1. Skip to navigation
  2. Skip to content
  3. Skip to sidebar
Source link: http://archive.mises.org/5318/you-oughta-dance-with-the-one-that-brung-ya/

You Oughta Dance With the One That Brung Ya

July 14, 2006 by

F. Scott Fitzgerald, the novelist, said the rich are different from us. His contemporary (and rival) Ernest Hemingway countered with, “Yeah, they’re richer”.

That’s certainly true of Warren Buffett, though whether he’s smarter than us or Jimmy – his margarita loving namesake – well, that may be questionable. because Warren, not Jimmy, just gave 31 billion or so to the Billy Gates Foundation. I’m not so sure about Billy’s intellect either – once you take him out of a computer lab. Consider that both gentlemen were true blue entrepreneurs who benefited the world and acquired wealth with their talent in a unruly themepark called Capitalism. Then they walked down the road to Foundationworld. Why would you win the Indy 500 with a Hemi 440 and then putt putt to your next race in a flathead four? Why a foundation – a structure that reeks of non-private ownership, like your local school board. And how responsive are they to consumer needs?

Why would free-swinging brawlers like Buffett and Gates set up foundations to cure the world’s ills. Why not a corporation in one form or another – the same structure that not only generated the riches under discussion – but provided products and services that answered the world’s needs. Who will be more highly motivated; the technicians, support and management personel blessed with options and ownership or salaried foundation people? I mean, having won the golden grail in the rough and ready barroom of capitalism, why seek a second prize (cure of cancer – discovery of the ultimate energy cell – regeneration of the heart, etc) in a monastic environment?

I suppose the motivation is avoidance of taxes. But that’s not a satisfying answer. Pay the penalty, I say, and get on with your quest. And in case the motive force is to publicly display one’s generosity, well, simply renounce the profits and other perks of corporate ownership.

And another problem. Foundations drift from their founders’ intentions – just ask the ghost of Henry Ford. Most of His non-incentivized foundation employees are lucky that Henry sleeps in the cold, cold ground. Even worse, foundations fail like government programs fail, but profits and losses – the ultimate barometer of success – are not there to administer the merciful coup de grace. A 31 billion dollar kitty will nurture failure for a hundred generations of Buffetts.

Let the Buffetts of the world show their gratitude to the system that created their wealth. Want to cure Aids? Set up a corporation with the shortest mission statement in businessdom: “reward owner/investors and cure Aids”. Give the shares to Aids sufferers, friends, names picked out of a Bulgarian phone book, or the faculty at Johns Hopkins. It’ll beat a foundation every time! And what’s that bucolic expression? “You oughta dance with the one that brung you.”

{ 14 comments }

Glen Raphael July 14, 2006 at 4:42 pm

Buffett is aware of the drift issue, so his gift included conditions designed to make sure the bulk of the money gets used up while Bill & Melinda are still around to direct it.

Skip July 14, 2006 at 6:24 pm

I don’t understand your aversion toward someone giving their legally accumulated wealth to other people in order to accomplish something with it. It does not sound very libertarian or free market of you. I also don’t understand your use of “that bucolic expression.” Do you mean that once a baker always a baker and one should never do anything else with the remaining years of your life?

Curt Howland July 14, 2006 at 10:21 pm

My objections are two fold:

Wasn’t this one of the poster-rich loudly in favor of keeping the estate tax (death-tax)? And what has he done, gone and made sure his estate wouldn’t be taxed.

Follow the money from the lobbying arm of the Gates Foundation / Microsoft. There is a very good reason the prosecution of Microsoft, absurd as it was, fell on its face at the federal level, and it wasn’t because the prosecutors suddenly realized that anti-trust is an oxymoron.

Personally, with a lump sum that large, I would set up engineering scholarships. …all over the world. Oh, and with the Mises.org of course! :^)

Andrew July 15, 2006 at 9:30 am

What makes us think that we are capable of guessing the true reasons behind the trillion-dollar money streams, looking at the shadows on the wall of the cave we are sitting in? Let’s admit that our mind is limited.

ted roberts July 15, 2006 at 10:20 am

Skip and others: I think its great for the rich to share their wealth. Thats not my point. I intended to say that some corporate, for-profit entity would be a better vehicle than a non-profit foundation. These guys made their fortunes and enriched the world via capitalism. Why not seek further goals with the same system. Foundations are notorious for not following the goals of their founders: or failing in their objectives. And the “bucolic expression” means if capitalism worked to make you rich, why not use the same instrument to accomplish your next goal. I am advocating the use of the free market to score again. It worked initially didn’t it. thanks for your thoughts. ted

Chris Hemphill July 16, 2006 at 8:55 am

So where is “Strive to rid the world of statist evils and generate a return for shareholders?”

