The Case for Socialism, examines the pledge of 40 billionaires to donate their wealth--and reports that there's much less to it than meets the eye., author of
WARREN BUFFETT ($40 billion in net worth, number 2 on the Forbes 400 list of richest Americans in 2009) says it was an "easy sell" to get 40 billionaires to join him in the "Giving Pledge"--a commitment by the super-rich to give away at least half of their wealth to charitable causes.
An easy sell? Really? Because if it was "easy" to get megalomaniac Oracle founder Larry Ellison ($27 billion, number 3) to part with even 50 bucks, much less half his fortune, for the good of humanity...well, somebody's getting sold something, but it ain't philanthropy.
The truth about the Giving Pledge is that the rest of us are getting taken--big time.
The pledge is a project of Buffett and Bill Gates ($50 billion, number 1). It was unveiled to a select audience of the super-rich elite at a secret meeting held in May 2009 in the President's Room at Rockefeller University in New York City--where one of the participants, financier David Rockefeller Jr. ($2.2 billion, number 147), seems to have an in.
Buffett and Gates' case basically came down to this: Anyone rich enough to get an invitation had far more money than they could possibly spend in their lifetime--more probably than even their wildest children could burn through. So why not donate the portion not already earmarked for more mansions, private jets and diamond-encrusted SUVs--and glory in the grateful thanks of the less fortunate to boot?
Corporate buyout specialist Peter Peterson ($2 billion, number 158) summarized the takeaway for the Daily Beast Web site: "We reached a very interesting kind of conclusion in that most of the philanthropists there said that they enjoyed giving money away more than they had enjoyed making it, and that's a pleasurable experience."
The media response was predictably fawning. "Some philanthropic acts feel at best insubstantial, at worst insincere," wrote New York magazine's Nitasha Tiku. "The company that donates 1 percent of its profits or recycles 10 percent of its packaging. The tycoon that makes a donation just in time for a tax write-off. This is not like that."
Of course, a few incurable cynics poked some holes in the story that Gates and Buffett, by making a few phone calls, had netted $600 billion--the project's claim--for making the world a better place.
For one thing, many of the contributions cited by Giving Pledge participants have already been given. Thus, Larry Ellison--who takes his decidedly uncharitable motto for business from the 13th century warlord Genghis Kahn: "It's not enough that we win; everyone else must lose"--claims he had already established a trust to donate much of his current net worth.
In other words, the only thing that Larry Ellison sacrificed for the Giving Pledge was the cost of the stationary for the peevish letter he wrote announcing his commitment.
NEVERTHELESS, THE Giving Pledgers are pretty impressed with the example they've set--and they expect you to be, too.
As David Rubenstein ($2.5 billion, number 123), whose Carlyle Group specializes in running the military-industrial complex, lectured: "I hope that the attention the pledge receives will encourage all Americans--not just a select few--to consider increasing their own giving to worthy organizations and causes."
You'd never know--from the pledgers themselves or the media reports about them--that the wealthy could learn a few things from "all Americans" about giving.
Every study of charitable contributions confirms the same fact--people who have the least give the most of themselves, and those with the most are downright stingy by comparison. Thus, Bureau of Labor Statistics figures for 2007 show that the poorest one-fifth of the population gave 4.3 percent of their household income to charity on average, while the richest one-fifth donated just 2.1 percent.
You'd also search the media in vain for any hint of how the Giving Pledgers amassed their fortunes in the first place.
Take John Arnold ($3.4 billion, number 91), who says he and his wife Laura view their wealth "not as an end in itself, but as an instrument to effect positive and transformative change." Arnold runs the positive-sounding Centaurus Advisers, a hedge fund based in Houston that specializes in investments in the energy industry.
Okay, now: "Houston" and "energy industry." Does anything come to mind when you put those two things together?
You guessed it: Enron. John Arnold's "instrument to effect positive and transformative change" got its start at the energy conglomerate Enron, which became the country's seventh-largest corporation by the late 1990s by taking advantage of deregulation to manipulate energy markets and gouge consumers. Then it went belly up in 2001 in a scandal that actually sent a few executives to prison.
Arnold was a trader at Enron and was credited with making three-quarters of a billion dollars for the company in 2000--he was rewarded with an $8 million bonus. After Enron collapsed into bankruptcy, he founded his hedge fund and used his "expertise" to continue gambling on energy markets.
When stacked up against this record, it's hard to regard Arnold's promise to donate half his fortune as generosity. More like returning a part of the loot, and expecting a pat on the back for it.
Actually, this point holds true for all the billionaires, not just the parasites who struck it rich gambling on hunger or foreclosures or electricity blackouts.
Bill Gates is, of course, cofounder of Microsoft, along with fellow Giving Pledger Paul Allen ($11.5 billion, number 17). Supposedly, Gates and Allen deserve to be wealthy because of their company's pioneering product--operating system software that allowed the boom in personal computers to take off in the 1980s.
But Gates and Allen don't have anything to do with actually producing the product that made them rich, and never did. They didn't even write the original software--they bought it from a computer programmer and successfully marketed it.
