Good intentions open Gates to hell
The Microsoft co-founder’s foundation might not be such a knight in shining armour
n his 2024 annual letter urging the superwealthy to commit to philanthropy, Mark Suzman, CEO of the Gates Foundation, makes much of how success depends on collaboration. “For our foundation, that means looking for market failures, areas where public and private sectors are unlikely to step in and so progress is unlikely if philanthropies don’t act.”
Suzman and Bill Gates often refer to market failure, always without irony. And without any sensitivity to the possibility that were it not for market failure, the former Microsoft CEO would not have accumulated the tens of billions he has pumped tax free into his foundation. During the 1990s Gates was locked in a marathon antitrust battle with the US department of justice, which charged that Microsoft had “illegally maintained a monopoly” in personal computer operating systems. Sounds like market failure right there.
Surely when a market is not working competitively, is not regulated effectively and generates hefty profits, it’ sa failed one.
Without venturing too deeply into Proudhon’s “property is theft” territory, it is likely that the majority of 21st-century billionaires are benefiting from some form of market failure, generally through the inability of governments to regulate effectively because of lobbying or corruption.
Suzman tells us that in tandem with governments and international groups in SubSaharan
IAfrica, the foundation funds research & development and “delivery of solutions” to help smallholder farmers. Genetically modified chickens, better able to survive disease, and drought-tolerant strains of cassava apparently don’t always represent profitable opportunities for private companies but could, says Suzman, help millions of families. “That’s exactly the kind of market failure we look to address.”
But it seems not everyone is happy with these efforts. In a recent book, The Bill Gates Problem, journalist Tim Schwab tells of his engagement with civil society organisations in Africa and their concerns.
One such is the Alliance for Food Sovereignty in Africa, which welcomes investment in agriculture but not “as a topdown force that ends up concentrating power and profit into the hands of a small number of multinational companies”. According to Schwab, many intended beneficiaries, who describe the aid as neocolonialism, have asked Gates to stop helping them. They say that since the launch of his Africa flagship project in 2006, the number of undernourished people across the affected 13 countries has increased by 30%.
To his credit, Peter Buffett (son of Warren) has acknowledged what he calls “philanthropic colonialism” and calls it destructive and manipulative.
Indeed, any of the super-wealthy who are considering signing on to Gates’s “giving pledge” would do well to read Schwab’s excoriating account. While Gates and the foundation appear sheltered from hostile media attention, every decade or so a detailed investigation appears in book form. Given all the nondisclosure agreements in Gates’s world, Schwab had limited access to on-the-record interviews, so it’s difficult to assess the veracity of this account. But because Gates exerts so much power over so many global issues and is so rarely challenged, it’s important that Schwab’s concerns are aired.
Certainly, it’s interesting that at end-2021 the foundation had 1,843 employees and was spending more than $1bn a year on administrative costs and professional fees. According to Schwab, hundreds of millions, maybe billions, end up with the usual self-proclaimed experts-for-hire such as McKinsey and Boston Consulting Group. And it turns out most of the foundation’s charitable grants go to wealthy nations, from where the money is presumably expected to trickle into Africa and India.
Perhaps the most worrying of Schwab’s analysis relates to
the foundation’s limited success, given the huge sums involved. Lives have been saved and improved, but claims of tens of millions of lives saved since 2013 do not stand up to scrutiny and the goal of reducing inequities has obviously not been met.
In Africa, after a lull, there’s been a resurgence in malaria. A New York Times report attributes this to a mosquito strain that mutated due to the foundation’s interventions, as well as the arrival of a new strain from Asia.
On a recent visit to a farm on the Zambezi, I watched young men fishing from canoes using mosquito nets, enabling them to scoop up everything, including resources lost to future fishers.
Ironically, severely unphilanthropic Elon Musk seems to have made a substantial contribution to the poor of Africa by giving them access to Starlink on commercial terms.
Perhaps philanthropists should focus on fixing market failures in their own backyards.