Showing posts with label Gates. Show all posts
Showing posts with label Gates. Show all posts
Thursday 3 March 2022
Friday 29 October 2021
Wednesday 6 October 2021
Friday 2 April 2021
The Poor and the Covid vaccine
Achal Prabhala and Leena Menghaney in The Guardian
As the UK’s vaccination programme was “knocked off course” due to a delay in receiving five million doses of the AstraZeneca vaccine from India, a far more chilling reality was unfolding: about a third of all humanity, living in the poorest countries, found out that they will get almost no coronavirus vaccines in the near future because of India’s urgent need to vaccinate its own massive population.
It’s somewhat rich for figures in Britain to accuse India of vaccine nationalism. That the UK, which has vaccinated nearly 50% of its adults with at least one dose, should demand vaccines from India, which has only vaccinated 3% of its people so far, is immoral. That the UK has already received several million doses from India, alongside other rich countries such as Saudi Arabia and Canada, is a travesty.
The billions of AstraZeneca doses being produced by the Serum Institute in India are not for rich countries – and, in fact, not even for India alone: they are for all 92 of the poorest countries in the world.
Except they’re now being treated as the sovereign property of the Indian government.
How did we get here? Exactly one year ago, researchers at Oxford University’s Jenner Institute, frontrunners in the race to develop a coronavirus vaccine, stated that they intended to allow any manufacturer, anywhere, the rights to their jab. One of the early licences they signed was with the Serum Institute, the world’s largest vaccine manufacturer. One month later, acting on advice from the Gates Foundation, Oxford changed course and signed over exclusive rights to AstraZeneca, a UK-based multinational pharmaceutical group.
AstraZeneca and Serum signed a new deal. Serum would produce vaccines for all poor countries eligible for assistance by Gavi, the Vaccines Alliance – an organisation backed by rich countries’ governments and the Gates Foundation. These 92 nations together counted for half the world – or nearly four billion people. India’s fair share of these vaccines, by population, should have been 35%. However there was an unwritten arrangement that Serum would earmark 50% of its supply for domestic use and 50% for export.
The deal included a clause that allowed AstraZeneca to approve exports to countries not listed in the agreement. Some countries which asked for emergency vaccine shipments from Serum, including South Africa and Brazil, were justified: they had nothing else. Rich countries like the UK and Canada, however, which had bought up more doses than required to vaccinate their people, to the detriment of everyone else, had no moral right to dip into a pool of vaccines designated for poor countries.
Paradoxically, when South Africa and India asked the World Trade Organization to temporarily waive patents and other pharmaceutical monopolies so that vaccines could be manufactured more widely to prevent shortfalls in supply, among the first countries to object were the UK, Canada and Brazil. They were the very governments that would later be asking India to solve their own shortfalls in supply.
The deal did not include restrictions on what price Serum could charge, despite AstraZeneca’s pledge to sell its vaccine for no profit “during the pandemic”, which led to Uganda, which is among the poorest countries on Earth, paying three times more than Europe for the same vaccine. (An AstraZeneca spokesperson told Politico that the “price of the vaccine will differ due to a number of factors, including the cost of manufacturing – which varies depending on the geographic region – and volumes requested by the countries”.)
As it became clear that the western pharmaceutical industry could barely supply the west, let alone anywhere else, many countries turned to Chinese and Russian vaccines. Meanwhile, the Covax Facility – the Gavi-backed outfit that actually procures vaccines for poor countries – stuck to its guns and made deals exclusively with western vaccine manufacturers. From those deals, the AstraZeneca vaccine is now the only viable candidate it has. The bulk of the supply of this vaccine comes from Serum, and a smaller quantity from SK Bioscience in South Korea. As a result, a third of all humanity is now largely dependent on supplies of one vaccine from one company in India.
Cue the Indian government’s involvement. Unlike western governments, which poured billions into the research and development of vaccines, there is no evidence that the Indian government has provided a cent in research and development funding to the Serum Institute. (This did not stop it turning every overseas vaccine delivery into a photo-op.) The government then commandeered approval of every single Covax shipment sent out from Serum – even, according to one well-placed source within the institute, directing how many doses would be sent and when.
The Indian government has not publicly commented on its involvement in the vaccine shipments and has refused requests for comment.
Last month, faced with a surge in infections, the Indian government announced an expansion of its domestic vaccination programme to include 345 million people, and halted all exports of vaccines. About 60m vaccine doses have already been dispensed, and the government needs another 630m to cover everyone in this phase alone. One other vaccine is approved for use – Bharat Biotech’s Covaxin – but it is being produced and utilised in smaller quantities. As more vaccines are approved, the pressure on Serum might decrease. For now, however, the bulk of India’s vaccination goals will be met by just one supplier, which faces the impossible choice of either letting down the other 91 countries depending on it, or offending its own government.
The consequences are devastating. To date, 28m Covax Facility doses have been produced by Serum for the developing world – 10m of which went to India. The second largest shipment went to Nigeria, which received 4m doses, or enough to cover only 1% of its population. Given the new Indian government order of 100m doses, further supplies to countries like Nigeria may be delayed until July. And given the Indian government’s need of 500m more vaccine doses in the short run, that date could surely be pushed out even further.
This colossal mess was entirely predictable, and could have been avoided at every turn. Rich countries such as the UK, the US, and those of the EU, and rich organisations such as Covax should have used their funding of western pharmaceutical companies to nip vaccine monopolies in the bud. Oxford University should have stuck to its plans of allowing anyone, anywhere, to make its vaccine. AstraZeneca and Covax should have licensed as many manufacturers in as many countries as they could to make enough vaccines for the world. The Indian government should have never been effectively put in charge of the wellbeing of every poor country on the planet.
For years, India has been called “the pharmacy of the developing world”. It’s time to rethink that title. We will need many more pharmacies in many more countries to survive this pandemic.
As the UK’s vaccination programme was “knocked off course” due to a delay in receiving five million doses of the AstraZeneca vaccine from India, a far more chilling reality was unfolding: about a third of all humanity, living in the poorest countries, found out that they will get almost no coronavirus vaccines in the near future because of India’s urgent need to vaccinate its own massive population.
It’s somewhat rich for figures in Britain to accuse India of vaccine nationalism. That the UK, which has vaccinated nearly 50% of its adults with at least one dose, should demand vaccines from India, which has only vaccinated 3% of its people so far, is immoral. That the UK has already received several million doses from India, alongside other rich countries such as Saudi Arabia and Canada, is a travesty.
The billions of AstraZeneca doses being produced by the Serum Institute in India are not for rich countries – and, in fact, not even for India alone: they are for all 92 of the poorest countries in the world.
Except they’re now being treated as the sovereign property of the Indian government.
