The "teach a man to fish" argument has been around for a few millennium. But saying that philanthropy ends in giving away fish seems to me like an excuse for people to abandon charity altogether. Isn't Kiva still a form of philanthropy, even though it's just a loan? Charity cannot be about cementing poverty by creating dependence, but can work if it's a reallocation of resources (outside the free market) that results in more balanced partners.
It seems strange that someone with the business acumen to become the world's richest man would not look on the inefficient and broken charity and aid systems as an opportunity to create a better solution. There won't be good new jobs in places where there isn't reliable electricity or clean drinking water.
Like most aging industries, the "making the world better" industry is definitely in need of some disruption. We see newer entrepreneurs talking about this space more and more, so I wonder how long it will be before the richest entrepreneurs start looking at new ways of solving these problems.
Not a huge fan of Slim based on what I've heard, but I mostly agree with him on this. Makes me wonder though, what he's doing holding on to tens of billions in wealth if he could be building businesses and creating jobs for the poor instead. It makes it sound like "Business is better than charity, but I'd rather just be rich"
I doubt many people would question that he has significant liquid assets, I was just pointing out the relevance of the question. For a business owner on his scale, I'd imagine that the vast majority of his wealth would be tied up in business ventures.
Rich in irony as well -- Slim's purchase of Telmex, the state-controlled telephone monopoly, meant that he could stifle competition and charge exorbitant rates. That's pretty much as far as you can get from encouraging employment for the poor.
“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 is made on a corrupt business deal with the corrupt president of the time (Salinas) who he was buddy-buddy with, followed by gouging the Mexican citizenry on phone bills for the last 2 decades. (Salinas’s PRI party made out well too, as Slim gave lots of money back to them over the subsequent years.)
I really don’t think he’s in any position to talk about charity.
> 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 like need lots of capital improvements to stay competitive. For comparison, AT&T is trading a 12 times earnings, but that's in a much more healthy and stable market than Mexico.
I guess getting a 10% stake at 8 times earnings is an okay deal, but it doesn't jump out to me as a great deal. Would you be excited to buy a stake at that price in a high capital Mexican business with no growth potential because it's tapped out? I wouldn't.
I can buy the argument that just shoveling huge amounts of aid to people doesn't fix anything long-term. But it's not solely a decision between that and no charity. He mentions employment, which often benefits from having a stock of not-yet-exploited research to commercialize (SV firms do a lot of innovation, but they also do a lot of commercialization of stuff for which the early-stage R&D was done in academia, at government research labs, etc.).
Charities funding research, and especially insisting that the research be published in some open-access and not-patent-encumbered form, can provide that raw material that new companies need. Charity-funded medical research can also directly produce treatments that improve conditions in a region long-term. And, although it runs into a bunch of political controversy, same for charity-funded research on things like new crop varieties.
they also do a lot of commercialization of stuff for which the early-stage R&D was done in academia, at government research labs, etc.
So they turn it from something of theoretical value to something that actually improves people's lives--to the point that they're willing to part with money to have it? That seems to add a lot more utility on the margin. Of course, it wouldn't mean anything if there weren't inventions to subsidize.
Yeah, I'm not arguing that commercialization isn't useful; it's the main way theoretically valuable ideas get actually produced. But I think it can be very helpful to innovative industries to have this big stock of theoretically-valuable ideas waiting to be mined for commercialization. Otherwise you either only get incremental advances, or you need big firms with their own R&D groups (like Microsoft Research). You can also have startups based on blue-skies research in some areas (especially pharma), but investors in most areas are pretty wary of funding a startup that has too much basic research in their critical path, due to the high risk.
Where you find widespread poverty, you also find an absence of both the rule of law and freedom from expropriation. And you people trying to get to places that have those things.
The vast majority of people are inherently capable of meeting their own needs, figuring out the needs of others and trading with them for mutual benefit...if they are allowed to do so.
I'm bemused by him implying that charity doesn't create employment or foster entrepreneurism amongst the poor.
It surely can't be seriously argued that wealth is better channelled through a single person's business empire representing nearly half of the country's stock exchange and 90% of its telecoms provision...
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.
It's a sort of chicken-and-egg question as to which must come first but generally, if infrastructure and education are there, public health will follow. On the other hand if most of the populace can't read or write, if there is a constant lack of resources and perpetual warfare, the people who you are healing will most likely end up in an early grave anyway. Employment will help with all of these things, since happily employed (and educated) people don't typically start rebellions, are capable of building lasting infrastructure and making use of outside aid.
Let's not get caught up in semantics here. You could just as easily consider giving people money in the name of charity an investment because you're investing in their better future. Can we taboo the words "charity" and "investment" and talk about what the actual acts are?
Semantics matter if they affect expectations. For me (at least), charity means giving money away and hoping for the best. Investment means getting involved with something, and making sure the money invested is properly used. The term "investment" implies a greater level of involvement.
Giving money away as "charity" can be an excuse for not actually getting involved.
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...
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 well as charity) doesn't help except in temporary emergencies.
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.
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 his source more. We wouldn't have the Gates foundation's fight against malaria, but we might have a more innovative and open global computing culture, and who knows what that would have meant.
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 monopolistic behavior.
You think we would have worse computer hardware now (for the price) if Microsoft had been less successful? Why do you think that? I don't believe that without MS/Intel we'd have only a bunch of Apple-model hardware manufacturers.
