July, 1995


Dear ICE Subscriber:


There is a temptation that almost always tempts the faithful Christian. It afflicts every ideological movement. It is the myth of the Sugar Daddy. There were several hoped-for Sugar Daddy in the 1970's. They were going to write the checks that would bankroll the New Christian Right. I can't think of a single major work funded by these megabuck types that has proven fruitful. Maybe they did some small projects that worked out. But they left no positive traces with their enormous wealth. (Only one of them still doles out money, such as $500,000 to a UN-related ecology group run by John Denver, the aging New Age guru.)

I made an unbreakable rule years ago: I never mention ICE's many uses for money in the presence of a rich man. I may suggest that another outfit has good project, but never do I ask for ICE's sake. When I used to talk to rich people (I never see them these days), I never got around to money. That way, they might listen to me.

But it goes much deeper than this. I do not believe in the myth of the Sugar Daddy. Like Santa, he does not exist for the likes of you and me. Sugar Daddies do occasionally appear on the scene if there is something either evil or stupid to finance, but they are not part of our world.

There is a theological reason for this. God wants all the glory. He is not willing to share it with rich people. Whenever there is some great triumph for the kingdom of God, there is never a rich man funding it until it becomes non-controversial. When a Christian organization does not really need a rich man's money, rich men will then write the checks — not before. This is why, generation after generation, the rich do not support the innovative, path-breaking work of the Church, the gospel, and the kingdom of God.

I remember attending a very important conference. This conference had been put together by a man of limited talents and less money. Howard Phillips was a speaker there. He was impressed with the whole affair. He told me: "The Holy Spirit is at work here." I asked him why he thought so. "Because [ ] sure couldn't have organized this."

I was warned very early against believing the myth of the Sugar Daddy. When I graduated from college, I got a summer job at a medium-size foundation. I got the job because I knew one of the senior staff members. I won't mention his name because he is still out there today, trying to raise money for his own small foundation, and he still dreams of finding some rich person to fund him. But he didn't three decades ago. Back then, he warned me about the world I was entering into, the foundation world. He really did not want to be in it; he wanted to start a Christian college. Yet here we are, three decades later, running our own little foundations. The college never appeared.


How and Why the Rich Give

He laid down some rules that govern giving by the rich. He said these rules are rarely broken. In 30 years, I have not seen any of them broken. They are variations of Jesus' words: "Verily I say unto you, That a rich man shall hardly enter into the kingdom of heaven. And again I say unto you, It is easier for a camel to go through the eye of a needle, than for a rich man to enter into the kingdom of God" (Matthew 19:23-24).

First, the rich man is buying, not giving. He is buying other men. He buys other men just as rich old men buy beautiful young women to be seen in public with. Other people are baubles to him — visible signs of his wealth and influence. Ideas rarely mean anything to such a man, except insofar as he thinks he will be perceived by others as a idea-man. The proof of his status as an idea-man is his control over full-time intellectuals, who rarely have much money.

Second, the rich man is not interested in changing the political-economic order. He is interested in modifying it to make his piece of the pie larger. If your ideas truly threaten the Keynesian welfare-warfare state, the rich man is not interested. He made his fortune in terms of the rules of the present system, and he is not going to undermine it. He wants only to milk it more efficiently.

Third, the rich man is fearful of being really out of step with other rich men. The rich do not seek controversy on the outer fringe; they seek it, if at all, only in one of the inner layers of respectable public opinion. The phrase "country club Republican" is accurate. These people today resent the intrusion of the New Christian Right into the Party, despite the fact that Republican candidates rely on these voters. The country club Republican would rather lose an election than have a controversial Republican win it. They wanted Thomas Dewey and Dwight Eisenhower, not Robert A. Taft, who was himself an Insider (Skull & Bones member, son of a Skull & Bones member).

The fourth rule I learned on my own over the next decade. The rich man buys intellectuals to listen to him. I can think of one blow-hard ignoramus who used to bring in scholars for two or three days to listen to him spout incoherent nonsense. He paid them to suffer through this. They always came. Leonard Read once sent me out to represent him, since Leonard was not about to listen to the old coot. If anyone was going to deliver monologues, it was Leonard; he refused to listen to them. The man tantalized his lap-dog scholars with the dream of getting a fat sinecure with the man's foundation, but it never happened. Not one of them went on his payroll full time. He strung them along until he died, doling out pittances. "Someday, someday," they dreamed, but someday never came.

A wealthy man is someone who can lose his job tomorrow, never go back to work, and not have to cut back on his life style. A rich man is someone who can lose his job tomorrow, suffer no reduction in his life style, pay his tithe, and his tithe will support at least four other people. These people will be: the rich man's yes-man, the yes-man's yes-man, a secretary, and someone to answer the phone.

