Ask HN: Why are billionaires not giving more money away? | Hacker News Reader

Ask HN: Why are billionaires not giving more money away?

32 pointsdanielovichdk45 comments

With some people having so much wealth, why are we not seing them put more money into society? Helping out where their money really can make big difference.

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I wrote about this a while back [1]. Thinking that more charitable donations will create more upliftment is a false premise. Don't get me wrong, charities do serve a function. But most of the human suffering emanates from greedy politics, corruption, and dumb policies. Most of the world problems can't be solved with capital alone.

Poor African countries, for instance, have received trillion dollars in aid, and yet because of the incompetence of their leaders, poverty is still wide-spread. I don't think if billionaires doubled their donations, it'll create a change the situation significantly.

[1]: https://shubhamjain.co/2016/10/02/fallacy-of-hating-the-rich...

I wish to confirm what you have written about African countries. I speak about sub-saharan Africa here. Even without donations Africa has enormous unrealised wealth and potential (minerals, gas, agricultural potential). Geopolitically also well positioned. With the exception of places like Nigeria, also comparatively underpopulated. Money is not the main problem here - an educated populace and strong institutions like proper independent courts, etc are needed. Without them, a very predictable form of feudalism emerges frighteningly fast. The west does work differently, but there are important lessons to be learned by watching what's happening here.

I haven't watched it yet, but Poverty Inc is a documentary that makes the case that aid does more harm than good:

https://www.povertyinc.org

Often the aid does more harm than good and actually keeps the very people in position of power that are corrupt.

The Dictator's Handbook: Why Bad Behavior is Almost Always Good Politics[0] examines the very phenomenon.

[0] https://www.goodreads.com/book/show/11612989-the-dictator-s-...

Awesome book. I find the lessons apply at all levels of leadership and influence, i.e., from running a country to running a high school clique. I worked in Africa under PEPFAR/CDC and can confirm, like 5% on average of that aid actually reaches the intended targets and has the intended impacts. The rest is siphoned off and diverted to the dictators and their coalitions (as defined by the book, the people actually keeping the dictator in power, not the populace).

Diet for a Small Planet also found that at the time the book was written, there were no countries incapable of feeding their people. Starvation mostly had roots in political problems, including civil war. It wasn't due to an absolute lack if food.

Sending food to starving countries often isn't a panacea. Frequently, the same political problems that caused the starvation in the first place prevent the food from getting distributed to the people who most need it. If it does get distributed, it can change the tastes of locals, who will now want to purchase a Western diet that they can't really afford. This leads to more hunger as people reject a diet of affordable local traditional foods and spend money on meat and wheat and other products beyond their means.

The first half of the book is a political piece. The second half is a vegetarian cookbook. It is one of the best books I have read.

Helping out where their money really can make big difference.

First do no harm. We don't necessarily know what works. We have rich folks who are pro UBI and that ticks me off. I don't think it is a good solution. I think it just helps salve their guilt at helping to destroy jobs. I don't want their guilt salved. I want them to focus on redistributing work. We should view the trend towards automation as the Second Industrial Revolution, not the start of making most people charity cases dependent on a handful of "generous" rich people or some nonsense.

I was homeless for nearly 6 years. Most programs to help the homeless are completely sucky. I am against growing more homeless services. I am trying to come up with answers that shrink the problem of homelessness.

But a lot of people are not interested in shrinking the problem. Many are fine with growing it, because it serves some sick emotional need of theirs.

I recently talked to someone who wanted to 'share their vision' of taking over an entire downtown block with homeless services. I cut them off with "I have an appointment. I gotta go."

This person said they had "a heart for the homeless." Sounds more like some sick hard on for the homeless. That isn't actually caring about the welfare of other people. That's some twisted desire to make them feel good about themselves. If you care about other people, help them get off the fucking street. Come up with solutions that shrink homelessness, don't build more soup kitchens. Geez.