Tough to say. I don't see any reason why we wouldn't have ended up with a market fragmented between Apple, Commodore, Atari, IBM, TI, Sinclair, Radio Shack, and twenty other companies all selling essentially similar hardware with mutually quirky chipsets and incompatible OSes.
That's certainly an accurate portrayal of the state of things in the era before MS-DOS. What would be some arguments to the contrary?
I find it hard to argue that, without Bill Gates, we wouldn't have ended up with a monopoly of some type in hardware/OS. Certainly Microsoft won the race, but it's not like every other player on the scene at the time wasn't trying to do the same thing.
Every single PC maker/OS developer knew that winning the bulk of the market was the key to success. Thus, they were all following similar strategies. I just think it's unlikely, if there was no Gates, that we wouldn't have all ended up on the same platform anyway, and some other company would have had a monopoly.
Possibly. But the question was, was a proprietary OS needed at all? I wasn't defending Microsoft or Intel specifically, just pointing out that the PC revolution damned sure was not going to happen if left up to Apple, Commodore, IBM, and the Unix geeks.
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:
Divided technical leadership was, indeed, important, up until the point where the hardware platforms converged. At that point it became a stumbling block to progress in application software.
The problem was that the hardware platforms were converging in terms of functionality, but not at the all-important register and ISA level. Consequently the OSes were not converging at all. Let's assume I don't have time to read a 27-page .PDF -- do the authors address the economic impact of the lack of a common platform for application development?
It's possible that somebody would have duct-taped some sort of graphical shell to CP/M and gained some traction, but at best, they'd have ended up doing exactly what Microsoft did by duct-taping a graphical shell to MS-DOS. People who walk into computer stores want to be told what to buy.
In the end it won't matter, if you believe that HTML is the next platform. In that case we'll all end up running dumb terminals anyway, and it won't matter what chips and what OSes are handling the UI. But that was never something that was going to happen in the 25 critical years between 1985 and 2010, when the commodification of high-performance PC hardware took place. We will not see another "window" of opportunity like that, and we absolutely would not have seen that one happen without Wintel, or something very much like it.
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.
except one could say that mexico represents Slim's philosophy and America (and most industrialized countries) more closely represent Buffet's/Gate's philosophies.
I think it's clear which philosophy has the better outcome for people in general.
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.
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.
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.
i disagree with the premise that the only motivation people have is personal greed.
I disagree with the depiction of taxation is a mugging, even libertarians want government when push comes to shove. Afghanistan is what it's like with no real government, and no one is for that. Even libertarians want the government to put a gun to your head to enforce contract law!
I never said the only motivation people have is personal greed.
Taxation is literally a mugging. And you are in error to assume that governments cannot exist without mugging. Businesses provide services and charge for them. A government could do this as well.
don't speak for libertarians if you aren't one. If you are one, you've failed to apply the zero aggression principle.
You also seem to fail to distinguish between using violence defensively against an agressor, which is moral, and using violence offensively to steal from someone (eg: taxation) which is immoral.
So you believe there should be no government? We have many examples of this throughout modern history. They were all shit holes. Every country on this planet that is a decent place to live has a strong central government. QED
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 broken into parts in order to promote competition. Same goes for the Bell Telecom companies in America, they were also all broken up. We have checks in place to curb the anti-competitive forces of certain companies.
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 from having a controlling stake in the most powerful company in oil, to having a controlling stake in most of the powerful companies in the whole oil industry (ExxonMobil, Chevron, BP, Shell). I just wanted to clarify that point because the order in which your statement was crafted kind of made it seem like the courts broke up his wealth when they actually expanded it.
1.Rockefeller, who had rarely sold shares, held over 25% of Standard’s stock at the time of the breakup. He, as well as all stockholders, received proportionate shares in each of the 34 companies...The companies’ combined net worth rose fivefold and Rockefeller’s personal wealth jumped to $900,000,000.http://en.wikipedia.org/wiki/John_D._Rockefeller
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.
What di you make of the DeBeers 10 year diamond monopoly? If all the supposed monopolies out there, this seems the hardest to debunk. I read one economist say they were really a cartel with government protection, but he didn't cite any evidence. DeBeers seem to have controlled the trade through their own shrewdness. Only point I can think against it is there's nothing to stop people reselling diamond rings so it's wrong to say they control the market.
The only way a cartel can work is via government enforcement. Cartels can try to fix prices, but as soon as they do, if the price is above the free-market price, members of the cartel will try to gain marketshare by selling under the table at a lower price. Cartels are not sustainable in a free market for this reason.
I can't comment on DeBeers because I do not know enough of the history of the situation. I will say, though, that diamonds are essentially worthless, and it is primarily by brilliant propaganda / advertising that people continue to buy them.
Standard Oil was able to use anti-competitive forces against competitors. They specifically were able to extract better rates for the transportation of oil with the railroad companies which helped give them a more competitive cost structure than peers. Because of the high cost of capital required at the time, many peers were driven out of business and were forced to sell to Rockefeller.
I love how ideological nonsense that bears no releationship to historical facts is considered "facts" and by not goose stepping along with your fascist ideology you feel justified in calling me ignorant. When its painfully obvious that all you are able to contribute to the conversation is a poor repetition of your vague memories of the propaganda you were told about the situation, when in reality, vertical integration, including the purchasing of transportation systems gave standard oil a competitive advantage. This is known as competition, and is not "anti-competitive". In fact, if you use the phrase "anti-competitive" seriously, you should lose the right to post on this website because you reveal yourself to be an unthinking socialist, and if you ever managed to start a company, you would surely fuck it up by following your ideology over reality.
