May 24, 2019 (579 words)
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Reflecting on the recent news that a billionaire offered to pay off some lucky graduates' student loan debt.
Tags: inequality
This post is day 144 of a personal challenge to write every day in 2019. See the other fragments, or sign up for my weekly newsletter.
Continuing the theme of the previous fragment: Every billionaire is a policy failure, part 2.
Recently, billionaire Robert F. Smith gave a commencent address at Morehouse College (a historically black university in Atlanta) where he announced that he was going to pay off the student loans for everyone in the 2019 graduating class.
(Cue the usual inane headlines, like this one from the Washington Post: Robert Smith pledged to pay off Morehouse graduates’ student loans. Is this fair to families who saved? No, you’re right, it’s not fair, just like a vaccine for polio is not fair to anyone who contracted polio, therefore people should continue to suffer from polio forever.)
Now, there are several ways of viewing this incident. One way involves approval and commendation: good for him for giving back! If you’re an especially optimistic person, you could even go so far as to conclude that the system must be working fine, because billionaires are stepping up to help society’s fix problems. Billionaires are entitled to their wealth because they’re deploying it towards good causes, so we should be happy to let them keep it.
But that would be much too optimistic of a reading. The majority of wealth owned by billionaires is not going to ‘good causes’ like this one; the reason this incident made the headlines is precisely because it’s rare. It’s exceptional. Even those who do pledge to donate most of their wealth to good causes often still expect a return, and in any case, they have enough wealth that donating most of it doesn’t prevent them from living in total luxury.
What Smith did - however magnanimous it may seem - should be understood as the bare minimum someone should do if see they others suffering and have the means to alleviate it. It’s not Smith’s fault that that the economic system which made him a billionaire is so cruel to everybody else, but neither does his tiny act of generosity exculpate the system.
If we accept the adage that every billionaire is a policy failure, then one aim of politics should be to create an economy that does not create billionaires - i.e., a world where no billionaires are possible. [Edit to clarify: At least, a world where being a billionaire doesn’t mean as much, and doesn’t confer that much power compared to non-billionaires. Like, for example, the power to pay off others’ student debt. If everyone had access to education/housing/healthcare/food/etc without taking on debt, then the existence of billionaires would be much less worrisome.]
But, you might ask, if there are no billionaires, who would pay off lucky graduates’ student debts? The answer is: no one, because there would be no student debt in the first place. Students shouldn’t have to be in thrall to the caprices of billionaires merely to avoid a life without the shackles of predatory student loan programs.
Massive wealth consolidation at the top, crushing amounts of debt for everybody else … these are two sides of the same coin, stemming from an economic system that increasingly favours those who own capital while disenfranchising those who don’t. Within these constraints, sure, the benevolence of billionaires is better than nothing. Still, better to have a system that doesn’t require billionaires to be benevolent in the first place.
Thanks to David Heinemeier Hansson who gave some feedback on this post and inspired the edit above. See also his excellent Twitter thread on this very topic.