How did we get here? Exactly one year ago, researchers at Oxford University’s Jenner Institute, frontrunners in the race to develop a coronavirus vaccine, stated that they intended to allow any manufacturer, anywhere, the rights to their jab. One of the early licences they signed was with the Serum Institute, the world’s largest vaccine manufacturer. One month later, acting on advice from the Gates Foundation, Oxford changed course and signed over exclusive rights to AstraZeneca, a UK-based multinational pharmaceutical group.
AstraZeneca and Serum signed a new deal. Serum would produce vaccines for all poor countries eligible for assistance by Gavi, the Vaccines Alliance – an organisation backed by rich countries’ governments and the Gates Foundation. These 92 nations together counted for half the world – or nearly four billion people. India’s fair share of these vaccines, by population, should have been 35%. However there was an unwritten arrangement that Serum would earmark 50% of its supply for domestic use and 50% for export.
The deal included a clause that allowed AstraZeneca to approve exports to countries not listed in the agreement. Some countries which asked for emergency vaccine shipments from Serum, including South Africa and Brazil, were justified: they had nothing else. Rich countries like the UK and Canada, however, which had bought up more doses than required to vaccinate their people, to the detriment of everyone else, had no moral right to dip into a pool of vaccines designated for poor countries.
Paradoxically, when South Africa and India asked the World Trade Organization to temporarily waive patents and other pharmaceutical monopolies so that vaccines could be manufactured more widely to prevent shortfalls in supply, among the first countries to object were the UK, Canada and Brazil. They were the very governments that would later be asking India to solve their own shortfalls in supply.
The deal did not include restrictions on what price Serum could charge, despite AstraZeneca’s pledge to sell its vaccine for no profit “during the pandemic”, which led to Uganda, which is among the poorest countries on Earth, paying three times more than Europe for the same vaccine. (An AstraZeneca spokesperson told Politico that the “price of the vaccine will differ due to a number of factors, including the cost of manufacturing – which varies depending on the geographic region – and volumes requested by the countries”.)
As it became clear that the western pharmaceutical industry could barely supply the west, let alone anywhere else, many countries turned to Chinese and Russian vaccines. Meanwhile, the Covax Facility – the Gavi-backed outfit that actually procures vaccines for poor countries – stuck to its guns and made deals exclusively with western vaccine manufacturers. From those deals, the AstraZeneca vaccine is now the only viable candidate it has. The bulk of the supply of this vaccine comes from Serum, and a smaller quantity from SK Bioscience in South Korea. As a result, a third of all humanity is now largely dependent on supplies of one vaccine from one company in India.
Cue the Indian government’s involvement. Unlike western governments, which poured billions into the research and development of vaccines, there is no evidence that the Indian government has provided a cent in research and development funding to the Serum Institute. (This did not stop it turning every overseas vaccine delivery into a photo-op.) The government then commandeered approval of every single Covax shipment sent out from Serum – even, according to one well-placed source within the institute, directing how many doses would be sent and when.
The Indian government has not publicly commented on its involvement in the vaccine shipments and has refused requests for comment.
Last month, faced with a surge in infections, the Indian government announced an expansion of its domestic vaccination programme to include 345 million people, and halted all exports of vaccines. About 60m vaccine doses have already been dispensed, and the government needs another 630m to cover everyone in this phase alone. One other vaccine is approved for use – Bharat Biotech’s Covaxin – but it is being produced and utilised in smaller quantities. As more vaccines are approved, the pressure on Serum might decrease. For now, however, the bulk of India’s vaccination goals will be met by just one supplier, which faces the impossible choice of either letting down the other 91 countries depending on it, or offending its own government.
The consequences are devastating. To date, 28m Covax Facility doses have been produced by Serum for the developing world – 10m of which went to India. The second largest shipment went to Nigeria, which received 4m doses, or enough to cover only 1% of its population. Given the new Indian government order of 100m doses, further supplies to countries like Nigeria may be delayed until July. And given the Indian government’s need of 500m more vaccine doses in the short run, that date could surely be pushed out even further.
This colossal mess was entirely predictable, and could have been avoided at every turn. Rich countries such as the UK, the US, and those of the EU, and rich organisations such as Covax should have used their funding of western pharmaceutical companies to nip vaccine monopolies in the bud. Oxford University should have stuck to its plans of allowing anyone, anywhere, to make its vaccine. AstraZeneca and Covax should have licensed as many manufacturers in as many countries as they could to make enough vaccines for the world. The Indian government should have never been effectively put in charge of the wellbeing of every poor country on the planet.
For years, India has been called “the pharmacy of the developing world”. It’s time to rethink that title. We will need many more pharmacies in many more countries to survive this pandemic.
Friday 30 September 2016
The Labour plotters are right: it‘s definitely Jeremy Corbyn who needs to ‘learn lessons’ from the last few months
Mark Steel in The Independent
Well, that was a highly successful three-month campaign to get rid of Jeremy Corbyn. There’s nothing like spending all summer on a project that proves worthwhile and repays the effort.
If Angela Eagle and Owen Smith were generals in a medieval army, they would report back to their commander: “We fired incessantly for three months and have brought such damage to our opponent’s army they now have 100,000 more soldiers than when we started, sir. And I’m not sure how, but although we’re fighting in Belgium, we seem to have given them Wales.”
Corbyn should ask them to do it every year; by 2025 he’d be crowned King of Europe.
Even more impressive was the way the plotters all agreed, after the result, that “this shows the lessons Jeremy needs to learn, and he has to reach out”.
Next they’ll ask Owen Smith to fight Tyson Fury, and as Owen is dragged away by paramedics, Stephen Kinnock will announce: “This shows the lessons Tyson has to learn. From now on he needs to look more skinny and wear glasses and reach out if he knows what’s good for him”.
This is an exciting development in democracy, that the side who won the least number of votes decides what the lessons are that have to be learned. Maybe this is how the anti-Corbyn section of Labour hopes to govern after a general election. They’ll say to the Tories: “As you won a majority of 190, you have to learn to reach out and fill your cabinet with me and my mates”.
Even so, the plotters made an important point: that Corbyn must reach out to those who already tried to unite the party by calling him a moronic pitiful unelectable pile of steaming goat sick for the last year.
Instead of being divisive, as he was last time by offering them jobs in the shadow Cabinet from which they resigned, he should let them pick their own jobs, and if they don’t fancy doing them one day, let them bring in games.
All the plotters agreed on the need for unity, and many of them displayed that straight away by not turning up to Corbyn’s speech. But Corbyn himself ruined the unity by turning up to it himself, rather than uniting with his colleagues by saying he couldn’t be bothered to say anything so he was popping down the pub.
