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Lewis suggests that donors to charity be able to deduct the full amount of their contribution from taxes This brings up a comparison in my mind: Bill Gates (ph

Lewis suggests that donors to charity be able to deduct the full amount of their contribution from taxes This brings up a comparison in my mind: Bill Gates (philanthropist) vs Paul Allen (investor). Whose post-Microsoft activity is more valuable? Who should be able to deduct more off of his taxes due to his cash distributions? Gates seems like a nice guy...but I think that's what he's going for: To make me (and the federalis) think he's a "nice guy". History has shown rather completely that charity is useless or harmful. Investing in companies, by contrast is useless or useful. I don't think we should encourage policies to make Paul Allen, like Gates, throw his money away rather than utilize it.

nostrademons 19y ago
"History has shown rather completely that charity is useless or harmful." Oh? Anyone here go to UChicago? That was Rockefeller's philanthropy. How about CMU? Carnegie-Mellon. Who watched Square One as a kid? Also Carnegie & Mellon. Ever aspired to being a Nobel Laureate? Alfred Nobel, the person who got rich off dynamite. The math competitions I went to were sponsored by a variety of corporate charities. The Intel and Westinghouse science competitions are Intel and Westinghouse's charitable programs, respectively. Olin College was started by liquidating the Olin Foundation. My high school was started with a grant from the Annenberg Foundation. I credit it with getting me interested in startups in the first place. It's now doing teacher training with a $500K grant from the Gates Foundation. One of my mom's friends is involved with schools in Africa. She says that the Gates Foundation has made a massive difference over there. Children who would otherwise die from childhood illnesses are going to school, learning to read and write, and even learning how to use computers. I think a better lesson to draw from history would be that attempts to distribute money are always fraught with unintended consequences, so tread carefully. However, you don't get to be a billionaire if you're not careful with money. Gates and Rockefeller and Carnegie don't need our advice on how to put their money to good use. I'd hardly say that Gates is "throwing away" his money. (Paul Allen, OTOH - really, can you say that the Portland Trailblazers are worth more than saving 70 million kids from measles?)
- mynameishere 19y ago
  To be sure, when I said "philanthropy" I implied the "giving to the poor" variety. Schools and Universities for whatever reason don't seem to spring up through the profit motive [1], and so giveaways of various kinds are typical. Many universities sprung up from Churches but that doesn't validate all the quantifiably harmful activities of churches. More to the point: She says that the Gates Foundation has made a massive difference over there Here's the thing: MAYBE Gates manages his money better than everyone else. I'm willing to accept the possibility, but I doubt it. It's always nice to hear that such-and-such is going well, but when it comes to massive boondoggles, you're unlikely to hear anything else. "Yes, yes, all the billions were well spent." The problem is, Africa is dirt poor despite endless charity from the west. http://en.wikipedia.org/wiki/List_of_countries_by_GDP_ http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal) I'm inclined to look at verifiable results rather than anecdotes. Here's the question: Do you think the presence of a well-run Emerging Markets investment fund through Gates' money would help Africa more or less than free Vista-loaded computers? [1] I don't know why this is. Why is CMU better than Devry? The best single answer is: Reputation. I'm inclined to bet of the free market, but educational systems seem resistent to the free market.
  - nostrademons 19y ago
    "Do you think the presence of a well-run Emerging Markets investment fund through Gates' money would help Africa more or less than free Vista-loaded computers?" Until Africa has the institutions necessary to support a free market, Gates's philanthropy (which actually is aimed more towards health and basic literacy than free computers) is much more useful than an Emerging Markets fund. Many die-hard free-marketers don't realize this, but markets require significant institutional support before they even become workable, let alone efficient. You need private property rights. You need contract law. You need courts that enforce laws in a predictable, non-arbitrary way. You need literacy. You need a culture that believes that it's worth sacrificing today's pleasure for tomorrow's happiness. You need a rational belief that there will be a tomorrow, and you won't die from some random illness or machete-toting warlord in the meantime. You need transportation infrastructure to move goods and services between locations. You need a stable currency that's accepted by everyone you're likely to do business with and won't be hyperinflated away on a warlord's whim. Africa has none of these. So pouring any sort of money into Africa, whether it comes from charitable donations or a hedge fund, means pouring it down a black hole. There's nothing special about the private sector that makes it immune to this. Normally, private firms do better because ones that fail get replaced by ones that succeed. Well, fine. They'll all fail, as will all their replacements. Gates is working at trying to supply the basic infrastructure necessary for a market economy to emerge. In order to have markets, you must have contracts and private property. In order to have contracts, you must have literacy. In order to have literacy, you must have education. In order to have education, you need a reasonable belief that you won't die next week from a random illness. So the Gates Foundation starts the process there: ensure that people have a reasonable belief that they won't die next week. It finds villages that already have a reasonably stable food supply and are not in the middle of a civil war (those, for the moment, are beyond help unless you get the U.S. military involved). It then vaccinates the children, installs pumps for clean water, teaches them some basic sanitation rules like "don't shit upstream of your water supply", and so on. Education only becomes realistic once children have a reasonable expectation that they won't die. Once they do, you can work on literacy. Once you have literacy you can try to change the institutions of the host country. More likely, you'd want to get some small-scale trade going among villages and between villages and the West. This is why the Internet is potentially so important over there - it lets African villagers bypass the corrupt warlords and governments above them. But not before they have the basics down. It's meaningless to speak of an Emerging Markets fund going into many African countries. There's no market at all, let alone an emerging one.
