You may think that Bill Gates is doing the world an enormous service by giving away nearly all of his fortune over the next twenty years. But the truth is that he’d be doing us all an even greater service if he spent a portion of his remaining time and money doing everything he can to change our country’s political economy to ensure that wealth isn’t concentrated in the hands of so few people and that, in the future, no single individual is able to attain his level of wealth and power in the first place.
Last week, Microsoft co-founder Bill Gates – who, at this writing, is worth an estimated $113 billion – announced that he intends to give away nearly all of his wealth over the next twenty years and will close the Gates Foundation by December 31, 2045. Since its inception in 2000, Gates’ foundation has donated more than $100 billion to global causes, and he believes it will be able to give an additional $200 billion over the next two decades. Gates also outlined some goals that he intends to achieve with his new largesse: reducing the deaths of mothers and children from preventable causes; eradicating deadly infectious diseases like polio, Guinea worm, malaria, and measles; and reducing poverty by supporting education, agricultural innovation, and digital public infrastructure.
It’s certainly admirable that Gates wants to give away his fortune to make a positive impact and, in his words, “drop off the list of the world’s richest people.” But Gates and big-name philanthropists like him give a master class in the pitfalls of relying on philanthropy to save the world.
For this week’s Closer Look, we’d like to outline the shortcomings of philanthropy from figures like Gates and explain why the real solution that lawmakers need to rally behind to save the world involves taxing the rich.
Pitfalls of Philanthropy
There is no denying that Gates has done a lot of good over the years with his massive giving. For one thing, thanks to him and a handful of other philanthropists, an estimated 2.5 billion children have been vaccinated against polio. Cases of the disease have fallen by 99.9%, meaning that it has been virtually eliminated.
But the fact remains that there are questions as to whether addressing diseases like polio was actually the biggest priority for the impoverished people that Gates helped. The lesson here is this: billionaires who are far removed from the realities of life in local communities should not have the power to swoop in and decide singlehandedly which problems are worth solving and which ones aren’t. Instead, it should be local communities themselves that decide through democratic processes what their problems are and what courses of action should be taken to resolve them.
Another pitfall of philanthropy is the fact that it has a very poor track record in accomplishing its aim of saving the world. For all of the billions that Gates and his other Giving Pledge friends have donated over the years – not to mention, the sheer number of charities out there (there are currently 1.8 million in the US) – you’d think that poverty, malnutrition, crime, and all the other problems facing our country and world would be eliminated, but they are most certainly not. You’d also think that the original Giving Pledge gang wouldn’t be richer than they were back when they first got together in 2010 – Gates was worth $53 billion back in 2010 and has increased his wealth by $60 billion since – but that’s another story.
The unfortunate reality is that most philanthropic giving tends to reinforce inequalities, not reduce them. In the US, only a fifth of the money donated by the rich reaches the poor; they’re too busy giving their millions instead to things like opera houses, ballet companies, sports teams, and elite universities. They’re also busy giving millions to their own private foundations and donor-advised funds, where money tends to sit idly for years without flowing to working charities on the ground.
Even when the wealthy’s charitable giving does manage to reach the poor though, it tends to alleviate symptoms rather than fix root causes. For example, the rich may make generous donations to homeless shelters, but they aren’t funding research to better understand homelessness and how best to eliminate it. They may give scholarships to disadvantaged kids to go to high-quality schools, but they’re not working to ensure that all schools have the resources they need to succeed. In short, while it’s commendable that some wealthy philanthropists donate to the poor and eliminate some degree of their suffering, for the most part, they’re not doing anything meaningful to fundamentally alter economic systems in ways that will make their giving unnecessary in the future.
In a similar vein, ultra-wealthy philanthropists also fail to recognize that they themselves are responsible to a large degree for the problems that they are purporting to “solve” with their philanthropy. Gates, for one, settled with the Justice Department after it was found that he engaged in anti-competitive business tactics. The Sackler family engaged in art philanthropy and were actually shunned by a number of museums and institutions in 2019 after their role in manufacturing America’s opioid crisis came to light. This is all to say that there is something wildly unfair about some people being able to make inordinate fortunes in ethically dubious ways – and then subsequently being allowed to donate their money wherever they like (!) and launder their reputations.
The Real Solution: Tax the Rich
So if philanthropy can’t save the world, what will? In the famous words of our Dutch historian friend, Rutger Bregman, “Taxes. Taxes. Taxes. All the rest is bull****.”
Again, we’re not denying the fact that philanthropy does do good in society. But at the end of the day, it can’t take the place of governments. None other than Melinda French Gates has espoused this position. (She should join our group!) She argues that philanthropy can serve as a catalyst by taking risks and researching solutions to problems, but that only governments have the capabilities to scale those solutions and make them widely available to the masses. For example, while philanthropists played a role in funding COVID vaccine research, only governments could operate at a scale to oversee national COVID vaccination strategies.
Governments are also the place where citizens “gather” to have their voices heard in a democratic fashion – typically at the ballot box but also in forums like town halls and lobby meetings with elected officials. Our government isn’t doing too hot a job at the moment of listening to everyone’s voices – they’re paying far too much attention to the rich – but it’s still the best vehicle that communities have for identifying and addressing problems collectively. Charities simply cannot compete in this regard.
All that said, this is why it is so important that governments at all levels have the revenues that they need to finance their investments – and particularly why it’s so important that rich people like us pay our fair share. A common refrain we hear in conversations with our wealthy peers is: “I would be fine paying more tax as long as I knew my tax dollars were going towards things that I support.” It’s an understandable view, but that’s not how governments work. The last time we checked, working people don’t get to “choose” where their tax dollars go, so neither should we rich people. If we don’t like the way that elected officials are spending, we can vote them out of office like everyone else come Election Day. But it’s not a valid excuse to skirt our patriotic duty to pay what we owe in taxes.
That’s why we’re funding this campaign at Patriotic Millionaires. Many of us donate regularly to charity, but at the end of the day, we believe the best service we can provide our fellow citizens, both at home and around the world, is to pay our rightful share in taxes. Only this way will we be able to reduce inequality and ensure that governments act like democracies by responding to the needs of the many, not the few. This is even more pressing given that the GOP is well on their way to passing their “big, beautiful” bill that will give yet another unnecessary and massive handout to wealthy people like us.
Bill Gates is often lauded as a “good” billionaire on account of all the good he has done through his foundation. But “good billionaire” is an oxymoron if there ever was one. Because in no world, real or imagined, can it be considered “good” for one person to have $200 billion to wield to advance their personal vision of what the world should look like. If Gates and his Giving Pledge friends agree, they are welcome to join us at Patriotic Millionaires to be part of the solution.