In economics, a monopoly exists when a specific individual or an enterprise has sufficient control over a particular product or service to determine significantly the terms on which other individuals shall have access to it.
This is not a definition, this is an expression of the leftist ideological position. I have seen many situations on Wikipedia where factually correct edits are reversed because they disagree with the ideology of the wikipedia editors who have stature.
It is kinda like hacker news where a useful comment like mine is voted down to zero, while someone calling me names and repeating ignorant comments that are consistent with the groupthink of the left, get modded up.
It is not that their name calling and ideological regurgitation are superior to my argument... it is that people vote based on ideology, often when they are profoundly ignorant of the reality.
I suggest that you not use Wikipedia as a source for definitions, as that one is particularly heinous. In common usage one could use the term "monopoly" to describe entities with strong pricing power, but common usage is not usage in economics, yet the wikipedia definition starts "in economics".
Any "Economist" who defines a monopoly as a company that does not have ownership of the entire market, is an ideologue pretending to be an economist.
According to my economics textbooks, when you say "ownership of the entire market" you are talking about a pure monopoly, which is different to a monopoly. You don't need the entire market to have monopolistic power.
So, I would disagree with your definitions, and your assertion that "in economics, they use this term correctly".
I would also suggest that your assertions seem somewhat ideological. Many people agree that trusts are bad for capitalism in that they restrict competition, and are not evidence of socialism.
I love how you just made up a term and then claimed that using the word wrong is justified because you made up a different term for the correct definiton.
Of course, you've never opened an economic texbook in your life.
I also love how you claim that my references to history are ideological assertions, then you make a broad and profoundly ignorant ideological assertion as a counter argument, except that, of course, you don't make an actual argument, you just say "many people believe".
Many people believe there is a good, that's not proof that its true.
You are a fucking ignorant socialist, and it is consequently no wonder that you are so dishonest as well.
It is fucktards like you that make hacker news (and any "social" news site) not worth participating on,..... because there are just too many ignorant, low intelligence people downvoting those who bothered to learn something and who bother to think.
Just in case there's any question of our relative positions here.
> 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.
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.
True monopolies are often the side effect of regulation, telecom not being an exception. Big companies lobby for regulation to create a steeper barrier to entry for start-ups, effectively mitigating competition.
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.
I went to a missionary conference once where an African princess came in and talked to us. Exactly the place where you'd expect a plea for more aid, right?
Well, not really. She said we needed to mind our own business and let Africa take care of itself.
Then a Bono video from his opulent mansion came on with some sort of campaign to end world poverty or something.
"Minding your own business" may be a loaded phrase there, though. Much of the misery in Africa is a direct result of western exploitation. That includes much misery the proximate cause of which is corrupt leaders. Guess who keeps many of them there.
She has a point that truly letting Africa "take care of itself" may be more effective than any aid. But that statement is not primarily about aid, and withdrawing aid doesn't help with the subjacent problems.
"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.org/wiki/Corruption_Perceptions_Index
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.)
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 wealthy people (see Russia's Oligarch's). In Bolivia, after shock treatment, there was a rise in unemployment, a fall in industrial output, and a fall in per capita GDP.
At my university (50k students) I started the first micro-credit organization and we've made over 100 loans to entrepreneurs in developing nations -- so I am not against capitalism or anything like that.
But I've studied economic development enough to know that you have to take a multi-pronged approach to promoting development. It's not just about going full-free market or full donations/state involvement. It's requires a mix.
Upvoted for insight! This is true, however I wasn't trying to suggest shock treatment. As you said, there is significant evidence against that. In fact, I don't think such a thing happens often without a change in regime. However, production and a larger workforce still do contribute much more to growth. Constant aid, however, has the danger of making the economy reliant on it. Thus, a transition from the latter to the former is desirable.
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.
For a country that was severely screwed by everyone 60-odd years ago, and crawled out from under the iron curtain less than 20 years ago, they are doing quite well, I think. Polish people have a lot of heart.
Historically many fortunes were built because of special privilege from the King.
Ignoring for a moment the anti-competitive claims against Microsoft, consider that that fortune already hinges on the special privilege of intellectual property law, which is backed in full force by the US justice system. Not all countries have this protection. Microsoft does not do anywhere near as well in countries without it. Does this protection ultimately help US citizens.....that point is up for debate, but it exists, and businesses exist to capitalize on it. Is it something that should be expected? For now, yes, but two hundred years from now, my guess is that intellectual property rights will have eroded, and we will view Gates's fortune as a fortune built using special privilege, just like oil fortunes were built before regulations against monopolies, and just like many shipping fortunes were built before that with special privilege from princes.
Special fortunes typically need something special in the first place. Carlos Slim is not that much different from Bill Gates. Bill Gates spent a little bit of time as a heroic startup guy, but he spent the majority of his career doing much the same stuff that Carlos Slim does. If copyright law changed, as many MP3 sharers wish it would, his fortune would deflate as much as Slim's.
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?
This may be your point, but you could take your argument and twist it to any law, or lack of law, in any country. All business, big or small, hinge on some sort of special privilege. IP law isn't special in this regard.
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 (Sanborn's) which he has managed to completely turn around from near-bankrupcy to huge commercial success.
I am not making a claim that his wealth from Telmex didn't contribute to his success, but implying he just managed to get where he is because Mexico's regulatory bodies are useless is a huge understatement to his ability in an industry where several key players (Like AT&T, Nextel, Telefonica Movistar, and others have failed).
