Thursday, June 29, 2006

Thoughts About Warren Buffet's Donation

I have somewhat mixed feelings and thoughts about the news that Warren Buffet have decided to give $37 billion
or about 85% of his personal wealth to charity.

On the one hand, at least this means that Warren Buffet is less of a hypocrite than he used to be, as he have for years argued that "the rich" should pay in more taxes. Being rich himself, this would imply that he should while waiting for others to be persuaded of his point of view donate his fortune, which is what he does now. Although, since his agitatation wasn't for people to give away money for good causes but to give it away to the government, he really should have given those $37 billion to the gift contribution department of the Bureau of the Public Debt, and not to the very private "Bill and Melinda Gates Foundation".

Another positive thought about this is that this certainly illustrates that in a society based on voluntary relationships there would be wealthy people willing to donate to people truly worthy of being recipients of aid. No government coercion is needed for that.

The negative thought about this is that it is not really certain that the best help to others billionaires can offer is by giving their money away. It might just have been that had they kept their money and invested them according to their proven wisdom in this area, they might have created more good for others than direct charity would have. What choice will be best for others is not clear and depends on the specific empirical conditions of all cases, but the point is that it is not necessarily the case that charity is the best way to benefit others.

Another negative thought is that the main recipient of this gift will be the "Bill and Melinda Gates Foundation", a foundation who have explicitly racist grounds for its work. It donates money to students, but only to non-white students. Imagine the outcry if they had given scholarships exclusively to white students, or if they had explicitly excluded black students, but since the racial discrimination is directed against whites it is apparently considered acceptable or even laudable.


Blogger Celal Birader said...

Hello Stefan,

That's interesting. I didn't know Buffett was advocating the paying of MORE taxes.

Also, in the press conference he gave with the B&M Gates, which i watched on CNN, he said he didn't think inheritance tax should be abolished or reduced.

Investing and the free market does help others, i would agree with you, but not that it is the ONLY or even the BEST way for helping others. The free market or capitalism does produce winners but it also produces losers. It's the losers or those who are in some way economically disadvantaged in society that need philanthropy.

Take health, for instance. They want to produce a vaccine for AIDS but a lot of expensive research has to end in "no results" before there is the one breakthrough.

That costs money, a lot of money. A firm in the free market might not reckon it in its interests to make that kind of investment if it did not see a good return. The Gates Foundation will finance such research and will finance other initiatives in education even if these things do not produce results. These are actions that only philanthropists not companies can take.

Finally, non-white students still suffer disadvantages because of prejudice so i don't think there is anything wrong with targeting them in order to give them extra help. As a white person you would not need that kind of help in America but non-whites still do need it unfortunately.

1:55 AM  

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