Some MPs will soon resume their commitment to unity by insisting Corbyn is hopeless, on every TV station, one by one through the news channels, the cartoon channels and the GOD channels. Then on a porn channel, John Mann will knock on a door to say: “Hope you’ll be voting Labour in the council by-election”. But a woman in rubber will reply: “I certainly won’t be voting for you”, so he’ll say: “I suppose that’s because we’ve been very, very bad and chosen an unelectable leader”, then lay down and scream: “We’ve been so irresponsible by saying we’ll renationalise the Royal Mail!” while getting thrashed on the arse with an egg whisk.
Others will prove their loyalty as they did before, by texting helpful snippets of information to journalists from meetings, such as: “OMG! Apparently Corbyn wants to abolish the army and replace it with a salad”.
The other demand from the side celebrating its achievement of getting fewer votes than someone they say is unelectable is there can be no threats of deselection. There should be no half measures with this; if Jess Phillips announces: “I’d rather vote for Donald Trump than Corbyn, that’s why I broke into his house and poisoned his fish”, that’s her right as a loyal party member and any talk of deselection would be divisive.
The next issue Corbyn must address now he’s been humbled by winning the election is the problem of all these new members. For example, an investigation into Liverpool Riverside complains there has been “an explosion in membership” which now “meets several times a month”.
That sounds sinister, because when has there ever been any need to do two things in a month?
And what are they all doing, joining like that? No wonder proper Labour members are suspicious. They should have to pass a test, clambering across an assault course, or swimming through piranhas.
As any business leader will confirm, there’s nothing more damaging to an enterprise than an explosion in people demanding your product. This is why Bill Gates always insists, when a new version of Microsoft Windows comes out, that anyone who asks for one is told they can’t have it as they’re almost certainly a member of the Workers Revolutionary Party.
One MP grumbled: “It’s all right these new people joining, but will they go knocking on doors at the election?” We can’t know the answer to that, which is why the best way to ensure they’re enthusiastic enough to knock on doors is to tell them they’re all infiltrating scum and they can sod off somewhere else with their several meetings a month.
If they still join, they should have to prove their loyalty by not only knocking on doors, but when someone answers, say: “Our leader’s unelectable so I don’t know why I’m bothering”.
But most importantly, not one of the plotters has fallen into the trap of accepting they may have made the odd mistake, and perhaps shouldn’t have all resigned to get rid of their elected leader, or whined too many people have joined their party, or gone to court to ban their own voters, or insisted people supported Corbyn because they’d had their arm twisted by Trotskyists, because it’s obviously Corbyn that needs to learn the lessons from the result.
Well, that was a highly successful three-month campaign to get rid of Jeremy Corbyn. There’s nothing like spending all summer on a project that proves worthwhile and repays the effort.
If Angela Eagle and Owen Smith were generals in a medieval army, they would report back to their commander: “We fired incessantly for three months and have brought such damage to our opponent’s army they now have 100,000 more soldiers than when we started, sir. And I’m not sure how, but although we’re fighting in Belgium, we seem to have given them Wales.”
Corbyn should ask them to do it every year; by 2025 he’d be crowned King of Europe.
Even more impressive was the way the plotters all agreed, after the result, that “this shows the lessons Jeremy needs to learn, and he has to reach out”.
Next they’ll ask Owen Smith to fight Tyson Fury, and as Owen is dragged away by paramedics, Stephen Kinnock will announce: “This shows the lessons Tyson has to learn. From now on he needs to look more skinny and wear glasses and reach out if he knows what’s good for him”.
This is an exciting development in democracy, that the side who won the least number of votes decides what the lessons are that have to be learned. Maybe this is how the anti-Corbyn section of Labour hopes to govern after a general election. They’ll say to the Tories: “As you won a majority of 190, you have to learn to reach out and fill your cabinet with me and my mates”.
Even so, the plotters made an important point: that Corbyn must reach out to those who already tried to unite the party by calling him a moronic pitiful unelectable pile of steaming goat sick for the last year.
Instead of being divisive, as he was last time by offering them jobs in the shadow Cabinet from which they resigned, he should let them pick their own jobs, and if they don’t fancy doing them one day, let them bring in games.
All the plotters agreed on the need for unity, and many of them displayed that straight away by not turning up to Corbyn’s speech. But Corbyn himself ruined the unity by turning up to it himself, rather than uniting with his colleagues by saying he couldn’t be bothered to say anything so he was popping down the pub.
Some MPs will soon resume their commitment to unity by insisting Corbyn is hopeless, on every TV station, one by one through the news channels, the cartoon channels and the GOD channels. Then on a porn channel, John Mann will knock on a door to say: “Hope you’ll be voting Labour in the council by-election”. But a woman in rubber will reply: “I certainly won’t be voting for you”, so he’ll say: “I suppose that’s because we’ve been very, very bad and chosen an unelectable leader”, then lay down and scream: “We’ve been so irresponsible by saying we’ll renationalise the Royal Mail!” while getting thrashed on the arse with an egg whisk.
Others will prove their loyalty as they did before, by texting helpful snippets of information to journalists from meetings, such as: “OMG! Apparently Corbyn wants to abolish the army and replace it with a salad”.
The other demand from the side celebrating its achievement of getting fewer votes than someone they say is unelectable is there can be no threats of deselection. There should be no half measures with this; if Jess Phillips announces: “I’d rather vote for Donald Trump than Corbyn, that’s why I broke into his house and poisoned his fish”, that’s her right as a loyal party member and any talk of deselection would be divisive.
The next issue Corbyn must address now he’s been humbled by winning the election is the problem of all these new members. For example, an investigation into Liverpool Riverside complains there has been “an explosion in membership” which now “meets several times a month”.
That sounds sinister, because when has there ever been any need to do two things in a month?
And what are they all doing, joining like that? No wonder proper Labour members are suspicious. They should have to pass a test, clambering across an assault course, or swimming through piranhas.
As any business leader will confirm, there’s nothing more damaging to an enterprise than an explosion in people demanding your product. This is why Bill Gates always insists, when a new version of Microsoft Windows comes out, that anyone who asks for one is told they can’t have it as they’re almost certainly a member of the Workers Revolutionary Party.
One MP grumbled: “It’s all right these new people joining, but will they go knocking on doors at the election?” We can’t know the answer to that, which is why the best way to ensure they’re enthusiastic enough to knock on doors is to tell them they’re all infiltrating scum and they can sod off somewhere else with their several meetings a month.
If they still join, they should have to prove their loyalty by not only knocking on doors, but when someone answers, say: “Our leader’s unelectable so I don’t know why I’m bothering”.
But most importantly, not one of the plotters has fallen into the trap of accepting they may have made the odd mistake, and perhaps shouldn’t have all resigned to get rid of their elected leader, or whined too many people have joined their party, or gone to court to ban their own voters, or insisted people supported Corbyn because they’d had their arm twisted by Trotskyists, because it’s obviously Corbyn that needs to learn the lessons from the result.
