
Why a German billionaire says that pledges like Mark Zuckerberg’s are really bad - nkurz
https://www.washingtonpost.com/news/wonk/wp/2015/12/02/why-some-people-feel-billionaire-pledges-like-mark-zuckerbergs-are-really-bad/
======
Afforess
There is no real explanation for why the pledge is "bad" except for the tired
argument that the state is _good_ and private foundations imitating the state
are _bad_. There is no further clarification or explanation; We are supposed
to accept this as some sort of given, without pretext or afterthought.

Articles like this are _bad_.

~~~
thomnottom
That's not what the article said at all - nor the German billionaire. He said
that having a few very wealthy people decide what were the most important
causes was bad compared to having the democratically elected government
decide. You may disagree with that, but it is quite different from simply
saying public good and private bad.

~~~
Afforess
> _He said that having a few very wealthy people decide what were the most
> important causes was bad compared to having the democratically elected
> government decide._

This sentence is really amusing to me, because our democratically elected
government, at least at the congressional level, is nearly all wealthy
millionaires. So either way, important causes are decided by the wealthy.

~~~
applecore
Your argument makes no sense: the people control everything in a democracy,
literally, by voting for their representation in government.

~~~
jaggederest
How well does that representation actually fulfill the wishes of their
constituency as a whole, let alone any individual voter? That's the point - by
being representative with no accountability, there's only the binary ability
to hire or fire with no ability to manage.

~~~
zzalpha
_How well does that representation actually fulfill the wishes of their
constituency as a whole, let alone any individual voter?_

Yeah yeah yeah, being cynical about democracy is cool, blah blah blah.

I suppose you should, what, just burn the motherf*cker down and be done with
it, then?

You know, in 50 years the GOP will be able to look back and point to one of
their most brilliant victories of all time: actively sabotaging the activities
of government, and then using the results of their very own actions to
convince the electorate that government doesn't work and cannot represent
them, despite the fact that they got themselves elected into the very system
they claim to despise.

It's utterly brilliant. "Starve-the-beast" neocon tactics taken to a whole new
level.

~~~
ancap
>"Starve-the-beast" neocon tactics taken to a whole new level.

I'm not sure you know what a "neocon" is. Neocons derived from Trotskyism and
are found in both major U.S. political parties. Neoconservatism has done more
to expand government than perhaps any other ideology present in American
politics.

>actively sabotaging the activities of government, and then using the results
of their very own actions to convince the electorate that government doesn't
work and cannot represent them, despite the fact that they got themselves
elected into the very system they claim to despise.

Ironically that strategy sounds a lot like a strategy that's been deployed by
progressives. If you look at some of the most heavily regulated sectors of the
economy--healthcare, banking, housing, wall street, etc--those are the same
areas which progressives hold up as free market failures.

------
HiLo
Krämer: So it's not the state that determines what is good for the people, but
rather the rich want to decide. That's a development that I find really bad.
What legitimacy do these people have to decide where massive sums of money
will flow?

SPIEGEL: It is their money at the end of the day.

Krämer: In this case, 40 superwealthy people want to decide what their money
will be used for. That runs counter to the democratically legitimate state. In
the end the billionaires are indulging in hobbies that might be in the common
good, but are very personal.

...

"There’s nothing necessarily wrong with the American system of tax-subsidized
charity, of course."

"The critique is that this system affords too much power to the rich, whose
decisions may not align with what’s best for society. This is not to say that
the government is a paragon of efficacy either, but it risks a lot to depend
on a handful of mega-billionaires to be prudent, effective philanthropists."

"What genre of philanthropy will Chan and Zuckerberg invest in? Possibly
anything. Their letter Tuesday set two missions, both ambitiously vague:
“advancing human potential” and “promoting equality." They mention curing
diseases, improving clean energy, promoting entrepreneurship, fighting poverty
and hunger, empowering women and minorities, and so on.

The pair do not have a sterling track record when it comes to effective
charity. One of their previous efforts, a high-profile $100 million donation
to fix the schools in Newark, N.J., has been widely criticized as a failure.

Chan and Zuckerberg write in their announcement that they have learned from
their past experiences with philanthropy. For now, they will start with their
own community in San Francisco, focusing on education, health and “connecting
people.”

~~~
merpnderp
You make it sound like Zuckerberg's donation in Newark happened in a vacuum.
It happened in tight collaboration with the school system, who stated needs
and approved every step of the process. It's not like Zuckerberg stepped in
and said "you shall obey!!!" Course in this case it just turned out that not
only could the democratically elected government of Newark magically waste all
their tax revenue, they were excellent at wasting donated money.