If someone would go ahead and start up a Galt’s Gulch or a private defense agency that properly regards the state as a band of thugs, I would gladly pay for their services.

Hugh Akston July 16, 2006 at 7:20 pm

It is certainly Gates’ and Buffett’s money to do with as they please, but it is quite disappointing and a bit tragic what they have decided to do with their fortunes. How ironic that two of the world’s most successful entrepreneurs are giving their money to anti-entrepreneurs like grant writers, NGO scammers, and third-world warlords and dictators.

Some ideas that almost certainly would have made humanity better off:

1. Venture capital funds focused on the issues the Gates Foundation wants to address.

2. X Prize-style awards for actually accomplishing concrete and worthwhile goals.

3. Purhcase and demolish UN headquarters.

M E Hoffer July 16, 2006 at 8:03 pm

What makes anyone think Gates and/or Buffett consider themselves Capitalists or believe in free-market competition, in the first place?

Yancey Ward July 17, 2006 at 7:51 am

Hugh Akston,

It isn’t clear to me that Gates will not pursue such methods that you outlined- it is still too early to pass final judgment, in my opinion.

However, my suspicions are that the money will be spent in ultimately fruitless endeavors, and 100 years from now the people of the third world will be just as destitute with no change at all in their method of governance and lack of property rights, which are the true causes of their poverty.

M E Hoffer July 17, 2006 at 11:21 am

From: http://www.nizenotes.com/

Part 3 also contains Buffett’s comments claiming that the free markets failed in solving the problem of disease in third world countries, which prompted Thomas DiLorenzo to call him an economic ignoramus.

Mr. Nize, you have a fine weblog.

http://www.nizenotes.com/

ted roberts July 17, 2006 at 2:55 pm

Commentors, I got some great comments and I’ve tried to answer them mainly directly. My basic point is that since capitalism spawned products and wealth for Buffett and crew why not use the same environment to accomplish his charitable goals – curing the worlds ills. Why would a smart guy like buffett think that non profit foundations are the rite instrument for his. I honestly find that puzzling.

Actually I spend many years working for both forms. I saw the difference. But as the comments goaded me to think twice about this issue, I wondered… why not the Buffett billion dollar competition. First entity (individual, corportation, foundation, association, whatever) to solve problem x , get a few billion. Break it up into categories of ills – so much for each. 31 billions goes a long way. Just stand out of the way – call it a “skunk
works” approach.

Yes your name Warren Buffett would be on the Silver Loving Cup stuffed with money. Just stipulate the prize and stand back. I believe in incentives. To me that beats the heck out of a foundation. ted

JIMB July 17, 2006 at 9:36 pm

Think it’s curious that so many super-wealthy people spend their money and influence on non-free ideology. Any idea why?

One reason might be that their wealth wasn’t acquired by the free market as much as we believe.

Another explanation might be that wealthy people want to influence society away from the market because their ultimate goals are not freedom for other people.

Food for conspiracy theories I guess …

M E Hoffer July 17, 2006 at 10:13 pm

JIMB,

Facts that are contra to State-approved indoctrination texts are not, de facto, “conspiracy theories”.

Your musings, as above, are more accurate than many care to think.

Carnegie and Rockefeller are prime exhibits that lend great weight toward proving the accuracy of your suppositions.

These chaps are more than free, in my book, to do what they will. The past is that carcass that hunts no longer. That the future remains, as the present, giving rise to greater numbers of State induced “winners” in our ever more feeble market, should be our concern.

JIMB July 17, 2006 at 11:54 pm

M E Hoffer — Right. Notice all theories of evil are conspiracy theories: even the state’s theories.

Wonder if Rockefeller or Carnegie inspired any of the movies about the “corporation as state” running a lottery for slave workers, the winner being transported out of the horrible conditions of state rule to an “island of bliss”. Every lottery winner (of course) is abused or killed to preserve the status quo for the benefit of the top dogs, unknown to the rest of the population. The latest I’ve seen in that theme (loosely applied) was Ewan McGregor & Scarlett Johansson in The Island.

Comments on this entry are closed.

Previous post:

Next post: