I’ve read a number of books on philanthropy over the last couple of years, but I think this is the one I would most highly recommend if you were thinking of reading just one. I think that is because it uses Carnegie and Bill Gates as examples to show how philanthropy has been used to make the world in the image of very wealthy people.
Both men made their fortunes by using monopolistic practices and often, if not actually breaking the law, coming so close so as to leave a taint and stench of anything but an excess of morality. Both then sought a kind of redemption by giving away large proportions of their wealth. But this ‘giving away’ idea is complicated.
First of all, there are tax benefits in giving away money. At one point in this the author says that if an insanely wealthy person gives away $100 million, they might save $75 million in taxes. You might think, ‘well, we are still $25 million better off than if they hadn’t given’ – the only problem is that we don’t get to decide where any of that money is spent. It might all go to Yale, or it might go to the Opera. Money paid in taxes is much more likely to redistribute wealth more than donations to ‘charities’ do – that is, taxes tend to help the poor more than money rich people overall donate to charities – and this is because a rich person often gives their tax deductable money to their favourite form of recreation, which doesn’t always help the poor in anyway at all.
But a bigger problem is that rich donors have an out-sized influence on the overall direction of many of the organisations they support. So, even when these organisations are set up to do good, or as Gates seems to like to say, ‘to do god’s work’, their preferences can override the choices that experts might otherwise have made. I’m going to give a few examples here.
The first is in an area I’m particularly interested in – education. A while ago Gates became a bit obsessed with small schools. He noticed that small schools were often at the top of the achievement distribution curve. It is not too hard to come up with a series of reasons why this might be the case. Smaller schools have more intimate relationships with their students, they are more like a community, maybe the students all feel like family and so help each other out more, perhaps teachers get a better opportunity to more deeply engage with their students – rather seeing them as some faceless hoard. All of these reasons sound plausible enough. However, the actual reason is ‘basic statistics’. If you have a large school, it is going to be populated by lots of kids and having lots of kids will mean kids at all levels of ability. Which in turn means a large school is likely to end up pretty close to ‘the average school’ – pretty much in the same way that if I toss a coin a million times, I am likely to come pretty close to 50:50 heads to tails. But if you have a small school, and a couple of well-educated families send their kids to the school, that could tip the school’s results right up to the top of the achievement curve – in much the same way that if I toss a coin five times I might end up with all heads, and no tails. Small samples are easily skewed, large ones, not so much. If Bill had looked, he would have noticed that small schools were clustered at the bottom of the achievement curve too, and for exactly the same reason, they just ended up with more tails than heads by the luck of the draw. It is easier for a small school to over or under achieve than it is for a large school.
But Bill was more attracted by the interesting and plausible reasons for small schools doing better than he was with the boring statistical reasons – and so he pumped millions into researching and supporting small schools. All good, you say, so what if he was wrong? Money was still going to schools and so the world is still a better place. Yeah, except for what happened next. One day the results started coming in, and those weren’t so good. So, Bill decided to cut funding to the project. It’s his money after all. Except that the schools that had come to rely on that money were left high and dry. They had become victims of the whims of a wealthy donor with a short attention span, something perhaps caused by his spending too much time interacting with screen-based technologies.
But even whim isn’t the worst of the problems here. It would be hard to criticise a billionaire who sets out to eradicate polio or to end malaria or to vaccinate Africa. What could you possibly have against that? Well, again, the problem is that we are dealing with an all-too-human being, and one who has no real expertise in the area of health that he has come to dominate. He also appears to be doing a lot of this work, at least in part, to be recognised and remembered for it. Look, many of us want immortality of some sort or other, I guess. However, his immortality can complicate the lives of many, many people. An example given in this book is the efforts that are being made to fully eradicate polio. This has been a major focus of Gates and although this isn’t literally said in the book, it might be because it would make for a particularly good news story if a diseases with a name everyone knows ends up getting eradicated due to his efforts. However, in seeking to fully eradicate polio, other diseases that cause much more harm (and deaths) are being ignored or sidelined.
The problems get more difficult because people who are rich tend to think that how they became rich is natural, inevitable and an indication of their own virtue and merit. And again, perhaps we are all deluded in our own ways – but the impact of, say, my delusions are likely to be fairly minor – whereas someone who has a wealth in the order of $100 billion, they can basically weaponise their delusions. Now, for virtually all of his life Gates has spent his time protecting copywrite laws – his wealth depended upon it, so it is hardly surprising he is fairly keen on the subject. However, defending patents and copywrite laws in the face of the crushing poverty of the global south isn’t necessarily in the best interests of these people. The examples given mostly involve him seeking technological fixes for the problems of the developing world – the creation of higher yield seeds or of patent medicines – and these come with a price tag. Charity is a business in so many ways. But here the lines between aid and business become particularly blurred. The example is discussed again here of the Indian farmers forced by the high cost of Monsanto crops to commit suicide by drinking the pesticide they need to purchase and that has driven them into crushing poverty.
Another example is HIV/AIDS where he has not supported the use of drugs as a preventative (some antiretrovirals reduce the viral load in a persons bodily fluids and this in turn means those infected are less likely to pass on the virus to their sexual partners). But Gates has strenuously opposed this. Now, there might be many reasons for him doing this – one of which might be his stated concern that since there is only so much money to go around it would be more effective to pursue prevention rather than cures. However, as someone quoted here says, “access to ARVs (antiretrovirals), would be a threat to intellectual property, the regime of which he staunchly supports”.
This book is fascinating, not least because it covers so many aspects of Gates’ activities – agriculture, health, education – while also linking the discussion around these back to his employment, investment and other business histories.
The biggest concern here is that Gates has bought his way onto the world stage. He has more power than the majority of world leaders, maybe more than all of them, given he has not fixed time to retire. Also unlike those world leaders, he is almost entirely unaccountable. At one point in this book an exchange is quoted between Gates and Piketty. Piketty had just given a speech in which he called for a wealth tax. Gates is quoted as saying to him after the speech, “I love everything that’s in your book, but I don’t want to pay more tax”. Piketty is quoted as saying, “I think he sincerely believes he’s more efficient than the government, and you know, maybe his is sometimes”. Yeah, maybe he is… but there are no consequences for the times when he is not more efficient. And because he has so much power, that becomes a real problem.