David Brooks, Billions, and the Paradox of Charitable Giving

David Brooks, Billions, and the Paradox of Charitable Giving
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In a recent column for the New York Times, David Brooks asked “What would I do if I had a billion bucks to use for good?”  The very question posed by Brooks about how he would give away $1 billion raises others.

For one, while it’s most certainly their money to handle as they wish, not asked enough is why the superrich think their abundant skills in the commercial space render them experts at charity.  Brooks certainly didn’t ask this question, and it’s passing strange considering his regular columns throughout Election 2016 about Donald Trump’s total lack of qualification for the job of President.  Wise minds can disagree on the latter (I agree with Brooks about Trump, but for different reasons), but if success at building a global real estate brand doesn’t necessarily correlate with governing success, why isn’t Brooks equally skeptical about high commercial achievers knowing how to do “good” with their charitable giving?

It’s also worth commenting on Brooks’ suggestion that the creation of wealth isn’t itself necessarily good.  More realistically, it should be asked why the need to do “good” after the act of creating wealth? Figure that Google has minted many billionaires, but who among us could live without it? Notable here is that Google Maps has made navigation of cities by the blind increasingly possible. 

Thinking about cars, Elon Musk’s Tesla has made him a billionaire many times over.  Should he quit now to do “good”? It’s worth asking because while left and right can quibble over subsidies enjoyed by Tesla (I say Musk’s Tesla holdings would be worth even more without them), this innovative automaker is inching ever closer to producing cars that don’t require a driver.  If so, readers might stop and imagine what this will mean for the young, blind, elderly and able-bodied adults in need of safe transportation, not to mention what it will mean for families less likely to get the permanently life-altering call about the death of a loved one in an automobile accident entirely caused by human error.  In terms of good, it seems Musk could do the world an exponentially greater turn through feverish, and wealth enhancing pursuit of transportation innovations that make the roads much safer.  Notable here is that Google too is directing many of its billions toward driverless technology.   

John D. Rockefeller contributed $500,000 toward a cure for scarlet fever after losing a grandson to it, his billions continue to inform charity today, but no reasonable person would suggest his or his heirs’ charitable endeavors measure up in terms of living standard enhancement to what he achieved in his pursuit of profits.  Goodness, days used to end at night before Rockefeller literally lit up evenings through broad access to kerosene, and then does anyone want to contemplate how comparatively bleak life was before Rockefeller’s refined oil met Henry Ford’s mass-produced cars?

In short, there’s nothing about the pursuit of wealth and profits that is the opposite of doing “good,” as Brooks seemingly alludes.  And because there isn’t, it’s worth asking why the superrich are so often pressured to remove their talent and wealth from the marketplace in favor of charity.  It’s the equivalent of sports fans telling otherworldly Golden State Warriors guard Steph Curry that he’s made enough money in basketball, so now it’s time to pursue NFL stardom as a defensive end.  Ok, but rushing the passer is not where Curry’s skills presumably lie.  And while the latter is a statement of the obvious, why isn’t it similarly obvious to say that commercial genius has little to do with impactful giving to charities?

Along the lines of the above, what if Rockefeller had pursued a third commercial fortune, and Bill Gates a second one after Microsoft as opposed to focusing his energies on his and his wife’s foundation? Warren Buffett famously co-founded the “Giving Pledge” that has Brooks positively frisky, but can anyone say with a straight face that Buffett’s charitable endeavors have improved the world more than his certain genius as a capital allocator? Why once again do the self-proclaimed serious thinkers so confidently bash our 45th president for exiting his swimming lane, but out of the mouth’s other side rhapsodize about billionaires shunning the source of their wealth in favor of the charitable work that has little to do with their existing abilities?

Thinking about Buffett in particular, he’s long explained his aversion to technology stocks (including Microsoft despite his multi-decade friendship with Gates) as being a function of him not properly understanding the underlying businesses.  Fair enough, figure that his investment track record justifies his decision to largely avoid tech stocks, but why doesn’t Buffett think his investment approach should similarly inform his approach to charitable giving? Does he really and truly understand where the charitable impact will be greatest in terms of curing heart disease or cancer, erasing malaria and undrinkable water in the world’s poorest parts, or fixing the worst neighborhoods in the United States?  And if not, does he know who does have high-return ability when it comes to parceling out money? Stressing yet again that it’s their money to do with as they please, let’s never forget that capitalistic genius of the billionaire variety has improved global living standards in exponentially greater fashion than have charities.  In that case, is it really charitable for the world’s capitalistic talents to deprive the world of the skills and capital that improve it the most?

Back to Brooks, in a passage that the more self-aware among us would likely never type out, he wrote “Now all I need is a hedge fund to get started,” if he wants to have a billion to give out.  Well, if we ignore for the purposes of this column just how impressively insulting is his insinuation that hedge fund wealth comes easy (Brooks is plainly unaware that the vast majority of such funds fail), Brooks once again spent Election 2016 mocking the pretense of Trump for trying to play a politician.  Ok, but right or wrong, people, including a former President in Nixon, have been telling Trump for decades that he’s meant for presidential politics.  On the other hand, it’s safe to say not many investors have asked Brooks to give up his musings about public policy and life in order to allocate capital. And while Brooks hasn’t revealed any observable qualities as healer of people or communities, this hasn’t stopped him from writing haughtily about what he would do with his billions if he gave up his writing in pursuit of allegedly easy hedge fund wealth. 

But since Brooks isn’t about to be handed hundreds of millions in order to apply his substantial IQ to investing, it’s safe to presume that his columns, books, television appearances and speeches provide him with an annual earnings that place him well within the 1 percent.  If so, and if he’s certain about his ability to do good in the way that Trump is about making America great again, he might personally fund one of the “collectives” he’s talking about in order to see if he knows any more about healing than does our president about governing. 

John Tamny is editor of RealClearMarkets, a Senior Fellow in Economics at Reason Foundation, and a senior economic adviser to Toreador Research and Trading (www.trtadvisors.com). He's the author of Who Needs the Fed? (Encounter Books, 2016), along with Popular Economics(Regnery, 2015). 

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