Chinese philanthropist donates all his fortune

http://www.theglobeandmail.com/news/world/chinese-philanthropist-donates-it-all/article1650447/

by MikeCapone • 16 years ago

69 60 16 years ago

slantyyz2• 16 years ago

I think this quote is a nice wake-up call to any potential heir who thinks he/she is entitled to a large inheritance:

“If my children are competent, they don’t need my money,” Mr. Yu explained. “If they’re not, leaving them a lot of money is only doing them harm.”

tarkin23• 16 years ago

Bit of a logical play, the dilemmic fallacy to be precise, but, alternatively:

If they're competent, leaving them a lot of money won't do them any harm. If they're not, they need his money.

[edit] here's the classical example of this change in perspective: http://divisbyzero.com/2008/11/30/euathlus-and-protagoras/

kiba• 16 years ago

Competent people will manage their wealth wisely, while the incompetent simply squander it.

sorbus• 16 years ago

But if they're competent, they don't need the money, because they'll be able to work up to the point where they have as much as he did - according to the article, he started off as a "poor street hawker," so his belief that his children could do the same is certainly logical. They probably also have the advantage of his connections, better education, and so forth, meaning that they should be even more capable than he was. Also, if they're competent, lacking money might be good for their moral character, and encourage them to eventually do the same if they gather a lot of money, doing more good for society.

If they're not competent, it's better to give the money to the foundation he started, so that it can help as many people as possible, instead of being squandered. Sure, his children might need it more, but they wouldn't be able to do as much with it which would be useful to society, which is what he is trying to do.

dieterrams• 16 years ago

Incompetence isn't an irreversible trait. A lot of people face barriers that make reversing the condition extremely difficult or impossible, but these typically aren't the children of rich people. Their problem is more likely one of never experiencing true need, and thus not understanding the risk of being incompetent.

exit3• 16 years ago

actually the idea of his children resenting this gesture is crucial to endearing himself.

angstrom2• 16 years ago

Or the ultimate in Asian parenting...

"What?! You get A- in math?! You not smart enough to get A+? Maybe you not smart enough to inherit fortune..."

bokchoi• 16 years ago

Racist much?

leelin• 16 years ago

How about if the children are competent AND they receive the money?

At the risk of having spoiled kids, might this potent combination bring us another Warren Buffet or Bill Gates? Sure it might not be fair, but children who inherit get a nice safety net which allows them to take greater risks to pursue their dreams.

Edit: I didn't realize the extent that Buffet bootstrapped his wealth. Still, there are plenty of good inheritance examples... the Trumps and Kushners?

philk2• 16 years ago

Warren Buffett made almost all of his money himself.

The problem is that when people get unearned money they usually become wasteful and lose their drive. It's also really hard to keep working on something financial when you've got a large external income; if you're making a million bucks a year in investment income then spending all your waking hours on a business that's making fifty grand a year doesn't seem worthwhile even if it might eventually grow much larger.

gcheong• 16 years ago

An interesting documentary around this question was made by an heir to the Johnson and Johnson fortune called "Born Rich"

http://www.youtube.com/watch?v=uKKb7_7qBrk

tzm3• 16 years ago

So... he's not an evolutionist and thinks being a philanthropist is more fulfilling. Seems self-righteous to me.

tzm3• 16 years ago

To clarify... if his children were competent AND had his money, I'm sure they could make an even greater impact to the world than he did. Instead, he would rather give his money away to charity as some form of personal achievement. ??

Isn't life suppose to evolute in some form, rather than starting from scratch? That is effectively what he's imposing on his children. His comment about "competence" makes no sense to me.

jchonphoenix• 16 years ago

Its an old adage that's been handed down many generations. I hear it from a lot of the wealthy in Hong Kong.

moolave• 16 years ago

I would say that by the time he said this, his children already have their own businesses, acquired some good wealth of their own, and have been groomed well to run them (and as well as handle/invest money wisely)

known• 16 years ago

I told my wife "My son will inherit my wealth, only if he is competent." and I made will accordingly. My son is 3 now.

MikeCapone6• 16 years ago

The article states that this makes him the first Chinese citizen to donate more than $1 billion to charity.

electromagnetic• 16 years ago

I believe this is a notable feat due to the ever present communist state that usually steps in on big companies in the Chinese mainland.

Hong Kong is still trailing many western cities in terms of GDP per capita (not by too far mind you), however I rarely hear of this happening in western cities. Surely in richer countries this should be happening far more frequently, but it doesn't.

exit3• 16 years ago

philanthropic donations are only ever patronizing. it shouldn't be possible to accumulate that much wealth to begin with.

MikeCapone6• 16 years ago

Who decides how much wealth it is okay to accumulate? (said another way: who decides how economically productive a person can be?)

Ardit206• 16 years ago

We, the People!

We decide who to lock up, so why not put a limit on how much wealth one can accumulate, say something like no more than 1000% of the average wage, all other income taxed at 100%, or 90% or 80%.

