Earlier this month I published a looooong piece explaining the current status of effective altruism (EA), the social movement that among other things inspired Future Perfect.
EA started as an effort to get financially comfortable people in the UK and US to donate more money to charities that could do the most good, but it has rapidly evolved into much more: a source of career advice, a political movement, and the preferred cause of at least two mega-billionaire households, Cari Tuna and Dustin Moskovitz (net worth $14.2 billion) and Sam Bankman-Fried (net worth $13.3 billion).
The piece got a lot of feedback, most of it helpful, some of it less helpful. But most of the critical feedback to the story, and similarly themed ones from Gideon Lewis-Kraus in the New Yorker and Naina Bajekal in Time, boiled down to a simple argument: these rich donors need to pay more in taxes.
It’s a fair point. The EA of 2013, which was mostly a few philosophy professors and students donating 10 percent of their money to buy anti-malaria bednets, was not particularly entangled with the American billionaire class. Nearly a decade later, it very much is. Some people hate the billionaire class for very understandable reasons, and that enmity is inevitably going to rebound on EA.
The enmity is particularly pronounced for Bankman-Fried, given the fact that crypto is, let’s be blunt, a completely useless asset class that has serious environmental costs.
(Disclosure: Bankman-Fried’s family foundation, Building a Stronger Future, is funding some of the Future Perfect section at Vox, so let me bite the hand that feeds me and say that I think him buying up Super Bowl ads and Vogue spreads with Gisele Bündchen to encourage ordinary people to put their money into this pile of mathematically complex garbage is … actually morally questionable. Bankman-Fried can do a lot of good with the money FTX produces, but parts of the production process make me increasingly uncomfortable.)
The EA push for higher taxes on the rich
But the critique of EA philanthropy is also made in ways that are frankly just inaccurate. “A huge number of effective altruists support unconditional cash transfers,” the writer/podcaster Michael Hobbes tweeted, “but if you propose taxing them and funding the welfare state (i.e. the same thing) they lose their minds.”
I have obviously not been present for all of Hobbes’s conversations with every person who identified as an effective altruist, but in my experience this statement is bizarrely false.
A 2020 survey of more than 2,000 EAs showed they tend to be college-educated (often grad school-educated) 20 and 30-something atheists or agnostics. In a 2019 survey of the community, about 72 percent reported being left or center-left politically; only about 12 percent reported being libertarian, center-right, or right-wing. These are not people who lose their minds at the idea of a welfare state.
More to the point, both the Tuna/Moskovitz and Bankman-Fried households are extremely generous backers of Democratic campaigns. “I’m for raising taxes and help elect Dems to do it,” Moskovitz tweeted the other day.
This is, if anything, an understatement. Moskovitz’s wife Cari Tuna, as I note in my piece, was ranked by the watchdog group OpenSecrets as the seventhth biggest donor to outside spending groups in 2020, above figures like George Soros. Bankman-Fried, for his part, gave more than Hollywood mega-donor Steven Spielberg or billionaire Illinois governor JB Pritzker.
In other words, the two main financial backers of EA are also among the dominant financial backers of the US political party that’s actively trying to raise taxes on rich people. The Inflation Reduction Act just passed a marked increase in tax enforcement and corporate taxes into law.
Tuna/Moskovitz and Bankman-Fried’s support for Democrats is not primarily because of tax policy; they have their own reasons for wanting Democratic control and specifically for wanting Donald Trump out of elected office, as my piece details. But it’s hard to avoid the conclusion that the EA movement, or at least its financial centers, are through their donations making higher taxes on rich people more, not less, likely.
So you want higher taxes. What do you do right now?
There’s something a little dissatisfying about this defense, though. Can you really get out of the guilt of being a plutocrat by using your money to swing elections to politicians who will tax you more?
The more hardcore critics of billionaire philanthropy would say, not really.
Emma Saunders-Hastings, a political theorist at Ohio State University, has advanced the most complete and uncompromising of these views in her recent book, Private Virtues, Public Vices. Saunders-Hastings argues that many if not most acts of philanthropy are “usurpations of public authority,” which “impose hierarchies of judgment and status” and “subvert valuable relations of social and political equality.”
In this view, billionaire philanthropy represents an act whereby the rich shape the society around them without deference to the wishes of the mass of that society. This critique clearly applies to EA, just as it applies to David Koch and David Geffen’s $100 million gifts to Lincoln Center to get their names on venues, or to Nike founder Phil Knight’s $400 million gift to Stanford to get a Rhodes Scholarship-type program named after himself. All these are mass reallocations of resources done without democratic input.
So, they’re undemocratic. Now what? There are billionaires committing their fortunes, right now, to philanthropic causes. If that’s politically unjust, we should identify what they should be doing instead.
