As much as I'm generally for wealth redistribution, that's not how it works. Gates and probably Bezos especially want to control their companies. They founded them, after all. So for that they own shares and those shares are the bulk of their money.
Also, I don't know about Amazon, but Microsoft was actually famous for distributing wealth quite well:
> The company's 1986 initial public offering (IPO), and subsequent rise in its share price, created three billionaires and an estimated 12,000 millionaires among Microsoft employees.
I think his point is for the on-going operations of the company. Employees there at the IPO make a lot of money but those afterwards probably make way less. At many companies employees don't even get any kind of RSU/ESPP/stock option grants, etc.
Just as a though experiment, Apple Inc. has about 140k employees and had a net profit of $55bn last year. If they'd keep half the profit, you know, for a rainy day, they could give a yearly bonus of ~$20k$ to each employee. With 0 risk for the company, financially.
Now, I'm not sure how this would work out since generally cash based bonuses are considered bad for long term motivation, but it is something worth pondering, at least.
> Like why doesn't Gates or Bezos give everyone a $100k bonus and keep a billion?
If you're looking to do philanthropic actions, giving all employees $100k doesn't do anything. It merely increases the wealth of those employees by a bit. What about fighting malaria? What about fighting climate change? Do you seriously expect all those recipients of $100k would all contribute as much proportionally?
And those employees have already been paid their agreed wages/salaries. So why does giving them extra money makes it more philanthropic?
> It merely increases the wealth of those employees by a bit. What about fighting malaria? What about fighting climate change? Do you seriously expect all those recipients of $100k would all contribute as much proportionally?
Yes. In a sane democratic system, I would expect government to finance these projects. And it does.
Now you can somehow make an argument that people in democracy are less likely to support these projects than they are alone as wealthy people. I don't see how it would work. Self-selected billionaires are on average less selfish than ordinary people?
>Yes. In a sane democratic system, I would expect government to finance these projects. And it does.
Have you ever tried to get something funded by a government program ? I would bet 10/10 times that a competent leader (which Gates is beyond a doubt) is going to be more efficient at executing on a goal than a bureaucratic system passed down between governments, parties and agency interpretations.
And that's assuming that money gets allocated towards the said goals, so much stuff gets funded that very few tax payers would support as a result of lobbying (which is always going to happen when you funnel that much money through politicians) and even if it gets allocated to the desired goals it then goes through contractors with connections that add a government markup + the overhead of keeping up with the bureaucracy.
Just having someone as competent and connected as Gates tackling that problem is a huge value add, getting that calibre of a person through a government system is very unlikely.
> a competent leader (which Gates is beyond a doubt) is going to be more efficient at executing on a goal ...
Bill Gates was perhaps a competent businessman, exploiting his powerful network, intellectual property laws, destroying the competition, lobbying. He was ruthless. It doesn't make him competent at everything. Especially something like climate change that requires a global policy of reduction in energy use (anyone who tells you climate change will be solved by innovation, energy efficiency, solar panels and fusion alone is lying to you.)
Bill Gates invested billions on nuclear energy innovation for a decade now.
What are the results? The world's energy use kept piling up, instead of being replaced by clean energy sources. Any decrease in GHG emissions in the developed world is a consequence of globalization and automation. It's just accounting. The GHG emissions have increased elsewhere.
Climate change is a governmental problem that requires investing in energy use reduction, insulation, public transportation, and the like. The solutions are there and have been for decades, but won't be implemented because we keep listening to tech evangelists.
> Climate change is a governmental problem that requires investing in energy use reduction, insulation, public transportation, and the like.
It's not a governmental problem, it's an inter-governmental problem. Don't forget that governments are in competition with each other as much as your local grocery store is in competition with a Wallmart on the next street.
