Apolitical Philanthropists
After reading an interview about Bill Gates’ plans to hook up Third World farmers with Coca-Cola, Matt Yglesias observes,
What always leaves me scratching my head about uber-rich philanthropists is why so many of their activities are so depoliticized. The state plays an enormous role in the economy and in people’s lives—much larger than any foundation ever could—and one of the biggest ways someone with a lot of money can impact the world is by using the money as a lever to move states.
[…]
But the biggest thing cutting developed world farmers out of the supply chain for Coca-Cola and others isn’t a logistic issue, it’s developed world agricultural policy. In the US, for example, Coke is made with high-fructose corn syrup thanks to barriers to importing sugar and subsidies for the growing of corn. This kind of thing is incredibly difficult to change even though you’d be hard-pressed to find serious policy analysts who think it’s a good idea. It’s incredibly difficult to change because the interest group pressure is all on the side of US corn and sugar producers. But that’s the kind of dynamic the richest man on the planet could conceivably change.
Matt’s probably right that public policy plays at least as large a role as infrastructure and other non-political barriers in Third World poverty and other problems that Gates and other philanthropists are trying to solve. But there are some obvious barriers to addressing the issues on that front.
First, there’s a reason public policy on any given issue is what it is. There are interest groups aligned to fight for the status quo, who’ll fight back hard against Johnny Come Latelies without the inside connections. And once policy has inertia, it’s incredibly messy to change it.
Second and relatedly, picking political fights makes enemies and makes it harder to raise money and achieve goodwill.
Third, the more one’s organization moves into the realm of lobbying and otherwise trying to change public policy, the harder it is to maintain tax exempt status.
Fourth and relatedly, until last week’s Supreme Court decision, it’s quite possible that our campaign finance laws provided additional obstacles to spending vast sums trying to change policy. Certainly, to the extent that it involved trying to elect candidates favorable to change and oust existing politicians who were barriers to change, it has been historically quite difficult.
Of course, I’m not a billionaire philanthropist and there may be a half dozen other explanations I haven’t considered.
Guys like Gates, Bono, and Oprah are liberal celebrities who get into the philanthropy racket to stroke they own egos–not because they are actually interested in changing policy.
They don’t give a damn about anyone but theyselves. All of the so-called philanthropy is a self-referential ego stroke.
I think that another possible explanation is that “billionaire philanthropists” don’t have a clear understanding of the reasons for their own success. Did they pull themselves up by their bootstraps or were they savvy manipulators of the political system?
In Gates’s case, it was probably his savvy manipulation of clueless IBM execs.
I would contrast Bill Gates with George Soros. Judging from his behavior I think that Mr. Soros has a clear understanding of the importance of government actions in his own financial success.
While all of the above is true to some extent, the main impediment is not the philanthropists’ motivations or U.S. government policy. The main impediment is the faulty social structures in the poor countries. If one doesn’t address that issue first, there will never be any reasonable expectation for success. Of course, if Gates et al choose to throw their money away, that’s their business.
What gets me about the uber rich, is when they tell me I should be paying more in taxes as they make huge tax avoiding donations to charities that they set up and then run thereby still controlling and directing the use of their money instead of paying taxes on it. If the government is doing such a great job of using my money that Gates feels I should be paying more taxes, he can kick in at couple extra sets of 000’s and help out a whole lot more than me. Same for Buffet with his long term cap gains arrangement vs income and there just isn’t room for the likes of Soros. mpw
I suspect he just likes being in charge of how his money is spent. I think that on the receiving end there is also often an advantage to not having aid directly connected to the US govt.
Steve
Isn’t anyone else made slightly queasy by Young Mr. Yglesias’ requirement that everything be political? That somehow the government’s imprimatur is required to legitimize charity? But hey, there’s nothing more efficient for delivering any service than the government, is there?
Well, let’s see. A photo op with a farm reform bill doesn’t get you liberal accolades. If they did increase markets for poor country products, well, why that is capitalism. Not to mention, the risk of losing their real purpose which is tax avoidance.
Plus remember the liberal mantra, give a man a fish and has a meal. Teach a man to fish and he’ll eventually vote Republican in order to save his company from liberal looting.
So, James starts with Yglesias saying:
And then he adds:
but you come back with:
Bill d’I: HUH???
Do you really think that the consuming public of Nigeria, or Bolivia, or Mongolia, (or all 3 combined) has more influence than the purchasing power of the American public?
Do you really mean to say that the small infitisimal economic structures of these 3rd world countries are more important than the largest economy in the world and the lobbyists who hold sway, who lobby on behalf of a corporation with a gross profit larger than these 3 countries GNP????
That somehow they can have a larger impact on US agricultural poilicy than one of the largest buyers of corn fructose syrup????
Ahhhh, Yes…. It is the fault of the poor, the disenfranchised, the unwashed masses…. IT IS THEIR OWN FAULT THEY GET RIPPED OFF!!! It is their fault that the rich get to game the system for their own benefit….
And James, saying this:
Doesn’t get you off the hook. It is understandable (change is messy) but it does not make the status quo right. Because a companies profit margin is NOT more important than the health of a country’s populace… any country…
Not even our own.
tom p, if I have to choose between dealing with the evils of the Coca Cola company acting in its own best interests or you acting in my best interests, I’m going with the Coca Cola company as less threatening to my interests and liberty. Be careful about the false dichotomies you throw up.
You lost me here. Neither Gates nor Buffett want you to pay more taxes. Soros, maybe.
Gates isn’t a big fan of taxes, and Buffett only thinks the rich should pay more.
I am surprised at you Charles, as I usually find your comments well thought out and insightful. This was neither. I did not propose anything other than the fact that selling ones soul to the corporate whores who run this country in their own self interest is not in your self interest. And you think it is about Coke. Or maybe you think it is about you?
I act only in my own self interests(I don’t buy coca-cola) and I really don’t give a rats ass what happens to you. But the idea of blaming some 3rd world hell hole for the effects of OUR economic (or agricultural)policies…
Stretches credulity….
Be careful of your own false dichotomies (such a big word…) and don’t worry about mine, they aren’t the half of what you put on to me.