David Goldstein (2:45)

Right. And all of your wealthy friends, they're with you, they understand that the most important way to give away their money is through the non tax deductible stuff.

Nick Hanauer (2:54)

Yeah, yeah. Sadly, no. And you know, this is Not a new phenomenon. This is something that rich people have done for generations, maybe thousands of years, is we wash away some of our sins by giving a little bit of money to charity, and we ignore the fundamental dynamics that are creating the need

David Goldstein (3:11)

for charity, which is the vast inequality that has made you and your friends so outrageously rich.

Nick Hanauer (3:19)

Correct. And today we get to talk to a super interesting and brilliant guy, Anand Girdedas, who has written this amazing book called Winners Take the Elite Charade for Changing the World. And in that book, he makes this very precise argument that we live in a world we refer to often as neoliberalism, as this world where the only thing that matters is money and competition, and the richer the rich get, the better off everyone else will be. And if you try to make rich people less rich, then you're actually harming poor people and all that stuff. And he calls that market world. And he has this very precise and, I think, important critique of that and believes that we need to be more honest, that we need to start to say that a few people are winning and most people are losing. And that one, it's not just that that's happening, but worse, a lot of the charity that wealthy people engage in either obscures that reality or actively promotes it. So I'm really excited to talk to Anand. I sort of became acquainted with him several years ago for the first time when I saw his. I think it was his first TED Talk. It was based on, I think, a book he wrote called the True American Murder and Mercy in Texas. And it's the story of this terrible murder that took place of an immigrant in Texas. And he gave this just astounding TED Talk. And you were like, whoa, that dude is really smart and talented. And then more recently, he wrote this really important book, Winners Take all, which quickly became required reading here at Civic Ventures.

David Goldstein (5:04)

Right. You know, the idea that this is a winner's take all economy, that's not new. The way he talked back at people like you, that was new.

Nick Hanauer (5:15)

Yeah. And very persuasive. And I can tell you definitively that the book had a huge impact, at least at this point, in terms of the kinds of conversations that people were having in big philanthropy around the country. Because the critique are, you know, they're persuasive, and it's hard to get out from under them. So, anyway, should be fun to talk to him.

Anand Giridharadas (5:39)

I'm Anand Girdhardas. I'm a writer, and I'm the author of Winners Take the Elite Charade of Changing the World.

Nick Hanauer (5:46)

We're huge fans of your book and are in pretty violent agreement with the thesis. But for our listeners, just lay it out, give us your perspective.

Anand Giridharadas (5:57)

You know, I think it's sometimes helpful to tell people in a way what's not in the book, which is why you did a book and how you get to the place of even beginning. And I think for me, it was observing two things that I think anybody listening to this, whether you agree or disagree with where I went with it, I think anybody listening to this would agree with the two observations. And observation number one is that we're living in this time in which you cannot walk down the street in certain zip codes of this country without bumping into a plutocrat trying to change the world. They are doing philanthropy. Maybe their kid is in Africa right now starting a social enterprise that turns poop into recycled coffee. They come back from those Africa trips with these like plutocrat bracelets that they all wear when they go to Africa. You know, they are involved in making finance more humane by doing impact investing and whatever else. And so all these initiatives are really ubiquitous and we all know they're going on. You know, when you go to college campuses, every young person is engaged in some kind of change the world effort. And so on the one hand, we're living in this time in which the very, very rich and powerful seem to be all in on the idea of making the world a better place and aware of inequality and interested in fighting it. On the other hand, we're living in this time in which the same class of people, the same plutocratic class that is doing so much to give and help, essentially has secured for itself and continues to benefit from a near monopoly on the fruits of the future and has essentially rigged the society to function as a casino in which the house that is them always wins. And so the inquiry behind Winners Take all started with the question what is the relationship between these two facts, which themselves are not particularly in dispute? I think where the dispute comes in is what you think the relationship is, and the conventional wisdom out there is, or was that the relationship was one of a drop in the bucket, that yes, we do live in this time in which there is this savage inequality. However, rich people are on the case, stepping up and there's just not enough of them, or they're not giving enough away, or they're not stretching their dollars far enough by not being effective enough, and that if only there were more of them and they gave it away better, and they did this and that, then we could solve these problems. And I started to become intrigued by an opposite possibility. That all this elite magnanimity and Do Gooding activity was actually part of how we sustain the elite monopoly on the fruits of the future. That, in other words, the extraordinary helping of our time was how we maintain the extraordinary hoarding. And I did what I do as a reporter, which is I began to

Nick Hanauer (8:51)

report it out, tease out more, how all this Do Gooding sustains the inequality and propels it.

