Fri, May 04, 2012 - Page 8 News List

[ LETTER ]

Social duties of the rich

In the years since the global financial crisis first hit, movements protesting severe disparities in wealth distribution have sprung up in the US and Western Europe.

The media and politicians have pointed out that similar problems exist here and this makes it interesting to compare how the rich in the US and Taiwan dispense their wealth.

In a capitalist society like the US, a disparity in wealth distribution has existed since the mid-19th century, when the so-called “robber baron” industrialists accumulated enormous wealth.

They got rich by elbowing out their competitors through both legitimate and illegitimate (by today’s standards) means. Representative “barons” are Andrew Carnegie (in steel), John D. Rockefeller (in oil), and Andrew Mellon (in finance). When they retired from their respective businesses, they gave away most of their wealth for the long-term good of the public.

After leaving a small estate to his only daughter, Carnegie gave away most of his wealth to set up an endowment for public libraries in US cities and a retirement fund for college teachers (the precursor of the Teacher’s Insurance and Annuity Association).

His philanthropic legacy lives on today in the Carnegie Endowment for International Peace. Rockefeller, in addition to setting up the University of Chicago and the Rockefeller Medical Research Institute (later the Rockefeller University), established the Rockefeller Foundation that championed public healthcare first in the US then internationally. His money also helped secure education for poor blacks in the segregated south of the US.

Mellon focused on the fine arts, donating some of his art collection to the Metropolitan Museum in New York and using the rest to establish the National Gallery of Art. The super-rich in the US today, such as Bill Gates and Warren Buffett, also put the bulk of their wealth toward tackling the world’s health and hunger problems.

These super-rich people have similar ways in which they accumulated their wealth. Besides using their abilities, they also believed that the general public, as consumers of their products, contributed greatly to their tremendous wealth. They felt they had a responsibility to give back to society so it could also benefit from their wealth. Carnegie even said that he hoped he would like to have not a penny left for himself when he died (although he did not manage to give away his money fast enough).

These rich men also share another common trait: They entrust their money to expert philanthropic managers with minimal interference. In short, they are capitalists with a conscience and their legacies have lasted for a very long time.

In Taiwan, South Korea and, to a lesser extent, China, how billionaires dispense their wealth is totally different to their counterparts in the US. They seldom give out large chunks of their money to anyone outside of or beyond the control of their families. We see very often that when these founding patriarchs pass away, their offspring start public squabbles and go after each other’s throats, as we have seen with the heirs of the Formosa Plastics founder and the Samsung Group in South Korea. Of course, they have set up foundations that ostensibly do charitable work. However, these are the results of social responsibility being forced on them by their respective governments in the form of inheritance tax.

This story has been viewed 2115 times.
TOP top