What is Digg?82 Comments
- cybernetic798, on 10/12/2007, -9/+25The article says Buffet fails to see how money can do more good in competitive hands rather than in a charity. I think the author is pretty ignorant, because as some of you guys might know, the money that is being given to the Gates foundation is provided at a set percentage of Class B shares of Berkshire Hathaway per year (roughly 1.5 billion Dollars per annum). The rest of the stock grows by an amount greater than that each year according to basically every projection on Berkshire's growth.
Furthermore, the author says that Warren Buffet should leave his money in competitive hands (???). What exactly does the author mean by this? it is such a vague phrasing that it could mean a dozen different things. This is exactly why random blog entries should not be making Digg's frontpage.
I think the author is just a dogmatic pissed off Republican who sees money going to charity as a wasteful outlet for the wealth that these billionaires have accumulated.
In reality, it is EXACTLY Buffet's mentality to give the money to the Gates' foundation since he knows them personally and the two parties are of similar mind on matters such as how the money should be spent.
Goddamn Digg's quality is down.... - inactive, on 10/12/2007, -4/+18in other words, hes a smart, rich, and good guy
- geekee, on 10/12/2007, -6/+20You missed the point entirely. Capitalism does more good for society than philanthropy. Capitalism create opportunity for everyone by allow people to specialize in what they're good at, and trade that work for what they need and want. Philanthropy helps those unable or unwilling to work productively, but it doesn't create long term solutions. The saying about teaching a man to fish instead of giving him a fish goes a long way in describing what I mean. Warren Buffett did more good for society in generating his wealth than he's doing now giving it away
- Rodzirra, on 10/12/2007, -0/+13@ jellygraph:
That poor kid in Africa would have stood a pretty good chance of not contracting malaria if DDT hadn't been banned by many governments. And even if he managed to escape the malaria, the collectivist thinking and sorry lack of property rights in Africa would keep him impoverished. Africa lacks private capital, and private capital is absolutely necessary to increase standards of living. - Lanser84, on 10/12/2007, -3/+15And far fewer remembered as "some rich dude" who held up their ability to create wealth as a virtue. These people build the world. I wish they'd be respected as moral ideals for their productivity - not need to give it away to get any moral credit.
- kevinmotel, on 10/12/2007, -2/+14libertarians rock because we want people to be free. if they are free and choose to be selfish, so be it
- geekee, on 10/12/2007, -2/+14The problem is that people don't recognize that in getting rich people usually help out society a great deal, by providing jobs and opportunities to trade. They only think in terms of Christian philosophy that self scarifice is the only way to do good. Therefore, they call the philanthropist a hero, but the wealthy man greedy. Ayn Ran has argued that greed can in fact be a virtue.
- synaesthesia, on 10/12/2007, -3/+13There are many worse things one's legacy could be overshadowed by than philanthropy. Anybody can go down in history as being 'some rich dude', but its a far smaller number who will be remembered as 'the rich dude who gave a ***** of money away to charity'.
- ViperDaimao, on 10/12/2007, -2/+11I believe what this article is saying is that Buffett did much more good for society when he was investing and making his money than he will do by giving it to charity or his support of ineffiecent govt.
- ViperDaimao, on 10/12/2007, -2/+11I dont think your emotional response is right cymrubeats. It's the old teach a man to fish vs give a man a fish. Through his investments he has given tons of men fishing poles and bait (who in turn do the same for others). I don't believe he is saying that giving to charity is bad, but rather than more ultimate good, more lives improved through his investing and making money than will be be giving the money to charity.
- Lanser84, on 10/12/2007, -4/+13This is a very thoughtful article. It points out that Buffet's greatest virtue is his rational thought and reality-oriented attitude. As applied to the stock market and business, this resulted in his personal massive accumulation of wealth (not to mention the funding of many valuable start-ups that showed promise to his savy eyes).
Although the author isn't as clear as he could be on this point, the article points out that Buffett's partial failing is in the moral realm. Instead of forging his legacy as one promoting practical rationality, he promotes altruism in the moral realm. He advocates higher taxes (including on himself), a policy which undercuts his (and other productive indivudual's) ability to create wealth. Finally, he may end up being best remembered for his philanthropy rather than his tremendous rationality and productivity. - geekee, on 10/12/2007, -3/+11Slavery is not capitalism. Pick a better analogy if you want to argue altruism over capitalism
- axiomata, on 10/12/2007, -3/+11Because you can't be smart, rich, and a good guy and be 100% capitalist?
- Smoove, on 10/12/2007, -2/+10*sniff* I smell an objectivist.