Anand Giridharadas (9:01)

To start with, I'll say, I get that that's counterintuitive to people. I mean, I think if you're like a Koch brother. First of all, my condolences on being a Koch brother or being a deceased Koch brother. But if you are. Sorry, was that not. Was that not spelled?

David Goldstein (9:19)

You're kinder than me.

Nick Hanauer (9:20)

Yeah,

Anand Giridharadas (9:23)

yeah, sorry, I forgot to drink my Coke Compassion coffee this morning.

Nick Hanauer (9:27)

Yeah, exactly.

Anand Giridharadas (9:29)

So I think there's some people who would say, like, you know, forget this guy, like, who cares about inequality? So I'm not going to have much luck with those people. But if you're persuaded that, yeah, this inequality thing is a big problem, I think many people, probably most people, the people, in a way I was writing to force, to question, I think many people would say, okay, but at least these people are doing some small thing to help. Isn't it better than doing nothing? That's the basic question that my book is up against. Because my book is a portrait of a series of people and of gestures, which I think at the margin, each of them is an improvement in the condition of the world, if you look at it in isolation. And so the question then becomes, what is this guy saying about the fact that not just the system that produces this wealth in which these people are trying to do a little bit, it's not just that it's not enough, it actively may be upholding the harm. So here's how I make that case. First of all, the simple way to think about it is if an individual act of do gooding is abetting a harmful system on a larger scale, then it may actually be a counterproductive deed. Now, that is obvious in cases like the Sacklers behind the opioid crisis, where a relatively small amount of money is enabling a system or a reputation cleansing that literally is allowing harm to be done on a much greater scale than the gift. But the point I was making was broader. And here are some of the ways in which individual acts of do gooding that are marginally helpful to people that really do make some difference in some people's lives may, in fact be contributing to a bad system, a reputation washing. Right. So you got a whole class of people who have caused to be resented in this time who are, as we know, in many cases, manipulating their company books so they don't pay taxes, who are underpaying workers who are claiming, as Jeff Bezos did, that they're going to give benefits and then pulling the benefits from Whole Foods workers, et cetera, et cetera. And so you got a bunch of people who are doing a bunch of things to make money that would really cause them a lot of problems and would create bad stories of the kind that would drive people into the streets and would force reform. But for changing their reputation, but for softening their image, but for acquiring a kind of moral glow as philanthropists, they would be in real trouble. I mean, sometimes criminal trouble personally, but certainly just kind of reform trouble.

Nick Hanauer (11:59)

And if I may interject, and it definitely takes one to know one, they are converting circumstances in which they would have low status into circumstances in which they would have high status, which is all wealth and power really is.

Anand Giridharadas (12:17)

Correct.

Nick Hanauer (12:17)

The people who work the hardest to be richest are the most status conscious people in our society. That's why they work so hard. And the thing that is most important to most people is their status and certainly to status conscious people. And I think that this point you make is really important and profound, is that if your goal in life is to have as much status as possible, these bad stories are. They're more than just inconvenient and they're a real problem.

Anand Giridharadas (12:47)

You know, I'm. I'm a parent. I have kids. You may have even heard in the background screaming like, I really care about, you know, I care less about what book critics think of me than I do about my kids. These people all have kids. Yeah, right.

Nick Hanauer (13:01)

Yes.

Anand Giridharadas (13:02)

These people, you know, can't afford to have themselves known as predatory loan sharks, social pariahs. Right. And I think here the point is that it's a relatively cheap, bargain basement way of changing your name 100%. The rule of thumb that I would use is you can kind of do bad things in the billions and wipe it out with gifts in the millions.

Nick Hanauer (13:24)

The millions, yeah, for sure.

David Goldstein (13:25)

Goodwill is something that corporations actually put on their balance sheet.

Nick Hanauer (13:29)

Yeah.