Sunday 6 December 2015
The art of profitable giving - PhilanthroCapitalism
G Sampath in The Hindu
Not too long ago, public opinion was against philanthropy. A new book explains how attitudes have changed, and why we must scrutinise them.
Once upon a time there was charity. The haves gave some to the have-nots, and that was that. Sometimes the giving impulse was religious, sometimes guilt-induced. But charity was more about the soul of the giver than the welfare or rights or dignity of the receiver. This is why there can be no charity between equals. Or between friends. For all these reasons, charity had for long remained an activity rooted in the personal-private, quasi-religious sphere.
Then came philanthropy. Jeremy Beer, in his The Philanthropic Revolution: An Alternative History of American Charity, argues that the displacement of charity by philanthropy was “the result of a reconceptualisation of voluntary giving as primarily a tool for social change.” It also marks, according to Beer, a shift from a theological to a secular framework for giving, bringing with it all the baggage that secularisation entails – blind faith in the technological mastery of the social world, centralisation, and the bureaucratization of personal relations.”
And today we have ‘philanthrocapitalism’. The term gained currency after The Economist carried a report in 2006 on ‘The birth of philanthrocapitalism’. Noting that “the need for philanthropy to become more like the for-profit capital markets is a common theme among the new philanthropists,” the article explains why philanthropists “need to behave more like investors.”
Two years later came the book that today’s biggest philanthropists swear by: Philanthrocapitalism: How the Rich can Save the World by Matthew Bishop (a senior business editor from The Economist) and Michael Green. The title is not intended to be ironic. It is an earnest argument: in a world of rich men and poor states, who better to save the poor than the rich themselves?
The advent of philanthrocapitalism may have finally brought to the fore what is tacitly understood but rarely made explicit -- the symbiotic relationship between capitalist excess and philanthropic redress.
When philanthropy was shunned
It is no accident that the first great philanthropists were also the greatest capitalists of their age. Nor is it a coincidence that many of these men, remembered today by their philanthropic legacies – John D Rockefeller, Andrew Carnegie, Andrew Mellon, Leland Stanford, James Buchanan Duke – also figure in Wikipedia’s list of “businessmen who were labelled robber barons”.
If one is to make sense of the recent surge in the quantum of philanthropic funds sloshing around looking for worthy causes – the Bain & Co. Indian Philanthropy Report 2015 notes that foreign philanthropic funding in India more than doubled from 2004 to 2009, jumping from $0.8 billion in FY‘04 to $1.9 billion in FY’09 – then one needs to go beyond the numbers and look at the economic underpinnings of corporate philanthropic initiatives. This is precisely what sociologist Linsey McGoey sets out to do in No Such Thing as a Free Gift: The Gates Foundation and the Price of Philanthropy, which released last month.
No Such Thing… kicks off with a quick reminder of the shady origins of philanthropy. How many of us know, for instance, that not too long ago public opinion (and government opinion) was against philanthropy in general, and corporate philanthropy in particular?
In the early 20th century, philanthropic foundations were “viewed as mere outposts of profit-seeking empires, only cosmetically different from the corporations that had spawned them, a convenient way for business magnates to extend their reach over domestic and foreign populaces.” McGoey quotes US Attorney General George Wickersham, who had observed that they were “a scheme for perpetuating vast wealth” and “entirely inconsistent with the public interest.”
Yet what was common sense in 1910 would sound blasphemous in 2015. While no self-respecting economist today can deny the obscene economic inequality that characterises our age, not many would willingly acknowledge the connection between concentration of wealth and philanthropy. That is to say, an equitable society would suffer neither a club of the super-rich that seeks self-expression through philanthropy, nor a class of the super-poor that is dependant on philanthropic charity for survival. McGoey makes this point simply with a quote from the economic historian RH Tawney: “What thoughtful rich people call the problem of poverty, thoughtful poor people call with equal justice the problem of riches.”
If philanthropy is thriving in this age of extreme inequality, it is because it serves a dual purpose: one, to make inequality more acceptable ideologically and morally; and two, to define poverty as a problem of scarcity rather than of inequality. Hence the ultimate argument in favour of philanthropy, deployed when all else fails, is the one based on scarcity: ‘something (from a foundation) is better than nothing (from the government)’.
Philanthropy is the palliative that makes the pain of capitalism bearable for those fated to endure it. Philanthrocapitalism, on the other hand, is about transcending this palliative function to represent capitalism itself as a philanthropic enterprise.
In Bishop and Green’s formulation, such a philanthropic capitalism – also known as ‘venture philanthropy’, ‘social entrepreneurship’, ‘impact investing’ – would drive innovation in a way that “tends to benefit everyone, sooner or later, through new products, higher quality and lower prices.”
As McGoey reveals in her book (and Bishop and Green attest in theirs), no one does philanthrocapitalism better, or bigger, than Bill Gates, who helms the world’s largest philanthropic foundation, the Bill and Melinda Gates Foundation (henceforth Gates Foundation), with an endowment of $42.3 billion. For this very reason, the Gates Foundation is an ideal case study for understanding the social impact of philanthropic foundations.
Problems with philanthrocapitalism
McGoey enumerates three obvious problems with philanthrocapitalism, illustrating each with reference to the Gates Foundation.
First is the lack of accountability and transparency. McGoey points out that the Gates Foundation is the single largest donor to the World Health Organisation (WHO), donating more than even the US government. While the WHO is accountable to the member governments, the Gates Foundation is accountable only to its three trustees – Bill, Melinda, and Warren Buffet. It is not unreasonable to wonder if the WHO’s independence would not be compromised when 10% of its funding comes from a single private entity “with the power to stipulate exactly where and how the UN institution spends its money.”
Secondly, “philanthropy, by channelling private funds towards public services, erodes support for governmental spending on health and education.” With governments everywhere slashing their budgets for public goods such as education and healthcare, the resultant funding gap is sought to be filled by philanthropic money channelled through NGOs. But with one crucial difference: while the citizen has a rights-based claim on government-funded social security, she can do nothing if a philanthropic donor decides to stop funding a given welfare project – as has happened time and again in many parts of the world.
At the same time, even as it facilitates government withdrawal from provision of social goods, philanthropy paves the way for entry of private players into the same space. McGoey details how the Gates Foundation orchestrated this brilliantly in the American education sector, where it helped create a whole new market for private investment: secondary and primary schools run on a for-profit basis.
Third, the same businessmen who made their money through unhealthy practices that worsened economic inequalities are now, in their philanthropic avatar, purporting to remedy the very inequalities they helped create. In the case of the Gates Foundation, Microsoft’s illegal business practices are well documented in the US Department of Justice anti-trust case against the company. As McGoey puts it, the fortune now being administered through the Gates Foundation “was accumulated in some measure through ill-gotten means.”