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.
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 rich because president Salinas helped him, but Salinas left 16 years ago and his businesses have flourshed in many areas and in many countries. Why can`t Mexico have somebody as talented as Warren Buffet?
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.
It is pretty clear that the growth in living standards over the last 100 years has a lot more to owe to the accumulation of capital goods than the working of charity. It's true that charity can alleviate short-term suffering, but Mr. Slim's assertion has a lot of historical support to it.
But charity probably does a lot more for the giver. I imagine giving $10 billion makes you feel about as good as making the $10 billion in the first place. Society will certainly admire you more.
Why? Anyone who has or inherits $10 billion can give it away. It takes nearly no skill. Only a very, very few people in the history of history can make $10 billion.
Well, I pretty sure that after a certain amount you become somewhat numb by gaining anymore. With giving you would get a sense of doing good for those you might need it more than you.
My comment wasn't really about the actual amount, but rather just in general the happiest people are the ones that give more than receive.
I like Carlos Slim's approach to charity.
He still use it time to time on relatively small scale when it's an efficient too.
But he focuses his effort on doing business. That's the best way businessmen can contribute to society.
Charity is most needed for problems that have no other natural source of funding. If the government/private sector can solve certain problems, then charities are perhaps not the best vehicle for solving those particular problems.
Buffett and Gates specifically focus on the former. Trying to reduce extreme poverty, provide healthcare, and educational opportunities. They also believe every life is of equal value. So the challenge then becomes helping the most people per dollar invested.
Some of the most well developed medical technologies/ solutions exists because their's a lot of wealthy people with those problems. A lot of male baldness and not so much malaria.
Malaria is a treatable disease. Millions die because they don't have access to care. You can't say these people would be better off employed, as if their health is not a factor in their economic output. Hence, the goal of trying to eliminate malaria is a valid philanthropic activity.
Buffett also donated through one of his children's foundations, to help solve/minimize the potential for a nuclear event. His view is pretty grim: the information is already out there, getting into more hands, and so the probability approaches 1 that an event will occur at some point in the future. What other natural funding exists for trying to solve this? It might be futile, it might be incredibly hard, but you need smart capable people working on this.
Furthermore, helping the rest of the world become a little bit more prosperous might reduce hostility, and violence that desperate people can be induced into. While businesses have had a great history of introducing wealth into the world, its always done with a profit motive. Where there is no profit potential, there is no interest of a business to be involved. A lot of these problems don't have those profit potentials. Hence, charity works in these areas.
Another important point regarding disease, in general, and especially malaria is that disease often leaves survivors with permanent physical disabilities and/or neurological deficits. I think a lot of people in the U.S. and Europe have this mistaken notion that malaria is like a bad case of influenza, mononucleosis, pneumonia, or some other common disease that we are familiar with. We think that the person gets really sick and feels awful and it could even be life-threatening, but that as long as you survive it, you fully recover. That simply isn't true.
Malaria primarily affects children and many survivors have severe permanent disabilities because of it (seizure disorders, deficits caused by stroke, psychiatric problems, etc.). And malaria is just one of many serious diseases in the developing world (tuberculosis, schistosomiasis, dengue fever, HIV/AIDS, hepatitis, etc.). If you acquire a severe disability before you're even old enough to enter the workforce, how does creating jobs help you? Creating jobs alone is insufficient to address the problems of Africa. You have to concomitantly address the heavy burden of disease if you are to have any chance of solving the economic woes of Africa.
I have a friend who was well off and was very much against handouts for most people. He would go on about people needing to get a job, pull themselves up and how not finding work was a lazy man's excuse. Then he lost his job, house, car, dog and health in less than a year and even had to move back in with his parents.
Amazing how his opinions have changed now that he is the one who despite his best efforts is struggling to just barely get by. He still feels you should make your own way, but now realizes it can be much harder than it sounds.
The "go get a low paying job" safety net is not what it once was. People these days really need to get creative and find new ways to generate income.
It's a tough issue. I rarely oblige anybody asking me for money on the streets. If they ask for food, I don't mind buying them a meal, but just giving out money doesn't sit well with me.
If I could give somebody $50 or $100 and know that it would be used to make their life better, I'd do it without hesitation.
Might be an interesting field for a non-profit organization?
I'm with you on the food thing, being hungry truly sucks. There's a cafe I frequent that gives me a discount and I have bought many a hungry person a meal there. A nice addition is since the staff are friends the person is treated like a normal customer (though one guy kept hitting on one of the waitresses to the point of it not being funny anymore).
A couple of months ago I was there: a failed project, no job, no money flowing in by almost 5 months, and albeit of being moderately competent by several measures, I was struggling too as you say. My view of the world has changed a lot because of that period, but the things just are in that way. I still strongly believe that you must find your way up in the ladder, but things are not easy.
In the meanwhile I did my best to try alternative strategies. At the end, thanks to God I was able to find a great job at a German company which happened to have a research center in my country, and the things are recovering.
I believe that money spent on education is money well spent. Building schools and etc, not only help to educate the young generation, but also provide jobs. An educated young man will be able to not only help himself, but his family and his surroundings.
I think the perfect model is the one Mohammed Unis advocates: so called "social entrepreneurship". The business makes a profit but it has a set of shareholders who control all voting rights who are interested in having the business do things that are not only motivated by profit.
In a way, Google is a bit like this. Sergei and Larry setup the company in such a way that they have far more voting rights than the non-founders and thus use Google to pursue aims that are more social, for instance developing new energy technology or cars that drive themselves, etc.