Anand Giridharadas (13:30)

And some of these programs, when they're done by companies, are literally run out of the marketing department, which reveals everything. So that's kind of thing A. Another thing is that a lot of these acts of do gooding, even when thing A is not involved, even when you're not an economic sinner or someone who's made money in a dishonorable way, the act of giving and then following up on the gift by sitting on boards of things and shaping how it's given and funding research, it confers power. And if you are persuaded by me that the central problem here is actually not a maldistribution of resources, although that's a big problem, but actually a maldistribution of power that has led to a maldistribution of resources, correct. Then a good deed that gives further leadership positions further intellectual sway to the views of that class of people is problematic. So, for example, if you decide as a Goldman Sachs that you're gonna get into the conversation about empowering women, which they did, 10,000 women program. Right. You're immediately on day one, one of the biggest players in that field, because you're Goldman Sachs, you are going to distort that conversation. When the rich and powerful get involved in social change, they change. Change. And so to the extent that there are ways of empowering women that involve a wealth tax, because, by the way, a lot of the things that a wealth tax would fund, if you look at Elizabeth Warren's plans or others, would be beneficial to all people and women in particular, in many cases, that's not gonna be part of your report. Yeah, that's not gonna be the stuff that you're talking about on your panels at the Aspen Institute. But if there's other ideas to empower women, like lean in feminism, which is, I think, just trying to convince women that thousands of years of patriarchy is a posture problem, they were just leaning at the wrong level of incline. Goldman Sachs may go all in for that because that's a way of promoting change. And my point is that dispute that intervention distorts the change markets the conversation that we have about change. So that's the second thing. And third, there is, I think, a level of outrage, general outrage, not about specific things, specific people did, but about who this society is working for or not, that gets in a way obscured and obfuscated by the generalized feeling that rich people are giving back. And it distracts people in many cases from the sheer extent of the rigging and the taking.

Nick Hanauer (16:11)

Yeah. So there is so much to unpack here. I want to first say that how extraordinarily useful your book and argument has been to our work because it has forced a conversation that needed to be had for a super long time. The thing that drives us crazy, to use a local example, are, you know, the local big companies who will give a million dollars to a homeless shelter and get all these accolades and their CEOs get status. And it's like just the.

David Goldstein (16:50)

Yeah.

Nick Hanauer (16:50)

Everybody's like, yay. Yeah, yeah, yeah, yay. But when an opportunity comes along to actually enact a tax to address the underlying problem, at the scale of the problem, they.

David Goldstein (17:02)

They'll spend another million dollars to prevent it, to elect a friendly city council.

Nick Hanauer (17:08)

Yeah. And it's just this sort of ass backwards, just the most insidious process that unfolds.

Anand Giridharadas (17:17)

I'm curious. I mean, you said that because I, you know, it's funny, for a writer, you kind of. You sit and you write this thing, then you drop it, and then it goes and lives its life. I'm always curious how these things, how these conversations happen. So, like, how specifically have you been able to use the book to change an individual person's mind or a group's mind? I'm curious, like what. How does that actually happen?

David Goldstein (17:39)

Can you go into those details, Nick?

Nick Hanauer (17:41)

Well, I can't name names, but I can tell you that your book, which sent shockwaves through the community of people who give a shit ton of money away, let somebody like me say we should be thinking differently about this. And that $25 million you just gave to that very nice nonprofit to help people who are poor could very well be better spent on five minimum wage campaigns that would actually solve the problem. And that has been super useful. I mean, I think of the 50 largest foundations in the country, 75% of them have education as one of their top priorities. Zero of them are working on wages.

Anand Giridharadas (18:29)

Yep.

Nick Hanauer (18:30)

Wages is the problem.

Anand Giridharadas (18:31)

Yeah, that's really interesting.

Nick Hanauer (18:32)

If I give a million dollars to my kids fancy private school, I get to deduct that from my taxes. If I give a million dollars to a minimum wage campaign, I can't. Therein lies the problem. Right? Is that we have it. It's. The whole thing is upside down and for super obvious reasons. Right. It's super cheap to write a million dollar check to the local homeless shelter. It's more expensive to be taxed 10 or 20 or 30 million bucks a year to address the problem.

Anand Giridharadas (19:04)

I'll tell you a story about it. I went to go speak to a group of. It was a coalition of folks that fight homelessness. And it was people who fight it from every angle. So it was like shelter providers, rehab clinics and treatment centers, but also funders, philanthropists, individual philanthropists, foundations, nonprofit. It was the whole. Anybody who kind of works on that issue in one space, and it was a massive room of these people. And many of them had read my book and we were having this conversation about essentially what you're talking about, that a lot of the people working on these issues are actually unwittingly fighting on both sides of the war. They're doing a good thing for the homeless, but in a way they don't realize they're also helping to cause homelessness.

Nick Hanauer (19:45)

Yes.

