At Davos, Michael Dell made clear that he believes he, and other rich people, are smarter at spending their money on public needs than government. This is why is he against the proposed 70% tax by Representative Alexandria Ocasio-Cortez. What are the downsides of a strong reliance of philanthropy?
There are two important downsides of replacing the government with philanthropy. First, most rich people have incredible skills that made them rich in the first place. It seems reasonable to assume that these skills go to waste when attention shifts to charity. Second, a strong reliance on philanthropy can increase inequality because there is no way philanthropists can and will coordinate their efforts. As a result specific causes get over- and underfunded, based on the preferences of specific individuals, or, more charitably, by chance. The government is they only entity that can come close to weighing all the costs and benefits of expenses on public goals.
Because the government has this special role in the economy and society, it should step up when philanthropy becomes pervasive. That might mean taxes should be increased and strong engagement with philanthropists is necessary. Else philanthropy will turn out less productive, or even counterproductive.