There are two strategies to tackling global warming that I firmly believe are completely ineffective: hoping for individuals to suddenly reduce their consumption, and hoping for politicians to swiftly pass necessary regulations in their countries. Both are essentially the same: asking someone to make sacrifice and suffer immediate negative consequences, and paying them with hope that others will volunteer to do the same (instead of doing nothing and enjoying the relative increase in status/wealth/power).
The reason to invest in research and new technology is because it gives a way out of the conundrum. Technology gives additional options to politicians. For instance, where no sane policymaker would mandate immediate restrictions on energy production in a nation powered by fossil fuels, dropping prices and increasing availability of solar PVs makes it easy to start funneling money into renewables, which a) makes the politician look progressive/pro-eco, b) allows to decarbonize energy production without reducing it and making the nation less competitive.
So basically - yes, the governments are ones with the power and means to solve this problem. But they won't just go and do it, for the same reason companies on the market don't just agree to do something together. If you want to push them to change, you have to go along with the incentive structures that govern the nations.
> The reason to invest in research and new technology is because it gives a way out of the conundrum.
No, it doesn't. At least not by itself. We need a combined response of energy savings, energy efficiency, behavioral changes and green tech to have a chance to mitigate climate change effects.
Anyone who believes into innovation to get us out of this mess didn't make the math. Take aviation. The aviation industry currently burns 10% of the world's crude oil production. The current front-leader innovative "way out" is biofuels. Except if we used 100% of the world's agricultural surface to produce biofuel, we could only replace 25% of the world's oil consumption. Hard to imagine a growing aviation industry with that kind of constraint.
I'm OK with biofuels powering airplanes, but only if we collectively accept flying maybe 10 times less. The same kind of math would apply with hydrogen, etc. There is no exception.
I don't know what to say on the climate change issue - the way I see it it's not something any one government can handle - you've said it - just gets outsourced out of your jurisdiction.
Even with trade pressures, etc. cheap energy is going to get used to increase the living standards of developing nations.
Also all the solutions proposed towards climate change issue seem shortsighted and regressive to me - everyone keeps pretending that if we reduce CO2 the earth will somehow return to a harmonious state and we will all live happily ever after. Even if cutting CO2 in the future fast enough would reverse climate change effects (which we can't really predict) there are still marginal risk factors that could end in global catastrophes (like the previous extinction events in history) and on top of that the globalised society is introducing new problems that we've had to deal with for last 50 years at best. A deadly virus outbreak with a long enough incubation time could swarm the population considering how interconnected the world is, nuclear catastrophes have potentially global impact, etc. etc.
So the politicians are talking about climate change because it's a popular topic with the voters - meanwhile the real problem is that we are dependent on an ecosystem that's incredibly fragile and society is introducing risk variables that didn't exist before.
The world is very interconnected and optimised - but this leads to fragility. We've had situations where a natural disaster in one area (Taiwan) caused major industry problems. Not to mention potential political issues like the recent trade wars with China.
The real solution is working on reducing our dependence on the ecosystem and building more resilient systems - but this is not something an average person would find intuitive - and so it's unlikely to get political support. A perfect example of where motivated individuals can make the difference - and where something like Mars colonisation research can end up providing solutions for earth. And then again it might lead to nothing, and I could be wrong and the climate change campaigning ends up working - it's good we have multiple actors pursuing different solutions.
> Even with trade pressures, etc. cheap energy is going to get used to increase the living standards of developing nations.
This is often touted as a reason why we developed countries cannot do anything to mitigate climate change risks. This is first of all false, developed countries together (USA, EU, Japan, Korea, Gulf states) still account for more than 70% of the emissions, NOT including the emissions associated with importations. The lifestyles of the richest 0.54% in the world — 42 million people — are emitting more greenhouse gas emissions than the poorest half of the global population —3.8 billion people.
It's about returning to reality. The lifestyles of most of us in developed countries should not exist.
