World's Richest Man: 'Charity Doesn't Solve Anything' • Hacker News Board

Re: World's Richest Man: 'Charity Doesn't Solve Anything'

#21

Post by jacobolus » Fri, Oct 15, 2010, 7:17 PM UTC

mcknz wrote: post #9

pchristensen wrote: post #4

Not a huge fan of Slim based on what I've heard, but I mostly agree with him on this. Makes me wonder though, what he's doing holding on to tens of billions in wealth if he could be building businesses and creating jobs for the poor instead. It makes it sound like "Business is better than charity, but I'd rather just be rich"

Rich in irony as well -- Slim's purchase of Telmex, the state-controlled telephone monopoly, meant that he could stifle competition and charge exorbitant rates. That's pretty much as far as you can get from encouraging employment for the poor.

“Purchase” is a pretty rich description, too. Slim paid an obscenely low price for Telmex – it was making $1.1 billion yearly profit, and Slim’s company paid less than $900 million for a 10% stake, which money came from loans Slim got on letters of credit (i.e. it wasn’t even his own money). Telmex was and is a near monopoly, with the kinds of monopolistic pricing that goes along with that.

Basically, Slim’s fortune is made on a corrupt business deal with the corrupt president of the time (Salinas) who he was buddy-buddy with, followed by gouging the Mexican citizenry on phone bills for the last 2 decades. (Salinas’s PRI party made out well too, as Slim gave lots of money back to them over the subsequent years.)

I really don’t think he’s in any position to talk about charity.

Re: World's Richest Man: 'Charity Doesn't Solve Anything'

#22

Post by [deleted] » Fri, Oct 15, 2010, 7:19 PM UTC

[deleted]

Re: World's Richest Man: 'Charity Doesn't Solve Anything'

#23

Post by _delirium » Fri, Oct 15, 2010, 7:20 PM UTC

byrneseyeview wrote: post #17

_delirium wrote: post #6

I can buy the argument that just shoveling huge amounts of aid to people doesn't fix anything long-term. But it's not solely a decision between that and no charity. He mentions employment, which often benefits from having a stock of not-yet-exploited research to commercialize (SV firms do a lot of innovation, but they also do a lot of commercialization of stuff for which the early-stage R&D was done in academia, at g…

they also do a lot of commercialization of stuff for which the early-stage R&D was done in academia, at government research labs, etc. So they turn it from something of theoretical value to something that actually improves people's lives--to the point that they're willing to part with money to have it? That seems to add a lot more utility on the margin. Of course, it wouldn't mean anything if there weren't inventions…

Yeah, I'm not arguing that commercialization isn't useful; it's the main way theoretically valuable ideas get actually produced. But I think it can be very helpful to innovative industries to have this big stock of theoretically-valuable ideas waiting to be mined for commercialization. Otherwise you either only get incremental advances, or you need big firms with their own R&D groups (like Microsoft Research). You can also have startups based on blue-skies research in some areas (especially pharma), but investors in most areas are pretty wary of funding a startup that has too much basic research in their critical path, due to the high risk.

Re: World's Richest Man: 'Charity Doesn't Solve Anything'

#24

Post by lukifer » Fri, Oct 15, 2010, 7:21 PM UTC

Seems to me that charitable investment in education does every bit as much good as building job-creating business.

Re: World's Richest Man: 'Charity Doesn't Solve Anything'

#25

Post by estel » Fri, Oct 15, 2010, 7:25 PM UTC

DevX101 wrote: post #19

estel wrote: post #14

Earlier quoted context omitted.

Presumably it would affect the amount he is actually able to immediately use to support those in need.

He's the richest man in the world. He has enough liquid assets to aggressively pursue charitable giving if he wants to.

I doubt many people would question that he has significant liquid assets, I was just pointing out the relevance of the question. For a business owner on his scale, I'd imagine that the vast majority of his wealth would be tied up in business ventures.

Re: World's Richest Man: 'Charity Doesn't Solve Anything'

#26

Post by cynest » Fri, Oct 15, 2010, 7:26 PM UTC

bryanh wrote: post #12

I agree, a job is much better than a handout. Regardless, infrastructure and education are two things that do help people create jobs and exit poverty. Charity != giving people money.

That, and stopping widespread debilitating diseases.

Re: World's Richest Man: 'Charity Doesn't Solve Anything'

#27

Post by Lendal » Fri, Oct 15, 2010, 7:28 PM UTC

Silly argument. Both are needed.

It doesn't do any good to teach a man to fish if he dies of starvation while waiting for the fish to bite.

On the other hand a failure in employment only leads to higher demand for charity. So they're both equally important.

Re: World's Richest Man: 'Charity Doesn't Solve Anything'

#28

Post by jacoblyles » Fri, Oct 15, 2010, 7:49 PM UTC

It is pretty clear that the growth in living standards over the last 100 years has a lot more to owe to the accumulation of capital goods than the working of charity. It's true that charity can alleviate short-term suffering, but Mr. Slim's assertion has a lot of historical support to it.

But charity probably does a lot more for the giver. I imagine giving $10 billion makes you feel about as good as making the $10 billion in the first place. Society will certainly admire you more.

Re: World's Richest Man: 'Charity Doesn't Solve Anything'

#29

Post by dennisgorelik » Fri, Oct 15, 2010, 7:50 PM UTC

I like Carlos Slim's approach to charity. He still use it time to time on relatively small scale when it's an efficient too. But he focuses his effort on doing business. That's the best way businessmen can contribute to society.

Re: World's Richest Man: 'Charity Doesn't Solve Anything'

#30

Post by sbaqai » Fri, Oct 15, 2010, 7:51 PM UTC

Charity is most needed for problems that have no other natural source of funding. If the government/private sector can solve certain problems, then charities are perhaps not the best vehicle for solving those particular problems.

Buffett and Gates specifically focus on the former. Trying to reduce extreme poverty, provide healthcare, and educational opportunities. They also believe every life is of equal value. So the challenge then becomes helping the most people per dollar invested.

Some of the most well developed medical technologies/ solutions exists because their's a lot of wealthy people with those problems. A lot of male baldness and not so much malaria.

Malaria is a treatable disease. Millions die because they don't have access to care. You can't say these people would be better off employed, as if their health is not a factor in their economic output. Hence, the goal of trying to eliminate malaria is a valid philanthropic activity.

Buffett also donated through one of his children's foundations, to help solve/minimize the potential for a nuclear event. His view is pretty grim: the information is already out there, getting into more hands, and so the probability approaches 1 that an event will occur at some point in the future. What other natural funding exists for trying to solve this? It might be futile, it might be incredibly hard, but you need smart capable people working on this.

Furthermore, helping the rest of the world become a little bit more prosperous might reduce hostility, and violence that desperate people can be induced into. While businesses have had a great history of introducing wealth into the world, its always done with a profit motive. Where there is no profit potential, there is no interest of a business to be involved. A lot of these problems don't have those profit potentials. Hence, charity works in these areas.