The "kindness" of billionaires

killerguerilla:

Headlines will say "Jack Dorsey donates $1 billion" and I want everyone to know that's not what he's doing. He's putting $1 billion into a company that's gonna be a part of the privatization of services the government should provide. It's gonna be like the Gates foundation.

So a tiny amount of that fund will get donated, but the bulk of it is gonna turn a profit for jack, and the billionaire defenders will praise him as he gets richer while most people get poorer.

Have you ever wondered why Bill Gates has gotten exponentially richer over the last 10 years even though he says he's trying to give away all his wealth? Or why his foundation has consistently made zero improvement in education outcomes? Is he just bad at doing philanthropy?

The answer is yes and no. His foundation isn't doing what he said it would do but it is achieving the desired outcome of making him richer. That's why billionaires don't donate money, they make foundations and partnerships so they can keep making profit and look charitable.

And his prediction was right, all the headlines ALREADY say "Jack Dorsey donates $1 billion" because most journalists are, generously, innumerate, gullible shills.

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20 Responses:

  1. Nick Lamb says:

    Have you ever wondered why Bill Gates has gotten exponentially richer over the last 10 years

    No? Why would I wonder about something that's either meaningless (if you mark any two points you can definitely draw a fancy exponential curve through them if you really want to, though a straight line would be easier) or untrue?

    Ordinarily I'd be less bothered about this, but we are literally right now living through the consequences of people not grasping what exponential growth is like.

    I guess what they're going for here is something like "Why does Bill Gates still have money?" and if I'm really, really trying to be generous I could imagine they genuinely don't know the answer to that, in which case they should ask their question and wait to hear the answer, but of course you won't get Twitter followers by learning, Twitter is about loudly yelling your certainty on whatever topics you've no clue about today.

    Some private foundations (most obviously the Trump foundation) exist to allow a rich person to cheat. Trump would say "I'm donating" but the charity would get a cheque from the Trump Foundation and Trump wasn't actually giving the foundation that money. Basic sleazy Trump stuff. Many of them aren't even intended for charitable purposes (whereas Trump's supposedly was) in the first place. But the Gates Foundation isn't very like that, and if Gates gives a personal donation it's his name of your cheque not the Foundation's.

    If you're endeavoring to join the dots here, I encourage you to focus on the step which has been forgotten in this rant. How would the money flow from the Foundation back to Bill? If you're Trump then you can just engage in illegal practices like self-dealing, because you're a crook. The Foundation can buy stuff and then give it to you or "permanently loan" it to you. But that's because Trump is a crook. Is the claim here that Gates is secretly a crook? Do they have multi-billion dollar receipts for such a claim?

    • GF says:

      As someone who works in Immunology and looks at orphan diseases a lot - I will say there is really no game in town except for gates money. I can hate him for windows but his funding work in diseases that really only affect poor people is completely admirable and not widely known. I actually, given what he has done in those areas for disease, drinking water, and general health - and done so for really no benefit (witness that part of this article) - I would kind of be OK with him getting richer (but agree with the point being made of random extrapolation.

      So... Dorsey probably doing it for bogus reasons. Gates actually has, and continues, to make a real difference in the world in a way most of us could only dream of.

      • ennui says:

        as the friend of someone who worked on a Gates grant for an underfunded endemic tropical disease. they pared down the original proposal to just one thing: producing a vaccine in 3 years. admittedly, they are pretty open about this, but because they are increasingly the only game in town... having post-docs do pharma grunt-work on the cheap is actually setting back the research. it destroyed my friend's career, in addition to the collapse of funding outside of cancer.

        Gates really is the end-state of the way biological science research funding has been going. it's the end of any sort of research program outside of pharma development.

        • GF says:

          Before gates there wasn't even that funding... so yeah - the grants get focused (and that happens from every granting agency in just about every segment) but there is now money. 20 years ago there was essentially no malaria research going on at all. Gates changed that.

          Also - fail to see the bad part of producing a vaccine. Gates is open that he wants to change human condition not just do research for the grins and giggles (said even though I am deeply involved in lots of basic research). Gates won't make money on any of the vaccines (selling stuff to poor people is a bad business model - which is why large pharma won't touch it)

    • Glaurung says:

      Gates is a trustee of the foundation, he probably gets a salary of some kind. Plus every time he donates to the endowment of the foundation, he gets to claim it as charitable contributions and reduce his taxes, it's safe to assume he minimizes his taxable income every year that way.

      Other than those two things, the rant is rather off base. The Gates foundation does have problems with zero transparency and only donating to stuff that Gates is interested in doing regardless of what could best use the money... but it is a real charity and it does hand out huge massive grants every year to the causes that it supports.

    • tfb says:

      In fact, it is easy to just snarf the data, and it's reasonably obvious from that that he's got approximately linearly richer since 2010. And in that period he's underperformed the NASDAQ composite index (including, I think, the recent big falls): so if he'd just kept his money in an index tracker fund he'd have done better than he has done. Perhaps that's what he did, in fact: he was just tracking the wrong index.

