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

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

#131

Post by jacobolus » Sat, Oct 16, 2010, 4:12 PM UTC

lionhearted wrote: post #117

jacobolus wrote: post #21

Earlier quoted context omitted.

“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…

> 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 So he paid $900 million for $110 annual profits? So a P/E of around 8? That's not an obscenely low price, especially if they already had complete market share and premium pricing. The only way to go from there is down, and it's a high capital business that'd most lik…

No growth potential? Yearly profits proceeded to shoot up by like 200% over the next several years.

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

#132

Post by orangecat » Sat, Oct 16, 2010, 4:57 PM UTC

pessimizer wrote: post #127

orangecat wrote: post #108

Earlier quoted context omitted.

Private individuals shouldn't be depended on to do anything but further their own interests Except for politicians, they'll be noble. If he created a lot of good jobs for people with fair wages, and charged fair prices, that's a massive good and can't be denied. He won't, though, because when things are done fairly, there's not a lot of profit to be made. Utterly unfounded. Counterexamples that come immediately to mi…

Politicians shouldn't be depended on to do anything but further their own interests. That's why we introduced democracy, in order to get their interests as closely aligned to the public interest as possible. Nobles are a different story altogether. >Utterly unfounded. Counterexamples that come immediately to mind are Steve Jobs and Larry Page and Sergey Brin. I'm not sure how your personal idols refute my ideas of fa…

I'm not sure how your personal idols refute my ideas of fairness.

I'm claiming they got rich by means of voluntary exchange with customers, rather than exploiting people. Do you disagree?

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

#133

Post by csomar » Sat, Oct 16, 2010, 5:06 PM UTC

As someone who is from a third-world country and self-educated, I can't stress enough on providing access to education.

We can create 5,000 jobs today. Simple workers with $10/hour pay. 100 years later and the country won't move. The workers don't understand the power of education, they won't teach well their children and in a third-world country, it's very unlikely they'll get a decent one.

I don't mean by education, an MBA, Ph.D... or all the buzz-words. I mean HN culture, real programmer, self motivation to work and exploit your full potential, mind openness to read and accept the other...

Comparing myself with my other peers, I'm a lot in a better condition and I feel proud of myself, doing something useful instead of spending my time on cafés and playing/watching football.

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

#134

Post by lzw » Sat, Oct 16, 2010, 5:23 PM UTC

csomar wrote: post #133

As someone who is from a third-world country and self-educated, I can't stress enough on providing access to education. We can create 5,000 jobs today. Simple workers with $10/hour pay. 100 years later and the country won't move. The workers don't understand the power of education, they won't teach well their children and in a third-world country, it's very unlikely they'll get a decent one. I don't mean by education…

The education you're talking about doesn't exist in first world countries either. The education, from elementary school to college, is focused on "teaching" people to be good: citizens (that is, compliant with government demands), consumers, and employees. The highest virtue in schools in first world countries are athletics and popularity. The lowest virtues are learning.

If you create jobs in an area, then people have the economic power to come together and hire teachers and create a school. If an external party, such as government, creates the school, the school will be focused on the agenda of that third party.

Education isn't a commodity like cotton. Pretty much all cotton is the useful as cotton. Much of the education in first world countries is focused on keeping people down, dependent, and unquestioning.

Every decade the schools teach less, and in less detail. It is pretty scary. (I expect to be downvoted because I believe most participants on HN are college students or recent graduates who haven't had enough time out of college to get the perspective that results in these conclusions.)

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

#135

Post by lzw » Sat, Oct 16, 2010, 5:25 PM UTC

lionhearted wrote: post #98

jakarta wrote: post #49

Earlier quoted context omitted.

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 re…

I haven't read Titan, but I can recommend "The Myth of the Robber Barrons". Excellent book.

The short story is this: All those robber barrons did far more good for society than the government that broke them up. The propaganda about how they were doing so much harm and needed to be broken up for the good of society is the basic propaganda of socialism. But of course, since it is taught as history, people believe it.

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

#136

Post by lzw » Sat, Oct 16, 2010, 5:30 PM UTC

napierzaza wrote: post #83

volski wrote: post #77

Earlier quoted context omitted.

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 broken into parts in order to promote competition. John D. Rockefeller actually ended up being a lot richer because the courts broke up Standard Oil[1]. He went…

I agree with your statement, while at the same time it was the monopoly that got him to the position he was in. It's hard not to make money once you're at that point. I don't think he could have gotten that rich if actual competition existed and he was investing in hundreds of companies. He didn't do any manoeuvring to get his stakes in all those separate companies, unless you count back room deals.

A monopoly is someone who owns an entire market. In the history of america, the only monopolies that have existed were government granted ones, like the US Postal Service. The government passed a law prohibiting the offering of first class mail. At the time they did this, there was a thriving and growing and diverse mail delivery system made up of thousands of small businesses and private contractors.

Standard Oil was never a monopoly, and never had monopoly pricing power. Standard oil was only ever able to get large because they quickly and constantly drove down the price of gasoline.