~~~
6stringmerc
I do find it rather disheartening that a tech inventor and a PhD in Biology
are being looked to as legitimate critics and saviors of public education.

~~~
merpnderp
Makes sense as the PhD's and government "experts" in education gave us the
unpopular and widely criticized No Child Left Behind and Common Core, which
hasn't done anything to stem the flood of unprepared kids going to college and
the work force.

~~~
HiLo
Yes, I'm sure GWB staffed his cabinet with "experts." Yes.

~~~
merpnderp
Well Obama has had 6 years to fix it. Which makes this less of a
republican/democrat issue than a "why the hell aren't we copying Finland"
issue. You know like why would government spend all this money on contractors
and consultants to figure out a new way to do things when they could just copy
a highly functional and successful system? Oh, corruption. Right.

~~~
dragonwriter
> Well Obama has had 6 years to fix it.

In the world where Obama was a dictator and could unilaterally rewrites
statutes, sure.

In the real world, Obama had just under two years (because Congressional terms
start earlier than Presidential terms) with Democratic majorities in Congress.

------
lloyddobbler
> _I find the US initiative highly problematic. You can write donations off in
> your taxes to a large degree in the USA. So the rich make a choice: Would I
> rather donate or pay taxes? The donors are taking the place of the state.
> That 's unacceptable._

Or flip that around - is Krämer's implied solution not a case of the state
taking the place of the individual?

Put another way, if you founded a company, created thousands of jobs for
families and individuals, and made a fortune, why should the state be the one
who decides what happens with your money? Why should the state have more of a
right to decide which causes get your charitable donations than you do?

~~~
HiLo
Because the structure that enabled you to amass that amount of wealth is
flawed, and disproportionately rewards "you" over the network that actually
did much of the heavy lifting. Nobody is saying they shouldn't be richly
rewarded, just that it's gotten fucking ridiculous.

~~~
marknutter
> Because the structure that enabled you to amass that amount of wealth is
> flawed, and disproportionately rewards "you" over the network that actually
> did much of the heavy lifting

This thinking is so poisonous and destructive and pervasive that I'm starting
to wonder if it is either due to some natural law of human nature or some
grand conspiracy to destroy modern society. Businesses are _not_ built on the
charity of the "system". Everyone is compensated in the building of a
business, in exactly the amounts they demand to be compensated. The government
gets its taxes, the employees get their salaries and benefits, the
shareholders get their equity, and the founder(s) get(s) the rest. At that
point, everyone is squared. Risk is appropriately rewarded, and risk is an
absolute requirement if you want great things to happen.

~~~
HiLo
I could say the same about your black and white thinking using outdated
Chicago/Neoclassic economic theories when applied to aggregate economies, but
I digress.

I didn't say they were built on the _charity_ of the system, just that they
were built _using_ the system.

You act like the first 50 employees of your stupid app company aren't taking a
risk too. But they get 0.01%, while the founders get...? Fairly early on, you
literally don't have enough time in a day to do it all yourself, even if you
wanted to, so you're quite literally taking credit for more risk than you were
actually able to take.

Considering Paul Graham's essay about how most of the work is ahead of you
even when you start adding employees, how is the risk so skewed towards
initial conditions versus the long path ahead?

This toxic thinking that a twentysomething takes more risk by trying to start
his own company while early in his career deserves _orders of magnitude_
better compensation for the risk he took, over many career people that will
have to be persuaded to risk their career and reputations on this new company,
who have families, mortgages, and serious obligations to others?

He really took 1,000x more risk? Bullshit dude.

~~~
chrisabrams
No one forced the employees to take 0.01%.

~~~
nerevarthelame
No "one" person did. But their circumstances certainly encouraged it. By that,
I mean that if a person has a baby on the way, mountains of debt from school,
an overdue rent payment, and no health insurance, then he or she may be forced
to take a paltry salary. But hey, it's better than debtors prison or death,
right? So let's call that social justice. Particularly with the absence of
unions in many American industries and the overall inefficiencies present in
the labor market, many individuals are not in a position where they can
negotiate a wage that is worthy of the quality of work they provide.

------
radicalbyte
The problem with the American system isn't the culture of direct donations
from private individuals. The problem is that too few people have the means to
give: it's the distribution of wealth.

A culture where private people donate is really attractive. I know that I get
a lot of joy when I help people out - I donate regularly to the causes I feel
important (mainly Africa, as a Brit living in Netherlands I figure I owe
them). As the article says, it improves social cohesion.

Wouldn't it be nice to live in a society where "everyone" enjoyed the gift of
giving?

