Foreign Aid

Bill Gates is Not Impressed By Centuries of Bottom-Up Development

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Bill Gates, ladies man

Bill Gates outlines his "plan to assist the world's poor" in a recent op-ed in The Washington Post, arguing that "the private sector hasn't always invested as much in development as it should because the market incentives haven't always been clear…"

Apparently Gates can see through the market haze. On November 3, he will go before the heads of the G-20 to recommend ways to "continue investing in development" despite the crunched global economy.

Gates writes that "aid is targeted to fill specific gaps in development," the most important of which is innovation. He then conflates aid and innovation, citing the U.S. aid-backed green revolution, which was supported by groups like the Ford and Rockefeller Foundations, that "fed a billion people in the 1950s and '60s" and aid-funded immunizations that have saved millions of children from disease. Neither example constituted innovation–both involved transferring existing technologies from rich countries to poor ones.

In Reason's July 2010 issue, Matt Ridley correctly identified "where the perpetual innovation machine and its increasing returns came from."

They were not planned, directed, or ordered. They emerged, evolved, bottom up, from specialization and exchange. The accelerated exchange of ideas and people made possible by technology fueled the accelerating growth of wealth that has characterized the last century.

Both the green revolution and aid-funded immunizations mercifully improved the lives of countless people. But innovations that lead to development and poverty reduction have not historically been spurred by top-down aid like that of the Gates Foundation; they have been driven by the freedom to exchange and experiment.

Gates, like many aid evangelists, conflates aid with development, innovation, and economic growth. Throwing lots of money and energy at producing more crops or increasing vaccinations will accomplish either end, but these sort of aid outcomes–while capable of doing good–are not development.

In response to parts of Ridley's 2010 book, The Rational Optimist, Gates noted in the Wall Street Journal last November:

Science will come up with vaccines for AIDS and malaria, and the "top-down" approach to aid criticized by Mr. Ridley (and by the economist William Easterly) will fund the delivery of these life-saving drugs.

It's not surprising that the man who co-founded a company notorious for top-down software design takes a similar approach to international development. 

Ridley responded to Gates' criticisms in the Journal:

Far from saying that aid "doesn't work, hasn't worked and won't work," I actually say this in my book: "Some of the most urgent needs of Africa can surely be met by increased aid from the rich world. Aid can save lives, reduce hunger, deliver a medicine, a mosquito net, a meal or a metalled road."

I go on to say that "statistics, anecdotes and case histories all demonstrate that the one thing aid cannot reliably do is to start or accelerate economic growth."

In a recent interview, NYU economist Easterly noted the importance of distinguishing aid from development:

The historical record is pretty clear that success in development comes from people doing development themselves… . there's no evidence aid can become the main engine of development to transform the Third World into the First World, poverty to prosperity.

Easterly also hit the crux of the aid debate, noting that people who begin their assessment of the world's poor by asking what they can do to help are missing the point.

What I'm saying is you're asking the wrong question. It's the wrong mindset, asking 'What can we do?' because you've already taken a top-down, paternalistic stance.

Which apparently suits Gates just fine. 

Read Reason on foreign aid here. Below, watch Matt Ridley discuss The Rational Optimist and why "ideas having sex" is a very good thing:

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  1. Hey Gates, you want to help, move Microsoft from 1st-world-whiteboi-central-WA to Ougadougou. I bet I can guess why you won’t. Racist.

    1. Dude, Bellevue/Redmond is, at best, second world. Come on. He’s already doing the East siders a huge solid.

      1. What do you mean, Bellevue makes Seattle look like the second world. On the rare occasion that I wander over there, I’m struck by the gap in flaunted income – fancier cars, restaurants, dressier people, cuter women with better teeth and fewer unsightly mole hairs, etc.

        1. It was a joke, dude, focused on the disdain Seattle residents tend to have for Bellevue.

          Not that I have any desire to go over there unless I have to.

        2. Bellevue/Eastside is the Stepford wives to Seattle’s Runaways.

          I’ll take the Runaways any day.

          1. Joan Jett was a visionary.

  2. Give a man a fish ever day and he’ll eat every day. Teaching him how to fish is unnecessary.

    1. 640K of fish should be enough for anybody.

      1. Two fishes and five loaves of bread should be enough, as long as a miracle-worker is serving them up.

      2. My kids don’t believe me when I tell them that people once had 640K of memory. And I haven’t even told them that there was a time I was thrilled to have access to such wealth.

        1. Dude, my TRS-80 had either 16K or 32K (can’t remember which model I had any more). Tell them about that.

          1. That’s what I meant–I was thrilled when 640K became available.

            I’m pretty sure I used something with 4K at some point. There’s more information in a sneeze than that!

