Parkland Institute
Op-eds | March 29, 2014

Beware the wealthy bearing gifts

Altruism of the wealthy is sometimes done for less saintly reasons

by Trevor Harrison

Everyone loves people who give unstintingly to charity. But a little skepticism might be in order before saluting too much the ballyhooed generosity of the rich.

Consider Al Capone. In the 1920s, Capone gained a reputation for his generous gifts to charity. During the Depression, he set up some of Chicago’s first soup kitchens. Like Robin Hood, with whom he was compared, Capone understood the political value of keeping regular folk on side, especially with the authorities on his heels.

No one would accuse Mark Zuckerberg or Bill Gates of being modern-day Mafioso, but not every wealthy donor is a saint – a fact the fawning media too easily overlook.

There are numerous reasons to give to charity. Altruism and a heightened sense of social responsibility are high on the list. (We’ll ignore those Grinches who argue there is no such thing as unfettered giving, even if the giver receives only a warm fuzzy.) But there are other less – shall we say – “charitable” motives for giving.

Ego is one. Both the Canadian and U.S. landscape are littered with large institutions bearing the names of prominent people whose altruism was mixed with a desire for recognition, if not praise, and a kind of immortality. Still, everyone is entitled to a bit of ego.

But there is also the kind of motivation that impelled Capone’s giving, the purchase of political protection and influence. This seems increasingly the case today. Where the very rich once gave to orphanages, corporate benefactors now more often give to right-wing think tanks or cash-starved universities and equally cowed NGOs who then feel compelled to vocally endorse the ideological aims of their funders.

Before genuflecting too much before the Altar of the Wealthy, we might ask ourselves two questions. How did wealthy donors amass their wealth from which to give in the first place? And what are the consequences of both their wealth and of their charity?

The first question, how did the very rich obtain their wealth, requires critical examination given an enormous body of research showing that the rich are getting richer, the poor poorer, and the middle class in many countries sinking like a stone. Case in point: Oxfam’s recent report showing that the top 85 richest people in the world now have as much wealth as the bottom half of humanity.

The usual answer to this question is “they earned it,” to which is sometimes added, with reverential piety, eyes raised, “the Market.” Such explanations – or justifications – ring increasingly hollow, however. No one can seriously believe the 85 richest people in the world “earned” their wealth. They are, rather, expropriators of a surplus that humanity has created over time through hard work, ingenuity, and (too often) suffering.

The answer to the second question, what are the consequences, turns back upon the first question, but needs some elaboration. In liberal economic theory, the economic and political realms are defined as separate. This requirement, one will note, is in the nature of a thought experiment, and not a description of the real world, which – ipso facto – makes it a rather bad theory, but a politically useful obfuscation.

The point is, economic wealth is a fungible commodity; that is, it can be transformed easily and exchanged for other forms of capital, both political and social. Transformed into political capital, financial wealth takes the form of donations to parties and candidates that show their appreciation through such things as tax breaks, free trade agreements, and corporate subsidies. Transformed into social capital, financial wealth takes the form of philanthropic gifts to various causes and institutions, thereby enhancing their social status and blunting the possibility of popular unrest.

The result is a decidedly un-virtuous cycle of economic, social and political power. The same hand that appears to give generously to public causes is the one also purchasing the means by which unearned wealth continues to grow. It is a form of money laundering of which Big Al would be proud.

Trevor W. Harrison is a professor at the University of Lethbridge and Director of Parkland Institute.

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