Rob Reich is a former board member of GiveWell and Good Ventures (i.e. Moskowitz and Tuna) and the people at OpenPhil seem to have a huge amount of respect for him.
Any idea what earned him such respect? His way of thinking is pretty alien to me, for example:
That’s why, independent of a tax break, what philanthropists do doesn’t deserve our automatic praise. It deserves an examination about whether it’s consistent with democratic governance as a whole, and then to be praised if it is and potentially to be rejected if it’s not.
Why is “consistent with democratic governance” the criteria here instead of say “expected to raise human welfare in the long run” (or something more cosmopolitan)? Why is “democratic governance” assumed to be automatically good, as opposed to full of problems that could potentially be ameliorated by philanthropists operating outside of it? I wonder if he wrote something in the past that impressed the people at OpenPhil (which might explain his way of thinking better to me as well).
Please note: I’m writing this not to denounce, but to try to understand a mode of thinking that I am unfamiliar with.
For once I find myself at odds with the common sentiment here. I’m one of those people who are convinced neither by Scott Alexander nor the OP.
Among other points, I fear, if we do as they said, that we’ll start self-censoring our speech towards billionaires donation; over time and through halo effect, this could lead to social censoring of any criticsm of billionaires. I can already see it in the way SA uses the loaded word “attacks on billionaire philanthropy” rather than “criticism of billionaire philanthropy”.
If I had to venture a guess, I’d say the difference between us is that most LW’s posters probably are closer to billionaires, geographically, socially, and in their values, than I. Maybe they are not worried because they can relate to billionaires in ways that I can’t.
There is no denying that through tax rebates the donators are leveraging everyone’s tax money. This is “a plutocratic element in a democratic setting.” as Rob Reich says. The fact that it worries no one here makes me wonder: would you have another government rather than democracy?
Again I’m not trying to corner you into breaking a taboo. I’m legitimately curious.
There is no denying that through tax rebates the donators are leveraging everyone’s tax money.
It seems equally valid to say that donors are only leveraging their own tax money, because donations can only reduce your tax bill to zero (or not even that because only donations up to half of your income is tax deductable), and not to a negative number.
This is “a plutocratic element in a democratic setting.” as Rob Reich says. The fact that it worries no one here makes me wonder:
Worried about what? That there’s some kind of slippery slope where billionaire philanthropy starts a process that eventually causes us have a non-democratic form of government, or that “a plutocratic element in a democratic setting” is bad even if there is no risk of that? I guess people aren’t worried about the former because it seems far fetched, and they aren’t worried about the latter because empirically it seems like the “plutocratic element” is trying and succeeding in solving a bunch of problems that our democracy is failing to solve. (Scott’s post gave a number of examples of this.)
would you have another government rather than democracy?
You seem to be thinking that if one believes ““a plutocratic element in a democratic setting” to be better than a pure democracy, then one must believe a plutocracy to be better than a democracy. But nothing says that a mix of plutocracy and democracy can’t be better than both of their pure forms.
Does this answer your question? Do you care to explain more what you are worried about?
It seems equally valid to say that donors are only leveraging their own tax money, because donations can only reduce your tax bill to zero (or not even that because only donations up to half of your income is tax deductable), and not to a negative number.
Let’s say that a bunch of people owe me money. If I give a discount to one of them, clearly, that discount is a present. It’s money I give to that person.
The way I see it, when someone gives 100$ to a charity with 40% tax deduction, what actually happens is that the person gives 60$ to the charity, and the state matches that with 40$ of its own taxpayer’s money. The fact that the state’s gift is limited to the amount of the person’s taxes is irrelevant to the nature of the transaction.
As Rob Reich concludes :
So the citizens of the United States are collectively subsidizing, through foregone tax collection, the giving preferences of the wealthy to a much greater degree than the giving preferences of the middle class or poor. And, of course, the giving preferences of the wealthy are not a mirror of the giving preferences of all people.
Worried about what? That there’s some kind of slippery slope where billionaire philanthropy starts a process that eventually causes us have a non-democratic form of government, or that “a plutocratic element in a democratic setting” is bad even if there is no risk of that?
Certainly, I see that plutocratic element as an erosion of democracy. But it’s not the only one. The whole electoral system is already bad enough; the leaders, elected and unlected, are unaccountable, and generally unwilling to even discuss a lot of measures that the majority of the voters ask for. Using our taxes to finance some rich guy’s pet charity is just another nail in the coffin.
the “plutocratic element” is trying and succeeding in solving a bunch of problems that our democracy is failing to solve.
Democracy is certainly not the most expedient. But it has arisen because History has taught us to be wary of forms of power that are too expedient. The point of democracy is precisely to have safeguards against unilateral use of power.
