Tuesday, February 25, 2020

Perpetual Foundations

Scott Alexander has an interesting review of Rob Reich's Just Giving. Along the way he notes Reich's opposition to perpetual charitable foundations and endowments, and Reich's drawing on Mill's criticism of them in the article usually now referred to as "The Right and Wrong of State Interference with Corporation and Church Property". I've read Reich's discussion of this before, and what struck me immediately was not just what Reich highlights from Mill's argument but what he glosses over.

Mill is very, very far, of course, from being the first person to criticize perpetual foundations and endowments; it was a longstanding anti-Catholic trope by Mill's day. Perpetual foundations and endowments in Europe were mostly a byproduct of the Catholic Church's management of monasteries, hospitals, and the like, and spread from there to certain civil uses (like the Bridge House Estates, founded in 1282 by the City of London to maintain bridges and still in existence maintaining London's bridges and, by cy-près, other projects beneficial to London). But even into the early modern period most of the major perpetual endowments and foundations in Europe were those of the Catholic Church, and the arguments against them were in fact justifications for the state seizure of the assets of Catholic churches, hospitals, and monasteries. Mill is, to his very great credit, completely aboveboard about this, and recognizes that his argument is in fact in this tradition; what he is doing is generalizing the principle and extending it in particular to the Church of England, and he notes that C of E protests against such state seizures would equally be a protest against its carrying off the monastic and ecclesial property of the Catholic Church in England and Wales (or, at least, all of it that the state left it). Of course, it's also the case that a reason for the argument is that the Church of England was one of the major obstacles to a number of utilitarian reform projects, and still even at that time had a considerable amount of power as a semi-independent institution; Mill is arguing for the use of state coercive power to take the resources by which it was able to exercise its opposition and apply them to projects utilitarians like himself would consider better uses. (This is one reason why Mill does make a qualified defense of foundations and endowments; he doesn't have a problem with them if they can always be turned to new utilitarian projects.) Mill puts a great deal of emphasis on the difference between the living and the dead, but, of course, it was not the dead who were his opposition, but the living clergymen who depended on the funds. And the argument was in fact an argument for a massive increase in state power by which to bring the C of E clergy to heel.

Reich very briefly gestures at the anti-Catholic character of the background, in talking about Turgot, but mostly writes his discussion of perpetual foundations and endowments in a way that, it seems fairly clear, deliberately skips around most of it.

While the Catholic Church and other religious bodies are still major sources of perpetual endowments and foundations, the disappearance of so many longstanding ones down the insatiable maw of the European nation-state before the colonial empires became developed enough to devour the resources of colonies instead, as well as various anti-clerical surges and shifting property laws, has had the result that a lot of resources flow through other channels. But the point is still of significance today, because the power to reorganize foundations and endowments to new purposes is, by its very nature, a power to raid not the dead but nonprofits of all kinds. And, indeed, this is precisely what Reich is really arguing: not that dead hands are ruling but that power is in the wrong living hands. And, like Mill, he thinks that power should be in other living hands. To his credit, Reich is fairly aboveboard about this aspect of his argument (see this interview, for instance). But it's worth recognizing that the argument is in fact a partisan contribution to a complex struggle over how power works, and that the assessment of the argument will really depend on one's assessment of that overall power struggle (including whether Reich's argument is really pro-democracy despite such arguments having a history of being statist, and whether he's really just arguing for the supremacy of politicians rather than donors, and whether it is really acceptable to give politicians the new power to seize, say, the endowment of Harvard and turn it to whatever ends the party in control deems suitable).

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