The Virtues of the Marketplace – Why business is better than charity

‘Tis the season to increase your donations to charities. Although the government takes too much from you to donate more for philanthropic endeavors, Westerners always dig a little deeper and find extra funds to help feed the poor, shelter animals and give children a present this Christmas.

This week, Tom Crist made headlines when he announced that his lottery winnings of $40 million will be completely donated in order to honor his late wife, who had tragically passed away from cancer. The funds will be given to cancer research organizations.

This isn’t the first time that a lotto winner has decided to give money to charity. Jim and Carolyn McCullar of Ephrata, Washington were generous with their sum of their $380 million winnings. The same could be said for Bob Erb of British Columbia, John Kutey of New York and many, many others.

Of course, voluntarily donating to charities, non-profit organizations and other worthwhile causes are always better than allowing the government to forcefully take it from the rich and middle-class and redistribute it – this resource of cash will then likely lead to fraud, waste and scandals. However, the question that should be asked: is charity better than business?

Ayn Rand has been quoted as saying, “My views on charity are very simple. I do not consider it a major virtue and, above all, I do not consider it a moral duty.” Is she right in saying that charity is not a virtue? Perhaps, but voluntarily giving is definitely better than receiving – that’s a whole other argument, though, in our society where millions expect something for nothing.

Charity – aside from research organizations – are great for short-term help, but savings, investments and entrepreneurship provide long-term assistance; it gives millions of people a job to look after themselves, put food on the table, clothes on their back and a roof over their head.

Bill Gates and Ted Turner are examples of wealthy entrepreneurs who have donated significant percentages of their billion-dollar estates to good causes. However, their own business minds have led to an obscene amount of wealth and opportunities not only for themselves but also for millions of individuals across the globe. Why not continue this?

Perhaps these millionaires and billionaires should put their money into more enterprises that can offer long-term stability for workers everywhere and help create their own prosperity rather than depending on the generosity of strangers.

Another good example of this is in Africa. For decades, the United Nations and dozens of countries have given aid (money, food, health) from the taxpayers to the people of Zambia, Zimbabwe, Botswana, Somalia and elsewhere. What has been the result? Millions are still impoverished, children are starving and no one is better off, except for the government of course.

John Stossel recently did a segment interviewing Michael Faye of GiveDirectly.org, an organization that allows Western donors to transfer cash directly to the more than 20,000 in need. The concept of the organization is to permit Africans to handle the money the best way they see fit rather than depending on a third-party, such as a charity or the UN. According to the program, one man purchased a used motorcycle and created a taxi service, while another man used the funds to become a welder. Most build metal roofs.

Indeed, this seems to be more of an investment than charity.

These individuals now have the capital to establish businesses and become self-sufficient and independent. It’s possible that these men and women will create enterprises that will then lead to employment for others, even if it’s just one, five or 10 workers. This is the long-term prosperity of entrepreneurship and business that gets the poor out of poverty and into the middle-class.

Remember what Bono said this year? “Capitalism takes more people out of poverty than aid.”

Those who give their money freely to charity should be celebrated, but those who produce new ideas, create innovative ventures and employ large amounts of workers should also be praised as much for giving new opportunities to those in dire need.

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