Reich doesn’t want to outlaw billionaire philanthropy. All he says is that it shouldn’t be subsidized by the taxpayer’s money, and that it should be closely scrutinized before rolling out the red carpet. I only see good practice here.
Edit : last minute idea. Billionaire philanthropists probably do a whole lot of good. But giving them credit for all of it would be comparing against a hypothetical world where billionaire philanthropy would be replaced by nothing. But we don’t know. We might have a world where good charity is done another way, maybe even better. In any case, even if you think Reich’s charitable credit would do worse, only the difference should be credited to our current system.
Ok, so by “everyone’s tax money” you meant “the government’s tax money” whereas I interpreted it as “your and other people’s tax money” (i.e., that you could leverage more tax money than you owed yourself).
Certainly, I see that plutocratic element as an erosion of democracy. But it’s not the only one. The whole electoral system is already bad enough; the leaders, elected and unlected, are unaccountable, and generally unwilling to even discuss a lot of measures that the majority of the voters ask for. Using our taxes to finance some rich guy’s pet charity is just another nail in the coffin.
In my view, leaders being unaccountable is the natural state of democracy, rather than an erosion of it. My perspective here comes from public choice theory. If you accept that “uneroded” democracy is just naturally full of flaws (again see public choice theory), then it wouldn’t be so surprising that some people can consider “using our taxes to finance some rich guy’s pet charity” to actually be an improvement rather than an “erosion”.
Democracy is certainly not the most expedient. But it has arisen because History has taught us to be wary of forms of power that are too expedient. The point of democracy is precisely to have safeguards against unilateral use of power.
It seems to me that if one could leverage more than one’s own share of taxes, then that would constitute a unilateral use of power, because the state is using force to collect taxes, and directing other people’s tax money essentially means you’re forcing them to spend their money in a way that you want. But if you’re only leveraging your own share of taxes, then it just means that the state is not forcing you to spend money the way that it wants.
But maybe by “use of power” you mean something besides “use of force”? If so, what? (The only other thing I can think of is “use of money or other resources” but that seems to cover way too much.)
Reich doesn’t want to outlaw billionaire philanthropy. All he says is that it shouldn’t be subsidized by the taxpayer’s money, and that it should be closely scrutinized before rolling out the red carpet.
Note that I wasn’t objecting to the scrutiny, but to basing it on “consistent with democratic governance” instead of something like “expected to raise human welfare in the long run”. Also he said “independent of a tax break [...] potentially to be rejected if it’s not.” Do you know what he meant by “rejected” here? Just “criticized”, or something stronger like “banned”?
Ok, I’m getting a feel of how you come to your conclusions.
My perspective here comes from public choice theory.
Any good reads to learn the basics?
It seems to me that if one could leverage more than one’s own share of taxes, then that would constitute a unilateral use of power, because the state is using force to collect taxes, and directing other people’s tax money essentially means you’re forcing them to spend their money in a way that you want. But if you’re only leveraging your own share of taxes, then it just means that the state is not forcing you to spend money the way that it wants.
That’s just another way to describe the same facts. I call it everyone’s tax money because in my mind, taxes are pooled. When the state refunds someone, it scoops money from that pool without regard from whom it comes from. You see it as a bank vault with separate boxes for each taxpayer. In your view, it’s true that the billionaire only leverages their own tax money; but by doing so they escape taxes, and the critical point is that they do so more that the layman. Different perspective, same result.
But maybe by “use of power” you mean something besides “use of force”? If so, what? (The only other thing I can think of is “use of money or other resources” but that seems to cover way too much.)
I did mean the latter, as RR did when he said : Philanthropy can be an exercise of power, and even if it’s unsubsidized philanthropic power, we still are required to scrutinize its deployment.
Also he said “independent of a tax break [...] potentially to be rejected if it’s not.” Do you know what he meant by “rejected” here? Just “criticized”, or something stronger like “banned”?
I think the latter. Considering his example just above, it interpret it to the effect that the rule forbidding citizens to send money to the police or the army should be extended to philanthropy in some cases, especially when those cases should be or used to be the duty of the state (like the example he gives about schools).
I think there’s a crucial test that could be performed, relative to your ideas (in this thread) anyways – how much of the ‘against billionaire philanthropy’ do you think is due to the tax rebate/refund? I think it’s close to zero.
(And I don’t have a problem with criticizing any philanthropy but I don’t have a problem with billionaires giving large amounts generally.)
That’s a good question. Or, rather, of the several ways I can interpret it (ha), each seems interesting.