            1. You young whippersnappers! I remember when a small computer weighed as much as a compact car, had 128 K of memory and cost $250,000. We walked to work in the snow, up hill both ways, all year long.

              1. That thing must have hurt your legs.

              2. WE used to dream o’ livin’ in a cardboard box.

              3. Someone should’ve said, “K? Why my first computer had one byte of memory. And we were lucky to have it!”

          2. Dude, my built-from-a-kit Sinclair had 4K.

          3. Color Computer, huh?

            Figures.

          4. Dating yourself again, Epi?

            I hope you at least make it to second base this time.

        2. When I got into the development biz, we wrote a medical billing app that ran in 28k. Suck it 640k-ers!

  3. Gates says “top down” means USA on top and Africa on the bottom.
    RACIST!

  4. Are we giving them AID, or AIDS?

    1. “Stay back children! Jared Jim wants to give you AIDS!”

      1. “Oh, you mean assisstance!” HA!

  5. Ideas having sex out of wedlock? This is why I’m voting Santorum.

  6. 640K of fish should be enough for anybody.

    All we need now is to get a “DEVELOPERS!” chant going and this will be a nerd-out of historical propo

    DEVELOPERS! DEVELOPERS!
    DEVELOPERS! DEVELOPERS!

  7. It’s amazing how the White Man’s Burden has transformed from imperializing Africa, to turning it into one huge Euro-American welfare state.

    1. Just wait till Billy boy realizes that African thug leaders are stealing all of his aid.

      1. I don’t think he cares, as long as they’re using Windows on their mobile oppression camels.

      2. Well, yeah, but now he gets to go to all the cool parties and hang out with Bono and people treat him like a great man, rather than just another rich nerd.

  8. The best thing Gates could have done for Africans is sit down and figure out how to make a shitload more money housing them, employing them, selling them power and communications, etc.

    It would have taken a huge amount of creativity, since the disposable income levels there are so low – but Gates had the capital and some smarts, so who knows what might have happened?

    But going all Carnegie just takes all that capital and blunts its momentum.

    1. But then he would be an “exploiter,” and all the right people wouldn’t like him any more.

    2. The best thing Gates could have done for Africans is sit down and figure out how to make a shitload more money housing them, employing them, selling them power and communications, etc.

      Yes, but since he didn’t read Adam Smith he still thinks giving people things is what raises them up. Even though personal achievement is from where HIS self esteem comes.

  9. BTW, we may need another Cain thread soon. The feeding frenzy has started. Other conservatives are popping up to say the guy is a huge creep to women, so it’s not “some liberal plot” any more.

    1. Why are you always on about Cain, anyway? Did he harass you?

      I wouldn’t be surprised if he did it or if it’s a bunch of bullshit. Truth is something we rarely get to see anymore.

      1. Yeah, I don’t know either. What I do want to know is who leaked it and it’s starting to look like it was Perry (who I predicted when the story first came out). That shit is far more interesting than listening to these windbags talk.

        1. Cain said it was Perry on FNN around the time your comment posted.

          1. Is Apathiest Hermain Cain?

          2. Correction. A Cain staffer said it.

      2. Cain’s shtick annoys me because he’s a content-free snake oil salesman who has shucked and jived his way into being a frontrunner.

        “I’m a problem solver! That means I don’t have to describe my policies now. Don’t worry, I’ll figure out something good.”

        “Aw, geez, I need something catchy to say at debates. I know! A 9-9-9 tax plan! That’s catchy!”

        “Look at me, I’m a political outsider! Sure, I was part of the Federal Reserve hierarchy, but I’ll just never mention that and talk to people in a folksy way!”

        The funny thing is that right before the sexual harassment scandal broke, I had started to think that Cain was an Elmer Gantry type. By that I meant that he was a hustler, taking advantage of rubes by pretending to be the truest true believer around. Imagine my surprise when it turned out that he was also a masher on top of that. Seriously, his candidacy is now a shot-for-shot remake of the Burt Lancaster classic.

        1. Why not? Lewis had already predicted Obama’s rise in It Can’t Happen Here.

          1. That story is so prophetic in ways that Sinclair Lewis only dared to joke about.

        2. Well, I don’t much like him either.

          1. I don’t like him either, which makes him the best shot for libertarianism.

            1. Being bestest buddies with Neal Boortz does not a libertarian make.

              1. Allow me my libertarian fatalism.

        3. Cain’s shtick annoys me because he’s a content-free snake oil salesman who has shucked and jived

          Something seems racist about this, but I can’t put my finger on it.

