Plutocrat charity is no substitute for a welfare state

Don't beg for handouts from billionaires. Tax them.

(Image credit: Illustrated | iStock)

MacKenzie Scott, the ex-wife of Amazon chief Jeff Bezos, has given away some $4.2 billion over the last few months. In an article describing her reasoning, she writes: "This pandemic has been a wrecking ball in the lives of Americans already struggling … Meanwhile, it has substantially increased the wealth of billionaires." So some 384 different organizations across the country have gotten various huge grants.

As far as billionaire philanthropy goes, Scott's giveaways are about as good as one could imagine. She is certainly not wrong about the pandemic, and she seemingly tried to seriously focus on the highest-need organizations, even giving huge grants to many organizations that didn't ask for money. Moreover, this rate of giving is high enough that she might actually eat into her fortune, rather than just doling out a portion of the interest while continuing to accumulate ever-more wealth (if she keeps it up for years, at least).

But even the best imaginable billionaire philanthropy is far short of progressive taxation and a good welfare state. The government can make sure all Americans have the money and services they need to live their lives, without having to rely on the dubious-at-best motivations of the ultra-rich.

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To start, the usual billionaire charity is far worse than what Scott has done. Bezos, for instance, is the richest person on Earth (with more than three times her wealth), yet has given away less than a billion dollars so far this year — and that in the form of Amazon stock, thus giving charities a vested interest in his continued profits. As Anand Giridharadas explains in his book Winners Take All, other plutocratic "charity" often comes in the form of giving to one's family and friends, or setting up some foundation where one's children can make millions in some no-show job, or "donating" what amounts to a camouflaged bribe to get your kid into Harvard (as Jared Kushner's father did), or being generous to launder one's reputation after making money through some kind of mass-casualty business (as the Sackler family has done after putting Pablo Escobar to shame peddling addictive opioid pills).

Even Scott's donations necessarily put the recipients in a supplicant position. She still has complete control over her remaining vast fortune, and many people and organizations will surely still need money after this round of donations. She could cut or refuse to fund people in the future for any reason, or no reason. Even if she is scrupulous about not interfering with the organizations she's funded, they and others who need her money will still feel the pressure to avoid offending her in any way. Private wealth is inherently like that — a mechanism of domination and control.

It's also worth noting that Scott in no way "earned" such a titanic pile of cash. Bezos of course has been the Amazon figurehead for years, but even he has almost nothing to do with why their two huge piles of Amazon stock are worth so much. He did a lot of work getting the company set up in the first place, of course, but one main reason it was successful initially is because it was allowed dodge state and local taxes for years — an entirely unmerited advantage it secured through political bullying. More fundamentally, as with Google and online search, Amazon is by far the largest online retailer because it was the first one to get established — on a digital communications infrastructure that was first developed by the government, mind you — and its advantage snowballed over time.

Now Bezos presides over a gigantic business empire that no single person could possibly keep track of in any kind of detail. He gets to keep so much of the Amazon corporate surplus because his company is a dictatorship — like kings of old, he does not have to understand or even be aware of the vast majority of his business operations to control the flow of profits — and because rich people have to pay few taxes these days. If the United States had the strong unions, the strict corporate regulation, and the high taxes on the rich that it had in the 1950s, Amazon workers would get a much larger share of the profit they produce, and Bezos would probably be worth less than a tenth of what he is today.

At bottom, all wealth is socially created, structured at every turn by government institutions — laws on corporations, property, taxes, legal liability, labor, copyright; programs like Social Security and Medicare; regulations on food safety and the working day, and so on. Jeff Bezos is rich beyond the dreams of avarice because state policy has been designed to funnel wealth to the very top of society. The terrific social carnage created by that extreme inequality is barely ameliorated at all by even well-intentioned philanthropy.

But there is another way. We could simply restructure our government institutions to make sure that every American without exception has a decent standard of living. Changing labor laws to spark mass unionization would mean higher wages for most workers, lower profits, and lower payouts to shareholders. High taxes across the board, but especially on the rich, would cut down inequality and help fund a generous welfare state for non-workers, especially children. Rolling up stocks into a social wealth fund could fund a universal dividend so the returns to owning capital go to all, not just the ultra-rich. In a democratic country, all people should share in the wealth produced by society, not just those who happen to catch the eye of the plutocracy.

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