Monday, August 20, 2007

Philanthropy, Gates Style

I liked this article even though I think one of its main arguments is nonsense: that investing in "damaging countries" by purchasing their common stock causes damage. Note that it is written by a Ph.D. geneticist / biophysicist, who rightly attacks the Green Revolution / Monsanto subsidy push.

Socially Responsible Investing (SRI) is nonsense. Someone will always buy the stock of a company that's doing well and sell the stock of a company that's doing badly. If anything it's better if socially responsible people reap the benefits from owning corrupt companies because they'll put the money to better use -- if they ignore the "irresponsible" opportunities, they make these opportunities all the more lucrative for the "irresponsible" investors. Furthermore, investing in corrupt companies gives you some power over their decisions. The article touches on this, but not firmly enough when it notes that "nearly one-third of philanthropic foundations take part in shareholder initiatives, voting their proxies to influence corporate behaviour. The Nathan Cummings Foundation, with an endowment of $481 million, has sponsored proxies to force corporations to address environmental sustainability and political transparency. Shouldn’t the Gates Foundation do the same?"

So the article could have cut out all that nonsense and focused on what is really wrong with the Gates Foundation: its focus on long-shot, ineffective cures; its big-business promotions and subsidization; the brain-drain it causes in Africa, and the lack of focus it puts on policy and infrastructure. The whole foundation is a huge waste of money, and it leads me to believe that it's either a publicity stunt or Gates / Buffett don't have a clue. (George Soros, on the other hand, does -- and he recently invested in Halliburton.)

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