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Why Zuckerberg’s Critics Are Wrong

• xlm1717 11y ago
  Some people have a tendency to tell other people what to do with their money. This can range from annoying when it's some pundit doing it, to dangerous when it's someone in government.
• deleted 11y ago
  [deleted]
  • justincormack 11y ago
    Well, others get singled out too, like John Paulson here http://blogs.reuters.com/felix-salmon/2012/10/23/philanthropic-donation-of-the-day-john-paulson-edition/ http://blogs.reuters.com/felix-salmon/2012/10/23/philanthrop...
    • scholia 11y ago
      No good deed goes unpunished ;-)
  • RodericDay 11y ago
    I think this is a fair, clear-headed way to start the discussion, fwiw.
    • vegabook 11y ago
      only if you believe that capital incentives are perfectly aligned with society's interests.
  • Kalium 11y ago
    Can we decouple this relationship without breaking both parts? Capital is useful as a reward because it is useful as a way to direct the labor of others.
    • deleted 11y ago
      [deleted]
  • addicted 11y ago
    "the most productive individual in society" I think this is the crux of the issue. Is Zuckerberg amongst the most productive individuals in the society? As another example, was Steve Jobs so much more productive than his competitors. Can Warren Buffet be considered productive at all, for that matter (we wouldn't have a shortage of insurance companies, sugar water selling companies, furniture and apparel companies if the specific ones Buffet invested and makes his money in never existed)? Note, I'm only mentioning individuals I am a fan of here. There are many worse examples than these. Just taking Zuckerberg for example, while he obviously did something extremely useful, his greatest "productivity" (as defined by his earnings) was that he happened to be the one whose social network, amongst the many hundreds of combinations being tried at the time, happened to have the right combination of factors that made it extremely popular. Is that reason enough to award him so much more control over the future of society as opposed to the guy who invented Orkut, for example?
    • deleted 11y ago
      [deleted]
    • kuschku 11y ago
      I originally wanted to reply to a reply to your comment, but it was deleted. The reply said that he disagrees with your logic, as we as society decided that capital accumulation is productivity. My comment to that was: > > We have defined productivity with capital accumulation in society. > We have not. > People get capital for being lucky, and from privileged backgrounds. Zuckerberg is not an exception, nor are most of us here on HN. > You don’t get rich because you are doing the best work. In fact, the most productive researchers usually end up on minimal grants having to save money, and never actually make much money themselves. > The money ends up with the people who have luck, connections, are at the right place at the right time. > This is why society has decided to publicly fund research based on productivity with tax money, as obviously the free market is unable to do so. > The free market isn’t funding Wendelstein 7-X, nor the LHC. The free market isn’t funding the E-ELT. The free market isn’t giving any of the involved researchers billions. > The people who invented the computer died poor, but a person who just happened to do what MySpace did before, at the right place, right time, happened to become billionaire. > No, capital accumulation is not even correlated to productivity.
  • qq66 11y ago
    The reason that Zuckerberg is singled out is simply because of the scale ($45 billion). The same reason that McDonalds is criticized for unhealthy food instead of Burger King/Wendy's/Carls Jr., or Apple criticized for labor conditions instead of HTC/LG/Samsung.
• scholia 11y ago
  Actual title: In Defense of Philanthrocapitalism, by James Surowiecki
  • zevyoura 11y ago
    The page has the same title as this story currently, so at least the clickbaity title is coming from the source and not OP.
• mahouse 11y ago
  Surowiecki
• thesunny 11y ago
  The harsh criticism feels unwarranted to me as well. It honestly feels to me like a little bit of misplaced self insecurity. I kind of get it, but considering that there is no evidence of ill will, I get the sense that people are reacting to something other than what's actually happening here (like their dislike for Zuckerberg's fortunes, how he got it, Facebook privacy issues, etc.) To put this into context, if a young mother dedicates 99% of her life (but not billions because she doesn't have it) into charity and she does so in the name of her children and their future, I doubt she would be receiving the sort of harsh criticism that Zuckerberg is receiving for the same thing. It reminds of people's hatred for SUV's (seems to have died down more recently). It was always under the guise of the environment, but really other types of environmental waste were not really villified to the same extent. For example, it's far worse to own a non-SUV and decide to live out in the suburbs and drive to work than to live nearby work and have an SUV. I'm not a Zuckerberg fan-club member, but what he did would be something I wish I could do someday and it doesn't seem weird at all to me to do this in dedication of my child. I also feel, from a pragmatic point of view, that we need to be encouraging people to donate.
