The richest Americans are more generous than the wealthy of other countries, a study recently found. But it isn’t just the super rich. At all levels Americans are more generous than residents of other countries.
A May 31 piece at NewGeograpy.com by Nima Sanandaji and Tino Sanandaji asking “Are America’s Rich More Generous,” reports that America’s “SuperEntrepreneurs” are far and away more generous to charity than those of other countries. Israel, Canada, the UK and Ireland come in at higher rates than other countries.
As the authors reviewed the data, they discovered that the answer to the article’s title is “yes,” America’s rich are more generous than others. But it isn’t just our rich, the pair note. All levels of American society are more generous than folks elsewhere.
Why is this? The authors find that it is our entrepreneurial culture, or capitalist ideals, and our concepts of an individualist’s social contract that drives our giving.
American capitalism differs from other societies in its historical focus on both the creation of wealth and the reconstitution of wealth through philanthropy. In 1957, Historician Merle Curti argued that “philanthropy has been one of the major aspects of and keys to American social and cultural development”. The implicit social contract allows rich Americans to retain most of their wealth from taxation. In return, they voluntarily give much of it back to society, in projects of their choosing. The notion exists that wealth beyond a certain point should be invested back in society to expand opportunity for future generations. In this way John D. Rockefeller, the richest man in American history, gave back 95 percent of his wealth before he died.
Americans give about 2 percent of GDP back to charity, the study found. That is “ten times higher the ratio of European countries.”
“Much of the new wealth created historically has thus been given back to society,” it was discovered. “This has had several feed-back effects on capitalism. For one, the practice has limited the rise of new dynasties. Another positive feed-back mechanism is that the donations to research and higher education in particular has allowed new generations to become wealthy.”
The pair conclude that, “The combination of opportunities to create new wealth and philanthropy has so far ensured that Anglo-Saxon societies are characterized by new wealth, compared to countries such as France where inherited wealth plays an increasingly important part in the economy.”
Follow Warner Todd Huston on Twitter @warnerthuston or email the author at firstname.lastname@example.org