Warren Buffet and charity

Updated: 21 May 2008, 23:26

Originally written: 29 June 2006

On 25 June 2006, Warren Buffet announced that he will give more than US$30-billion, over time, to the Gates Foundation, set up by Bill Gates. The combined donations of the two wealthiest men in the world will apparently total about US$60-billion. The National Post is less than thrilled.

Terence Corcoran, in a front page article in the 27 June National Post, comments:
In the world of philanthropy, of course, the sight of Bill Gates and Warren Buffet, the richest men in the world, throwing most of their billions out the window has the high moralists of anti-capitalism jumping with joy.
A longer article, by Colby Cosh, later in the same issue critiques the historical benefits of this charitable approach. He ends the article with strong approval, but with a big “if.”
If Warren Buffet’s donation does half as much good [as Carnegie's donations to build libraries], dollar for dollar, he will be entitled to enter history as one of mankind’s most monumental benefactors.
Richard Salsman, in the Financial Post section of the National Post ends his article:
Neil Cavuto of Fox News remarked that “Bill Gates is planning to devote his life to charity. He has made his billions; now he wants to make a difference. I say good for him — and good for any billionaire who wants to do some good with his money.”

On this premise, a great businessman doesn’t really “make a difference” — and doesn’t really do any good — so long as he’s greedily producing values, creating wealth or investing assests. He only does “good” when his wealth goes “back to society.”

This is the anti-egoist, anti-profit premise that’s eroding capitalism and prosperity. It’s the root premise of the antitrust laws and it’s the main premise that explains the utter tragedy of Bill Gate’s early retirement.
The alleged anti-capitalists, to whom Corcoran refers, probably are delighted. Socialists, including Capitalism’s Gravediggers, are not, because charity does not resolve the underlying problems of capitalism. Charity cannot eliminate poverty. The existence, the necessity, of charity is proof of poverty.

Corcoran believes that the money would benefit society as a whole — including the poor — much more by using it to increase the wealth of the philanthropists. He could well be correct. This should, but most likely will not, be considered by the supposed anti-capitalists. They should take heed of Corcoran’s arguments. The “anti-capitalists” of the Left do not intend to undermine capitalism, and their support of charity could be counter productive to the welfare of the poor.

The vast majority of “anti-capitalists,” using Corcoran’s broad-brush definition, have no desire whatsoever to eliminate capital accumulation, the wages system of forced labour, and buying and selling. Therefore they need to ensure that capitalism works — in some wishful sense — for the poor. If their approach, including charity, does not actually generate the best quality of life for the poor, then their approach does not — even within the confines of capitalism — deserve the support of anyone who honestly wants to improve poverty. Improving poverty is a bizarre concept, necessitated for the Left, by believing that the actual structure of capitalism, which apparently they do not understand, is necessary.

The arguments from Corcoran, Cosh, and Salsman assume capitalism. That is expected from ideologues of capitalism. Although their grasp of what constitutes capitalism is suspect, their approach may make more sense than the approach of the Left.

If the intention is to eliminate poverty, then capitalism — no matter how it might be administered — is the wrong paradigm to be considering. Poverty is a necessary part of capitalism.

Capitalism can only function if the poor (including the vast majority of the world’s population, in every country on the planet) must offer themselves up for employment. Employment is necessarily the production of profit by workers, for the owners of the means of production.

To eliminate poverty, capitalism must be forced to surrender to the next stage of social and economic development: socialism.

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