Dolly Parton is immensely talented and her talent has made her very rich. Not only can she sing, write songs, and act, but she has wisely kept control of the publishing rights to her music, meaning she receives royalties both on her own recordings of songs she wrote and those of others, like Whitney Houston’s mega-selling recording of “I Will Always Love You.” Forbes estimated her net worth at $350 million in 2021, attributing substantial portions to her publishing rights and to Dollywood, the theme park Parton cofounded in the 1980s.
As impressive as all of the above is, it begs the question: why isn’t Parton a billionaire like Paul McCartney, who doesn’t own the publishing rights to his most lucrative material, cowritten with John Lennon?
The answer given by numerous articles and popular social media memes is that Parton is not a billionaire because she has given away so much of her money to charity. One viral meme claims:
“Let's be clear: Dolly Parton is a millionaire and not a billionaire because she *keeps giving money away. * Being a billionaire is MORAL FAILING. She gives away shockingly large amounts of money every year and is STILL RICHER THAN YOU AND I WILL EVER BE.”
Other variations encourage people to “be like Dolly.”
There are two assertions here to examine. The first is counterfactual. If Dolly Parton hadn’t given so much of her earnings away, would she today be a billionaire? It’s impossible to know for certain, but it’s certainly plausible, even likely. Let’s assume it’s true. That means Parton has foregone the accumulation of at least $650 billion in additional net worth by directing earnings she could otherwise have invested in profitable ventures towards charitable causes.
The second assertion is that it is a “moral failing” to direct one’s own capital in the opposite way. This is demonstrably false even if one accepts the meme author’s moral premise.
MSN just reported the five biggest philanthropists of 2023. They were all billionaires. They all likely donated an order of magnitude more money than Dolly was capable of giving. Had those five billionaires (four men, one woman) made decisions over the course of their lives similar to Parton’s, far less money would have been donated to charity in 2023. This is an indisputable fact.
But even the meme’s moral premise is false. It is not morally superior to give one’s money away rather than invest it for profit. To say so is to argue that it is morally superior to keep more people in poverty than one otherwise would. It wasn’t charity that lifted a billion people out of extreme poverty since 1990. It was capitalism.
Specifically, countries operating on the premise that it is morally superior to redistribute wealth to those most in need abandoned this premise and allowed their citizens to direct more of their capital towards their own self-interest. Every country that did this saw its poverty rates plummet. Every country that has remained on the redistribution premise continues to suffer.
This isn’t a phenomenon unique to the past thirty years. All of human history has confirmed Adam Smith’s great insight that people pursuing their own self interest do far more good for society as a whole than people supposedly sacrificing their self-interest for the good of society. While there has never been a purely laissez faire capitalist society, those that approached that ideal the closest have raised the living standards of their poorest people the most.
This is why the United States is the richest country in human history. It is the reason China went from being one of the poorest to one of the fastest growing economies in the world, with the most people lifted out of extreme poverty. Ditto India. Socialist countries that become more capitalist see a significant drop in poverty levels and exponential economic growth. There are no counterexamples.
The emotionally dissatisfying but undeniable conclusion we can draw from all this that it is not better in any way to “be like Dolly.” On the contrary, far more people – including the poorest among us – would be better off if Dolly had invested the money she gave away into profitable enterprises and become a billionaire. The same holds true for the five billionaires who gave away so much more.
This also comports with the historical record. It is the profit motive itself that guides capital towards the ends which will help the most people, not the genius of those who accumulated the capital. In fact, it is precisely when they abandoned the profit motive and became philanthropists that past billionaires (in today’s dollars) have done more harm than good. See the vast network of Rockefeller and Carnegie foundations, not to mention Bill Gates’ philanthropic efforts.
It is one of the great paradoxes of human existence that we are emotionally wired against what does us and humanity as a whole the most good. It is no wonder the free-market system emerged during what we now call the “Age of Reason.” The question confronting us is whether that was a one-off or if we can ever find our way back.
Much of the charitable giving by wealthy Americans is driven by a desire to avoid 50% death taxes on assets over $20M or so. Anything that goes to the government is almost entirely lost and so potentially better to give 100% to good causes, however inefficient.
Of course, much of the giving is actually to an individual's own charitable foundation which can invest the money and, annually, make more income than the required charitable spending. Such a foundation will provide jobs, perks, influence and other benefits to many generations of the benefactor's offspring.
Consider another place where charitable giving provides far less in tax benefits. In the UK, rich men tend not to try and get credit from a promise to give away all of their wealth, but instead flee to tax havens like Singapore (Dyson), the BVI (Branson), Monaco (Cleese), Cayman Islands (Connery), Bermuda (many). If Americans could also move their tax jurisdiction, I suspect this would be the popular choice here too.