Now, in the red corner: Bill Gates & Warren Buffett, ranked the #2 & #3 wealthiest people in the world
In the blue corner: Carlos Slim (a Mexican business tycoon), #1 on that list
Earth’s three wealthiest people are in an intense philosophical boxing match right now about how to best help the world with their massive fortunes.
Earlier this year, Gates & Buffett created significant buzz when they announced their pledge to give away “the majority of their wealth to philanthropy.” Over 40 other billionaires have joined them. This pledge will result in billions of dollars funneling into charities across the globe. But, not all billionaires agree with their approach.
The most prominent of these billionaires is Carlos Slim, who made provocative comments in response to Gates and Buffet:
The only way to fight poverty is with employment. Trillions of dollars have been given to charity in the last 50 years, and they don’t solve anything. To give 50%, 40%, that does nothing.”
Slim’s comments have served to magnify the criticisms levied by many economists and academics in recent years: Entrepreneurship, not aid, is what truly solves problems and alleviates poverty. The accomplishments of charity, they argue–despite its very noble intentions–pale in comparison to the accomplishments of businesses in creating jobs, raising incomes and improving the lives of poor people around the world. In some cases, they argue, charity has actually done more harm than good in alleviating poverty.
It’s a very interesting debate. As someone who works in the “space between” entrepreneurship and charity, I have enjoyed following the conversation between these heavyweights. More personal opinions to come on this issue, but I’m curious: What are your thoughts?
(Carlos Slim, despite his comments, has given more to charity than just about anyone else in the world. His specific criticisms were toward the billionaire’s pledge to give more than 50% of their wealth to philanthropy.)
I agree with both. I believe that the only way to truly alleviate poverty is through education and enabling, which inevitably leads to entrepreneurship on a small scale. I disagree that giving to charities does not help solve the issue.
It is the responsibility of the giver to make sure that their gift goes beyond monetary value and translates into growth. In the case of Gates and Buffet, they are responsible to contribute to charities who will, in turn, not merely “give” to the impoverished, but to lead them to a place of growth. It sounds idealistic, but I believe hope in ideals gets people through reality to a better place.
I really want to side with Slim on this one because he’s got the best name, but I can’t. His argument is too narrow, and I believe some in his camp are well-meaning and do great things to push for business that helps the poor and others are using it as an excuse to do nothing. Effective philanthropy simply needs to meet a need. Though often, discerning that need is very difficult. An example of what I mean: Kansas City, MO high schools have an approximate dropout rate of 50%. Solutions: more job opportunities in the area for the students after grad, higher salaries to attract better teachers, more staff to “nurture” positive personal growth, higher salaries for parents in the area, after school activities and programs, police force to crack down on illegal forms of economic vitality. Maybe all that’s needed is for a few thousand people like me to volunteer to mentor a kid. Maybe all those put together would only make a 10% difference. Or maybe they’d make a 2% difference per year and over time the community would begin to reinvest in itself and people would learn to invest in each other the community would begin to thrive. I don’t know, but it’s complicated and it’s complicated because the school is there and the education is there and kids are choosing not to accept it. My point: there’s a deficiency in the education of KCMO youth and they have schools to go to, so what is the need?
Great post Chris, I think this is a debate we should be grappling with more often. I think the problem with Slim’s argument is that he poses philanthropy or charity as a monlith. The truth is, charitable giving has an array of forms today. In fact, with the rise of social entrepreneurship, the two (charity and entrepreneurship) don’t necessarily have to be mutually exclusive. I think the onus is on us, as the nonprofit sector, to demonstrate this and educate our constituency about the possibilities for charitable giving that (as Slim suggests) leads to employment. In particular, social investment funds allow us to leverage our money in ways that have never been possible before, often with a return as well! Looking forward to hearing more of your thoughts. -L
It’s a question that has fascinated me as well. I’ve written a couple posts about this, but here’s my one on Slim’s comments: http://remnantculture.com/?p=2002
The gist of my point of view is that both charity and entrepreneurship are important, and from a macro level, perhaps entrepreneurship is the best widespread solution. However, charity can play a huge role in feeding entrepreneurship (and the other way around).
Here’s an excerpt:
“There are plenty of counterarguments [to pro-job creation arguments] that leave the solution a bit up in the air for me. For example, philanthropy has the potential to bring plenty of spiritual benefits to the table by funding missionaries, planting churches, and simply promoting Christ-like behavior. Depending on what you believe, such spiritual transformation could indeed lead to widespread alleviation from of poverty (much as it did during the Great Awakening). Likewise, philanthropy can also heal the sick, educate future billionaires, and drive seemingly (or momentarily) unprofitable innovations — all of which can bode very well for the economy in the long run.”
As for me I believe to eradicate poverty for d poor u just have create more jobs that does not involve education, jobs dat involve skills and using what dey know how to do with their hands. Most of this people have lots of skills in them but don’t have opportunity to show them. Let’s help the needy MR SLIM