Wednesday, June 28, 2006

Bring on the philanthropists

Guardian Unlimited | Comment is free | The welfare state is waning. Bring on the philanthropists: "The 19th century was the age of capitalism, the 20th the age of socialism. It seems that the 21st will be the age of charity

When the world's second-richest man gives most of his money to the world's richest man we do well to count our spoons. Warren Buffett has given $31bn to Bill Gates to add to his $29bn foundation. Gates replied with a quote from Adam Smith on the virtue of philanthropy. He omitted another quote from the great man, that merchants "seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public".

Truly large fortunes are fiendishly difficult to dispose of. Men have bought property, built mansions, blown everything on casinos, horses and women. They have given money to their children to do likewise. Peerages, yachts, football teams, opera houses, ranches in Latin America have come and usually gone. Even the wildest imagination is eventually exhausted. Buffett claims to believe in meritocracy and is thus forcing his children to rub along on a billion each. Since leaving cash in a bank sticks in the entrepreneurial craw, the rest must go somewhere. In desperation Buffett sought help from the Gateses.

When asked why they were not giving their estimated $3bn a year to government for state aid, Buffett treated the question as absurd: "Bill and Melinda will do a better job than ... the federal treasury." He declared that philanthropists "should seek out talent to distribute their money just as they sought out talent to acquire it". A similar approach is taken by Turner, George Soros and Sandy Weill of Citigroup. Those who have tired of making money are finding new challenges in their philanthropage. "

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