> The real solution is working on reducing our dependence on the ecosystem and building more resilient systems
Please come back to reality. The world spends trillions of dollars on the ISS to host 6 people. Anything remotely looking like an artificial ecosystem would be prohibitively expensive, not counting our limited resources on Earth would simply make it impossible for it to sustain life for more than a few million people. You can work hard to be part of the few richest million who would make it in this artificial biosphere, or you can change your own lifestyle and footprint, try to inspire others, and then you can realise that we can still live happily with a lower footprint.
- The budget of a democratic nation isn't under direct control of its constituents, so average selfishness of the citizens has nothing to do with it.
- A democratic nation has lots of interests jockeying for the budget, and can easily swallow arbitrary amounts of money.
- Almost all of that money is spent on improving the things for that nation, so a nation state is not the best organization to task with solving a global/international problem.
Most importantly though, the more diffused the money, the less effective it is. Coordinating people costs a lot (think of how much charities spend on advertising!). With his fortune, Gates can just drop $60M on some promising anti-malaria activity; in the alternative reality d-d/you are proposing, it's unlikely that 600 of his employees would suddenly coordinate to drop their $100k on that operation; most likely, no money would be donated at all.
So the argument essentially boils down to focus. Much like with distractions and personal productivity, both the market and a government budget can absorb arbitrary amounts of diffuse money with little of value to show for it; it takes focused, bulk money under control of a person to move the needle on some issue.
I don't buy the focus argument. It looks to me as an argument against free market, towards some kind of central planning. Focus can be surprisingly inefficient.
Isn't the whole point of free market that the money end up distributed to citizens (consumers), who then choose what to do with it, and what problems to tackle?
I also think we have Bill Gates (very focusedly) fighting malaria on one side, and Koch brothers (also focusedly) fighting for coal on the other. I am not convinced that in the sum, the side of Bill Gates has won.
If we perhaps diffuse the money, maybe we will actually find enough people to fight malaria, but there will be less people willing to spread lies about climate change. Because there are actually more ordinary people having trouble with malaria than ordinary people having trouble what to do with a coal mine once coal mining gets out of fashion.
It is an argument against free market - to the extent that some people think it's a panacea for all problems. It isn't.
Free markets work best when needs are diverse and not easy to identify. The money flows along feedback loops and finds its way to where it serves best. At least for a while, until those with money use it to redirect more money towards them. But that's a topic for another day.
Ultimately, both Gates and Koch brothers got their money in the free market. It's hard to have one without the other. I think it's best to encourage more rich people to be like Gates, because we'll always have plenty of Kochs.
Yes. We coordinate efficiently in small groups. Less than Dunbar's number, generally. Beyond that, we use hierarchical governance, laws, money and markets as crutches.
Progress implies moving in a direction or towards a specific destination. Maybe the reasoning is that with a couple of billionaire philanthropists there is a smaller number of directions or destinations so the odds of hitting them is more likely. With government deciding and ordinary people contributing taxes, there is a multitude of officials and citizens all pulling in different directions. So, basically the same argument you would make in favor of dictatorship.
Democracy is good because people can govern themselves. The smaller the unit of decision is, the better. So in a big nation, you have perhaps 300 million people, so each vote only has 1/300 millionth of an influence but over 300 million people.
In a small town, you have perhaps 500 people, so each vote has 1/500th of influence over 500 people.
Well, when Bill Gates decides what to do with his money, it's 1/1th of influence over 1 person's wealth.
You need it explained why helping vulnerable and poor groups instead of giving a bonus to your already well payed employees is considered philanthropic? I really don't see what you're driving at here.
Let the market decide. Paying your employees better would be "trickle down economics" in actual action. If those employees decide to use it for philanthropy then the "trickle down" continues.
Except "trickle down" hasn't happened, isn't happening, and won't happen.
There’s no such thing as “trickle down economics”, the phrase “trickle down” was a joke created by a comedian named Will Rogers. So if you’re waiting for a satirical critique of politics to start shaping the economy, then I don’t know what to tell you.
