Alana Semuels: Do you disagree with the implications of my piece, that philanthropy may give the wealthy too much influence in the public-policy arena?

Reid Hoffman: There’s differential power among people. Some people are in positions of strong political power and other people aren’t. Some people are wealthy and other people aren’t. There are probably better systems. We haven’t discovered them yet.

Then you say, well, do the wealthy have disproportionate influence in the world? The answer is yes. Is philanthropy a channel by which some of this influence is then realized? The answer is of course yes. But many of us are pretty skilled at how to apply capital to effective projects. It’s part of how we got to where we are. It’s part of creating LinkedIn, part of being a venture-capital investor. It is actually in fact a good thing and not a bad thing.

Does that mean that, sometimes, some people use it to potentially less good ends? The answer is yes. But broadly speaking, I think having people who know how to apply capital and leverage effective methods, doing that for social and philanthropic good, is a good thing. You just have to be careful about politics and about abuse.

Semuels: Inside Philanthropy calls your approach to philanthropy capitalistic. It suggests you look at how your money can reach the most people, rather than funding causes that might not be as efficient. Are there flaws to that approach?

Hoffman: Are there some flaws to a capitalist approach? Yes. Are there some flaws to the way that people might be giving their money, whether it’s to religious organizations or to the opera or to the thing that makes them feel better rather than the best possible impact? The answer is absolutely yes.

An effective-altruism point of view is: If you have wealth, and at least a reasonable moral compass, to ask, “How do you create the most good for the most people?” I’m not saying this is the perfect system. But what’s the better system? If you say, “form a democratic committee where everyone votes on everything,” well, then you get Congress. It’s a question of, what system gets more of the really good outputs? It’s not at all saying that a capitalist system or an investment-oriented system has nothing to correct and nothing to improve. That’s foolishness to say that. However, it has a lot of strengths that contribute a lot of good outcomes.

Semuels: Are philanthropists more effective than government in effecting change?

Hoffman: If you contrast the productivity that comes from a networked or capitalist distribution of resources versus a centralized planning system, frequently referred to as communism or socialism, the network approach does much better when it’s applied accurately. There are arguments for when not to apply it accurately. For example, I’m not a big fan of private prisons, and I’m not a big fan of private militaries.