Former NBA all-star and now commentator Charles Barkley recently sat down with Conan O’Brien and said that Michael Jordan, Tiger Woods and Scottie Pippen are very cheap individuals and that they don’t give homeless people money or they don’t tip waiters well.
Barkley cited an example when he gives homeless people money. He admitted he takes part in this practice, but every time he does, Jordan slaps his hand and says, “If they can ask you for spare change, they can say, ‘Welcome to McDonald’s, can I help you, please?’”
“I think it’s important when you’re successful, the waiter, the waitresses, the blackjack dealers, they work extremely hard, they don’t get a great salary,” Barkley told O’Brien. “The more successful you are, the more you should tip, I truly believe that. … I never went overboard. I tipped $25,000 before. I won about $700,000 at a blackjack. You have to tip. I probably should have tipped more to be honest with you.”
“I think that’s why [Woods and Jordan are] rich,” Barkley added. “They don’t tip. That’s their secret to being rich, they don’t tip.”
There are two important points that Barkley needs to understand:
Henry Hazlitt
In his groundbreaking book “Economics in One Lesson,” economist and author Henry Hazlitt provided an example of two brothers who inherited a lot of money, but both had two different philosophies as to how they should spend their money.
The first brother took his fortune and had a great time with it: he would go to the best restaurants and purchase the best clothing. When he would attend a cafe, he would tip the server a large sum of money. This extravagant spending led him to become the most popular guy in town. It might have given the economy a short-term boost in the arm too.
The second brother, meanwhile, was a lot more conservative in his spending habits. He led a modest lifestyle and decided to save and invest his fortune. It turned out that depositing his money into a bank and investing his money into the economy did a lot more: it helped the private sector to establish companies, it helped enterprises expand their current business and it also created jobs. His prudence benefitted the economy in the long run.
As the first brother lost most of his fortune, no one seemed to care about him anymore – not the waiters, the tailors, the restaurant owners. The second brother, who helped the economy through saving and investing, still had his wealth and then some (interest and dividends), which then allowed him to serve as a consumer as he bought goods and services with his savings.
The moral of the story: stimulus never works and creates malinvestment, but savings and investments allow the economy to grow and flourish and benefit the person who made the initial investment.
If Charles Barkley can give homeless men and women money then he’s assisting in immediate short-term relief. However, Jordan, Woods and Pippen are aiding the overall economy because their wealth is in itself investing in pretty much everything.
Value of Money
Each person is different: his morals, his values, his ethics, his tastes in food, art and entertainment. The same can be said about his money. Some people value their money greatly, while others are quite indifferent to their net wealth. One group of people is philanthropic, while the other is misanthropic.
Every single person has their own value scales, which also means an individual can do whatever they want with their own money without having force used upon them or perhaps even being judged for how they handle their funds.
Why do you assume that because Charles Barkley gives money to homeless people and is a good tipper he isn’t also investing his money?
I think Andrew misses the point. What I have read of Henry Hazlitt does not suggest to me that he is against tipping generously only that it may be wise to use ones money conservatively. One can be philanthropic and still recognize those individuals in need.
And while investing in local economy in whatever way one would choose is a wonderful idea when we forget that others, for whatever reason. are less fortunate or smart then one is called greedy.
Certainly a person has the right to do whatever they choose with their money but I can still judge them as greedy SOB so long as I do not attempt to steal their money to use it the way I think it should be used, eg. taxation.
The first brother was likely NOT a generous person but more likely someone who was insecure and wanted recognition. That is often an issue with people who come into money suddenly. The second brother, being conservative, likely rarely would be somewhere that generosity was available. In other words he probably would rarely go out to eat or to expensive forms of entertainment.
In my opinion both brothers had problems and probably could have benefited from a week of living on the street, I’ve been there so I suspect both would have vastly changed their perspective. The first brother might have come to realize that someone can have what seems like plenty one day and be on the streets the next. I’ve met people who were formerly successful. One was an attorney that through various circumstances had lost everything.
The second brother would probably come to understand that not everyone who is on the streets is there because they are lazy or unwilling to work. Some really do just need enough to get on their feet and maybe some sort of training. He might start some sort of business that focused on such things and encourage his other rich friends to invest as this would also help the local economy.
Henry Hazlitt’s point, at least from this limited quote seems not about being generous but about being wise and thoughtful about how one uses one’s money.