New-Age Generosity

First up, here are a couple of links I suggest you read:

1. Warren Buffett’s Unprecedented Generosity

2. Branson makes $3bn climate pledge


4. Ted Turner: UN Saviour?

As a reminder, let me just run through the numbers again. Warren Buffet, $37 Billion;, $1 Billion; Richard Branson, $3 Billion and; Ted Turner, $1 Billion. Yes, it is literally billions of dollars that these men and women are giving away from their savings for philanthropic causes.

Two points to note about this: firstly, the massively obscene amounts of money being talked about. Philanthropy of this magnitude has been unheard of and is a very recent phenomenon. $40 Billion is an amount that is much larger than the GDPs of many countries. How are they creating so much wealth and what is motivating them to give it away at the end of it all? Capitalism and free markets. The people involved participated in free markets and were allowed to price and sell freely. If Buffet invested in sunrise sectors and played the markets to earn his billions, Bill Gates rode on the PC revolution to become the richest man in the world. Fat chance either of them would have reached where they are now if they were, say, set up businesses in China. They did not break any laws, worked hard and grew their businesses splendidly. So with Branson, Ted Turner and Google. All their wealth and fame are creations of a free-market society that encourages businesses. By and by, they also generated employment for millions world-wide, directly and indirectly. Now, we know all this about capitalist businesses. The grouse of pseudo-communists and pseudo-socialists against this is – So what if they are creating wealth? We must tax them massively and make their life difficult. How dare they earn when the poor do not have anything to eat or drink?

As morbid it is, in the first place, to think of someone else making moralistic judgements for you, you also know the socialists are mentally handicapped. Leaving that aside, the free-marketeers are not obliged to defend themselves against these accusations. Benefits to the society have already accrued on account of their enterprises – livelihood generation, revenue for the governments and convenience for the customers. But, they have gone ahead now with their mission to give something back to the society. And, they are doing this out of their own behest and interest. No government is policing them to be generous. No one is asking them to do something for the poorer brethren of our society. Not only in the western world, in India, we have Infosys, the TATA group, Azim Premji Foundation and the like setting up their philanthropic arms. Could you have envisioned this in the pre-90s era? Again, there is no law that asks the likes of Narayan Murthy and Azim Premji to set up philanthropic institutions.

As we settle into the post-reforms era, I can notice the sea change in attitudes of our generation against the previous, in terms of how we view wealth. More of us are donating, volunteering and pledging to improve the lives of the lesser-blessed.  A large percentage of the previous generation grew up in an economy of scarcities. Though a large part of the country still lives in an impoverished state, we have more of the urban rich donating a part of their wealth to philanthropic causes.

The second point to note about those news items is the purpose behind the philanthropy. It is not vague and it is not short-sighted. They are not calling all the poor of the world to assemble and distribute money to them. They are very clear and specific on the way they have to go about it. If the B&M Gates Foundation is dedicating its resources to rid the world of the deadly HIV/AIDS disease, Richard Branson is exploring ways of making the world a greener place. Google will take up small projects world-wide with short-term and narrow objectives for now. With time, they want to alleviate poverty in the world., in fact, states that they are a for-profit organization. Ted Turner wants to put in his money to research alternate fuels. They are going about philanthropy just the way they would run any of their other businesses. Almost all of them have set up foundations with a proper structure, dedicated work-force and are teaming up with partners at the grassroots level. It is their money and they are making sure it makes a difference to the people they intend it to.

It is heart-warming to read about such stories, knowing people who are able to, are trying to make the world a better place. It also vindicates the system of free-market economy and private ownership of businesses. For too long, businessmen and entreprenuers, the world over have been maligned, cursed and abused for making profits. If your numbers changed from red to black, you turned from a good man to an evil monster. The communists will cry hoarse everytime an ailing industry is privatised, even if the enterprise is sucking the government dry with mounting losses. The anti-globalization protesters launch into a tirade every time global trade is opened up. Yes, there are disturbances and problems. Yes, not all businessmen will turn philanthropists (not that they have to). But, in my mind, I have no doubt that constraining and controlling the economy is not a solution at all. It is just not an option, if you want any society to progress. The biggest advantage a free-market society offers it that it gives room for alternatives to emerge and improve. The socialist society only rots away as it stagnates. There is no motivation for any alternatives to spawn.

From a overall perspective, the cycle goes something like this – A and B in a society with net wealth W. A has 90% of W and B has 10%. The socialists would want to steal 40% from A and give it to B. Free-marketeers would much rather increase W so that both A and B have more. With time, as these examples show, A does distribute away his excess wealth to the rest and also try to make B more capable of earning. But, if you try to steal from him before he earns his share, what motivation does he have to earn and make W bigger?

Update: I should have done this much earlier, but better late than never, and also holds relevance to the topic of the post. Speaking of volunteering, here is my close friend and colleague, Ghatak’s narration of his experience as a volunteer with a NGO. Easily ranks as one of the most inspiring pieces of writing I have read in recent times. The Bob Dylan song in the beginning is an icing on the cake.

New-Age Generosity

3 thoughts on “New-Age Generosity

  1. DODO says:

    a very timely article!

    The preveious generation was made to grow up in a milieu of scaricity and that scarcity was generated by none but the government. In order to keep the public sector behemoths it could not invest adequately to the social sector ( talking abt education, health and policing) which are the primary job of a government, not running companies. These companies bleed money from the govt which could have been utilized to build pan indian infrastructure . But as things are, these socialists are the biggest enemies of the poor. They always try to please the middle class ,the huge government servent population. Had they really been worried abt the poors they would have come out of the government run loss making companies and would channel the money to more developmental purposes ( which would have serverd many times large number of needy population than the number of the employees of the companies leftists are apparentlty fighting for). But quite worried to notice that the present government is taking step backward towards that era( if not walking backwards they are not walking forward either).

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