Caligula 19y ago
".but I think that's what he's going for: To make me (and the federalis) think he's a "nice guy"." I don't think Gates cares what you think. "History has shown rather completely that charity is useless or harmful" Wow. What history are you referring to?
- mynameishere 19y ago
  What history are you referring to? The history of Africa. Billions and billions and billions of dollars thrown away. It's still very poor.
  - nostrademons 19y ago
    This is largely because people give away money stupidly, not because people give away money. Until recently, most aid to Africa was distributed top-down. Western organizations would send money to African governments or African NGOs, which were supposed to distribute the money to their people. However, since Africa is so corrupt, the money usually got "stuck" at some warlord, who squirreled it away in a Swiss bank account or bought a nice palace or private security detail for himself. Very little of it reached the people it was supposed to help. Bottom-up charitable programs in Africa have been very successful. Things like the Gates Foundation, various micro-capital organizations, and direct school-to-school exchanges have made a measurable difference in the lives of many Africans.
    - byrneseyeview 19y ago
      "This is largely because people give away money stupidly" But is that an accident of history (people care more about making money than about giving it away?) or a characteristic of charity? From what I've read, less than 1% of the increase in standards of living during the last 200 years can be attributed to charity. Given the number of fortunes that are charitably disposed of, giving money away rather than investing it is akin to making your target group worse off so you can feel better about yourself; it's selfish and destructive, and but for a trick of language, it would be blatantly uncharitable. See also: http://slate.com/id/2110817/ http://slate.com/id/2110817/
adamdoupe 19y ago
Wow, you think that all the contributes of the Bill and Melinda Gates Foundation are "useless or harmful"? (http://en.wikipedia.org/wiki/Bill_and_Melinda_Gates_Foundation http://en.wikipedia.org/wiki/Bill_and_Melinda_Gates_Foundati...) I would not consider giving my money back to do things like eradicating polio useless.
- mynameishere 19y ago
  Thanks for the link. You've confirmed everything I've said and more: The Gates Millennium Scholars fund, according to its official website's frequently asked questions section, only provides scholarships to African American, American Indian/Alaska Native, Asian, Pacific Islander American or Hispanic American applicants. What a tool. Maybe I will buy that Macintosh, after all... Imagine an investment firm with the above policy. Imagine!
  - deleted 19y ago
    [deleted]
run4yourlives 19y ago
I think you've been downmodded because the thoughtful point you raised is shrouded in rhetoric. Is investing more valuable than charity? It's an interesting concept worth exploring, but clearly if you compare instance to instance you're going to look stupid. Take a look a nostradamous's excellent rebuttal to your comparison. I think though, that the point Lewis is making is based on a simple fact: Charity is done for the direct benefit of others and investing is done for the direct benefit of self. If you take this theory, and allow for a better self benefit by increasing charity contributions, you should be able to have a net gain for both the givers and the givees.
- nostrademons 19y ago
  "Charity is done for the direct benefit of others and investing is done for the direct benefit of self." I think it's a bit more muddled than that. For example, YC "investments" have a predominantly benevolent motive: help more people found startups, which increases consumer welfare and lets the founders get rich. PG et al really don't need and probably won't use the money. The Grameen Bank invests in projects, but its primary goal is to help economic development, and it only turns a modest profit. Meanwhile, when I give money to beggars on the street, I have a reasonable belief that they're going to use it to get drunk. I don't do it for them, I do it because I don't want to feel like an asshole. Yet most people would still consider this charity. I think a better distinction might be: Investments measure their success against the market. Charity measures its success against the world. Because evaluating charity is so much less precise, you need to be extra careful when making charitable contributions (assuming you're doing it to do good, and not just to make yourself feel good). However, since not everything that counts can be counted, some benevolent activities can only be pursued as charity. Invest when you can and give charitably when you can't, and be extra careful with charitable contributions, because it's much harder to know that you're successful.
  - run4yourlives 19y ago
    > For example, YC "investments" have a predominantly benevolent motive Ah, I'm not going to give you that one. YC is in the game to make money. Whether PG needs it or not, likes helping college kids or just needs something to do, the fact remains YC's primary purpose is to make money for itself. >Investments measure their success against the market. Charity measures its success against the world. That's an interesting take. I tend to agree. I think that the OP though was trying to compare investing's indirect "trickle down" benefits to charity's and concluding that investing had a greater net impact. I'm not sure I agree with that, but it's a compelling standpoint.