Of course, none of this should detract from the undeniably good work that philanthropic bodies have done. The Gates Foundation has saved countless lives, especially in Africa, through its funding of immunisation programmes and outreach projects. Its several achievements, therefore, have been deservedly celebrated. Nonetheless, critical scrutiny lags far behind the lavish accolades.
Even the three issues discussed above barely scratch the surface. McGoey goes on to raise several more.
She asks, for instance, asks how the Gates Foundation’s interventions in global health tally with Bill Gates’ violent opposition to any dilution of the patent regime. The Gates Foundation was the largest private donor to the Global Fund to Fight AIDS, Tuberculosis and Malaria. At the same time, it “has continually lobbied against price reductions of HIV drugs and other medicines”, infuriating activists who “want a more equitable global patent regime” and “do not want charity handouts.”
She examines the Gates Foundation’s partnerships with Coca-Cola, not exactly popular among those who value public health. In the context of the Foundation’s work to help combat global hunger, she reveals how its financial ties with Monsanto and investments in Goldman Sachs “may be compounding food insecurity rather than mitigating it”.
She interrogates its skewed research portfolio. Of the 659 grants made by the Gates Foundation in the field of global health, 560 went to organisations in high-income countries, even though the problems being targeted were in low-income countries. How does excluding local scientists and programme managers who are best placed to understand the problems help the cause, asks McGoey.
While it is generally taken for granted that a philanthropic foundation would make grants only to non-profits, McGoey draws attention to the Gates Foundation’s non-repayable grant of $4.8 million to Vodacom, a subsidiary of Vodafone. In 2014, the Gates Foundation also announced a grant of $11 million to Mastercard for a “financial inclusion” project in Nairobi. Interesting how philanthropy has evolved to such an extent that in a world wracked by hunger, disease, war, and malnutrition, two entities found to be most in need include a multinational credit card network and a multinational mobile service provider.
Finally, not to be forgotten are the tax breaks that philanthropic foundations enjoy. Critics have pointed out that nearly half of the billions of dollars in funds that philanthropic foundations hold actually belong to the public, as it is money foregone by the state through tax exemptions. History has shown that progressive taxation is the most efficacious route to redistribution. But a strong case for philanthropy is another way of making a strong case for lower taxation of the rich – after all, it’ll leave them with more money to spend on uplifting the poor. Small wonder then that philanthropy’s biggest enthusiasts are political conservatives.
The Economist report on philanthrocapitalism cited above also quotes a young Indian philanthropist, Uday Khemka, who predicts that “philanthropy will increasingly come to resemble the capitalist economy.” That was in 2006. Nine years later, the publication of McGoey’s No Such Thing As a Free Gift marks the first systematic attempt to document this phenomenon.
sampath.g@thehindu.co.in
Not too long ago, public opinion was against philanthropy. A new book explains how attitudes have changed, and why we must scrutinise them.
Once upon a time there was charity. The haves gave some to the have-nots, and that was that. Sometimes the giving impulse was religious, sometimes guilt-induced. But charity was more about the soul of the giver than the welfare or rights or dignity of the receiver. This is why there can be no charity between equals. Or between friends. For all these reasons, charity had for long remained an activity rooted in the personal-private, quasi-religious sphere.
Then came philanthropy. Jeremy Beer, in his The Philanthropic Revolution: An Alternative History of American Charity, argues that the displacement of charity by philanthropy was “the result of a reconceptualisation of voluntary giving as primarily a tool for social change.” It also marks, according to Beer, a shift from a theological to a secular framework for giving, bringing with it all the baggage that secularisation entails – blind faith in the technological mastery of the social world, centralisation, and the bureaucratization of personal relations.”
And today we have ‘philanthrocapitalism’. The term gained currency after The Economist carried a report in 2006 on ‘The birth of philanthrocapitalism’. Noting that “the need for philanthropy to become more like the for-profit capital markets is a common theme among the new philanthropists,” the article explains why philanthropists “need to behave more like investors.”
Two years later came the book that today’s biggest philanthropists swear by: Philanthrocapitalism: How the Rich can Save the World by Matthew Bishop (a senior business editor from The Economist) and Michael Green. The title is not intended to be ironic. It is an earnest argument: in a world of rich men and poor states, who better to save the poor than the rich themselves?
The advent of philanthrocapitalism may have finally brought to the fore what is tacitly understood but rarely made explicit -- the symbiotic relationship between capitalist excess and philanthropic redress.
When philanthropy was shunned
It is no accident that the first great philanthropists were also the greatest capitalists of their age. Nor is it a coincidence that many of these men, remembered today by their philanthropic legacies – John D Rockefeller, Andrew Carnegie, Andrew Mellon, Leland Stanford, James Buchanan Duke – also figure in Wikipedia’s list of “businessmen who were labelled robber barons”.
If one is to make sense of the recent surge in the quantum of philanthropic funds sloshing around looking for worthy causes – the Bain & Co. Indian Philanthropy Report 2015 notes that foreign philanthropic funding in India more than doubled from 2004 to 2009, jumping from $0.8 billion in FY‘04 to $1.9 billion in FY’09 – then one needs to go beyond the numbers and look at the economic underpinnings of corporate philanthropic initiatives. This is precisely what sociologist Linsey McGoey sets out to do in No Such Thing as a Free Gift: The Gates Foundation and the Price of Philanthropy, which released last month.
No Such Thing… kicks off with a quick reminder of the shady origins of philanthropy. How many of us know, for instance, that not too long ago public opinion (and government opinion) was against philanthropy in general, and corporate philanthropy in particular?
In the early 20th century, philanthropic foundations were “viewed as mere outposts of profit-seeking empires, only cosmetically different from the corporations that had spawned them, a convenient way for business magnates to extend their reach over domestic and foreign populaces.” McGoey quotes US Attorney General George Wickersham, who had observed that they were “a scheme for perpetuating vast wealth” and “entirely inconsistent with the public interest.”
Yet what was common sense in 1910 would sound blasphemous in 2015. While no self-respecting economist today can deny the obscene economic inequality that characterises our age, not many would willingly acknowledge the connection between concentration of wealth and philanthropy. That is to say, an equitable society would suffer neither a club of the super-rich that seeks self-expression through philanthropy, nor a class of the super-poor that is dependant on philanthropic charity for survival. McGoey makes this point simply with a quote from the economic historian RH Tawney: “What thoughtful rich people call the problem of poverty, thoughtful poor people call with equal justice the problem of riches.”
If philanthropy is thriving in this age of extreme inequality, it is because it serves a dual purpose: one, to make inequality more acceptable ideologically and morally; and two, to define poverty as a problem of scarcity rather than of inequality. Hence the ultimate argument in favour of philanthropy, deployed when all else fails, is the one based on scarcity: ‘something (from a foundation) is better than nothing (from the government)’.