But solutions that shrink the problem of homelessness are hard to create. It is a hard problem to solve. In contrast, programs to "help the homeless" (like soup kitchens) are easy to dream up, but often help entrench the problem rather than resolve it.

No matter who you are, trying to find something that actually works is challenging.

Bill Gates said that automation of an efficient system magnifies the efficiency. Automation of an inefficient system magnifies the inefficiency.

I think that same paradigm applies to throwing money at problems. I would hate to guilt rich folks into throwing more money at programs that actually make the problems worse and entrench them. They can just keep stuffing it under their mattress or whatever until we have some concepts for how to actually improve things. Then someone can go try to convince rich folks to invest money in real solutions.

> First do no harm. We don't necessarily know what works. We have rich folks who are pro UBI and that ticks me off. I don't think it is a good solution. I think it just helps salve their guilt at helping to destroy jobs.

Rich people don't destroy jobs, efficiency / innovation / increases in productivity destroy jobs. Society doesn't need jobs that are no longer required, and it makes no sense to pay people for things that can easily be done by a machine.

Now, that said, the problem you describe is real and it is an issue. But I don't know what a viable solution aside from a properly implemented UBI would be.

The first industrial revolution shortened work weeks, in part to redistribute work. People worked really long hours. That was the norm. With automation, unemployment levels rose while those with jobs continued to work inhumanely long hours. Then people pushed for the 40 hour work week.

I think we can again work to lighten the burden of work for the average worker without disenfranchising large numbers of people.

I used to write about that on my old blog, but I probably won't continue to write about it. Here is at least a partial list of those writings:

http://micheleincalifornia.blogspot.com/p/ir2.html

My latest related thing, brand new. Still fleshing it out.

https://news.ycombinator.com/item?id=15781531

False premise - you cannot know the full aggregate of those who actively give to charity regularly.

A great number of people including some very wealthy ones prefer to give anonymously and often stipulate that as condition of their giving.

Furthermore, even with public donations, there is no mechanism to track all of it for various reasons (e.g. many agencies may release totals but not donor/donation details), so you can't know the totals, much less judge the rate changes of that.

Nor is giving away money necessarily an unalloyed good; it can create dependency.

Most billionaires have their value tied up in stock which they don't want to be selling. As long as you own your stock, you own your baby. Once you sell it you are losing control. There are of course exceptions.

I'm going to guess that what the question is referring to is not random charitable donations, but large projects in the old Rockefeller/Carnegie mold. Bill Gates and Warren Buffet have done this, but not too many others. Eli Broad has dedicated major funding for medical research. Peter Thiel seems to be determined to destroy society. I guess it depends on how much the feel themselves to be a part of society, and want to keep it going.

I would argue that allocating the capital wisely and creating jobs is more valuable than giving it away to charity. Being a billionaire opens up the floodgates to get people to listen to you and to have a meaningful impact on the world. I'd lose respect if Jeff Bezos, Bill Gates decided to stop investing their money in game changing ideas and just donated it.

Which societal problems do you think are caused by a lack of capital?

It's important to realize that even if they're not giving enough, they do give more in times of great inequality. Unfortunately, that's not, and will never, be able to do the job that politics and real redistribution is designed to do:

"In developing this position Walker sits squarely within the traditions of American liberalism, with its belief that promoting equality of opportunity within the current economic and political system is the best response to its failings. Everyone should have the same chance to be privileged, you might say, so that they can use their privilege to attack privilege more efficiently.

There’s some logic to this line of reasoning, but it rests on two questionable assumptions.

The first is that generating more philanthropy is effective as a route to reducing inequality. If it isn’t, then the intellectual scaffolding supporting Walker’s arguments collapses, because the problems of capitalism can never be addressed regardless of how many new philanthropists it creates. At the macro level however, societies that are most dependent on philanthropy like the USA are also the most unequal and vice versa—it’s the social democracies of Scandinavia that have the highest levels of equality and wellbeing, where the foundation sector is very small.