They only gain this income by exploiting the proletariat so its only fair!

angstrom2• 16 years ago

Why, the Star Fleet Federation of course. ;)

Seriously, even if wealth were capped such that you could only attain a multiple of the median income or some other bench mark it would only serve as a straight jacket for productivity. Distributing those gains back to society directly would only serve inflation as the relative cost of goods and services would seek equilibrium with demand and the existing money supply. The only thing I can imagine is having excess productivity siphoned off via a tax or general fund that reinvests back into society...which is the goal of philanthropic efforts. Instead of giving their children the trust fund, it becomes a resource for society to focus on the things the free market neglects.

philk2• 16 years ago

philanthropic donations are only ever patronizing

You're wrong. The Gates Foundation has pledged $10 billion to vaccine research and I can't think of how that could be considered "patronizing".

it shouldn't be possible to accumulate that much wealth to begin with.

I disagree. The most productive people in society should be rewarded accordingly, and encouraged to keep producing. If you put a cap on rewards you'll put a cap on productivity.

sbov• 16 years ago

I don't agree with a wealth cap, but:

How do you define productivity, the one who makes the most money?

Theres also this mentality that pretty much anything goes in businesses, which I find a bit interesting. Hence the phrase: it's not personal, it's business. So people are allowed to screw you over and be complete a-holes when it comes to business.

Some businesses (see: credit cards) are most profitable when they siphon billions from the poor, which is then placed in the hands of the rich. Then, after doing so, they are lauded for donating that money to philanthropic causes. I don't know how this can be viewed as anything other than patronizing.

Locke1689• 16 years ago

Actually, a "wealth cap" is not such a ridiculous idea. Essentially, it's simply a progressive income tax with a tax bracket at 100%. If the bracket is high enough, e.g. $200 million, then it doesn't act as a disincentive and helps to balance the imperfectness of the market.

Many would cite John Rawls here, but I have my own criticisms and my philosophical debates (I am a philosophy minor) can run into weeks of time. Instead, I'm going to simply make the argument that wealth over $200 million is meaningless to a single person. That is, from a practical perspective, that is more money than one could ever spend. The only positive use that could come from that amount of money is heavy watched investment and philanthropy. It is not easy to see that $1 billion is enough to move the world. Why should that responsibility fall into a single citizen's hands? In the best circumstances, the citizen hires a flotilla of people to manage that wealth (e.g., Gates and Buffet) and they spend it wisely and do great good. I don't see the fundamental reason why the government couldn't just do the exact same thing. By awarding the money of a government to a single person (Gates and Buffet each had, at the height of their wealth, more money than most of the governments in the world), this simply ensures an entrenched oligarchy of the rich (and therefore powerful) unless they decide to give it away.

Many would argue that this is "their" money so they deserve it. I think this argument is mostly bollocks, though. Bill Gates had over $100 billion at one point. Let's say that a skilled professional makes ~$1 million (gross) over the same time period. That's a 100,000x multiplier. Did Gates really do 100,000x more work? Did he really have 100,000x more insight? I think he just got lucky. He was at the right time at the right place with a good idea. From there he built a company. But the trick is that it's a lot easier to make a lot of money when you already have a whole lot of money.

Anyway, I'm gonna end this here, even though I'm not completely satisfied with my argument because this is becoming ridiculous.

P.S. This is not for those who believe that the government can do nothing right. I'm not sure that it's even worth arguing with those people. Theoretically, there's no satisfying proof that that's the case and practically the only evidence I see is that when those same people set the government up to fall, it falls hard.

exit3• 16 years ago

> You're wrong.

No actually i'm right.

> and I can't think of how that could be considered "patronizing".

the part where bill gates accumulates wealth through computer technology, and where computer technology depends on minerals mined under slave labor conditions, or devices put together in sweatshops, and then he gets lauded for "donating" what he dispossessed those people of.

that would be one of many patronizing threads to this story, for example.

> The most productive people in society should be rewarded accordingly,

the non-linear returns of capitalist accumulation do not reward people "accordingly".

w00pla• 16 years ago

The Bill&Melissa Gates foundation wasted a lot of money on the "Love life" programme. It was essentially a program that was supposed to use advertisements to encourage youths to practice safe sex.

It turned out into more of a sex advertisement and soft money for advertisers and managers (i.e. completely misspent money).

The media did not complain though (since they received a shitload of advertisement money).

gonefishin• 16 years ago

> In a society where capitalism is just 30 years old

Chinese capitalism is many things, but one thing it's not is young.

jiganti• 16 years ago

I wonder how much influence, if any, Gates/Buffett and their recent push for the wealthiest Americans to give 50% away before death had on him. With Americans potentially giving away more, it makes the rest of the world look worse by contrast.

cwtann• 16 years ago

This idea was planted via inception?

Dylanfm• 16 years ago

This brings something from Philip Greenspun's site to mind: http://philip.greenspun.com/materialism/early-retirement/ "The standard tools that rich families use to preserve their wealth down through the centuries include the following: ... * charitable foundations and organizations that are supposed to work for the public benefit, but in fact provide jobs and luxurious vacations ("board meetings") for members of your family for decades to come..."

Although, I do think this guy is doing this for good, his family will still at least have employment from it. It says his sons are on the organisation's board, for example.

Chinese philanthropist donates all his fortune

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