A New Economic Paradigm
I knew that title would
get your attention.
With all the news consuming
the headlines, some more important than others – oil spills, flotillas, Helen
Thomas, the World Cup, Afghanistan – a major story is developing, right under
our noses, with hardly anyone taking notice.
This major story will
not just make history, but it promises to change the course of history.
But like all historical
shifts and fundamental revolutions, this “story” is not a fleeting event;
it is unfolding over time. And it takes a bit of stepping back (and rising
up) to gain a birds eye view and see the forest for the trees.
Exactly four years ago this
column celebrated Warren Buffett’s enormous
and unprecedented $30 billion plus gift to charity, as heralding
in a new era in history. I wrote then: “I submit that
when the annals of history are written, this event will
go down as a major milestone, marking a shift in human consciousness
and leaving an impact that will reshape future attitudes.”
Some people thought that
my words then were overly dramatic. I respectfully submit now that if anything
my words were understated and not dramatic enough.
Buffett and Gates
Now four years later,
Mr. Buffett and Gates are unleashing act II in their history-making generosity.
This week – as reported by Fortune Magazine and Charlie Rose – Mr. Buffett
and Gates announced their request to the richest people
in America to pledge at least 50% of their wealth to charity.
They established a special website just for this purpose,
which states its objective: “an effort to invite the
wealthiest individuals and families in America to commit
to giving the majority of their wealth to philanthropy.”
In a public letter, Mr.
Buffett states: “In 2006, I made a commitment to gradually give all of my Berkshire Hathaway
stock to philanthropic foundations. I couldn't be happier with that decision.
Now, Bill and Melinda Gates and I are asking hundreds of rich Americans to
pledge at least 50% of their wealth to charity. So I think it is fitting that
I reiterate my intentions and explain the thinking that lies behind them.”
Buffett begins by first committing his pledge: “More
than 99% of my wealth will go to philanthropy during my
lifetime or at death.” And then he continues with
his call and challenge to the wealthy. Here
is the complete text of Buffett’s letter.
What is the history behind this historic move? In a cover story titled The
$600 Billion Challenge, Fortune
reports that just over a year ago, in May 2009,
Gates and Buffet called a confidential meeting, hosted by
David Rockefeller, of 15 billionaires, in which the two
wealthiest men in the world set in motion “the biggest
fundraising drive in history.” The goal of the meeting
was to begin a major drive to “get the super-rich,
starting with the Forbes list of the 400 wealthiest
Americans, to pledge – literally pledge –
at least 50% of their net worth to charity during their
lifetimes or at death.” Fortune estimates that at minimum
this 50% would add up to be… $600,000,000,000.
The attendees at that
meeting, which, as Fortune writes, “would
make any charity – or any conspiracy theorist – swoon,” consisted of: Bill
Gates, Oprah Winfrey, Warren Buffett, Eli and Edythe Broad, Ted Turner, David
Rockefeller, Chuck Feeney, Michael Bloomberg, George Soros, Julian Robertson,
John and Tashia Morgridge and Pete Peterson.
Several of them have
already risen to the challenge and made their pledge.
To appreciate the historical
implications of this initiative, allow me to summarize what I wrote four year
ago, in placing this generosity in historical context.
Throughout the ages accumulated
wealth was simply not given away to charity. Quite the contrary: It was always
used to gain and consolidate power and influence.
In days of old and not
so old huge sums of money – let alone the value of today’s 40 billion dollars,
more than the GNP of over half the countries of the world today – would be
used to build monarchies, wage wars, conquer lands and construct monuments
How money was used may
have something to do with the way it was accumulated, largely from non-commercial
sources: usually through war, pillaging, ransoms, slavery, taxation, blood-money
and bride-money – forces of dominance and control.
Indeed, the history of
wealth is directly linked with the history of war and violence, and even the
history of religion. Finance lies at the heart of the rise and fall of the
great empires and their conquests and defeats – Alexander the Great, the Roman
Empire, the Viking assault on England, the Norman Conquest, the Crusades,
the Hundred Years War between England and France, the Spanish conquest of
Mexico and Peru, the aftermath in Britain of the Napoleonic Wars, the U.S.
Civil War, and the financing of the two World Wars. For example: The need
to transfer large sums of money to finance the Crusades (1095-1270) provided
a stimulus to the re-emergence of banking in Western Europe.
Obviously, when wealth
is gained through aggressive or criminal activity it will be used to perpetuate
corruption, and not serve as a force for good.
And when wealth is driven
by myopic, short term gain it inevitably wanes. Today it is controlled by
the prevailing dominant individual or group, and tomorrow by the next vanquisher.
It never lasts. Where, for instance, is the great wealth of the Roman Empire
today? Who inherited the vast holdings of the British Empire? And what about
Mali, the Ottoman dynasty or the Incas – each the wealthiest empire in its
time; today barely remembered?