          1. It’s the oil. Nigeria has oil.

          2. Anything both Black and Republican is racist. Just ask Janeane Garofalo.

          3. Is it the shucking or the jiving?

    2. The GOP establishment has already picked Mr. Hairspray. Anybody who appears to be endangering his coronation will have “scandals” or “an accident” if necessary.

      1. Which Mr. Hairspray are you referring to; the political windsock or the one with a room-temperature IQ?

        1. You’re going to have to be more specific.

          1. C’mon, you know, the imperialist nutjob that wants increased defense spending across the board.

            1. Obama? You’re confusing me.

          2. I’m trying to figure out if my shadenfreude after the Stupid Party somehow manages to lose to Obama is enough to offset having to deal with another 4 years of teleprompter rule.

            1. I don’t think it will be. The big O has been so astoundingly terrible so far that I don’t even want to think of four more years where he doesn’t even care about re-election. Because if this is how he acts when he does care about it (presumably), I do not want to see how he acts when he doesn’t.

          3. I believe they are referring to Shit Flopney, the AIDS cocktail of GOP politics.

            1. And you can tell this how?

              1. Process of solid waste elimination. Besides, Grand Coif Tarkin’s hair doesn’t move.

            2. So I take it that anyone who has not held libertarian views from the cradle onward is unworthy of your support? I mean, if they ever change their minds you’ll label them a flipflopper.

              1. Changing one’s mind and being consistent afterwards for more than a minute is one thing, Tulpy Poo; Flopney sticking his mung covered digit in the air and following the stench from whence it came out of nothing but sheer expediency is something entirely different. If the shoe fits…

                With the noted exception of ObamneyCare of course, as Flopney has been quite consistent in his advocacy and implementation of centrally planned health care: That alone richly earns him a high-velocity, sustained French kiss with cylindrical, hydrochloric acid drenched revolving cheese grater.

              2. Dude,

                Romney changes his mind frequently on issues, invariably in directions that benefit him in the next election.

                The likelihood of him changing his mind based on anything other than what his pollster tells him will sell in Peoria/Beacon Hill/Salt Lake City is less than your chance of hitting powerball tonight.

                1. The above was aimed at Tulpy.

                  Also what Groovus said.

    3. Liberal plot? From liberal Republicans maybe.

  10. A few years back I taught for a university in Thailand that was the recipient of some money from the Gates Foundation. Before the award, the library was small and had a pretty slim selection of books and few computers. After getting the money, they greatly expanded the library, but didn’t buy too many books (Thais in general don’t like to read very much). They did buy a lot of computers, but whenever I passed by a student on a computer they were either playing a game or using chat. So this kind of giving is nice, but it’s not going to change long established cultural habits.

    1. Students primarily using comupters to game and chat is a universal cultural trait.

      1. Yes, but students in the U.S. also read books, or at least they used to. I rarely found a student there who was interested in ideas or thinking of any kind. Planning ahead was also not a strong cultural trait, and I think some of this feeds into development. My point was that just giving money to education, doesn’t necessarily lead to more education.

        1. My point was that just giving money to education, doesn’t necessarily lead to more education.

          I hate to be an ass but this is another thing for which there is plenty of evidence right here at home.

          Yes, but students in the U.S. also read books, or at least they used to.

          Used to being the operative word. I’m not long out of the education system and I can assure you that reading was something us nerds did. It wasn’t nerdy just understanding the books better but merely reading for fun at all.

          1. I take your point on some of this, but just because some traits exist in the U.S. or in other places in the developed world, that also exist in the developing world, doesn’t make the two worlds equivalent. The difference in degree can be very significant. Sure, there are young men in the West who don’t plan very well, and there are young men who drive their motorbikes drunk, crash, and die. But in Thailand, per capita, there’s a significant difference here. It might be a difference in degree but it’s large enough to look like a difference in kind.

            The notion that culture matters when it comes to development is nothing new. I’m just offering a specific example and suggesting why the Gates’ Foundation type of giving won’t make much of a dent unless there’s a shift in cultural values. (But not to pick on the Thais too much, here; I like a lot of other things about Thai culture).

            1. Oh, and to the extent the West is in decline is to some extent also linked to a decline in certain values that used to be more important here.

            2. I grew up in South East Asia so I guess I’m a bit defensive about these things. As an American growing up overseas the one lasting lesson I brought home was that people tend to be the same (good and bad) wherever you go. That and people in America complaining about “poverty” don’t know what real poverty is.

    2. Where did you teach? I taught at King Mongkut’s Institute of Technology: North Bangkok a few years back.

      1. For some reason that just tickles my funny bone: King Mongkut’s Institute of Technology.

    3. So this kind of giving is nice, but it’s not going to change long established cultural habits.

      Are you suggesting that Twitter alone won’t change the world?