      Notes: I didn't correct for inflation, but since 2010 it's not been huge, and correcting for inflation would make him seem poorer, not richer.

      Of course, if we believe the bullshit that economics is built on there are genuine exponential processes involved in things like this (even once you remove things which are really just renormalising the units we use to count things): 'GDP will grow at 2.5% a year, for ever', yes, of course that makes sense. Really, it does, it's all just fine, we don't need to worry about boiling the oceans in 400-odd years, that's a long way away.

  2. newb says:

    I'm sick of pseudo-charities

  3. ennui says:

    > "How would the money flow from the Foundation back to Bill?"

    Gates is a growth-investor in biotech and is very heavily committed. The ability to profit biotech is largely determined by government policy. Biotech is talked about as if it's about blue-sky scientist-inventors creating the future (sound familiar) but it's still largely about poaching academic research groups and trying to "monetize" their "intellectual property"; the million-dollar hepatitis cure is the poster child for this. Similarly, the Gates foundation is lauded for it's support of science, but what Bill does (Melinda has a slightly different focus) is run it like a Biotech private equity fund. He looks for research on diseases that are less likely to be profitably treated, and pays research groups to create therapies using academic research labs to do very cheap pharma r&d. Note that this is all in the private sector where the concept of "conflict of interest" has zero meaning. But, how do you think Gates (or his biotech investments) might profit from being associated with high profile "nonprofit" diseases, the kinds that have high level international governmental attention? It's a much grander version of the charter school investment scam Gates and his Wall Street buddies had been running.

    You can see it all kind of coming together with the race to privately develop a Covid-19 vaccine: https://www.businessinsider.com/inovio-coronavirus-vaccine-trial-starts-in-philadelphia-kansas-city-2020-4

    And you can see what kind of shitbags (like Gates) are involved and the kind of thinking they do:

    There's Boris Nikolic, former chief science-advisor to Gates, who was shocked to be named executor of Epstein's estate. Here's Nikolic, Epstein, and Gates pictured together: https://www.nytimes.com/2019/10/12/business/jeffrey-epstein-bill-gates.html

    For flavor, here's Peter Kolchinsky https://twitter.com/PeterKolchinsky "Ph.D. virologist and managing partner of a biotech investment firm. He's been making the rounds on twitter peddling basic virus info to raise the profile of his opinion-making. And what are his opinions: https://peterkolchinsky.com/articles

    "What the Wuhan crisis shows, though, is that we are all patients with a common symptom—fear, which many are suffering from now over the prospect of a deadly virus, COVID-19, terrorizing communities and families. Fear comes with its own costs, as the global economy is already discovering, with travel bans and quarantines. A treatment or vaccine would ease our minds, even if most of us don’t wind up using it. How should we price the value of peace of mind? Health economists don’t know.”

    and in case you wonder what he thinks about drug prices in the USA:

    "The math behind drug development is often twisted by pharma’s critics to suggest that there is widespread price gouging in the industry. But the drug industry’s profit margin fluctuates between 10% and 20%, less than that for the software and oil and gas industries."

    • Matt says:

      You make funding research sound so sinister.

      Can we also hear the sinister motives behind the Gates Foundation's work on getting people clean water and vaccines? It's obviously such a shitbag thing to do but I can't quite make out why.

      • ennui says:

        As I said, Gates doesn't really fund "research" he funds what he (his advisors) see as developable product. The nice thing about being as large as Gates is that you can look at what's broadly profitable for your investment position, across the whole biotech industry. You don't have to make money on everything and, as with software, biotech is driven by "intellectual property". You can control a corner of the market without having any products at all as long as you control the right patents, or make sure no one controls a patent. You'll notice that Boris Nikolic, when he worked for Gates, advised him on investments both inside the foundation and in his personal portfolio.

        I'm sure one of the reasons Gates is invested in biotech as heavily as he is is because the industry works a lot like software wrt intellectual property. He is interested in controlling markets to insure his investments are profitable, same as Microsoft.

        • matt says:

          I have no idea what you think Gates should do differently.

          Let's assume you had his capital and his focus on public health. Wouldn't you invest in biotech stocks?

          What is "coming together" when private companies are developing Covid vaccines? Is private research undesirable just because it's private? Why? Because it inevitably ends in profiteering? It doesn't always end that way, particularly in the case of vaccines. eg. MMR, flu

          There are some bad actors among the drug companies that earn a profit from their patented drugs. Does that make everyone that touches biotech bad?

          Maurice Hilleman developed a lot of vaccines at Merck and that worked out well for all of us. Merck deserves criticism for a number of things they've done since, and continue to do. But on balance we're better off having the vaccines.

          What makes "intellectual property" inherently evil? He's not a patent troll. Where's the evidence he's trying to corner any particular market? His investment in Inovio? The foundation has a patent on toilets that they license to anyone. There is no profit to be made selling toilets to rural Indians. Still the foundation has spent 9 figures on the project including grants to public universities.

          I think Gates is a good guy. Several people here think he's a "shitbag". I tried to find evidence to support the shitbag theory. Couldn't do it. Looks like pure altruism to me.