Anyway, Buffett's altruism isn't the problem. The problem is that throwing money indiscriminately at problems is unlikely to be very successful when he does it, any more than when a government does it. If he really wants to achieve his altruistic goals, he should harness the same market forces that made him what he is.
For example, if he really wants to end AIDS in Africa, then he could offer two billion dollars to the first pharma company that produces an honest-to-goodness cure for AIDS. (Developing a drug costs about a billion, more or less, so the incentive would need to be bigger than that.) Or he could take competitive bids from anyone who claims he can reduce AIDS in Africa, fund the promising ones, and stop funding the ones that don't achieve anything. He's rich enough to create an AIDS industry all by himself. - mfratt, on 10/12/2007, -1/+8Indeed he is. I have no problem with philanthropy, and it is hardly anti-Capitalistic. What is anti-Capitalistic is the government forcibly taking your money, typically through taxes, and giving it to the less fortunate. If I had millions or billions, I would donate money and services/products, but a government which believes in redistrobution of wealth is overstepping it bounds.
- Smoove, on 10/12/2007, -0/+7"There is absolutely nothing anti-capitalistic about a free choice towards philanthropy."
I agree with you on that point--but he also advocates the estate tax. Which is particularly interesting, since he and Gates are constructing the ultimate estate-tax shelter before our very eyes. Why do you think that the world's richest people ALWAYS create "foundations" when they die? - prax, on 10/12/2007, -1/+8::Sigh:: Capitalism isn't evil. It's the person. It's always the person. Same for being a Democrat, Republican, black, white, gay, straight, whatever else someone might be that upsets another.
- mk32066, on 10/12/2007, -1/+8@ geekee
I agree with you that "Capitalism does more good for society than philanthropy." But capitalism only helps out society. I think that donating money to charities that help out individual people doesn't really help anyone. But i think that the charities that donate money to finding cures for diseases and especially charities that help out the environment are the ones that people should donate too. Because in those two cases it will help the long term solution. - graystar, on 10/12/2007, -2/+8If he chooses the way he spends his money as well as he invested it we should expect some decent results. If on the other hand he had been forced to give it to the government in tax, it would have been wasted.
- axiomata, on 10/12/2007, -2/+8cybernetic is right.
A charitable capitalist is still 100% capitalist. He's just charitable. - mousky, on 10/12/2007, -0/+6Eyecantremember: Most of the world that is poor is anything but capitalist. If people are truly interested in helping Africa, they would demand that the US (and other western democracies) stop subsidizing their agricultural industries. They would demand that the US stop dealing with dictators and warlords. They would demand that any aid go directly to the people that need it, not through some government department that will only give to a select few friends of the government or for military goods. They would demand that the US stop selling arms to dictators and warlords. They would demand free and open elections. They would demand a free market. But hey, it's easier to complain about those greedy capitalists.
- geekee, on 10/12/2007, -2/+8@Cymrubeats:
Your clueless if you don't think capitaism helps everyone. People in the US considered poor today are rich by standards of even a couple of hundred years ago. Capitalism leverages everyone's ability, not just the rich, and provides opportunity to people, to do what they are good at, and trade their productive work for the things the need and want. For capitalism to be efficient, it needs good leaders, so that work is productive. This is what Buffett brings to the table. - Smoove, on 10/12/2007, -0/+5"Well, as much as Warren Buffett's investments have helped AIDS sufferers in Africa - that is, not a great deal - I think his chartiable investments might do a good deal more."
It's possible. But the point made in another article (linked from this one) is that whatever the foundation thinks should be done about AIDS is what they will do--whether or not it's the best plan. They could easily spend a billion or so distributing condemns by the bushel, and buying advertising to push for condom usage like crazy, but if so it would basically be a billion dollars wasted. Africa in general isn't a very receptive place for the condom campaign.
What should be done instead? Bloody good question. I don't know. That's why, if I had a billion dollars and decided to throw it at the problem, it would probably not help very much. - azermuffin, on 10/12/2007, -0/+5Ironic ? China & India have only become richer with the introduction of free enterprise and property rights. Most of the growth in China is located in the free-market zones. Millions of people starved thanks to collectivist farming techniques. Furthermore if socialism & communism is so great, then why do so many people try and leave those type of couuntries ? Milllions of chinese fled to Hong Kong, Taiwan, and Singapore. All of whom are couuntries much richer than China and India.
- ViperDaimao, on 10/12/2007, -5/+10This is a libertarian not a republican. There is an unfortuantely increasing difference between the two.
