Charity Begins With Wealth Creation


Charity—helping people who have trouble helping themselves—is a good thing two times over. It's good for the beneficiary and good for the donor, too. Stephen Post's fine book, The Hidden Gifts of Helping, reveals that 76 percent of Americans say that helping others is what makes them most happy. Giving money makes us feel good, and helping face-to-face is even better. People say it makes them feel physically healthier. They sleep better.

Private charity is unquestioningly better than government efforts to help people. Government squanders money. Charities sometime squander money, too, but they usually don't.

Proof of the superiority of private over government efforts is everywhere. Catholic charities do a better job educating children than government—for much less money. New York City's government left Central Park a dangerous mess. Then a private charity rescued it. But while charity is important, let's not overlook something more important: Before we can help anyone, we first need something to give. Production precedes donation. Advocates of big government forget this.

We can't give unless we (or someone) first creates. Yet wealth creators are encouraged to feel guilt. "Bill Gates, or any billionaire, for that matter," Yaron Brook, author of Free Market Revolution and president of the Ayn Rand Institute, said on my TV show, "how did they become a billionaire? By creating a product or great service that benefits everybody. And we know it benefits us because we pay for it. We pay less than what it's worth to us. That's why we trade—we get more value than what we give up. So, our lives are better off. Bill Gates improved hundreds of millions of lives around the world. That's how he became a billionaire."

Gates walks in the footprints of earlier creators, like John D. Rockefeller, who got rich by lowering the price of oil products, and Cornelius Vanderbilt, who did the same for transportation. The clueless media called them robber barons, but they were neither robbers nor barons.

They and other creators didn't just give us products to improve our lives, they also employed people. That's charity that keeps on giving, because employees keep working and keep supporting their families. "That's not charity," Brook said. "(It's) another trade. You pay your employees and get something in return. But the employee is better off, and you are better off.

"And when you start thinking about the multiplier effect, $50 billion for Bill Gates? That's nothing compared to the value he added to the world. That is much greater than the value he'll ever add in any kind of charitable activity." Gates now donates billions and applies his critical thinking skills to charity. He tested ideas in education, like small high schools, and dumped them when they didn't work. Good. But if he reinvested his charity money in Microsoft, might he have helped more people? Maybe.

Brook points out that Gates gets credit for his charity, but little credit for having created wealth. "Quite the contrary," Brook said. "We sent the Justice Department to go after him. He's considered greedy, in spite of all the hundreds of millions of people he's helped, because he benefited at the same time. (When) he shifted to charity, suddenly he's a good guy. My complaint is not that he's doing the charity. It's that we as a society value not the creation, not the building, not the accumulation of wealth…. What we value is the charity. Yes, it's going to have good impact, but is that what's important? … Charity is fine, but not the source of virtue. The source of virtue is the creation and the building."

What especially offends Brook, and me, too, is stigmatizing wealth creators. The rich are made to feel guilty about making money. I sometimes attend "lifetime achievement award" ceremonies meant to honor a businessman. Inevitably, his charity work is celebrated much more enthusiastically than his business creation. Sometimes the businessman says he wants to "give back."

Says Brook, "It's wrong for businessmen to feel like they need to 'give back' as if they took something away from anybody."

He's right. They didn't.

If we value benevolence, we must value creation.


NEXT: Ron Paul Hits NRA: "School shootings, no matter how horrific, do not justify creating an Orwellian surveillance state in America."

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  1. I did Bill Gates on his desk!

  2. Geez, what was Bill Gates mainlining in those days?

    1. Based on that pedobear look, I’d say 10-year-olds.

  3. Alt-Text: “Want to see why they call it MicroSoft?”

      1. I’d like to thank the Academy…

  4. Production precedes donation. Advocates of big government forget this.

    I doubt it. Charity is something that exists outside the state, and well, those BigGov advocates believe “Nothing outside the State”. Further that money is money that the state could/should have seized through taxation but did not, so it violates “Everything for the State” as well.

    They aren’t ignorant of charity; they are hostile to it.

    1. Or, at best, want to control it.

    2. stossel’s faulty assumption, common to many libertarian apologists for the wealthy, is that the wealthy did not accrue their wealth through state advantage.

      Microsoft, for example, had plenty of government contracts… The USS Yorktown comes to mind. But also more subtly, through IP enforcement.

  5. Call me a faux libertarian if you wish but I detest the one sided view of the industrial titans as angels. These guys exploited political connections and used every trick imaginable to benefit themselves first and foremost. The good they did through philanthropy doesn’t erase the this. How about pointing out that Rockefeller would have preferred none of us had access to the light bulb or the pollution Standard Oil was responsible for?

    Don’t get me wrong what these men did pushed society forward in unimaginable ways, but it’s intellectually dishonest to set aside the the at times criminal behavior of the industrial titans.

    1. How about pointing out that Rockefeller would have preferred none of us had access to the light bulb or the pollution Standard Oil was responsible for?

      And yet even without your Top Men to promote the light bulb (only brought to reality by JP Morgan), somehow we all use light bulbs instead of kerosene lamps.

