Post by Ezra Roizen
Bart and I have launched weover.me as a venue to discuss matters that can have an impact on the decisions we make, priorities we set, and ultimately, the lives we lead.
The format: We select a topic, post a blog (or two), set an evening for us all to discuss the topic, and then post a follow-up blog with a summary of the collected thoughts on the topic, from the weover.me community.
For our first event (on Thursday November 10th), we’ve decided to bite off more than we can probably chew. But, so be it!
The Topic: What will you do with your billions? Or, will you even choose to accumulate them?
Warren Buffett has put plans in motion to give 85% of his fortune to charity. Bill Gates has famously said he only plans to leave a tiny amount of his wealth to his kids and has already begun in earnest the process of deploying his billions for social good. Why then did they accumulate all this money in the first place? What does this tell us about wealth and how we share it, if at all? What can we learn about our own lives from these extreme examples?
Harvard political philosopher John Rawls is credited with the following concept (which I lifted from Wikipedia): Any system of social and economic inequality should satisfy two conditions: first, it should offer favored positions and offices open to all under conditions of fair equality of opportunity; and second, it should maximize benefits to the least advantaged members of society.
The second standard is the really interesting one to me (I think we all get the first part, that opportunities should be equally available): social and economic inequalities are OK, so long as they operate “to the greatest benefit of the least advantaged members of society.” What that means is if you have a system where the richest person has 1 million units of wealth and the poorest person has 5 units of wealth, that’s a better system than one where the richest person has 10 units of wealth and poorest person has 4 units. Even though in the first system the difference between richest and poorest is 999,995, and in the second the disparity is only 6 units. A narrower wealth gap is less important than the poorest person having the most he can have.
Our modern American, capitalist, democratic architecture is essentially Rawlsian in nature. We allow for massive disparities in wealth and tell ourselves that’s the best way to do things, and if you don’t believe us, look at all those rusty Soviet tanks.
Then guys like Buffett and Gates send a message that seemingly turns the current processes for wealth distribution on its head with their decision to give their fortunes away. Fascinating.
Clearly acts like these are almost unfathomably generous. But several questions come to mind:
Are Buffett and Gates our role models? Did they lead socially optimal lives? If the end result of their labors is the betterment of society at large – which it appears to be – and did they set an example we should all follow (at whatever scale we can)? Or is this generosity more of an afterthought, like having more leftovers than you have fridge space once the party is over?
If the next billionaire knows she is going to give 85% of her money away once it’s all accumulated, would she design a slightly different life? One that systematically redistributed vs. one that waited until the fourth quarter.
There’s an argument that these guys could have designed a different kind of model for their lives, one where they didn’t build such giant fortunes, but where they built organizational models that distributed that money back into the system along the way. Or even more simply, where a greater number of people in their respective ecosystems saw a greater amount of wealth.
Then again, would that distribution be as effective in affecting world crises? Or is it better to deploy a massive amount of money toward a single purpose, such as the cure for AIDS? An argument could be made that amassing that kind of capital is the only way to really move the needle on some major challenges.
Maybe the only way libraries get built is if an Andrew Carnegie does it himself. Maybe we *want* the economically fittest among us to amass great fortunes and then give them away. Maybe that’s the best way for some big things to get done.
Chris DeVore, a Seattle entrepreneur/investor, recently wrote a great post bemoaning the fact that Seattle’s millionaires tended to come from the middle ranks of a few large companies (Microsoft, Amazon, etc.). They were unlike the Silicon Valley-styled “frontline” entrepreneurs. They don’t self-identify themselves as entrepreneurs, according to Chris. To that end, they tend to buy Maseratis rather than “give back” by investing in the next generation of Seattle startups. This gets me thinking that just making a lot of people rich along the way may in fact *not* lead to broader-based good behavior. Maybe we’re all better off if a few well-intended and enlightened folks get to keep most of the wealth we collectively create. Those people would then get to invest in specific problems that plague society as a whole.
