The Virtue in Jeff Bezos’ $2 Billion Fund to Help Preschoolers and the Homeless

 

The $2 billion Bezos Day One fund might do a great job at helping the homeless and educating preschoolers from low-income families. Or it might be a bust. It’s obviously too early to make any sort of reasonable prediction about whether Jeff and MacKenzie Bezos will succeed as a philanthropists.

For critics, however, all that is pretty much beside the point. The effort is inherently “morally complicated.” Some see it as a tax dodge on the Amazon founder’s $160 billion fortune. They would prefer — in the name of “democratic accountability” or some such — for Uncle Sam to somehow grab a big chunk of that massive wealth to fund government efforts to help preschoolers and the homeless. (As if Bezos’ efforts wouldn’t be accountable to the democratic process that produces laws and regulations or accountable to parents who voluntarily choose to enroll their kids.)

There’s also an objection to the private sector getting involved — Jeff Bezos especially — in the provision of public goods such as education or housing for the homeless. (Critics note Bezos lobbied to kill a $500 per employee tax on Seattle’s largest companies. The proceeds would have gone toward homeless shelters. I think Team Amazon had a point.) The growing anti-tech activist movement views Amazon as a harmful monopoly that’s bad for consumers and its own workers. He can keep his pricey PR ploy. This bit from the Bezos’ announcement, in particular, seems to grate: “We’ll use the same set of principles that have driven Amazon. Most important among those will be genuine intense customer obsession. The child will be the customer.” What Bezos apparently views as a beneficial promise, the critics see as a threat.

“Customer.” A dirty word to capitalism skeptics, maybe, but savvy businessmen like Bezos understand the centrality of the customer. The Amazon vision, he wrote in his famous 1997 letter to shareholders, “is to build the world’s most customer-centric company.”

It’s a beautiful thing, when you stop to think about it. A virtuous thing, even. Capitalism — what economist Deirdre McCloskey prefers to call “trade-tested betterment” in “Bourgeois Equality” — is “the most altruistic of economic systems because everything is directed toward satisfying the ordinary customer.” A person in business, McCloskey write in “Bourgeois Virtues,” depends on humble listening and “imaginative engagement” with the customer “to guess what they are thinking, to see the witness in them.” Many parents would very much like their schools to more imaginatively engage with their students.

McCloskey recalls how that in late 1980s socialist Bulgaria, department stores had armed guards on every floor to prevent angry customers from attacking “the arrogant and incompetent staff charged with selling shoddy goods that instantly fell apart.” No wonder visitors from such countries were so stunned to visit the American counterparts. McCloskey: “The way a salesperson in an American store greets a customer makes the point: ‘How can I help you?’ It is an instance in miniature of the bourgeois virtues.” I’m looking forward to seeing how the Bezos Day One fund helps its needy customers.

Published in Economics
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  1. Vectorman Inactive
    Vectorman
    @Vectorman

    James Pethokoukis: The $2 billion Bezos Day One fund might do a great job at helping the homeless and educating preschoolers from low-income families.

    Does anyone know how Mr. Bezos’ fund will be different than the federally funded  Head Start Program? Even at the end of the linked Wiki article it states:

    In 2011, Time magazine’s columnist Joe Klein … wrote:

    “You take the million or so poorest 3- and 4-year-old children and give them a leg up on socialization and education by providing preschool for them; if it works, it saves money in the long run by producing fewer criminals and welfare recipients … it is now 45 years later. We spend more than $7 billion providing Head Start to nearly 1 million children each year. And finally there is indisputable evidence about the program’s effectiveness, provided by the Department of Health and Human Services: Head Start simply does not work.”

    I’m no expert at early childhood development, but a well focused one-on-one mother/grandmother/adult probably has better results than the Head Start boondoggle. And Mr. Bezos is probably a fool for suggesting otherwise.

    • #1
  2. Goldwaterwoman Thatcher
    Goldwaterwoman
    @goldwaterwoman

    Establishing a charitable foundation is probably the smartest way a wealthy individual can avoid paying huge taxes on capital gains while establishing that person and his family as philanthropists and gaining favorable  publicity for doing so. The Bill and Melinda Gates Foundation, for example, is the largest one in the world and did much to change Bill Gates’ public perception as an overly aggressive businessman to one of the good guys. As the original founder dies and subsequent generations take over, the missions can take on new lives. Today’s Ford Foundation, for instance, is currently more about social justice and inequality, a liberal organization Henry Ford would barely recognize.    Go here for more information on starting a private foundation with pros and cons.  

    • #2
  3. JoelB Member
    JoelB
    @JoelB

    Who is likely to do more good with the money – the man who built one of the largest enterprises of the day, which has set the standard for customer service, or a group of government bureaucrats? 

    • #3
  4. Goldwaterwoman Thatcher
    Goldwaterwoman
    @goldwaterwoman

    JoelB (View Comment):

    Who is likely to do more good with the money – the man who built one of the largest enterprises of the day, which has set the standard for customer service, or a group of government bureaucrats?

    Most probably a guy who built a large enterprise, but there are undoubtedly those who would disagree.

    • #4
  5. JoelB Member
    JoelB
    @JoelB

    As a homeschooler parent, now finished with homeschool, I doubt that sending three and four year-olds to school is either good for education or socialization. It would be better in most cases to wait a few years until motor skills, visual perception, and emotions have matured a bit before the stress of formal studies is introduced. 

    • #5
  6. GFHandle Member
    GFHandle
    @GFHandle

    The modern left (not liberals) hate private charities. (Classic liberalism was precisely the view that there should be a space between the individual and the government–unions, newspapers, churches, etc.) The new left, the progressives, etc. want the government to run everything. They think this is democratic.

