“If you stick me down in the middle of Bangladesh or Peru,” Warren Buffett has said, “you’ll find out how much this talent is going to produce in the wrong kind of soil.” The Nobel Prize-winning economist and social scientist Herbert Simon estimated that “social capital” is responsible for at least 90 percent of what people earn in wealthy societies like those of the United States or northwestern Europe. By social capital Simon meant not only natural resources but, more important, the technology and organizational skills in the community, and the presence of good government. These are the foundation on which the rich can begin their work.
If you have a rich friend who keeps talking about "all my hard work and all my money that I earned", go send them the above passage from Peter Singer’s NYT magazine cover article on why people should be giving much, much more to charity. As I’ve said before, luck and circumstances are vital.
In a somewhat related piece in the December Atlantic Monthly, the wonderful Clive Crook writes enthusiastically ($) about the British documentary Seven-Up which interviewed children at age seven and then every seven years after that to see how they grew up. The filmmaker’s thesis: "Give me a child at seven, and I will give you the man." After watching the privileged children prosper materially and the unprivileged children flounder but still make it to adulthood in one piece, Crook concludes:
Does privilege early in life make it easier to prosper as an adult? Yes. Do early setbacks spoil your chances? Of course they do. The children of rich parents tend to be rich; the children of poor parents do much less well. One cannot watch these films without wanting to lean hard against the unfairness of this world. Yet one sees, also, that satisfaction in life is not the same thing as material success. Though one emerges disinclined to mold these lives to theories, one comes away suspecting that happiness, contentment, and self-respect are character traits as much as they are fruits of success. Money matters, obviously, but so do whether you are crushed by disappointment or spurred by it, sociable or solitary, restless or settled, capable or incapable of intimacy, deserving or undeserving of trust. And loneliness, maybe, is worse than poverty.
Ideally, have lots of money and a large capacity for happiness. But if you had to choose just one, these films suggest which it should be.
I was just reading an article earlier about the leadership academy for girls that Oprah Winfrey has built in South Africa. Her message to them? “You are not your circumstances; you are your possibilities.” I think imbuing children with that truth, with that sense of just how possible it is to break free of their circumstances, is what is missing for far too many poor children.
Jackie, I can’t disagree that a positive mindset has to be maintained. But still. Millions of poor children die because they don’t have food or water. You can’t use the power of positive thinking to create those material essentials. Someone else needs to provide food, water, and shelter to poor children.
Capital L libertarians love to use the phrase “pull yourself up by your bootstraps and take control of your future”. I’m a big believer in this mindset when it comes to America’s middleclass, but not when we’re talking about the slums of India or Africa or anywhere else. I find it insulting when someone (not saying you did) in the first world says third world people just need to work harder or be more optimistic.
You talked about kids in England, and I don’t think this is a third world country yet (no matter how bad the healthcare is). I don’t think people in the third world ‘just’ need to work harder or be more optimistic, but I think it does help immeasurably to have a mindset which rejects the idea of what everyone else thinks is your rightful inheritence (poverty and misery).
Here’s my current justification for not giving to charity:
Preventing nuclear war (or some awful disease) will help humanity more than extending the lives of poor, powerless people.
Giving a dollar to charity today is worse than giving away the returns from a dollar invested for 60 years.
My thoughts on charity are more logical and helpful than others. Therefore, my interests come before theirs because a small impact on my life could have a much larger impact on humanity’s utility than a big impact on their lives.
Therefore, I will practice egoism and donate the leftovers when I die.
It is now a statistical fact that the number of overweight humans outnumbers those that are starving. I find this extremely disturbing on a personal community level; it illustrates how capable we are of eliminating the hungry if only in our own backyards. I see in this blog a lot of emphasis on charity, and a lot on making money and I want to offer a suggestion. Combine the two, it has been done with great success.
Marisa-Clare — I agree for-profit endeavors can be quite charitable.
Anonymous — Giving the returns of a dollar invested for 60 years is worse than giving the returns of a dollar invested for 600 years.
In response to anonymous, I think he might have had this Buffet quote in mind:
“Someone who was compounding money at a high rate, I thought, was the better party to be taking care of the philanthropy that was to be done 20 years out, while the people compounding at a lower rate should logically take care of the current philanthropy.”
– Warren Buffet
Again and again, research has shown that money (beyond a certain point) has limited correlation to happiness.
That being said, the key is that “certain point,” which is currently beyond the grasp of the vast majority of the globe.
There is still a lot of good that money can do.
It’s one’s own money and it’s perfectly alright even if she decides to keep it all. In a way, she is doing a lot good by not being charitable, since it makes others stronger by fighting every inch of their challenge on their own, no matter how frail they are or how long does it take.
But remember, She is just one hurricane away from losing it all and looking worse than those from the third world – where none of the Ivy league training is gonna’ help. She has to wage the base battle for survival and that’s the proof of the pudding.
My own father grew up pretty poor in rural Iowa with five siblings and a single mother. Yet, through some luck, a lot of savvy, and a lot of hard work; he made himself pretty wealthy through several businesses he created. There were certainly people who gave him a chance, particularly in terms of business loans or investment, but he didn’t benefit from social capital that many entrepreneur’s do (outside of the wonderful conditions that this country has, which he acknowledges).
It wasn’t until college that I came to understand that my dad’s bootstrapping experience was not the norm. Even worse I had to realized that some people, but dint of background would do quite well, even if they were jerks and didn’t work that hard (as well as the correllary).
Still, my father shows what is possible; and I have met others who have done something similar. (And don’t forget Larry Ellison, who did not grow up wealthy).
PS – My dad, though he would strike most as conservative, always had a strong sense of justice and of the little guy, because he had been there. He can come off sounding like a crank, but he’s always aware of what the other guy is feeling.