Anand Giridharadas (19:45)

And you know what's interesting for me is I'm a general purpose writer and I write about this as it relates to many different worlds, but I don't know the deep dive on each person's little world. And so I learn a lot by what people tell me about their little world. And in this little world of the nonprofits that are fighting homelessness, people started to raise their hand and basically talk about a lot of the people who donate to us. We know, in terms of their tax practices or how they pay people, that they are part of how there is homelessness in our community. And we as a, you know, a lot of these are younger people who work in these development jobs. A lot of them are women raising money from powerful men. There's an enormous sexual harassment problem, by the way, in that donor, young female development officer relationship that doesn't get talked about enough. And those donors kind of get to keep doing it. And no one's going to tell them the truth. The people doing the work on the ground with homeless people can't tell them the truth because they're going to need another 3 million next year.

Nick Hanauer (20:49)

Exactly. And homelessness is actually a very interesting example because homelessness by your winners take all crowd is treated as a symptom of poverty, and that's a lie. Homelessness is a consequence of inequality. And it's the very people who are writing the checks for the homeless shelters whose enterprises are driving the inequality that produces the homelessness. Economic growth is in many ways a good thing, but it's not an unalloyed good. And when the rent in a place goes from $5 a month for an apartment to $2,000 a month for an apartment because of that economic growth which benefits a small minority of people, obviously the consequence of that is a ton of homelessness and a bunch of other sort of social pathologies. And to not be able to connect those two things, the benefits that accrue to some people of growth and the harm that befell other people as a consequence of that growth is, I think, the central sort of narrative problem we face is that people, well, either can't or won't connect these two things. I would Just tell you that in my social world, that is the stickiest and most awkward part of the conversations I have to have with people, because everyone I know is complaining about homelessness and none of them will admit that it's their fucking fault that homelessness is a byproduct of the economic system which has benefited them so much.

Anand Giridharadas (22:30)

I want to push on something you're saying, because I think this is at the very intellectual heart of the matter. And there's a kind of litmus test question about where you stand on this and how you see this issue of inequality. Because frankly, President Trump talked about inequality, Joe Biden talks about inequality, Elizabeth Warren talks about inequality. So at some point, if everybody's talking about it, we need to sharpen a little bit. What are the different theories out here? And there is a basic dividing line that I propose in the book, which is whether you have a win win paradigm or a win lose paradigm. What you are describing there with homelessness is that some people are homeless because the people on top have made certain choices. I fully agree with you on that. I think that maps onto many issues as a true thing. But that is the fundamental thing that most people in power deny. A relationship between those on the bottom and those on top. No one denies, from Joe Biden to Donald Trump to Elizabeth Warren, no one denies that there are some people on the bottom and some people on top. No one denies, I think, that there's too many people on the bottom and that life is too hard on the bottom right now in America. No one denies that. The question is, are the people down below there, in spite of the success of the people on the top or because of the success of the people on the top and winners take all, in some ways is an emphatic argument that the people down below are down there because someone's standing on their back, someone is standing, in fact, on their neck. Then when you start to say, how do I look at these different initiatives that are happening? How do I look at 10,000 women from Goldman Sachs? How do I look at impact investing? How do I evaluate presidential candidates? You should ask yourself, is the theory of change being proposed here one in which we can empower those below by in no way threatening the wealth and power of those on top? Win, win. Or is the theory of change at work by this person or this organization, that the only way to do right by those in the bottom is to crimp the power and wealth of those on top? That is a fundamental dividing line in how you see America today. I am strongly Emphatically because of evidence in the win lose camp. I think you are too. And I think, by the way, when you look at the 2020 candidates, I think this becomes a very helpful way to evaluate who's who.

Nick Hanauer (24:48)

I want to go deeper on the winners and losers dynamic because I think it's true, but nuanced. So I know Jeff Bezos extremely well and I can attest to the fact that he is the most galactically talented person I've ever met. And I've met a lot of people. Right. And there is almost no scenario in which Jeff Bezos would not have come out on top. Maybe not as a professional football player, but certainly he may not have become

David Goldstein (25:20)

the richest person in the world, but

Nick Hanauer (25:22)

no, no, no, you think he was

David Goldstein (25:23)

going to become the richest person in

Nick Hanauer (25:24)

the world no matter what the question is. The question is how rich and how much wealth should the system provide for the most capable and hardworking person in the SOC relative to others. So Jeff Bezos's net worth, and I use that word worth cautiously because I think the word misexplains what's actually happening.

David Goldstein (25:48)

It implies that he deserves it.

Nick Hanauer (25:50)

Exactly. But obviously if Jeff was required to pay every worker connected to Amazon, whether they were his direct employer or a contractor enough to live in dignity, his net worth would might not be in the hundreds of billions, it might be in the tens of billions. Now, does that mean that Jeff Bezos lost Anand? I would submit no.

