Do ‘The Good Rich’ Exist?
By: Hamilton Nolan
We live in a world in which wealth is distributed in a wildly unequal way. A tiny few have billions of dollars, while many more have nothing. Though the reactions to this persistent and growing state of inequality span the ideological spectrum, it’s fair to say that most people consider it a problem. For the very wealthy—and their sympathizers—extensive philanthropy is often held up as their personal nod to the world’s unfairness. These generous philanthropists are considered to be the good ones.
But is “The Good Rich” a contradiction in terms?
This question need not immediately descend into a screaming match between Marxists and free market demagogues. It is not an inquiry into the personal character of billionaires. It should not be supported or refuted by emotional appeal to Warren Buffett’s appealing cuddliness, or Steve Scwharzman’s unappealing grandiosity. It can be examined as a question of what really is—as a simple query of the state of the world. Do the drawbacks of such a vast accumulation of wealth in the hands of any single person outweigh any amount of charitable gestures that person could take on behalf of good causes? Does the very fact that we have a system that allows such vast inequality hurt us all more than all of the billionaires’ philanthropy will ever help us?
The seed of this discussion is planted in a new book by the historian Robert Dalzell, The Good Rich and What They Cost Us. He considers popular wealthy Americans from George Washington onwards, and their contributions towards (and detractions from) the general welfare. In an interview with Heather Horn, Dalzell makes one incisive point worth considering for this large question. It is about how great philanthropy can distort the public’s ability to clearly perceive the larger question at hand: “The proportion of the very wealthy who are very generous is not large, but we tend to assume that there’s a kind of universality to what happens here—there isn’t. That’s a cost we pay, because this whole notion of ‘the good rich’ I think reconciles us to levels of inequality in the society that in terms of our democratic ideology would otherwise be unacceptable.”
This, I think, is undoubtedly true, and is, on a smaller scale, why philanthropy is routinely deployed by wealthy individuals and corporations alike as a PR move. But for the sake of our discussion, it is not the motives that matter. Can even the most honestly generous billionaires be costing society more than they give? Bill Gates, of course, is the best case study—a man who’s given tens of billions of dollars in what is, by all appearances, a very genuine effort to help the world’s neediest. In a classic 2006 essay, the utilitarian philosopher Peter Singer (while noting that Gates is more generous than almost all of his peers), asks:
Gates may have given away nearly $30 billion, but that still leaves him sitting at the top of the Forbes list of the richest Americans, with $53 billion. His 66,000-square-foot high-tech lakeside estate near Seattle is reportedly worth more than $100 million. Property taxes are about $1 million. Among his possessions is the Leicester Codex, the only handwritten book by Leonardo da Vinci still in private hands, for which he paid $30.8 million in 1994. Has Bill Gates done enough? More pointedly, you might ask: if he really believes that all lives have equal value, what is he doing living in such an expensive house and owning a Leonardo Codex? Are there no more lives that could be saved by living more modestly and adding the money thus saved to the amount he has already given?
This is the discussion as asked from the perspective of the very poor in the world who are still suffering. (And it applies, of course, to all of us, not just billionaires.) It is possible for a billionaire to give away billions without sacrificing anything at all, in terms of their own lifestyle. Anyone would be happy to sign a deal mandating that they have to give away $30 billion, as long as they got $53 billion in return. Likewise, many great philanthropists leave the money to charity in their will, allowing them to enjoy their wealth to its fullest extent for as long as they live. As far as morally admirable actions go, these are not so impressive. While a grand charitable donation from a billionaire may look staggering on paper, when viewed as a proportion of his wealth as a whole, it loses much of its luster. And when viewed by how much money the billionaire keeps after his philanthropy is done, the donations look even shabbier yet.
The purpose of this discussion is not to impugn the character of billionaires. It is to ask: What is the cost to society of the perception that we should be grateful to these wealthy men for their generosity? The assumptions implicit in that view are A) that the wealthy are fully entitled to their money because they earned it on the basis of their own talents, and B) that the need for society and its laws to protect the entitlement of the rich to their own wealth outweighs the aggregate societal needs that could be cured or ameliorated by that wealth (poverty, disease, etc.). Gratitude towards the great philanthropists is based on the assumption that they are not and should not be expected to give their wealth back to the world; it is based on the assumption that the normal, default, acceptable behavior for the very wealthy is to hoard most of their wealth and put it solely to their own use. It is a view in which society grovels at the feet of great men who have succeeded where the rest of us have failed.
Warren Buffett himself has attributed most of his success to the society he lives in—its governmental protections, its rule of law, its fair and transparent markets, its educational system, and so on. The wise rich (and anyone realistic about the role of chance in the outcomes of all of our lives) recognize that personal talent is but one minor ingredient of vast success. If society is responsible for the vast majority of the success of the rich, then returning the vast majority of that wealth back to society is the least that the rich can do. (Really, it’s the least, considering the fact that they would still be left incredibly wealthy.) This level of giving back to the society that spawned them should be expected of the rich. Yes, society owes them its gratitude—the same gratitude that it owes you for paying your taxes, and volunteering, and making your annual donation to UNICEF. The same gratitude, regardless of the number of zeroes on the check. The gratitude that comes when someone does a good thing that they are expected to do. The gratitude you get for fulfilling your role as a responsible member of society.
To the extent that we should be grateful to the great philanthropists, we should be grateful to them for fulfilling a duty. And to the extent that that duty is to be truly generous, it is a duty that none of them have fulfilled.
Let us consider the most extreme normal example of generosity by “The Good Rich”: a hugely wealthy person who gives away all of his money to good causes in his will. Should this be seen as a gesture of generosity above and beyond what society could expect? Here’s a more interesting question: what, if anything, did this person cost society by having all of that money while they lived? What are the opportunity costs to society of having billions of dollars concentrated in the hands of a single person?
Imagine if money were food. (Don’t worry, money is much better than food.) The wealthy man has silo after silo full of grain. Meanwhile, thousands of people are poor and starving. “I built up these vast stores of food over my career as a trader. Although I could never eat all of the food they hold, it gives me great personal satisfaction to gaze upon them and reflect on my own success. But don’t worry,” says the rich man, “upon my death, all of my food holdings will be distributed to the poor.” The people cheer his generosity. The rich man lives fifty more years. The poor starve to death each winter.
Just as the rich man could have saved the starving poor by giving them his food now, so could the rich save thousands of lives now by collectively funneling their vast resources to those in need. Society does not expect them to do that, and so they don’t. In America, having, holding, and hoarding great wealth carries no shame. It is considered one’s personal prerogative. The implications of all of the lives that that money is not saving as it sits in the bank are not treated as real considerations. But they should be. Starving is starving is starving.
Put simply, the very wealthy owe something to society. Not just a smile and a thank you: they owe help. And they owe, let us reasonably say, as much help as they can give without completely sacrificing the sweetness of life’s rewards that act as an incentive to keep all of us capitalists innovating and working hard. To think of the rich as great people for giving something back handcuffs society. It places us all in a sort of self-imposed psychological subjugation. And we do not have to do that to ourselves. We live in America. No one is too rich or too poor to be equal.