See, Ozmandias? You should have opted for the school of engineering.
Slate’s article by Jordan Weissmann, its senior business and economics correspondent, about the largest donation ever made to Harvard University is one of those monstrosities that has great value as an ethics test. If you think his argument is reasonable, then you need help.
Essentially, the Slate piece is the ultimate example of an unethical argument I have focused on before, which can be summarized as, “If you give to what you care about rather than what I care about, then your donation is unethical.”
Unless your contribution is to ISIS, or isn’t really a contribution but an attempt to buy access for your own purposes (like with, to pick an example out of the air, a donation to the Clinton Foundation), there is nothing unethical about a $400,000,000 donation, which is what John Paulson just gave to Harvard University’s endowment for the School of Engineering and Applied Sciences. The school will be renamed after Paulson, which Weissman also finds repugnant. The title of the piece: “Billionaire’s Ego Donates $400 Million to Harvard.”
Let me pause here to note that I refuse to give my money to Harvard, which solicits me regularly. The university is rich, I’m not, and I prefer to give my charitable gifts to Georgetown Law Center, specifically to the student theatrical organization I founded there, which like all theater groups, needs funds. I am sure Weissman finds my contribution unethical as well, because, really, what good are the arts compared to what he has decreed is worth giving to as the “more pressing causes in the world”? As he sees it, that is, but that’s all that matters.
Let me go through Weissman’s many objections that cause him to sneer at Paulson’s charity:
1. “Gestures to Ivy League schools …inevitably have as much to do with the giver’s ego as their sense of altruism.” Yes, and so do almost all philanthropic donations, regardless of source and objective. The motto in fundraising (I was a professional fundraiser for a decade) is that donors give money for their purposes, not yours. People who give a lot of money to good causes like to have some recognition, and they deserve it. Apparently Weissman believes that the only ethical donations are anonymous ones, because that’s modest. I’m impressed by anonymous gifts, though they often have selfish motivations as well: the donors don’t want to be hounded by more fundraisers. Nevertheless, that lack of modesty is so trivial as a flaw in large charitable contributions that to harp on it is perverse. Successful people tend to have egos that are often in proportion to their accomplishments. The construct of the left is, we know, that accomplishments and success are just randomly distributed fruits of privilege, ergo the self-esteem that often results from such success is as unsavory as the privilege that generates it.
This is, to be blunt, un-American crap.
2. Harvard “does not strictly need more money, especially compared to the financially strapped colleges that typically educate lower-income students.” First of all, this is demonstrably false. Harvard does need more money if it is going to expand and improve its School of Engineering and Applied Sciences, secure that school’s financial health in perpetuity, and do so without sacrificing other objectives it deems important. Harvard also educates lower-income students, the best and brightest of them, and thus the best resources money can buy are expended on the students most likely to make the best use of them for the benefit of society. Weissman believes this is wrong, and that the 400,000,000 should be given to lesser schools, with less of a track record of spending money wisely, while educating less promising students.
I am in sympathy with that argument to some extent. The marginal utility of all that money is less at Harvard than anywhere else, and I can envision the donation having a far more sweeping impact elsewhere: giving it to Sweet Briar, for example. That does not mean there is anything wrong in any way with bolstering Harvard’s School of Engineering and Applied Sciences. The donation is an unequivocal, absolute good.
The money could have been spent “better”? That’s your opinion. It’s not your money. Shut up.
3. “Harvard and its elite peers are by far the biggest beneficiaries of the world’s giving. According to Moody’s, the 40 wealthiest colleges and universities suck up 59 percent of all charitable support devoted to higher ed.” That’s right, the most obviously successful of non-profit organizations, that demonstrably accomplish their missions and do their jobs well, tend to get the most contributions. What a shock. Now, here in Northern Virginia, a rival theater company that has done good work, picked up some important allies, won a lot of awards, raised a lot of money, gets rave reviews more or less by showing up and spends like drunken sailor just got millions of dollars from the city in which they perform, while my company in that same city got zip. Now, I may believe, and indeed I know, that the money that company received would have been better used, created more benefits for the community, and have had a greater impact if it had been given to my theater than the bigger, richer more successful one, but there is no reason in the world for the city to know that, or trust me to accomplish what the other company has already accomplished. Success breeds success. People like to support winners, not losers who might be winners with a little help. Progressives just hate that, and because they hate it, they pretend it’s unnatural and wrong. It is extremely natural, and most of the time, smart.