      Government didn’t kill oil lamps, the market did.

      1. Sooner than later, the market is also going to kill big government in America (i.e. when the bond market stops allowing the fed gov to dictate its own interest rates on what should be shit debt).

        The market is also going to abandon the dollar, because leviathan demands the unfettered printing of fiat dollerz to keep itself alive. The dollar will be abandoned as the global reserve currency, and big government is done.

        The moral of my story is, as always, remember to buy physical gold. Because it is no accident that bernanke closely resembles the Architect of the neo-liberalism matrix lolzolsolslzlzolz.

        1. when the bond market stops allowing the fed gov to dictate its own interest rates on what should be shit debt

          The bond market hasn’t set the interest rates on Treasuries since probably 2009, maybe earlier.

          The Fed has been clearing Treasury auctions at low rates for at least that long, and has been involved (through QE buying) in taking Treasuries off the market generally, to make sure the secondary market doesn’t start making trouble.

          1. You can only monetize debt for so long. It is only due to the dollar’s status as global reserve currency that it has been able to last this long. But our political class (and our electorate) has abused that status, and the printing of fiat dollarz is already pushing countries away from the dollar (i.e. China, Russia, Iran, etc.)

            It is very pertinent to the subject of this article: America’s capitalist system (and men like Rockefeller, Ford, Carnegie, Gates, etc.) built this country and the dollar, but the statists and collectivists are abusing it in order to keep their welfare state going. Forced charity (and its consequent statism) is destroying our civilization instead of achieving allegedly benevolent aims.

      2. Do you think if Rockefeller had the opportunity he would not have tried to ban the light bulb as unsafe? I wouldn’t be surprised if he had a conversation with quite a few Pols about the possibility…

        The Industrial Titans were who they were. Neither angels or demons just men who did some great good and some despicable evil.

    2. Call me a faux libertarian if you wish

      you passed that marker and went to full-blown leftard derp with the “pollution Standard Oil..” part. What a pity that the buggy industry was put out of business and that man’s standard of living was immeasurably improved through the combustion engine.

      On the other hand, you are getting your wish re: the treatment of perceived criminality what with The Obama demonizing everyone who ever done something outside the control of Big State.

      1. I have to wonder if the pollution from motorized transport is more or less than the pollution from animal transport, myself.

        1. Not to mention dead horses left lying in the streets.

      2. Rockefeller and Standard Oil did not safely dispose of the by products of oil production. This pollution violated the property rights of many. How is that a leftist argument.

        Dogma cannot change facts. Now I’m quite happy with the advancements in society that the titans enabled. There accomplishments don’t absolve them of responsibility for their misdeeds.

        1. This pollution violated the property rights of many.

          Step 1: Go to court
          Step 2: Show damages
          Step 3: ???
          Step 4: PROFIT

          If you can’t do that – if your damages are imaginary or unquantifiable – then your property rights weren’t violated.

        2. Actually, relative to the industry at the time, Standard Oil dramatically lowered the amount of pollution from the refining process. They didn’t view it as pollution reduction, but reducing waste and spillage. One of the major drivers of the growth of the internal combustion engine is the fact that Rockefeller wanted to find a market for one of the byproducts of the kerosene refining process that was Standard Oil’s staple – gasoline.

      3. Call yourself whatever you want, but we’ll expect you to return the monocle post haste.

    3. The problem comes when criminal behavior is excused for these titans, and that’s where Bill Gates’s business practices came to be investigated by the justice department, not his wealth.

      Articles like this one are damaging to the cause of libertarianism by oversimplifying the issue into “stop demonizing the rich” when it calls for us to ignore the rule of law to do so.

      1. Bill Gates’ only “crime” was that of designing systems no one else could compete with. The government had to “investigate” him, in order to justify the continuation of its protection racket.

        But as for you and me, Gates revolutionized our lives. He has given you far more than you could ever give him.

        The same was true of Rockefeller. As Standard Oil gained market share in the 1870’s, refined oil prices dropped continually. The greatest beneficiaries of Rockefeller’s or Gates’ productive genius was not themselves, but their customers.

      2. ^^ THIS! ^^

        So called “pure” libertarianism can’t exist anywhere other than a classroom. To think that Rockefellar, Carnegie and Morgan were anything other than flawed yet genius and enterprising men is rewriting history. To think that given their druthers they would not have slit the throats personally of their competitors regardless of what was good for the public at large is stupidity. And they would have gladly paid whatever was necessary and often did) to cover the crime.

        1. Why can’t we simply prosecute crimes instead of trying to claim crimes where they don’t exist? Standard Oil (according to nihilistzero) was guilty of violating property rights, and Microsoft abuses patent protections, but neither could have been a monopoly without a combination of government coercion of competitors and refusal to prosecute crime. Both were guilty of crimes, but not of the “crime” of monopoly.

          You’re probably right that all these men would have happily slit the throats of their competitors. This is crime and should be treated as such. How does this in any way show that libertarianism can only exist in a classroom? Perhaps if the classroom is the only place we can see crimes for what they are (which today is probably true but not objectively so).