Anand Giridharadas (26:12)

I think when I hear people trying to frame an argument like that, yeah. I hear the immense power in our culture, the pressure in our culture to tell the powerful that they too will benefit from social change. Now you may be right as a descriptive fact. I mean, I actually think it's true to a certain extent that when you, you know, when you don't have so many people desperate, it's a more fun society for rich people too. There's a, there's a truth to that, certainly. But I think we have to overcome the cultural pressure we, we feel, and we all feel, if you've been part of the culture of the United States in the last 40 years, to reassure rich people that there's not genuine loss involved. The same way you can make some sonorous Obama esque claim about how what is happening now demographically in the United States is good for white people too. And in a certain sense it is. But I think we actually get real social problems when we're not honest with people about the fact that we are asking them to lose something.

Nick Hanauer (27:20)

Yes.

Anand Giridharadas (27:20)

And I think it'd be a better society he's living in. But to be honest, I think in a fairer America, you know, Jeff Bezos may have a couple billion dollars, if that, and we might have invested through a wealth tax and other taxes and through frankly higher minimum wages that would have crimped his thing on the pre redistribution side, you know, we might have invested $100 billion that is currently his net worth into the society and reap all kinds of benefits out of that. And I don't want to sit here and lie and say that would entirely be a gain from him. I mean, if he had a billion dollars instead of what he has now, he would not be running his own space program. His room for error to fail at Amazon would be drastically smaller if he didn't have the kind of money he has. So we gotta be real with people. I am willing.

Nick Hanauer (28:10)

No, that's fair.

Anand Giridharadas (28:10)

To actually have that guy have less power, less of a seat. Less of a seat at the table for sure. In order to make $100 billion worth of investments in the common good in this country over the last 10 years.

Nick Hanauer (28:21)

The thing about you, Anand, is you have a way with words. And I think this frame you have that generosity is not justice is an extremely important part of this thread that we need to build a world which is more just. And if you are going to bend the arc of history towards justice, you are mostly going to antagonize rich and powerful people. Right? That's just. That is it?

Anand Giridharadas (28:49)

Yeah.

Nick Hanauer (28:50)

Increasing amounts of justice means that the most powerful will have less power and let's say, and almost certainly less money. And that is just. That's just sort of an arithmetic fact.

David Goldstein (29:01)

You're arguing against the Econ 101 textbook here. You're arguing for a non pareto optimal world.

Nick Hanauer (29:08)

Exactly.

Anand Giridharadas (29:09)

I specifically think about Econ 101. I went to the University of Michigan. I enrolled in the fall of 1999. I took Econ 101. I guess either that fall or, I don't know, maybe it was my second year, first year or something. And I remember exactly as you say. I remember learning, you know, like all parties benefit from trade.

Nick Hanauer (29:27)

Yeah.

Anand Giridharadas (29:27)

There may be some transitional thing, but like both sides benefit. Both countries become richer. We were in fucking Michigan. We were in Michigan. It was 1999 in Michigan. When I started going to grocery stores outside Ann Arbor. I realized that there were Bosnia like economic conditions 20 minutes in every direction.

Nick Hanauer (29:49)

Yeah, right.

Anand Giridharadas (29:50)

How could they still have been teaching in 1999 that trade benefits all people? A lot of this like if any other discipline were allowed to operate on the bullshit assumptions of economics and then completely guide how we organize the modern world, it would be a scandal. It would be a scandal. You just assume everything away. And so that's a big part of it. And it is economic logic, you're exactly right, that has pushed this win, win thing. Whereas anybody who studies politics and power as their lens or sociology, sure, completely understands that a lot of the time someone's down because someone's on their neck. And this becomes a lot easier to see when you go to historical episodes. You know, we're all biased about our own time, but we're all more clear eyed about other people's times. Right? So if you say in Downton Abbey or the world of kind of feudal England, or the feudal world a while ago, are the people on the edge of the property who don't own the land but farm it and pay rent, or are the servants and drivers living in the basement? Are they there just because they haven't quite gotten into the castle yet, or are they there because of what the people in the castle do, because of the system that they benefit from and fight to defend? And it's super obvious that they are down there because you are up there. And if you go to slavery in the south and you say, are the slaves slaves simply because they haven't become white masters yet, or are they there because white masters are perpetuating systems that keeps them below? You say it is obvious that they are down there because you are up here. And you go to the caste system in India and you say, are people untouchable just because they haven't read enough books to become a Brahman yet? Or are the Brahmins actually maintaining a system that invents them as untouchables and keeps them down there? And you say, yes, it's obvious that the people are down there because someone is standing on their neck. And so then the question becomes, why is it that when we look at our own society, we suddenly unlearn what we have learned through history, which is that when you have an injustice, there's usually someone benefiting from it. And that person usually needs to be moved out of the way and have their power reduced in order for justice to be done?

