“I was in Forbes magazine listed as a billionaire, which really, really pissed me off.” This is a very strange, but very real, quote from Yvon Chouinard, the founder of Patagonia, a multi-billion dollar outdoor apparel company. This week, headlines highlight Chouinard’s decision to give away his ownership in Patagonia, valued at ~$3 billion, to a trust that will use future profits to battle the climate crisis. Clearly, Chouinard is an outlier in the business world, especially regarding the choices he makes about his income. Chouinard and Professor Coppock’s brother might get along quite well, since they both gain significantly less marginal utility per additional unit of income than the average person. They both prefer to spend time outdoors instead of earning more income.
Chouinard’s decision to give away the $3 billion that were rightfully his are still in line with the basic economic principle that peopledo things when the expected utility is greater than the expected cost. In this case, Chouinard’s contributions to fighting climate change will personally bring him a marginal benefit greater than $3 billion would. This is quite remarkable to think about, especially because Chouinard (aged 83) will likely not be living to see how his dollars will make a difference. Perhaps Chouinard is an altruistic individual that cares greatly about the well-being of others, and the threat of climate change threatens that well-being.
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When people donate this much money to charitable causes it always leaves me to question where their utility comes from. Does their utility come from them actually helping other people, or in this case the world as a whole? Or does it come from their need to look charitable in the eyes of the media? This difference is important because it differentiates between an altruistic cause or a purely selfish one. The altruistic cause is normally out of line with the basic economic assumptions where economists believe everyone to be solely acting out of self-interest. It is not in Chouinard’s self-interest to invest in something that he will never see the positive consequences of. It would be more economical for Chouinard to be noticing that his life is nearing its end and wanting to leave a good impression on the public (the robber barons of the 19th century such as Carnegie and Rockefeller had great success with this tactic). With this reasoning, he automatically sees the positive reaction and generates utility from his donation. I would also like to question, why make such a public donation if he was purely acting altruistically? So the question still lies – is Chouinard acting out of self-interest with a good media team to spin his donation to be selfless or does he truly only care about the environment?
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