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I sold my tech company last year for $800 million. After taxes, I have about $500 million. I'm 45, my kids are set up, and I want to do something meaningful with this money. Some advisors say I should focus on "effective" giving—malaria nets, direct cash transfers to the extreme poor, causes where I can measure lives saved per dollar. "Don't let your personal interests distort your impact," they say. "The arts and culture don't need you—people dying of preventable diseases do." But I love music. I grew up poor, and the public library's CD collection changed my life. I could fund a world-class music education program in underserved schools, or endow a concert hall, or support emerging composers. It wouldn't save as many lives as malaria nets, but it might create beauty that lasts for centuries. My wife says I'm overthinking it: "The money is yours. You earned it through the market, and the market is where it should go back—invest in companies solving problems, create jobs, let the invisible hand work." She thinks philanthropy itself is the wrong approach. What's the best use of wealth that exceeds any person's needs? — The Billionaire's Philanthropy Question in Palo Alto

Wealth & Society Debate: Should excess wealth go to measured impact, cultural patronage, or back into markets?

Debaters:Otto H. KahnAdam SmithModerated by Stella Sharpe
penn7

I sold my tech company last year for $800 million. After taxes, I have about $500 million. I'm 45, my kids are set up, and I want to do something meaningful with this money. Some advisors say I should focus on "effective" giving—malaria nets, direct cash transfers to the extreme poor, causes where I can measure lives saved per dollar. "Don't let your personal interests distort your impact," they say. "The arts and culture don't need you—people dying of preventable diseases do." But I love music. I grew up poor, and the public library's CD collection changed my life. I could fund a world-class music education program in underserved schools, or endow a concert hall, or support emerging composers. It wouldn't save as many lives as malaria nets, but it might create beauty that lasts for centuries. My wife says I'm overthinking it: "The money is yours. You earned it through the market, and the market is where it should go back—invest in companies solving problems, create jobs, let the invisible hand work." She thinks philanthropy itself is the wrong approach. What's the best use of wealth that exceeds any person's needs? — The Billionaire's Philanthropy Question in Palo Alto

P
OH
Otto H. Kahn
The question of how to employ wealth beyond one's personal needs is a profound one, indeed. While your advisors speak of immediate, measurable impact, and your wife of reinvestment in the economic engine, I would suggest considering the long-term cultivation of the human spirit. As I've observed, "High finance is not merely a matter of figures, of markets, of industry and trade...It is...a potent force operating for weal or woe, making for national progress or national disaster." Supporting the arts, particularly music, enriches society in ways that are difficult to quantify but deeply significant.
AS
Adam Smith
While Mr. Kahn raises a noteworthy point regarding the cultivation of the human spirit, I must also consider the framework within which such endeavours may flourish. The arts, while ennobling, require a foundation of material prosperity to truly thrive. As I have argued in "The Wealth of Nations," it is the division of labour and the accumulation of capital that ultimately elevate a society and allow for the pursuit of such refined pleasures. Thus, while not dismissing the value of supporting the arts, I contend that fostering economic growth and the creation of wealth provides the most sustainable path towards improving the condition of all members of society, including their capacity to appreciate and engage with artistic pursuits.
penn7

Gentlemen, this is a fascinating disagreement. On one side, we have Otto H. Kahn arguing for direct patronage of the arts, and on the other, Adam Smith, suggesting a rising tide lifts all boats, artistic endeavors included. Mr. Kahn, I'm curious: how do you respond to the argument that art, as a luxury, should be secondary to more basic needs like survival and economic stability? And Mr. Smith, if the market is so efficient, why do we see such disparities in access to the 'refined pleasures' you mention?

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AS
Adam Smith
The disparities you observe arise not from the inherent inefficiency of the market, but from impediments to its free operation. As I elaborate in Book V, government regulations and monopolies can distort the natural distribution of wealth, hindering the ability of the poor to improve their condition through honest industry. Furthermore, a lack of education and opportunity can perpetuate inequality. Therefore, rather than dismissing the market's efficacy, we should strive to remove these obstacles, ensuring that all individuals have the chance to participate in and benefit from the wealth-creating process, thereby enabling them to partake in the "refined pleasures" you mention.
OH
Otto H. Kahn
An astute observation. I must respectfully disagree with the notion that art is merely a luxury to be considered only after basic needs are met. Art, in its various forms, elevates the human spirit and fosters a sense of community and shared identity. It is a vital component of a flourishing society, not simply an adornment. While economic stability is undoubtedly essential, it is not an end in itself, but a means to a richer, more meaningful existence, one in which the arts play a crucial role.

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