Rob Reich on philanthropy and what foundations are good for

by on March 26, 2013 at 11:38 am in Economics, Law, Political Science | Permalink

From Boston Review, you will find his stimulating essay here.  Excerpt:

I believe there is a case for foundations that renders them not merely consistent with democracy but supportive of it.

First, foundations can help to diminish government orthodoxy by decentralizing the definition and distribution of public goods. Call this the pluralism argument. Second, foundations can operate on a longer time horizon than can businesses in the marketplace and elected officials in public institutions, taking risks in social policy experimentation and innovation that we should not routinely expect to see in the commercial or state sector. Call this the discovery argument.

Do note that some parts of Reich’s essay are more critical of foundations than this.  Behind the main link, the column “Forum Responses” provides numerous comments on Reich, you can find mine here.

Norman Pfyster March 26, 2013 at 12:14 pm

Is there a line of thinking out there that believes that philanthropy and foundations are inconsistent with democracy? If you substituted the word “university” for “foundation,” would you get the same argument?

BC March 27, 2013 at 4:22 am

Based on the first part of Reich’s essay, and TC’s critique of it, apparently the answer to your first question is “yes”, remarkably. Apparently, there is a line of thinking that an important feature of democracy is that one views private wealth primarily as wealth that has not yet been properly seized by government. Hence, in Reich’s view, philanthropy can be viewed as undemocratic because philanthropists are “unaccountable” in how they spend their own money. Under this view, the alternative to the Gates Foundation, for example, was not that Bill Gates could have spent that money on private consumption. The alternative was that the government could have spent that money based on the whims of elected officials. It’s undemocratic, in Reich’s view, that elected officials don’t get to determine whether and how Bill Gates’s private wealth is spent to fight global poverty and disease.

In the second part of his essay, Reich defends foundations, but not for the conventional reason that most people might cite, some variation of, “Hey, it’s great that some people choose to spend their own wealth trying to help others.” No, instead, Reich only concedes that there might be two reasons, pluralism and discovery, that might cause us to be gracious enough to allow people to spend their own wealth for the public good. The underlying view, though, is that foundations are consistent with democracy only if the government decides that there are good reasons for foundations to exist. This line of thought culminates in Reich’s final paragraph, where he urges that we learn more about foundations’ “performance” so that we may properly “judge” them.

It’s striking to me how many on the Left nowadays have embraced some form of this private-wealth-is-not-really-a-right view. Maybe, I wasn’t paying close enough attention, but I don’t remember this view being so common 10-15 or even 5 years ago. In fact, if The Onion wanted to lampoon the Left, one could easily imagine that they could have used Reich’s essay with only a few modifications. The piece would have easily been recognized as caricature. Today, such an essay is presented as serious argument.

happyjuggler0 March 27, 2013 at 1:52 pm

+1

prior_approval March 26, 2013 at 12:37 pm

‘I believe there is a case for foundations that renders them not merely consistent with democracy but supportive of it.’

And centers – let us never forget the noble work of centers. And institutes. Especially when funded, or even founded, by foundations. Particularly family foundations, which can also have a longer time scale than any individual family member.

The Anti-Gnostic March 26, 2013 at 1:14 pm

Rob Reich, Associate Professor of Political Science and Director of the Program in Ethics in Society at Stanford University,

This forum is part of an ongoing collaboration with the Bowen H. McCoy Family Center for Ethics in Society at Stanford University.

Rich C March 26, 2013 at 2:29 pm

“I would sooner say that we live in a constitutional republic with strong democratic elements, not a democracy.” – Tyler Cowen (at link).

Admittedly a side-issue, but your claim we don’t live in a democracy is an incorrect correction.

We live in a democracy. We live in a republic. We live in both. We live in a democratic republic. We live in a republican democracy. We live in “a democratic constitutional republic” if you like. Regards.

JWatts March 26, 2013 at 3:22 pm

I think it’s more complicated than you make it out. Democracy democratic republic. I find TC’s sentence to be more accurate than your paragraph.

JWatts March 26, 2013 at 3:41 pm

That should be:

Democracy NOT EQUAL democratic republic

jseliger March 26, 2013 at 3:25 pm

Foundations aren’t “total scandals,” but, having worked with and submitted proposals to many of them, I sympathize with the critics, for reasons I wrote more about in “Foundations and the Future” and elsewhere.

As a hobby for rich people, foundations are better than jets or islands, but for those of us in the trenches with them, it’s hard not to notice that self-aggrandizement explains their behavior much, much better than altruism.

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