Wednesday, May 07, 2008


So there's a post by Atanu Dey that was bound to be written and discussed by someone: about Mukesh Ambani's 2 billion dollar home in the middle of a city where so many earn less than 2 dollars a day. Is it "morally" justified? Isn't it like a slap in the face of the poor and unfortunate? Are you a socialist if you say it is?

While I have left a comment on the post, I want to repeat it here and expand a little on it because it involves an incident that I personally find quite revealing and humbling and which comes to my mind often.

The point is about measuring the factors that contribute to our success in society. Barack Obama once asked none other than Warren Buffet (now “again” the richest man in the world) why he gave so much money to charitable causes. And Buffet basically said that while he certainly owes his success in part to his own talents, it was made possible only because he lived in a society that educated him, that supported the application of his particular talents. In another time and place where physical strength may have been valued, Buffet says he could have ended up a wild animal's dinner. Since society helped him not become that, the least he could do in his opinion is to repay some of this favor back. Now Buffet could be easily dismissed by the cynical as one of those stock characters who can afford to speak flippantly about money because they have a lot of it. But Buffet is not just a talker; he is a man who has famously walked the talk by giving away a truly substantial part of his fortune to the Gates foundation. This is also the same Buffet, by the way, who still drives his old Lincoln Town Car.

It’s one of the most humbling stories I have heard and makes a lot of sense in my opinion. Nobody should claim that you should be told how to spend your own wealth, but as I see it, the number of people who are steeped in hubris, thinking that they owe their success only to their innate qualities, is more than I would be comfortable with. In fact I am constantly reminded of this opinion precisely because I keep on running into people who think that because they earn a hundred thousand dollars by the time they are 28, they must be the smartest people in the world. They forget the simple fact that they get paid so much because they live in a society that values their particular talents. In another time it could have been very different, say when manual labor was much valued. In that time they could have easily exchanged places with those who they may pity today. I don't want to pretend I am taking some moral high ground here, but I am genuinely puzzled by the opinions of these otherwise intelligent and concerned folks.

So does that mean they don't "deserve" that money and that it's their "moral responsibility" to share it with others. Of course not. The libertarian argument is in my opinion irrelevant here, and the "argument from socialist leanings" is not even on the same page. It's not about whether you should have the "right" to do this; that's obvious. The argument is about recognizing the context in which you and everyone else lives their lives. So much is made of capitalism that it is convenient to forget that capitalism also involves wealth generation by people, which in turn involves people being able to participate in the free market system. Sadly many governments around the world don't help people achieve this and in many cases downright stifle their ability to do so. But giving back to society in one way or another is another way in which you enable these people to rise above their situation. One can argue about the exact method of giving back; simple charity may not do much, but that's why many choose to help people actually generate the ability to participate in the free market system, through simple actions such as educating them and assisting them in the fight against infectious diseases. And that helps sustain the kind of society which makes you enjoy your wealth and prosper. No matter how much we may think otherwise, just like Newton's scientific children we are standing on the shoulders of the giant that's society.

Bill Gates knows this and acts on it. So does Warren Buffet. And the last time I checked, they were not "socialists"

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