~~~
merpnderp
In the US a lot of people who aren't billionaires or even millionaires donate
a lot of money. And people donate a lot of time to their causes.

[http://www.nptrust.org/philanthropic-resources/charitable-
gi...](http://www.nptrust.org/philanthropic-resources/charitable-giving-
statistics/)

[http://nccs.urban.org/nccs/statistics/Charitable-Giving-
in-A...](http://nccs.urban.org/nccs/statistics/Charitable-Giving-in-America-
Some-Facts-and-Figures.cfm)

------
jey
This guy takes it as a given that the Government is well-run and wise. But
what's the practical alternative for someone who instead thinks that the
current political environment is toxic and insane?

~~~
HiLo
You take it as a given that the private sector is well-run and wise.

Nobody is saying either solution is great. All it's saying is that: wouldn't
it be better to have all this power be in the hands of the democratically
chosen, versus billionaires who may or may not be making relevant investments?

edit: Just downvotes, no response?

~~~
bmmayer1
"wouldn't it be better to have all this power be in the hands of the
democratically chosen"

This assumes the money in question belongs to the state to begin with, and
we're merely deciding how it is to be allocated. That is not the case. This is
not the rich deciding what to do with the public money, it's the rich deciding
what to do with their own money.

I think we would all agree, regardless of level of income, we would rather our
own money be allocated to the causes that we support, rather than the causes
that 51% of people support.

~~~
HiLo
"it's the rich deciding what to do with their own money."

No, I wouldn't agree on that at all. That runs entirely counterproductive to
what our society is built on. This is the arrogance people talk about - you
think you know what is better for people than they do.

~~~
saosebastiao
Actually, it is, at least using your own arguments. The money in this case
actually does belong to the billionaire. He earned it under the legal
environment decided by our democratically chosen government. And he gets to
keep what the democratically chosen government decided is his to keep. And he
gets to choose how to spend it, because the democratically chosen government
has decided to afford him that freedom.

------
jeffdavis
The trade is this: if you made $100 and your marginal tax rate is 20%, you can
either (a) let the government spend $20 however it sees fit and you spend $80
however you see fit (which may be an $80 bottle of wine); or (b) you spend
$100 on any charitable cause you see fit (which must meet certain
requirements).

That doesn't seem like a bad trade to me, especially since rich people have
fairly low marginal tax rates.

~~~
kuschku
And that’s how the US ends up with horrible roads, transit quality going down,
and so on.

~~~
sliverstorm
Terrible roads seem far too local of a problem to be due to philanthropic
billionaires diverting wealth. Quality seems to vary distinctly by county or
city; I once lived near a city line where the line was demarcated by the
abrupt transition from flawless asphalt to a minefield of potholes. Neither
was a particularly famous, wealthy, or powerful county, and neither had
resident billionaires.

No, I'm more suspicious of measures like California's Prop 13, as well as
county and city level management.

~~~
kuschku
Well, tax loopholes in general lead to less taxes. Which leads to budget cuts.

For example, look what happened in the UK:
[http://www.theguardian.com/commentisfree/2015/nov/11/david-c...](http://www.theguardian.com/commentisfree/2015/nov/11/david-
cameron-letter-cuts-oxfordshire)

------
jessriedel
Anyone who thinks that the federal government will spend money better than a
charity is free to give it to the IRS. They accept donation. But no one
believes this is a good idea, as evidenced by the fact that such donations are
_many_ orders of magnitude less than Americans donate to charity.

~~~
mnx
This is a really important point to make. The government may be democratically
elected, but that doesn't mean that much, because of how the political system
works. When people have the choice directly, they don't vote for the
government. Also, comparing track records, the government has a really bad one
when it comes to actually helping the poor, not just giving them enough money
not to die.

------
Maultasche
Perhaps the German government can make good decisions about where to spend
money, since I know they put lots of money into science and culture, but I
wouldn't trust the US Congress to do the same.

The US federal government is far more likely blow it all on the military
weapons systems or funding tax cuts that benefit the wealthy rather than
funding guinea worm eradication or anti-malaria initiatives in Africa. The
typical US congressman is unwilling to spend money altruistically on things
that aren't perceived as directly benefiting the United States.

Sure, billionaires aren't saints either, but I think it's far more likely that
they'll donate to causes that are geared toward having a positive long-term
impact on humanity as a whole.

