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

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

#91

Post by ESchmidtSeesYou » Sat, Oct 16, 2010, 1:45 AM UTC

8ren wrote: post #15

microcredit seems hopeful: http://en.wikipedia.org/wiki/Grameen_Bank While the love of profit can be evil, if a business is actually creating value (eg. a windmill saves the labour of hand-milling flour; division of labour; technology in general, including methods of organizing labour), there's an opportunity for the bigger pie thereby created to benefit everyone. Just shifting money around (which includes theft as w…

I used to be big on microcredit, until I realized it isn't actually profitable (as is claimed).

The vast majority of funding for microcredit organizations comes from government. It's still charity, even if it can often be fairly efficient charity.

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

#92

Post by ESchmidtSeesYou » Sat, Oct 16, 2010, 1:47 AM UTC

borisk wrote: post #59

Andrew_Quentin wrote: post #50

Earlier quoted context omitted.

You mean it would be best that others could copy the ideas of inventors so that inventors die poor rather than breakthrough pioneers who have given this world the digital age, or at least have contributed towards it significantly, be rewarded appropriately?

Right, Bill Gates - the inventor of the PC, word processing, electronic spreadsheets and more ...

And convicted monopolist. Not all good, not all bad.

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

#93

Post by yters » Sat, Oct 16, 2010, 1:47 AM 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.

If the people are responsible enough to use it correctly.

See this not happening in Afghanistan, where their acceptance of drugs and all other sorts of questionable behavior has left their populace lazy and subject to strongmen and corruption.

As a side note, I'm quite sure America will not become Afghanistan if we legalize drugs and pederasty. Why, I can't really say...

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

#94

Post by ESchmidtSeesYou » Sat, Oct 16, 2010, 1:51 AM UTC

Lendal wrote: post #27

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.

This is basically correct, but it still depends on one's values.

Who do you value more, the current generation or future generations? Essentially the perpetual argument over the standard discounting problem.

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

#95

Post by ESchmidtSeesYou » Sat, Oct 16, 2010, 1:53 AM UTC

jakarta wrote: post #44

makmanalp wrote: post #37

Earlier quoted context omitted.

This is ad hominem if I've ever seen it. Especially in corrupt societies, I feel like jobs would fare much better than donations by: 1) Increasing economic activity which is required for growth 2) Making sure the money goes to where it's supposed to, and used the way it's supposed to. (Remember the stolen OLPCs? Donations don't always make it to the destination if they're juicy targets.)

A number of countries experimented with shock treatment capitalism as a means of quickly bringing their economies up to speed. Take Russia or Bolivia as examples of what can go wrong. In each case, they quickly freed up their economy and tried to privatize everything. The problem was, they had no real legal system in place to properly check that activity. Key national industries went into the hands of just a few weal…

You can blame people like Larry Summers, who advocated shock therapy when he was Chief Economist of the World Bank, devastating the economic potential of the former Soviet bloc.

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

#96

Post by lionhearted » Sat, Oct 16, 2010, 1:56 AM UTC

I disagree with him, but there's merit in what he says. Let me give you an example.

I had coffee in an NGO-operated cafe in Siem Riep, Cambodia. All profits went to running a small school for 10 kids.

I did the quick math on a napkin, and realized they were doing far worse as an NGO/charity than they would be to help people as a for-profit business.

Observe: With a 20% net profit after all expenses (which I think they had, if not higher), they'd be able to have enough of a downpayment to open a second cafe within less than a year. A year after that, they'd have 4-5 cafes opened. In three years total, they could be around 8-12 cafes.

At that point, they'd be producing 12 times as much income. They'd also be employing 12 times as many people, and working in a cafe is a really good job in Cambodia. (Air conditioning, pleasant working conditions, friendly client base, regular hours, not dangerous - unlike most Cambodian work).

But by paying it all out right away, they have much less impact. What they're doing is good, yes, but they might be being a little shortsighted if their goal is to do the greatest good. Currently, they were employing 10 people or so (plus the people who did construction, installation, painting, decoration of the cafe, etc) If they reinvested profits for 4 years, they could be employing 120 people who all get better wages and working conditions who can help their families, and they'd be generating 12 times as much in profit. At that point, if they started getting 1/10th of what they were making to charity, they'd be giving more than they are with one cafe.

Consider that. As a charity, they operate one location, employ 10 people, and educate 10 children. If they ran it as a business, in only four years they could run 12 locations, employ 120 people, and with only a fraction of their profits could educate 12 children. Plus, they'd still have the other 90% of profits to open more cafes, or other businesses, or to help more people, or to open hospitals, or whatever. I've heard similar critiques from a local Khmer businessman and an Indian engineer/restaurant owner I met there. NGO's, while well intentioned, might be stifling development in Cambodia. Maybe. At the very least, running that cafe for-profit and reinvesting profits would've produced a hell of a lot more good very quickly.