One option would be for billionaire donors, from Geffen and Knight to Tuna/Moskovitz and Bankman-Fried, to simply donate their money to the US treasury. As philosopher Richard Y. Chappell notes, this is a perfectly allowed option that enables the wealthy to put their spending decisions in the hands of Congress. (Such donations could only be used to pay off the public debt, but hey — it’s tax deductible.)
But one almost never hears people proposing this. When push comes to shove, critics of big philanthropy usually don’t want to commit themselves to the view that slightly reducing the federal budget deficit is morally or politically preferable to letting billionaires donate to other causes.
Another option would be for billionaires to shift to consumption: go on even more vacations, stay at even nicer hotels, buy even more art for themselves, etc.
At times Saunders-Hastings seems to tilt toward this view. She notes that, “Some philanthropy is quite easily conceived as consumption,” such as opera patronage (billionaires paying for art they enjoy consuming) or yacht clubs (billionaires … okay, yeah, you get this one).
But she adds “even donations that primarily serve others can bring the donor indirect or intangible benefits,” she continues, meaning that “attempting to single out a subset of philanthropy as nonconsumption looks unpromising.”
If it’s really not possible as a matter of political theory to distinguish between buying bednets to save children’s lives from malaria and buying Yale an international airport — and if Saunders-Hastings is right that philanthropy has particular antidemocratic properties that billionaire consumption doesn’t — it seems to follow that we’d be better off with billionaires buying more yachts rather than giving their money away.
That view is coherent, but I find it impossible to swallow. At other points, Saunders-Hastings does too; she praises Julius Rosenwald, the multimillionaire from Sears who funded schools for black children in the Jim Crow south, because he provided a “stopgap” in a situation “where government is unable or unwilling to meet the requirements of justice.”
That opens up a crack in the critique that honestly begins to look more like a gaping chasm.
You go to tax war with the legislative body you have
It strikes me as plausible that the persistence of factory farming, the failure of governments to invest in preventing pandemics, and the failure of rich nations to protect residents of poor ones from preventable diseases — that all these things violate principles of justice.
If that’s true, how are the spending priorities of EA donors unacceptable while Rosenwald’s are noble?
This is knotty, complicated stuff. But the upshot for me is that we will live in a world of extreme wealth inequality for the foreseeable future, and the best we can likely hope is for the winners in that rigged game to donate their winnings justly.
The past year in US politics is illustrative. The 2020 election was, in one important sense, the best for the Democratic Party in 12 years: It marked the first time since the 2008 election that the party controlled the presidency and both houses of Congress. Given that these kinds of “trifectas” tend to only last for two years before midterms wipe out the governing party’s congressional majority, this victory meant that the 2021-22 legislative session was likely the high-water mark of the party’s power for the next decade or more. For supporters of higher taxes on the wealthy, this was about as good as it was going to get for a long time.
But the victory did not lead to a legislative majority willing to raise individual income tax rates on either wages or investment income, or willing to raise the corporate tax rate, or willing to expand the estate tax. Instead, the most ambitious tax policy capable of earning 50 votes in the Senate was a new 15 percent “minimum tax” on high-profit corporations, meant to force companies claiming large tax deductions to pay more. The Inflation Reduction Act, which included that minimum tax, also included an excise tax meant to discourage companies from buying back their own stock, as well as more funding for the IRS to catch tax cheats.
That’s not nothing, but from the perspective of wealth inequality, it’s close to nothing. The US would need a truly massive change to the way it taxes accumulated wealth or investment income, akin to the Billionaires Income Tax proposed by Senate Finance Committee chair Ron Wyden (D-OR), to cut into major fortunes like Tuna/Moskovitz’s or Bankman-Fried’s. The experience of 2021-22 suggests very strongly that there is not a governing majority capable of making those changes in the United States anytime in the near future. Americans simply are not electing enough people to the Senate with those views for it to happen.
That likely means that the conversation about taxing America’s wealthy more will be highly academic until Democrats gain a more progressive governing majority; if history is any guide, that will probably take another 10 years or more after Democrats likely lose the House this fall. (And given the Senate’s rural skew, which penalizes Democrats, a decade might be optimistic.) As long as that discussion is academic, the discussion of how billionaires should spend their fortunes, given that they will not be taxed more heavily, remains very practical and real, and very high-stakes.
It’s well and good to point out that the game is rigged. It is. But that’s just the start of the conversation.
Millions turn to Vox to understand what’s happening in the news. Our mission has never been more vital than it is in this moment: to empower through understanding. Financial contributions from our readers are a critical part of supporting our resource-intensive work and help us keep our journalism free for all. Please consider making a contribution to Vox today.
The post If you’re such an effective altruist, how come you’re so rich? appeared first on Vox.