Demonstrating the main problem with charity: as soon as people start getting good intentions, they shut their brains off. They care about throwing money at a problem, not making sure that the money is spent in a way that doesn't make the problem even worse.
This is where the Gates Foundation really shines: they don't just give away huge sums of money, they carefully research how to spend it.
Wait a second... my reading of the story is not that we're giving rice to Haiti for free, but that the rice we're selling to Haiti is cheap because we're subsidizing US farmers.
I just don't want us confusing charity to Haiti (which apparently isn't happening from the US government yet) and subsidizing US farmers who can then underbid foreign farmers. Two very different stories.
He's right, and it shouldn't. That's what governments and collective decision-making are for. Private individuals shouldn't be depended on to do anything but further their own interests, even in the charity sphere. They spend money for PR purposes, to strengthen personal connections, or simply because they enjoy the environment it puts them in. The major cause of misery in the world is the lust for power and influence over other people, and money epitomises that.
What people need is security in employment and compensation, and protection against unavoidable risk, like fire and sickness. Without exploiting the weakness and insecurity of workers, you can't really amass the kind of cash this guy has, so I'm not sure about the quality of the jobs he's creating if he can skim that much value off of the top. The profit margin on fairness is a lot lower than the profit margin on slave wages, monopoly, and legislative arbitrage.
That's not to say that he couldn't, though. 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. Sorry, rant over:)
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 mind are Steve Jobs and Larry Page and Sergey Brin.
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 fairness.
I think you need to look more specifically at what exactly the Gates Foundation does if you want to answer the questiona at the end of the article. They're known for fighting disease, primarily; disease in third-world countries is a major barrier to industrial expansion into these countries. Further, charity has achieved at least one major victory: the eradication of smallpox, perhaps the greatest achievement in human history, so I'd say it's contributed at least a little -- and the Gates Foundation has some good precedent for their goals.
With Bill Gates you at least know that there's an extremely intelligent person at the top, looking to solve real problems (assuming he's past the phase of donating Windows machines to schools).
I think that's the largest point: just giving out money to causes is typically a poor way to make a difference. However, if you intelligently spend that money (whether it be by empowering people through job creation or eradicating diseases) then you have a chance of making a lasting impact.
> assuming he's past the phase of donating Windows machines to schools
Why do you feel the need to throw that jab in there? Windows is the more prevalent computing platform in the world. Stepping aside from our nerd world for a second, you could argue he would be doing them a disservice trying to ship them Linux or something that wouldn't be compatible with the most popular software in the world.
Ironically, I was just trying to head off a negative conversation. I figured it'd come up since I mentioned that Bill Gates was using his charity to solve real problems. When saying that, somebody usually mentions how the foundation has been used (in the name of charity) to market Windows to future generations.
I think his gripe is charity in the form of cash handouts which don't fix anything. Charity in the form of research or other expense toward eradication of a disease is different.
Now this is purely hearsay, but I've heard it said the creator of the smallpox vaccine regretted what he'd done because the amount of polio it produced greatly outnumbered the lives it saved.
Edward Jenner introduced the variola vaccine in the late 1700s. Polio didn't even become a major problem until after his death!
>In developed countries during the late 19th and early 20th centuries, improvements were made in community sanitation, including better sewage disposal and clean water supplies. These changes drastically increased the proportion of children and adults at risk of paralytic polio infection, by reducing childhood exposure and immunity to the disease.
First time I hear a claim that charity is responsible for smallpox eradication.
Sure, charities did help a lot, but it took Worldwide coordinated effort by WHO with primary donors being UN member states to achieve full eradication.
Whats that old saying? "Dont give a man a fish, teach him how to fish."
Unfortunately, some people cant even afford fishing equipment. So a mix of both is very important. Why throw tonnes of money? Throw some jobs with that too.
carlos is correct. An example of this is how America deals with developing countries that they are trying to rebuild.
Countries that are addicted to American "financial" aid don't go anywhere, but countries that create an environment, enforcable rule sets and standards that attracts foregin direct investment from businesses around the world prosper and raise their standard of living.
Charity is a bandaide and not a solution. Constant free aid kills inniative, inntiative creates economic prosperity, wealth, etc.
The gist of their company is that for every pair of shoes they sell, they give a pair away to children in impoversihed countries. Seems like a really nice thing to do.
That said, I've always thought they would be better off helping would-be entrepreneurs in those countries to make and sell shoes of their own. IE, perhaps they could use their resources to help people in those countries learn how to make the shoes, provide some assistance in sourcing the materials, etc.
As it is today, if someone in those areas where they give shoes away has any aspiration of making shoes, they have no chance because they won't ever be able to compete with someone coming in and giving away free shoes.
When the kid who received the new pair of free shoes inevitably needs another pair, there is infrastructure in place for him to get those new shoes, rather than waiting for Tom's to show up again with more free shoes.
I'm not knocking Tom's because I think their intentions are simply to help people. But I do think they're missing the target - I think that is what Senor Slim is referring to.
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[ 4.0 ms ] story [ 220 ms ] threadLike most aging industries, the "making the world better" industry is definitely in need of some disruption. We see newer entrepreneurs talking about this space more and more, so I wonder how long it will be before the richest entrepreneurs start looking at new ways of solving these problems.
I don't see anything capitalist in them.
Nor in "All Lives have equal value."
