Wednesday, August 4, 2010

On the Giving Pledge

What a very interesting set of news reached my eyes today.

http://www.msnbc.msn.com/id/38556042/ns/us_news-giving/

To summarize: Bill Gates and Warren Buffet are rallying US billionaires to give half of their wealth (over time or at their deaths) to charity, and apparently many billionaires have already rallied up behind it.

That's 90 billion between Gates and Buffet alone (they're giving most of it I believe). I remember having these conversations with friends, where we would try to calculate the possibility of these guys actually spending their money in their lifetime, or in their families lifetimes. Turns out, it just isn't happening. Not even if they redid their kitchen as often as humanly possible. They could fund their own spacefaring program, but as Richard Garriot showed us, that isn't really necessary when you can just "hitch a ride with very deep pockets."

Now, I'm cautious as to how to interpret this. Recent figures of wealth distribution indicate what was true in 2006: the top 2% control most (>51%). Where the Giving Pledge to pull off even with a fifth US 400 billionaires, that would mean an immensely large amount of money going back to the "ordinary"" people, in strict terms of wealth redistribution.

Is this out of the goodness of their hearts? I would normally jump to say that there has to be an agenda... However, reading the letters from various individuals (http://givingpledge.org/) especially Warren Buffet's, I'm getting the feeling that it's just that, philanthropy. On hindsight, I shouldn't be surprised, either. I mean, take the Christmas Carol and Scrooge. People change, constantly, especially when age brings them a more mature look of the future: and right now, the future looks rather grim. And I don't mean that as a political statement: taking a look at world population, the environment, hunger, disease, that's enough to give anyone a downer. From the comments on the article, I think mostly everyone is rallying behind this effort. Then, a very simple analyis of a very simple billionaire psyche model predicts this as a no brainer: having secured my family's financial future, owned planes, awesome houses and cars, enjoyed life to its utter fullness, what would I do with such a vast amount of leftover money at death's door? I know my analysis is as scientific as intelligent design, but I think it has some sense behind it.

I think we can agree that, at least at the core, this is an enormous gift and terrific responability. Nevertheless, regardless of how large the gift becomes, the next question that should be raised is how it will be used. I'm not a finance expert, but I'm sure that the vastly differing ideologies that exist here in the United Stated would come up with as vastly differing opinions on the manner of how the redistribution into charities should actually proceed. I would argue, then, that when the time comes, let there be a smart debate about it, but understand that it ultimately falls into the giver's choice. Whether this is leaving it to whim and luck, I'm not sure. These people had the knowledge, foresight, and a little bit of luck to acquire all their wealth, I think we can trust them to make the right decisions when it's time for them to "give it away."