BSSB.BE London School of Economics and Political Science 22/11/2018
* Is philanthropy, by its very nature, a threat to today’s democracy? Though we may laud wealthy individuals who give away their money for society’s benefit.
Robert Reich shows how such generosity not only isn’t the unassailable good we think it to be but might also undermine democratic values and set back aspirations of justice.
Big philanthropy is often an exercise of power, the conversion of private assets into public influence. And it is a form of power that is largely unaccountable, often perpetual, and lavishly tax-advantaged.
The affluent—and their foundations—reap vast benefits even as they influence policy without accountability. And small philanthropy, or ordinary charitable giving, can be problematic as well. Charity, it turns out, does surprisingly little to provide for those in need and sometimes worsens inequality.
- The “Gospel” opened with a discussion of inequity. This was the Gilded Age, and, even as most Americans were struggling to get by, the one-per-centers were putting up “cottages” in Newport.
- The disparity was, in Carnegie’s view, unavoidable. It was the price of progress, and progress, ultimately, benefitted everyone. “The ‘good old times’ were not good old times,” he observed. “Neither master nor servant was as well situated then as today.”
Having dealt with accumulation of wealth, Carnegie then turned to his real concern: what to do with it. Passing on riches to one’s children was a mistake, he argued, for inheritances “often work more for the injury than for the good of the recipients.” Handing out money to the poor was similarly ill-advised, since “neither the individual nor the race is improved by almsgiving.”
Rather, the best way to dispose of a fortune was to endow institutions that would aid “those who desire to rise.” Universities were a good cause; so, too, were public libraries, music halls, and swimming baths. The “man of wealth,” Carnegie advised, should consider himself “the mere trustee and agent for his poorer brethren, bringing to their service his superior wisdom, experience, and ability to administer.”
“The Gospel of Wealth” has been called the “ur-text of modern philanthropy.” It advocated a new kind of giving, a form of charity that wasn’t charity but something more pragmatic and, at the same time, more ambitious—a giving aimed, in Carnegie’s words, at improving “the general condition of the people.” Acting on his own advice, Carnegie went on to endow Carnegie Hall, the Carnegie Foundation, the Carnegie Endowment for International Peace, the Carnegie Institute of Technology (now part of Carnegie Mellon University), and more than twenty-five hundred local libraries. His contemporaries financed the Rockefeller Foundation, the Russell Sage Foundation, the Field Museum, and the University of Chicago.
The “Gospel” also prompted the ur-critiques of philanthropy. In 1890, the Reverend Hugh Price Hughes, a Methodist minister, wrote that, while he was sure Carnegie was “a most estimable and generous man,” his “Gospel” represented a “social monstrosity” and a “grave political peril.”
William Jewett Tucker, a professor of religion who would later become the president of Dartmouth, was no less horrified. What the “Gospel” advocated, Tucker wrote, was “a vast system of patronage,” and nothing could “in the final issue create a more hopeless social condition.” To assume that “wealth is the inevitable possession of the few” was to evade the essential issue: “The ethical question of today centres, I am sure, in the distribution rather than in the redistribution of wealth.”
Carnegie made his money from railroads and steel. Three years after he wrote “The Gospel of Wealth,” he decided to break the union—the Amalgamated Association of Iron and Steel Workers—at one of his company’s largest plants, the Homestead steelworks, outside Pittsburgh. Employees were presented with a new contract with pay cuts up to thirty-five per cent.
When they rejected it, they were locked out. Carnegie Steel brought in Pinkerton agents to guard the plant, and in the resulting melee at least sixteen people were killed. In the end, the union collapsed.
To critics, the Homestead strike made explicit the inconsistency of Carnegie’s position. How could a person ruthlessly exploit his employees and, at the same time, claim to be a benefactor of the toiling masses? The Saturday Globe, a Utica-based weekly, published a cartoon showing two Carnegies, conjoined at the hip. One, smiling, handed out a library and a check; the other held out a notice telling workers that their pay had been slashed. “As the tight-fisted employer he reduces wages that he may play philanthropist,” the caption read.
We live, it is often said, in a new Gilded Age—an era of extravagant wealth and almost as extravagant displays of generosity. In the past fifteen years, some thirty thousand private foundations have been created, and the number of donor-advised funds has roughly doubled. The Giving Pledge—signed by Bill Gates, Warren Buffett, Michael Bloomberg, Larry Ellison, and more than a hundred and seventy other gazillionaires who have promised to dedicate most of their wealth to philanthropy—is the “Gospel” stripped down and updated. And as the new philanthropies have proliferated so, too, have the critiques.
- The publication is not an editorial. It reflects solely the point of view and argumentation of the author. The publication is presented in the presentation. Start in the previous issue. The original is available at: London School of Economics and Political Science (LSE)