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Book Review: Why Philanthropy Matters - WSJ.com
March 27, 2013 | WSJ | By LESLIE LENKOWSKY

A Buffett Rule Worth Following
WHY PHILANTHROPY MATTERS
By Zoltan J. Acs
(Princeton, 249 pages, $29.95).

entrepreneurs were as philanthropic as those born into wealth, if not more.

This surprising fact propels "Why Philanthropy Matters," by Zoltan J. Acs, a professor at George Mason University. Mr. Acs has spent his career studying how entrepreneurs operate and what role their business ventures play in the economy. In his new book, he focuses on another kind of contribution they make, one that, he argues, is as essential for prosperity as the products and services they create.

Successful entrepreneurship, he writes, requires a steady stream of innovations. The best places to develop them are privately funded research universities, medical centers and other kinds of institutions—like libraries and laboratories—that are insulated from competitive and political pressure. He cites, among other examples of nurtured innovation, the agricultural advances developed in land-grant universities during the 19th and 20th centuries and the contributions made to the information age by the students and faculty of Stanford University. As important as industrial research may be, the university has become, since the 1980s, "the source of new knowledge to be transferred to the private sector."

But there is more to the logic of entrepreneurial charity than hatching innovative ideas. As Mr. Acs notes, the success that certain entrepreneurs achieve when they disrupt old industries and establish new ones can bring big rewards, resulting in disparities of income and wealth. Without the philanthropy that would underwrite scholarships or other sources of opportunity, the public might not long tolerate such differences.

In "The Gospel of Wealth" (1889), Andrew Carnegie urged his prosperous contemporaries to avoid "hoarding great sums" and to give their "surplus" wealth away during their lifetimes, to strengthen an economic system that might thereby produce some riches for all. In the more measured tones of an economist, Mr. Acs is making much the same point: A capitalist economy not only enables but requires philanthropy. Through it, entrepreneurs can support the kinds of institutions that generate discoveries and that provide pathways for other people to make their own fortunes.

Mr. Acs buttresses his argument with a variety of examples, including those of billionaires—among them, Michael Milken and David Rubenstein —who have followed Bill Gates and Warren Buffett by committing themselves to giving at least half of their wealth to charity and whose charitable enterprises are aimed at creating opportunity for others. (Eli Broad, for instance, subsidizes charter schools and management reforms to improve urban education.) In Mr. Acs's view, America's ability to combine entrepreneurial capitalism and philanthropic uplift is rare among developed nations.
Andrew_Carnegie  billgates  book_reviews  books  capitalism  Colleges_&_Universities  creating_opportunities  David_Rubenstein  disequilibriums  disruption  Eli_Broad  entrepreneurship  innovation  knowledge_economy  moguls  Michael_Milken  philanthropy  society  Stanford  symbiosis  technology_transfers  Warren_Buffett 
march 2013 by jerryking
The return of high-risk optimism - FT.com
May 1, 2008 3:00 am
The return of high-risk optimism

By John Gapper
Michael_Milken  high-risk  optimism 
june 2012 by jerryking
Toward a New American Century - WSJ.com
OCTOBER 7, 2010 Wall Street Journal by Michael Milken. Despite
high unemployment, declining education standards and greater
competition from China and other countries, we can extend America's
pre-eminence long into the future if the public and private sectors—and
all of us as individuals—assume greater responsibility for our common
destiny.

Six areas in particular provide opportunities for positive change:

• Housing. • Entitlements. • Education. • Health.• Immigration.• Energy.
Michael_Milken  immigration  human_capital  education  energy  entitlements  housing 
october 2010 by jerryking
Illness as Economic Metaphor - WSJ.com
JUNE 20, 2009 | Wall Street Journal | By MICHAEL MILKEN and JONATHAN SIMONS. The first rule, as always, is do no harm.

"[There's] a remarkable alignment between treatment regimens for sick economies and sick people. In both cases, it's important at some point to let the patient's immune system carry the load of recovery. Overtreatment is bad medicine.

Before the 1970s, our economy's "immune system" resided in financial institutions, especially banks and insurance companies. Companies looked to these institutions for capital that could restore growth and create jobs whenever the economy got sick. Beginning with the 1974-75 recession, however, capital markets took over the healing function; equity and bond markets provided the "antibodies" that corporate America could depend on to fight off the infection of recession.

Economies that lack the crucial immune-system component of a corporate bond market tend to suffer longer, deeper recessions. The most obvious case in point is Japan, whose banks struggled to recapitalize in the 1990s.
'70s  antibodies  capital_markets  deleveraging  economic_downturn  financial_institutions  immune_system  metaphors  Michael_Milken  overtreatment  recessions  stress-tests  
june 2009 by jerryking
Why Capital Structure Matters - WSJ.com
APRIL 21, 2009| Wall Street Journal | by MICHAEL MILKEN

The optimal capital structure evolves constantly, and successful
corporate leaders must constantly consider six factors -- the company
and its management, industry dynamics, the state of capital markets, the
economy, government regulation and social trends. When these six
factors indicate rising business risk, even a dollar of debt may be too
much for some companies.
corporate_finance  capital_structure  Michael_Milken  debt  equity  capital_markets 
april 2009 by jerryking

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