Recently Bill gates and Mr. Warren Buffet, perhaps the second and third richest men in the world (closely following Carlos Slim described in an earlier post) visited India in connection with their philanthropic activities. The personal wealth of these men is probably around fifty billion dollars each. Mr. Buffet mentioned that since he had far in excess of what he could use to improve his own life, he had decided to give away 99% of his wealth in charity so that it might help to improve the life of others. My mind instantly went to my friend Mr. Khanna of Nainital who too indulges in charitable work although his personal wealth is of the order of ten million dollars or so only. The name and more has been changed here so that this post may be regarded as a fictional one except for its message. Mr. Khanna received some of his wealth as inherited property and earned some in his own career as a hotel manager of a four star hotel. Most of it though has been a result of the escalation of the value of immovable property. Mr. Khanna owns four properties – a house built on about an acre in Nainital, a farm house on a nine acre farm on the outskirts of Bareily that is in the plains about a hundred and fifty Kilometers south of Nainital on the road to Delhi, a three bed room apartment in New Delhi and another two bed room apartment in a classy section of London. The London apartment has a small study as well, which too may be improvised as a bedroom for a single person on occasions. Mr. Khanna mostly lives in his Nainital home and for a couple of months most winters on the farm. The Delhi apartment remains largely locked and it is only for a few days a year that Mr. Khanna is able to visit it. On visits to Delhi, he first checks into a hotel while an assistant moves to the apartment to clean it of accumulated dust and make it habitable. The next morning is spent in banking and if Mr. Khanna, who is just over sixty now, can finish his banking chores in the morning he returns immediately to his farm in Bareily (about five hours drive to the North towards Nainital) and onwards to his bungalow in Nainital the next day. Mr. Khanna's large Nainital home is a wooded property that has several giant pine trees, an oak and a couple of apple trees. There is a clearing on the south and east side for Mr. Khanna to grow his choice lettuce and celery in summer when it is too hot for the same on the farm in the warmer plains. Another clearing to the east is reserved for assorted spring flowers- larkspur, anemones, tulips and crocuses and huge rose and hydrangea bushes as well as the pebbled driveway that leads up to the front porch and verandah lined with potted geraniums. Mr. Khanna has not visited his apartment in London for four years now. He feels there is little point. At one time around fifteen years ago he would visit London at least once a year, largely for shopping especially when Mrs. Khanna was alive. However now he finds the journey tiring and feels that most of what he needs is available in stores in Delhi. Moreover, he says, after living in Nainital he finds most other cities in the world suffer from air pollution. His purchases include canned tuna and Norwegian Sardines by the box loads. His daughter and son in law who live in Canada regularly courier him fine dried salmon, truffles and caviar for which Mr. Khanna pays. Mr. Khanna loves grated truffles on his omelets made lovingly by his experienced cook of twenty years - Hira Lal. On Sunday mornings, many of which I have shared with him, a white Bordeaux wine or Champagne accompanies the breakfast. Mr. Khanna’s daughter also has a key to the London apartment and stops over at the London apartment every year on her annual trips to India. She strictly uses the other bedroom only, leaving Mr. Khanna’s bedroom undisturbed for a possible visit by Mr. Khanna. London suits hang ever ready for him in the wardrobe. However, on my recent visit Mr. Khanna mentioned that over the last four years or so, he has put on weight and he may have to visit Harrods for a change of wardrobe on his next visit. He proposes to bring back the existing suits for Hira Lal rather than discard them. Mr. Khanna left his hotel job with an international chain at the age of forty-five. At that age he inherited the Bareily farm and the Naintial Bungalow from his mother and moved to Nainital. He set up his own Hotel in Nainital that he ran for six years and then sold it. However he was able to strike a deal with the hotel so that he could retain his wine list in the hotel cellars. In India the laws do not permit storing more than a few bottles of alcohol at home, and since Mr. Khanna makes it a point to adhere to law rigorously, he was able to devise a perfectly legal clever scheme of storing his wine at the hotel and having delivered whatever he requires at short notice. Besides his four immovable properties worth about five million dollars, Mr. Khanna also has cash assets approximately totaling another five million dollars. About a quarter of it is held in gold in bank lockers and the rest is in bank deposits and company stocks. His liquid assets yield about fifty lakh rupees (around a hundred thousand dollars) as income every year. Mr. Khanna says that he is able to spend only half of that every year so that he uses the other half for charitable work in sponsoring improvements in poorly funded government schools in the country. Many a poor government school has a new building, playground, library or garden because of this charity. Mr. Khanna has added much joy and enlightenment to the lives of thousands of children through this act. Mr. Khanna has set up a charitable education trust for the purpose and channels his donations through the trust for a tax and administrative advantage. The trust also runs a Nursery and primary school on an acre carved out from Mr. Khanna’s farm in Bareily. Mr. Khanna initially started the school to help out the children of his farm workers. It gradually expanded from a nursery to a primary school. Mr. Khanna does not propose to advance the school further as long as he lives to avoid associated headaches but has made provisions for such an expansion in his Will. Mr. Khanna has willed the entire farm as well as most of his movable assets to this trust so that the school can be expanded after his demise. Of the remaining, two properties are willed to his only daughter in case she return to India in her old age and one to a secret beneficiary. Mr. Khanna needs to spend only fifty thousand dollars a year (around two lakh rupees a month) for all his expenses that include a fleet of four vehicles – two cars, a van and a tractor – a staff of ten persons – four that stay on his Nainital property and four on the Bareily farm as well as two gunmen cum drivers that move with him and stay wherever he stays. Some income from the milk cows, orchards and produce on his farm supports the farm staff and supplements his income. Fine iceberg lettuce, cos lettuce and celery is grown on the farm. This type of produce is not grown in most other farms in India and therefore five star hotels that require it grab it for guests.