- ExCornelius, on 10/12/2007, -1/+6I wonder why people so often conflate the economic system of capitalism with some form of egoistic moral philosophy. Capitalism is not government giving money to corporations (i.e., corporate welfare). Capitalism is not a system where rich people are morally encouraged to screw over the poor. Capitalism is not "what we have now".
It should be noted that most of Africa is pretty screwed precisely because they DON'T have a capitalistic economy; citizens don't have protected property rights, their governments routinely interfere with the trade of what little the people do own, and tax away much of what little profit they make.
Property rights, Profit, and Prices
lead to
Innovation, Incentive, and Information - axiomata, on 10/12/2007, -0/+5geekee, I understand your point. I am, in fact, libertarian leaning. The issue I took with the parent comment and the article was the distinction that good philanthropy somehow makes you less capitalistic. The common libertarian position is that charity, when of the voluntary sort, is good, and in no way makes you any less capitalistic.
The article wants to criticize Buffett for not investing his wealth back into the capitalistic machine whatever that means. The author even notes that Buffett denied charitable requests earlier in his career because he felt he could do more with it. That action was smart and good. But the difference is now he is getting close to retiring (and dieing). He will no longer be able to compound his wealth once that happens as the author seems to think he could. The next best option is to give it away knowing that it will be compounded and spent wisely. - autodogmatic, on 10/12/2007, -1/+5Addressing many of the different issues here would take quite awhile. Pointing out all of the ad hominem attacks would take even longer. That said, two points I'd like to clarify:
1. I am not an Objectivist or follower of Ayn Rand. Though I certainly think Rand made some excellent points, I do not identify myself as a believer (that jargon seems about right). I am simply a self-interested individual attempting to use reason in an effort to bring meaning to my life.
2. My disappointment in Warren Buffett is not founded upon his philanthropic choice so much as his failure to see the immense good of his capitalistic life. Like many commenters here, the modern individual seems almost ashamed by their self-interested (a.k.a. capitalistic) choices. Buffett is not anti-capitalist by choosing to be charitable: I noted in the article that I found his choice "laudable" (Liberty is about the freedom to do what you want with that which is yours).
Buffett falls short (99% is pretty damn close to a 100) as a capitalist by failing to acknowledge the goodness of his prosperous life - prosperous because he was a rational, self-interested human being. It is this lack of acknowledgement of the essence of his life that bothers me. How could he not see the good effects of his capitalistic behavior? How could he understand the importance of capital in the hands of the individual for himself but then advocate that power be taken away (via taxation)? His position appears contradictory.
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It is sad that so many would have spat upon Buffett as a filthy capitalist but for the fact that he chose to give his money away. Such an attitude betrays a lack of comprehension as it pertains to the power of wealth in the free hands of the individual. Buffett didn't have to give it all away to be a hero. His fundamental heroic act was the creation of the wealth. And no, for him, it was *not* the endless pursuit of money, but the creation of wealth that drove him. His creative, productive ability gave him a sense of worth and made him happy. Is there more to life than doing that which fulfills you? - DavidDigg, on 10/12/2007, -2/+6I know this sounds wrong, and I'll be modded down for it, but curing infectious diseases in 3rd world countries is a _terrible_ idea. All this will do is make more people in 3rd world countries. It is much better to give them education, a natural birth control, before doing anything that has a high chance of increasing their numbers, thus putting EVEN MORE pressure on resources. Again, feel free to cringe/recoil in disgust, etc... but the fact remains that more people != better world.
- kaon, on 10/12/2007, -1/+5Capitalism is, just like any other system of economy, inherently amoral. Immoral persons can do evil with it just as much as moral persons can use it for good.
- ExCornelius, on 10/12/2007, -0/+4"Capitalism and philanthropy are antagonistic, hence, one cannot be both a (true) capitalist and a philanthropist. "
Capitalism is an economic system with private property (i.e., you can own stuff) and capital mobility (i.e., you can trade stuff). Philanthropy is the donation of private property to help others. How is a particular economic system antithetical to a moral choice? In fact, how can you have the notion of charity without first having property rights over what you're going to give away? - sp3tt, on 10/12/2007, -0/+3@Comatose. Obviously, you know almost nothing about how capitalism works. Maybe you should look up what is called "consumer sovereignty". Capitalism is, in von Mises' words, essentially mass production for the masses. Yes, capitalism has no separate distribution process. Under capitalism, distribution and production are inseparable.
- azermuffin, on 10/12/2007, -0/+3Israel is capitalist to some degree. Unfortunately it is still too socialist for my own tastes.