Our government is based on a representative democracy; maybe we also need a representative economy?
Yet I can’t shake this underlying feeling that there’s a better way than the Gates and Buffett model, their model seems like the 1.0 version. Is it really best to architect our existence around amassing huge personal fortunes for eventual redistribution? Or is there instead some yet-to-be created design based on a more holistic life, where the fruits of our labors are more actively shared, and enjoyed, along the way?
I’m also completely open to the notion that there isn’t a better way. That this is the way it should be, that somehow holistic social/business/life models will take the edge off of healthy competitive forces, create inefficient systems, and in the end we’re better off keeping our professional games sharp and sharing our profits as a second step.
This is the topic of our first discussion, and I think it’s completely fitting with the founding notion of weover.me: is the ultimate outcome of our labors and lives to amass the largest fortune we can, and maybe give some of it away as a second step? Or should we be seeking new holistic work/life models that combine an integrated and “gradual” distribution of our resources along the way?
Please leave a comment below and Bart and I are looking forward to seeing you on November 10th.
Follow on perspective posted by Bart Garrett:
Giving Money Along the Way
What to do with my billions? An answer is sure to remain in the hypothetical realm, unless my middle school girlfriend’s locker combination eventually secures a winning lotto ticket! But, Ezra asks a great question: Should you amass much wealth over time, and then give most of it away with 2 minutes left on the clock, or, do you give some away as you go, a decision that will certainly keep you from making as much and from having as much to give?
I will *argue* for the latter, though I agree with Ezra that deploying massive amounts of money might be the best way to move the needle on some global social issues. Still, creating practices and rhythms for ongoing sharing and giving can be both humanizing and soul-saving.
Sharing and giving “as you go” is…
1) Humanizing because “out of sight is out of mind.”
2) Soul-saving because “the love of money is the root of all kinds of evil.”
Humanizing because “out of sight is out of mind.”
I cut my teeth on the political philosophy of John Rawls. But, were he writing today and not fifty years ago, I think he would adjust his paradigm. To pay less attention to the disparity of wealth in a society and more attention to increasing the wealth of the poorest people in that society might seem noble on the surface, but might prove wrong in the end.
Robert Reich served as Secretary of Labor during the Clinton administration and now teaches in the Goldman School of Public Policy at Berkeley. He often begins his lectures with this illustration: “What if I were a genie that could increase the capacity of the American economy, that could provide more wealth and income for everyone? But, here is the catch: 90% of that increase will go to people who are already in the wealthiest top 5%. The rest is going to be distributed to everyone else. And, because of this, everyone is going to do better including the people at the very bottom. There will be less poverty! The increase in the income and wealth of people at the bottom will no be insignificant! How many of you are in favor of me snapping my fingers and granting you that wish?”
In academic settings, around ½ of the crowd raises their hands. Reich then goes on to say that this scenario is actually what has played out in the American economy over the past 25 to 30 years, and then asks, “Are we better off as a society today?” Reich is pointing out that a gross disparity of wealth is not good for society, even if it increases the “bottom line” for everyone. Kate Pickett and Richard Wilkinson make a similar argument in “The Spirit Level: Why Greater Equality Makes Society Stronger.” In fact, they argue that the income gap between a nation’s richest and poorest is the most powerful indicator of a functioning, happy, and healthy society.
This premise will set-off a political debate with myriad questions: What is justice? Should it be grounded in equality (utilitarianism) or freedom (libertarianism)? What do we do when those to things are at odds with one another? Further, what role should the “state” play in orchestrating equality, mitigating inequality, protecting freedom, and/or limiting freedom? Recognizing the political contours of the question, one critic of The Spirit Level posed the question: Is a primitive aboriginal tribe living in absolute poverty and equality to be preferred to a modern society with income disparities of 2 to 1 or even 100 to 1? This reviewer concluded her review by writing: “Thankfully mankind has generally moved away from stagnant societies where all wealth was controlled and redistributed by political force (kings, dictators and socialist commissars), to societies where wealth went to those who actually created it. Historically the greatest creators of wealth…are a remarkably small number of entrepreneurs and inventors. That of course has led to ‘income disparity’. I’m all for it.”
