Warren Buffett’s son is almost completely wrong about charity

I first encountered this article by Warren Buffett’s son Peter Buffett in a pair of tweets by Mistress Matisse, complaining about the implication that making condoms available is a bad thing. But it wasn’t until I saw the article linked by Leiter that it registered with me just how bad the article was.

I’m going to go through this article paragraph by paragraph, pointing out the flaws.

I HAD spent much of my life writing music for commercials, film and television and knew little about the world of philanthropy as practiced by the very wealthy until what I call the big bang happened in 2006. That year, my father, Warren Buffett, made good on his commitment to give nearly all of his accumulated wealth back to society. In addition to making several large donations, he added generously to the three foundations that my parents had created years earlier, one for each of their children to run.

Early on in our philanthropic journey, my wife and I became aware of something I started to call Philanthropic Colonialism. I noticed that a donor had the urge to “save the day” in some fashion. People (including me) who had very little knowledge of a particular place would think that they could solve a local problem. Whether it involved farming methods, education practices, job training or business development, over and over I would hear people discuss transplanting what worked in one setting directly into another with little regard for culture, geography or societal norms.

I’d agree with this, if the point were that before giving or planning the project, people need to do the research to figure out what will most actually help. That’s the message of the effective altruism movement. But that’s not where Buffett is going with this.

Often the results of our decisions had unintended consequences; distributing condoms to stop the spread of AIDS in a brothel area ended up creating a higher price for unprotected sex.

That’s the line Matisse complained about. The problem is that a higher price for unprotected sex isn’t necessarily a bad thing. Theoretically it could be if what happened here is that freely available condoms made unprotected sex seem more attractive to clients, leading to more unprotected sex.

But I suspect what actually happened is that freely available condoms made sex workers less willing to have unprotected sex, raising the price by standard supply and demand, and meaning that probably less unprotected sex was happening. Yes, you’d prefer to eliminate the harm, but when you can’t eliminate a harm then harm reduction is a very good thing.

But now I think something even more damaging is going on.

Because of who my father is, I’ve been able to occupy some seats I never expected to sit in. Inside any important philanthropy meeting, you witness heads of state meeting with investment managers and corporate leaders. All are searching for answers with their right hand to problems that others in the room have created with their left.

Really? I’m willing to accept the premise that some of the world’s problems are caused by “investment managers and corporate leaders.” But a lot of the world’s problems are caused by “things have always been that way, and they’ve only started to get better relativeply recently.”

A century ago, there were no antibiotics, no vaccines for measles or polio. On the whole people were much poorer, even people in countries like Britain or the US could be at risk of hunger if they lost their jobs. The world was also a much more violent place.

None of that excuses anyone adding to the harm, it doesn’t even excuse inaction, but it does make it pretty implausible that most of the world’s problems can be blamed on anyone alive today, corporate leader or otherwise.

There are plenty of statistics that tell us that inequality is continually rising.

Actually, this is a gross oversimplification at best, but let’s accept the premise for the sake of argument. If inequality were increasing, what would it mean?

I don’t want to give the impression that inequality is all hunky dory. More inequality tends to mean more of society’s resources being wasted on whatever nonsense rich people are doing to make themselves feel important, resources that could be going to basics like food, shelter, health care, and education. And maybe inequality has some other indirect downsides.

But that said, I’d like to state for the record that inequality in itself is not as big of a problem as having polio. Or measles. Or starving to death. Or dying in the trenches. Or… you get the idea. Increasing inequality would be more shocking if it were bringing with it increases in those other problems, but in reality those other problems are being solved.

If the size of the pie where fixed, and it were simply a matter of deciding how to slice the pie up, this would be impossible. The reason life has gotten so much better over the last century, and can do so even if inequality is increasing, is that the size of the pie has grown a lot (even on a per capita basis).

At the same time, according to the Urban Institute, the nonprofit sector has been steadily growing. Between 2001 and 2011, the number of nonprofits increased 25 percent. Their growth rate now exceeds that of both the business and government sectors. It’s a massive business, with approximately $316 billion given away in 2012 in the United States alone and more than 9.4 million employed.

Philanthropy has become the “it” vehicle to level the playing field and has generated a growing number of gatherings, workshops and affinity groups.

As more lives and communities are destroyed by the system that creates vast amounts of wealth for the few, the more heroic it sounds to “give back.”

Even if some corporate bosses are guilty of destroying some lives, the “more” raises the question: More than what? More than used to get destroyed? That seems implausible, when you look at how much things have improved since a century ago.

It’s what I would call “conscience laundering” — feeling better about accumulating more than any one person could possibly need to live on by sprinkling a little around as an act of charity.

I don’t think “sprinkling a little around as an act of charity” is anything to be applauded, but it’s odd to see Warren Buffett’s son, of all people, talk about philanthropists only in those terms, when his father has not just “sprinkled a little around” but pledged to donate 99 percent of his considerable fortune to charity.