- sp3tt, on 10/12/2007, -0/+3@Bioshocker. I suppose you've already committed suicide by starvation, the only moral option by your code of morality, because that profit is amoral implies that acting is amoral, for all acts aim at increasing psychic profit. Happy non-acting. Happy being a vegetable for the rest of your "life". All humans act, which implies that all humans pursue psychic profit. You cannot morally act at all if you deem profit immoral.
In all voluntary exchanges, all involved parties make a profit (ex ante, not necessarily ex post, but that is just because we live in a world of uncertainty, and uncertainty is a necessary condition of action). Please explain why it is immoral to pursue a better life.
You, sir, are wholly and completely evil.
@fatdog. China's extreme growth rate can be explained by the very high rate of savings and the lack of a welfare state. And please, point to one capitalist country in the middle east. - Smoove, on 10/12/2007, -1/+4Two words: ESTATE PLANNING
- ExCornelius, on 10/12/2007, -1/+4For all the ills of the early 20th century, please don't blindly attribute them to capitalism, much less "overcapitalism" (whatever that means). If anything, government interference in the market is what deepened and prolonged the Great Depression. Before anyone brings it up, please note that corporate welfare (e.g., Halliburton) and government-chartered monopolies (e.g., AT&T) are NOT examples of what occurs in a capitalist market, it's what occurs under a "mixed" economy, when the state gets involved in "fixing" perceived ills.
- povofsky, on 10/12/2007, -0/+3geekee makes an interesting point. the question is whether $30bn is more effective when invested directly back into the capitalist machine, or as philanthropic cash give-aways. The answer depends on your goals. If warren simply wanted to create more wealth, reinvestment is the way to go. But "creating wealth" is obviously an ambiguous and non specific goal. Clearly, his friend Gates has very specific initiatives in mind, say, the curbing of aids in india etc. So if warren's ultimate goal is curbing aids in india, is it better for him to "create wealth", or to put money directly into aids curbing initiatives? The trickle down theory only works so well, and is usually best understood by us kids. Maybe warren's getting a little restless in his old age, and i'm all for it.
- Arch77, on 10/12/2007, -0/+3In other words, the Author wants to chastise someone for being good. I think the author needs to take a deeper look in the mirror, not Mr. Buffett. Of all the ridiculous considerations, the infinitude of human dissatisfaction and calculating comparisons, to try to pinch out some sort of fallibility for philanthropy is beyond compare. I get the article; I get it! The Author found a hypothesis and the paper ensued. Now he should wake up.
- Bioshocker, on 10/12/2007, -3/+5"The problem is that people don't recognize that in getting rich people usually help out society a great deal,"
The pursuit of profit is amoral. Sometimes it acts morally, sometimes it acts immorally. To say it "usually" helps out society a great deal is a subjective, personal judgment (as of course, is judging it to usually not help society). - HMTKSteve, on 10/12/2007, -0/+2mousky is correct.
Capitalism is the carrot that the worker works towards. There is no carrot in slavery, just a whip.
A free worker paid a fair wage will always perform better then a slave. - sp3tt, on 10/12/2007, -0/+2@joellaugh: what is so bad about acting in one's own interest? I'm selfish, what is the problem?
- sp3tt, on 10/12/2007, -0/+2Laissez-faire Capitalism != Anarchy.
- sp3tt, on 10/12/2007, -0/+2@jellygraph. Please prove that capitalism caused poverty in Africa. Please prove that capitalism is causing poverty in Africa. Guess what, you won't be able to do it for the simple reason that it ain't so.
@fatdog. Please add an argument to your post. - obsequies7, on 10/12/2007, -0/+2forgive the rambling-- i agree with you 80%. I'm only bringing up questions to some of the articles finer points.
" We are surprised and disappointed that such a free market legend could fail to understand the basic nature of capital: that capital is always more productive in competitive hands rather than charity cases."
it's interesting, too, that Buffett holds a masters degree economics. i wonder what he studied. Maybe he's a keynesian. i don't know the answer.
maybe he understands the basic nature of capital, but maybe he doesn't believe in the *morality* of capital. maybe there's a difference in buffet's heart between "what is good" and "what is maximally efficient". i know, that's intellectually preposterous. but its rather human.
or maybe he owns a different set of ethics and morality altogether. I don't know.
"Bill Bonner elucidates the problem and hints at the inconsistency of Buffett's beliefs:
For it is thus, with real income, honestly earned by sweat and saving, that people are lifted out of poverty. Acts of grand benevolence, on the other hand, whatever good they do in the short term (and we don't deny that they do great good in the short term) usually make things worse in the long term. Instead of [individuals] getting to choose what they want, [they] get what the givers choose to give them, not as customers, but as charity cases. "
one of the finer points in libertarian and anarcho-capitalist circles is the role of philanthropy/charity. It%u2019s hotly debated.
i disagree with Bill Bonner on this one%u2014and I read the source article as I subscribe to his newsletter.