Philanthropy is the palliative that makes the pain of capitalism bearable for those fated to endure it. Philanthrocapitalism, on the other hand, is about transcending this palliative function to represent capitalism itself as a philanthropic enterprise.
In Bishop and Green’s formulation, such a philanthropic capitalism – also known as ‘venture philanthropy’, ‘social entrepreneurship’, ‘impact investing’ – would drive innovation in a way that “tends to benefit everyone, sooner or later, through new products, higher quality and lower prices.”
As McGoey reveals in her book (and Bishop and Green attest in theirs), no one does philanthrocapitalism better, or bigger, than Bill Gates, who helms the world’s largest philanthropic foundation, the Bill and Melinda Gates Foundation (henceforth Gates Foundation), with an endowment of $42.3 billion. For this very reason, the Gates Foundation is an ideal case study for understanding the social impact of philanthropic foundations.
Problems with philanthrocapitalism
McGoey enumerates three obvious problems with philanthrocapitalism, illustrating each with reference to the Gates Foundation.
First is the lack of accountability and transparency. McGoey points out that the Gates Foundation is the single largest donor to the World Health Organisation (WHO), donating more than even the US government. While the WHO is accountable to the member governments, the Gates Foundation is accountable only to its three trustees – Bill, Melinda, and Warren Buffet. It is not unreasonable to wonder if the WHO’s independence would not be compromised when 10% of its funding comes from a single private entity “with the power to stipulate exactly where and how the UN institution spends its money.”
Secondly, “philanthropy, by channelling private funds towards public services, erodes support for governmental spending on health and education.” With governments everywhere slashing their budgets for public goods such as education and healthcare, the resultant funding gap is sought to be filled by philanthropic money channelled through NGOs. But with one crucial difference: while the citizen has a rights-based claim on government-funded social security, she can do nothing if a philanthropic donor decides to stop funding a given welfare project – as has happened time and again in many parts of the world.
At the same time, even as it facilitates government withdrawal from provision of social goods, philanthropy paves the way for entry of private players into the same space. McGoey details how the Gates Foundation orchestrated this brilliantly in the American education sector, where it helped create a whole new market for private investment: secondary and primary schools run on a for-profit basis.
Third, the same businessmen who made their money through unhealthy practices that worsened economic inequalities are now, in their philanthropic avatar, purporting to remedy the very inequalities they helped create. In the case of the Gates Foundation, Microsoft’s illegal business practices are well documented in the US Department of Justice anti-trust case against the company. As McGoey puts it, the fortune now being administered through the Gates Foundation “was accumulated in some measure through ill-gotten means.”
Of course, none of this should detract from the undeniably good work that philanthropic bodies have done. The Gates Foundation has saved countless lives, especially in Africa, through its funding of immunisation programmes and outreach projects. Its several achievements, therefore, have been deservedly celebrated. Nonetheless, critical scrutiny lags far behind the lavish accolades.
Even the three issues discussed above barely scratch the surface. McGoey goes on to raise several more.
She asks, for instance, asks how the Gates Foundation’s interventions in global health tally with Bill Gates’ violent opposition to any dilution of the patent regime. The Gates Foundation was the largest private donor to the Global Fund to Fight AIDS, Tuberculosis and Malaria. At the same time, it “has continually lobbied against price reductions of HIV drugs and other medicines”, infuriating activists who “want a more equitable global patent regime” and “do not want charity handouts.”
She examines the Gates Foundation’s partnerships with Coca-Cola, not exactly popular among those who value public health. In the context of the Foundation’s work to help combat global hunger, she reveals how its financial ties with Monsanto and investments in Goldman Sachs “may be compounding food insecurity rather than mitigating it”.
She interrogates its skewed research portfolio. Of the 659 grants made by the Gates Foundation in the field of global health, 560 went to organisations in high-income countries, even though the problems being targeted were in low-income countries. How does excluding local scientists and programme managers who are best placed to understand the problems help the cause, asks McGoey.
While it is generally taken for granted that a philanthropic foundation would make grants only to non-profits, McGoey draws attention to the Gates Foundation’s non-repayable grant of $4.8 million to Vodacom, a subsidiary of Vodafone. In 2014, the Gates Foundation also announced a grant of $11 million to Mastercard for a “financial inclusion” project in Nairobi. Interesting how philanthropy has evolved to such an extent that in a world wracked by hunger, disease, war, and malnutrition, two entities found to be most in need include a multinational credit card network and a multinational mobile service provider.
Finally, not to be forgotten are the tax breaks that philanthropic foundations enjoy. Critics have pointed out that nearly half of the billions of dollars in funds that philanthropic foundations hold actually belong to the public, as it is money foregone by the state through tax exemptions. History has shown that progressive taxation is the most efficacious route to redistribution. But a strong case for philanthropy is another way of making a strong case for lower taxation of the rich – after all, it’ll leave them with more money to spend on uplifting the poor. Small wonder then that philanthropy’s biggest enthusiasts are political conservatives.
The Economist report on philanthrocapitalism cited above also quotes a young Indian philanthropist, Uday Khemka, who predicts that “philanthropy will increasingly come to resemble the capitalist economy.” That was in 2006. Nine years later, the publication of McGoey’s No Such Thing As a Free Gift marks the first systematic attempt to document this phenomenon.
sampath.g@thehindu.co.in
Sunday 1 July 2012
New-tech moguls: the modern robber barons?
Are today's captains of industry – the wealthy and powerful figures who control the digital universe – any different from the ruthless corporate figures of the past?
From left: Co-founders of Google Larry Page and Sergey Brin, Chairman and CEO of Dell Michael Dell, Co-founder of Microsoft Bill Gates, and Chairman and CEO of Facebook Mark Zuckerberg Photographs: AP; Getty
Here's an interesting fact: 10 of the people on Forbes magazine's tally of the world's 100 richest billionaires made their money from computer and/or network technology. At the top (second on the list) is Bill Gates, co-founder of Microsoft, whose net worth is estimated by Forbes at $61bn, despite the fact that he continues to try to give it away. Gates is followed by Larry Ellison, boss of Oracle, with $36bn, and Michael Bloombergwith $22bn. Larry Page and Sergey Brin – co-founders of Google – occupy joint 24th place with $18.7bn each. Jeff Bezos of Amazon is No 26 with $18.4bn while the newly enriched Mark Zuckerberg of Facebook sits at No 35 with £17.5bn. Michael Dell, founder of the eponymous computer manufacturer, is at No 41 with $15.9bn while Steve Ballmer, Microsoft's CEO, is three places lower on $15.7bn and Paul Allen – co-founder of Microsoft – brings up the rear at No 48 with a mere $14.2bn. Steve Jobs, who was worth about $9bn when he died, doesn't even figure.
