Advocating "Giving Back" Is Selfish and Greedy

An oft repeated meme, at least here in the USA, is the notion that rich people should “give back” to the community. If they don’t choose to do so, instead opting to keep all of the wealth they “derived from the community”, they are painted as selfish and greedy. Nothing could be further from the truth; in fact, the truth is exactly the opposite. To advocate that wealthy entrepreneurs “give back” is a glaring defiance of reality. So much so that the meme can only arise out of either sheer ignorance or cold-hearted selfishness and greed, or worse – an ugly desire to destroy innocent values.

The latest high-profile propagation of that selfish meme comes in the form of a smug one-liner carelessly dropped by Yale law professor Bruce Ackerman, in a recent article published in the Los Angeles Times. In response to Facebook co-founder Eduardo Saverin’s renunciation of US citizenship in favor of Singapore’s more entrepreneur friendly environment, Ackerman quips: “Rather than paying back, he is moving on.”

It is easy to understand how an unthinking individual falls prey to this meme. (After all, if the fallacy were obvious, the meme would cease to propagate.) The meme is best supported by the following rationale: “If someone is rich, those riches had to be gotten from the community (or country, in Saverin’s case). Since the rich person has more money than the average person in the community in which he enriched himself, it follows that he took more from the community than he gave. Therefore, to be fair to those poor folks he skimmed off of, he should return a portion of it.”

This rationale is faulty, because it conveniently overlooks how the rich person “got” his riches from “the community”. There is a specific mechanism, or procedure, through which this occurred. It is a mistake to skip over this, and jump straight to the conclusion that the riches are somehow unearned.

Even more simpleminded rationales supporting this meme include: “The community enabled him to get rich, so it is only fair that he show appreciation by giving back” (this rationale was alluded to by Ackerman; in the article, he speaks of “the country that made their success possible”). “The rich got lucky, and ought to share with those less fortunate”. And an especially presumptuous and unapologetic rationale, presented to me once by a former coworker, “No one needs that much money”.

There are several things fundamentally wrong with each of these rationales. But let’s get straight to the bottom of why the meme itself not only relies on a suspension of reality, but is grossly unfair, inhumane, selfish, and greedy.

In order for an entrepreneur to become wealthy, he or she has to do several things first – including putting personal hard earned savings or valuable credit rating on the line (what if the venture fails; most do, in fact), put in long hours with little or no initial reward, apply hard mental effort (work smart), be self-motivated and highly disciplined, etc.

All of this giving occurs before the entrepreneur even gets a product or service on the market. If he fails, he has nothing to show for all that he gave. (A point worth noting here is that virtually none of those who advocate “giving back” would even get past this stage – precisely because they are unwilling to give so much with no guarantee of getting anything back.) For the few who succeed in their efforts, and manage to become wealthy, they acquire every single dollar of that wealth by giving a product or service in order to receive that dollar. How, then, is there any duty to “give back”? How is such a concept even remotely fair? Simple: It is not.

The wealthy entrepreneur got that much richer than others in the community because he gave so much more than they did. Eduardo Saverin may have billions of dollars; but because of him, billions of his fellow human beings have Facebook, which is of such value to many of them that they would not want to go back to doing without. This is a voluntary, fair and equitable exchange. There simply is nothing for either party to “give back”. It is a done deal.

Here is an idea: When you go to the local farmers market to stock up on fresh, organically grown fruits and vegetables (which are essentially luxury items), do you give a portion of your purchases back to the market after paying for them? Why not? It is exactly the same concept. To say that entrepreneurs who earned their wealth by providing value to the community’s inhabitants through voluntary exchange, should then “give back” to the community, is exactly the same as saying one should “give back” a portion of one’s purchases to the farmers market, after paying for them.

There is fundamentally no difference whatsoever between the two scenarios.

Note that those who advocate “giving back”, never specify who the actual individuals are who were “taken from”, and thus should be “given back” to. No, it is a purely collectivist idea: Give back to “the community”, or “the country”, etc. This is why the analogy of the farmers market is only accurate if one envisions buying from individual vendors, but then “giving back” a portion of the purchases to “the market” – not individual vendors. Either way, the notion of “giving back” that which one has received through giving in the first place is beyond absurd.

In a purely capitalist exchange, there is always a give for every take, a win-win for all. The exchange cannot take place unless each party sees personal value in the exchange. Why would anyone wish to introduce an imbalance where such a fine balance exists? When the implications of the “give back” meme are followed through to the logical conclusion, it becomes clear that it is rooted in the most contemptible of human desires: Selfishness, greed, and above all – envy.


Menno Troyer

The Daily Reckoning