4. “Paulson is helping to exacerbate the severe and growing gap between schools that teach predominantly well off students and schools that teach the rest of America.” No, he’s not. He’s choosing to reward the school that gave him his degree for its role in his success, and to help an excellent institution keep doing an excellent job of educating its students. He’s not “exacerbating” anything; he’s making a charitable donation to a good cause that he cares about. He isn’t ethically obligated to care about or assist lesser schools, or the students they serve. Let the successful grads of some of those schools give their millions to the non-Ivy League institutions. If none of those grads are making millions, maybe the schools don’t deserve donations. Either way, this is not Paulson’s problem or duty.
5. Here’s a deceitful and dishonest statement: “In the meantime, the man will presumably write this latest mega-donation off from his taxes, meaning the American public will effectively subsidize his act of personal monument-building.”
Why, yes, he will, as the tax policies of the nation have long encouraged charity and philanthropy, and that policy has been a spectacular success at encouraging philanthropy and building a strong and vital non-profit sector. No, the American public isn’t subsidizing anything, as all of this is his money, not “taxpayers’,” and the rules regarding how much of his money he is obligated to pay from his accounts into the Treasury do not trigger any payment in the other direction whatsoever. To confiscation, wealth transfer-obsessed Marxists like Weissman, the maw of Giant Government owns everything, so any amount of wealth the citizen who earned it is allowed to keep is really a “subsidy.” It is not. Nor is his act “personal monument-building.” This isn’t a stately pleasure dome, or Ozymandias’s statue: it’s a school, and a school that will produce research and new technology that will make society, the nation and the world better. 400,000,000 dollars could buy one hell of a monument if that’s all Paulson wanted.
Yes, I guess I am getting a little pissed off. A man gives $400 million dollars to benefit students, research and technology, and this jerk writes about him like he’s a Pharoah.
6. “Which is the sort of thing that makes some people, including the Obama administration, believe we ought to limit charitable deductions.” The word for those people are statists and fools. The charitable deduction has worked spectacularly well, and virtually every study has shown that messing with it would gut the non-profit sector, while sending wealth into other, less beneficial places to avoid taxes while government fails to pick up a million dropped batons. Non-profits do well the things government does inefficiently and poorly or not at all, in part because the good and ethical ones, which is most of them, are operated by passionate activists, not sullen bureaucrats waiting until their pensions vest. Of course Obama wants to limit the exemption. He is not dissuaded from his touching faith in the ability of government to accomplish worthy goals effectively , despite the fact that the waste, ineptitude and incompetence of his own administration will stand for decades as exhibits A through U in the case to the contrary. A college president whose institution performed this badly would be removed inside of a year, and a non-profit this bad at accomplishing its mission would be abandoned by donors and buried by competitors, not to mention facing lawsuits and maybe prosecution.
The Hard Left’s blind ideological hatred of the successful and wealthy is as irrational and indefensible as any racial bigotry, and there can be few better examples of it than Slate’s attack on a man because he gave $400,000,000 to higher education.
Ethics Alarms 
#5
Of course, taking Leftist conclusions to their logical premises, his money never really was his money to begin with. So making his own decisions with it by definition is taking the collective’s money away from the collective decision makers.
Where this writer is inconsistent is that he doesn’t see EVERYONE’s expenditure of money, from the biggest mill to the lowest penny, on personal desires as unethical if independent of a central decision making process.
“Non-profits do well the things government does inefficiently and poorly or not at all”
That’s an understatement.