What's striking about this is not just the staggering wealth that these people have managed to squeeze out of what are, after all, just binary digits (ones and zeros), but how recent are the origins of their good fortunes. Mark Zuckerberg, for example, went from zero to $17.5bn in less than eight years. Microsoft – the company that has propelled Gates, Ballmer and Allen into the Forbes pantheon – dates only from 1975. Oracle was founded in 1977. Bloomberg turned a $10m redundancy cheque from Salomon Brothers into his personal money-pump in 1982. Dell started making computers in his university dorm in 1984. Bezos launched Amazon with his own savings in 1995. Brin and Page turned their PhD research into a company called Google in 1998. And Zuckerberg launched Facebook in 2004.
For some of these people, great wealth is correlated with significant power. Once Microsoft captured the market for PC operating systems and office software, Bill Gates and co ruthlessly leveraged their monopoly to eliminate rivals (remember Netscape?) and dictate pricing. So we got a world where you could have any kind of computer you wanted, provided it ran Microsoft Windows. In the era when the PC was the computer, Bill Gates was king because he controlled the PC.
But although Microsoft remains a significant force, its power waned as computing moved from the PC to the network – and therefore to the people and companies who dominate that. Step forward the Google boys, who have the power to render any website virtually invisible, because if their algorithms decide not to index a site then effectively it ceases to exist – at least in cyberspace. Their computers also read our mail and store our documents. Google dominates the online advertising business. The company's founders say grandly that their mission is "to organise the world's information" – and they mean it. They have already digitised a significant amount of the world's printed books – although they are not yet authorised to make many of them available online. And Google's cars have photographed every street in the industrialised world.
Meanwhile, in another part of the jungle, Amazon's Bezos is not just vaporising bricks-and-mortar bookstores; he's also on his way to becoming the world's biggest publisher. And he's already the world's largest online retailer – the Walmart of the web. In social networking Mark Zuckerberg has cunningly inserted himself (via his hardware and software) into every online communication that passes between his 900 million subscribers, to the point where Facebook probably knows that two people are about to have an affair before they do. And because of the nature of networks, if we're not careful we could wind up with a series of winners who took all: one global bookstore; one social network; one search engine; one online multimedia store and so on.
There was a time when the power exercised by computer and internet companies seemed a matter of relatively esoteric concern. But as digital technology began to pervade our daily lives, the boundary between the "real" world ("meatspace", as geeks used to call it) and cyberspace began to blur. What happened in the latter suddenly mattered in the former – and not just in Tunisia and Egypt either. Think of the way Steve Jobs's creation – Apple – exercises such dominance over online music, smartphones and tablet computers. Or ponder what Google and Facebook now know about our lives, loves and obsessions. Or what Amazon knows about our consumption patterns. The implication is that cyberpower has correlates in the real world, which means that it's time we had a really good look at those who wield it. What are these masters of the digital universe really like? What are their values and their politics? And are they any different from the corporate moguls of the past?
Given their prominence, we know surprisingly little about our modern moguls – for various reasons. One is that we are remarkably incurious about what makes them tick. We focus instead on the fact that one of them (Zuckerberg) wears a hoodie even when being interviewed by investment bankers; or that Larry Page, co-founder of Google, refused to stop using his laptop when a big media mogul came to talk to him; or that Bill Gates used to rock furiously backwards and forwards in a rocking chair when being interviewed for an anti-trust case; or that Steve Jobs drove a comparatively modest sports car and lived in a small, old-fashioned house rather than the postmodern minimalist palace that many people would have predicted.
But this is all superficial stuff, the journalistic fluff of celebrity profiles and gossip columns. What's much more significant about these moguls is that they share a mindset that renders them blind to the untidiness and contradictions of life, not to mention the fears and anxieties of lesser beings. They are technocrats who cleave to a worldview that holds that if something is technically possible then it should be done. How about digitising all the books in the world? No problem: you just throw resources and technology at the task. And if publishers protest about infringement of copyright andauthors moan about their moral rights, well, that just shows how antediluvian they are. Or how about photographing every street in Europe, or even the world? Again, no problem: it's technically feasible, after all. And if Germans object to the resulting intrusion on their privacy, well let them complain and we'll pixelate the sods. Oh – and when we discover that those same cars have been hoovering up the details of our home Wi-Fi networks, their bosses say "Oops! Sorry: it was a mistake." Same story with the high-resolution satellite imagery beloved of Google and – now – Apple. Same story with Mark Zuckerberg's fanatical, almost sociopathic, belief that the default setting for life should be "public" rather than "private". The prevailing technocratic motto is: if something can be done, then it ought to be done. It's all about progress, stoopid.
Actually, it's all about values. And money. The trouble is that technocrats don't do values. They just do rationality. They love good design, efficiency, elegance – and profits. That's why one of the poster children of the industry is Apple's creative genius, Jonathan Ive, who designs beautiful kit in California which is then assembled in Chinese factories. And when the execrable working conditions prevalent in such places are exposed, the company's senior executives profess themselves surprised and appalled and resolve to do everything they can to ameliorate things. And we believe them – and continue eagerly to purchase the gizmos manufactured in such oppressive plants.
Why are we so credulous, so forgiving? It's partly because wealth – like political power – is a powerful aphrodisiac. But it's mainly because we accept these people at their own valuation. We've bought into their narrative. They see themselves as progressives, as folks who want to make the world a better, more efficient, more rational place. We're charmed by their corporate mantras – for example "Don't be evil" (Google) or "Move fast and break things" (Facebook). In their black turtlenecks and faded jeans they don't seem to have anything in common with Rupert Murdoch or the grim-faced, silk-hatted capitalist bosses of old. Instead of grinding the faces of the poor, our modern technology magnates move effortlessly from tech forums to TED to All Things D to Davos, reclining on spotlit sofas discussing APIs and cloud computing with respectful or admiring moderators. And in recent times, they are even invited to lunch with President Obamaor as guests at political summits where they are fawned upon by presidents and prime ministers who hope that some of the magic dust will rub off on them.
What gets lost in the reality distortion field that surrounds these technology moguls is that, in the end, they are fanatically ambitious, competitive capitalists. They may look cool and have soothing bedside manners, but in the end these guys are in business not just to make money, but to establish sprawling, quasi-monopolistic commercial empires. And they will do whatever it takes to achieve those ambitions.
The strongest link that binds them is that they are all pioneers in the exploitation of virgin territory, and that rings some historical bells. When the internet first exploded into public consciousness in the 1990s as a result of the web, many observers were reminded of what happened in the United States after the end of the civil war in 1865. Then, there was an exciting sense of a continent to be explored, gold and mineral resources to be discovered and exploited, land for anyone who was prepared to work it, industries to be founded, opportunities galore. What then followed was an explosion of speculative investment, led by railway companies which – as Anthony Trollope shrewdly observed on a visit to the US – "were in fact companies combined for the purchase of land… looking to increase the value of it fivefold by the opening of the railroad."
