NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Thursday, April 9, 2015

Here’s a scary picture that fits nicely into a growing populist critique of philanthropy: Wealthy donors are using the power of the purse to muffle debate about economic inequality.

Drawing on his own experiences as a speaker, as well as other evidence, Robert Reich writes in the Huffington Post about pressures to play down criticism of the wealthy and corporations in order to keep donors happy. He also talks about how business funding is corrupting think tanks, and how Koch family money is reaching into more institutions.

Reich warns:

Philanthropy is noble. But when it’s mostly in the hands of a few super-rich and giant corporations, and is the only game available, it can easily be abused. Our democracy is directly threatened when the rich buy off politicians. But no less dangerous is the quieter and more insidious buy-off of institutions democracy depends on to research, investigate, expose, and mobilize action against what is occurring.

Important parts of Reich’s argument are correct. But the overall picture he paints is misleading. In fact, one big reason there has been such a robust debate about inequality lately is because a host of wealthy donors have spent a fortune to put this issue on the national agenda.

In his commentaries, Robert Reich often says that growing inequality is not just bad for America’s social fabric, but also undermines economic growth. He’s right, which is why plenty of smart rich people think the same thing.

Before looking at the rich donors who’ve been pushing back against inequality, let’s take a look at where Reich’s arguments do hit the mark.