In May 2015, President Obama said this to a panel on poverty at Georgetown University:
The top 25 hedge fund managers made more than all of the kindergarten teachers in the country. So, when I say that, I’m not saying that because I dislike hedge fund managers, or I think they are evil, I’m saying that you’re paying a lower [tax] rate than a lot of folks who are making $300,000 a year. You pretty much have more than you’ll ever be able to use in your family will ever be able to use.
There’s a fairness issue involved here. And by the way, if we were able to close that loophole, I could now invest in early childhood education to make a difference. That’s where the rubber hits the road. That’s … where the question of compassion and ‘I’m my brother’s keeper’ comes into play. And if we can’t ask from society’s lottery winners to just make that modest investment, then really this conversation [on poverty] is for show.
Though Obama singled out hedge fund managers, his remark about “society’s lottery winners” clearly was meant to apply to successful achievers generally. It’s a logical followup to his “you didn’t build that” worldview.
In rebuttal, Forbes’s Rich Karlgaard has a nice column titled Society’s Lottery Winners. I recommend it, with one caveat. Early on, Karlgaard writes:
WORDS MATTER. Take the phrase “If we can’t ask from society’s winners to make [an] investment. … ” It’s a familiar plea from preachers and fundraisers, a particularly American approach. The U.S., happily, is a country that mints many winners who then traditionally give lots of money to charities, churches, schools and nonprofits.
Now change this plea by the addition of a single word: “If we can’t ask from society’s lottery winners to make [an] investment. …” Hmm–it has an altogether different ring to it, no? That one word, “lottery,” changes the entire meaning. A good-hearted plea to society’s successful to heed their better angels and give something back becomes, by inserting “lottery,” sarcastic and cutting.
I left these comments:
“A good-hearted plea to society’s successful to heed their better angels and give something back becomes, by inserting ‘lottery,’ sarcastic and cutting.”
But what does “give something back” imply? It implies that the successful got something they didn’t earn or deserve, and so have a duty to give it back.
But as Karlgaard makes plain throughout this article, successful people make their money by “meeting market needs”: i.e., by creating economic value in exchange for the money they receive from consumers who willingly buy that value. But the successful are not the only winners. Those who receive the values the successful create are also winners. I’m composing this comment on a Dell computer. Michael Dell wins, but so do I. It’s not just “win.” It’s win-win. Highly successful people, like anyone on any level who works for money, give value for value—except that the wealthy create a lot more value for a lot more people. Hence, their fortunes. I would argue that the economic value the successful give far exceeds their fortunes in most cases. How do the cumulative benefits enjoyed by Google’s millions of users and thousands of employees stack up against the monetary fortunes of [Larry] Page and [Sergey] Brin, however many $billions they may be worth? The relationship of society’s most successful achievers to society in general is not just win-win: It’s arguably win-WIN.
Political “entrepreneurs” who get rich by government favor rather than market trade aside, successful people have nothing to “give back,” because they already gave plenty in the process of becoming “society’s winners.” “Give something back” is a terrible way to counter Obama’s morally obscene derogation of success and achievement. The use of that phrase only validates Obama’s premise, because substituting “give back” for “lottery” merely says the same thing in a different way. The generosity of the wealthy is laudable, but not because they have anything to give back. The use of the term “give something back” in this article mars an otherwise powerful rebuttal to Obama.
One more point needs to be addressed regarding two above comments; one by Obama, and one by Karlgaard. Obama said:
There’s a fairness issue involved here. And by the way, if we were able to close that loophole, I could now invest in early childhood education to make a difference. That’s where the rubber hits the road. That’s … where the question of compassion and ‘I’m my brother’s keeper’ comes into play. [emphasis added]
Obama is clearly playing the altruism card. How does Karlgaard respond? Less Obama’s “lottery” insertion, Karlgaard concedes that such calls amount to “A good-hearted plea to society’s successful to heed their better angels and give something back . . .” [emphasis added]
This concession to altruism by Karlgaard amounts to, “‘Giving back’—giving away your earnings to those who didn’t earn it—is morally superior to creating wealth,” if creating wealth is given any moral credit at all. By conceding Obama’s altruist premises, Karlgaard concedes the moral high ground to Obama. Once Karlgaard concedes the moral high ground, quibbling over Obama’s “lottery” terminology is inconsequential by comparison.
This is another example of why defending free market capitalism requires challenging altruism. Capitalism, with its emphasis on individual rights to life, property, and the pursuit of personal happiness, doesn’t jive with “I’m my brother’s keeper.”
Give Back? Yes, It's Time For The 99% To Give Back To The 1%—Harry Binswanger
'Give Back' Is One of the World's Most Impoverishing Commands—Yaron Brook and Don Watkins
How You Build That