Zuckerberg Buys the Affection and Admiration of the Public

Dec 2, 2015

27

Baltimore, Maryland

'Wow.'

That was how the world's second biggest philanthropist, Bill Gates, described the decision yesterday of the worlds' first biggest philanthropist, Mark Zuckerberg, to give away most of his fortune.

Zuckerberg, hero of the popular movie, The Social Network, in which our daughter played a small (but important) role, has decided to 'give back'.

All over the world, the press is ga-ga. 'See, the rich aren't all SOBs,' say the reports. Apparently, some of those who have done well are willing and eager to 'do good' with their money.

Here's the Reuters report, for example:

  • Facebook Inc Chief Executive Officer Mark Zuckerberg and his wife said on Tuesday they will give away 99 percent of their Facebook shares, currently worth about $45 billion, to a new charity in a letter addressed to their daughter, Max, who was born last week.

    The plan mirrors a move by other high-profile billionaires like Warren Buffett and Bill and Melinda Gates, who have pledged and set up foundations to give away their fortunes to charity.

    On his Facebook page, Zuckerberg posted a photo of himself, his wife, Priscilla Chan and their new daughter, Max, along with a post entitled 'A letter to our daughter.'

Isn't this great! That kind of money is bound to yield some big payoffs. Perpetual motion? A cure for cancer? Squaring the circle? Base metal to gold? Nuclear fusion? The mass of the Hicks Boson? Did John Snow really die? Asian fusion?


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Chan and Zuckerberg are going to focus initially on 'personalised learning, internet connectivity, curing disease, and community building'. In the long run, they'll be trying to 'advance human potential and promote equality'.

Our troubles are over. 'The Zuck' is on the case...with $45 billion of do-gooder money...we can feel human potential advancing already, like Hannibal crossing the Alps or the Wehrmacht crossing the Oder.

But wait...how can you advance human potential? How do you know what is an 'advance'? How do you know what the 'potential' is? How do you know that you are going in the right direction?

Hey, you can't fool us. We saw the movie. Zuckerberg is a jerk. Maybe a creep.

But if that were so, why would he make such a magnanimous, selfless, and generous gesture? Surely he is a good guy after all.

Wait again...we are firmly committed to presenting an alternative (i.e. unpopular) view. So, we will do so here too:

Zuckerberg's gift is the work of the devil.

All we know about Zuckerberg is that he is apparently one of the greatest producers of wealth the world has ever seen. And now, he gives his wealth to charities.

But how is the world a better place when the capital is moved from the hands of people who know how to create wealth to the hands of do-gooders, with no record of having ever produced any wealth at all?

We don't know. Of course, the gift has a huge public relations value for Zuckerberg and Facebook. Ultimately, money serves to make a person more loveable. Reduced to its most elemental level, it proves that a man is capable and a woman is desirable.

Zuckerberg has just paid a huge price to buy the affection and admiration of the public.

You have to remember, too, the rule of 'declining marginal utility'. The more you have of something, the less each incremental unit is worth - to you.

Zuckerberg has so much money that he can give away 99% of it and still not have to look at the right side of a menu. His gift won't force him or his wife to take public transportation. He won't have to send his daughter to public school or shop at Walmart.

In other words, the money he gives away has near zero real value to him. He still controls Facebook. His lifestyle will be unaffected.

But even if the money isn't particularly important to Zuckerberg, and he might be giving it for selfish reasons, still it will make the world a better place, won't it?

Alas, no. The only way we can measure improvement is in money. If a project makes money, it must have produced more than it consumed. Take away the profit motive and you don't know whether you're going forward or backward.

You don't know whether you're adding to the world's wealth or subtracting from it. You don't know whether you're doing good...or bad.

Are Africans better off after absorbing most of the world's good intentions over the last 100 years? Apparently not. Are the people who collect money at stop lights - holding up signs that say they are 'homeless veterans' - improved because you give them a dollar to two? Maybe not. Are communities stronger, better, more prosperous, and more virtuous when do-gooders aim to make them that way? Who knows? Will your children be better people if you give them money? Probably not.

On the evidence, charity does at least as much harm as good - maybe more.

And if that is true, Zuckerberg should have kept his money to himself.

Bill Bonner is the President & Founder of Agora Inc, an international publisher of financial and special interest books and newsletters.

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7 Responses to "Zuckerberg Buys the Affection and Admiration of the Public"

Sushil Kumar

Dec 11, 2015

I agree with your statement. It would depend upon where this money will get finally used. The control will still remain with him and his wife. However, he has created a new trend. May be this will inspire few others to donate and do really good for the poor.
I would still give him benefit of doubt.
SK

Like 

Suhit

Dec 4, 2015

Bill,

You are right. Charity is not always the way. In some cases, that is the only way. The food for homeless, taking care of abused kids, providing shelter to a women beaten up by her husband. In the immediate and the now, charity is the way to do it.

The world is changing and to solve long term challenges you need to bring about the power of business to do social good. It is for this exact reason Chan Zuckerberg is an LLC and not a foundation. They are free to invest in startups, in for-profit ventures and even partner with others.

Worth thinking through about the potential of what he is trying to do here.

In terms of giving away his wealth and not making a difference to his life. You are right. But tell me which 31 yr old has done anything like that?

Best
Suhit

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Bahuleyan.A

Dec 3, 2015

A different view altogether.But an eye-opener all the same.This magnanimous offer should have matching results on the ground.Hope the world becomes a better place to live in.

Like (1)

Gaurav

Dec 3, 2015

Dear Bill,
You sound like Scrooge at the time of Xmas.
Zuckerberg is a JERK, but surely there are charities that have actually helped people.
You know 'Teaching a man to fish' also requires money along with committed people.
I love your sense of humor, and I like your contrarian views, but can't say that I agree with the article in totality

Like (1)

Sanjiv Tandon

Dec 3, 2015

Agree with the view that, has the world ( africa, Latin America, asia) become a better place, become more prosperous after getting so many grants from the philanthropists/ Church/ rich governments. The answer in big NO.

The reason is all these big politicians of stronger and rich countries and religious leaders of the world (read pope). These politicians have spread so much hatred and created so much fear for their own vested interests that half of the countries are involved in wars ( internal or external) and hence are dependent on these governments for help.

Is there any need to have so many countries? Why can't we have one world government divided into a few countries just because of administrative purposes ? Why cant we promote internationalism instead of nationalism? In that case, we will not have to spend a single penny on defence forces and weapons. Nuclear energy will be used only for productive purposes and not for any destructive purposes. There will be so much savings in the world that no body will need any help from anyone and this world will become a better place to live.... more prosperous and more happy.

But politicians will not allow that to happen, otherwise who will bother about them. Same is the case with church. How they will get opportunity to convert the people in poorer countries, when there are no takers of their money.

Just think over.

Like (1)

dipankar ghosh

Dec 3, 2015

the intention is good , but the implementation may be the key.Has there been any apprisal of Bill Gate's charity achievements In India unfortunately the NGO's get dole from the government and then go on to my the flashiest car with that money.how about an investigative piece on that.

Like (1)

ramana kumar

Dec 3, 2015

i think this is one of the most ridiculous articles that i have read. reminds me why i 'unsubscribed' from Bonner's articles in the first place. according to him, all charities are wasteful and useless. i know for a fact that is not true. i have seen enough first hand evidence; and read more than enough abt so many good things happening around the world. i am sorry - but reading and writing abt this is really a waste of time.

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