When a man moves from being merely successful to being truly wealthy, he shifts his ideas as he shifts his club membership. In the early days, when he could spare a few thousand dollars, he was hard core. When he can spare $100,000, he grows nervous at what he had supported earlier. When he can spare $500,000, he hires a yes-man, who continues to say yes until the rich man dies. If he is truly rich, he hires a team of yes-men. They tell him to conserve his money by avoiding terribly controversial uses. He listens. His fortune grows. Then the yes-men inherit his fortune and do the opposite of what he believed in. This has been the story of the major foundations.

Think of Warren Buffett, America's most successful investor. His father, Howard Buffett, was the lone Ron Paul-type libertarian Congressman of the 1940's: a great man. He and Leonard Read used to get together. The man was really a hard-core anti-statist. Warren, however, plans to leave his fortune to a foundation that will promote population control. If he lives another 20 years, and his investments earn his typical 20% per year (reinvested), that foundation will be in the range of $100 billion. It will throw off more revenue annually than the entire capitalization of the Rockefeller Foundation today. It will be the largest single pool of disposable private wealth on earth.

Think of what $100 billion would do. It would build 30,000 debt-free churches with day care center operations attached that would fund the churches indefinitely. But where would we get the personnel to run them? How could this much money be absorbed?

That is the problem. It was Rockefeller's problem 90 years ago. The old man's theologically liberal adviser, Rev. Frederick Gates (not a yes-man), who helped John D. Senior give away $500 million (worth at least $10 billion today) and helped his son give away many more millions, wrote to John D. Sr. in 1905, warning him that the compound interest on his fortune was growing too fast. "Your wealth is rolling up, rolling up like an avalanche! You must keep up with it! If you do not, it will crush you and your children and your children's children."

In a crucial 1990 Harvard University Ph.D. dissertation, Albert Frederick Schenkel shows how Junior gave away about $100 million to the Protestant Establishment (billions in today's purchasing power). He was behind every major push toward ecumenism in the first half of the century. His influence was monumental. Historian Charles Harvey, who labored with me in the Augean stables of graduate student teaching assistantship obscurity three decades ago, has studied Rockefeller's activities in detail. He concluded in 1982:

The obscurity of Rockefeller's role is partly due to his artful circumspection as heir to the world's largest industrial fortune and the controversies surrounding its formation. The oversight is also due, one suspects, to the aversion of historians to what might seem a vulgar economic determinism or even a conspiracy thesis. Yet, as with a number of other major developments in the first half of the twentieth century, to ignore Rockefeller is to miss much of the inside story.

The Rockefellers' money, along with Andrew Carnegie's, pump-primed today's welfare-warfare state. Later, so did Henry Ford's. With this history in mind, my economist friend, the late Ben Rogge, who worked as a part-time advisor for the blow-hard moneybags I mentioned earlier, told me this: "My job is to see that the money he gives away doesn't do too much harm." That was the most he hoped for. On the whole, he succeeded. He got the blow-hard to tie up his inheritance so tightly that is used today mostly to publish reprints of old libertarian books. Not bad. Pretty good, actually. No one gets hurt.

We look at what concentrated charitable wealth has accomplished, and it's mostly evil. The super-rich intend good but accomplish evil. As Rogge said: "They know how to accumulate it. They don't know how to give it away." Their wealth places so much responsibility in their hands that the division of intellectual labor cannot deal with it. The money attracts intellectuals and power-seekers who want to maintain their own employment. The money builds up, but to what purpose? To undermine the kingdom of God.

We think: How can Christianity ever overcome this? Answer: by preaching the gospel, extending the division of labor, decentralizing political power, and allowing open competition to spread the wealth. We must get the government out of the wealth-concentration business. We must shrink the state and reduce the market-thwarting benefits that the state offers to large businesses and cartels.

God gets the glory when His common people work hard, cooperate, and pool their assets — not just money but vision, prayers, and ideas. Our job is to be talent-multipliers (Matt. 25:14–23). A million people giving away $100 every year can do more good than one man giving away $100 million once. His yes-men will guide him into very large mistakes. Our decentralized mistakes are spread over many projects. The best projects will survive. We can fund more of them.

In the 1970's, Western banks loaned recycled Arab oil money to huge, government-operated projects in Latin America. It was cheaper for a handful of bankers to arrange these loans than to arrange a hundred thousand small loans to enterprising Latin Americans. Close to half of these loans went bad. Only bureaucracies could absorb that much money, but bureaucracies do very stupid things and then refuse to repay: the bureaucratic way, especially in Latin America. Today, small Christian business groups arrange $1,000 loans (or less) to small Latin American businesses. The default rate is far less. Let this be a lesson to us.