Thus began the era satirised by Mark Twain and Charles Dudley Warner in their novelThe Gilded Age: A Tale of Today, which was published in 1873. Twain and Warner were struck by the rampant greed and speculative frenzy of the times – not to mention its pervasive political corruption. But in that febrile milieu a smallish group of ingenious, ruthless and visionary entrepreneurs created a modern industrial state. Leland Stanford, EH Harriman, Jay Gould, Charles Crocker, Henry Plant, Henry Flagler, Cornelius Vanderbilt and Charles Yerkes built railways; John D Rockefeller created Standard Oil and brought his distinctive brand of oligopolistic order to the oil business, eventually controlling 90% of the industry; Andrew Carnegie, Henry Frick and Charles Schwab created a vast steel industry; and bankers such as JP Morgan, Joseph Seligman, Andrew Mellon and Jay Cooke organised the finance that funded these huge ventures.
In addition to building a modern industrial state, these gents amassed huge fortunes for themselves using a raft of dubious techniques, including fraud, stock-dilution, the bribing of corrupt politicians, the creation of secret cartels (ironically called "trusts") and the ruthless exploitation of poorly paid, non-unionised workers – which is why Matthew Josephson dubbed them "robber barons" in his book of the same title. In the end, their abuses and excesses led to a legislative backlash in the form of the 1890 Sherman Anti-Trust Act, the first federal statute to limit cartels and monopolies, and to a more general public revulsion ushered in by Theodore Roosevelt's presidency in 1901. In the twilight of their lives, some of the barons (for example Carnegie, Mellon and Frick) sought to acquire public respectability – or perhaps bargaining chips for negotiating with the Almighty – by endowing charitable foundations and eponymous museums, and engaging in other public-spirited enterprises.
In comparison with these monsters of the gilded age, our contemporary moguls – Gates, Page, Brin, Ellison, Bezos et al – may look rather tame. They appear, for example, to be much more law-abiding than their 19th-century counterparts; or at any rate they have had much less success in bending lawmakers to their will. In fact, compared with the skills of the entertainment industry in suborning members of the US Congress, the technology magnates are the merest amateurs – which is why the legislators were so astonished by the industry's vigorous reaction to Sopa, the Stop Online Piracy Act. The thought that the technology industry might actually have teeth had never previously occurred to the denizens of Capitol Hill.
We should also remember that the world in which Microsoft, Oracle, Google and Amazon operate is radically different in one important respect. The stage on which Rockefeller, Carnegie, Vanderbilt and their contemporaries strutted was predominately a national one: most of their enterprises and ambitions spanned only the continental United States, whereas the big technology companies of our day are transnational corporations that operate in a variety of different cultures and legal jurisdictions. John D Rockefeller just had to worry about fixing American officials and politicians; Larry Page, Google's CEO, has to deal not only with the US Department of Justice, but also with the European Commission, the Chinese government and Vladimir Putin's goons.
There are also radical differences in the kinds of industrial empires that the two classes of magnate have created. The 19th-century entrepreneurs built huge companies, conglomerates and cartels. They employed millions of people, operated huge plants and equipment (railways, shipping, iron and steel mills, oil refineries) and made an indelible imprint on the landscape. To use a contemporary cliche, they "shipped atoms" – physical objects. With the exception of Amazon and Apple, their modern counterparts, in contrast, are mainly in the business of shipping bits – in the form of software and online services. Despite the bleating of their PR departments, they are not huge primary employers. Google, for example, has only about 33,000 employees worldwide. And often the only tangible, physical sign of their presence and scale is the huge server farms that power their operations and which do have a significant impact on the environment – not to mention the landscape in the places where they are located.
But just because our contemporary moguls don't gouge minerals from the earth, run blast furnaces or operate oil refineries doesn't mean that their growing empires aren't real. To the physical economy created by Carnegie and co, digital technology has added a whole new economy based on information goods – nowadays embodied as ones and zeros – which may turn out to be at least as pervasive and valuable. We still make cars using steel, rubber and plastics, for example, but the value of the electronics in their engine management units and braking-control systems already exceeds the value of the vehicles' physical components. And this pattern will increasingly be replicated in other areas of economic life.
So the fact that one cannot see the information goods that Google and co gather, store, disseminate and control doesn't mean that those goods aren't real and valuable. To take just one example, Facebook now owns and controls a virtual space that will soon contain more people than the entire Indian subcontinent. Those merry throngs may delude themselves that they are cavorting in a public place. But in reality they are gathering in Master Zuckerberg's shopping mall – a fact that potentially gives him a reach and power that would make any robber baron green with envy.
Sceptics will point out that when one puts our masters of the digital universe in a historical context they aren't as rich or as important as we currently imagine. Last year, for example, Forbes commissioned an economist to come up with an inflation-adjusted list of the richest Americans of all time, and the website Business Insider published the results. The list is headed by those grizzled old robber barons, John D Rockefeller, Andrew Carnegie and Cornelius Vanderbilt, with $336bn, $309bn and $185bn respectively. The only contemporary figure who makes it on to the list is Bill Gates, whose net worth at its peak was estimated at $136bn – which (says the sceptic) rather puts Larry Ellison, the Google boys and Jeff Bezos into perspective.
Bubble punctured, then? Not quite. It could be that the reason Bill Gates makes it on to the inflation-adjusted list is simply that he's been around the longest. Microsoft, remember, dates from 1975 – 37 years ago. Facebook has only been going since 2004. Who knows where Zuckerberg and the Google boys will be in 2041? The digital economy has a lot more growth left in it. As Churchill might have said, we haven't yet reached even the end of the beginning.
But perhaps the most intriguing question about these two different groups of industrial magnates concerns their legacies. The industries and enterprises founded by the robber barons of the 19th century still endure – though in some cases (steel, for example) the action has moved to Asia and parts of the developing world. What, one wonders, will endure of Google, Facebook, Oracle and Amazon? And what will be their founders' legacies? And here we get a clue from the robber barons of the 19th century. Many years after their deaths we still recognise the names of John D Rockefeller and Andrew Carnegie. Will Zuckerberg and Page enjoy the same level of name-recognition among our great-great-grandchildren?
The answer may well depend not on how much money they make, but how much they give away. After all, the way their 19th-century counterparts live on is in the charitable foundations they established – the Rockefeller Foundation, set up in 1913, and theCarnegie Corporation of New York, founded in 1911. And here at least we do have a contemporary mogul who is way ahead of the pack. The Bill and Melinda Gates Foundation, with assets of $37.4bn, is the world's largest charitable trust.
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