          Could the foundation be more transparent? Sure. Could they play nicer with public health agencies? Sure.

          • ennui says:

            > I think Gates is a good guy.

            I mean, Gates may be a good husband and father, I have no clue (contra: Epstein), but in business he was a crook: liar, cheat, thief. Of course, Microsoft was part of how that kind of behavior became normalized in the software industry and you could argue that that's what "business" is about but... the point is that "equity" in Biotech isn't derived from owning machines or factories but held up in intellectual property. It changes the way the corporations are structured and how profits flow through the industry in general. The history of Microsoft is the history of Bill Gates and Co. using racketeering to control intellectual property. All of the bullshit criminal behavior comes down to the fact that you don't have to produce anything to win, you just have to control what is produced. The birth of Google, Facebook, Amazon, etc. the whole internet-culture of shit-software to steal from people comes out of the failure to bring Microsoft under the rule-of-law. Gates has had his ass kissed for 40 years for being a crook, he probably thinks he's a "good' at business the same way Buffet is good at picking ponies...

            Do you really want biomedical research to work the same way as the software industry?

        • tfb says:

          He is interested in controlling markets to insure his investments are profitable, same as Microsoft.

          If he wanted to make a lot of money he'd be funding research into diseases which kill people who have a lot of money: cancer, for instance. Funding research into malaria is a really shitty investment decision because malaria doesn't kill those people. It's a good decision if you care about saving human lives, but he doesn't care about that, does he? Yes, obviously he does.

          Bill Gates was a force for very great harm in computing. But bad people can become good people it turns out: redemption is possible.

          • thielges says:

            The best way to make money on pharma is not to cure a disease. Instead create a drug that alleviates its symptoms, creating paying customers for life. If you look at the heaviest advertised drugs you’ll see none of them cure a disease, they extend or improve the quality of life.

            • margaret says:

              to tfb's point, you have to do it in a market that has money. where people are getting their drinking water out of an open sewer isn't such a market. maybe gate's really brilliant dr. evil plan is to lift people out of poverty so they forever have to rely on him for toilets and clean water.

            • tfb says:

              That may well be true, but it has nothing at all to do with my point: if you are trying to make money from doing x you need to be aiming at a group which has money to pay you to to do x. If you are not doing that, then either you're not trying to make money, or you are making a very bad decision.

              • thielges says:

                Sorry, I didn’t intend to contradict you but extend the basic ideas that pharma is in it for profit. Cures are not profitable because they are one-time treatments.

                While certainly the market for continuous lifetime treatment is more lucrative in wealthy regions, there’s still money to be made from the poor. The poor might not have much cash but they make it up in quantity.

    • Julian Macassey says:

      Ah yes, profit margin. How do you define that? What are your expenses that keep that profit margin low? I know one large pharma that has several Gulfstreams (the regular employees fly commercal), a bamboo jungle in the CEO's penthouse office, fountains and drystone walls around the campus, two limos standing by with armed chaufeurs for the CEO. I could go on. All that comes off the bottom line. That keeps that profit margin down.

  4. margaret says:

    just because gates is richer than ever doesn't mean he's not spending money or that he is profiting from the research he's doing (and if he did - shrug). first, he has much more money than it makes sense to spend all at once on his (foundation's) projects. second, even if he could spend it that fast that wouldn't likely be the best use of the money. if it's spent at about the same rate the foundation earns it then the fountain of money is perpetual.

    it would be great if our taxes funded this kind of research but we don't live in that world - and someone would be profiting from that anyways, also.

    there are plenty of reasons to hate on gates but building a foundation to work on solving some of humanities most pressing problems seems petty. i'll save my billionaire hate on the kochs, kardashians, hiltons, and walton families.

  5. Thomas Lord says:

    Or why his foundation has consistently made zero improvement in education outcomes?

    This is wildly unfair. For the sake of a cheap dunk on Gates it ignores the real world experience of actually existing school districts, like Berkeley's. Early on in Gates' ventures into philanthropy he gave millions for a revolutionary transformation of Berkeley High School. Following the Best Practices he had discovered (i.e., some shit he heard at dinner one night) the Berkeley Unified School District tore down decades of accumulated institutional weight and knowledge to move swiftly to a small schools model, one of the first such reprogrammings in the nation, and a model for the world of what the Gates', the Brody's, the Walton's of the world could bring to the table.

    The programming was impeccable. The Gates people guided Berkeley with a confident and open hand to a system of over-stretched resources, division and resegregation, low morale, fiscal unsustainability, and locked-in faltering test scores for all but a rich elite who got, in essence, a little private-school-within-the-public-school. With breathtaking efficiency Gates poured a tidal wave of funding over the campus, sweeping away the old, scouring the terrain. In a final act of philanthropy Gates showed Berkeley the necessary "tough love" of funding the irreversible experiement, standing up the brave new "system", and standing aside to watch it fund itself on wishes and dreams.

    "Zero improvement in education outcomes,"?!? I think not. Few people in this weary world could have so swiftly, with such resolve and efficiency produce such negative improvements. Credit where credit is due.

    Good day to you, sir.

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