The Mises institute did a study that determined that non-profits do EVERYTHING better than the government that isn’t legitimate government business (read as “Constitutional”)
Weissmann accuses Paulson of making donations that help rich people who don’t really deserve it, but then he recommends giving the money instead to poorer colleges? Or eliminating the charitable tax deduction so the U.S. government gets it? No. Weissmann’s just doing the same thing as Paulson, on a slightly broader scale.
If Weissmann seriously wanted charitable contributions to help the poor, he wouldn’t advocate it being given to anyone in the United States. We’re one of the richest nations in the world. People living at our poverty line are making more than 85% of the people in the world. If Weissmann was really serious about helping the poor, he would insist that all charitable donations go to fighting hunger and disease in sub-Saharan Africa.
By advocating that the money go to American colleges or to help the American poor, Weissmann is doing what he complains about when Paulson gives money to his alma mater or to maintain Central Park because he can see it out his window — helping people he knows instead of helping people who need it the most. But I’m sure Weissmann thinks that its okay when it’s his pet charities that benefit.
Bingo. In other words, he’s an idiot.
Classic case of a liberal arts major (as was I, by the way) pissed off at a guy who studied something hard like engineering or chemistry or economics, or something boring like business and made a lot of money while the smart liberal arts major (maybe women’s studies?) is stuck working at a magazine or a website. The line goes something like, “Hey, that’s not FAIR! I’m smarter than he is and I studied cool stuff. Why is he making so much money? It’s not right. He should have to give me some of that. I’m stuck here in Brooklyn. I mean, it’s kind of cool, sort of, but a private jet of my own would be neat.” Pathetic.
Don’t trash talk people who focus on those studies:
Disaffected little busybodies who focused their early studies on liberal arts often move on to great gigs like founding Communist Russia or Nazi Germany.
… or enabling one sleazy president and then running for the position yourself a couple of times.
Pathetic indeed. I didn’t mention, because the post was long enough, that the Slate hack also disses the billionaire because he made money speculating, which he regards as just short of being criminal. It’s useless, you see…all it does is make money; it doesn’t build anything. Making money is mot an honorable profession. But the gift disproves this thesis. Making money is as constructive as any other enterprise, depending on what you do with the money. The billionaire used that money to transform a school and over time, better the lives of countless human beings, maybe a billion or more. That’s a lot to ignore in order to demean the act as spending 400 million on “a monument.”
And then there’s George Soros. Hahahahahaha. And how about the Koch brothers. How many millions has one of them donated to a hospital in NYC? But they’re evil. Yuck. How many people do they employ? How much tax revenue do their companies generate? Evil.
How does this type of speculation make money? Isn’t it a zero sum game like poker?
It is. It makes money for him. And if he uses the money to care for his family, be a good citizen, invest in the economy, and to give him freedom to use his talents for other things than working all week, it can be a net gain for society, just as the wealth of the Rockefeller kids, which was inherited, activated a team of productive, patriotic, talented American public servants and citizens.
Of course, as a hedge fund manager Paulson also made money for lots of other people—that’s a service. He’s also been heavily involved in philanthropy before this, including $15 million to the Center for Responsible Lending, $20 million to New York University Stern School of Business, $15 million to build a children’s hospital in Guayaquil, Ecuador, £2.5 million to the London School of Economics, and $100 million to the Central Park Conservancy, which Slate also didn’t approve of.
A short sales is selling a stock at today’s price with the expectation of buying it a lower price at some specific time in the future for delivery. So doesn’t the profit of the person who went short equal the loss of the person that went long making it a zero sum game?
I can understand this transaction in a futures market where someone, like a farmer, wants to shift the price risk to another person and lock is his price and can better budget his expenses.
My question had to do the transaction not with the short seller’s use of the money after he receives it. As far as I am concerned he can do with it as he pleases. However, I am assuming that he was honest in his transactions and not fixing the market like the bankers and LIBOR or the fraud that occurred in derivative market that was based on subprime mortgages.
No, I get it. My point is that 1) he was more than just a speculator, but mainly 2) using money that someone else loses well makes the transaction beneficial to society.
