On the public good and the masters of the universe – Anne Nelson in TLS:

‘America’s magnates can’t aspire to a place on the Queen’s birthday honours list. Instead they validate their status by splashing their names across large and showy marquees. The beneficiaries are often cultural institutions, medical centres, colleges and universities, as well as entire charitable foundations, ostensibly for the benefit of the public. But the public doesn’t get a vote. Would it prefer the David H. Koch Plaza at the Metropolitan Museum in New York, with its “intricate lighting palette” to “highlight the dynamism of the fountains”, or a Koch-subsidized waiver for the $25 tickets that out-of-towners must buy to see the actual art?

Philanthropy shapes Americans’ image of themselves as citizens of what the news site Axios has described as “the world’s most generous country”. A recent Axiosreport (updated March 12, 2022), noted that nearly 60 per cent of Americans donated money in 2021, with an average donation of $574. The most popular beneficiaries included the St. Jude Children’s Research Hospital, the Alzheimer’s Association, the American Cancer Society and a charity that provides food to hungry American children. But giving isn’t always an act of pure altruism. Americans live under a tax regime that has become increasingly (if not consistently) regressive over the past century, and in which the effective tax rate for the Forbes 400 wealthiest Americans – on average 8.2 per cent in recent years – is lower than that paid by many middle-class taxpayers.’

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‘New books by Charlie Eaton and Lila Corwin Berman shed light on the dark side of the American non-profit sphere, showing how dramatic changes in financial instruments and tax policy have promoted the plunder of the US public coffers – and the social safety net they support – in the name of private charity. Two other new books, on George Soros and the Vanderbilt dynasty, demonstrate the different ways in which philanthrophy can operate.
Nowhere has the gap widened more than in the realm of higher education. Bankers in the Ivory Tower: The troubling rise of financiers in US higher education by Charlie Eaton describes the way private equity and tax policies have become drivers of inequality in American colleges and universities.’

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‘American income equality reached its peak in the 1970s, during the Richard Nixon administration. The American middle class prospered and the poorest benefited from federal support for housing and education. Universities, arts institutions and public broadcasting were buoyed by tax dollars, allowing them to widen their missions to marginalized populations. Since then the pendulum has swung back, and Eaton takes on the past few decades from the narrow but significant perspective of higher education: specifically, the way shifts in the finance industry led to the accumulation of huge endowments in elite institutions, to the detriment of educational opportunities for the broader population.
The author shows how the process began with steep cuts to state and federal taxes and capital gains taxes for the wealthy. This led to substantial cutbacks in federal funding for higher education and the substitution of grants by loans for students in need of assistance. Large numbers of for-profit colleges appeared, aggressively recruiting low- income students for low-quality degrees to be financed with crippling debts. “At the end of the 1970s”, Eaton reports, “a new political coalition was forged between big business, the old financial elite, and a rising conservative movement. The coalition would push the US government to deregulate financial activities and cut taxes in crucial ways for the resurgence of financier wealth and power.” Technology accelerated this shift: “Computerization and new ideas from academic economists simultaneously enabled financial technicians to assess credit risks for corporate and individual borrowers and investors at a radically increased scale – and to conduct daily trades in stocks and corporate debt instruments numbering in the billions rather than the millions”.
The financial deregulation of the early 1980s encouraged squadrons of hedge-fund managers to tap their social relationships with college endowment managers.’

