Are successful entrepreneurs expected to give back to society ?
There is a discussion going on about if government should tax billionaires heavily, appropriate their wealth and use it for public good or let these billionaires decide what is best use of their money. What is better — Bill Gates spending his billions to create social impact the way he feels is appropriate or Uncle Sam taxing it and using it to create social impact ?
This issue can be discussed at multiple levels. For one, proponents of capitalism are vocal about the fact that free and fair competition and proportional returns for risk and entrepreneurship, will result in economic growth. Few outlier success stories are celebrated by the media to serve as inspirations for hundreds of thousands who take the plunge of entrepreneurship.This is probably as important as the support infrastructure provided by venture capital firms, incubators and universities.
On another level, we need to understand if a billion dollar spent by an entrepreneur will create more social impact compared to that spent by a government with its checks and balances. Here we need to compare an average government with an average billionaire. (not the ones we generally look up to)
Unfortunately, it’s quite hard to pin point an average government. Governments and their programs lie in a wide spectrum in terms of the efficiency with which they create social impact.
For example in Corruption Perception Index, the spectrum is pretty wide.
Even for non-corrupt governments, many factors are at play while allocating funds. They might choose to allocate their funds to areas that will give them good optics and in turn good electoral returns even though other high impact areas are starving for funds.
It is also quite hard to describe the average billionaire.
While you see a higher proportion of tech entrepreneurs here, when we include people further down in the ranking, the list is quite diverse.
They must be having very different motivations as they are all humans(I hope), but might be alike in certain skills like, drive, grit, people skills, business sense etc. They might choose to leave their wealth for their children, or even invest in causes that they have some interest in. Their own local community might interest them more than a community in much better need thousands of miles away. In this era of global market access, the billionaire could have earned his windfall gains from consumers across the world and if so, even while giving back it is fair to expect a global perspective.
Which creates more social impact for a single dollar : Fighting malaria in Africa or investing in research for a cure for cancer. ?
According to GiveWell, fighting malaria in Africa creates the biggest social impact for a dollar.
What do the uber-rich want ?
Usually a billionaire would have already satisfied herself with most of the lower order needs and would be a bit interested in esteem needs and/or self actualisation.
What is a fair objective ?
A fair objective should consider social impact from an international perspective. It should broaden its scope to humanity and if possible to all life in earth and beyond.
What is a possible solution ?
An international partnership of governments and organisations that can transparently certify the social impact of various agencies and let billionaires decide from the bouquet of causes they can invest in, in return for some benefits like honorific titles, privileged access to events, ability to name institutions and programs and more…
In fact, we see examples of these, already carried out by many organisations.
In today’s era, when a lot of wealth is getting concentrated at few big conglomerates who have global market access, a balanced approach of nurturing free enterprise and ensuring social justice is very much required.
