Friday, June 30, 2006

Concentration of Wealth

I’ve been catching up on the news, and one item particularly caught my attention.

Apparently, the second richest man in the world has decided to give away a large chunk of his wealth.

To whom?

Why, to the first richest man in the world!

Does this strike anyone else as odd?

Ok, ok, I must add all of the appropriate disclaimers, and contextualize this more: It’s great that the second richest man in the world, Warren Buffett, has decided to give away much of his wealth. And he’s really not giving it to Bill Gates personally, but to a foundation the Gates have started—The Bill and Melinda Gates Foundation, devoted to health and education. I also genuinely appreciate Buffett’s honesty and humility at admitting that he is not sure how wisely to distribute his money, hence his giving it to a foundation he trusts will put the money to good use.

But I still find this news item troubling. Here’s why:

First of all, it seems to mark a public moment in the development of global economics that finally reveals convincingly that there are some people who have more money than they know what to do with. While we know that this is not really the first time this has happened, Buffett’s public confession of this fact reveals this truth in startling, honest clarity like never before. If we had any doubts before, they are finally erased with this confession: the combination of intelligence, hard work, and good luck that generate great wealth do not, in and of themselves, also confer wisdom. The qualities that draw great wealth towards a person are not the same qualities that teach one how to channel that wealth back into the world in a way that will effectively address the world’s problems. Buffett himself said: “In business you look for the easy things to do. In philanthropy, you take on important problems and it is a tougher game” (quoted in The Christian Science Monitor, “The Monitor’s Views: Giving the Buffett Way,” June 29, 2006).

And so this moment shows that there is something terribly wrong with our economic system: (a) that it is possible for some to amass more wealth than they know what to do with, and (b) that we have not given the wealthy and fortunate the right kind of education: we have not educated them in wisdom.

The second reason I find this news item troubling is that Buffett’s giving so much of his money to the first richest person’s foundation concentrates all of this wealth into the hands of very few. Even though I’ve just argued that we cannot trust the wealthy to know how to spend their money well, Buffett’s gesture paradoxically assumes that we can. This must mean that in his own mind he was making personal distinctions: he didn’t trust himself to know how to distribute the money wisely, but he does trust his friend Bill Gates. He is not interpreting his decision structurally, but simply personally. But what if it really is a structural problem?

Even if we grant that the Gates Foundation is doing a good job at distributing money effectively to important causes, is it right that so much money should be controlled by just a small handful of people? Anyone who answers “yes” is back to assuming that money itself confers virtue and wisdom. But the richest person in the world is the person least likely to really understand the full nature of the problems in the world. Those who are rich are protected from most of the kinds of suffering faced by the poor. Those who are rich have the luxury of choosing which problems to try to address—unlike the poor, who have problems they would rather not choose thrust upon them anyway.

And so while the Gates Foundation might be doing great good in what it does, there are other problems too that need attention. Currently, our economic system concentrates wealth, and then lets the rich channel that wealth back to whatever causes they want to support. The more wealth is controlled by just a small number of people, the more likely it is that the money is being targeted to a narrow range of concerns and is not being used as effectively as it could be used. If the wealth could be spread more widely, directed by a larger number of people who have experiential connections to a wide range of arenas of need, then the wealth might more effectively engage the world’s problems and bring about lasting structural change.

So, I really don’t fault Buffett at all. It is that this moment reveals something deeply problematic in our economic system. He was honest and made the wisest choice he could within our deeply flawed system, and his money will end up doing good in the world. My concern is with the wide range of other worthy causes that remain unaddressed. My concern is that, in the meantime, people will keep starving to death; big industries will continue to find clever ways to ignore environmental protections in favor of their “bottom lines” while our government supports them and their CEOs make more money than they know what to do with; and we will continue to engage in and support wars in which 90% of the casualties are innocent civilians—and we justify these wars by irrationally insisting that this is how to “defeat terrorism.” My concern is that our economic system channels more money into wealth, war and environmental damage than into addressing the root causes of poverty, alleviating war, or building a sustainable world that would protect the natural environment.

My concern is that the people who control the most wealth are the least motivated to change the economic system to make it one that would distribute money more equitably, channeling it to where it is needed. The wealthy instead like the system the way it is: it’s almost a gravitational system, where concentrations of money attract more money to itself. They would prefer to have and control the money themselves, instead of having the economic system distribute it for them. They trust themselves more than anyone or anything else to distribute the money wisely—er, that is, until they finally admit that really they have no idea what to do with it all…

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