Is it bad if Bill Gates gives away half of his estate?

By Ben Boychuk and Joel Mathis

Is giving to charity an act of socialism? Some readers of Fortune think so. After a June article about pledges by billionaires Bill Gates and Warren Buffett to donate half their estates to charity, the magazine was inundated with complaints ― with some readers calling the effort "socialist" and suggesting the money should be used to start new businesses instead.

"For all their vast wealth, these people don't have a clue about how economies flourish and fail," one reader wrote. "Don't give your money away. That's called putting it in a bottomless pit. Invest it."

Is there room for altruism in a capitalistic society? Or is philanthropy un-American? Joel Mathis and Ben Boychuk, the RedBlueAmerica columnists, debate the issue.

Joel Mathis

Market-oriented conservatives have long tried to defuse allegations that they're heartless moneygrubbers by saying that they're not against helping needy people, exactly ― they just think it's the job of communities and churches and private charity, not the state. That makes the recent reaction to the Fortune article rather confusing.

Let's concede one thing to the critics: Capitalism is great. The market has created more wealth ― and lifted more people out of poverty ― than any other force in history. Wealthy individuals really can help society by starting businesses and putting people to work.

In the cases of Gates and Buffett ― who have already made such societal contribution ― that can easily be done with the billions of dollars each man's family will still have after their sizable philanthropic donations.

But Fortune's readers seem more than a little foolish when they suggest that two self-made billionaires don't understand economics. They're also guilty of narrow thinking. There are places the market cannot reach and people the market cannot help, even in the most vibrant of economies.

That has been true in the United States, one of the richest societies in the history of humanity. Even with the great opportunity provided in the country, there have still been many poor people to feed and many sick people to heal. It is no slur on capitalism to say this.

At its finest, capitalism has created the wealth that affluent institutions and individuals ― people like Gates and Buffett ― have freely chosen to steer toward the needy. Philanthropy shouldn't be the alternative to capitalism, nor vice-versa; the two can and should work hand-in-hand.

Conservatives usually know this, which is why they've advocated for private and "faith-based" charities. To see them now sneer at altruism is weird and a little unsettling.

Ben Boychuk

The problem here isn't charity. The problem is Bill Gates and Warren Buffett.

Americans tend to disdain the gaudy rich and ostentatious displays of wealth. Gates and Buffett are what might be called ostentatious donors. Through his family foundation, Gates has donated tens of billions of dollars to causes ranging from education reform to vaccinations for poor women in third world countries. Buffett has given $8 billion alone to the Bill and Melinda Gates Foundation.

Have they helped people? Probably. Have they shaped public policy? Almost certainly. The question is whether those billions have shaped policy for the better.

To the extent Gates and Buffett have pushed for reforms that expand the scope and reach of national governments, that's not positive change. Gates and Buffett both have used their power and fortunes to advocate, among other things, greater federal say over corporate governance, choice in health care, and public education.

Americans may or may not agree with Gates and Buffett. I don't. Happily, Americans remain free to support charitable causes that advocate other points of view.

And the fact is, Americans are amazingly generous with their time and money. Despite the recession and high unemployment, Americans in 2009 gave more than $303.75 billion to charitable causes, according to Grenzenbach Glier and Associates, a consulting firm specializing in nonprofit philanthropy.

Self-described conservatives are especially giving. Arthur Brooks, who is now the president of the American Enterprise Institute, published a terrific book in 2006 called "Who Really Cares." In that book, Brooks provided data showing conservative families in 2000 gave about 30 percent more money per year than liberal-headed families on average, while earning 6 percent less income.

Brooks is careful to say it's not simply a matter of conservatives being more generous than liberals. Religion, family, source of income and beliefs about the role of government all influence how people give. But clearly charitable giving is not a "bottomless pit." At its best, it can be an investment in life-saving work or world changing ideas.

Ben Boychuk and Joel Mathis blog and podcast every week at https://www.freedompub.org and https://joelmathis.blogspot.com/.