Mrs. Khanna passed away ten years ago as a result of a heart attack. Mr. Khanna though is in the pink of health. He utilizes it for golfing, fishing, mountain treks and regular visits to the Nainital clubs and hotels every evening. The only health problem Mr. Khanna had suffered from until a few years ago was asthma, but that disappeared on a chance suggestion from me to eliminate wheat products from his diet and to take vitamin C regularly. Now that the asthma has disappeared Mr. Khanna has found that he need not stay away from wheat entirely but only needs to restrict its intake to about half of what he consumed earlier. Instead he has trout and other fish from the abundant mountain lakes around Nainital, pearl potatoes or Biryani made from choice basmati rice. As my mind returns to Bill gates and Warren Buffet I was thinking that one certainly does not need fifty Billion dollars for a good quality of life. Even ten million dollars as Mr. Khanna has or much much less as most others possess is enough to lead a good quality of life, as good as is humanly possible and to do charitable works as well. Infact an opposite view is also held by some of the most learned that the more we possess the more our worries and troubles and charity is not performed with material things alone. It can be a physical gesture of help or even just plain good wishes, prayer or counsel or even just a smile or a few kind words. This last is at times of greater value. A few sound words were more useful to Mr. Khanna to overcome his troublesome asthmatic condition rather than his millions. If one has surplus wealth or even far in excess of what an average human possesses on the planet there might be a moral responsibility to involve oneself in charity with material things but if one does not have excess then there is none. Certainly with fewer possessions and fewer worries the chances of attaining peace and ensuing happiness are greater. It has also been seen in life that it is the poor who are the most generous in helping out a fellow human in need rather than the rich. Persons like Mr. Khanna, Warren Buffet and Bill Gates are exceptions rather than a rule. Certainly that has been my experience and observation on many an occasion. it is perhaps for this reason that Nature grants more and more with time to the person with a generous and non clamorous heart while it takes away from the rich with a selfish and greedy one.
My mind also went to a friend of mine (described in the previous post) who at the age of sixty had a personal wealth of around a hundred million dollars as per some of the reports on the Internet. It was mentioned in a report that he thought that was not enough. He ventured out for perhaps another hundred million and got into trouble. As a result he has lost much and stands to loose more in the near future. Even had he made his second hundred million in the next ten years, when would he be at peace to spend it? At seventy-two? Would he be able to do much at that age? Is it some sort of a psychosis that prevents some from realizing when and what is enough? It is fortunate that Mr. Khanna escaped a similar psychosis in his life. I would have missed the Sunday breakfasts on my visits to Nainital then. I am sixty-one and already feel tired to do most of what I could do with even a fraction of the wealth that Mr. Khanna has. Who needs caviar and truffles for breakfast? I do not care for caviar and would much rather have button mushrooms than truffles at breakfast and if the occasion demands I can brew my own fine wine to rival a Bordeaux any day and those ultra soft Black forest cakes from the Earls Court hotel in Nainital or creamy Swiss chocolate cakes that Mr. Khanna orders for desert from the nearby Swiss Hotel of Nainital are just plain Sin. No wonder Mr. Khanna does not fit into his London suits any more.
The top Photo shows the Swiss Hotel of Nainital. It is housed in a century old heritage building of Nainital. The second photo is of the Earl's Court hotel in Nainital. It is ranked fifteenth from amongst the fifty odd hotels of Nainital for its ambiance and gardens by some reviewers on the Internet.