David Goldstein (32:02)

It's the cult of the market. In our popular culture, we celebrate both wealth and philanthropy. And part of that assumption is that better to let rich people like Nick give away his money than have the government do it, because the government is always inefficient. And this market of philanthropy will be wiser. After all, he's really smart. He made all this money. He must know how to spend it.

Anand Giridharadas (32:27)

We gotta talk about that, though. So Michael Dell recently, Davos in January made a version of this argument when he was asked about Alexandria Ocasio Cortez, the congresswoman's tax proposal, the tax high incomes, 70% marginal income tax rate. And he basically used his foundation to say, you know, we give money away in this really effective way, and therefore it's much better to have us do that than the government. Couple things. First of all, this idea that government is inefficient, it just passes through rich people chatter as like an undisturbed hypothesis. Actually, it's just not true. There's a lot of different ways to look at it. Our healthcare system is way more private than all the other rich countries, and it is way less efficient than all the other rich countries. So that's kind of complicated for that thesis. It's also true that programs like Social Security are some of the most efficient things in the history of the world. And you'd have old people, like, bleeding out on the streets without them. And they're not only efficient, but tremendously effective. Pick any area of life. Old people. Which rich person or corporation has done more for old people than Social Security has? Which rich person or corporation has done more for black people than the Civil Rights act and the Voting Rights Act? Which organization, including Sheryl Sandberg, she can compete, has done more for women than, you know, suffrage? The reality is this idea that solving things through policy is inefficient is straight up corporate propaganda. Are there government programs that are inefficient? Sure. Is there money spent in government that doesn't add social value? Sure. Do you want to start listing companies that spend money that don't add social value? Does Exxon add social value? Does Pepsi add social value? I mean, how many companies in the Fortune 500 add social value? So a lot of things are not perfect. I don't think government is specially imperfect. And I think the reality is the biggest civilizational achievements, like the fact that something you don't think about very often in America that I think about as someone whose family came from India, who travels all around the world. You go out to eat in India, you're rolling the dice on getting sick. I can't remember the last time I ever got sick in a restaurant in America. That is a gigantic civilizational achievement that was achieved through government, through policy and law.

Nick Hanauer (34:43)

Yeah, for sure. We would be remiss if we did not Zero in on whether somebody like me can indeed play a constructive role in all of this.

David Goldstein (34:55)

Is he just spinning his wheels here?

Anand Giridharadas (34:57)

We've reached the therapy portion. So I'm gonna just mark the time now, and I'll just. I will only bill you for this. For this part of the. For this part of the hour. Yeah, just lay down. So, look, it's a very important question, and I am often misunderstood on this score, which, you know, I guess you can only blame yourself. I mean, I clearly, I haven't communicated it well, but I said in my first interview, I think the opening day of the book in the Chronicle of Philanthropy. Look, in a better world, in a better America, rich people will have less money in general. They will make less money while they're on the making end. More of it will be taken through wealth, taxes, and other devices. They will have net worths way lower than Jeff Bezos', and we will actually have fewer social problems for them to solve through philanthropy because a lot of that money that we've taken from them would be invested. Right. So that's the world I want to get to. By the way, someone stood up recently in June at a book event I was doing in London. He was like, you know, you guys are talking about all these social problems. I just want to say, I'm from Sweden. We do not have a lot of philanthropy there, but we also don't have any of the social problems you all were talking about today on stage and then you sat back down. So I want to live in a world like that. However, I am a realist in addition to being an idealist, and I understand that we don't live in that world now, and we may not live in that world ever, and we're not going to live in it for, you know, 10 years at a minimum. And so the question is, like, if you are a rich person, as you are persuaded of that eventuality of wanting to get there, but you want to know what to do today? I do absolutely believe there are better ways to give that would help hasten the advent of this fairer society and fairer system. And there's other ways to give whose primary, while it may assist some people primary effect would be to shore up the bad system. Right? There is system busting philanthropy, and there is system enhancing philanthropy. There is a de rigging philanthropy, and there is rigging philanthropy. So let's talk about what exists within the de rigging group. Within the system busting group. And I'll give you, you know, I'm actually working on a Project to try to guide rich people into some of these areas. So let's pick a few of these areas.

Nick Hanauer (37:14)

Yeah.

