September 2006: More and Bigger Crumbs from the Table

Buffett-Gates generosity no substitute for social justice
September 1, 2006

When U.S. investment guru Warren Buffett donated $31 billion last June to the foundation headed by software mogul Bill Gates and his wife Melinda, visions dawned of a new golden age of philanthropy. The mammoth gift doubled the size of the Gates fund, making it by far the world’s largest charitable foundation. Buffett was effusively lauded by politicians, media pundits, and even by many civil society groups, who welcomed the prospect of more aid in their efforts to reduce world poverty, AIDS, and other afflictions.

Far be from me to denigrate such a grandiose act of altruism. Buffett deserves all the praise lavished on him, as does Gates. But if anyone thinks that the worst ills plaguing humanity can be remedied by charity alone, on any scale of magnitude, please think again. Even if all 691 of the world’s billionaires were to emulate Gates and Buffett—a most improbable scenario—the massive social, economic, and environmental problems that confront us would be only slightly moderated.

The reason I doubt that the Buffet-Gates humanitarian model will find favour with most of their fellow plutocrats is because it is completely alien to their mindset. If the amassing of as much wealth as possible—by any means—is your main driving force, you tend to measure your worth by the size of your wealth. To voluntarily diminish your riches is to lower your self-esteem.

One of the free-market ideologues reacted to the Buffett endowment in a scathing op-ed in the local paper. He accused Buffett of betraying and undermining capitalism, which he described (accurately) as a system for making money, not giving it away. He also noted bitterly that only mega-billionaires like Buffett and Gates can part with so much of their booty and still stay comfortably in the billionaire class.

One does not have to be a cynic to suggest that, although philanthropy on the Gates-Buffett scale may be unselfishly motivated, it does bring substantially significant benefits:

  • All charitable donations are tax-deductible.
  • A sharing-the-wealth image is good for business.
  • To the extent that charity helps people to escape poverty, sickness, and illiteracy, it also helps turn them into profit-generating consumers of hamburgers, movies, even computers.
  • The more that charity is relied upon to alleviate the ill-effects of unregulated global markets, the less the pressure on governments to take broader and more effective remedial action.

Nor are large grants and bounties always given without strings attached. Are the recipients obliged to buy their relief from specified corporations? Are they expected to show their appreciation by supporting specified political leaders? If they are educational institutions, are they supposed to inculcate in their students the appropriate tenets of capitalism and free enterprise?

The donors, too, are expected to have the “right” political attitudes. A few years ago, when the Dixie Chicks offered $1 million to the American Red Cross, the Red Cross refused to accept the money because the singers had publicly criticized the foreign policies of the U.S. commander-in-chief, especially his invasion of Iraq. Political correctness, it seems, is insisted upon at both ends of the charity spectrum.

Bill Gates has spent a billion of his foundation’s dollars on American and Canadian public schools, and it would be naive to assume he doesn’t favour schools that are dedicated to graduating compliant workers and consumers rather than independent thinkers.

“A compelling case can be made for keeping corporate leaders out of our classrooms,” says Philip Kovacs. “When they shape our schools and other institutions according to their needs, their ideology undermines the democracy the schools purportedly serve.”

Nicholas Ruiz, a professor of the humanities at Florida State University, also questions the altruistic motivations of corporate philanthropists. Calling it “capital masquerading as good-will,” he wonders if its main purpose is not to provide a benevolent mask for corporate malevolence.

“So Warren Buffett, the second richest American white man, gives $31 billion to Bill Gates, the richest American white man. Bravo. But why not instead give $1,000 to each of the 37 million Americans who are living in poverty?”

A pertinent question. The answer, of course, is that such a wide dispersal of Buffet’s wealth would fail to make much of a dent in the U.S. poverty rates, and indeed would make the ineffectiveness of all such charity much more obvious. In an economic system that glorifies material gain rather than magnanimity, the generosity of atypical tycoons like Buffett and Gates is clearly an aberration.

If we had an economic and political system that was designed to distribute the world’s resources more equitably, the poor wouldn’t have to rely on the crumbs tossed to them from the tables of the rich. Their entitlement to a decent standard of living would be built into the system. Instead, we not only fail to put limits on greed, but also fail to tax back enough of the excess accumulated wealth to fund the public programs needed to really help the poor. Our tax system even obscenely diverts taxes collected from lower-income earners into handouts and subsidies that further enrich the affluent.

By all means let’s compliment Buffett and Gates on their munificence. But let’s not slacken our efforts to change a system that substitutes such voluntary (and exceptional) wealth-sharing for a system geared to achieving real social justice.

(Ed Finn is the CCPA's Senior Editor.)