Carlos Slim and the Giving Pledge

Carlos Slim Helu is one of the prominent people to have declined to sign the Giving Pledge promoted by Warren Buffett and Bill Gates.Here is his reasoning:

“I prefer that Bill Gates create a Microsoft or Steve Jobs create an Apple.” Giving away their personal wealth “is an interesting idea… but it won’t solve any problems. They will make that money tax deductible and give 5% [of the overall amount] every year to [the actual] charity. If they collect $300 billion, they will use only $15 billion every year. That won’t solve any problems.”

“It’s more important to put all your resources and your experience [to work]. Many of the problems will be solved by business activity and development.” Slim cites the example of an infrastructure construction company that he owns. “We are bidding for projects and that’s how you need to [develop a country]. You need to invest in factories and laboratories…. That’s my challenge in my life, to help change my country. Charity doesn’t solve poverty. How much charity has been done in the past years, trillions of dollars.”

I like the way he puts it :business activity and development will solve the problem of poverty.This is something I believe in and that I have seen happen time and time again. However it gets hard to articulate this point when people get to talking about the need for the wealthy to be charitable.The wealthy are wealthy because they have the skills to make and keep wealth.The best way they can serve society is use their skills to make and keep their communities wealthy.

It’s important to create opportunities and give people a break when they need it but giving in a way that creates dependency merely perpetuates poverty.For many people a job or a chance for some self employment is the first step out of poverty.And it is business activity and development that creates jobs.