I side-step the political debate and the cost-benefit analysis of giving just before the buzzer Vs. giving along the way. Instead, I want to simply point out that societies with a great disparity of wealth are societies that are becoming less and less human by the moment. How? Why? First, they are societies where people of socio-economic, cultural, and ethnic diversity do not overlap and connect as often as they should. Second, they are societies full of people that assume money will fix all of the problems, and assumption is often made at the expense of relationships.
(1) Robert Putnam, a Sociologist at Harvard, in his ground-breaking work, Bowling Alone, demonstrates that the greater the disparity of wealth in a society, the fewer interactions there are in that society between the “rich” and “poor.” This means that the poor are “out of sight, and out of mind,” thus creating a dehumanizing reality for both rich and poor. The poor lose human dignity, cast aside as less-than-human discards (Scrooge’s “decrease the surplus population”), and the rich become less and less human in becoming more and more godlike under assertions that they “made money the old-fashioned way—they earned it!”
(2) This inability to connect across the lines of massive socio-economic disparity ultimately causes the rich (and yes, that is you and me!) to feel guilty for not knowing or caring for anyone who is poor. Thus, we assuage the guilt by throwing money at social issues rather than throwing our lives into relationships with people that are most unlike us. You know, people that don’t wear “smart guy” glasses (guilty!), and say things like, “The bouquet is fruity, but the finish is kind of earthy and gritty” (guilty again!).
Because religion is viewed today a primitive conversation between a bunch of people and their imaginary friend, allow me to put an extra olive in the martini of religious practice. Robert Putnam, in his newest work, American Grace, argues that, “Strikingly, religiosity is correlated with greater class bridging, especially downward bridging…. We also find some evidence that upward bridging is more common among religiously involved lower-class Americans, but that pattern is much less robust…. In short, religious social networks seem to serve as a counterweight against growing class segregation.” What is more, he argues that religion has fought against the disparity of wealth and not for it: “Many contemporary secular progressives have forgotten that the history of religion in America is replete with powerful examples of evangelical revival promoting social reform and equality. Indeed, it is harder to identify purely secular progressive movements in American history than to find progressive movements infused with deep religious commitment and undergirded by religious institutions. The First Great Awakening, the wave of Protestant evangelical revivalism that swept from England through the colonies from about 1730 to about 1760, was thoroughly infused with egalitarian ideology and formed part of the background to the American Revolution. Revivalist ministers in this Awakening were, observed historian Gordon Wood, ‘eager to promote the idea of equality that became so important in the Revolution’ and ‘became deeply involved in reform movements of the early Republic.’”
When poor people are not “out of sight and out of mind,” but rather share our tables and neighborhoods, then they receive dignity and the rich receive humility; both become more fully human.
Soul saving because “the love of money is the root of all kinds of evil.”
Shouting “Jesus!” in a crowded theater will scare people more than shouting “Fire!” But, pick up the hot potato for a moment, and ask people, “What is the most famous quote uttered by Jesus?” Answer: “Judge not lest you be judged.”
OR “The love of money is the root of all kinds of evil.”
Notice that Jesus did not say that “money is the root of all kinds of evil,” but that the love of money is. Whether or not you believe Jesus was nothing more than the son of a Jewish carpenter, a figment of the collective imagination, a raving lunatic, a Tinker-bell without wings, or God incarnate, this is perceptive counsel.
It is very easy to attach our status or our security to money—how much we spend or save determines who we are. Like the ring was for Gollom, our money can quickly become “my precious” as we clutch it and count it. Practicing the profane by giving money away along the way might just end up saving your soul.