Ali’s blog

Mostly quant stuff with occasional digressions

Bill Gates spouting more do-gooder rubbish

Posted by alifinmath on January 24, 2008

In the WSJ today:

“We have to find a way to make the aspects of capitalism that serve wealthier people serve poorer people as well,” Mr. Gates will tell world leaders at the forum, according to a copy of the speech seen by The Wall Street Journal.

Capitalism isn’t designed for the poor; it’s a system designed for the rich and powerful to become ever more so; the poor are just grist to the mill.

In particular, he said, he’s troubled that advances in technology, health care and education tend to help the rich and bypass the poor. “The rate of improvement for the third that is better off is pretty rapid,” he said. “The part that’s unsatisfactory is for the bottom third — two billion of six billion.”

Technology is designed for those with means.

Among the fixes he plans to call for: Companies should create businesses that focus on building products and services for the poor. “Such a system would have a twin mission: making profits and also improving lives for those who don’t fully benefit from market forces,” he plans to say.

“Market forces” are there to make a profit — that’s what the game is all about. If companies don’t address the needs of the poor, there’s a good reason: the profit-making potential isn’t there.

But Mr. Gates’s argument for the potential profitability of serving the poor is certain to raise skepticism. “There’s a lot of people at the bottom of the pyramid but the size of the transactions is so small it is not worth it for private business most of the time,” says William Easterly, a New York University professor and former World Bank economist.

Amen.

It’s amazing how far Gates has got his head up his backside. He seems to not really understand the dynamics of a system that has allowed him to become the wealthiest man in the world. There is an organic relationship between the existence of billionaires like him and the two billion indigent people he refers to: the modern world system — dominated by the West on the basis of colonialism and overt military force — which has developed over the last few centuries is precisely what creates these massive disparities. And this system for appropriation of resources — in shorthand we call it “capitalism” — is fell and untameable. Go back five hundred years and see what kind of disparities existed then — nothing on the scale of today.

Anyway, this will make Gates feel good about himself, give him a glowing feeling inside, and give him something to do as he retires from operational control of Microsoft.

Ultimately the dispossessed have to take their destinies in their own hands. Do-gooder reformers can’t help them and are an irrelevance at best.

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