But mush of their work uses capitalist principles, which you can see if you look at some of their programs: http://www.gatesfoundation.org/global-development/Pages/over...
Basically, Slim’s fortune is made on a corrupt business deal with the corrupt president of the time (Salinas) who he was buddy-buddy with, followed by gouging the Mexican citizenry on phone bills for the last 2 decades. (Salinas’s PRI party made out well too, as Slim gave lots of money back to them over the subsequent years.)
I really don’t think he’s in any position to talk about charity.
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 like need lots of capital improvements to stay competitive. For comparison, AT&T is trading a 12 times earnings, but that's in a much more healthy and stable market than Mexico.
I guess getting a 10% stake at 8 times earnings is an okay deal, but it doesn't jump out to me as a great deal. Would you be excited to buy a stake at that price in a high capital Mexican business with no growth potential because it's tapped out? I wouldn't.
Charities funding research, and especially insisting that the research be published in some open-access and not-patent-encumbered form, can provide that raw material that new companies need. Charity-funded medical research can also directly produce treatments that improve conditions in a region long-term. And, although it runs into a bunch of political controversy, same for charity-funded research on things like new crop varieties.
So they turn it from something of theoretical value to something that actually improves people's lives--to the point that they're willing to part with money to have it? That seems to add a lot more utility on the margin. Of course, it wouldn't mean anything if there weren't inventions to subsidize.
The vast majority of people are inherently capable of meeting their own needs, figuring out the needs of others and trading with them for mutual benefit...if they are allowed to do so.
It surely can't be seriously argued that wealth is better channelled through a single person's business empire representing nearly half of the country's stock exchange and 90% of its telecoms provision...
Charity != giving people money.
Giving money away as "charity" can be an excuse for not actually getting involved.
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...
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 well as charity) doesn't help except in temporary emergencies.
The vast majority of funding for microcredit organizations comes from government. It's still charity, even if it can often be fairly efficient charity.
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 his source more. We wouldn't have the Gates foundation's fight against malaria, but we might have a more innovative and open global computing culture, and who knows what that would have meant.
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 monopolistic behavior.
That's certainly an accurate portrayal of the state of things in the era before MS-DOS. What would be some arguments to the contrary?
Every single PC maker/OS developer knew that winning the bulk of the market was the key to success. Thus, they were all following similar strategies. I just think it's unlikely, if there was no Gates, that we wouldn't have all ended up on the same platform anyway, and some other company would have had a monopoly.
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...
The problem was that the hardware platforms were converging in terms of functionality, but not at the all-important register and ISA level. Consequently the OSes were not converging at all. Let's assume I don't have time to read a 27-page .PDF -- do the authors address the economic impact of the lack of a common platform for application development?
It's possible that somebody would have duct-taped some sort of graphical shell to CP/M and gained some traction, but at best, they'd have ended up doing exactly what Microsoft did by duct-taping a graphical shell to MS-DOS. People who walk into computer stores want to be told what to buy.
In the end it won't matter, if you believe that HTML is the next platform. In that case we'll all end up running dumb terminals anyway, and it won't matter what chips and what OSes are handling the UI. But that was never something that was going to happen in the 25 critical years between 1985 and 2010, when the commodification of high-performance PC hardware took place. We will not see another "window" of opportunity like that, and we absolutely would not have seen that one happen without Wintel, or something very much like it.
If the political system over there ever became really functional, his empire would be broken apart and much of his wealth would contract.
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.
I think it's clear which philosophy has the better outcome for people in general.
What is this, fallacy friday?
I think when people debate things like Charity, they take leave of logic.
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.
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"
I disagree with the depiction of taxation is a mugging, even libertarians want government when push comes to shove. Afghanistan is what it's like with no real government, and no one is for that. Even libertarians want the government to put a gun to your head to enforce contract law!
Taxation is literally a mugging. And you are in error to assume that governments cannot exist without mugging. Businesses provide services and charge for them. A government could do this as well.
don't speak for libertarians if you aren't one. If you are one, you've failed to apply the zero aggression principle.
You also seem to fail to distinguish between using violence defensively against an agressor, which is moral, and using violence offensively to steal from someone (eg: taxation) which is immoral.
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. Same goes for the Bell Telecom companies in America, they were also all broken up. We have checks in place to curb the anti-competitive forces of certain companies.
John D. Rockefeller actually ended up being a lot richer because the courts broke up Standard Oil[1]. He went from having a controlling stake in the most powerful company in oil, to having a controlling stake in most of the powerful companies in the whole oil industry (ExxonMobil, Chevron, BP, Shell). I just wanted to clarify that point because the order in which your statement was crafted kind of made it seem like the courts broke up his wealth when they actually expanded it.
1.Rockefeller, who had rarely sold shares, held over 25% of Standard’s stock at the time of the breakup. He, as well as all stockholders, received proportionate shares in each of the 34 companies...The companies’ combined net worth rose fivefold and Rockefeller’s personal wealth jumped to $900,000,000.http://en.wikipedia.org/wiki/John_D._Rockefeller
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.
I can't comment on DeBeers because I do not know enough of the history of the situation. I will say, though, that diamonds are essentially worthless, and it is primarily by brilliant propaganda / advertising that people continue to buy them.
Standard Oil was able to use anti-competitive forces against competitors. They specifically were able to extract better rates for the transportation of oil with the railroad companies which helped give them a more competitive cost structure than peers. Because of the high cost of capital required at the time, many peers were driven out of business and were forced to sell to Rockefeller.
