Three related pieces of information:
- There has been a dramatic increase in people giving money directly to help other people through cash transfer apps, rather than through nonprofit organizations.
“The coronavirus pandemic has mainstreamed a once-radical form of charity — or solidarity, depending on your politics and vantage point — in which strangers use peer-to-peer payment apps to give money directly, and instantly, to each other.”
-The Giving Apps: How Venmo and Cash App Upended a Century-Old Charity Model | Caitlin Dewey | OneZero|
2. 19 million Americans are facing eviction in January if the federal government doesn’t make immediate policy changes extending aid and/or eviction moratoriums.
“A report issued this month from the National Low Income Housing Coalition (NLIHC) and the University of Arizona estimates that 6.7 million households could be evicted in the coming months. That amounts to 19 million people potentially losing their homes, rivaling the dislocation that foreclosures caused after the subprime housing bust.”
-Nearly 19 million Americans could lose their homes when eviction limits expire Dec. 31 | CBS News
3. The percentage of wealth owned by America’s billionaires, 650 people or 0.0001% of Americans, is $4 trillion, more than double the wealth owned by the bottom 50% of Americans (~160 million people). Billionaire wealth grew by $1 trillion since the start of the pandemic in March — a departure from previous economic crises when the very rich were affected in the same direction as the rest of the country.
At the intersection of these three bits of information is big political questions:
- Scale of Responsibility: what is the level of responsibility for basic societal functioning? Is society a platform for individuals to do whatever they can for themselves and whomever else they select? Or is society a set of responsibilities to each other for a baseline way of life? To make the questions more concrete (if oversimplified): is America Facebook, a platform that facilitates benefit (and profit) for those best situated to make the most of it, with no larger responsibilities or reasons for being? Or is America an interstate highway system, a mechanism with a shared baseline of rules and expectations for people to get where they’re going, even as some get there faster and in more comfort than others?
- Allocation of Risk and Reward: What kinds of risks do we protect people from — which risks do we take collective responsibility for? — and which do we make the responsibility of the individuals taking them? How do we allocate the rewards of risk — how broadly do we give credit for “wins” and how much do we credit and insist on reinvestment in the systems that allows for those wins? Is there a floor for public risk? A ceiling for private reward, especially if that reward is enabled by public investment?
That three bits of reality are true at the same time — collapse of support of institutions that are ostensibly set up to help at something larger than an individual level, millions of Americans on the verge of losing everything due to national (global) events, and a few hundred people benefiting from “platform America” at historic and historically disproportionate levels — are evidence that we’re answering these political questions in consistent and truly consequential ways. Ways I’m not sure most of us would explicitly choose.
It is a set of political choices that land us here as Americans, where risk is pushed to those who can least manage it, reward is reserved for those who least need it, and the scale of our responsibility is at the individual — rather than systemic — level.
Caitlin Dewey’s reporting on the rise of peer-to-peer giving includes this explainer: “Direct givers often say urgency motivates them — rent payments and utility bills don’t wait, after all. But the choice to Venmo or Cash App aid is often also political, a commentary on the role and efficacy of conventional nonprofits. Critics of waste and redundancy in the field … frame direct giving as more efficient … Meanwhile, progressive and left-wing activists see mutual aid and direct giving as a means of subverting racist, classist, and ableist systems — philanthropy among them.”
Note that both reasons for direct giving are criticisms of the system of philanthropy, but that direct giving replaces this broken system with no real system at all. Hoping people respond to Venmo or cash app links on Twitter isn’t a reliable or scalable system for getting people what they need, and, just like GoFundMe campaigns, are as likely to amplify inequities and prejudices in terms of who gets help as traditional philanthropic systems are.
“The spectacularly fruitful GoFundMes are the ones that make the news — $24 million for Time’s Up, Hollywood’s legal-defense fund to fight sexual harassment; $7.8 million for the victims of the Pulse nightclub shooting in Orlando — but most efforts fizzle without coming close to their financial goals … Part of the allure of GoFundMe is that it’s a meritocratic way to allocate resources — the wisdom of the crowd can identify and reward those who most need help. But researchers analyzing medical crowdfunding have concluded that one of the major factors in a campaign’s success is who you are — and who you know ... Most donor pools are made up of friends, family, and acquaintances, giving an advantage to relatively affluent people with large, well-resourced networks.”
-When GoFundMe Gets Ugly; The largest crowdfunding site in the world puts up a mirror to who we are and what matters most to us. Try not to look away. | Rachel Monroe | The Atlantic
Neither the philanthropic system nor the non-system of direct giving address the deeply political questions of how the larger systems are set up to put so many people in need, why so many people in need of help are people of color, immigrants, single mothers, and others with identifiable and shared demography, and how all of that is true while another very small group of people is positioned at the far opposite end of need (and those people also generally share demography — overwhelmingly white and male, or the white wife or daughter of a white man who made the list first.)
In ways not dissimilar from CEOs and companies that do corporate social responsibility (CSR) but steer clear of engaging the political questions that create the conditions for that CSR, abandoning philanthropic systems for direct giving is like trying to fill a dry lake bed a drop at a time. It’s Sisyphean at best.
America’s billionaires could avert the eviction crisis looming in January. Together they could pay every single overdue rent bill for every person through January and most would still be billionaires after that expenditure. That would be an extraordinary act of mercy and they should do it. BUT, if they don’t also engage in the politics of systemic relief, the need for another extraordinary act of mercy will just arise again in March.
