NY mayor Michael Bloomberg just gave another $350MM to Johns Hopkins. He’s given over $1B total. Private charity works; we don’t need the government to do this.
This is an interesting story for another reason: it highlights the importance of letting individuals earn and keep* vast sums of money.
Individuals need to be incentivized (rather, not de-incentivized through high tax rates on earnings and capital gains) to be entrepreneurial and generate huge amounts of wealth. Why? Because be entrepreneurial is fundamentally an individual undertaking. Large institutions generally cannot do it effectively. And when individuals succeed, they generally return to the community, in some form, much more than you might expect. They certainly give back much more than the “average” individual does. How many “average” people contribute (in aggregate), through private charity or taxes, as much as Bloomberg has? And that’s not even considering the contributions of the many people that Bloomberg has made wealthy by being his top associates.
Large institutions simply cannot generate the kind of wealth and prosperity that individuals can. Disagree? Then reconcile this: the $350MM gift (>$1B total) from Bloomberg is significant for the institution; the President says so (see the article linked above). As such, it implies that Johns Hopkins would have a hard or impossible time generating that much excess revenue on its own. I would wager that it cannot do it; I would wager that no university could. Universities rely upon wealthy donors precisely because they cannot generate massive returns on their own. Universities (as is true of most large institutions) are not entrepreneurial; they are not innovating and revolutionizing the world. And note that Johns Hopkins also is not getting this kind of support from state or Federal government. Again, if they were, then the contribution from Bloomberg wouldn’t seem so remarkable. (Think about it this way: when was the last time you made WaPo headlines for contributing $50 or $100 to your alma mater?)
If you break Atlas – through taxation, regulation, whatever statism you impose on him or her – you break a tremendous number of other things. In this case, you break higher education. Think about that next time you ask for higher taxes on the wealthy. Private charity works; and it works, in part, because of the generosity of the very wealthy.
* – by “keep” here I mean to retain as an individual as opposed to having it forcibly taken through taxation. Of course I don’t mean hoard since I am explicitly discussing individuals voluntarily giving away this money in the form of charity.