------
narrator
50 billion dollars is about 1/2 the budget of the State of California for a
year. It's really not that much in terms of government expenditures. However,
If used creatively, it could have a huge impact on the world, but that takes
vision. Money without creativity and vision does nothing except raise the
price of everything.

~~~
Veedrac
Precisely. The article hasn't been justifying the claim that large charitable
donations are bad; it has being justifying the claim that not taxing
charitable donations is bad.

But I'm not inclined to believe that, since I can reasonably believe that the
increase in charitable giving from not having the tax is more significant than
the gain from having the government control 20% or so of it.

------
basaah
Someone recently suggested this book [1] to me. I'm still reading it, but
enjoying the ride so far.

The 'shift of power away from the government' argument is just one of the
arguments made in the book, and author Linsey McGoey discusses it much more
thoroughly than the article does. See quote /a/

[1] [http://www.versobooks.com/books/1959-no-such-thing-as-a-
free...](http://www.versobooks.com/books/1959-no-such-thing-as-a-free-gift)

/a/ The second concern is that philanthropy, by channelling private funds
towards public services, erodes support for governmental spending on health
and education. Outspoken observers such as Michael Edwards, a former executive
at the Ford Foundation, point out that private philanthropy is no substitution
for hard-fought battles over labour laws and social security, in part because
philanthropy can be retracted on a whim, while elected officials, at least in
theory, have citizens to answer to.

------
BjoernKW
Yeah, rather leave that money to the state who will spend it on actually
useful things such as new wars that will make the military-industrial complex
even wealthier.

This kind of thinking unfortunately is common in continental Europe,
particularly in Germany and France. This is not all about the common good or
democratic legitimacy. It's really all about redistribution of wealth and
getting back at "the rich". It's about slave-moral thinking that strives to
punish the well-off and make everyone feel equally miserable.

------
snorrah
Article suggests the Chan Zuckerberg initiative is non-profit, but I'm reading
from multiple other sources that is definitely not the case.

Not sure who's right, but if it's not WaPo, then that's some terrible fact
checking and kinda invalidates the whole article.

Edit - Chan Zuckerberg is a for profit, that will fund non profits, so WaPo is
actually incorrect.

~~~
steveklabnik
I don't think that level of detail is publicly available yet. And even non-
profits start out as an LLC, and then gain that designation, so that _could_
be what's happening here.

------
skybrian
The argument doesn't make much sense to me. Each government is basically a
single decision-maker that already has a very large budget. Just by watching
the news, we know these decisions aren't always all that rational (though
democratic!). Giving more money to a government doesn't increase diversity of
funding sources at all.

Starting another large foundation creates a new source of funding with an
independent decision-making process. This increases diversity in sources of
funding. (Though not as much as breaking it up into multiple charities.)

Whether it's a net improvement or not depends on whether their decision-making
is better than average. Unfortunately, little can be done about charities with
poor decision-making (there are no market forces, and corruption is possible).
But at least it's independent.

------
exelius
IMO both have their merits.

Governments are good at solving broad, societal level problems. If they
weren't, they would be overthrown and replaced. But they're remarkably
inefficient at solving individual, specific problems: they can do it, but it
will take 4x as long and cost 10x as much as it should. Also, government
intervention is limited in scope - it's hard to be philanthropic outside your
constituency.

That's where philanthropists can step in. There are some problems that don't
provide enough benefit to any single government to throw weight behind
solving, but that require massive resources. Bill Gates' anti-malaria campaign
is a good example: no country with the money to fund a malaria eradication
program has significant rates of malaria.

------
mmaunder
I'm curious why this dropped completely off the home page? Do posts get nixed
by mods? If so, why this one? [I don't really care, just curious about the HN
moderation process]

~~~
nkurz
I'd appreciate if Dan would chime in, but I think it likely triggered the
"Flamewar Detector". I think this is based on a ratio of Upvotes to Comments,
possibly adjusted by flags, but I don't think it's been fully described.

This isn't a perfect system, as sometimes contentious conversation can be
better than non-discussion. But overall it's probably a good to have a
temporary throttle until a moderator can make finer grained fixes.

------
cjbenedikt
There are two trains of thought in the comment section: one that argues
because the billionaire made the money himself (unless he/she inherited it)
he/she should be entitled to distribute it and the other that he/she may be
better positioned to do so than the state. You can argue that the billionaire
was only able to make so much money because the country/state he/she lives in
provided the necessary infrastructure and environment. Paid for by the tax
payer. As Warren Buffett famously said:"Had I been less fortunate and be borne
in another country I probably would have become lion fodder." Hence, he/she
should pay his taxes as a payback to the taxpayer. You can also argue that the
billionaire, because he/she is so successful, must be better in determining
what to do with his/her money than the state. However, research suggests that
many successful entrepreneurs had significant luck (as Buffett's quote
suggests too). Take successful hedge fund managers for example. It also runs
against the idea of Democracy. Because if you follow through with this line of
thought you may well abolish any elections and leave it to the billionaires to
decide who rules - which is almost the case in the US, isn't it?