In economics, a monopoly exists when a specific individual or an enterprise has sufficient control over a particular product or service to determine significantly the terms on which other individuals shall have access to it.
It is kinda like hacker news where a useful comment like mine is voted down to zero, while someone calling me names and repeating ignorant comments that are consistent with the groupthink of the left, get modded up.
It is not that their name calling and ideological regurgitation are superior to my argument... it is that people vote based on ideology, often when they are profoundly ignorant of the reality.
I suggest that you not use Wikipedia as a source for definitions, as that one is particularly heinous. In common usage one could use the term "monopoly" to describe entities with strong pricing power, but common usage is not usage in economics, yet the wikipedia definition starts "in economics".
Any "Economist" who defines a monopoly as a company that does not have ownership of the entire market, is an ideologue pretending to be an economist.
In economics, they use this term correctly.
So, I would disagree with your definitions, and your assertion that "in economics, they use this term correctly".
I would also suggest that your assertions seem somewhat ideological. Many people agree that trusts are bad for capitalism in that they restrict competition, and are not evidence of socialism.
Of course, you've never opened an economic texbook in your life.
I also love how you claim that my references to history are ideological assertions, then you make a broad and profoundly ignorant ideological assertion as a counter argument, except that, of course, you don't make an actual argument, you just say "many people believe".
Many people believe there is a good, that's not proof that its true.
You are a fucking ignorant socialist, and it is consequently no wonder that you are so dishonest as well.
It is fucktards like you that make hacker news (and any "social" news site) not worth participating on,..... because there are just too many ignorant, low intelligence people downvoting those who bothered to learn something and who bother to think.
Just in case there's any question of our relative positions here.
http://www.google.com/search?client=safari&rls=en&q=...
I'm sorry that you got downvoted. Take it easy.
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.
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.
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.
There is also the logical fallacy known as "Appeal to Authority" in @maxawaytoolong's comment.
But we should not be logic nazis I suppose.
My own opinion is that both Slim and Gates can be right at the same time. Lots of businesses provide for lots of people...but not all.
Well, not really. She said we needed to mind our own business and let Africa take care of itself.
Then a Bono video from his opulent mansion came on with some sort of campaign to end world poverty or something.
She has a point that truly letting Africa "take care of itself" may be more effective than any aid. But that statement is not primarily about aid, and withdrawing aid doesn't help with the subjacent problems.
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 wealthy people (see Russia's Oligarch's). In Bolivia, after shock treatment, there was a rise in unemployment, a fall in industrial output, and a fall in per capita GDP.
At my university (50k students) I started the first micro-credit organization and we've made over 100 loans to entrepreneurs in developing nations -- so I am not against capitalism or anything like that.
But I've studied economic development enough to know that you have to take a multi-pronged approach to promoting development. It's not just about going full-free market or full donations/state involvement. It's requires a mix.
Ignoring for a moment the anti-competitive claims against Microsoft, consider that that fortune already hinges on the special privilege of intellectual property law, which is backed in full force by the US justice system. Not all countries have this protection. Microsoft does not do anywhere near as well in countries without it. Does this protection ultimately help US citizens.....that point is up for debate, but it exists, and businesses exist to capitalize on it. Is it something that should be expected? For now, yes, but two hundred years from now, my guess is that intellectual property rights will have eroded, and we will view Gates's fortune as a fortune built using special privilege, just like oil fortunes were built before regulations against monopolies, and just like many shipping fortunes were built before that with special privilege from princes.
Special fortunes typically need something special in the first place. Carlos Slim is not that much different from Bill Gates. Bill Gates spent a little bit of time as a heroic startup guy, but he spent the majority of his career doing much the same stuff that Carlos Slim does. If copyright law changed, as many MP3 sharers wish it would, his fortune would deflate as much as Slim's.
"The only way to fight poverty is with employment"
"Trillions of dollars have been given to charity in the last 50 years, and they don’t solve anything"
"There is a saying that we should leave a better country to our children. But it’s more important to leave better children to our country"
That's what he said. It may be really wrong, stupid, or right. What matters is "is he right?".
Slim's story includes several investments on different industries, including specialty shops (Sanborn's) which he has managed to completely turn around from near-bankrupcy to huge commercial success.
I am not making a claim that his wealth from Telmex didn't contribute to his success, but implying he just managed to get where he is because Mexico's regulatory bodies are useless is a huge understatement to his ability in an industry where several key players (Like AT&T, Nextel, Telefonica Movistar, and others have failed).
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.
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 rich because president Salinas helped him, but Salinas left 16 years ago and his businesses have flourshed in many areas and in many countries. Why can`t Mexico have somebody as talented as Warren Buffet?
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.
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.
Who do you value more, the current generation or future generations? Essentially the perpetual argument over the standard discounting problem.
But charity probably does a lot more for the giver. I imagine giving $10 billion makes you feel about as good as making the $10 billion in the first place. Society will certainly admire you more.
I would hope it would make most people feel better... a lot better.
My comment wasn't really about the actual amount, but rather just in general the happiest people are the ones that give more than receive.
Buffett and Gates specifically focus on the former. Trying to reduce extreme poverty, provide healthcare, and educational opportunities. They also believe every life is of equal value. So the challenge then becomes helping the most people per dollar invested.
Some of the most well developed medical technologies/ solutions exists because their's a lot of wealthy people with those problems. A lot of male baldness and not so much malaria.
Malaria is a treatable disease. Millions die because they don't have access to care. You can't say these people would be better off employed, as if their health is not a factor in their economic output. Hence, the goal of trying to eliminate malaria is a valid philanthropic activity.