  • iamcurious 11y ago
    >if a young mother dedicates 99% of her life (but not billions because she doesn't have it) into charity That is the point. He is not dedicating 99% of his life, he is moving money around. If an average person gives 5% of his income to charity he is losing power and losing opportunities. He is sacrificing his well being and that of his immediate family for charity. If someone with as much money as Zuckerberg or Gates does it he is increasing his power and his opportunities. They still get influence, they earn karma points, they get a legacy, they still decide. The average guy giving is a hero, Zuckerberg is not.
    • deleted 11y ago
      [deleted]
    • FeepingCreature 11y ago
      Still. Results.
• cryoshon 11y ago
  I'm going to go out on a limb here and say that "philanthrocapitalism" is a term used to obfuscate the issue of billionaires setting up tax havens in the guise of philanthropy. The term implies that philanthropy can be or is a mode of capitalism, whereas in reality it's the opposite because philanthropy deals with altruistic allocation of resources rather than profit-seeking allocation of resources. Let's not use this term, because it's deceptive and doesn't make sense internally. Instead, let's do some white hat thinking (purely facts, as little spin as possible) about Zuck's new venture. Fact: Zuck has laid down a large chunk of change for a new project, and marketed this project to the public as large scale philanthropy. Fact: Zuck will get a large amount of leeway on taxes and oversight by moving his money in this way. Fact: some billionaires before Zuck have made similar moves that actually turned into fantastic philanthropic organizations that have made tangible positive impact in the world (Gates Foundation)-- but others have used the construct as purely a means to protect their money and get good PR. These are some of the facts. I do not believe that there is any way to get around or reinterpret any of them without adding opinion, which probably snuck in anyway despite my efforts. At this point, I think that the reactions of those who question Zuck's motives are justified because we haven't had the time to see the program in action disbursing money as it claims that it will. A promise, a wad of cash, and a lot of PR do not make an effective philanthropic organization. Effective philanthropy requires that real, living people and real institutions are altered in an objectively positive way. The proper stance is skepticism and a request for more evidence of good will. EDIT: I will add that the rabid detractors of Zuck have counterparts with the rabid pro-Zuck crowd... I doubt Zuck is looking out for anyone other than himself, but there is more to life than celebrity-watching, and it seems petty no matter how you slice it.
  • jegutman 11y ago
    Is it at all clear that Zuckerberg is getting any tax benefit from moving his shares? I believe the "foundation", which is not a non-profit, will still pay taxes when it sells FB shares. If the LLC donates to a non-profit then it will get a tax benefit. IANAL, so please someone who is actually informed feel free to correct me. A lot of what I've seen written is completely un-nuanced and probably wrong.
• mangeletti 11y ago
  Here's an idea: Don't allow tax deductions on "charitable" contributions. If, for instance, somebody wants to give $100MM to Central Park, let them do it because they like Central Park that much, rather than because they like it $70MM worth, and the tax payers can cover the other $30MM. Philanthropy is about giving, period. Not giving when it has financial benefits that make it easier at the expense of others.
  • ant6n 11y ago
    I think it's perfectly reasonable to deduct charitable contributions - up to say, 10K per year. There exist people who sit on huge amounts of unrealized capital gains. If they donate 100M in stock, then they can sell 100M in stock without ever paying any taxes whatsoever.
    • mangeletti 11y ago
      I agree that setting a limit (rather than getting rid of deductions altogether) could be beneficial, while also eliminating a lot of the abuse, but there is one other thing to consider: If the limit is $10,000, the middle class and wealthy gain the benefits of directing tax dollars while the underclass remain unrepresented. I'm a capitalist through and through (you might guess that based on my ideas herein), but giving different people different rules is always a problem.
      • jcdavis 11y ago
        The "underclass" likely already don't gain any benefits because they almost certainly take the standard deduction instead of itemizing.