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‘This and other social movements promoted a more diversified meritocracy, producing generations of remarkable figures in the sciences and the arts, as well as government.
Today, the New Gilded Age is transforming these institutions, once again, into incubators of extreme wealth and status markers for privilege. Although they still educate artists, scientists and reformers, Eaton reminds us that 70 per cent of Harvard graduates now apply for work at a leading investment bank or consulting firm. The Ivy League graduates working in finance join powerful “old boy” networks to promote their common interests, and these networks siphon taxable income into untaxed endowments for their alma maters. In recent years they have also invested heavily in separate for-profit colleges that prey on low-income students. Eaton points to “widespread investment in for-profit colleges by nonprofit and public universities via private equity and hedge funds … The most elite private universities invested earliest in these funds and have reaped the largest returns because of favorable terms and the size of their endowments” – increasingly through the use of shell companies.
Thanks to their profitable endowments, the elite colleges can offer “need-blind” places (i.e. ones that do not consider an applicant’s financial situation) and financial aid to half of their undergraduates. They boast of advances in racial diversity, but the economic imbalance is still apparent: in 2017 the New York Times reported that five of the Ivy League schools had more students from the top 1 per cent of the income scale than from the bottom 60 per cent. And while these institutions flourish financially, benefiting those fortunate enough to be able to attend them, the situation is very different at the for-profits and state universities. In recent years the latter have faced big cutbacks, and they are now routinely saddling their students with debts to cover fees of $20,000 per annum for in-state tuition and over $50,000 for out-of-state (plus living expenses). The situation is even worse at for-profit colleges, where, Eaton reports, the proportion of African Americans, women and veterans is generally higher than at non-profits. These students are also more likely to acquire a debt or to default (limiting their credit and housing options in the future), and less likely to graduate with a degree. Once celebrated as a path to upward mobility, American higher education is increasingly becoming an obstacle.
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‘Berman explains that many philanthropic organizations originated as religious mutual aid societies for struggling immigrants in the late nineteenth and early twentieth centuries. In an era when anti-Catholicism and antisemitism were rife, and state support for the poor was next to nonexistent, these associations served as a lifeline for their respective communities. There was no question of stockpiling assets; money was raised from the community and promptly disbursed to its needy. As Berman writes, “Jewish and Catholic philanthropic institutions regarded their yearly fund-raising as a mandate from the people, and their quick distribution of those dollars to meet material needs served to legitimate the following year’s campaign”. She continues: In the wake of the Gilded Age, which saw the rise of striking inequality, many Americans maintained a distrust of stockpiled wealth. Even Andrew Carnegie, the consummate industrial capitalist, denounced the practice of holding vast fortunes in perpetuity, and in his famous late-nineteenth century essay, “The Gospel of Wealth,” he argued for the return of wealth to society through philanthropic distribution.
Understandably, charities based on religious and ethnic communities were prime candidates for the self-dealing that Charlie Eaton calls “philanthropic homophily”: Catholics supporting Catholics, Jews supporting Jews and so on. Yet Jewish philanthropies, Berman shows, were affected by two specific historical developments.
One, of course, was the Holocaust, which presented American Jews with a world of need among European Jewish survivors and sparked an intense commitment to the new state of Israel. The second was the notable progress of Jews in American society. Antisemitism gradually abated after the Second World War, as did the numerus clausus quotas that limited Jewish entry into universities and the professions. Various Pew studies find that American Jews are now the wealthiest and best- educated religious cohort in the US. But assimilation comes at a price. While the “Jewish-connected” population has remained relatively stable at 2-3 per cent of the total, American Jews have become increasingly secular – more than 40 per cent of married Jews have a non-Jewish spouse.’

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‘Taken together, Eaton and Berman’s books suggest that the US’s non-profit tax policy is a dangerously underestimated factor in the country’s national divide. According to Philanthropy Daily (July 27, 2020), as of 2017, non-profit endowments amounted to about $1.7 trillion (roughly the GDP of Canada). That’s $1.7 trillion dollars withheld from economic activity, and many billions of tax dollars withheld from the public purse. As Berman writes: [Jewish philanthropic] federations’ turn toward the tools of finance is intelligible only in the framework of similar transformations in the American state that saw public interests increasingly beholden to market-driven models of growth and progress. Through tax reform, cuts to social welfare spending, and policies to deregulate and subsidize the financial industry, the American government steadily put the public good in the hands of private entities that controlled and benefited from the market economy.
The results reveal the splendours and miseries of modern America. The wealthy enjoy the benefits of state-of-the-art medical research and technology, housed in gleaming facilities bearing their names. The less fortunate lack access to basic care, resulting in the parents’ GoFundMe appeals on Facebook to raise money for their children’s treatment.’

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‘Soros, who confesses to messianic tendencies, emerges here as a complex figure, a man who would prefer to be remembered as a philosopher king than a financier. But Socrates required his philosopher kings to spend thirty-five years in education and an additional fifteen toiling in lesser offices to learn administrative realities. Billionaires, be they Soros, Koch or Gates – not to mention Jeff Bezos, Peter Thiel or Elon Musk – rarely have any experience in government or public service, while their keen minds, mastery of new technologies and grasp of market forces tend to lend them a worrisome sense of their own omniscience.
It is the age-old question: do we invest our hopes in our flawed democracies, even as we watch voters make one disastrous blunder after another, or cede actual governance to these masters of the universe, whose power derives from the market, not the ballot box? It’s a bipartisan dilemma: Democrats may blame Republicans for promoting a neo-feudal society, but the long war of the tax code against the public sector has been waged by Democratic and Republican administrations alike. The results are clear: when, as Lila Corwin Berman writes, “the public good is placed in the hands of private entities that controlled and benefited from the market economy”, it is those private entities, not the electorate, who shape our lives.’

Read the article here.

Philanthropy isn’t working, especially not in education, which is almost self-evident.
It might be working in the arts, but even there, government subsidies probably provide better results. It all depends on how you measure the results. In education, read the article, the disastrous results in the US are clear for everybody with eyes.

Charity, almost 2 trillion dollars a year, is a disaster for public goods, for the economy and it is spreading inequality rapidly, so rapidly that it undermines society.

The side note about assimilation is interesting as well, you might end being part of the majority, at last, which means also that you end up disappearing, fading away. I’m not sure if this is something that is by definition regrettable. The right to disappear, as a culture, as a people, is a human right as well.

And American Jewry is not the same as European Jewry. Different past, different present, different future also.

Another remark: Soros who wants to be a philosopher king, a dangerous ambition.
The name Soros is also, as is widely known, a dog-whistle for antisemites and their anti-Semitism. His opinions and support for migrants, the European Union, liberalism in general make him more even more attractive as a symbol of the powerful, corrupt, rich and leftist Jew.

Which is to say as well, antisemitism might return to the US, it will make assimilation more difficult. Those who are attacked as Jews will suddenly feel the need to become Jews once again. The same can be said of course about other minorities.