Vox - These are the trade-offs we make when we depend on billionaires to save us

Theodore Schleifer reports in VOX about Big Tech billionaires and quotes Sally Hubbard of Open Markets Institute.

There is something deeply frightening about relying on billionaires to save us in this crisis. But what if we have no better choice?

The US government has repeatedly proven to be sluggish at best and impotent at worst at controlling the carnage of the coronavirus crisis. American deaths are now over 10,000, officials are comparing this week to 9/11 and Pearl Harbor, and at times it can feel like there are no leaders who can help.

But saviors, of a sort, loom: billionaires — and tech billionaires in particular.

Tech billionaires dominate the list of the world’s wealthiest people. And so Silicon Valley could not be better prepared to step into this void. And it has, even if unevenly. Jack Dorsey on Tuesday promised a new $1 billion philanthropy. Apple has donated 20 million masks. Bill Gates is building factories to produce vaccines that don’t even exist yet. And other tech elites — think millionaires, not billionaires — have mobilized their networks for ambitious efforts to find equipment from around the globe or feed hospital workers in their hometowns.

But for all the wealthy’s good deeds, this status quo raises alarming questions about the long-term dangers of this dependency on this private sector and its generosity, especially about the world we’ll inherit once the dust settles. How can we be stronger the next time a pandemic, or any other crisis, strikes?

In conversations with philanthropists, wealth advisers, and billionaires over the last week, they described the uneasy bind to Recode: On one hand, tech billionaires are doing many helpful things. A nurse on the front lines of the crisis probably couldn’t care less whether the mask that protects them came from Tim Cook or from Donald Trump — they’re just glad they have one.

But two things can be true at once: Tech billionaires can be doing good while simultaneously revealing their power and entrenching it for the long haul. As the government struggles and the safety net crumbles, tech billionaires are reaching the apex of their influence — influence that may not recede so easily once we do manage to survive this pandemic.

“If we need the resources now but we’ll regret them having this power later,” asked Megan Tompkins-Stange, who studies the influence of the elite, “what does it mean for immediate suffering at the moment?”

“We do need billionaires to donate their resources when a state has failed so abjectly,” she told Recode. “At the same time, opening up all these avenues for philanthropies to provide for the public need — even in the short term — provides more space for them after the crisis to leverage that into new democratic legitimacy.”

There are four interrelated spheres in which tech billionaires have commanded more plutocratic influence during this crisis: their philanthropic power, their corporate power, their political power, and the power of their personal brands. We are living in their world more than ever, and it’s worth asking if that’s a good thing.

Philanthropic power

Over the past year or two, the world of billionaires has wrestled with a fresh, counterintuitive question: Is it wrong for the megarich to give to charity? After all, they could just pay more in taxes instead.

But today’s crisis has laid bare how much we might need these billionaires in a specific moment: when the government is failing. And since philanthropists can only do so much, critics say that the crisis points to problems with our system more broadly — and that the US shouldn’t have to rely on charitable billionaires for masks or ventilators next time.

“Philanthropy is taking on a greater portion of the responsibility for response than anyone expected,” said Dustin Moskovitz, a co-founder of Facebook and one of Silicon Valley’s most thoughtful billionaire philanthropists. “Unfortunately, I think it’s clear to anyone closely following the situation today that philanthropy simply can’t solve this crisis on its own.”

That’s true despite the number of Silicon Valley billionaires whose net worths have skyrocketed over the past decade. Some of them are so wealthy that even if they want to give their money away, they literally cannot dispense their fortunes quickly enough. This has fueled the rise of charitable vehicles like donor-advised funds and thinned the line between a billionaire and an asset manager: Both are overseeing vast financial empires. Advisers to tech billionaires, in particular, describe a paralysis: The nouveau riche don’t even know what to do with the money so they stow it away to be tapped later.

And yet the critique of billionaire philanthropy revolves around the idea that these donations are an expression of private power. Indeed, philanthropists like Moskovitz are some of the most important people in determining the shape of America’s response to an unprecedented crisis. They are imbued with unaccountable, untransparent, and undemocratic influence. Power grabs can happen. And their donations can legitimize the philanthropists as heroes, which can discourage scrutiny of their business practices.

But that general theory misses two things about this particular moment: First of all, while the donations certainly do offer a public-relations boon, much of the current philanthropic response — for pandemic models, for vaccine research, or for feeding the hungry — are not directly emboldening billionaires’ short-term grip on society, although questions about their taxes remain. And secondly, this critique can overgeneralize the entire philanthropic response to the crisis by focusing solely on top-down efforts from billionaires.

Even if you hypothetically believe that the rich should be taxed at a much higher rate and that democratic leaders, not billionaires, should be the ones making funding decisions, it is not as though the tax code is going to be rewritten right now.

Read the full article on VOX here.