Donating Ourselves to Death?

We might be donating ourselves to death.  Wealth goes two ways.  The first, and most often noted, is how much money a person has.  The second, and most frequently ignored or overlooked, is how much stuff costs.  A salary of $350,000 a month sounds like a lot, but when a one bedroom apartment costs $59,000 a month, suddenly that salary seems a bit low.

According to one website, ¥350,000 is about the average monthly salary in Japan, and according to another ¥59,000 a month is about the average rent for a one bedroom apartment outside of a city center.  Right, it is yen, not dollars, but given the same values in dollars, those wages would not be that impressive given those costs.

Where ignoring costs and focusing on dollar amount becomes problematic is when average pay raise is less than average inflation.  When pay increases less than inflation, it is the same as pay decreasing by the difference.  This has been happening in the US, especially among the middle and lower classes, since at least 1960.  That, however, is not the subject of this article.

Modern companies are expected by many consumers to back popular causes.  Companies that donate to educational, environmental, or human rights causes are are revered by many consumers, and companies that do not are viewed as evil money grubbers.  The consequence is that companies feel obligated to back some popular cause, because otherwise they will loose business and eventually fail.  From a cost point of view this is problematic.

It is possible to reduce the income of the poor without ever touching their money or reducing their wages or welfare benefits.  All that is necessary is to raise prices without raising the wages and benefits of the poor.  An extremely effective way for the general public to do this is to make companies feel obligated to spend money on something that will not bring any profit.  Consumers who refuse to do business with companies that do not support some popular cause force businesses to spend more money on unprofitable things.  This, in turn, forces those companies to raise their prices.  Increased prices make the poor even poorer.

While supporting moral causes is a good thing, expecting businesses to do so is a misplacement of resources.  When a business donates to a cause, it is indirectly forcing all of its customers to donate to that cause.  If some of those customers cannot afford to donate, then this practice is unethical.  This kind of shopping habit perverts competition to force businesses to do things that are oppressive to the lower classes.  The correct application of market forces uses competition to keep prices low, and this application of competition supports a healthy economy.  Competition that values things other than price or product quality almost always results in increases in price and reductions in quality.  Admittedly, competition that encourages businesses to act ethically (from a business standpoint, not a popular cause standpoint) can be very good and can help keep workplaces safe and encourage ethical treatment of employees (though it still increases prices and/or reduces quality but justifiably).  Competition that encourages or forces businesses to start acting outside of their sphere of influence, however, is harmful to the economy, because it drains funds from the rich and poor equally and without their consent.

We might be donating ourselves to death.  The graduated income tax system is designed to put the majority of the tax burden on those with the majority of the money.  At first this may seem unfair, but a government that protects the ownership of property benefits the wealthy far more than the poor, because the wealthy have more to protect.  In addition, the poor cannot afford much if any of the burden, and what good is a government that favors protecting property ownership over the lives and well being of its citizens?  When businesses donate, they impose a sort of flat tax on all of their customers.  Of course, the rich pay more than the poor, because they spend more, but the poor cannot afford to pay any of this involuntary tax.  By donating to popular causes, businesses are harming the economy and robbing the poor.  When people refuse to shop at the cheaper stores because those stores do not donate to a popular cause, they are paying the more expensive store off for oppressing the poor.

It is not fair to blame the businesses for this problem, because they are not, for the most part, responsible.  They are responding to market forces.  If they did not do this, they would ultimately fail.  The blame goes to the people who blindly choose to avoid stores that do not donate without considering the consequences.  The blame goes to the people who are too lazy to donate directly and instead patronize businesses that donate so they can feel good about themselves anyway.  If a cause is worth supporting, it is worth donating directly, instead of spreading the burden to those who cannot afford it by expecting businesses to do the work of donating.

Philanthropy does not belong in for-profit business.  Those who want to donate to a cause should do it themselves instead of expecting someone else to do it for them.  It is hard enough for the poor without forcing them to donate to every popular cause.  This problem is one of the many reasons the US economy is struggling and taking so long to recover.