
Why Zuckerberg’s Critics Are Wrong - donohoe
http://www.newyorker.com/magazine/2015/12/21/in-defense-of-philanthrocapitalism
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necessity
>Governments do better at providing public goods (defense, say, or education)

Not really. At least not necessarily. Health and education as provided by the
government in Brazil is just horrendous. People die in line and student's
grades are far, far below private schools. Public security is non-existence,
whereas organized communities both poor and rich enjoy relative security with
private guards in the streets and electric fences or barber wire on their
houses fences. Generals have said Brazil has ammunition for just 1h of war[1].
There was recently a rise in the private education sector, with competition
leading to affordable prices for the poor. However, with the current recession
I think the sector has slowed to a halt, like all others.

[1] [http://exame.abril.com.br/brasil/noticias/exercito-
brasileir...](http://exame.abril.com.br/brasil/noticias/exercito-brasileiro-
possui-municao-para-uma-hora-de-guerra)

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PhilWright
I have three problems with the original press release and what it entails.

1 = It comes across as the most epic humble brag of all time. The short form
of the release is simply 'Look how great I am for making 10's of billions and
how amazing I am for giving most of it to charity. Hell I will only leave a
handful of billions for myself to live off.'

2 = He should not be trying to get credit for something he has not actually
done yet. You cannot expect credit for giving 10's of billions to charity
until you have actually given it to charity. Wait 20 years and then issue a
press release showing how much you have actually given away.

3 = Maybe this is more of cultural issue but it is the height of uncouth
behaviour to boast about your charity work. The first we hear about your
charity work should be many years in the future when it is exposed that you
have given billions to good causes. Deriving even the smallest credit for
charity giving only diminishes the giving.

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philwelch
> Maybe this is more of cultural issue but it is the height of uncouth
> behaviour to boast about your charity work. The first we hear about your
> charity work should be many years in the future when it is exposed that you
> have given billions to good causes. Deriving even the smallest credit for
> charity giving only diminishes the giving.

The Jobses donated anonymously to charity for years and all we ever heard
about was how Steve Jobs was an asshole because, unlike Bill Gates, he wasn't
a philanthropist.

Contrariwise, Bill Gates gave billions of dollars to charity, but only his own
charity named the "Bill and Melinda Gates Foundation" of which he is the full
time co-chair, and uses his celebrity to popularize their work.

~~~
sombremesa
> all we ever heard about was how Steve Jobs was an asshole because, unlike
> Bill Gates, he wasn't a philanthropist.

Whoever you heard that from was probably not worth listening to, though.

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thesunny
The harsh criticism feels unwarranted to me as well.

It honestly feels to me like a little bit of misplaced self insecurity.

I kind of get it, but considering that there is no evidence of ill will, I get
the sense that people are reacting to something other than what's actually
happening here (like their dislike for Zuckerberg's fortunes, how he got it,
Facebook privacy issues, etc.)

To put this into context, if a young mother dedicates 99% of her life (but not
billions because she doesn't have it) into charity and she does so in the name
of her children and their future, I doubt she would be receiving the sort of
harsh criticism that Zuckerberg is receiving for the same thing.

It reminds of people's hatred for SUV's (seems to have died down more
recently). It was always under the guise of the environment, but really other
types of environmental waste were not really villified to the same extent. For
example, it's far worse to own a non-SUV and decide to live out in the suburbs
and drive to work than to live nearby work and have an SUV.

I'm not a Zuckerberg fan-club member, but what he did would be something I
wish I could do someday and it doesn't seem weird at all to me to do this in
dedication of my child. I also feel, from a pragmatic point of view, that we
need to be encouraging people to donate.

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iamcurious
>if a young mother dedicates 99% of her life (but not billions because she
doesn't have it) into charity

That is the point. He is not dedicating 99% of his life, he is moving money
around. If an average person gives 5% of his income to charity he is losing
power and losing opportunities. He is sacrificing his well being and that of
his immediate family for charity. If someone with as much money as Zuckerberg
or Gates does it he is increasing his power and his opportunities. They still
get influence, they earn karma points, they get a legacy, they still decide.

The average guy giving is a hero, Zuckerberg is not.

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TeMPOraL
So what?

This sounds like a twisted, reversed version of Widow's Mite[0], in which the
rich guy is being hated for giving a lot of money for good purposes. Yes, the
average person (or the poor person) is giving up much more personally. But
even the Bible story doesn't deny that the rich guy giving lots of money is
doing _much more_ for the cause. If you care about _actual effect_ , as
opposed to judging someone's moral state (to which Jesus is entitled, you're
not), you should be happy that a rich person can single-handedly give more
good than most other donors taken together, and you should encourage more rich
people to drop their money, instead of scaring them off.

It's results that matters.

[0] -
[https://en.wikipedia.org/wiki/Lesson_of_the_widow%27s_mite](https://en.wikipedia.org/wiki/Lesson_of_the_widow%27s_mite)

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iamcurious
>you should be happy that a rich person can single-handedly give more good
than most other donors taken together

How is that supposed to make me happy?

>It's results that matters.

What results beyond Zuckerberg having even more power and influence than
before?

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TeMPOraL
> _How is that supposed to make me happy?_

Because significantly more good is being done? It should make you happy if you
care about the particular issue being solved. If not, that's fair, but it
means we're not complaining about philanthropy anymore, but about rich people
being rich.

~~~
iamcurious
_You_ claimed I should be happy about rich people being rich. I asked how you
expected me to do that.

Also, I'm not sure good is being done at all. As my second question showed.

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scholia
Actual title: In Defense of Philanthrocapitalism, by James Surowiecki

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zevyoura
The page has the same title as this story currently, so at least the
clickbaity title is coming from the source and not OP.