Tax-funded, redistributive government; people-funded, independent civil society action; and dynamic but well-regulated businesses are far more important. It was the same story in America under the New Deal and the Great Society, which kept economic inequality at much lower levels before the new gilded age began around the turn of the Millennium. In fact in the US, philanthropy has increased in line with inequality over the last 50 years, so the more you have of one, the more you have of the other. Statistically speaking, philanthropy is a symptom of inequality and not a cure."

The Privilege of being Privileged: https://www.opendemocracy.net/transformation/michael-edwards...

Because "charity" is not necessarily the best place for them to put it. Lots of money goes into charity, but a lot of it is lost from inefficient spending.

And few of them believe their businesses are not doing a lot of good for society. Jeff Bezos is the only one who can create an Amazon. Rockefeller improved transportation. Warren Buffet invests in businesses people are too greedy or impatient to invest in.

They all believe that they're adding a lot of value to society by doing what they do. Elon Musk is good at articulating what he does, but Jeff Bezos probably believes that he's doing a lot more good for poverty in the USA by reinvesting his money into Amazon.

Most wealthy people have an odd psychology. They want to believe that they have earned everything they have, that it is some sort of just reward for their own fiscal righteousness or cleverness or intelligence. Many don't even consider themselves rich and use terms like "we're doing ok" or "middle class" or "normal". But at the same time might feel ashamed to buy the expensive bread because it may make the maid fell uncomfortable. To them all it took was hard work, so why doesn't everyone else do the same, why should their money be taken in taxes or why should they sacrifice for someone else as it is their own fault to be in such a situation.

Most don't factor in how privileged they were to be born into some wealth or with parents who were educated. On the smallest level, it trickles down to the expectation that they would go to college (my poorest friends were never expected, encouraged or helped to do so if anything it was discouraged by their family as a waste of time and money). Going even deeper, if your parents were good with money and had resources to help you, suddenly taking that unpaid internship during a summer isn't a big deal, because dad pays for your living expenses while you do it, to the poor kid it's an impossible notion to work for free in a big city on your own dime. Going into debt for college, forget it dad paid for that too, so now the next ten years of your life aren't sapped by student loans, for some these are crippling. But I think more than anything having the fiscal wisdom of parents who know how to wisely invest is the biggest advantage of all.

All of that said, they get a few things right, blaming others for your problems isn't constructive and their education and hard work is a factor. The only problem is the disconnect between recognizing how lucky you were so that you forget to be kind to those who weren't as lucky (and I don't mean financially kind, I mean just not being a dick).

So to sum up, why don't they donate more or give more money away? They think the world is as it should be, people who earn things have things, people who don't have things didn't earn them. This is an oversimplification, but that's the gist of it.

Probably because the people who devote their lives to charity, and the people who devote their lives to earning billions of dollars don't have a lot of overlap?

The exceptions tend to people who start businesses with a charity focus, or who retire and need something to do.

Because all their wealth are already put into society. Where do you think all the factories comes from? Who do you think employs all the people? Who creates products and services that people want and which improves people's lives? Billionaires do not sleep on the bag of cash - their wealth is already tied up to the things they are already doing. And as for non profit activities probably all of them do it for the causes they believe in. Universities, libraries, research, art, charities etc. I never understood this demonstration of the rich people, like they are some kind of evil aliens who want to hurt "us good people". This communistic nonsense should just go.

I downvoted you for;

1) "This communistic nonsense should just go." This is taking the question to an extreme POV you want, not where the discussion was.

2) "Who do you think employs all the people?" Its worth recognising small businesses employs about 50% of the population and is contributing more new jobs than corporates these days.

It's OK I don't mind. 1. This was a bit of rant but questions like this are very related to communist's/socialist's "it's always someone else's fault". This is not productive nor is helpful. It's better to educate yourself on how economics work in the real world. Then you will have a chance to make the world a better place yourself instead of "let's use force to take from productive people and give it to unproductive people" which is not that good of an idea in the first place from economics perspective (proven empirically in many countries many times).