Anand Giridharadas (37:14)

If you say I want to fund a billion dollar effort, raise a fund to do a billion dollar effort to lay the groundwork to get money out of politics. Now that could, by the way, be part philanthropic, it could be part political action committee. We could talk about how you do that.

David Goldstein (37:33)

Right.

Anand Giridharadas (37:34)

That's sort of like a Koch brothers type of initiative where you're working all sides of the IRS tax code with the philanthropic and this and that. Right. But more importantly, a billion dollars to try to get money out of politics would on the one hand, be a big exertion of philanthropic power, rich people power, something like someone like you could absolutely lead and get involved in. However, if it succeeded, it would drastically reduce the power of that class. Of your class.

Nick Hanauer (38:04)

Yeah.

Anand Giridharadas (38:04)

Right. And that is the paradigmatic example that I'm trying to get at here. What is traitor to your class? Giving. Right.

Nick Hanauer (38:13)

Yeah.

Anand Giridharadas (38:13)

So that's a good example. Here's another traitor to your class giving. If we were to say there's a bunch of lawyers right now in America fighting for educational equity, basically trying to win cases saying that unequal funding by property tax is unconstitutional right now, it is very constitutional. And so, as you know, you go to Marin or Greenwich or Evanston, and they got some very nice public schools ring fenced for their district. The money stays in that district. Mommy or daddy has a nice house. So you get a nice public school. And then everybody else has schools that are strapped. It's immoral. It should be unconstitutional. Now you can get things like that rendered unconstitutional. But it takes like 20 years. And you gotta farm cases and you gotta alter public opinion and you gotta start some stealth initiative at the Federalist Society convincing right wing judges that this actually violates Christian values. It takes like a concerted project of work, as they did in the gay rights cases. The people doing that do not get the kind of funding that the people doing charter schools get. Right. So a billion dollar initiative to help those lawyers. There are areas and we could go on, but there are multiple areas of system busting philanthropy. A philanthropy that would actually tend to push us in a direction of solving these problems in ways that have the following four public, democratic, institutional, and universal. And we need to rich people can give in ways that increase the odds of us solving more and more of our problems that way.

Nick Hanauer (39:40)

You know, I've often thought that we need a new language of philanthropy, that we actually need four or five words, new words. To describe the different kinds of giving from the most self interested, which is to give a big donation to some college that you want to get your kid into, you know, to the polar opposite where you are working in a way to increase justice directly, which contravenes your power.

David Goldstein (40:11)

Right. When, when you, when you give political money to raise your own taxes, you are contravening your own personal interest.

Nick Hanauer (40:19)

Right, Exactly. And that, that should be called something different than donating to your own kid's private school.

Anand Giridharadas (40:26)

You know, there is this conversation that's happening now around what is the ethics of that kind of credit. But I think there's a more basic question here which should really get these people's attention, which is it's not just do you give people credit, do you actually give a tax deduction for these donations? And here's what I propose. You know, there's some people who want to abolish the tax deduction altogether. There's some people who I think that's me, would want to have it limited, you know, so that regular people giving $100 to United Way could get it. But plutocrats giving away a billion dollars don't get it. That's another smart proposal out there. There's some people who don't want it touched because they feel America is so dependent on that largess. Here's another idea that I have, and I don't even know that I would vote for my own idea relative to maybe yours. But a thought which is that what if we made the tax deduction for philanthropy conditional? How public spirited the gift actually is.

Nick Hanauer (41:23)

It should be on a sliding scale.

Anand Giridharadas (41:25)

Correct. And so, and so here's a few things on that scale. If you get your name on it, right? If you're putting your name on a building, yeah. The whole world's gonna know you did it, then I think you don't get the tax deduction because what you're purchasing is a reputation shoe polish. And you're purchasing. Fine. That's a, that's a service. That's not a gift, right? You're buying a service.

David Goldstein (41:47)

You don't get a tax deduction for buying the naming rights on a stadium.

Anand Giridharadas (41:52)

In that sense, a lot of these things are identical. Number two, if you are a meddler, after you give, you sit on the board, your kids are on the board, your nephew is an intern, you are asking for quarterly or weekly PowerPoints from the staff which they have to spend the entire week preparing instead of actually doing the programmatic work. If you're a meddler and you insist on Using the gift to exert more and more power over society. Knock yourself out. No tax deduction. You are buying the right. And a lot of, you know, older people don't have necessarily a lot to do after they've made all their money. They're in their 60s or 70s, they love these board meetings, they love having these young women call them and give them updates. Like, you don't get a tax deduction if you're, if you're using that kind of giving to like have a friend phone you. We could then talk about, you know, if you have set up some mechanism for the public to have some say in what you're doing, if you've, you know, allowed a certain amount of community involvement, if you've allowed people receiving the grants to shape the thing, then maybe you get the tax deduction. If you haven't, you haven't. You don't. Basically what I'm suggesting is the tax deduction we give, which costs tens of billions of dollars a year to the taxpayer, we are giving because we are essentially saying, I think you are doing a public service that is saving us money as a society, so we'll reimburse you for some of that. You're doing some of the stuff that we would do if you didn't do it. But that's actually often not the case. And we need more of a check to make sure that these gifts that the public is helping subsidize are actually public spirited.