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dayon
Surowiecki did a horrible job of making a case for his conclusion. After
reading that, I'm left wondering why his critics are wrong. Perhaps he should
have avoided the click-bait title and tried to actually explain something
reasonably rather than arguing from the position of "Zuckerberg and I are
right, and you're wrong. Now I'm going to write some paragraphs".

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mangeletti
Here's an idea:

Don't allow tax deductions on "charitable" contributions.

If, for instance, somebody wants to give $100MM to Central Park, let them do
it because they like Central Park that much, rather than because they like it
$70MM worth, and the tax payers can cover the other $30MM.

Philanthropy is about giving, period. Not giving when it has financial
benefits that make it easier at the expense of others.

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ant6n
I think it's perfectly reasonable to deduct charitable contributions - up to
say, 10K per year. There exist people who sit on huge amounts of unrealized
capital gains. If they donate 100M in stock, then they can sell 100M in stock
without ever paying any taxes whatsoever.

~~~
mangeletti
I agree that setting a limit (rather than getting rid of deductions
altogether) could be beneficial, while also eliminating a lot of the abuse,
but there is one other thing to consider:

If the limit is $10,000, the middle class and wealthy gain the benefits of
directing tax dollars while the underclass remain unrepresented.

I'm a capitalist through and through (you might guess that based on my ideas
herein), but giving different people different rules is always a problem.

~~~
ant6n
Well, you could make it 1K$. But I think the issue is to try to make it harder
to use donations for tax-avoidance by very rich people; this isn't really
about the middle class vs poor people (who tend to pay fewer taxes anyway).

I think another general issue is that many deductible donations go towards
organizations that spend very little on their prescribed cause; or aren't non-
profits or for the benefit of the public at all.

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tim333
I think the critics are mostly, maybe at a subconscious level annoyed by the
unfairness of Zuckerberg first having a fortunate upbringing / IQ, then making
$45bn before turning 30 and then doing saint like stuff. So they try to knock
him down which I guess is understandable, and rationalise it in various not
totally logical ways which I guess is human nature.

~~~
david927
I'm glad you're making an effort to understand the criticism, but
unfortunately you need to spend more time doing so.

His company, Facebook, is infamous for not paying taxes. (On profits of three
billion last year, it paid six thousand dollars in corporate taxes.)

Now, instead of paying taxes on his personal capital gains, he's placing them
in an LLC, which he controls, ostensibly to do philanthropic work.

He could avoid all criticism by simply paying his taxes.

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RyanGWU82
My understanding is that the founding of the Chan Zuckerberg Initiative has no
tax implications at all. The only way that tax would be avoided is if the
foundation sells some Facebook stock and donates the proceeds to accredited
non-profits in the same year. But the exact same deductions would apply if the
Chan-Zuckerberg family donated directly.

~~~
david927
That's opaque; of course it's the same as if he had donated directly.

I'm not accusing him of illegal tax evasion. I'm accusing him, and Facebook,
of legally not paying taxes. That it's legal, though, is of little
consolation. Remember that it was legal to send Rosa Parks to the back of the
bus, at the time. The criticism is directly that its legality is a poor veil
and its morality open to debate.

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cryoshon
I'm going to go out on a limb here and say that "philanthrocapitalism" is a
term used to obfuscate the issue of billionaires setting up tax havens in the
guise of philanthropy. The term implies that philanthropy can be or is a mode
of capitalism, whereas in reality it's the opposite because philanthropy deals
with altruistic allocation of resources rather than profit-seeking allocation
of resources. Let's not use this term, because it's deceptive and doesn't make
sense internally.

Instead, let's do some white hat thinking (purely facts, as little spin as
possible) about Zuck's new venture. Fact: Zuck has laid down a large chunk of
change for a new project, and marketed this project to the public as large
scale philanthropy. Fact: Zuck will get a large amount of leeway on taxes and
oversight by moving his money in this way. Fact: some billionaires before Zuck
have made similar moves that actually turned into fantastic philanthropic
organizations that have made tangible positive impact in the world (Gates
Foundation)-- but others have used the construct as purely a means to protect
their money and get good PR.

These are some of the facts. I do not believe that there is any way to get
around or reinterpret any of them without adding opinion, which probably snuck
in anyway despite my efforts. At this point, I think that the reactions of
those who question Zuck's motives are justified because we haven't had the
time to see the program in action disbursing money as it claims that it will.
A promise, a wad of cash, and a lot of PR do not make an effective
philanthropic organization. Effective philanthropy requires that real, living
people and real institutions are altered in an objectively positive way. The
proper stance is skepticism and a request for more evidence of good will.

EDIT: I will add that the rabid detractors of Zuck have counterparts with the
rabid pro-Zuck crowd... I doubt Zuck is looking out for anyone other than
himself, but there is more to life than celebrity-watching, and it seems petty
no matter how you slice it.

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jegutman
Is it at all clear that Zuckerberg is getting any tax benefit from moving his
shares? I believe the "foundation", which is not a non-profit, will still pay
taxes when it sells FB shares. If the LLC donates to a non-profit then it will
get a tax benefit.

IANAL, so please someone who is actually informed feel free to correct me. A
lot of what I've seen written is completely un-nuanced and probably wrong.

~~~
hsitz
I am a lawyer -- or used to be one -- and your understanding is consistent
with mine. I think some people are confused and think there's something shady
going on, because they think Zuckerberg is getting some tax benefit from
gifting to a non-charitable organization. But what you say is actually what's
happening: no tax benefit to Zuckerberg on the gift to the LLC, although the
LLC itself will be able to claim tax benefits by making subsequent gifts to
non-profits.

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xlm1717
Some people have a tendency to tell other people what to do with their money.
This can range from annoying when it's some pundit doing it, to dangerous when
it's someone in government.

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mahouse
Surowiecki

