Gates Foundation To Spend All Its Assets 319
El Lobo writes "The Bill & Melinda Gates Foundation has said it will spend all its assets within 50 years of both of them dying. The foundation focuses on improving health and economic development globally, and improving education and increasing access to technology. It also focuses on fighting diseases such as HIV/AIDS, tuberculosis, and malaria. The Seattle-based foundation plans to increase spending to about $3.5 billion a year beginning in 2009 and continuing through the next decade, up from about $1.75 billion this year." The Wall Street Journal (excerpted at the link above) called the foundation's decision "a decisive move in a continuing debate in philanthropy about whether such groups should live on forever."
Fair play (Score:5, Informative)
Re:Redistributing the wealth (Score:3, Informative)
Re:What I think Bill Should Do (Score:5, Informative)
Funny you should mention that. He's doing just the opposite. Gates just bought 10% of PNM Resources, a gas and electric utility in Arizona. They don't do renewable energy.
Gates also owns major portions of Home Depot, Canadian National Railway Co, Republic Services (a garbage hauling company), several TV networks, Four Seasons Hotels, Berkshire Hathaway, and several Big Pharmaceutical companies. This is not the profile of an enlightened investor. These are the investments any Robber Baron would make to diversify his holdings.
Keep your eye on Cascade Investments LLC, that's Gates' personal holding company. He's still building his personal fortune, leveraging his monopoly into more areas.
Re:Seems like a waste (Score:5, Informative)
"Should" is not a useful word in the real world, unfortunately. A foundation is insulated from all external pressures. This can be good in some cases, but it ultimately leads to uselessness of the foundation.
Everything is a tradeoff. When a foundation spends a dollar, that means the foundation is liquidating $1 worth of capital and labor in the marketplace. If they spend enough money, people lose their jobs, factories shut down, and new businesses are unable to find the resources (capital and labor) to start up.
Of course, that dollar is hopefully spent wisely. If it is spent wisely, the benefits will outweigh the aforementioned costs. With someone like Bill Gates in charge, I'm sure those dollars are spent wisely. After he dies, who will make sure the dollars continue to be spent wisely? There is no feedback cycle to correct the course when they start making bad choices. Businesses do have a feedback cycle: their resources are taken away from them when they become inefficient.
Donating to charity, although it makes you feel good, can actually be bad for society unless you make SURE your resources are used more wisely than where they were before.
The best economic thing a normal person can do for society is to produce as much as possible, and consume as little as possible. It's simple, but rarely said. However, here in the US (like most countries), we tax production and not consumption (or very little, anyway). There are a million ways to make consumption taxes progressive, just like income taxes, but without the problems associated with taxing production.
Re:Seems like a waste (Score:4, Informative)
Of course businesses aren't 100% efficient. You could pick 1000 other examples. However, the point is that there IS negative feedback that limits how inefficient the business can be. If they sold one meal for every 1000 they threw away, that business would be liquidated by the shareholders and the shareholders would replace it with another more efficient business. That's called negative feedback, and it keeps businesses on the track of efficiency.
the real world is not the happy ideal world of the proof of capitalism's efficiency
The point of capitalism is not that it's perfectly efficient, but it allows correction when things become inefficient. Governments, schools, and foundations have much less in the way of feedback, and what feedback does happen is MUCH slower and MUCH less direct. If the government needs to move in a new direction, it takes YEARS to get new representatives, new bills, and new votes. By that time the correction is long overdue, and everyone's way off course. Also, by that time, the issue has been combined with so many other issues that a voter cannot logically separate the issues or determine causation as easily.
If a business gets a little off-course, people get fired, capital is liquidated, and people are laid off. Those resources are then free for use by another company. This can happen to even a large business in a quarter year, and a smaller business in a few days.
Also, under capitalism, generally the people with the most direct knowledge of a matter and the most interested parties are the ones making the decisions. That information is very valuable, and the processing of that information can't be done by a small group effectively. Capitalism works because the entire population is processing information around them constantly. A small fraction of the population simply can't collect and calculate the information quickly enough to be more efficient than capitalism. That's why socialism fails, and will continue to fail until they solve that problem.
As for producing rather then consuming, it's rather hard to justify useless work as being efficient.
Useless work is not production. Production is creating something that is demanded (by yourself or someone else).
Oh, and shouldn't we welcome high unemployment rates as proof that we all have time to spare and still make all the goods we need?
Nice try. You're using two different definitions of "unemployment". The economic definition is "people looking for work". If they are looking for work, that probably means that they are consuming without producing. That is undesirable because, as I said, we want people to produce more than they consume. In capitalism, there is negative feedback for not working, in specific, if you don't work you are eventually prevented from consuming.
Re:It is convenient you left off Pacific Ethanol (Score:3, Informative)
Re:Seems like a waste (Score:3, Informative)
http://www.economist.com/printedition/index.cfm?d
It's the leader article. Unfortunately it's subscription only, but I think it's fair use to snip the last paragraph, which Bill seems to have taken to heart, and repost it here:
"The second danger lies in the vanity of philanthropists. They often like the notion that their foundations will live on after them, carrying their name down from generation unto generation. But, after the founder has died, foundations tend to become sclerotic and directionless--the fiefs of administrators who have lost sight of the original aims. So if you aim to be a truly philanthropic philanthropist, spend your money fast: do as much good as you can when you're alive, and let posterity go hang."
I think we can conclude that Bill reads the Economist.