Capitalism and Charity

Recently by Jeffrey A. Tucker: The People on the Move

So I finally gave in and coughed up a donation to Wikipedia, after long weeks after being stared at by the mug of Jim Wales. Suddenly I realized something: this website is very useful to me, and it also performs a social function.

It needs money to operate. Who better to step up and do what needs to be done? So I went for it. It was no trouble at all, and felt good. Now I have a sense that I'm a partial owner – a stakeholder of sorts – in this apparatus that I use every day.

And the other day, I did the same for a small choir that sings great stuff. And there's a museum in town that's cool so I gave a bit there.

Then I went over to and gave.

Each time took only a few seconds.

All these institutions are important to my life. I want them to thrive. I benefit, and everyone benefits. Doesn’t it make sense that I would do something to help make that possible?

I’m under no illusion that my modest efforts here make the difference between life and death for these institutions. But you know what? It doesn’t matter. I’m combining my own efforts with hundreds and thousands of others, and together we all amount to something. I may not know these other donors. I don’t have to. We can still work together to do something wonderful that none of us could ever do separately.

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I've been asking around about what others are doing and it turns out that many people are in on the act, whatever their financial means. The Mises Institute's efforts this year have been more successful than any previous year. I suspect that many other institutions can say the same.

Now, fifteen years ago, in the age of mail sacks and sticky stamps, none of this would have been possible. You had to have money to raise money, and the money you raised went to raising more money because everything was such a headache in the world before the web.

Today, a small donation goes so much further. A bit of web programming makes the donation interface possible. It takes just a minute to type in your credit card information. Everyone benefits.

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It gets me wondering: are we beginning to see the emergence of a new culture of giving, made possible by technology that makes it ever easier to give small amounts or micro-donations? We’ll know in a few years when the data come in but I suspect that this is what is happening.

Giving like this can be habit-forming. The world is filled with miraculous and wonderful things, mostly online and mostly for free. We use this stuff every day. It makes the world a better place. Why not show support in a tangible way?

So many times in the past I’ve sat at concerts and looked at the back of the program to see that rich foundations and rich people gave lots of money to make all this possible. I could never do such a thing. I could never join the ranks of the great philanthropists. It’s out of my league.

Today it is different. Why should philanthropy be monopolized by billionaires? I can be a philanthropist. Pooling the cooperative generosity of thousands and millions is actually more effective and certainly more inspiring.

It's true that giving this way doesn't make rational sense according to a neoclassical idea of what constitutes economic rationality. LRC is free and it will be there whether I give or not. The same might be said of the Mises Institute. If all we cared about were commercial exchange, I would have every incentive to use the free good and never pay. There is no harm done in free riding, right?

Mises himself had a broader view of rationality. He said that all actions are rational from the point of view of the actor. I'm glad to embrace that idea; it makes sense to me. I give because I want to support something I believe in, end of story. Giving in this way is not strictly a capitalist act if you define capitalism as only commercial exchange based on contract.

But if we see capitalism as the voluntary sector of society characterized by private property relationships, this kind of micro-giving is part of that.

So I'm beginning to wonder now. In the future, will it be possible for artists, poets, musicians, painters, writers of all sorts, and others to make a buck through encouraging micro-donations? A few years ago, I might not have thought so. But if giving in this way becomes habitual – and it really does feel great – maybe this could happen.

Maybe, just maybe, technology will help foster a new culture of donations that could become an important part of economic life for everyone. This habit not only makes it possible for important institutions to survive. The culture of the donation could end up restructuring how we think of economic life itself.

Try it and you will see.

December 31, 2010

Jeffrey Tucker [send him mail] is editorial vice president of

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