I hate to be a grammar Nazi, but I noticed a spelling error – Pharoah. It is properly spelled “Pharaoh.
And yes, I know this because American Pharoah (misspelled) is running for the Triple Crown today, and the misspelling of his name has been pointed out many times. And yes, this is a useless and pedantic comment, but better me than some angry scold.
This phrase encapsulates the author’s biases and ethical blindness most succinctly:
The level of self-interest here is irrelevant, and there are always “more pressing causes,” depending on your perspective. The fact that this author feels comfortable chiding a man for his choice of a charity even he admits is worthy just brings us full circle to Margret Thatcher’s famous remark, “The problem with socialism is that you eventually run out of other people’s money.”
Perhaps the author should go out and earn $400 million he’d like to give away, and he can give it to smaller schools and concerns that he feels are more worthy. In other words, let him donate his charity to whom he will, and provide others with the courtesy of allowing them to do the same.
The author seems like the sort that feels like he, or perhaps the government, should “help” us decide the best use of our charitable giving. Some part of this strikes me as more insidious than anything other than the current assault on free speech from the left.
No, it was misspelled because I really thought that was how it’s spelled. Thanks, Glenn. I’ve learned something today.
I don’t think we’re close to even. I learn something every time I visit here. 🙂
My daughter attends Harvard practically free because of the very generous financial aid offered to families of middle and lower incomes…I am very grateful to the people who donate to the school to make that happen!
“The statesman who should attempt to direct private people in what manner they ought to employ their capitals would not only load himself with the most unnecessary attention, but assume an authority which could safely be trusted, not only to no single person, but to no council or senate whatsoever, and which would nowhere be so dangerous as in the hands of a man who had the folly and presumption enough to fancy himself fit to exercise it.” From Adam Smith, “The Wealth of Nations” 1776
Man, those guys could write.
That’s nice to here Kbg. I wonder sometimes whether scholarships are a good idea. Sometimes they seem to breed nothing but successive generations of grubby, smarty pants, ivory-towered eggheads and nutjobs that spend their entire lives in a parallel universe complaining about everything. What have the SATs and tons of scholarships gotten us? The Clintons and the Obamas and their ilk.
Engineering and Applied Science? The very areas in which this Nation is coming up short, these days? And this clown thinks this is a BAD thing? Gimme a break! You got it, he’s an idiot.
I read that article thinking he could have a rational, educational piece. No such luck. As was pointed out, he is apparently a liberal arts major and can’t reason well. I think there IS a decent point to be made. The Ivy Leagues have huge endowments and can afford, basically, to let everyone come for free if they want to (even after they lost enormous amounts to con men like Bernard Madoff with their unbridled greed and arrogance). If he pointed out that you can make a lot more of a difference/dollar donating to poorer universities, he has a very good point. Some people donate money because they want it to make a difference, not just to get their name on the building or their less-than-brilliant children admitted to a good school. Donating to your alma mater is a no-brainer, but maybe you shouldn’t make no-brainers. If you are donating money so they can demolish a state-of-the-art facility to build a better or bigger state-of-the-art facility, you might make more of an impact donating somewhere else.
The problem, Michael, is that it’s HIS money. He made it, and how he made does not enter into the discussion. What he does with that money is nobodies business but his. Do I have the right to bitch about what he did with it? Absolutely. Guaranteed by the Constitution. Do I make myself seem like a foolish demagogue for doing so? Again, absolutely.
I didn’t say he couldn’t spend it any way he wanted. If you read my post, you would find that my point is that you can make a larger impact by donating money to a school other than an Ivy League one. My point was, if you want to get your name on a building at your alma mater, knock yourself out, but if you want to make a big difference with your money, look elsewhere. The gift garnered headlines about the amount and the gift’s impact. A commentary about the actual impact of such gifts is not out of line. To suggest otherwise is like saying you can’t criticize a charity for claiming to fund new treatments for a serious disease when they really just hold fundraisers and hand out advertising items with their own name on them.