21 comments:
Ashok,
That's good that you're happy with your life and don't need new suits. I'm happy to hear that. I think we are happier if we don't compare with others, and we cannot compare with others because each has own unique struggle. Don't you just enjoy your own struggles? I do!
Absolutely Keiko. Good to hear from you.
Life is perfect if we realise the advantages of our own individual positions because we are all unique individuals requiring a different set of circumstances.
Actually Keiko, I toohave been putting on weight gradually over the last twelve years, so that I have had to change suits frequently. In my case though it is not chocolate cakes but perhaps just a genetic process with age and also a lack of sufficient exercise. During periods that I did exercise the weight gain was arrested and even reduced and I must get back to more exercise sooner. However my friends tell me that I am not overweight but I would like to be slimmer because my feeling is that one is healthier and more active that way.
Are you back from Japan? The situation is still worrisome there and I frequently pray for it to improve fast.
Keiko, the original post was written in a hurry and since then I have read and edited it.
Ashok,
I wonder what made them think that they can lead the world in their way. Have they spent a lot of time studying cultures and languages? Do they understand how the Indian society really works? Have they realized that the society is so different from their own?
About Buffet giving 99% of his asset away, that is good. But I feel how indecent that people kept making money past the amount that they cannot possibly use. That's not the kind of leaders we need.
You are right Keiko that these men do not understand India much. They cannot since they have not lived in India and Warren Buffet said as much. However, Bill Gates has seen that there are still large pockets of poverty in India since that is plain to see and Warren Buffet was convinced that economy would grow rapidly, that too is perhaps natural seeing how far the Indian economy is compared to other world economies but now the knowledge and technology is there.
I agree with you that it is not decent to acquire much but only to an extent. The fact that these men have thousands of time more than other persons considered rich in the world does not and cannot mean that they are thousands of times cleverer, more able or thousands of time more hardworking. That is not rationally possible. There are many other clever persons in the world for sure. Therefore it means that money has come to these persons more or less automatically by a combination of chances in the main. Warren Buffet has certainly not struggled to acquire his wealth nor has compromised his morals or ethics to acquire it. He said it was like a snowball that rolls down a hill and gets bigger and bigger. In any case these men have now seen the decency of giving it away and so better late than never. Often a philanthropist can do a better job then governments can do with tax money.
It is indecent when a person struggles too hard, or compromises ethics especially to collect more of anything then is needed, and if it is indecent too if a person has excess but cannot help family, friends and society at large with that excess but rather clings on to what he has or gives for show and advantage only.
Moreover Keiko if one has far in excess of something that many others are short of then it rightly belongs to others and it has only reached these persons as caretakers for that wealth. If they can put it to good use for benifit of others that may reduce the indecency. Sometimes philantrhopists use their money in a better way than goverments use tax money, which too is a huge collection in a few hands.
Gandhi was one person in India who gave away all his wealth at a very young age realising the indecency of holding on to more than what is required and then devoted his time to service of society instead of earning more.
Ashok,
Since Buddha and Ghandi came out of India, I hope to see younger Indians follow their footsteps. There is something we cannot be taught in schools. If we don't have self decipline that comes from a long tradition, I think indecency remain disguised like a decent look. If I were the lowest caste, I still don't want charity, but I appreciate someone taking time to teach me read and write Hindi.
Keiko
I too am not in favor of charity of a personal kind. The charity referred to in this post was for social causes such as education etc.
Gandhi was an exception and the age of Buddha has long gone by. The last International Buddhist University in India was destroyed in the eighth century. Since then India has slipped into indiscipline, corruption, poverty etc. but we hope things will improve in future with education that is spreading with democratic systems and increasing prosperity.
Last year the parliment approved the reopening of the most famous buddhist university - Nalanda University. The work for that has started.
If one has surplus wealth or even far in excess of what an average human possesses on the planet there might be a moral responsibility to involve oneself in charity with material things but if one does not have excess then there is none.
Almost all of us have a surplus of wealth, even if we are not completely debt free. The unwillingness of those who can to help allows poverty to exist in the world. I believe most people “should” give to charity or donate time or both. I don’t know how it is in the rest of the world, but in American, given the choice of a premium coffee or saving the life of a child in a third world country for one year, there is no choice. We need coffee and we do not need third world country children.
As I understand things, I am just a socialist, though, and because I think we should consider buying our coffee in the form of a saved life, what I mean is that Americans should give up the American dream. It is a false dichotomy that is frequently used. Besides, what is a starving child going to do with a premium coffee anyway, right?