nostrademons 19y ago

"History has shown rather completely that charity is useless or harmful." Oh? Anyone here go to UChicago? That was Rockefeller's philanthropy. How about CMU? Carnegie-Mellon. Who watched Square One as a kid? Also Carnegie & Mellon. Ever aspired to being a Nobel Laureate? Alfred Nobel, the person who got rich off dynamite. The math competitions I went to were sponsored by a variety of corporate charities. The Intel and Westinghouse science competitions are Intel and Westinghouse's charitable programs, respectively. Olin College was started by liquidating the Olin Foundation. My high school was started with a grant from the Annenberg Foundation. I credit it with getting me interested in startups in the first place. It's now doing teacher training with a $500K grant from the Gates Foundation. One of my mom's friends is involved with schools in Africa. She says that the Gates Foundation has made a massive difference over there. Children who would otherwise die from childhood illnesses are going to school, learning to read and write, and even learning how to use computers. I think a better lesson to draw from history would be that attempts to distribute money are always fraught with unintended consequences, so tread carefully. However, you don't get to be a billionaire if you're not careful with money. Gates and Rockefeller and Carnegie don't need our advice on how to put their money to good use. I'd hardly say that Gates is "throwing away" his money. (Paul Allen, OTOH - really, can you say that the Portland Trailblazers are worth more than saving 70 million kids from measles?)

mynameishere 19y ago
To be sure, when I said "philanthropy" I implied the "giving to the poor" variety. Schools and Universities for whatever reason don't seem to spring up through the profit motive [1], and so giveaways of various kinds are typical. Many universities sprung up from Churches but that doesn't validate all the quantifiably harmful activities of churches. More to the point: She says that the Gates Foundation has made a massive difference over there Here's the thing: MAYBE Gates manages his money better than everyone else. I'm willing to accept the possibility, but I doubt it. It's always nice to hear that such-and-such is going well, but when it comes to massive boondoggles, you're unlikely to hear anything else. "Yes, yes, all the billions were well spent." The problem is, Africa is dirt poor despite endless charity from the west. http://en.wikipedia.org/wiki/List_of_countries_by_GDP_ http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal) I'm inclined to look at verifiable results rather than anecdotes. Here's the question: Do you think the presence of a well-run Emerging Markets investment fund through Gates' money would help Africa more or less than free Vista-loaded computers? [1] I don't know why this is. Why is CMU better than Devry? The best single answer is: Reputation. I'm inclined to bet of the free market, but educational systems seem resistent to the free market.
- nostrademons 19y ago
  "Do you think the presence of a well-run Emerging Markets investment fund through Gates' money would help Africa more or less than free Vista-loaded computers?" Until Africa has the institutions necessary to support a free market, Gates's philanthropy (which actually is aimed more towards health and basic literacy than free computers) is much more useful than an Emerging Markets fund. Many die-hard free-marketers don't realize this, but markets require significant institutional support before they even become workable, let alone efficient. You need private property rights. You need contract law. You need courts that enforce laws in a predictable, non-arbitrary way. You need literacy. You need a culture that believes that it's worth sacrificing today's pleasure for tomorrow's happiness. You need a rational belief that there will be a tomorrow, and you won't die from some random illness or machete-toting warlord in the meantime. You need transportation infrastructure to move goods and services between locations. You need a stable currency that's accepted by everyone you're likely to do business with and won't be hyperinflated away on a warlord's whim. Africa has none of these. So pouring any sort of money into Africa, whether it comes from charitable donations or a hedge fund, means pouring it down a black hole. There's nothing special about the private sector that makes it immune to this. Normally, private firms do better because ones that fail get replaced by ones that succeed. Well, fine. They'll all fail, as will all their replacements. Gates is working at trying to supply the basic infrastructure necessary for a market economy to emerge. In order to have markets, you must have contracts and private property. In order to have contracts, you must have literacy. In order to have literacy, you must have education. In order to have education, you need a reasonable belief that you won't die next week from a random illness. So the Gates Foundation starts the process there: ensure that people have a reasonable belief that they won't die next week. It finds villages that already have a reasonably stable food supply and are not in the middle of a civil war (those, for the moment, are beyond help unless you get the U.S. military involved). It then vaccinates the children, installs pumps for clean water, teaches them some basic sanitation rules like "don't shit upstream of your water supply", and so on. Education only becomes realistic once children have a reasonable expectation that they won't die. Once they do, you can work on literacy. Once you have literacy you can try to change the institutions of the host country. More likely, you'd want to get some small-scale trade going among villages and between villages and the West. This is why the Internet is potentially so important over there - it lets African villagers bypass the corrupt warlords and governments above them. But not before they have the basics down. It's meaningless to speak of an Emerging Markets fund going into many African countries. There's no market at all, let alone an emerging one.