I interpret your answer as being honest and in good faith. I’d default to the same were Reich to answer, if he were to answer like you did. I’d expect most other prominent public critics to deflect in some way.
More generally, I’d interpret similar answers from others writing ‘against billionaire philanthropy’ as weak-moderate evidence of the same.
As to how to more precisely test that, I admit that it’s probably very tricky and thus I downgrade how “crucial” a test it really is. Here’s one idea:
Some billionaire, one of those previously criticized in the manner under discussion, announces that, for every philanthropic donation they make, they’ll make ‘matching’ donations to the relevant federal, state, and municipal treasuries to ‘offset’ the tax rebate/refund effect of the donations.
I’d expect that, mostly, this would result in heavier criticism and increasing suspicion. I’d expect you, if asked, to moderate your own criticism or praise the offsetting directly.
‘Ideally’, we’d ask The Simulators of the Universe, to re-run the universe simulation and ‘magically’ have some kind of tax law passed that removes the refund/rebate at some point before some portion of billionaire philanthropic donations and we could measure the number and ‘sentiment’ of criticisms.
Realistically, we could probably much much more crudely approximate something similar, but any comparisons would inevitably be confounded by all kinds of other things.
Any idea what earned him such respect? His way of thinking is pretty alien to me, for example:
Why is “consistent with democratic governance” the criteria here instead of say “expected to raise human welfare in the long run” (or something more cosmopolitan)? Why is “democratic governance” assumed to be automatically good, as opposed to full of problems that could potentially be ameliorated by philanthropists operating outside of it? I wonder if he wrote something in the past that impressed the people at OpenPhil (which might explain his way of thinking better to me as well).
Please note: I’m writing this not to denounce, but to try to understand a mode of thinking that I am unfamiliar with.
For once I find myself at odds with the common sentiment here. I’m one of those people who are convinced neither by Scott Alexander nor the OP.
Among other points, I fear, if we do as they said, that we’ll start self-censoring our speech towards billionaires donation; over time and through halo effect, this could lead to social censoring of any criticsm of billionaires. I can already see it in the way SA uses the loaded word “attacks on billionaire philanthropy” rather than “criticism of billionaire philanthropy”.
If I had to venture a guess, I’d say the difference between us is that most LW’s posters probably are closer to billionaires, geographically, socially, and in their values, than I. Maybe they are not worried because they can relate to billionaires in ways that I can’t.
There is no denying that through tax rebates the donators are leveraging everyone’s tax money. This is “a plutocratic element in a democratic setting.” as Rob Reich says. The fact that it worries no one here makes me wonder: would you have another government rather than democracy?
Again I’m not trying to corner you into breaking a taboo. I’m legitimately curious.
It seems equally valid to say that donors are only leveraging their own tax money, because donations can only reduce your tax bill to zero (or not even that because only donations up to half of your income is tax deductable), and not to a negative number.
Worried about what? That there’s some kind of slippery slope where billionaire philanthropy starts a process that eventually causes us have a non-democratic form of government, or that “a plutocratic element in a democratic setting” is bad even if there is no risk of that? I guess people aren’t worried about the former because it seems far fetched, and they aren’t worried about the latter because empirically it seems like the “plutocratic element” is trying and succeeding in solving a bunch of problems that our democracy is failing to solve. (Scott’s post gave a number of examples of this.)
You seem to be thinking that if one believes ““a plutocratic element in a democratic setting” to be better than a pure democracy, then one must believe a plutocracy to be better than a democracy. But nothing says that a mix of plutocracy and democracy can’t be better than both of their pure forms.
Does this answer your question? Do you care to explain more what you are worried about?
Let’s say that a bunch of people owe me money. If I give a discount to one of them, clearly, that discount is a present. It’s money I give to that person.
The way I see it, when someone gives 100$ to a charity with 40% tax deduction, what actually happens is that the person gives 60$ to the charity, and the state matches that with 40$ of its own taxpayer’s money. The fact that the state’s gift is limited to the amount of the person’s taxes is irrelevant to the nature of the transaction.
As Rob Reich concludes :
So the citizens of the United States are collectively subsidizing, through foregone tax collection, the giving preferences of the wealthy to a much greater degree than the giving preferences of the middle class or poor. And, of course, the giving preferences of the wealthy are not a mirror of the giving preferences of all people.
Certainly, I see that plutocratic element as an erosion of democracy. But it’s not the only one. The whole electoral system is already bad enough; the leaders, elected and unlected, are unaccountable, and generally unwilling to even discuss a lot of measures that the majority of the voters ask for. Using our taxes to finance some rich guy’s pet charity is just another nail in the coffin.