There is this tendency for americans to call businesses that are not monopolies under the definition to be monopolies to justify using violence against them (it is violence when a company is forcibly broken up or forced to not engage in "anti-competitive" (by which they really mean "competitive") activities.)

The reality is, none of these businesses were monopolies, and as much as I hate microsoft, they weren't a monopoly. Existing laws would have been sufficient for enforcement against microsoft for their crimes, which included fraud and misrepresentation. But the "anti-trust" laws are all about preserving government power and are used only against businesses that become big enough to wield influence and thus attract opponents in government... usually opponents in government in the pocket of competing businesses.

The US would be a better country and have a more robust economy, if Standard Oil had never been broken up. This and the "anti-trust" movement is a triumph of socialism over capitalism.

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

#137

Post by lzw » Sat, Oct 16, 2010, 5:33 PM UTC

huherto wrote: post #126

sprout wrote: post #65

Earlier quoted context omitted.

Wow, that's a load of non-sequiturs. Monopoly is a side effect of the massive corruption plaguing Mexico. Microsoft doesn't even come close. As for aid in Africa, that's a specific charity you worked with in Africa. There are people who do good work there. Dismissing aid because people are bad at it is like dismissing software development because people are bad at it. One way or another it's necessary.

"Monopoly is a side effect of the massive corruption plaguing Mexico" Hold it. Please don`t make broad accusations. If you have any specific information about Telmex say so, but do not generalize. That badly hurts our reputation and it has been said many times that people just take it as true. Mexico has corruption levels that are consistent with outher countries with similar development levels. http://en.wikipedia.o…

Americans operate under the delusion that our government is not corrupt. They see corrupt actions as legitimate. For instance, governments here regularly steal property from private citizens without having the citizens be charged with a crime (let alone convicted.)

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

#138

Post by lzw » Sat, Oct 16, 2010, 5:37 PM UTC

bilbo0s wrote: post #82

makmanalp wrote: post #40

Earlier quoted context omitted.

Wow, and this one is a false analogy. Just because one is from America and the other is from Mexico doesn't mean that they've been the sole affectors of their respective countries' welfares, or that the current (good or bad) state of their countries is a direct result of their actions. What is this, fallacy friday?

I was thinking it was fallacy friday too. I think when people debate things like Charity, they take leave of logic.

I think the leave of logic is to reject economics and just believe in something for ideological reasons.

Slim is making an economic point. Part of the reason there is no end of poverty in this US is due to the "War on Poverty" which destroyed the charity system (via government takeover of welfare programs) and has inhibited job creation (via government regulation, taxation and inflation.)

We were well on our way to ending poverty in this country before the New Deal was done to us.

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

#139

Post by lzw » Sat, Oct 16, 2010, 5:38 PM UTC

jshen wrote: post #106

makmanalp wrote: post #40

Earlier quoted context omitted.

Wow, and this one is a false analogy. Just because one is from America and the other is from Mexico doesn't mean that they've been the sole affectors of their respective countries' welfares, or that the current (good or bad) state of their countries is a direct result of their actions. What is this, fallacy friday?

Mexico has virtually no safety net, a fraction of redistribution of wealth for social good such as infrastructure and education, etc Using taxes for laying a foundation that provides greater opportunity for society in general is very similar to doing it with charity. Not doing it is very similar to saying, "leave it to the private sector"

It is "very similar" in the way that buying a meal at mcdonalds is "very similar" to being mugged. In one case you do it voluntarily and the people involved are incentivized to do it efficiently.... and in the other case you do it at gun point and the person involved has no incentive to spend the money efficiently.

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

#140

Post by lzw » Sat, Oct 16, 2010, 5:44 PM UTC

huherto wrote: post #129

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.

You are attacking the person. Not his arguments. Most people assume that just because he became so rich in a developing country he must have done it thru corruption. Carlos Slim is an engineer, he teached algebra and linear programming at the national university. Before buying telmex he was already very successfull in many areas( real state, industrial, financial, comercial and mining). Many people say that he was so…

Why can't Mexico have somebody as talented as Warren Buffet? It is because Americans are prejudiced. (note this may not be true of HN readers, I'm speaking of the broader american culture.)

They don't believe they are prejudiced, they don't know they are prejudiced, but they believe what they are taught to believe. And they believe that mexican is full of corrupt people with little motivation. this isn't racism... it is the image of mexico we are sold by politicians ("all drugs come from mexico" "mexican immigrants just want to use our welfare programs") and the media.

I'm not sure if they view all spanish speaking countries as corrupt and full of people who need to be "Saved" by american imperialist "enlightened socialism" or if mexico is a special case.

They talk fondly of Venezuela, because Venezuela has a strong leader who is a clear leftist and has done photo ops with Oliver Stone and other prominant leftists. (nevermind that he appears to be the most corrupt leader in the western hemisphere.)

Americans' world perceptions are shaped by media. And media doesn't allow for the possibility that people everywhere are essentially the same, with cultural differences. So, americans think that the Nazis had to come to power in Germany because germans are genetically fascist people, for instance.

I say this, not as an outsider criticizing americans. But as an american who has studied how the nazis came to power, and how ideology is used to shape americans perceptions of other people, as an academic subject.