Millions of Americans will go without healthcare and millions will be bankrupted by healthcare expenses this year and next (and for the foreseeable future, absent major changes in policy). America’s billionaires could avert this healthcare crisis — they could pay insurance premiums for every person who lost their job and their healthcare coverage with it due to the pandemic. They could cover that through January, and copays, too. They could do that and most would still be billionaires on the other side. And that would be an extraordinary act of humanitarian mercy.
I could add a parallel paragraph here for any number of other crises non-billionaire America is facing down right now. Homelessness, public education, retrofitting public spaces for COVID safety, infrastructure, student loan debt, etc. all come down to how to pay for what’s needed.
America’s billionaires could distribute some of their extreme wealth back to the people who have made it possible — without workers and customers, today's or those of a generation ago that made their ancestors rich, none of these billionaires would be billionaires.
They could do give through the auspices of a nonprofit and write it off of their taxes as a charitable contribution.
And there’s the rub. If the billionaires give, and do so in a way that takes advantage of the systems that benefit them, all while not changing the answers to the big political questions that got us here —government relief that overwhelmingly benefitted those who least needed it, healthcare tied to disappearing jobs, city and local governments starved of resources to provide basic services, etc. — then relief will be short lived.
We’ve got a very small number of billionaires that control a massively disproportionate percentage of our national wealth as a result of policy choices in alignment with our political decisions to maximize America as a platform for profit, and make risk largely public while reward is largely private.
The array of federal policies that enforce these decisions is too vast for a single article, but to dig into perhaps the most consequential: inequality is a consequence of diminishing progressivity in taxation. Per one of many recent studies documenting this reality:
We find that the significant drop in tax progressivity starting in the late 1970s is the most important driver of the increase in wealth inequality since then. The sharp observed increases in earnings inequality and the falling labor share over the recent decades fall far short of accounting for the data. The model can also account for the dynamics of wealth inequality over the period — -in particular the observed U-shape — -and here the observed variations in asset returns are key. Returns on assets matter because portfolios of households differ systematically both across and within wealth groups, a feature in our model that also helps us to match, quantitatively, a key long-run feature of wealth and earnings distributions: the former is much more highly concentrated than the latter.
-via Sources of US Wealth Inequality: Past, Present, and Future | NBER
Put simply: we have systematically made it so the wealthy get wealthier and their wealth is protected, without doing anything to systematically protect people who are not wealthy in any of the same ways. We have provided the wealthy a floor, while stripping away the net for the poor.
So, at the same time that philanthropy is veering away from systemic solutions — and away from investing in any sort of infrastructure for engaging the politics that create our conditions — extreme wealth is shoring up the systemic bulwarks against change.
Combine diminishing investment in institutions that work at some level of scale on the fallout from our various systems with extreme concentration of wealth, and you’ve got a stable society, albeit one built on very particular answers to the critical political questions of responsibility and reward.
Diminished investment in institutions that work at scale relocates not just resourcing to the one-to-one level, but also relocates any hope of political change to the one-to-one level. People venmoing twenty bucks to each other are unlikely to be situated people vote, understand what they’re voting on, or are otherwise included in the politics that generated their situation. Advocacy at scale isn’t going to happen if donating at scale isn’t happening.
So, the extreme concentration of wealth continues to mean a growing concentration of power, too. Which will almost certainly mean more reduction of responsibility down to the individual — more “platform America” — and more private reward with public risks.
There are other answers to these big questions.
At least a couple of billionaires are pursuing them. MacKenzie Scott, Jeff Bezos’ ex and the third wealthiest woman in the United States (after Alice Walton, daughter of Walmart founder Sam Walton, and Julia Koch, widow of Koch Industries co-founder David Koch), is giving away massive sums of money directly, without strings attached and without building a massive organization to shelter her money from taxes, to organizations making a dent in intractable issues.
“There’s no question in my mind that anyone’s personal wealth is the product of a collective effort, and of social structures which present opportunities to some people, and obstacles to countless others… People who have experience with inequities are the ones best equipped to design solutions. Last fall, I asked a team of non-profit advisors with key representation from historically marginalized race, gender, and sexual identity groups to help me find and assess organizations having major impact on a variety of causes … I gave each a contribution and encouraged them to spend it on whatever they believe best serves their efforts. Unless organization leadership requested otherwise, all commitments were paid up front and left unrestricted to provide them with maximum flexibility.
-116 Organizations Driving Change | by MacKenzie Scott
As proof that these three facts are true at the same time in America is based on our political choices, examples about from around the world of countries to have made different political choices, resulting in different systems and different outcomes.
For example, other countries have built systems to keep people from homelessness and starvation while they take measures to defeat the virus spread, including in many cases direct financial assistance to citizens and small businesses.
Most other western countries have built systems so that access to health care during a pandemic doesn’t collapse with the job market, and paying for healthcare doesn't cause widespread bankruptcy.
Nearly universally these countries have built systems that balance public risk and private reward in ways that have the wealthiest citizens reinvesting in the countries that enabled their success.
Obviously all of these systems have limits and parameters — there is extreme wealth inequality around the world right now, health systems are stretched to capacity everywhere, homelessness and hunger are crises in many places. But the US stands alone in our answers to these crises remaining rooted in a politics of purely individual responsibility and extremely narrowly distributed reward.
None of this is to say that anyone should stop giving directly to people in need, nor that the super-wealthy shouldn’t give super amounts to people in need. We should and they should. Charity is important and good no matter the political answers to systemic questions.
But it is to say, again, that everything is politics, including the safety net with so many holes in it that it no longer resembles a net, but instead some strings held on either side by a few people such that if you’re one of the lucky few, your fall might be broken for a minute. Including the dramatic and extreme accumulation of wealth and power among a vanishing few. And including the shocking lack of pressure or support for our shared institutions to act in any different way.