Can the rich buy our love?
That’s the question at the heart of Robert F. Dalzell Jr.’s “The Good Rich and What They Cost Us,’’ which offers a useful historical perspective on wealth and philanthropy.
Dalzell presents portraits of earlier Americans -- one from each of the past four centuries -- who got rich, made people mad along the way and tried to restore themselves to the public’s graces through good works. Modern concerns -- about taxation, crony capitalism and social entrepreneurship, to name just three -- echo throughout.
Each of Dalzell’s protagonists was in some way morally compromised:
The Puritan merchant Robert Keayne was found to have overcharged for nails, a precious commodity in the Boston of his day, in an early example of public unease with profit.
Allowing for inflation, George Washington was the richest president ever, yet his wealth was built on the backs of slaves.
The Lawrence brothers, a pair of New England textile makers, depended on cotton picked by Southern slaves and on increasingly harsh conditions in Northern mills.
John D. Rockefeller earned a reputation for utter ruthlessness in assembling his Standard Oil empire.
All made fortunes and all gave away wealth, if not in life then at least in death. Redemption wasn’t their explicit aim, but Dalzell certainly thinks the desire for it played a role.
In his view, this may explain why Bill Gates has given away so much money while Steve Jobs hardly donated any. Jobs was practically deified by Apple’s many fans, who regarded his products as gifts, while Microsoft, the business Gates founded, grew “big enough to be perceived as a profiteering monopoly,” Dalzell writes. “And it was in the face of that development that Gates embarked on large-scale philanthropy.’’
The author notes that Oprah Winfrey, like Jobs also quite popular, was notably absent from the list of tycoons who have pledged to donate half their wealth. (On the other hand, Warren Buffett is a ringleader in the movement despite his near beatification in popular culture.)
Judging from “The Good Rich,” the author is no doubt a fine teacher. He’s learned, articulate and subtle, and he raises an important question. Is the generosity of the rich -- and “wealthy Americans are less generous than we think,” Dalzell reminds us -- adequate to sustain a democracy in which inequality has increased to such epic proportions?
Dalzell takes the trouble to sketch just how unequal our society has become, noting that inequality in this country is worse than in Egypt, India or Pakistan.
He cites studies showing that the richest 20 percent control 84 percent of U.S. wealth, and that the average real after-tax income of the top 1 percent grew by 275 percent from 1979 to 2007. The bottom fifth gained only 18 percent.
Unfortunately, Dalzell never fully engages with the questions at the heart of his book. There is no evidence presented on whether having a class of mostly self-made plutocrats results in a net benefit to society, perhaps through greater innovation or faster economic growth.
Nor does he grapple with whether we’d be better off if the functions now performed by philanthropy were filled by the state (which underwrites them, to some extent, through the tax deductibility of charitable gifts).
Should we maintain this deduction? Would we be better off with higher marginal tax rates on the rich? Is it even possible to change our economy in ways that deliver greater income growth to the 99 percent? Dalzell doesn’t address these concrete questions, which flow naturally from any discussion of the costs and benefits of philanthropy.
Yet the book is valuable nonetheless, if only for the historical context it provides. The author’s leanings aren’t hard to detect -- he clearly has real concerns about inequality, and doubts about the compensating value of philanthropy. So should the rest of us. Thanks to Dalzell, our thinking on the subject will at least be enriched by history.
“The Good Rich and What They Cost Us” is published by Yale University Press (199 pages, $28). To buy this book in North America, click here.
(Daniel Akst writes for Muse, the arts and leisure section of Bloomberg News. The opinions expressed are his own.)
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