“THE problem of our age is the proper administration of wealth,” wrote Andrew Carnegie in 1889. More than a century later, the citizens of supposedly Communist China could hardly disagree. Carnegie, one of the wealthiest men of America’s Gilded Age, soon set about giving his money away, and on April 24th Jack Ma, one of the wealthiest men of China’s Gilded Age, suggested he would start to do the same. Mr Ma and Joseph Tsai, co-founders of Alibaba, an online marketplace, announced the creation of philanthropic trusts that could be worth as much as $3 billion. “Somebody has to do something,” says Mr Ma of China’s environmental and health-care problems. “Our job is to wake people up.”
It is easy to be cynical about this. The gift is a move taken straight out of a Silicon Valley public-relations playbook, ahead of Alibaba’s expected initial public offering this year, which could value the company at $150 billion. But it could still have a remarkable effect not just on China’s fast-expanding class of super-rich, but also on its government.
China’s wealthy are a notoriously stingy lot. When two of America’s best-known philanthropists, Bill Gates, who has advised Mr Ma, and Warren Buffett, visited the country in 2010, a meeting they held was notable for the number of Chinese tycoons who stayed away. Of 122 billionaires around the world who have signed the Giving Pledge promoted by Messrs Buffett and Gates, promising to give away half their wealth by the end of their lives, not a single one is Chinese, even though China now has 358 billionaires, one-fifth of the global total.
The main reason for this is fear: many have made their money in the shadows of a supposedly socialist country, so few of China’s rich are keen to identify themselves publicly. China’s princelings, related to the leadership, are often the least enthusiastic of all, especially when the regime of Xi Jinping, China’s president, is condemning corruption, albeit selectively. Having made his money more publicly, Mr Ma may be an exception, but his foundation still adds pressure on other Chinese tycoons. Mr Xi should help, by publicly applauding Mr Ma and by making all donations tax-deductible.
It is also a prompt for Mr Xi to promote civil society. With its countryside teeming with poor children needing education and old people needing health care, the regime has decided to give non-governmental organisations (NGOs) more freedom to operate, under party scrutiny. Mr Xi needs to let them play a larger, more independent role. This highlights the party’s central dilemma: it is scared of allowing independent groups of citizens to flourish and help solve problems, and yet that is exactly what China needs. As long as civil society is kept weak, China’s social problems will get worse. Passing a new charity law, stalled for years, to clarify charities’ legal status would be a useful step in the right direction.
The question for Mr Ma is how far he is prepared to nudge the regime in this direction. His public stance is, sensibly, that he wants to work with the government, not confront it. But the areas he is likely to focus on—education, health care and the environment—matter enormously, and technology can spur political change. Mr Ma recently launched kits for smartphone users to crowdsource data on poor water quality across China, a sly dose of insurrection. Carnegie became famous not just for the money he gave away and the example he set to other philanthropists, but for the way he prompted the American government to embrace education, civic programmes and social reform. Mr Ma’s money and example can do the same for China, if only the Communist Party will allow it.
via Philanthropy: China’s Carnegie | The Economist.
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