Thursday, February 25, 2010
I ran across an interesting essay recently entitled "In Defense of Charity and Philanthropy". Interesting because it restates and then challenges the conventional law and economics wisdom that capitalism and its profit seeking "misers" are not only preferable to (what I will call) charitable socialism and its do-gooder philanthropists in an economic sense, but morally superior as well. Imagine that. The profit seeker is actually morally superior to the philanthropist. The idea, espoused by Adam Smith and Ayn Rand in one form or another, is that individual profit seeking is the best way to ensure the most goods and services for the most people. It is morally good to satisfy as many as possible and anything that sacrifices more than the necessary few for the sake of others is morally lacking. Capitalism sacrifices the least number of people for the good of all, according to those who believe in it. Indeed, much political discourse during the last presidential campaign regarding capitalism, socialism, and redistributionism had a moral flavor to it. Obama, for example, was indignantly and pejoratively derided as a "socialist" by many, even those who believe that a healthy and vibrant charitable sector is to be desired in a capitalist world. I understand, of course, that the three "isms" can be distinguished from the charitable sector in that the former are types of government while the charitable sector is comprised of the ungoverned, if not the ungovernable. Still, a blanket condemnation of socialism seems necessarily to cast suspicion on the charitable sector as morally lacking since socialism's more equal distribution of wealth is often an important goal of the charitable sector as well. Charities, as classically defined, seek the Utopia where nobody wants and everyone receives her subsistence, at least. The indictment, though, is that in the absence of personal (as opposed to public) profit, more people will receive slightly or greatly less than their subsistence. A society without a profit motive is morally lacking because it actually prefers and tolerates more poor people than does a society that embraces profit seeking. Ergo, the miser is morally superior to the philanthropist.
I may very well be mixing my own ideas with those of the essayist. But much of the law regarding nonprofits, tax and otherwise, is based on the implicit, if not explicit notion that capitalism is morally superior to socialism and, indeed, the charitable sector. The essayist provides food for thought, at least, to the contrary.