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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

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.
- mynameishere 19y ago
  Africa has none of these. Wrong. South Africa is a passably modern country, and it became that way through its sheer money-making opportunities. The existence of rich resources, mixed with a decent climate made SA more workable than other countries. The Africans in SA didn't need handouts in order to work in mines. But currently, you have two types of prospering Africans in SA: Those who made it on their own, and those who received "handouts" from the affirmative-action-drunk post-Apartheid government. Guess which group might eventually sink the ship? Which sunk Zimbabwe? Improvement comes through mutually beneficial exploitation, like it or not. I'm an asshole, but I'm right. My (little) money's where my mouth is: Almost all of my investments are in foreign companies, with a large share in undeveloped countries. I've done quite well... I don't give a fly about Africa's well-being (believe me), but there's growth opportunities there.
  - nostrademons 19y ago
    I thought I'd left in a clause where I excepted a few African countries, but it looks like I edited that out. There are some African nations that are not doing too poorly. South Africa, Egypt, to a lesser extent Kenya, Botswana, and Ghana. What I wrote above does not apply to them. I'd very much disagree about your assessment of why South Africa developed, though. The rest of Africa is rich in resources too, and many of them have free (as in lack of regulation) markets. South Africa became a passably modern country because it was colonized by the British. Unlike other European colonial powers, the British brought their institutions with them and trained the local natives to govern them. When other European colonial powers pulled out, they took all trained administrators with them. Take a look at the list of British colonies in Africa (http://en.wikipedia.org/wiki/Decolonization_of_Africa http://en.wikipedia.org/wiki/Decolonization_of_Africa): Egypt, Sudan, Ghana, Cameroon, Nigeria, Sierra Leone, Tanzania, Uganda, Kenya, Malawi, Zambia, Gambia, Botswana, Lesotho, Mauritius, Swaziland, Zimbabwe, and South Africa. Now take a look at the most successful economies in Africa (http://en.wikipedia.org/wiki/Africa#Economy http://en.wikipedia.org/wiki/Africa#Economy): South Africa, Botswana, Ghana, Kenya, Cameroon, Egypt, and until recently, Nigeria. Notice any similarities?
    - 19y ago

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.

mynameishere 19y ago
Africa has none of these. Wrong. South Africa is a passably modern country, and it became that way through its sheer money-making opportunities. The existence of rich resources, mixed with a decent climate made SA more workable than other countries. The Africans in SA didn't need handouts in order to work in mines. But currently, you have two types of prospering Africans in SA: Those who made it on their own, and those who received "handouts" from the affirmative-action-drunk post-Apartheid government. Guess which group might eventually sink the ship? Which sunk Zimbabwe? Improvement comes through mutually beneficial exploitation, like it or not. I'm an asshole, but I'm right. My (little) money's where my mouth is: Almost all of my investments are in foreign companies, with a large share in undeveloped countries. I've done quite well... I don't give a fly about Africa's well-being (believe me), but there's growth opportunities there.
- nostrademons 19y ago
  I thought I'd left in a clause where I excepted a few African countries, but it looks like I edited that out. There are some African nations that are not doing too poorly. South Africa, Egypt, to a lesser extent Kenya, Botswana, and Ghana. What I wrote above does not apply to them. I'd very much disagree about your assessment of why South Africa developed, though. The rest of Africa is rich in resources too, and many of them have free (as in lack of regulation) markets. South Africa became a passably modern country because it was colonized by the British. Unlike other European colonial powers, the British brought their institutions with them and trained the local natives to govern them. When other European colonial powers pulled out, they took all trained administrators with them. Take a look at the list of British colonies in Africa (http://en.wikipedia.org/wiki/Decolonization_of_Africa http://en.wikipedia.org/wiki/Decolonization_of_Africa): Egypt, Sudan, Ghana, Cameroon, Nigeria, Sierra Leone, Tanzania, Uganda, Kenya, Malawi, Zambia, Gambia, Botswana, Lesotho, Mauritius, Swaziland, Zimbabwe, and South Africa. Now take a look at the most successful economies in Africa (http://en.wikipedia.org/wiki/Africa#Economy http://en.wikipedia.org/wiki/Africa#Economy): South Africa, Botswana, Ghana, Kenya, Cameroon, Egypt, and until recently, Nigeria. Notice any similarities?
  - 19y ago