David Goldstein (43:29)

I actually think it's easier just to eliminate all taxes deduction. Only 25% of filers actually itemize anyway. So if it was up to me, you just remove all deductions entirely and that's how you simplify the tax code. But we have a closing question for you. We ask all our guests, why do you do what you do?

Anand Giridharadas (43:51)

I think I write and write nonfiction and try to think about books as biopsies of a society in a moment in time. And I do that because I think in a, in a large and complex and affluent society such as ours, there are so many people who are so invested in stories about reality that sometimes reality is a casualty. And I think about writers as the people who are paid to tell the clear eyed truth. They're not paid to rep a particular company and make it look good or paid to represent a particular ideology or party. And while it's important that a lot of people out there are doing those kinds of jobs building things, repping things, advocating for things, I think it's important to keep around a certain number of village Gossips who talk to people who find out what people really think and try to tell the truth. I got especially lucky with this book that the truths in this book were not my private truths. They weren't things that only I thought they were in the way of the village gossip. The thing that a lot of people secretly thought but couldn't say because they got a job. Their health care depends on going back to that foundation tomorrow. And I think it's important to have some people in the society to whom people whisper about the truths they can't say, because those people, those writers, can say it in their stead.

Nick Hanauer (45:17)

I love it. That's a good answer.

David Goldstein (45:23)

I gotta tell you, Nick, I was a little disappointed you didn't hand you your head on a platter.

Nick Hanauer (45:28)

He was surprisingly unmean to me, wasn't he?

David Goldstein (45:32)

Yeah, maybe that's just you.

Nick Hanauer (45:36)

I was ready for more, but still, it was a super interesting conversation. And I think he's such a remarkably articulate thinker and speaker, it's really cool to get to talk to him directly. Yeah.

David Goldstein (45:48)

And it's hard to overstate, I think, the influence he's had with his book and his public appearances over the past few years. Because we've really have been living in an era in which we have celebrated extreme wealth and celebrity and celebrated the philanthropy from you and your wealthy friends. And. And he's starting to open eyes to what the real costs of all this have been.

Nick Hanauer (46:19)

And again, I think it's worth, just for a second, more deliberately and more precisely tying this conversation back to economics.

David Goldstein (46:29)

Right.

Nick Hanauer (46:29)

Because this is an economics podcast, and his book was not strictly speaking about economics, but the thing about economics is that it isn't a science. It's mostly a narrative. It's how human societies rationalize who gets what and why. It's how we instantiate our social and moral preferences about status, privileges, and power. And I think that he has spoken very directly to those things. He has spoken very directly to the kind of ideas that have shaped our culture, which in turn have shaped how we think about economic policy and all the things that touch that.

David Goldstein (47:15)

And pointing out that philanthropy as it's used today by folks like the Sacklers and the opioid crisis that they created. It's a form of reputational money laundering that actually distracts from the true cause of the problem. What we argue in our office and what you have argued to your wealthy friends is that you need to spend your money better in the sense that you are addressing the symptoms, but not the disease. You give money to fund a homeless shelter rather than addressing the structural inequalities in the economy that leads that produce homelessness. He goes a little further where it's not just you need to spend your money more wisely. Maybe you shouldn't have so much money.

Nick Hanauer (48:05)

Right? The world would be a better place indisputably if the wealthiest citizens had less and everybody else had more. You would just have and you would have less need for less need for philanthropy. Exactly. Obviously. Anyway, very interesting conversation. Fun to have him on. I'm glad he wasn't mean to me.

Podcast Announcer (48:29)

Pitchfork Economics is produced by Civic Venture. If you like the show, make sure to subscribe, rate and review us. Wherever you get your podcasts, find us on Twitter and Facebook @CivicAction and Nick Hanauer. Follow our writing on Medium@CivicSkunkworks and peek behind the podcast scenes on Instagram. Itchfork Economics as always from Our team at CivicVentures, thanks for listening. See you next week.