  11. I did not see any reference to corrupt third world leaders. Doesn’t Africa have a shitload of those?

    1. Ah I see the connection – Gates always treated PC manufacturers much like an African kleptocrat-in-chief.

  12. Gates’s work has always been soulless and clunky. He’s a technician and a businessman. Nothing wrong with that but when it comes to wisdom, I wouldn’t look to Bill Gates for that.

    1. ff nails it. The only reason anyone cares is because his wealth makes him a 300lb gorilla.

  13. the private sector hasn’t always invested as much in development as it should because the market incentives haven’t always been clear…

    Couldn’t have said it better myself. We’re talking about America, right?

  14. New at Reason: John Stossel on? ?

    Oh God no… please no…

    1. 404
      Nothing to see here . . .

  15. This is like the worst chat room ever.

  16. The first European flush toilets were installed in the middle of the 19th Century. More people died in the 20th Century from diseases that spread due to a lack of toilets than in all that century’s wars and genocides combined. The problem isn’t a lack of innovation. The problem is a lack of access to things already invented. Dictators should stop spending so much on fighter jets and missiles so that their citizens can spend the saved tax dollars on toilets and sewage treatment facilities.

    1. For more information, check out the World Toilet Organization. Toilet Day is coming up. http://www.worldtoilet.org/wto/

    2. Ah yes, but the quality of their life was no doubt lowered by the loss of gamboling opportunities.

      1. Or membership in Gambolers Anonymous.

        1. Lord I was born a gamboling man

          1. Everyday I’m gamboling

            1. God of Gambolers

  17. I just thought it was microsoft.

  18. “Gates writes that “aid is targeted to fill specific gaps in development,” the most important of which is innovation.”

    Is this a joke? The man who revolutionized the computer industry and became the richest man in the world thanks to capitalism doesn’t understand that it creates wealth and drives innovation?

    I don’t know what this guy has been smoking, but I know I want some of it.

    1. Apparently it’s really bad for your brain, so… Maybe you don’t.

  19. Gates writes that “aid is targeted to fill specific gaps in development,” the most important of which is innovation.

    No, Bill, it’s not. The sine qua non of development is non-predatory governance. If people know that they can produce an excess above the bare subsistence level without a thug bonking them on the head and taking it, they’ll begin to do so quite nicely on their own. Without it, all you’re doing is giving them new trinkets to be seized by the thugs.

  20. Gates, like many aid evangelists, conflates aid with development, innovation, and economic growth

    Years ago I was at one of these NYC roundtable debates/salon-style events (often where I’ve met Reason writers) when I met a guy who was a career Ford Foundation bigwig… my girlfriend was working at the UN at the time on African aid… She waxes on for a while about her ambitions to end malaria, AIDS, female genital mutilation, help end ethnic conflicts, provide education, water, introduce civic instutions to tribes, etc etc.

    After a listening patiently for a few drinks he basically goes, “I’ve personally overseen about $5billion in spending in latin america since 1970. All of it money generated by productive enterprise in the US. I can say with confidence and absolute certainty that nothing, absolutely nothing we’ve done has had any measurable positive effect, and we might as well have just dumped all that money in the ocean for all the good we did.”

    He then went on to point out that if we’d just *traded fairly* with the countries we gave aid to, they’d have developed their own institutions and industries naturally, without any direction from the Ford Foundation or the IMF or the UN.

    Basically, he was like, “I was you, 40 years ago – what I learned was: Paternalism Doesn’t Work.”

    It was not a well-recieved message. At least by her. Mainly because the guy was confirming what I had been suggesting to her for the previous year.

    One wonders how long it will take before everyone else figures out that Tax-Funded beneficence tends to be the least efficient way of achieving anything.

    1. It achieves something: it gives the people who agitate for it the feeling that they’re “helping poor people”, without the agitators doing any work or even any thinking. They pat themselves on the back for their “compassion” and look down their noses at those of us getting fleeced to fund their “moral superiority”.

      1. Enjoy Every Sandwich|11.3.11 @ 12:47PM|#

        It achieves something…

        Tax breaks.

  21. the green revolution wasn’t simply the transfer of technology developed in a free market process in the West; The Cooperative Wheat Research Production Program, where Borlaug first starting successfully breeding disease-resistant dwarf wheat, was funded by the Rockefeller Foundation and the Mexican Ministry of Agriculture from the very beginning. That is, the development of the technology, the actual innovation process, *was* subsidized by the institutional philanthropy sector, not just the dissemination of the technology to India and elsewhere.

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