Oh, and in America, the exceptions are used to prove the rule. We even say that: "This is the exception that proves the rule."
The exceptions prove the rule that is not the exception, of course, but that is not how people use the argument. They actually try prove the rule with the exception that disproves it by its existence as an exception.
Rich men are usually rich not out of generosity, but out of greed. Yes, there are exceptions. Yes, the exceptions are exceptions, nothing we should ever use to prove that greed is ok.
I agree with most of what you have written John. Everyone is capable of helping fellow humans in need and should do so in whatever way they can. One never knows when one shall be on the other end of the stick. It is the poor who appreciate this most and it is because of this that I think they are the most generous in coming forward to help.
You mention greed but the unfortunate thing is that the economic system that has prevailed in the world –capitalism – is in effect the exploitation of greed. There is an attempt to control it through regulation when it gets out of hand but such attempts are not fully effective.
On the other hand, the alternative model – communism – that was attempted in the world failed because it went too far in the other direction. Even farming, small retail operations and the ownership of a home were nationalized in Russia and until recently in Cuba. Had these few things as mentioned here not been done the socialist model would have lasted longer. Ownership of a farm is not greed unless one’s land holding becomes excessive and that can be limited. Ownership of a home is not greed if it is not too large or if one owns more than a single or even two homes. More can be owned if it is for renting to those who do not own one. In this respect Mr. Khanna of my story is erring by owning four homes and keeping two of them locked. He uses his principal home and the one on his farm frequently (it serves a different purpose) but the other two are just possessions that are much needed by someone else perhaps and should be relinquished as soon as possible. Besides there economic model the most serious flaw in Communist models was that they eliminated democracy and basic human freedoms. That cannot go on forever in any society.
On the capitalistic side the state handing over even health care to private enterprise is going too far. It leads to making a business out of human suffering. I have met an American child doctor who mentioned with glee that he waits for at least one child needing surgery every week and hopes for more in the California area he practices. It is Greed that has led to high medical costs and it is greed that leads societies to unsustainable levels of consumption such as in the use of energy and construction of new homes etc. Unfortunately much of the world is trying to emulate this capitalistic model.
Ashok, I find things to agree with and things to disagree with. I suspect that, in general, you and I would not agree on broader philosophical issues, but I'll need to read more from you to understand your perspective better.
"Often a philanthropist can do a better job then governments can do with tax money."
I think this is a brilliant point, so I'm glad you made it twice. I instinctively dislike governments, and their bureaucracy and inefficiencies make your statement very true. Governments are necessary for many things, but I don't think spreading charity is one of them.
"it is indecent too if a person has excess but cannot help family, friends and society at large with that excess but rather clings on to what he has or gives for show and advantage only."
I'm very impressed by what Gates and Buffet have been doing the last few years, and I think when people get to the point where they simply can't spend the wealth that they've accumulated, there is a moral obligation to give it away.
"if one has far in excess of something that many others are short of then it rightly belongs to others"
Here is where I begin to disagree with you. I see a world of difference between a moral obligation on the wealthy individual to be charitable, and allowing others to have a claim on that wealth.
"On the capitalistic side the state handing over even health care to private enterprise is going too far.
Here I disagree, as well. The perspective I choose is the young doctor who pays for her education and puts out a shingle. Why shouldn't she charge what the market will allow in order to cover her costs, repay her school loans, and earn a healthy income? If she charges too much, people will choose another doctor, and other doctors will poach her patients.
The same inefficiencies and bureaucratic nonsense the government brings to charity will also be brought to health care. The government cannot manage an entire system, choose the best outcomes, manage health care costs, set prices in every locality, and deliver care to every patient who needs it. But a private system, full of independent actors who make their own decisions can do exactly that, most efficiently and providing maximum value.
Welcome Heathen. We need a conservative point of view to balance what we get here. Most others that visit here tend to lean towards the socialistic view.
I think I have worded the statement " belongs to others" incorrectly" I did not imply that anyone should have a legal calim on anyone elses wealth. However, I do think that there is something terribly skewed about systems that allow this amount of disparity in the first place.
Yes certainly medical graduates should be allowed to recoup their education costs but soon after doing that they go on for the kill. You mention competition as something that will control prices but within professional groups and groups of industry there is considerable co-operation so that they raise costs as a group. I have lived both in Canada and India and find that there is a huge difference in costs that cannot be justified. The costs of essential needs like legal or medical ones hit the roof if professionals are allowed to exploit human desperation.
The high cost of medical education is another case where the private education industry has been allowed to run away with cost increases and then as you say a second wrong has to be committed to right the first one. The high costs also do not make for equal opportunities for all, that you agree should be in place.