Democracy is certainly not the most expedient. But it has arisen because History has taught us to be wary of forms of power that are too expedient. The point of democracy is precisely to have safeguards against unilateral use of power.
Reich doesn’t want to outlaw billionaire philanthropy. All he says is that it shouldn’t be subsidized by the taxpayer’s money, and that it should be closely scrutinized before rolling out the red carpet. I only see good practice here.
Edit : last minute idea. Billionaire philanthropists probably do a whole lot of good. But giving them credit for all of it would be comparing against a hypothetical world where billionaire philanthropy would be replaced by nothing. But we don’t know. We might have a world where good charity is done another way, maybe even better. In any case, even if you think Reich’s charitable credit would do worse, only the difference should be credited to our current system.
Ok, so by “everyone’s tax money” you meant “the government’s tax money” whereas I interpreted it as “your and other people’s tax money” (i.e., that you could leverage more tax money than you owed yourself).
In my view, leaders being unaccountable is the natural state of democracy, rather than an erosion of it. My perspective here comes from public choice theory. If you accept that “uneroded” democracy is just naturally full of flaws (again see public choice theory), then it wouldn’t be so surprising that some people can consider “using our taxes to finance some rich guy’s pet charity” to actually be an improvement rather than an “erosion”.
It seems to me that if one could leverage more than one’s own share of taxes, then that would constitute a unilateral use of power, because the state is using force to collect taxes, and directing other people’s tax money essentially means you’re forcing them to spend their money in a way that you want. But if you’re only leveraging your own share of taxes, then it just means that the state is not forcing you to spend money the way that it wants.
But maybe by “use of power” you mean something besides “use of force”? If so, what? (The only other thing I can think of is “use of money or other resources” but that seems to cover way too much.)
Note that I wasn’t objecting to the scrutiny, but to basing it on “consistent with democratic governance” instead of something like “expected to raise human welfare in the long run”. Also he said “independent of a tax break [...] potentially to be rejected if it’s not.” Do you know what he meant by “rejected” here? Just “criticized”, or something stronger like “banned”?
Ok, I’m getting a feel of how you come to your conclusions.
Any good reads to learn the basics?
That’s just another way to describe the same facts. I call it everyone’s tax money because in my mind, taxes are pooled. When the state refunds someone, it scoops money from that pool without regard from whom it comes from. You see it as a bank vault with separate boxes for each taxpayer. In your view, it’s true that the billionaire only leverages their own tax money; but by doing so they escape taxes, and the critical point is that they do so more that the layman. Different perspective, same result.
I did mean the latter, as RR did when he said : Philanthropy can be an exercise of power, and even if it’s unsubsidized philanthropic power, we still are required to scrutinize its deployment.
I think the latter. Considering his example just above, it interpret it to the effect that the rule forbidding citizens to send money to the police or the army should be extended to philanthropy in some cases, especially when those cases should be or used to be the duty of the state (like the example he gives about schools).
I think there’s a crucial test that could be performed, relative to your ideas (in this thread) anyways – how much of the ‘against billionaire philanthropy’ do you think is due to the tax rebate/refund? I think it’s close to zero.
(And I don’t have a problem with criticizing any philanthropy but I don’t have a problem with billionaires giving large amounts generally.)
I can only reply for myself: around 60%.
Now you could contact RR and ask him the same question.
In any case, how do you interpret the answer?
That’s a good question. Or, rather, of the several ways I can interpret it (ha), each seems interesting.
I interpret your answer as being honest and in good faith. I’d default to the same were Reich to answer, if he were to answer like you did. I’d expect most other prominent public critics to deflect in some way.
More generally, I’d interpret similar answers from others writing ‘against billionaire philanthropy’ as weak-moderate evidence of the same.
As to how to more precisely test that, I admit that it’s probably very tricky and thus I downgrade how “crucial” a test it really is. Here’s one idea:
Some billionaire, one of those previously criticized in the manner under discussion, announces that, for every philanthropic donation they make, they’ll make ‘matching’ donations to the relevant federal, state, and municipal treasuries to ‘offset’ the tax rebate/refund effect of the donations.
I’d expect that, mostly, this would result in heavier criticism and increasing suspicion. I’d expect you, if asked, to moderate your own criticism or praise the offsetting directly.
‘Ideally’, we’d ask The Simulators of the Universe, to re-run the universe simulation and ‘magically’ have some kind of tax law passed that removes the refund/rebate at some point before some portion of billionaire philanthropic donations and we could measure the number and ‘sentiment’ of criticisms.
Realistically, we could probably much much more crudely approximate something similar, but any comparisons would inevitably be confounded by all kinds of other things.