    I am of two minds. On my Amazon Echo news blast I keep hearing a preening announcement from Jet Blue about how they are giving a small percent of their profit amounting to $40 million to charity. Which charity, I ask? Who chooses? Wouldn’t the passengers rather keep the money in their own pockets so THEY could choose.  Given the “good work” done by the Rockerfeller Foundtion, the Ford Foundtion, etc. I am torn. I love the idea of private charity. I hate the big grant funders who shape the art market, the education market, etc.  Not to mention that law whose name I forget that says that all institutions not explicitly on the right will drift to the left. My corollary is that even those created to support conservative values and causes will do the same over time.  What to do?

    • #6
  7. Vectorman Inactive
    Vectorman
    @Vectorman

    JoelB (View Comment):
    Who is likely to do more good with the money – the man who built one of the largest enterprises of the day, which has set the standard for customer service, or a group of government bureaucrats?

    While it’s true that government is less efficient that individuals, people like Bezos are not remotely “squeaky” clean. Many question the UP Postal service for subsidizing Sunday delivery of Amazon shipments. And his purchase of the Washington Post keeps him in good standing with the Swamp. And the Swamp will probably ignore questionable working conditions at Amazon, etc.

    • #7
  8. RushBabe49 Thatcher
    RushBabe49
    @RushBabe49

    Liberals like Bezos love wasting their money on philanthropy that does not work, because they don’t care whether it works or not.  They care about appearing compassionate and caring.  They insist on throwing good money after bad, and they are welcome to do so-it’s their money.  Giving poor people money does not “cure” poverty.  Giving the “homeless” money does not cure homelessness, nor does it get street people off the streets.  So probably most of his money will be wasted, but he gets a big tax deduction for it.

    • #8
  9. DonG Coolidge
    DonG
    @DonG

    The $2B would be much better spent promoting 2-parent families.  I wish it would go towards “amazoning” education, but based on what he has done with WaPo, Bezos is probably more interested in virtue signaling than innovation or effectiveness.  Let’s hope for the pleasant surprise.

    • #9
  10. The Reticulator Member
    The Reticulator
    @TheReticulator

    RushBabe49 (View Comment):
    Liberals like Bezos love wasting their money on philanthropy that does not work, because they don’t care whether it works or not. They care about appearing compassionate and caring.

    I disagree. I don’t think they care how they appear. Oh, they may try to fool a few people here and there about their intentions, but mostly they want that money under their control.    

    • #10
  11. JoelB Member
    JoelB
    @JoelB

    Vectorman (View Comment):

    JoelB (View Comment):
    Who is likely to do more good with the money – the man who built one of the largest enterprises of the day, which has set the standard for customer service, or a group of government bureaucrats?

    While it’s true that government is less efficient that individuals, people like Bezos are not remotely “squeaky” clean. Many question the UP Postal service for subsidizing Sunday delivery of Amazon shipments. And his purchase of the Washington Post keeps him in good standing with the Swamp. And the Swamp will probably ignore questionable working conditions at Amazon, etc.

    I intentionally did not address Bezos’ motives or methods. I believe as a general principle that private individuals should not be taxed to support the government welfare state. Nor do I believe that government should favor businesses with subsidies.

    • #11
  12. I Walton Member
    I Walton
    @IWalton

    Education isn’t a public good although if done well it has positive externalities which are public goods and has negative externalities if done poorly which is what we’re doing.  Housing for the homeless isn’t a public good either although homelessness has negative externalities.   We’ve turned education  into public provided goods by creating state monopolies and that has had even more negative externalities than the total absence of public schools would have  had.  We turned private schools into public schools in the early 19th century to spread protestantism, but now it serves to separate kids from such things.

     A public good is a good or service from which other’s can’t be excluded and which is jointly consumed such as Defense or a radio signal, or music in a loud speaker which one can avoided only by not eating in the private good of a restaurant or avoiding the mall that is playing it, or bad government policies that affect everyone .  We should abolish the public school system and the property taxes which fund them and replace the whole thing  with vouchers for low income people, defining low income and education generously.

     Any charitable effort to replace the public school system, provide funds for kids to escape the public school systems they’re afflicted with should be celebrated.  Providing pre kinder schooling however is aimed at increasing women in the work force and liberating them from full time motherhood.  While this may be good and probably has positive externalities for some kids,  it isn’t necessarily education but we learn from individuals trying these things and they can stop when they choose to, in contrast to publicly provided services which never seem to stop no matter how awful.

    • #12
  13. Amy Schley Moderator
    Amy Schley
    @AmySchley

    Vectorman (View Comment):
    Many question the UP Postal service for subsidizing Sunday delivery of Amazon shipments.

    The program that Amazon takes advantage of is available for everyone. If the city opens the zoo when there’s 8″ of snow on the ground and I’m the only person there, is the city subsidizing me?

    • #13
  14. Goldwaterwoman Thatcher
    Goldwaterwoman
    @goldwaterwoman

    The Reticulator (View Comment):
    I disagree. I don’t think they care how they appear. Oh, they may try to fool a few people here and there about their intentions, but mostly they want that money under their control.

    Can’t say that I blame them. If you make a lot of money, and the IRS has a way you can donate to a cause you care about and get lots of tax deductions for so doing, it’s the best of all worlds. Good tax accountants and tax lawyers are worth their weight in gold to a seriously wealthy person. 

    • #14
  15. TBA Coolidge
    TBA
    @RobtGilsdorf

    Does this mean we get our tax money back? 

    • #15
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