Archive for November, 2011

Money Money Money

Thursday, November 10th, 2011

I had a friend in college whom I met again while about to enter grad school. He’s one of the book-smartest people I’ve ever met, just brilliant at making connections among all sorts of diverse intellectual traditions and disciplines: computer science, philosophy, literary theory, evolutionary biology – it was all one big playground for his mind. And he said the darnedest thing to me when I described my nascent career in philanthropy. This was more than ten years ago, so I have to paraphrase, but the gist was, “I thought about being a professional do-gooder, but then I realized, much better to get rich and then direct the funding to what I think is important.” Of course, that imperative to donor-directed giving is all the range now, but what struck me was the sequencing: smart, progressive people should get rich, and then use that power to do good.

I think about that conversation often, because it’s becoming clear in the current 99%/1% discussion that progressives have a real ambivalence about getting rich. Not being rich, getting rich. Put another way, what is the progressive theory of wealth accumulation? (Separate discussion needed about tech wealth and the cult of Steve Jobs.)

The libertarian economist Tyler Cowen responds to progressive blogger Matt Yglesias’s post on this topic, and the comments on Cowen’s post are well worth browsing – much more light than heat than is usually the case in comments sections.

For me, what it’s about is this: under the current, rigged set of rules, those who succeed the most are rewarded inordinately, all out of proportion to their level of achievement. It didn’t always used to be this way: the ratio of pay between CEO and worker didn’t used to be so absurdly high. (There was a very interesting piece in New York magazine a few weeks back about how Mitt Romney is to a degree behind this change, from his management consulting days.) But these days, if you hit the jackpot, the multiplier effect is astronomical. That’s wealth that could have been distributed differently, more broadly. And it used to be, under good old red-blooded American capitalism. But the game is rigged in a way that rewards the 1%, kind of whether they want it or not. Don’t hate the player, hate the game? I dunno.

To me, this starts to get at the heart of the discussion, and opens up some space to think about the role of philanthropy in helping to promote certain framings and certain incentives. Not sure what that looks like yet, but I picture a small flame in a room full of gusts of hot air, and the need to cup your hand around it so it doesn’t get snuffed out. What does a positive, progressive theory of wealth accumulation look like, and where does philanthropy fit in the picture?