for the greater good

Ran into a flurry of Zuckerberg charity articles and couldn’t resist a drive-by commentary.  High-level social politics, tax law, and whispers of oligarchy?  I am but a moth to the flame.

If you’re not familiar with the baseline here:

  • Zuckerberg and Chan create an LLC where most of their wealth (99% of Facebook shares, currently >$45bil) will be converted into potentially charitable contributions to society, though the legal boundaries on what their money can be used for are pretty lax.  It’s not really clear what they’re planning to focus spending on.  Always a good start.
  • The whole thing is spurred by Bill Gates’ Giving Pledge, an initiative to get the superwealthy to donate the majority of their wealth rather than devoting it to an inheritance.  A surprising amount of billionaires have been on board with this.

It’s hard not to sound like a stale bag of farts in questioning or critiquing a billionaire giving away his fortune.  The ideas here are laudable.  I tend to believe that most people – superwealthy or not – are generally doing what they think makes sense, and even if these actions benefit him indirectly or directly, there has to be some recognition that he could have gone the path of pure wealth optimization.

But the story is not as simple as a billionaire going all-star humanitarian.  There’s 3 major perspectives to consider here, and I’ll follow up with my opinion.

  1. The Chan Zuckerberg Initiative is only sort of a non-profit.  It’s an LLC.  It can contribute to political campaigns.  It can invest in for-profit corporations.  It has no requirements about how its funds are allocated, any expectations of progress or results, or about how Zuckerberg himself accesses its funds. “Mr. Zuckerberg was depicted in breathless, glowing terms for having, in essence, moved money from one pocket to the other.”
  2. Massive scale donation like this is actually a huge strain on social services and government operations.  The tax take on $45bil could mean solvency for any number of critically endangered programs.  Under the current tax system, the government will probably never see any of those funds.
  3. What differentiates Zuckerberg from the Koch Brothers?  The Kochs deploy hundreds of millions per year in education – admittedly, a very specific, intensely capitalistic, neoconservative education – but their only immediate benefit is the social capital gained by blasting Randian principles across the American landscape.  Non-trivial, to be sure, but they’re likely to meet their grave before the benefits are truly reaped.  Isn’t this charity? Maybe, maybe not – but we should absolutely hesitate to celebrate altruism without first seeing meaningful details of intent and foresight.
The point: oligarchs vs the government

There’s a distinct flavor of political disillusionment in America that says the government is utterly incapable of properly handing real money. The logic would go, then, that it’s for the best that a small group of agile, well-trained businessfolk should be allowed to execute their estate as they see fit.  The problem is that this is literally oligarchy.

Whatever your feelings are about the efficiency of governments at any scale, there has to be some steadfast line we hold to about the nature of that power. The government’s institutions may be plagued by nepotism or gridlocked by dueling party interests, but damn it all, at the end of the day we elected those garbage mutts, and however bad it might be right now, the combined will of the people is still strong enough to end a political career overnight.

That is not a power that anyone will ever have over the Chan Zuckerberg Initiative, LLC.  That corporation will only ever find itself beholden to Priscilla Chan and Mark Zuckerberg, and no one else.  There is no binding legal agreement that would leave them to suffer any meaningful pressure from the public.

It is unsettling to know that potentially trillions of dollars in crucial funds for social progress hinges upon the currently favorable mindset of such a small handful of vastly wealthy people.  History indicates that it’s not unthinkable or even unlikely for such tides to shift.  And if they did, our country – our whole world, in fact – would have no recourse.

One thought on “for the greater good”

  1. I always wondered how much money the government might see (on a yearly basis) if people weren’t able to transfer their wealth to tax-reducing entities like charities or LLCs – without first paying /some/ tax on it. Or for that matter, transferring wealth down to generations without paying estate taxes. Would it be a size-able amount?

    “It is unsettling to know that potentially trillions of dollars in crucial funds for social progress hinges upon the currently favorable mindset of such a small handful of vastly wealthy people.”

    It seems /more/ unsettling that billions if not trillions of dollars in crucial funds are held in these tax-reducing entities that are essentially doing nothing but maintaining or growing their wealth over time.

Comments are closed.