Caligula 19y ago

".but I think that's what he's going for: To make me (and the federalis) think he's a "nice guy"." I don't think Gates cares what you think. "History has shown rather completely that charity is useless or harmful" Wow. What history are you referring to?

mynameishere 19y ago
What history are you referring to? The history of Africa. Billions and billions and billions of dollars thrown away. It's still very poor.
- nostrademons 19y ago
  This is largely because people give away money stupidly, not because people give away money. Until recently, most aid to Africa was distributed top-down. Western organizations would send money to African governments or African NGOs, which were supposed to distribute the money to their people. However, since Africa is so corrupt, the money usually got "stuck" at some warlord, who squirreled it away in a Swiss bank account or bought a nice palace or private security detail for himself. Very little of it reached the people it was supposed to help. Bottom-up charitable programs in Africa have been very successful. Things like the Gates Foundation, various micro-capital organizations, and direct school-to-school exchanges have made a measurable difference in the lives of many Africans.
  - byrneseyeview 19y ago
    "This is largely because people give away money stupidly" But is that an accident of history (people care more about making money than about giving it away?) or a characteristic of charity? From what I've read, less than 1% of the increase in standards of living during the last 200 years can be attributed to charity. Given the number of fortunes that are charitably disposed of, giving money away rather than investing it is akin to making your target group worse off so you can feel better about yourself; it's selfish and destructive, and but for a trick of language, it would be blatantly uncharitable. See also: http://slate.com/id/2110817/ http://slate.com/id/2110817/

adamdoupe 19y ago

Wow, you think that all the contributes of the Bill and Melinda Gates Foundation are "useless or harmful"? (http://en.wikipedia.org/wiki/Bill_and_Melinda_Gates_Foundation http://en.wikipedia.org/wiki/Bill_and_Melinda_Gates_Foundati...) I would not consider giving my money back to do things like eradicating polio useless.

mynameishere 19y ago
Thanks for the link. You've confirmed everything I've said and more: The Gates Millennium Scholars fund, according to its official website's frequently asked questions section, only provides scholarships to African American, American Indian/Alaska Native, Asian, Pacific Islander American or Hispanic American applicants. What a tool. Maybe I will buy that Macintosh, after all... Imagine an investment firm with the above policy. Imagine!
- deleted 19y ago
  [deleted]

run4yourlives 19y ago

I think you've been downmodded because the thoughtful point you raised is shrouded in rhetoric. Is investing more valuable than charity? It's an interesting concept worth exploring, but clearly if you compare instance to instance you're going to look stupid. Take a look a nostradamous's excellent rebuttal to your comparison. I think though, that the point Lewis is making is based on a simple fact: Charity is done for the direct benefit of others and investing is done for the direct benefit of self. If you take this theory, and allow for a better self benefit by increasing charity contributions, you should be able to have a net gain for both the givers and the givees.

nostrademons 19y ago
"Charity is done for the direct benefit of others and investing is done for the direct benefit of self." I think it's a bit more muddled than that. For example, YC "investments" have a predominantly benevolent motive: help more people found startups, which increases consumer welfare and lets the founders get rich. PG et al really don't need and probably won't use the money. The Grameen Bank invests in projects, but its primary goal is to help economic development, and it only turns a modest profit. Meanwhile, when I give money to beggars on the street, I have a reasonable belief that they're going to use it to get drunk. I don't do it for them, I do it because I don't want to feel like an asshole. Yet most people would still consider this charity. I think a better distinction might be: Investments measure their success against the market. Charity measures its success against the world. Because evaluating charity is so much less precise, you need to be extra careful when making charitable contributions (assuming you're doing it to do good, and not just to make yourself feel good). However, since not everything that counts can be counted, some benevolent activities can only be pursued as charity. Invest when you can and give charitably when you can't, and be extra careful with charitable contributions, because it's much harder to know that you're successful.
- run4yourlives 19y ago
  > For example, YC "investments" have a predominantly benevolent motive Ah, I'm not going to give you that one. YC is in the game to make money. Whether PG needs it or not, likes helping college kids or just needs something to do, the fact remains YC's primary purpose is to make money for itself. >Investments measure their success against the market. Charity measures its success against the world. That's an interesting take. I tend to agree. I think that the OP though was trying to compare investing's indirect "trickle down" benefits to charity's and concluding that investing had a greater net impact. I'm not sure I agree with that, but it's a compelling standpoint.