And Warren Buffett isn’t from the “get my name on a bunch of buildings” school of “charity” either. From what I can tell the things he’s donated to are, if not maximally efficient do-gooding, then still likely to do a great deal of good. (Granted, Peter is managing to make giving himself control of a good chunk of the money look like a mistake.) People like Warren Buffett are heroes, make no mistake about it. For his son not to acknowledge that is odd.

But this just keeps the existing structure of inequality in place. The rich sleep better at night, while others get just enough to keep the pot from boiling over. Nearly every time someone feels better by doing good, on the other side of the world (or street), someone else is further locked into a system that will not allow the true flourishing of his or her nature or the opportunity to live a joyful and fulfilled life.

It just keeps existing inequality in place? No, I’m pretty sure that sometimes, at least sometimes, it also does things like prevent people from getting malaria, which is kind of important.

And with more business-minded folks getting into the act, business principles are trumpeted as an important element to add to the philanthropic sector. I now hear people ask, “what’s the R.O.I.?” when it comes to alleviating human suffering, as if return on investment were the only measure of success.

Now I’m not sure about this, because I don’t know for sure who these people are who are talking in terms of R.O.I…

But if they’re effective altruism people what they mean is “how can we do the most good with our money?” And yes, when you’re trying to do good, how you can do the most good should be the measure of your success.

Microlending and financial literacy (now I’m going to upset people who are wonderful folks and a few dear friends) — what is this really about? People will certainly learn how to integrate into our system of debt and repayment with interest. People will rise above making $2 a day to enter our world of goods and services so they can buy more. But doesn’t all this just feed the beast?

Holy. Fucking. Shit. Words fail to describe how wrong this is. Do I call it callous? Out of touch? Offensive? None of those words do it justice.

Does Peter Buffett have any fucking idea what it’s like to live on $2 a day? Normally I wouldn’t claim to, but he must have even less of an idea. Please, everybody, go read this article on Cambodian factory workers who survive on 25 cent orders of noodle soup and talk about how great it would be if their employers would just raise their wages to $100 a month.

You see, until recently the Cambodian minimum wage was $61 a month. In recent talks with the government, a Cambodian trade union initially asked that the minimum wage be raised to $120 a month, but then said they’d be okay with $100 a month. So far, they’ve only been able to get the government to agree to $75 a month plus $5 for health care.

When I was in Cambodia back in February, I heard a story about a Cambodian girl who’d grown up outside the country. When she came back, everyone thought she was South Korean, because she was too tall. Because in Cambodia, everyone grows up with their growth stunted by malnutrition.

So Buffet’s dismissive phrase “so they can buy more,” what that really means is, “more than 25 cent noodles.” More food for your children, so that maybe, just maybe, they’ll grow up to be as tall as a South Korean. It’s basic fucking necessities like that that Buffett is dismissing as “just feeding the beast.”

I’m really not calling for an end to capitalism; I’m calling for humanism.

At this point, I’m pretty sure Buffett has no idea what he’s trying to “call for.”

Often I hear people say, “if only they had what we have” (clean water, access to health products and free markets, better education, safer living conditions). Yes, these are all important. But no “charitable” (I hate that word) intervention can solve any of these issues. It can only kick the can down the road.

Yeah, it can only kick the can down the road. That, and save a few people from dying of malaria.

Really, $10 billion dollars goes fast when you’re trying to deal with problems that afflict entire regions of the globe, so you’re probably not going to make them go away overnight, but that’s a terrible reason to be dismissive of people’s efforts to do what they can to help.

My wife and I know we don’t have the answers, but we do know how to listen. As we learn, we will continue to support conditions for systemic change.

It’s time for a new operating system. Not a 2.0 or a 3.0, but something built from the ground up. New code.

What we have is a crisis of imagination. Albert Einstein said that you cannot solve a problem with the same mind-set that created it. Foundation dollars should be the best “risk capital” out there.

What does any of this even mean?

There are people working hard at showing examples of other ways to live in a functioning society that truly creates greater prosperity for all (and I don’t mean more people getting to have more stuff).

Right. More prosperity, by which he doesn’t mean starving people getting to have more food. Because food is just stuff, after all.

Money should be spent trying out concepts that shatter current structures and systems that have turned much of the world into one vast market.

Why? Will that actually help people? Or just make Peter Buffett feel better?

Is progress really Wi-Fi on every street corner? No. It’s when no 13-year-old girl on the planet gets sold for sex.


But as long as most folks are patting themselves on the back for charitable acts, we’ve got a perpetual poverty machine.

This is empirically false; poverty is falling globally in spite of whatever back patting is going on.

It’s an old story; we really need a new one.

Again, why? To make Peter Buffett feel better?

The first two paragraphs end up being a perfect description of what Buffett does in the entire rest of the article. He wants to save the day, but he has very little knowledge of the problem. So his solution is railing against the evils of buying stuff, because he personally finds buying stuff icky.

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