What growth does do is increase competition for labor, so if your economic life plan resolves around earning income from labour, then you benefit from growth. You can see the effect our most recent growth trend has had in the fact that the unemployment rate is the lowest it’s been since the 60s [0], wage growth is double CPI [1], and workforce participation is starting to creep back up after a rather long downward trend [2].
I think giving me a charitable interpretation would be a good start. The origin of the phrase is lost in modern day culture and has a well understood meaning, and you denying me that makes it clear what kind of engagement you are looking for: one in which you feel justified and correct.
I'll give it to you: You're right! Good facts!
Moving on now...
I don't care if my neighbors can get one decent job or more-than-one-shitty job (your [0] and [2]) nor do I care that for X years we had growth in wages (your [1]) when the previous N*X years (for large N) that "real growth in wages" was 0. I would love to sell you stock that will grow at 0% for 30 years and only the last 5 have 2% over inflation. I don't want that toxic shit in my portfolio.
What I care about is the mentality that is justifying making "the market" be one or a handful of people, who happen to own a massive amount of wealth. It's no longer a free market. They are the market. Its self delusional to think someone shouting "I am the State!" has a democratic government, just as someone shouting "I am the market!" is a free and open capitalist market.
Basically, I can't believe my free-market loving friends are ok with its own dismantlement by the concentration of wealth by the ultra wealthy. And I am trying to get through to them.
Give the money to the employees. Who cares if they're already overpaid, because if they are then they'll also make philanthropic donations.
I think the charitable interpretation is that you (like many others) believe there is a group of free market economists that promote this idea of “trickle down economics”. This idea has even less merit than a strawman, since it’s literally a reference to a satire.
> I would love to sell you stock that will grow at 0% for 30 years
Real wage growth (inflation adjusted) has grown about 14% over the past 30 years (which included a financial crisis), so your assessment of the situation is quite unfactual. Those number are fantastic for a highly developed nation, especially when combined with such astonishingly low unemployment.
> What I care about is the mentality that is justifying making "the market" be one or a handful of people, who happen to own a massive amount of wealth.
Having more wealthy people doesn’t mean that everybody else has less. The growth in wealth isn’t taken away from others, it’s generated through economic growth. “The market” is in an absolutely fantastic state. If you want to market your labor, there is abundant opportunity to do so, and it’s worth more and more every year. If you want to generate your own wealth, go ahead, there is a huge amount of cheap capital available (that’s what all those wealthy people did, most of them at times in the past when capital wasn’t as available).
If you want people to “give” you money (as you put it), I don’t know... try Venezuela? The only thing that determines the value of anything is supply and demand. The only alternative system ever (disastrously) trialed was central planning. If you have a better system than supply and demand to propose, then you might have a Nobel prize on your hands.
> Real wage growth (inflation adjusted) has grown about 14% over the past 30 years
> your assessment of the situation is quite unfactual
This, for example, is entirely uncalled for. Ignoring the personal slander, since you're one for citations, and don't even provide one for your own quote here, it makes me suspicious so I went and pulled a chart for you on Wikipedia [0] based on the Department of Labor (using the same CPI that you used in your original reply to me) to show that, no, I do have a factual basis. And trying to claim I am irrational or unfactual is a great way to try to make me feel like shit. But I don't (which is not an invitation to keep trying).
> Having more wealthy people doesn’t mean that everybody else has less. The growth in wealth isn’t taken away from others, it’s generated through economic growth.
This is clear you're strawmanning me. And missed my entire point. The sheer amount of wealth, I have no problem with. But the sheer amount of wealth and power to dictate entire markets and, more alarmingly, remove segments of the population from having power in the free market is problematic for me, a free-market guy. Individuals should not have the market power to dictate what the market is. A free market should not have people powerless in that market. Which is exactly what is happening when people have to work multiple shit jobs and rely on social welfare to maintain a basic standard of living.
> If you want people to “give” you money (as you put it), I don’t know... try Venezuela?
