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There is some irony in the location for the annual Milken Global Conference, which this year celebrates a decade of meetings. The Beverly Hilton, a plush walled garden on busy Santa Monica Boulevard in Beverly Hills, used to be the site of Milken's high-80s meetings of buy-out funds and takeover specialists. As the LA Times noted in a front-page profile this week:
There are a few echoes of the past: The four-day conference is held at the same hotel where Milken in the 1980s presided over what became known as the Predators' Ball — a gathering of corporate takeover artists who used his high-yield junk bonds to finance their hostile bids. And the predominant attire is still the Wall Street power suit — dark and tailored, shirt preferably white or light blue (all the better for that hallway interview with Bloomberg Television or face time with CNBC anchor Maria Bartiromo).
This year, in a crowd of boldface names that includes Governor Arnold Schwarzenegger, Rupert Murdoch, Ted Turner, Sumner Redstone, John and Theresa Heinz Kerry, Boone Pickens, Michael J. Fox, Andre Agassi, Kirk Douglas, Sydney Pollack, Frank Gehry, Sherry Lansing, Quincy Jones, Mort Zuckerman, and Eli Broad among others, it's Milken himself who stands out.
After all, his is a remarkable story of personal renovation - at 61, Milken has gone from the notorious junk bond king of two decades ago to a leader in innovative economic views, changing capitalism, and American philanthropy.
The Global Conference is a product of the Milken Institute, a 40-person think tank with staff in Los Angeles and Washington DC, which focuses on broad economic issues that affect change; it aims to accelerate that change by bringing together economists with government types, business leaders, financiers, and philanthropists. Oh, and Hollywood celebrities, of course. Milken clearly knows the value of a well-known face, and he easily salts the Institute's work with connections to a who's who in the entertainment world.
There are other projects, including the Milken Family Foundation; through the Milken National Educator Awards, the MFF has awarded a total of about $54 million to more than 2,000 teachers. And there's FasterCures/The Center for Accelerating Medical Solutions - a non-profit "action tank" formed under the auspices of the Milken Institute with a mission to identify and implement global solutions to accelerate the process of discovery and clinical development of new therapies for the treatment of deadly and debilitating diseases.
But the Milken Global Conference is Mike Milken's public face on the powerful world of insiders, world leaders, and CEOs - its success gives Milken even more entree than he enjoyed before; its platform allows deals to happen, deals that are increasingly philanthropic in nature. It was no accident that this year's conference was the first to feature a full philanthropic track, and that leaders in the social entrepreneurship area were very much in evidence.
It's become one of the top three or four conferences in the world for serious economic discussion - the kind with real-world repercussions. The LA Times summed it up well:
The event has grown into a confab of Hollywood heavyweights and political and academic stars — even the occasional Olympian. Milken sets the agenda, and it's an eclectic one, from the future of K-12 education to the future of prostate cancer treatment to the future of capitalism. (Luckily for the high-net-worth gathering, the conclusion of Monday's panel of three Nobel laureates in economics was that the free-market system had one.)
Think the World Economic Forum in Davos, Switzerland, without the skiing and antiglobalization protesters and with better shopping. (Which is why some have dubbed this Davos West.) Or the Clinton Global Initiative without the presidential invitation and the $15,000 annual membership fee.
If there can be said to be a single organizing principal of this Milken Global Conference, you'd have to choose this one: its organizers' core belief that the opening of capital markets is inherently good for human society. Applied to philanthropy, that belief in capitalism came out in what may well be the manifesto of this year's conference - that in the United States, "capitalism and philanthropy are twin expressions of an underying set of values."
That principal was laid forth in today's panel on "Entrepreneurial Philanthropy" by Don Randel, president of the Andrew W. Mellon Foundation. Randel argued that public civility, an organized well-regulated society, and the rule of law expressed "a kind of trust," a common belief that allows those in the society to believe in institutions.
"The culture of philanthropy rests on the same values that the great success of American business and free markets rest on," he said.
Teresa Heinz Kerry, serving on the same panel, took that theme of civic trust a step further, arguing that American volunteerism was what spurred its philanthropic instinict.
"Because you had to cross the country, you had to band together and perservere, there is a real history of volunteerism that you don't experience in other countries, and I've lived all over the world. All the kinds of group support systems - it's an American thing, it doesn't happen anyplace else. It is the great strength of America, going beyond yourself. That is why American philanthropy is so dominant."
Mike Milken noted that "individuals give today at least four times what comes out of corporations and foundations - most of the money being given is coming from individuals." And while that's true, the economists on his Nobel winners panel at lunch focused not on individuals, but on systems; economists tend to shy away from philanthropy as a major economic driver - even though the combination of individual philanthropy and overeas remittances (money sent back by immigrants to their countries of origin) - amounts to half a trillion dollars each year.
The ecomomists Gary Becker and Kenneth Arrow tussled lightly over the role of government in the increasingly capitalist world society, but really around the edges it was an argument over just how much good light regulation could do to continue to spur capitalist growth. They approached the world's healthcare needs - from disease in the developing world to the aging population of western nations - from a purely democraphic-economic standpoint: there are more aging people, so a market for caring for aging people is of value. Malarial and other deaths from poor water will decrease when market conditions align to fix the problem. The HIV/AIDS epidemic in Africa has discouraged investments in higher education because people who don't believe they're going to live very long don't invest in learning and aspiration.
A little cool and clear, shall we say, like the weather here in Los Angeles today.
But sometimes the truth is best served with a chilly breeze, especially in a world that celebrates its philanthropist-capitalists on the very same magazine covers increasing numbers. Becker was merely voicing a common perception when he stated that allowing markets to create social change - in their own time, of course - "is the greatest gift capitalism has provided."
While traditional philanthropy is honored here (there are any number of big-name foundation leaders here, from Milken himself to Eli Broad), it's innovation and collaboration that are the watchwords; that overlap with capitalism and creating markets. It's no accident that Milken launched its first philanthropy track this year - less than 12 months after Warren Buffett's historic gift and in cultural wash of increased media attention to giving. Still, when Carl Schramm, president of the Ewing Marion Kauffman Foundation, stated boldly that "foundations historically have been the most critical institution in the advancement of society," there wasn't a rush to agree.
Indeed, as a brand, the word "foundation" isn't particularly in favor. Here's the advice Don Randel had for the budding philanthropists of today:
"Don't go hire a bunch of foundation bureaucrats to run it for you...it gets to be a business of self-perpetuation, with more and more layers of hoops to jump through to provide every last grant. And then grant manangers begin to think it's their money."