~~~
abandonliberty
Tangent: >leave it to the billionaires to decide who rules - which is almost
the case in the US, isn't it?

I realized a few years ago that this is the end result in any organization,
but some German beat me to it in 1911.

[https://en.wikipedia.org/wiki/Iron_law_of_oligarchy](https://en.wikipedia.org/wiki/Iron_law_of_oligarchy)

>Michels theory states that all complex organizations, regardless of how
democratic they are when started, eventually develop into oligarchies.

------
radicalbyte
I would be very interested in seeing what percentage of the "social" donations
are going to "Religious" organizations, per country.

~~~
bmmayer1
Just because an organization is religious doesn't mean it can't provide social
benefit. The air quotes seem unnecessary.

------
ucha
The maximum estate tax rate in the US is 40%. Sure, donations are tax free,
but the donated assets amount to at least 2.5 times what the government would
have gotten.

Is it acceptable to have the privilege to choose where your fortune will be
allocated when you give away a supplemental 150% of it? Maybe it's not or
maybe it is; I would strongly lean towards the latter.

------
lispm
One of the arguments here in Germany is that if these billionaires were
actually paying taxes, the country would have more money and there would be
less to pledge. Generally the thinking is that public sector should run many
basic services and should provide/organize enough welfare to those in need.

------
mynameishere
It depends on what you like. Many people are probably happy that organizations
like the Ford Foundation will advocate globalist left-wing anti-Americanism
_forever_. Bill and Warren and Mark's money will do the same as well, no
matter their intentions. O'Sullivan's law.

There's no point in arguing about whether the state is better suited to handle
the money. It would actually be better off cashed out, piled up, and burnt.
Literally. A tiny deflationary event vs. eternal troublemaking.

~~~
kuschku
I’ll just let you know that without the money spent by the German government
you wouldn’t have mp3, or AAC.

You wouldn’t have most of modern technology, nor would you have Wendelstein
7-X.

You wouldn’t have DHL or T-Mobile.

Sure, they waste lots of money (BER, S21, Elbphilharmonie), but still they
manage it better than the private sector ever could.

The top politicians earn less than the managers of any company at that size —
Merkel earns 216'000€ a year. The CEO of even middle-sized companies end up
making far more than that.

~~~
pyvpx
uhh, DHL was started by three folks in California.

~~~
kuschku
And is owned by Deutsche Post nowadays, a German governmental entity.

------
Tiktaalik
I'm curious, with the LLC structure of the Chan Zuckerberg organization, there
is more flexibility than a non profit. Are there any checks at all to ensure
that it is actually operated as a charity? For example, thinking generations
ahead, could a Mark Zuckerberg III go against his ancestor's wishes and take
the private company in a totally different direction and not actually do any
charitable work with the money?

------
shmerl
_> It is all just a bad transfer of power from the state to billionaires._

Complaining about that is missing the forest behind the trees. With Citizens
United and general ineptitude of the legislative branch to produce any
significant fixes to the system, that power is long transferred.

------
Kinnard
[https://news.ycombinator.com/item?id=10670604](https://news.ycombinator.com/item?id=10670604)

------
amai
Peter Krämer is actually also one of the few billionaires who is in favor of
reintroducing a high wealth tax in Germany.

------
damosneeze
> It is all just a bad transfer of power from the state to billionaires.

And who owns the state? Last I checked, it was billionaires.

------
arasmussen
I personally trust Mark Zuckerberg more then I trust our government with the
money. I think it will go a lot farther. I wouldn't say that about every
billionaire though.

------
jstalin
Politicians should decide how your money is spent, not you.

~~~
kuschku
Voters should decide how taxes are spent, not billionaires who evade taxes.

~~~
thatswrong0
Tax avoidance =/= tax evasion. One is legal, one is not.

~~~
kuschku
One of them is breaking the law, the other is working around it – but the
intention is the same.

~~~
thatswrong0
Not in my mind - no one pays more tax than they need to. Are we saying that
_every person in the country_ has the same intention as illegal tax evaders?

It's hypocritical to point out someone who is avoiding tax just because they
are doing it on a larger scale than you unless you voluntarily pay more taxes
to the government than you need to.

------
rwmj
This is JWZ's opinion (in strong terms):

[https://www.jwz.org/blog/2015/12/zuckerberg-has-not-
donated-...](https://www.jwz.org/blog/2015/12/zuckerberg-has-not-donated-
anything-you-gullible-credulous-pinheads/)

