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RS 221 - Rob Reich on "Is philanthropy bad for democracy?"

Release date: November 13th, 2018

Rob Reich

This episode features political scientist Rob Reich, author of "Just Giving: Why Philanthropy is Failing Democracy, and How it Can Do Better". Rob and Julia debate his criticisms of philanthropy: Does it deserve to be tax-deductible? Is it a violation of the autonomy of recipients to attach strings to their charitable gifts? And do philanthropists have too much power in society?


Rob's book: "Just Giving: Why Philanthropy is Failing Democracy, and How it Can Do Better"

"Famine, Affluence, and Morality" by Peter Singer

"Doing Good Better" by Will MacAskill

Edited by Brent Silk

Music by Miracles of Modern Science

Full Transcripts 

Reader Comments (9)

The US should repeal the Gift/Estate (Death) Tax. This tax supposedly causes families to donate to foundations, and to engage in other philanthropy, since such foundations avoid this tax. But allowing families to keep capital in productive businesses, and to retain all their employees, would actually benefit society much more. Furthermore, this tax definitely repels capital from the US, since it encourages wealthy persons to abstain from seeking US citizenship and residency.

Rob Reich's objection to "Big Philanthropy" on political influence grounds disintegrates into a legally superfluous argument in light of the 1st Amendment. Billionaires may quite legally create an entire self-funded Political Action Committee (PAC), or simply engage in limitless independent political expenditure. This right, btw, predates CITIZENS UNITED. When Billionaires donate to charities and universities, most of the capital funds a combination of bureaucracy, direct aid, research, and the like, instead of purely political action.

The law of most states already provides a remedy for a Trust, Foundation, or other perpetual entity that has a purpose contrary to public policy. The board of such an entity, certain public officials, or in some instances any interested party, may break or reform the trust, foundation, or other entity and rededicate the assets of that entity to a proper purpose. In the case of the racist, and thus legally impossible, attempt to create a segregated public park, reverter correctly occurred to the heirs of the estate. The heirs can reinvest or donate the assets of their estate, and the original donor hardly benefited their family name by making a requirement of segregation, and then having that fact highly publicized.

Major Universities definitely benefit from large endowments. Those universities produce tremendously useful scientific research, and the faculty at those universities earns a great number of the noble prizes awarded in chemistry, physics, medicine, and economics. Those universities also teach future generations of researchers and leaders, and those kids need a place to eat, live, and recreate. If billionaires simply paid the estate tax, a significant portion of those revenues in the form of federal grants would go to the universities to fund research, albeit with substantial losses due to extra bureaucracy and corruption found in the government.

Rob Reich mentions that the property tax distribution of funds to local school systems depends on affluence of particular neighborhoods and districts, and that California should have a statewide per pupil outlay. However, the REAL ROOT PROBLEM causing poor performance in the US arises from the fact that the government cannot competently administer schools. The US consistently ranks as somewhere between #1 and #4 for the greatest per pupil education expenditure in the OECD. However, the US also consistently ranks near the bottom on student performance. If every parent had a school voucher for their child, either on a local or statewide basis, parents would have the power of choice, and would favor good schools and disfavor poor schools. Competition, not throwing yet more money at a broken system, provides the true answer to this problem.

The Government utilizes capital less efficiently than Private Charity, and much less efficiently than Private Enterprise. Creating or expanding business, and hiring employees to perform productive work, has a greater benefit to society than Charity, and has a much greater benefit to society than Government.
November 14, 2018 | Unregistered CommenterJameson
very helpful and informative article
November 14, 2018 | Unregistered CommenterLife-Science-Wisdom
Are you sure this Reich is not related to the other Reich?
November 15, 2018 | Unregistered CommenterMax
Reich is worried about paternalism, but wants the government to decide how to spend your money instead of letting you decide for yourself.
If I want to fund cancer research, I could donate to a university with the stipulation that the money go to cancer research rather than gender studies, or I'd have to donate to an organization dedicated to cancer research.
But universities have been criticized for accepting large donations for pseudoscientific "integrative medicine", and now attention has turned to large donations from Saudi Arabia after the murder of Jamal Khashoggi.
I can see how large donations from George Soros to "grass roots" activists like Black Lives Matter and anti-ICE groups are bad for democracy. But Reich seems more worried about donating money to fix problems in your local school than about money in politics.
November 15, 2018 | Unregistered CommenterMax
This just in: "Bloomberg donates 'unprecedented' $1.8B to Johns Hopkins"
"Former New York City Mayor Michael Bloomberg announced Sunday he's donating $1.8 billion to his alma mater, Johns Hopkins University, to boost financial aid for low- and middle-income students. The Baltimore university said the contribution — the largest ever to any education institution in the U.S. — will allow Johns Hopkins to eliminate student loans in financial aid packages starting next fall. The university will instead offer scholarships that don't have to be repaid."

How terrible! It would be better for Democracy if he'd use his wealth to buy Socialist politicians like Bernie Sanders and Ocasio-Cortez who'd raise everyone's taxes to fund college for everyone.
November 19, 2018 | Unregistered CommenterMax
When the Market Is Our Only Language

Anand Giridharadas: "Winners Take All: The Elite Charade of Changing the World" | Talks at Google

“The existence of poverty is the proof of an unjust and ill-organised society, and our public charities are but the first tardy awakening in the conscience of a robber.”
― Sri Aurobindo
November 20, 2018 | Unregistered Commenteranon.
The Ezra Klein show/podcast
November 20, 2018 | Unregistered Commenteranon.
Max, "Bloomberg donates $1.8B to Johns Hopkins ... The university will offer scholarships that don't have to be repaid." A much better use of his money than supporting socialism. Point well made.
November 21, 2018 | Unregistered CommenterJameson
Prof. Reich, thank you and Julia for this enlightening interview and explanation of these bigger consequences philanthropy. (Special thanks to both for making your affiliations known in advance, unlike too many outlets.) Being personally very experienced in poverty, I wholeheartedly agree that too many "generous people" needlessly make desperate people jump through hoops, often unintentionally but sometimes very intentionally. (Sometimes the ignorance of "successful people" is pretty staggering.)

However, PLEASE consider some professional media training: even in this conscientious interview it was pretty cringe-worthy; when it's time for the mainstream or unfriendly interview, it's gonna hurt. (Maybe you were trying to treat this more like a talk or lecture and lead up to the bigger points. As an introvert I can't say that I have any fantastic advice anyway.)

I'm also a bit surprised that you didn't mention some easier glaring examples, such as how large money donations are helping "Complimentary and Alternative Medicine" infiltrate otherwise respectable universities [ ], which is definitely a net negative. And NPR just did a story about how the Peninsula Open Space Trust perpetuates poverty [ ] even so close to some of the wealthiest communities.

Admittedly, perhaps I'm missing some important thrust of your argument that wouldn't relate to those.

Anyway, I do appreciate the discussion. No doubt you'll be hearing from Darren McKee of The Reality Check [ ] since he is a huge proponent of effective altruism and big fan of GiveWell. Take care.
November 23, 2018 | Unregistered Commenterswan

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