The Bill and Melinda Gates Foundation released their annual letter for 2014 a few months ago. It was devoted to dispelling three common myths, which they argue, block progress for the poor.
1. Poor countries are doomed to stay poor.
2. Foreign aid is a waste.
3. Saving lives leads to overpopulation.
These myths are indeed myths, and the Gateses are right to try to dispel them. It is also nice to see the Gateses sharing to their audience some important facts that they would have otherwise had to turn to some more radical scholars, to find. Myths #1 and #2, for example, was nicely addressed in 2002 by economist Ha-Joon Chang in Kicking Away the Ladder (although reading any number of the Asian, African, and Latin American nationalists from the 1940s to the 1960s or so might also have done the trick). For Myth #3, we could go back to Betsy Hartmann’s 1987 book, Reproductive Rights and Wrongs (I picked it up after reading an article by Hartmann in 2000 called Cross-Dressing Malthus).
But the main point I wanted to make in this blog is one I made a few years ago here about philanthrocapitalism. That is, that the solutions for the world’s problems aren’t going to come from billionaires, and the billionaires know it. Bill and Melinda admit it, in a low-key way, in their letter, with an extended discussion of government aid:
“When pollsters ask Americans what share of the budget goes to aid, the average response is “25 percent.” When asked how much the government should spend, people tend to say “10 percent.” I suspect you would get similar results in the United Kingdom, Germany, and elsewhere…Here are the actual numbers. For Norway, the most generous nation in the world, it’s less than 3 percent. For the United States, it’s less than 1 percent.”
What billionaires can do is tiny compared to what governments can do. In their letter, Bill and Melinda are trying to do what anyone can: try to convince others of their arguments in favour of policies they think would help. That is clear from the content of their letter and the nature of their arguments. Why would they do that, if governments didn’t matter?
But their organizations follow a different model. Gates made his billions on one side of a debate. What he argued and practiced was that the software programmers created could be cut up and sold for massive profits. On the other side of that debate, about knowledge, information, computers, and society, were those who argued that information should be free, that innovation occurred when people could share, that software should be under the control of its users. Gates, like the other software billionaires, benefited from collaborative innovations – then privatized them to make his billions, and then used the power that came from those billions to try to stop the innovation and freedom that he benefited from (Linda McQuaig and Neil Brooks tell this story in their 2010 book The Trouble With Billionaires).
Like most corporations, Microsoft does its best to reduce its tax burden, to avoid taxes wherever possible, and to be part of a long-term trend of corporations paying less and less in taxes. Some of the billions in taxes Gates didn’t pay are now part of his foundation’s endowment. But if it’s governments that do the real work of development, then starving those governments of revenue can’t be good for development. Even as they try to lobby governments about the value of foreign aid, the Gateses practice a model where the wealthy keep money away from governments, and distribute it as they see fit, through charities of their choice, and where foreign NGOs, rather than local, sovereign governments, control the money and the power. Perhaps there are other myths that block progress for the poor, like:
4. Private aid is significant compared to government aid.
5. Rich people can’t be expected to pay taxes like everyone else.
6. Priorities decided by individual, wealthy donors, yield better development outcomes than priorities decided by democratic processes.
Maybe we can watch for these in the 2015 letter…
