Wednesday, August 4, 2010

Thirty US billionaires pledge to give away half their fortunes to charity

Could be good, so long as it doesn't reduce the capital available for startups. I have no idea whether this will have any impact. My guess is no impact.

I think one of the most efficient forms of charity might be for owners of private companies to charge below profit maximizing prices on products, especially to the people who cannot afford more. For example, if Michael Dell tool Dell private and then provided laptops at marginal cost to kids in developing countries.

The concept of entrepreneurs expanding the objective of private companies (no fiduciary duty to shareholders) beyond profit maximization to doing great things intrigues me. I am not arguing for any form of government intervention that would kill the psychic pleasure of entrepreneurs such as me. If I had enough money where the marginal value of wealth was primarily status, then a more fulfilling status game might be how much good one can do. Another example is Mars sourcing ingredients from less convenient and possibly more expensive locals. Yes, I understand the concept of comparative advantage, but development of new sources might be a public good that is under-supplied. Again, just an idea.

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