In future I am certain mankind will allow fairer practices. A model for education that has been proposed in an alternative philosophy (morphism) is that the goverment gives citizens automatic loans for education and other essential needs such as legal fees, medical costs etc. This goverment loan unlike a commercial loan is of a different kind. It is charged back from the individual as an additional tax e.g. if the tax for others is 20% for the individuals owing goverments as a result of such loans the tax rate is 30% until the loan is paid back or the individual dies (in whic case it is charged to the estate or forgiven). That way the high cost of education does not stress the individual and keeps costs in control. It also does not burden other citizens if they have not incurred similar costs/loans
Ashok,
I am often accused of being a socialist, though I don't describe myself that way. I am a capitalist with socialist tendencies.
I believe in what we call "The American Dream," and I define that not as the ability to acquire an 1800 sq ft home with a two car garage(and two cars to fill it), but rather, the ability not to have finances be our main concern in life.
If someone becomes wealthy (though I offer no definition of the term), I consider that somewhat, the American Dream. I am in favor of that opportunity in America.
However, I want the government, in exchange for offering this dream, to make sure it takes care of everyone who cannot or does not succeed in living that dream. I suppose that makes me part socialist. I don't want the idea of capitalism and the idea of socialism to be mutually exclusive, as I am an advocate of both. What sets me apart from a great many in America is that I am totally convinced of two things:
1. Socialism and capitalism can live in harmony.
2. Socialists and capitalists can live happy satisfying lives in this socialist/capitalist world.
In America we have a graduated tax system, where your income is diced up into chunks. As you make more money, higher portions get taxed at a higher percentage until you reach the maximum tax rate for a portion of your income (called top margin tax rates). I am sure you know all this, but I love the sound of my own voice.
In 1913, the top marginal tax rate was 7%. By 1952, it was 92%, and it stayed above 90% until it fell in 1964 to 70%. It stayed there until 1980 where it started falling more sharply. Today it is at 35%. To me, a 90% + top marginal tax rate is not that different from an income cap. Lots of people actually think we should have an income cap. I am not one of them. I like capitalism. However, I think the top marginal rate should be somewhere above 35% (not sure where). Our long term capital gains tax is currently capped at 15%. I think it should be well above that. It used to be at 73%, however and that is not capitalism.
So, I don’t favor going to back to the good ole days. However, I do favor taking care of our citizens, and taxing enough to do it. Some conservatives consider this redistribution of wealth, forced charity and entitlements. I am OK, with the entitlements label, so long as we do not use the label to mean we shouldn’t do it. Likewise, forced charity, or redistribution of wealth, are fine terms, so long as we still do it. I am not in favor of making the argument one of semantics. I want this world and some people do not want this world. Some people consider the world I want to be unjust. I tend to think expecting some people to suffer while others have plenty and while both are living under the auspices of a representative government is not fair.
I am a little off topic, I know, as the post is about truffles and altruism. But the idea that we all should contribute where we can dovetails into the idea that we all should be taxed where we can.
Mr. Heathen,
I respect you immensely, but I am not attempting to resurrect the tax debate. I certainly would not want to sully this site with such a discussion. I just wanted to finish the thought I started earlier. For the same reason, I bit a hole in my tongue and made no reference to your comment, sir.
Ashok,
I read your paper, Morphism, although not completely. It is very interesting, and I agree with many sentences on the paper. But since almost all the economic/political systems have shown problems, I think it's safer to keep working on our whatever the model we currently have, rather than switching to completely different model. It is risky. As one of the comments I saw, I agree that maybe, some part of morphism can adapt into the current system.
You have a great mind. I'm impressed. I'm all for equal education and health care for all the citizens. Under such system, I think we will be kinder to each other.
John, many of my ideas are similar to your although we may give them different words and different interpretations.
Yes I am aware of the extensive discussions between you and heathen on the tax thing. The entire subject is very complicated and needs more debate and study in a very civil manner, not allowing passions to interfere although I know that is not always easy.
Keiko
That paper was written a long time ago and it is a first attempt. Since then I have revised some of my ideas, not radicaaly different from those in that paper but with improvements.
Yes for sure it is risky to experiment with an entirely new system but the proposals there were such as could be tried in bits as mentioned in an evolutionary rather than revolutionary manner. Then it is not risky.
John, although I have not studied the economic system of Sweden much but read reviews that seem to say that they have achieved the sort of balance between socialism and capitalism that you mention.
In general European countries and even Canada to your north has a better balance between socialism and capitalism. All these countries also have great public health care systems.
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