Buffett also donated through one of his children's foundations, to help solve/minimize the potential for a nuclear event. His view is pretty grim: the information is already out there, getting into more hands, and so the probability approaches 1 that an event will occur at some point in the future. What other natural funding exists for trying to solve this? It might be futile, it might be incredibly hard, but you need smart capable people working on this.
Furthermore, helping the rest of the world become a little bit more prosperous might reduce hostility, and violence that desperate people can be induced into. While businesses have had a great history of introducing wealth into the world, its always done with a profit motive. Where there is no profit potential, there is no interest of a business to be involved. A lot of these problems don't have those profit potentials. Hence, charity works in these areas.
Malaria primarily affects children and many survivors have severe permanent disabilities because of it (seizure disorders, deficits caused by stroke, psychiatric problems, etc.). And malaria is just one of many serious diseases in the developing world (tuberculosis, schistosomiasis, dengue fever, HIV/AIDS, hepatitis, etc.). If you acquire a severe disability before you're even old enough to enter the workforce, how does creating jobs help you? Creating jobs alone is insufficient to address the problems of Africa. You have to concomitantly address the heavy burden of disease if you are to have any chance of solving the economic woes of Africa.
Amazing how his opinions have changed now that he is the one who despite his best efforts is struggling to just barely get by. He still feels you should make your own way, but now realizes it can be much harder than it sounds.
The "go get a low paying job" safety net is not what it once was. People these days really need to get creative and find new ways to generate income.
If I could give somebody $50 or $100 and know that it would be used to make their life better, I'd do it without hesitation.
Might be an interesting field for a non-profit organization?
I saw the tip of the iceberg, and it was scary.
In a way, Google is a bit like this. Sergei and Larry setup the company in such a way that they have far more voting rights than the non-founders and thus use Google to pursue aims that are more social, for instance developing new energy technology or cars that drive themselves, etc.
http://www.bbc.co.uk/news/world-latin-america-11472874
This is where the Gates Foundation really shines: they don't just give away huge sums of money, they carefully research how to spend it.
I just don't want us confusing charity to Haiti (which apparently isn't happening from the US government yet) and subsidizing US farmers who can then underbid foreign farmers. Two very different stories.
Here's the same sort of story from Al-Jazeera in 2008.
http://english.aljazeera.net/programmes/insideusa/2008/07/20...
Here's the same information in a report from 2004: http://www1.american.edu/TED/haitirice.htm
Here's a copy of a Washington Post article from 2000 (original behind paywall) http://www.hartford-hwp.com/archives/43a/217.html
The story is getting traction today for the same reason as the one about Sims...journalistic sloppiness.
What people need is security in employment and compensation, and protection against unavoidable risk, like fire and sickness. Without exploiting the weakness and insecurity of workers, you can't really amass the kind of cash this guy has, so I'm not sure about the quality of the jobs he's creating if he can skim that much value off of the top. The profit margin on fairness is a lot lower than the profit margin on slave wages, monopoly, and legislative arbitrage.
That's not to say that he couldn't, though. 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. Sorry, rant over:)
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 mind are Steve Jobs and Larry Page and Sergey Brin.
>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 fairness.
I'm claiming they got rich by means of voluntary exchange with customers, rather than exploiting people. Do you disagree?
I think that's the largest point: just giving out money to causes is typically a poor way to make a difference. However, if you intelligently spend that money (whether it be by empowering people through job creation or eradicating diseases) then you have a chance of making a lasting impact.
Why do you feel the need to throw that jab in there? Windows is the more prevalent computing platform in the world. Stepping aside from our nerd world for a second, you could argue he would be doing them a disservice trying to ship them Linux or something that wouldn't be compatible with the most popular software in the world.
It was on the internet so it must be true!
>In developed countries during the late 19th and early 20th centuries, improvements were made in community sanitation, including better sewage disposal and clean water supplies. These changes drastically increased the proportion of children and adults at risk of paralytic polio infection, by reducing childhood exposure and immunity to the disease.
(Edward Jenner died in 1823)
Sure, charities did help a lot, but it took Worldwide coordinated effort by WHO with primary donors being UN member states to achieve full eradication.
Unfortunately, some people cant even afford fishing equipment. So a mix of both is very important. Why throw tonnes of money? Throw some jobs with that too.
Countries that are addicted to American "financial" aid don't go anywhere, but countries that create an environment, enforcable rule sets and standards that attracts foregin direct investment from businesses around the world prosper and raise their standard of living.
Charity is a bandaide and not a solution. Constant free aid kills inniative, inntiative creates economic prosperity, wealth, etc.
The gist of their company is that for every pair of shoes they sell, they give a pair away to children in impoversihed countries. Seems like a really nice thing to do.
That said, I've always thought they would be better off helping would-be entrepreneurs in those countries to make and sell shoes of their own. IE, perhaps they could use their resources to help people in those countries learn how to make the shoes, provide some assistance in sourcing the materials, etc.
As it is today, if someone in those areas where they give shoes away has any aspiration of making shoes, they have no chance because they won't ever be able to compete with someone coming in and giving away free shoes.
When the kid who received the new pair of free shoes inevitably needs another pair, there is infrastructure in place for him to get those new shoes, rather than waiting for Tom's to show up again with more free shoes.
I'm not knocking Tom's because I think their intentions are simply to help people. But I do think they're missing the target - I think that is what Senor Slim is referring to.