Gates and Allen are rich not because of anything they do, but because they own. That gives them power over how Microsoft operates--most importantly, over how much the people who do produce Microsoft products get paid, which is never as much as the value they contribute. The amount that the owners and executives skim off after costs are covered is profit--and the source of their wealth.
This is the secret about the Giving Pledgers: The source of their fortunes, like all of America's billionaires, is the system of organized theft built into capitalism.
THE QUESTION of what the Giving Pledgers are really giving comes into even sharper focus when you consider what their "charity" is directed toward.
In the case of Thomas Monaghan ($485 million in 2005), the Domino's Pizza king, one man's philanthropy is another man's shameless-promotion-of-the-Christian-Right's-bigoted-agenda.
Monaghan is a notorious funder of right-wing causes, particularly the crusade to end women's abortion rights. Beneficiaries of his "philanthropy" include Ave Maria University, a private college he founded and envisions as the center of an exclusively Roman Catholic town in Florida, and the Thomas More Law Center, which has led the legal challenge against marriage equality, women's right to choose, the teaching of evolution, and the separation of church and state.
In other words, Monaghan is one of the moneybags behind the U.S. right wing's political crusade to turn back the clock. But apparently, that's no different to Warren Buffett than donating for cancer research.
Others who've signed on with the Gates-Buffett philanthropy pledge are less blatant, but no less ideological in their giving.
For example, Bill Gates' foundation is best known for working against diseases ravaging poor countries, but he and Wall Street speculator Eli Broad ($5.4 billion, number 42) have made a project of pushing charter schools and education privatization in the U.S. Their cause masquerades as "reform," but the effect has been to siphon off already meager funds from public school systems and to scapegoat teachers for the education crisis.
Then there's Pete Peterson, the leveraged buyout guy who was so excited about giving money away after the secret meeting in New York last year. Turns out he's less enthusiastic in other contexts.
Peterson plans to devote his fortune to the un-coincidentally named Peter G. Peterson Foundation, which spreads the gospel of...government fiscal austerity in order to reduce the federal deficit. As FireDogLake blogger Doug Martin wrote, Peterson wants his money used:
[t]o slash and kill society's evils, those "unfunded entitlement promises," "ballooning debts to foreign lenders," and America's "mushrooming health care costs." In fact, he considers our "massive, hidden debts and unthinkable taxes" as "child abuse," clubbing to death our future children and grandchildren. This domestic violence, Peterson claims, "is not only an economic issue but a national security issue and, above all, a moral issue."
Are you following this one? Peterson and his friends on Wall Street get rich during the 1990s and 2000s thanks to the government's financial deregulation and George W. Bush's tax cuts for the super-rich. Then, when it's time to "give back," Peterson identifies as the single greatest threat to humanity the federal deficit--which grew to immense proportions in large part because of those tax breaks.
For Peterson, this isn't a Giving Pledge. It's a pledge to take and take some more from working people.
BUT PETERSON'S peculiar definition of a "charitable cause" throws a deeper issue into sharp relief.
The initiatives spearheaded by Gates and friends, described so often as altruistic, but more often than not shaped by their political prejudices and organized according to their cherished free-market principles--what authors Matthew Bishop and Michael Green call "philanthrocapitalism"--have come to the fore at exactly the same time that government programs aiding working people and the poor, protecting the environment and advancing social goals have been cut back.
These cuts have accelerated during the Great Recession, and their effects are devastating, as a recent New York Times article documented--public schools across Hawaii closed on 17 Fridays during the past school year to save money; the public bus system shut down in Clayton County, Ga., outside Atlanta; one-third of the streetlights switched off in Colorado Springs.
It's no secret what set the stage for these cuts--decades of conservative political domination in Washington, under Republicans and Democrats, which, among other projects, whittled away at the corporate and individual tax system, progressively starving the government of revenue at the federal, state and local level.
The portion of federal tax revenue coming from corporate taxes has fallen to below 10 percent, down from about 33 percent half a century ago. The crowning achievement of the tax-cutters, though, was Bush's two massive tax-break giveaways, at a cost of $1.3 trillion, whose benefits were enjoyed primarily by the already rich. That kind of money dwarfs what Gates and friends are promising to donate.
The tax cuts were justified by a generation's worth of smears against "big government" programs, allegedly administered by unthinking bureaucrats and benefiting the undeserving.
And now, here come the philanthrocapitalists, whose mega-fortunes were made that much bigger by Washington's tax-break mania, promising to contribute a fraction of what they took away during the past 30 years, but only if they get to call all the shots, because they know so much better than anyone else what's best.
As journalist Peter Wilby wrote in the Guardian: "If the rich really wish to create a better world, they can sign another pledge: to pay their taxes on time and in full; to stop lobbying against taxation and regulation; to avoid creating monopolies; to give their employees better wages, pensions, job protection and working conditions; to make goods and use production methods that don't kill or maim or damage the environment or make people ill."
But of course, that's not what the Giving Pledge is about. The philanthrobber barons want to give on their terms, to advance their agenda, without any accountability--and with an eye out for what's in it for number one.