The Chronicle of Philanthropy makes a passing (and mostly implied) point that libertarians have been making for many decades, namely that the real philanthropy of business creators is not how much in company resources they give to charity but rather the way in which their enterprising commercial activities help society. It is a huge point with far-reaching implications, and it is odd how the Chronicle just mentions this point so casually:
Jobs “did not sign the Giving Pledge nor did he ever make a public gift that appeared on The Chronicle‘s Philanthropy 50, an annual list of the largest charitable gifts.” However, “devices like the iPhone and iPad have helped many organizations communicate more efficiently. They have allowed groups to improve the way they respond to disasters, communicate with supporters, and carry out their day-to-day work.”
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And Steve Jobs the person who sat on billions? What contribution is there in that lump of money?
Money isn’t wealth.
Capitalism BAD! *Stomp Stomp* Grumble Grumble
Private Property BAD! *Stomp Stomp* Grumble Grumble
There is “contribution” in a lump of money that looks like it is doing nothing. Every minute it is not *doing* anything it is not chasing goods or services and driving up those prices. When such a moment occurs that low prices attract its appearance in the market it has the effect of keeping prices from falling as much as they would without its presence. Either way it is acting to stabilize the market prices from wild swings and that is a benefit for everyone, therefore the lump of money’s owner *is* contributing.
If the lump is simply burned it would benefit all the holders of money in exactly the same manner that creation of money by the gov/fed/banks injures them. It would increase the value (purchasing power) of that money. [OK, it would quickly be replaced for the benefit of the producer, but that is only because that is the way our money creation currently works.]
A very large amount of money creates a problem regarding the spending of it that is not unlike the problem that government has in spending the *easy money* that it gets from taxing, borrowing and printing. It may be spent badly. The charitable industry is not immune from this effect.
The contribution was that all that money was sitting in a bank being loaned out to people like you and me.
Corey, the point sailed right over your head. Steve Jobs earned billions, not by extorting it from the taxpayers, but by offering products which people willingly chose to pay for. People spend X dollars for an iPod or a Macbook because the product is worth more to them than whatever wlse they might have spent those dollars on.
The point did not sail over my head. My point sailed over yours. Forgive Apple for not donating. Ok. Do not forgive the wealthiest of men for hoarding and not investing that money elsewhere (ie charity). There are plenty of fine investments which do not have the bad effects commenters have mentioned. Why not build a school, or contribute to pancreatic cancer research e.g?
Why not leave it in a bank? The banks act as a mediator between people willing to loan out money (savers) and people willing to take out a loan (borrowers). Steve Jobs helped more people raise their standard of living by precisely not spending that money on a school.
To my knowledge his estate has not been settled, and so perhaps it’s a bit premature to pass judgment on Jobs’ philanthropy. For all any of us know he’s endowed a large sum to one cause or another, and it will take more than two days to arrange the transfer. Even if he chose to give nothing, it was his to do with as he pleased.
Lets say that you have a forgotten and isolated island.
Lets say a man lives there who has 50% of the total money supply (say 10 million dollars).
The rest of his isolated island has 10 million dollars in total then as well.
Lets imagine that the man doesn’t need a lot, so he only spends 20,000 a year, so the vast majority of his wealth is “doing nothing.”
Lets say one day this man gives the rest of his money to a charity on the island.
Will this additional money cause new goods to come into existence? Obviously not, so what his charitable giving will do is cause resources to be diverted from the other earners of income towards the recipients of his charity.
To the extent one gives to charity they are putting their money into further current consumption instead of future production, and to that extent also charity is a net drain on future wealth creation. This is not to say no one should consume in the current moment, or provide to others so they can do the same, but if everyone did this it would not be to our benefit.
Peoples’ point here was spelled in an article by Doug Casey called “Charity? Humbug!” in which giving people private jobs via wealth creation beats private charity because it helps people exit wealth instead of creating welfare dependency even if the government wasn’t involve as all.
Apologies, Gil. You said it much better here than I did below (although I’m sure you meant to say “welfare” rather than “wealth.” Oops!