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

#97

Post by ESchmidtSeesYou » Sat, Oct 16, 2010, 2:04 AM UTC

CamperBob wrote: post #68

awakeasleep wrote: post #18

I think about this in regards to Mr. Gates. He amassed such a huge fortune by building walls around his software, limiting people's potential in a way. Was it necessary? Did proprietary software need to happen to spur innovation? What about his uncompetitive practices? I end up wondering what the balance of 'good' would be in the world if instead of taking everything he could, he had allowed others to grow and shared…

Did proprietary software need to happen to spur innovation? To the extent that the Wintel monopoly resulted in lower hardware costs, it's hard to see any intellectually honest Linux or BSD user arguing otherwise. You would not be able to buy 3+ GFLOPS systems with gigabytes of RAM and terabytes of mass storage for less than $1000 without the kind of mass standardization that, history suggests, can emerge only from mo…

Oh, really? You're actually making the opposite argument: divided technical leadership is what drove most progress in personal computing. Unless you yearn for the days of the IBM mainframe...

The Economics of the Microsoft Case, by perhaps the best technology economist there is, Timothy Bresnahan of Stanford:

http://citeseerx.ist.psu.edu/viewdoc/summary?doi=10.1.1.24.7...

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

#98

Post by lionhearted » Sat, Oct 16, 2010, 2:04 AM UTC

jakarta wrote: post #49

maxawaytoolong wrote: post #33

Earlier quoted context omitted.

"... and own a monopoly" Like Bill Gates and Microsoft, who were actually convicted as monopolists? After working in aid in Africa, I have to say I agree more with the Mexican monopolist than the American one.

That's the point. Bill Gates was convicted of being a monopolist and checks were put on what his company could and could not do. That does not happen in Mexico. In more extreme cases, look at John D. Rockefeller's Standard Oil. Rockefeller used to be the wealthiest person in the world (according to some, if you inflation adjust his money, he may have been the wealthiest person in the last 200 years). His company was…

> In more extreme cases, look at John D. Rockefeller's Standard Oil. Rockefeller used to be the wealthiest person in the world ... We have checks in place to curb the anti-competitive forces of certain companies.

If anyone is curious about John Rockefeller, I'd very strongly recommend "Titan" by Ron Chernow, which is a very detailed and fair biography of Rockefeller. It's one of the more important biographies I've read for my own development as a person.

After reading it, I'm thoroughly convinced that the oil industry would've been much smaller and much more expensive without Rockefeller's work, and he was a genius about chemistry, engineering, distribution, and all sorts of things. Rockefeller is probably in the 10 Americans of wealth created of all time - oil prices fell a huge amount due to Rockefeller's leadership, ability to find talent. He paid people well and treated them well. Did a lot of philanthropy, and raised his kids really modestly too. They lived in a three bedroom home with his wife and six kids for a long time, treated people really well. His kids didn't know they were one of the wealthiest families in America until they were teenagers.

Really an amazing guy. I'd recommend that biography to anyone. I think most people, even people who strongly believe in social causes and regulation, will admire the guy a lot after reading his biography. He did a massively lot of good for the world.

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

#99

Post by jorgeortiz85 » Sat, Oct 16, 2010, 2:17 AM UTC

jamn wrote: post #73

jakarta wrote: post #20

I don't place a lot of value on Carlos Slim's advice. His vast fortune has basically been a result of his ability to practice regulatory arbitrage and own a monopoly (and stifle competition) in Mexico, a country with a highly inefficient governance system. If the political system over there ever became really functional, his empire would be broken apart and much of his wealth would contract.

Even though Telmex (his landline company) was acquired from the state, and therefore was a monopoly from the start, Slim faced a monopoly by Iusacell on the wireless phone industry, which he managed to break and manage to get Telcel (his wireless company) to become a monopoly basically by making people want to switch. Slim's story includes several investments on different industries, including specialty shops (Sanbor…

You can't think of any ways Telmex could leverage its landline monopoly into advantages in the wireless sector? Or use an existing monopoly to prevent new competitors from gaining traction, no matter how well-funded?

Telmex charges exorbitant fees for any call that needs to connect to one of their customers. Given that they own 90% of the market, it's impossible to run a telephone company without letting your customers call Telmex customers. If you have to pay Telmex's fees, there's no way your prices to customers will be competitive.

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

#100

Post by eru » Sat, Oct 16, 2010, 2:29 AM UTC

ESchmidtSeesYou wrote: post #92

borisk wrote: post #59

Earlier quoted context omitted.

Right, Bill Gates - the inventor of the PC, word processing, electronic spreadsheets and more ...

And convicted monopolist. Not all good, not all bad.

I guess you did not spot the irony.