Charity Begins With Wealth Creation

Charity — helping people who have trouble helping themselves — is a good thing two times over. It's good for the beneficiary and good for the donor, too. Stephen Post's fine book, "The Hidden Gifts of Helping," reveals that 76 percent of Americans say that helping others is what makes them most happy. Giving money makes us feel good, and helping face-to-face is even better. People say it makes them feel physically healthier. They sleep better.

Private charity is unquestioningly better than government efforts to help people. Government squanders money. Charities sometime squander money, too, but they usually don't.

Proof of the superiority of private over government efforts is everywhere. Catholic charities do a better job educating children than government — for much less money. New York City's government left Central Park a dangerous mess. Then a private charity rescued it. But while charity is important, let's not overlook something more important: Before we can help anyone, we first need something to give. Production precedes donation. Advocates of big government forget this.

We can't give unless we (or someone) first creates. Yet wealth creators are encouraged to feel guilt. "Bill Gates, or any billionaire, for that matter," Yaron Brook, author of "Free Market Revolution" and president of the Ayn Rand Institute, said on my TV show, "how did they become a billionaire? By creating a product or great service that benefits everybody. And we know it benefits us because we pay for it. We pay less than what it's worth to us. That's why we trade — we get more value than what we give up. So, our lives are better off. Bill Gates improved hundreds of millions of lives around the world. That's how he became a billionaire."

Gates walks in the footprints of earlier creators, like John D. Rockefeller, who got rich by lowering the price of oil products, and Cornelius Vanderbilt, who did the same for transportation. The clueless media called them robber barons, but they were neither robbers nor barons.

They and other creators didn't just give us products to improve our lives, they also employed people. That's charity that keeps on giving, because employees keep working and keep supporting their families.

"That's not charity," Brook said. "(It's) another trade. You pay your employees and get something in return. But the employee is better off, and you are better off.

"And when you start thinking about the multiplier effect, $50 billion for Bill Gates? That's nothing compared to the value he added to the world. That is much greater than the value he'll ever add in any kind of charitable activity." Gates now donates billions and applies his critical thinking skills to charity. He tested ideas in education, like small high schools, and dumped them when they didn't work. Good. But if he reinvested his charity money in Microsoft, might he have helped more people? Maybe.

Brook points out that Gates gets credit for his charity, but little credit for having created wealth. "Quite the contrary," Brook said. "We sent the Justice Department to go after him. He's considered greedy, in spite of all the hundreds of millions of people he's helped, because he benefited at the same time. (When) he shifted to charity, suddenly he's a good guy. My complaint is not that he's doing the charity. It's that we as a society value not the creation, not the building, not the accumulation of wealth. ... What we value is the charity. Yes, it's going to have good impact, but is that what's important? ... Charity is fine, but not the source of virtue. The source of virtue is the creation and the building."

What especially offends Brook, and me, too, is stigmatizing wealth creators. The rich are made to feel guilty about making money. I sometimes attend "lifetime achievement award" ceremonies meant to honor a businessman. Inevitably, his charity work is celebrated much more enthusiastically than his business creation. Sometimes the businessman says he wants to "give back."

Says Brook, "It's wrong for businessmen to feel like they need to 'give back' as if they took something away from anybody."

He's right. They didn't.

If we value benevolence, we must value creation.

John Stossel is host of "Stossel" on the Fox Business Network. He's the author of "No They Can't: Why Government Fails, but Individuals Succeed." To find out more about John Stossel, visit his site at <a href="http://www.johnstossel.com" <http://www.johnstossel.com>>johnstossel.com</a>. To read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate Web page at www.creators.com.

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Comments

After my father died in WWII, he was on the other side, my mother worked as a translator, met some very "charitable" Americans, and was able to immigrate to Canada, with all four of my sisters. She made certain we learned English as quickly as possible, and passed on a work ethic to us which has been a boon, and a bane, at times. :) My ancestors believed in noblesse oblige, which has been translated in this country into a curse. I am now an American, in awe of what brains and hard work can accomplish. I, too, do not like the phrase "giving back" because it denotes taking something not earned and then returning it.
I just finished eighteen months of volunteer work at my college. I left because of the force the Union exerted during restructuring/downsizing. Everyone gave up a great deal, but the Union made certain there was no pain involved for them. Reading this op-ed has made it easier for me to decide how I wish to spend my future volunteer hours. Thank you.

While I have no problem with someone inventing the next wheel or killer app or whatever it is that makes all of our lives better, I do see an issue with the trend of accumulating the benefits as a dragon hoards treasure. Maybe it's naive, but I have this Forrest Gump outlook on wealth: "You need so much to live comfortably, and the rest is for showing off."

That's when 'charity' steps in. You're showing off in a way that is beneficial to others, instead of narcissistic.

Couple that with the tendency for large corporations or influential people to 'game the system' so that they get even richer at the expense of others (sidelong glance at Wal-Mart), and we see entirely too much emphasis on the "control the board" version of the Free Market game. Once you've got enough to live comfortably, perhaps ensure your kids and grandkids are set to succeed, let someone else coexist in that market. If their ideas are better, or their product better or cheaper, so be it. You don't have to crowd them off the map because they're infringing on your turf. Who cares?

Perhaps this could be called the "Trickle-across" theory of market economics.