Are Europe's super-rich cheapskates
compared to their
American counterparts?
American Philanthropy a Lesson for Europe (Le Monde, France)
"While there have always been wealthy people, the emergence of a
genuine class of super-rich is without historical precedent. ... It remains for
the super-rich to atone for what is due to good fortune at least as much as to
their extraordinary talents. ... Almost all cultural institutions and great
American universities are funded by private donations, while in Europe they are
public and half-starved. ... These philanthropic gestures are not enough to make
super-rich Americans admired, but they do make them bearable."
The income gap between
the super-rich and ordinary people raises universal anger among “the indignant”
in Spain, citizens of Switzerland who decided in a March 3 referendum to
cap “excessive compensation,” anti-Wall Street
demonstrators in New York and the traditionally capitalist French left.
While there have
always been wealthy people, the emergence of a genuine class of super-rich is without
historical precedent. But unlike in the past, these super-rich are generally
neither aristocrats nor heirs, but the creators of their own fortunes. They
have either founded a new global enterprise (Microsoft, Google, Zara come to
mind) or they manage financial wealth of global dimensions. Globalization is
the true foundation of super-richness.
It is naturally
concentrated in places where singular wealth is created: Silicon Valley for IT;
pharmaceuticals in Switzerland; Paris, where fashion is decided; Hong Kong,
where Chinese capital had fled; Geneva, London, New York, where money is
invested; and where natural resources abound and are concentrated in a few
hands to be sold on the global market - Russia, Saudi Arabia.
Earthlings are thus
divided into two economic categories that Karl Marx couldn't imagine - not
proletarians and capitalists, but those who work for the local market and
receive local compensation; and those operating on the global market and pocket
wages and profits from around the entirety of the planet.
Looking at the recently-published
Forbes Magazine list of the 500 richest people in the world, you can check the
coincidence between the super-rich and the global market: oil, gas, IT,
telephony, fashion, cosmetics, and money management are globalized, and are at
the root of nearly all out-of-the-ordinary wealth.
VISCERAL REACTION
A century ago, the titans
of capitalism grew rich through the creation of railways (Vanderbilt), steel
mills (Carnegie) and refineries (Rockefeller): all these activities have become
local, while fashion (Zara) and cosmetics (L'Oréal) have
become global.
Lodestar Center, Arizona State University Graphic
While not analysis, popular
and even visceral reactions against the super-rich are perfectly understandable
in democratic societies. But French-style confiscatory taxes and prohibitions in
the fashion of Switzerland's populists are not enough to restore balance
between the two sources of wealth - local and global - since globalization also
moves people and profits with greater agility than states.
If this contemporary
super-richness can be explained, that does nothing to make it legitimate: the
super-rich have the privilege of locating themselves in the right place at the
right time. Better to be a prince of Qatar than a Congolese peasant; better to
work in a Swiss bank than in a bank in New Zealand. But do these happenstances
justify the income gap?
Posted By Worldmeets.US
To say that the billionaire
owner of an investment fund produces added value that justifies his personal
gain is a strictly economic point of view which is impossible to prove. It is
equally impossible to prove that a president of a bank, pharmaceutical company
or mobile phone firm is irreplaceable to the point of earning thousand times
more than the average of their employees.
No one is that irreplaceable.
It remains for the super-rich to atone for what is due to good fortune at least
as much as to their extraordinary talents. There is a way to do this. It is
called "philanthropy."
Philanthropy is most
developed in the United States, where neither the "non-profit" sector
- neither capitalist nor socialist - represents 10 percent of the economy. George
Soros, for example, spent $10 billion - half of his fortune for 20 years - to
help dissidents in Central Europe, finance rehabilitation programs for drug
addicts in Baltimore, and educate persecuted Roma in Hungary.
Bill and Melinda Gates
donate $4 billion each year to develop agriculture and eradicate malaria in
Africa. Just recently, financier John Paulson, in New York, donated $100
million for the maintenance of Central Park, and Wall Street investor Stephen Schwarzman donated $100 million to renovate the Central
Library in New York.
FUNDED BY PRIVATE DONATIONS
Almost all cultural
institutions and great American universities are funded by private donations,
while in Europe they are public and half-starved.
Note that philanthropy
should not be confused with charity. As Benjamin Franklin, considered the
founder of modern philanthropy, wrote in 1740, the purpose of philanthropy is
to change society so as to eliminate the very need for charity: for this reason,
systematic philanthropy favors education, scientific research, and public
health.
These philanthropic
gestures are not enough to make super-rich Americans admired, but they do make
them bearable. For the record, this tradition of philanthropy is a legacy which
is more Calvinist than Catholic: according to a Geneva preacher, fortune only passes
through the rich, who are supposed to redistribute it.
A century ago, this
doctrine led Andrew Carnegie to declare that it was “indecent to die rich.”
It seems to me that Europe's
super-rich should also discover philanthropy: there is no shortage in our
society of groups and people in need, and that could benefit from a donation.
The donation, once again, is not charity, but the price paid in order to remain
a member of the human community.
The donation gives
dignity as much to the giver as to the receiver. Philanthropy is not the
solution to inequalities of status that arise from globalization, but it would
be the beginning of conscientiousness.