Charity works much differently than a coercive government welfare program.
Individuals actually do get to choose what charity they are willing to receive-- in the market of non-profits, the individual can choose from a number of agencies for help-- a wide variety of religious or secular organizations. The terms of help could be small grants or small loans, clothing for free or for a tiny fee. or meals. or sermons. whathaveyou. They %u201Ccharity case%u201D only needs ask.
It's also in the charity's best interest to help the downtrodden get on their feet as quickly as possible%u2014so as to turn them into %u201Ccompetitive hands%u201D. A typical non-profit has a very limited budget. It competes with dozens to hundreds of other agencies for needed donations. So-called charity cases kept in dire straits for too long drain the agency's funds and will soon be turned away.
smart donors (like foundations) research charities and give to those they feel do the most good-- and sometimes that's based on the charity%u2019s operating efficiency. poorly managed charities don't survive in the marketplace.
Personally, I advocate the total abolishment of the federal government welfare system. And I believe in charity and philanthropy.
imo, it's in the fed government's best interest to keep people on the dole and in poverty for as long as possible-- provides a steady stream of voters who will give the welfare-state bureaucrats jobs and the politicians votes. Taxes are obviously not donations. Never mind the gross personal intrusions the government imposes on those who seek benefit from the welfare system.
In the end, in terms of property rights, it should be Buffet's choice alone on what he does with his money. Spend it, invest it, abandon it, burn it, donate it, give it to his kids, give it back to his shareholders or employees-- it's his very sovereign choice.
one more thing: "It is Buffett's incomplete, inconsistent economic understanding that vexes the capitalists of the world."
No human, to my knowledge, has complete, consistent economic understanding. Complete and consistent == perfect. Who is perfect in knowledge? Perfect in understanding? I mean, maybe if Buffet would have stayed in school to get his PhD... ;) I can only jokingly ask "Why aren't people perfect?"
Embracing the dogma of capitalism is different than understanding the concept of it. Buffet really understood how the markets worked-- the bottom line proof was his accumulated wealth. But it doesn't follow that he believed in the morality of the markets, or that capitalist theory is the same as reality. Or that he even agreed with it. He may have seen the markets as a game that he figured out how to win-- not a total expression of the moral and economic reality. - mousky, on 10/12/2007, -0/+2It's true. Remember when they had the drought in Ethopia and the world sent all that food? Well, on the surface it looked like a wonderful idea. Unfortunately, it meant that child-bearing women became healthier and had more kids, which meant even more mouths to feed. The food crisis was never solved, so there was another wave of starvation. But hey, it felt good to help those people in need, though we never really did help them.
- HMTKSteve, on 10/12/2007, -0/+1@Geekee -
The US is the only country in the world where the "poor" have cars, TVs, AC and are likely to be obese!
The "dirt poor" in the US are a very tiny fraction of the poor in the country.
Some where in the last thirty years the definition of "poor" was changed to mean "not middle class or better" ... - inactive, on 10/12/2007, -4/+5Well, as much as Warren Buffett's investments have helped AIDS sufferers in Africa - that is, not a great deal - I think his chartiable investments might do a good deal more.
This article makes a good point that capitalism does social good by generating wealth across the entire community - but even more good can be done if Buffett takes money from his pocket and uses it to help people who have been passed over by capitalism's rising tide. - Smoove, on 10/12/2007, -1/+2More power to them! However, the principal objection remains: the foundation will only pursue Gates's directives, whether or not those are the the most effective ways to achieve his own stated goals. For example, the absolute most effective approach to reducing malaria has already been tried, and nearly succeeded: use DDT. I'll bet any takers that the Gates foundation will NOT be spending its billions to encourage the resumption of DDT usage in Africa.
- mousky, on 10/12/2007, -1/+2kaon said "But technically, in a purely capitalistic society, with no laws against slavery, a slave would be the most cost-effective worker."
That is incorrect. The most cost-effective worker is the one that maximizes the value of his output for the least cost. Slaves may be wonderful for repetitive mindless hard labour, but do you want a slave wiring or plumbing your house? Do you want a slave performing a triple-bypass? There was a time when there were no laws against slaverly, yet many non-slave people were employed. - psients, on 10/12/2007, -2/+3There is absolutely nothing anti-capitalistic about a free choice towards philanthropy.
Warren Buffet: The 100% Capitalist. -
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