2. Nit-picking on my my "all". I didn't mean that literally. Billionaires' wealth is tied up and even if they would sell everything (and give everything to charity) someone else (who takes over) would be even richer which most likely would result in less competition, less innovation, higher prices and lower quality to everyone. Lack of understanding in how economy works results in questions like this.

I concur 2) was nitpicky :)

Regarding your statement "let's use force to take from productive people and give it to unproductive people" which is not that good of an idea in the first place from economics perspective (proven empirically in many countries many times)."

Firstly, one can easily argue force to take wealth is already in place. Most people would pay less tax if it was voluntary. Try not paying your tax and see what happens. So pretending this taking by force system doesn't already exist is ignorant or misleading for rhetoric. The discussion really should be about levels of taxation, not should there be taxation (ie forceful taking of money).

Secondly, I'd be interested in where your empirical evidence comes from regarding how taking money 'from productive people" is a bad thing. And clarify 1) productive and wealthy are not the same and should be recognised and clarified what is being debated. I assume we are staying with the core discussion of taking money from billionaires in general, and not focusing on billionaires that rent seek vs value add. And for your empirical evidence, I assume your looking at the usual quoted countries at the more extreme edges like Communist Russia or Venezuela. But please point me somewhere if I'm wrong.

I would suggest you look at history more openly. You should find empirical evidence suggests some level of redistribution is hugely beneficial. No economy in the world has transitioned to first world status without significantly balancing wealth distribution during this time. This could be coincidental but I doubt it. Look at western Europe, Japan, US, Canada, Australia etc through the 19th century. These became first world as they built the service and mass consumer economy. How you ask I am sure? We'll it was many things and redistribution of wealth and assets was a paradigm shift during this transition for all nations, much like what china is attempting now. People make the mistake of thinking first world countries are 'capitalist' in a much more pure sense than reality. All these countries have significant redistribution policy already, most more so during boom times. Think about education, health, unemployment systems, fire departments, roads, libraries, vehicle authories etc

So my general point is that outside the fanatical fringe, people shouldn't debate whether wealth redistribution good or not, but what level of redistribution, or on what financial terms is it beneficial. I dont claim to know whats right, but I feel places like Venezuela massively overcooked policy left, whilst many western nations are swinging a bit too right these days.

"Firstly, one can easily argue force to take wealth is already in place." That's exactly what I had in mind just maybe was not clear enough. Welfare economics/socialism has a lot of support on emotional level and it is understandable that people who might be struggling are asking questions like in this thread. But if we are discussing economic policies we want to implement then a simple analysis and understanding on the very basics on how things work quickly reveals that it's not as simple as "lets take it from the rich and give it to the poor and everyone will be happy". Taxes are necessary but I would argue that welfare is not what it should be used for at all.

About empirical evidence of socialism failures - countless examples where underdeveloped countries tried it - Russia & co (some not voluntary like my country Lithuania), Cuba, Venezuela, Nicaragua (and actually majority of south/central America so no need to list all of them), Somali, Libya (and actually mostly all worst African states where USSR were heavily involved no need to list it), good latest example from Africa is Zimbabwe, from Asia largest one is India, Bangladesh, Yemen, Cambodia, Vietnam, Burma, Laos etc. Basically any poor country you can think of - it will have a history of some form of socialism. Nice example is China. You can compare it to Taiwan and Hong Kong. Also you can compare China 50 years ago and now (despite being communist on paper now it's one of the most capitalist countries in the world in reality and it's very good for them). North vs South Korea. Just too many examples. Redistribution simply does not create any wealth. Some very rich countries can get away with it but even current day Sweden on the very top on ease to do business lists. And Sweden is already very rich so they have something to redistribute (https://mises.org/library/sweden-myth)