        2. To think that given their druthers they would not have slit the throats personally of their competitors regardless of what was good for the public at large is stupidity.

          If they literally slit the throats of their rivals they would be guilty of murder and should be locked up. If you mean that figuratively they would have utilized any competitive advantage to outperform their rivals in business, then no crime was committed by any moral standard except pure communism. That’s also the only framework from which the fact that they didn’t consider the “good of the public at large” when exchanging value for value in a business deal would be even tangentially relevant.

        3. It’s a fair claim that guys like Gates or Rockefeller wouldn’t hesitate to skin anyone they could to add to their fortunes. As much as their achievements are to be celebrated, it’s foolish to pretend that they were saints working for the public good. Now, ask yourself a question, if they’re such vicious bastards and ruthless competitors, why on earth would you trust them with a gun at your head? Because that’s precisely what an activist state does. In a world that’s governed by government fiat, it’s ultimately going to be rich, resourceful, ambitious and ruthless men – the John D. Rockefellers, the Andrew Carnegies, the Pierpont Morgans, and the Bill Gateses of the world – who will find their way to access political power. The difference being that such a system would reward only their avarice, their ruthlessness and their manipulativeness, not their ability to produce and innovate.
          You note that Rockefeller would have been delighted to ban the electric light. It was a tribute to the power of liberty at the time that, as happy as he would have been to do so, and as many politicians he might have bought to help him in such a quest, the state didn’t have that power at the time. Instead, he had to find a market for a byproduct of the kerosene production that had been Standard Oil’s staple – gasoline and the internal combustion engine. Since then, Rockefeller’s “green” compatriots have managed to ban the lightbulbs that he so feared in favor of CFCs.

      3. Don’t confuse Rockefeller’s pollution with Gates’ activities. Gates made no trespasses, and received no subsidies. Microsoft had no lobbying presence until they started being investigated for “anti-trust” “violations”. The Nihilist is making a very over-broad generalization here regarding the ultra-rich.

        1. The Nihilist is a collectivist fuck, employing collectivist fuck rhetoric, if that’s what you mean.

  6. Bankers are a clear exception to this idea. They create nothing.

    1. Unless you think capital formation and lending are important to an economy. Other than that though, yeah, nothing.

  7. “You praise any venture that claims to be non-profit, and damn the men who made the profits that make the venture possible.”

  8. I agree about the “giving back” phrase. As long as someone doesn’t live on charity or by theft from others, he must give value to get value. There is continuous giving and giving back. The person who is lauded for (or, as some say, “guilted into”) “giving back” actually gives MORE.

  9. “Neither robbers nor barons?” Well, regarding the former, being that I lean toward being an anarchist and pro-free market, these robber barons were nothing but. Mercantilism always includes officials very happy to be bribed.

    Can’t say it better than Alfred Adask:

    “These “robber barons” devised schemes whereby their seemingly disparate corporations could combine to gain control of markets, freeze out competition, create monopolies, and then raise prices, profits and power to exorbitant levels. These objectives were achieved in a number of industries?in part because the robber barons were able to bribe congressman, senators and even presidents enact laws that favored monopolies.”

    1. Whew, I thought I was alone. Without government thugs no monopoly can survive in a market unless its offering prices lower than could be achieved otherwise. If a monopoly is “price-gouging” then that must mean their products can be produced cheaper by a competitor.

      1. Standard Oil never had any help from the government. Rockefeller won because he was the best, because no one could refine and distribute oil products as cheaply as he could.

        The same is true of Carnegie, Ford and most of the men we are told to regard as “robber barons”. But if you want to find crony capitalism in the gilded age, look no further than the railroads.

    2. Tell me, what mechanism of a completely laissez-faire market would prevent the formation of a monopoly? And by what (non)authority would your anarchist (non)government prevent monopolies from forming? Oh, and what (non)authority of the (non)state determines when prices and profits have become “exorbitant”?

      These objectives were achieved in a number of industries?in part because the robber barons were able to bribe congressman, senators and even presidents enact laws that favored monopolies.

      Like what, the Sherman Antitrust Act? The reason why the “monopolies” had to disguise themselves as “seemingly disparate corporations” was precisely because of the institutional prohibition on monopolies – however derived. You’re either really ignorant or really stupid.

      1. The point to be made is: a monopoly cannot happen in a laissez-faire system. In the absence of state intervention, if one company dominates an industry–so what?

        It can only do so by offering the best money can buy.

        1. Exactly. Natural monopoly exists when market efficiency is maximally achieved by concentrating production with a single firm, and even then there is no guarantee of perpetuity of the monopoly because the only barrier to entry is sufficient capital. I have a hard time understanding what part of “These “robber barons” devised schemes whereby their seemingly disparate corporations could combine to gain control of markets, freeze out competition, create monopolies, and then raise prices, profits and power to exorbitant levels.” would be distressing to a laissez-faire anarcho-capitalist in principle.

  10. What would the biblical “Good Samaritan” have done without his wealth? Probably passed by or paused to see if there was anything of value left on the robbed man.

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