The Backlash Against the Billionaires' Pledge

Are Bill Gates and Warren Buffett the new robber barons?

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Even as the praise continues to roll in for the 40 billionaires pledging to donate a full 50 percent of their wealth to charity, a few writers are beginning to see the darker side to the story. While all are careful to call the pledge "admirable," some journalists and pundits worry about the initiative's echoes of robber-baron philanthropy in the Gilded Age. A roundup of commentators taking a closer look at the pros and cons of philanthropy, writ large:

  • Back to the Robber Barons  The donations themselves are great, says Berkeley public policy professor Robert Reich. What's troubling is what these large sums of money mean--"how much money is now concentrated in so few hands"--and how reminiscent it is of an earlier era:
It's more evidence we're back in the late 19th century when robber barons lorded over the economy and almost everyone else lost ground. The Vanderbilts, Carnegies, Rockefellers made so much money they too could give away large chunks to charity and still maintain their outsize fortunes and their power and influence ... America's median hourly wage, meanwhile, dropped last year, and it continues to drop. That's not even counting the 15 million Americans still out of work. Most Americans don't need charity. They need good jobs.
  • Confirmed: Carnegie Returns  "40 of the country's billionaires have resurrected and updated Andrew Carnegie's doctrine of the 'gospel of wealth,'" writes Steven Pearlstein in The Washington Post. He's not taking issue with the billionaires or their donations. "There can be little doubt, however, that their commitment has raised the bar on social responsibility even as it raises questions about the social value of large personal fortunes." Pearlstein then launches into a review of the "gradual  hollowing out of the middle of the U.S. economy," growth since the 90s coming "at the top and bottom of the skills ladder," resulting in the "'polarization' of the labor force," exacerbated during the recession.
  • 'Noblesse Oblige That Might Have Embarrassed Even John D. Rockefeller'  While pointing out that he's not "pick[ing] on the billionaires for their charity," The Wall Street Journal's Evan Newmark compares the gesture to Obama's "workers-of-the-world" rhetoric at a recent AFL-CIO meeting: they're both "condescending, nearly cartoonish PR exercises--the exact opposite of good leadership." He's also irritated that, on the same day as the Giving Pledge announcement, Secretary Geithner made another case against tax cuts for the wealthy. Newmark doesn't like the Giving Pledgers being confused with America's "wealthy," who, according to the tax code, aren't so much the Gates and Buffet types as "the local doctors who treat your mother, the McDonald’s franchise owners who feed your family, the Toyota dealers who sell you a car."
  • Donations? How About Actually Paying Taxes  Peter Wilby takes the opposite approach in the Guardian, with a more comprehensive critique of so-called philanthrocapitalism. "The US treasury already loses at least $40bn ... a year from tax breaks for donations," he writes. Not only does the government lose the money, but the billionaires then get to determine what the "good causes" are. Other problems with philanthrocapitalism include that it tends to "[tackle] symptoms of poverty and distress rather than underlying causes," and tends to towards "do[ing] things to the poor, rather than with them."
Just as market approaches carry dangers when applied to public services, so they do when applied to charities. The emphasis on "rates of return" and "value for money" may exclude people in great need who happen to be difficult to reach or, even if made fit and healthy, would be of marginal economic utility ... If the rich really wish to create a better world, they can sign another pledge: to pay their taxes on time and in full; to stop lobbying against taxation and regulation; to avoid creating monopolies; to give their employees better wages, pensions, job protection and working conditions; to make goods and use production methods that don't kill or maim or damage the environment or make people ill.
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