I guess we look at 19th century extremely differently. For me it was as laissez-faire as probably possible. Current levels of redistribution and inefficiency of it would have been unimaginable back then. We should be very thankful for our ancestors who were working so so so hard. We are currently standing on the shoulders of those giants that started this exponential growth of technology that improved our lifes so much in the last couple hundred of years. Especially USA which to this day is world's economical, industrial, technological and innovation locomotive. Even logical arguments why redistribution though taxes are working for me seems like mental gymnastics and doesn't really much sense. Why would would someone should be efficient with someone else's money even if he has good intentions? Why would redistribution create larger pie to everyone? 19 century is a great example to me how human potential can be unleashed with freedom (from a lot of things at that time - religion, taxes, regulation etc).

I don't disagree with your conclusion. I would avoid left vs right labels though. There is some unavoidable reality on how the world works and labels clouds our judgment and we make emotional decision based on what is "morally" right or wrong and not adapting and working with what we actually have in reality. Every country is actually capitalistic (including USSR and North Korea). The only difference is who control that capital. It's ironic that in capitalist countries it's usually controlled by people (people of merit who often are creators and innovators) and in "communist" countries it is controlled by "government" - usually people with no merit and very often very evil ones. The ones who are good at getting at the top in the power pyramid. Where do you think computer would be invented and would reach all the regular folks?

Money won't be helpful. It will just go to corruption. The premise that if poor countries will just imitate the west, not be corrupt and be smart, then poverty will go away is ignorant thinking. And if this happens Europe and America will never have illegal immigrants again I hear that a lot sad to say. While I'm not poor but I grew up in a poor neighborhood. I could say that if these billionaires adopt more of my destitute childhood he gets a good education not only from academic but also from the parents it could be a life changing charity. Rather than throwing money on to corrupt organizations.

You don’t become a billionaire by giving anything away. These people are all psychopath tier manipulators. You can be sure anything they’re giving away (eg Gates/Buffett tax dodge) they’re getting more than equal value in return.

Maybe because everyone that would give it away, did.

To maintain the status quo.

"Making the world a better place" is the biggest lie ever said.

Why should they? Why can't the poor help themselves? Most of us won't be poor if we only spent on the essentials. Stop buying material crap. Foster good relationship with family, neighbors and community. Community service at large and help each other. The wealthy get rich because we keep buying more of the crap they make that we don't need.

In India, the poor do this. They don't have enough food to eat, forget helping others. They live on less than 50c a day. They don't buy material crap. Your answer applies to the American poor, not the ones who live in third world countries.

There is one problem with your theory: There is a serious shortfall of affordable housing in the US. So a lot of Americans are having trouble affording even the basics.

No there's not. Move away from the fancy cities. Move to country and places like Detroit. I did, I'm in Detroit metro. You can buy houses here for what folks pay for a car

I basically did the same thing. I developed a portable income and moved to a small town to get myself back into housing.

But most people can't just up and move wherever they want. The jobs are mostly in the expensive big cities. Even services like Task Rabbit, Amazon Flex or Uber are mostly only available in a short list of very large cities.

Meanwhile, we have torn down about 80 percent of SROs and the like and the default expectation is that young, single people should get a roommate. There is a dearth of genuinely affordable housing near jobs that would allow people to live alone and make ends meet working an entry level job. Those options mostly do not exist.

Pretending this isn't a problem because you found a solution that works for you is pretty LA LA LA not listening. Detroit has affordable housing because so many locals are in dire straits that a charity was created not that long ago to pay the water bills of people getting their water cut off: https://www.detroitwaterproject.org

So, basically, your life works because you saw opportunity amidst this debacle, not because everything is fine in the US.

Because the most marginalized in our society are so screwed. They're dealt the worst cards. It's easy to shout Randian quotes from your high tower, but when you come from impoverished backgrounds barely making ends meet, something like an unexpected parking ticket or an injury can mean going homeless.

You have no idea where I come from.

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