Their bloated administrations are the shock troops of the culture war

Monday, July 25th, 2022

There are two kinds of revolutionaries, Balaji Srinivasan argues, technological and political, and there are two kinds of backers, venture capitalists and philanthropists. There aren’t term sheets between philanthropists and political revolutionaries, with “exits” to the tune of billions of dollars, but impact certificates could fix that, Scott Alexander suggests.

Arnold Kling doesn’t want that “fixed”:

Profit-seeking investment is driven ultimately by what consumers want. Philanthropy is driven ultimately by what donors want. Unless you think that donors are morally superior to the rest of us, you should not be rooting for more philanthropy.

One can speculate that one of the causes of increased social tension is the rise in philanthropy. Our “cold civil war” is funded by George Soros, Peter Thiel, Tom Steyer, and the like. Universities are among the most popular “charitable causes,” and their bloated administrations are the shock troops of the culture war.

We are better off with Soros speculating on currencies and Thiel trying to take businesses from zero to one. We are better off when university alumni invest their money in search of profit.


A lot of philanthropy goes to colleges and universities. Much of this goes to fancy new buildings. I think that Scott would agree that this does not help poor people. But were the donors who funded buildings trying to help the poor but lacking skills at effective altruism? Obviously not.

The challenge is not to make philanthropists more efficient at getting performing-arts centers and sports complexes built on campus. The challenge is to change the focus of donors toward something more worthwhile.

On the other hand, over the years Wal-Mart has hired many low-skilled workers and lowered the cost of living in many poor rural areas. Wal-Mart did not set out to help poor people, but that was the result.

More generally, markets have been shown over time and across countries to reduce poverty. The market does not produce the results of a benevolent omniscient quasi-deity. But donors themselves are neither benevolent, omniscient, nor quasi-deities.

I think that there is too much money to be made nowadays in non-profits dedicated to causes. Think of people making money as “activists.” I worry that “impact markets” could lead to even greater investment in arms races between opposing advocacy groups.


  1. Michael van der Riet says:

    No. You’re not knocking careers in the humanitarian industry, are you? Questions to be carefully considered are

    - To what extent can I set off my charitable donations against tax
    - Will I get to be on TV often
    - Will that in turn get me laid more often

  2. Bomag says:

    The same market universe that gave us Walmart also gave us Big Pharma and the MIC, so doesn’t seem much to brag about.

  3. Kunning Drueger says:

    Bomag, what’s wrong with Walmart?

  4. Bomag says:

    Not saying anything’s wrong with Walmart.

    Saying we often get something non-Walmart.

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