      • ant6n 11y ago
        Well, you could make it 1K$. But I think the issue is to try to make it harder to use donations for tax-avoidance by very rich people; this isn't really about the middle class vs poor people (who tend to pay fewer taxes anyway). I think another general issue is that many deductible donations go towards organizations that spend very little on their prescribed cause; or aren't non-profits or for the benefit of the public at all.
• necessity 11y ago
  >Governments do better at providing public goods (defense, say, or education) Not really. At least not necessarily. Health and education as provided by the government in Brazil is just horrendous. People die in line and student's grades are far, far below private schools. Public security is non-existence, whereas organized communities both poor and rich enjoy relative security with private guards in the streets and electric fences or barber wire on their houses fences. Generals have said Brazil has ammunition for just 1h of war[1]. There was recently a rise in the private education sector, with competition leading to affordable prices for the poor. However, with the current recession I think the sector has slowed to a halt, like all others. [1] http://exame.abril.com.br/brasil/noticias/exercito-brasileiro-possui-municao-para-uma-hora-de-guerra http://exame.abril.com.br/brasil/noticias/exercito-brasileir...
• tim333 11y ago
  I think the critics are mostly, maybe at a subconscious level annoyed by the unfairness of Zuckerberg first having a fortunate upbringing / IQ, then making $45bn before turning 30 and then doing saint like stuff. So they try to knock him down which I guess is understandable, and rationalise it in various not totally logical ways which I guess is human nature.
  • gohrt 11y ago
    The complaints are largely that he is talking about doing benevolent dictatorial stuff in the future, not that he is *doing saint like stuff now".
  • david927 11y ago
    I'm glad you're making an effort to understand the criticism, but unfortunately you need to spend more time doing so. His company, Facebook, is infamous for not paying taxes. (On profits of three billion last year, it paid six thousand dollars in corporate taxes.) Now, instead of paying taxes on his personal capital gains, he's placing them in an LLC, which he controls, ostensibly to do philanthropic work. He could avoid all criticism by simply paying his taxes.
    • Aeolun 11y ago
      Well, I'd argue that the problem is not that companies make use of legal loopholes, which after all is perfectly legal, but that the system still hasn't been fixed to stop them from doing that. It's not like I don't try to pay the least amount of taxes I can every year.
      • the_cat_kittles 11y ago
        that is LOL bad reasoning: take a look at human history and see the lengthy list of atrocious things that have been legal at some point in time.
        • vezzy-fnord 11y ago
• dayon 11y ago
  Surowiecki did a horrible job of making a case for his conclusion. After reading that, I'm left wondering why his critics are wrong. Perhaps he should have avoided the click-bait title and tried to actually explain something reasonably rather than arguing from the position of "Zuckerberg and I are right, and you're wrong. Now I'm going to write some paragraphs".
• PhilWright 11y ago
  I have three problems with the original press release and what it entails. 1 = It comes across as the most epic humble brag of all time. The short form of the release is simply 'Look how great I am for making 10's of billions and how amazing I am for giving most of it to charity. Hell I will only leave a handful of billions for myself to live off.' 2 = He should not be trying to get credit for something he has not actually done yet. You cannot expect credit for giving 10's of billions to charity until you have actually given it to charity. Wait 20 years and then issue a press release showing how much you have actually given away. 3 = Maybe this is more of cultural issue but it is the height of uncouth behaviour to boast about your charity work. The first we hear about your charity work should be many years in the future when it is exposed that you have given billions to good causes. Deriving even the smallest credit for charity giving only diminishes the giving.
  • philwelch 11y ago
    > Maybe this is more of cultural issue but it is the height of uncouth behaviour to boast about your charity work. The first we hear about your charity work should be many years in the future when it is exposed that you have given billions to good causes. Deriving even the smallest credit for charity giving only diminishes the giving. The Jobses donated anonymously to charity for years and all we ever heard about was how Steve Jobs was an asshole because, unlike Bill Gates, he wasn't a philanthropist. Contrariwise, Bill Gates gave billions of dollars to charity, but only his own charity named the "Bill and Melinda Gates Foundation" of which he is the full time co-chair, and uses his celebrity to popularize their work.
    • sombremesa 11y ago
      > all we ever heard about was how Steve Jobs was an asshole because, unlike Bill Gates, he wasn't a philanthropist. Whoever you heard that from was probably not worth listening to, though.