Law student studying advanced AI law and policy

BLOG

Defending Philanthropy Against Democracy

Scott Alexander has a good post on why he does not find criticisms of mega-philanthropy convincing. This post adds some additional arguments for that position. I suggest readers read Alexander’s post first, since I largely agree with it and will assume readers have read it.

The Democracy Criticism of Philanthropy

A criticism of mega-philanthropy is that it’s anti-democratic. This excerpt from Anand Giridharadas’s book Winners Take All is perhaps representative:

When a society helps people through its shared democratic institutions [as opposed to private charitable foundations], it does so on behalf of all, and in a context of equality. Those institutions, representing free and equal citizens, are making a collective choice of whom to help and how. Those who receive help are not only objects of the transaction, but also subjects of it—citizens with agency. When help is moved into the private sphere, no matter how efficient we are told it is, the context of the helping is a relationship of inequality: the giver and the taker, the helper and the helped, the donor and the recipient.

I do not find this criticism compelling for several reasons.

Framing: Two Reasons Democracy Might be Valuable

I start from the presumption that there are two reasons “democratic control” of any given resource might be good: (1) because democracy is procedurally valuable (i.e., the fact that a decision was made democratically gives it moral value), and (2) because democracy is instrumentally substantively valuable (i.e., it tends to produce substantively good results).

The second point—substantive legitimacy—is essentially an empirical question: Do resources disposed of through private philanthropy, all things considered, do more good than resources spent via democratic control? The empirical question is well worth debating, but in my view it is both less interesting and less central to existing discussions than the procedural question. So, for the rest of this post, I focus on the procedural question: Is private philanthropy procedurally objectionable? I argue that in most cases it is not.

Why Heightened Scrutiny of Philanthropy?

A key premise of this debate is that philanthropic disposal of resources needs to be justified in a democratic society. Insofar as any action needs to be ethically justified, this is trivially true. But I think most critics have a more demanding standard in mind than this. Consider Rob Reich’s remarks in Vox:

Big philanthropy — more than ordinary small donations that most people make — is an exercise of power. It’s an attempt to direct your private assets for some public influence, often with a naked aspiration to change public policy. And in a democratic setting, wherever power is exerted, it deserves our scrutiny, in order to understand whether it’s serving democratic purposes or undermining them. And philanthropy shouldn’t be exempt from that examination.

The underlined assertion deserves more scrutiny. Any decision is an exertion of power: specifically, the power to make the actual decision made instead of some other decision. Whenever one spends money (to take the clearest case), one exercises power insofar as one directs that money to one of many possible ends, either philanthropic (give the money to GiveWell), “democratic” (give the money to the United States government, whose budget is supposedly determined democratically), or selfish (spend the money on candy).

To be clear, I agree that these are morally weighty decisions. I am not convinced, however, that (from a public policy standpoint) philanthropic dispositions ought to be subject to greater moral scrutiny than selfish dispositions. Such added scrutiny seems to perversely disincentivize altruistic dispositions.

In a liberal society, we typically presume that government scrutiny of certain decisions is suspect. If I decide to spend my next $10 on a book rather than donating it to GiveWell, we do not typically presume that that decision needs to be democratically ratified, even though it is an “exercise of power.” Insofar as liberalism is a standard starting assumption for our discourse, I think philanthropy critics have failed to argue why philanthropic decisions deserve greater scrutiny than other private decisions of similar magnitude, such as how much money to spend on various personal goods.

Democratic Ratification of Philanthropy

In response, a critic might argue that the problem is not the philanthropy per se, but the subsidization of it. But this point decisively undermines the democracy criticism: the legal subsidization of philanthropy (by tax deductions and exemptions) was as democratic a decision as any in America. Thus, in a very real sense, Americans have democratically ratified (and incentivized!) the private philanthropy status quo.

Of course, one could (and maybe should) argue the current charity law system is flawed. But note that this is no longer a procedural criticism: it is a criticism of the substantive merits of a system designed by democratic forces. Our democracy could refuse to incentivize or even disallow philanthropy, but it has refused to do so. Instead, we have decided to incentivize it.

One could argue that the decision procedure for arriving at those incentives was flawed. Perhaps. But if so, this undermines the supposed legitimacy of using that process to control philanthropic resources instead.

The critic could also argue that the problem is the “whitewashing” effect of philanthropy. Like Alexander, I am not convinced that this is a real phenomenon, but even if it was, I don’t think the criticism holds. A democracy should be able to weigh the pros of philanthropy (solution of market and policy failures) against cons it might have (whitewashing a bad or unequal economic system). If the democracy decides that the pros outweighs the cons, that calculus deserves respect. Through the various policy subsidies of philanthropy, our democracy appears to have arrived at such a decision. Again, that might be a substantively bad decision, but it is not an anti-democratic one. And if the decision to subsidize philanthropy was substantively flawed, one wonders why we should expect better disposition of money that would have otherwise gone to philanthropy.

American Democracy is not “Democracy”

I find that in this discussion there is a very uncomfortable elision between “democracy” as an abstract virtue and “democracy” in practice, by which critics usually mean the American government.

To see why I find this objectionable, suppose I delegated my donation decisions to a demos of three: Jeff Bezos, Bill Gates, and Warren Buffet. Someone would rightly object that this is not a democratic procedure, since the demos is small and also extraordinarily unrepresentative of all Americans. Of course, I could and perhaps should expand my demos. But where is the proper stopping point? When does the relevant demos become large enough to call the decision reached by them “democratic”?

Critics appear to believe that the answer is roughly, “once the demos includes all eligible voters in America.” But note that this is not an obvious stopping point, since the set of moral patients includes at least all people in the world. Thus, allocation by the United States government is only more democratic than my demos-of-three as a matter of degree, not kind.

Furthermore, like my demos-of-three, Americans are disproportionately wealthy and powerful. They also, unsurprisingly, tend to favor themselves, allocating only about 1.2% of our governmental spending towards foreign aid. Thus, governmental control of would-be philanthropic resources would still favor the relatively rich and powerful.

The critic might respond, “yes, but surely control by a bigger demos is better than control by a smaller one. Sadly, no global democracy yet exists, so maybe the American democracy is the best available.” However, the Indian, not American, government has the largest demos of any existing democracy. Curiously, forcibly redirecting philanthropy dollars from American charities to the Indian government is not a top priority of philanthropy critics.

More seriously: in the absence of a global democracy, I think the right thing to do is not “delegate to the biggest democracy you can.” Instead, the best philanthropists try to identify the ways to do the most good while affording all moral patients equal weight in a democratic spirit.

Of course, many philanthropists are either negligently or intentionally not so democratic in spirit. This is a legitimate objection to raise to philanthropy, but the philanthropy critic would still need to show that moving resources from private philanthropy to American governments (or whatever the counterfactual is) would be better as evaluated from the viewpoint of all moral patients. I suspect that this is not the case, but in any case it is not an argument I’ve seen made. In the absence of such a showing, I do not think it is legitimate for them to act as tough US governmental control of resources is unqualifiedly “democratic” as compared to philanthropy.

policyCullen O'KeefeEA