Some even make a case
for a conspiracy amongst the global aristocracy of wealth, arguing that the
top Western industrialists and institutions were behind the rise of Communism
and Fascism around the world. As W. Cleon Skousen writes in The Naked Capitalist,
his review of Dr. Carroll Quigley’s Tragedy and Hope: “Power from any source
tends to create an appetite for additional power... It was almost inevitable
that the super-rich would one day aspire to control not only their own wealth,
but the wealth of the whole world.” “As I see it,” Skousen writes, “the great
contribution which Dr. Carroll Quigley unintentionally made…was to help the
ordinary American people realize the utter contempt which the network leaders
have for ordinary people. Human beings are treated en masse as helpless puppets
on an international chess board where giants of economic and political power
subject them to wars, revolution, civil strife, confiscation, subversion,
indoctrination, manipulation and outright deception as it suits their fancy
and their concocted schemes for world domination.”
Whether you agree with
this argument or not, no one can doubt the history of wealth as a force of
control. Money was always synonymous with power, greed and all its corrupt
Now comes Mr. Buffett
and with his unprecedented commitment turns the historical use of wealth on
That was four year ago.
As long as Bill Gates
and Warren Buffett were the only ones to bequeath their fortunes to charity
the argument could be made that their generosity was an anomaly. But now that
the second wealthiest man in the world has joined the wealthiest one in not
just giving away most of their fortunes to charity – the accumulative amount
of both their charitable commitments is simply staggering – but they have
also issued a challenge to the wealthiest people in the world to join them
– it is impossible to dismiss and should cause us all to raise more than our
eyebrows. In contrast to the way wealth was always used for personal gain,
Mr. Buffet and Mr. Gates initiative should capture our attention to realize
that something extraordinary is underway.
Andrew Carnegie fulfilled this ethos of generosity to its fullest extreme.
In his 1889 essay “Wealth” (later named “Gospel
of Wealth”) – which reportedly had a strong influence on
Mr. Gates and Mr. Buffett – presents a powerful argument
that “the duty of the man of wealth” is to serve as a “trustee”
for the larger community. The wealthy should not give their
wealth to their children but to administer it for the benefit
and common good of the public, and thereby create the “ideal
State, in which the surplus wealth of the few will become,
in the best sense, the property of the many”. Carnegie believed,
as he wrote in another article in 1908 that “wealth is not
chiefly the product of the individual…but largely the joint
product of the community.”
The American model in
general, and Carnegie’s philosophy and the present Buffett/Gates move in particular
is a major event not just in the history of philanthropy (no one has ever
bequeathed a larger charitable gift) but in the history of mankind in general.
It is nothing less than Messianic: It is essentially a shift from
being a taker to becoming a giver.
The difference between
these two models of wealth – the historical model of greedy wealth to gain
personal power or the model that is now beginning to take hold (let’s call
it the post-Gates/Buffett era) of wealth as an opportunity to give – is not
merely a difference in approach; it reflects a fundamental different attitude
to life: Are we human beings essentially takers or givers? Is life about you,
or about you serving a greater cause?
And now we have the major
philanthropic stride taken by Mr. Buffett and Mr. Gates.
In a world where most
people ask: “What more can I take?” there are the precious few who have taken
the road less traveled and ask: “What more can I give?”
Perhaps – hopefully – this will begin a trend of giving, turning takers into
givers, ushering in a new era of economics: The Economics
of Giving. (The recent global humanitarian effort to help
Haiti was also an example of this historical shift. See
Maimonides writes that
the Messianic age does not necessitate miraculous or cataclysmic external
change. The primary change will be from within; a radical shift of consciousness.
Instead of seeing materialism as an end in itself, we will see it as a means
to “knowing G-d.” This consciousness will affect our economic view. As Maimonides
puts it: “Material delights will be found as dust,” which also means that
the abundance of material wealth will render it valueless as dust and useless
as an end unto itself. This in turn will naturally eliminate envy and competition,
hunger, poverty and strife. “The business of this entire world will be to
Today we stand at the threshold of a new economic paradigm. The final frontier
of the history of money and wealth: To see the acquisition
of wealth as a means for giving and fuel for spiritual growth.
Wealth, in short, will finally realize its true value: soul
energy, elevating and transforming all of existence. (see
The wealthiest men in
the world today force us all to ask the question about the nature of our own
wealth and its acquisition. And how it will be used: For temporary power,
to be stashed away gathering dust in some Swiss account, eventually squandered,
sometimes a generation or two later, often destroying families in the process,
or will the wealth be used for eternal benefit, to build and improve the world.
Here’s an additional
critical fact that drives the point home as to the enormous historical shift
of the Buffet/Gates initiative:
Most likely, Mr. Buffet and Gates are descendants of Esau,
grandson of Abraham – who originally pioneered the
concept of giving close to 4000 year ago.
It’s beyond fascinating
that though Abraham’s message – and the Divine mandate – of charity was passed
on to us through the generations via the Torah and via the children of Jacob
(not Esau), today the ones leading the Messianic charge are not the children
of Jacob, but those of his twin Esau!…
is not a tectonic historical shift what is?