05 December 2015

Medium: “How to look at the Chan Zuckerberg Initiative”

Here’s the truth: No matter how good their intentions, the net result of most such efforts has typically been neutral at best, and can sometimes be deeply destructive. The most valuable path may well be to simply invest this enormous pool of resources in the people and institutions that are already doing this work (including, yes, public institutions funded by tax dollars) and trust that they know their domains better than someone who’s already got a pretty demanding day job. That may not be as appealing to the cult of disruption within the tech echo chamber, but would be exactly the kind of brave and unexpected move that might offer Max a great example of how to engage with the real world that the rest of us live in.

Anil Dash

Balanced response to what turned out to be a controversial announcement by Mark Zuckerberg and his wife at the birth of their daughter. In this case I consider criticism to be healthy and necessary. First of all Facebook, like many other American corporations, employs a number of tactics to reduce its tax burden and maximize profits; before donating this wealth, the company should distribute profits more fairly to countries where they are earned. Also, from what I understand, the newly-created foundation doesn’t actually function as a charitable organization, instead allowing Zuckerberg to make investments and employ political lobbying with less scrutiny. In this sense it’s probably more similar to Google’s new Alphabet mother company than to a charity.

An L.L.C. can invest in for-profit companies (perhaps these will be characterized as societally responsible companies, but lots of companies claim the mantle of societal responsibility). An L.L.C. can make political donations. It can lobby for changes in the law. He remains completely free to do as he wishes with his money. That’s what America is all about. But as a society, we don’t generally call these types of activities “charity”.

What’s more, a charitable foundation is subject to rules and oversight. It has to allocate a certain percentage of its assets every year. The new Zuckerberg L.L.C. won’t be subject to those rules and won’t have any transparency requirements.

Jesse Eisinger
Facebook stock evolution

The larger issue is that the American system encourages this, both culturally and fiscally: massive concentration of wealth and power in the hands of the few. It’s one of the signs of oligarchy highlighted by Thomas Piketty in his recent book – and foreseen by science-fiction authors like David Brin in Existence. No matter how good or noble their intentions, the allocation of wealth would be better served by government and local institutions. Not to mention how this practice undermines the principles of democracy through lobbying – rich people supporting laws to make them richer – and because it reduces the power of the elected government to pursue and implement policies for all citizens.

Aschoff: Periods of increasing activity by philanthropic foundations, or these days “philanthrocapitalists,” are historically a symptom of social crisis associated with rising inequality. On the surface this might seem positive. But we can’t expect big foundations to solve inequality, or poverty, or any number of other social ills.

Foundations distract from how wealth creation works, by making it appear that philanthropists are doing people a favor out of the goodness of their hearts. This hides the fact that the wealth they have amassed was not simply the result of their own cunning or ability—it was made possible by all the people who worked for them, not to mention the public infrastructure made possible by taxpayers. By presenting themselves as do-gooders or charitable institutions, foundations erase the last four decades of aggressive lobbying for financial deregulation and tax-cuts and the concerted attacks on working people and unions by businesses and elites.

Nicole Aschoff

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