I think the problem most people have with (correctly) viewing Steve Jobs’ innovations as philanthropy is that he improved himself (got rich) and improved the world (awesome products) at the same time. People prefer the notion that philanthropy and community service should somehow harm the provider in exchange for benefiting the community. They think it should be a sacrifice.
God forbid both parties benefit from voluntary action!
I suppose “casually” is in the ear of the reader, but the paragraph you quoted is excellent. I don’t care if our point is made by accident or intentionally…I’ll take the endorsement of classical liberal principles.
Cheers,
Janet
How much money did he and Apple make by using the state to enforce ip monopolies?
Real entrepreneurs do not rely on illegitimate business methods.
Ask yourself: Is a gangster boss a philantropist just because he is spending money he earned through crimes?
Yetanotherlibertarian, you raise an interesting point, which is discussed at length on this site. I like Rothbard’s Patents versus Copyright discussion in Man, Economy and State, and hesitate to use IP as a general term because of Rothbard’s treatement of the distinction between the two. In general, the IP discussion has challenged my libertarian thinking more than any other single issue, and I enjoy the stretching of my brain.
Having said all that, I do think your question is not applicable in this discussion, because we are not talking about the zero sum game of gangsters, but the wealth-creating (pie enlarging) reality of Steve Jobs creating and producing things that people are willing to voluntarily purchase. I believe that even if patents did not exist, Jobs would have done what he did. He would have created and innovated and sold products. If Steve Jobs invested in gold and physically slept on it (yes, even if it was NOT lent out to other people!), I am not bothered one iota. His wealth was his to do with as he pleased.
Cheers,
Janet
Hi Janet, I partly agree with what you said. Apple (to a greater part) and Steve Jobs (to a smaller part) did really create wealth, innovation and progress. I do not deny that.
But in all that praise for him I criticize mainly two points: 1) Much of the position Apple has today is based on state-created monopoly power. 2) Steve Jobs was a marketing genius and a brilliant leader and public face of a big corporation. But he was neither the (sole or even responsible) designer and creator of this corporation nor did Apple only consist of him. If he had not lead Apple than someone else would have and Apples success would have been probably nearly the same. And all the important products of this corporation are based on some other people right inside that corporation who develop and so on. For most people it seems as if all the success of this big corporation has to be attributed to its public face and that Apple was only successful because of him. That’s simple not true.
“If Steve Jobs invested in gold and physically slept on it (yes, even if it was NOT lent out to other people!), I am not bothered one iota. His wealth was his to do with as he pleased.”
I do not have a problem with that (regarding wealth acquired in a legitimate (based on libertarian theory) way. Big corporations and their leaders do base much of their wealth on aspects enabled by the state (hence the problem of corporatism).
If a corporation had a state granted monopoly on certain chemical elements that would certainly contribute to its wealth, innovations and so on.
Points well made. I had my own small business that grew into a medium-sized business. We were successful because of all of our amazing employees working together…under the leadership of my amazing husband. These things are not easy and they do not happen randomly. It takes lots of planning, hard work, leadership, hard work, people skills, and hard work.
Having said all that, I acknowledge your point about corporatism and the role that government plays in the game. We were shut down by a government department (see http://www.youtube.com/watch?v=tgFPDcPr5yA), and so our competitors did not have to compete. This is not capitalism.
In general, I think the point of this discussion is that the best “philanthropy” is to create something (a good or service) that people want or need, provide honest employment for others, and trade! That’s much more sustainable (apologies!) than “charity” which non-producers demand of producers.
Cheers,
Janet
Steve Jobs didn’t give people in the U.S. very many jobs though, he took advantage of cheap labor in China instead and only a handful of people in the U.S. benefited from his “job-creating” products. He was really good at marketing and convincing people they needed something that they didn’t. He had no qualms about taking advantage of people for commercial gains without concern for the effect on society. So in that sense, he is an American success story. But not a human success story.
Do you really think that people in China are not human? That they don’t deserve jobs?
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