What has Jeff Bezos done wrong?

I think it’s fair to say that the response to Jeff Bezos’ recent announcement that he will be donating $2 billion his new charitable fund has been relatively negative, with responses ranging from the snarky to the outraged. So I have been thinking about why he has generated so much hostility, whether it is justified and how far I agree with it. I am still working through my thoughts on this, so these are fairly provisional ideas – I’m absolutely open to arguments and evidence I haven’t considered.

Broadly speaking, I think there are two objections to Bezos’ charitable giving. First, that he pays too little tax, and so he should pay more in tax rather than giving to charity. Second, that he pays his workers too little, and so he should pay his workers more rather than giving to charity. Notice that these are objections to how Bezos arranges his finances more generally, rather than his charitable giving per se. It is a bit perverse that Bezos seems to be criticised more for using the money he saves on tax and better remunerating his workers on charity than on buying, say, a yacht. I suspect this is partly because people are often more upset by hypocrisy than actual immorality. But let’s suppose that there is a link between Amazon’s low tax/low pay and Bezos’ charitable giving. What then?

One line of objection is that Bezos is wrong to believe that he is a better person to disburse social spending than the state. James Bloodworth decries the “pseudo-paternalistic view of humanity” that leads “Men like Jeff Bezos [to] view it as their job, rather than the job of the democratic state, to distribute their vast riches” Instead, it would be better to pay more in tax, and allow the democratically elected government to decide how to use these funds. As a relatively statist social democrat, I am naturally sympathetic to these arguments. But I don’t think they are necessarily correct. There are two issues here. First, who uses their money in a more effective way to promote the social good – billionaires’ foundations or the government? Second, are there significant negative social and political effects of billionaires to support the state rather than doing their own charity?

On the first question, it’s far from obvious to me that the social spending of the state is always or generally better than that of philanthropists. If I had to give $1 billion to the US government or Bill Gates’ foundation, I would be more confident in Gates doing more good with it. First, Gates would give more of the money to the global poor. Second, ensuring his interventions have clear evidence of effectiveness is more obviously important to Gates.

On the other hand, if Bill Gates were to deliberately reduce his tax bill to pay for his charity, this could have negative social consequences. It could undermine social norms of compliance with the tax system, among people likely to do far less good than Gates. It could reduce Gates’ own social and political influence, and hence his ability to work within the system for good, rather than as an isolated individual. And it does seem plausible to me that the power relations and arbitrariness of private charity mean it is sub-optimal to state provision, all else equal. I think it is better for the beneficiaries of social programmes to see these benefits as a matter of entitlement, rather than arbitrary largesse.

Putting these together, I think it might be the case that billionaires’ charity can sometimes, under some conditions, be better than tax-funded government spending – provided the charity does enough good. As a result, I think the issue with Bezos is twofold. First, that is giving such a paltry amount – relative to his tax savings. But equally importantly, as Kelsey Piper argues, there is little reason to think that he is giving especially effectively.

The second objection people have to Bezos is that his charity seems to come at the expense of his workers at Amazon. The argument seems to be that charity begins at home: Bezos should spend more on his Amazon workers before he thinks about trying to help anybody else. Having recently read James Bloodworth’s excellent expose of the terrible  conditions in Amazon distribution centres, again I can see the force of this argument. Management engages in countless petty tyrannies, the physical requirements placed on workers are extreme, breaks are too short, and hours can be irregular and subject to late changes.

Of course, the pay is poor, too, at least by the standards of rich countries. Yet Bloodworth’s wages at Amazon amount to over £10,000 a year. That would place him in the top 20% of the global income distribution. Indeed, the reason many Eastern Europeans come to the UK to work for Amazon is because their wages are relatively high compared to what they could earn back home. So if Bezos were to spend some of his money helping the many people in the world far worse off than Amazon workers, what would be so bad about that? Again, is the issue with Bezos’ targeting of his charity, rather than the charity per se?

I have to say I am conflicted on this. I think a plausible response is to say that money isn’t everything. Amazon workers may be better off than many in terms of income, but worse off unnecessarily in terms of working conditions. And it may do more good for Jeff Bezos to swallow the costs necessary to alleviate these conditions – shortening shifts, offering more secure and less punitive contracts – than to use these extra profits to help the very poor. But it’s not obvious.

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