This is such an obvious troll and a clear demonstration of your misunderstanding of my point and clear lack of caring on your part to understand, that it doesn't matter how logical and fact based of an argument I make, you're here to poke fun of a caricature of myself you have concocted for yourself. I'm calling this out as an opportunity for you to reflect.
This is rediculous and dripping with silicon valley "we're workers too" attitude. Employees, especially tech employees, have the luxury of being able to go elsewhere if they don't feel they're being adequately compensated. There is no comparison between helping poor african groups or donating to education and giving your employees, who agreed their wages were fair, a raise. Even if you don't like it, it's ultimately his money. This isn't the alms that could have kept the poor coders from having to endure hardahip. It's difficult to comprehend the mentality that could see the workers as the victims in this situation. They were paid the wages they were promised, is the argument that somehow he's a bad person for amassing more than them?
They are not being 'deprived' of anything. They agreed to exchange their labor for a fixed price, and they received that price. There was no 'deprivation' anywhere in the system.
If you're withholding the fruits of labor from workers because "too bad, bro; you signed the paper" then you're not really trying to be kind to anyone. You just want to be rich and appear to be kind.
How much of the worker output actually is his personal accomplishment, and how much is synergy effect coming from the fact that the employer gave them tools, materials, support of other workers, standard operating procedures, know-how? Therefore not all "fruits of labor" actually belong to a worker.
Microsoft had generous stock option grants to employees. The Seattle Times reported in the 1990s that there were 10,000 Microsoft millionaires in the area.
Getting rejected by Microsoft in the 1980s is one of the ways I've cleverly avoided becoming a billionaire :-)
Your money just goes a lot further when paying for the general provision of public goods (not just giving someone a bonus and calling it "profit sharing") in very poor countries. Some social scientists and analysts are talking about a 1000x multiplier: the social benefit of spending $1 for targeted philanthropy in poorer countries might be the same as someone in a first-world country spending $1000 on their private consumption.
> Can someone explain to me why it's more philanthropic to amass billions instead of sharing profits with employees?
Because you have to dedicate immense resources in a concentrated approach for an extremely long period of time, to conquer some major problems like Malaria or to develop an HIV vaccine or to drive down vaccine production & distribution costs (& difficulties) for the third world. Private philanthropy can often maneuver at speeds that government money can't, take risks governments don't like to, and go places that government money takes far longer to go (there are typically few stakeholders, decision makers - Bill Gates can just decide tomorrow to put a billion dollars behind a thing, whereas the same action might take many months or years by a government body).
If you have 100,000 people and give them each $100,000, their actions will be wildly disparate and will make essentially no impact on major problems. They may make small dents in very local problems, at best (and or improve the well-being of their unit: their family, neighborhood, community and similar). There's nothing wrong with that mind you. However standard local problems already have heavily proven systems that work on them, particularly local government + taxation (this is obviously dependent on the effectiveness of the local government in question and the taxation; regardless it has been repeatedly shown to be highly effective all around the world).
But billionaires can also decide to spend their money on projects that work against the public good. Including those that subvert the value of government spending.
Philanthropy is - at best - one side of the coin.
The other side is the anti-democratic identity between >$1bn net worth and political leverage. (Actually that leverage probably starts at around $100m - although the more you can put on the table the harder you can push to tilt it.)
I believe Microsoft has created a huge amount of money for their employees (their IPO created billionaires and order of thousands or tens of thousands of millionaires).
I don't think Microsofot employees feeling snubbed by their CEOs.
So in this case Bill Gates is doing both. Sharing profit as well as being philanthropic.
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Also, I don't know about Amazon, but Microsoft was actually famous for distributing wealth quite well:
https://en.wikipedia.org/wiki/Microsoft
> The company's 1986 initial public offering (IPO), and subsequent rise in its share price, created three billionaires and an estimated 12,000 millionaires among Microsoft employees.