don't then they are pointlessly squandering their wealth, which we (and they) obviously don't want. The only thing I can conclude whenever I see Bill Gates or Warren Buffet signing over a check for anything, even if i happen to agree, is that philanthropy is either useless or downright anti-democratic, either way it scarcely deserves the praise heaped on those who practise it regularly.