How to reduce global inequities

Thirty years after he dropped out of Harvard University, Bill Gates returned there to receive an honorary degree:

The Crimson has called me “Harvard’s most successful dropout.” I guess that makes me valedictorian of my own special class … I did the best of everyone who failed.

Gates was invited to deliver this year’s commencement address. He called on graduates to use their education to make the world a better place:

Humanity’s greatest advances are not in its discoveries — but in how those discoveries are applied to reduce inequity. Whether through democracy, strong public education, quality health care, or broad economic opportunity – reducing inequity is the highest human achievement.

Gates says we can reduce the disproportionate incidence of poverty and disease in the less developed parts of the world. Capitalism is the problem, and capitalism will provide solutions:

Melinda and I read an article about the millions of children who were dying every year in poor countries from diseases that we had long ago made harmless in this country. Measles, malaria, pneumonia, hepatitis B, yellow fever. One disease I had never even heard of, rotavirus, was killing half a million kids each year – none of them in the United States.

We were shocked. We had just assumed that if millions of children were dying and they could be saved, the world would make it a priority to discover and deliver the medicines to save them. But it did not. For under a dollar, there were interventions that could save lives that just weren’t being delivered.

If you believe that every life has equal value, it’s revolting to learn that some lives are seen as worth saving and others are not. We said to ourselves: “This can’t be true. But if it is true, it deserves to be the priority of our giving.”

So we began our work in the same way anyone here would begin it. We asked: “How could the world let these children die?”

The answer is simple, and harsh. The market did not reward saving the lives of these children, and governments did not subsidize it. So the children died because their mothers and their fathers had no power in the market and no voice in the system.

But you and I have both.

We can make market forces work better for the poor if we can develop a more creative capitalism – if we can stretch the reach of market forces so that more people can make a profit, or at least make a living, serving people who are suffering from the worst inequities. We also can press governments around the world to spend taxpayer money in ways that better reflect the values of the people who pay the taxes.

If we can find approaches that meet the needs of the poor in ways that generate profits for business and votes for politicians, we will have found a sustainable way to reduce inequity in the world.

Gates insists it can be done. The problem is not that people don’t care; the problem is, people don’t know where to begin:

I am optimistic that we can do this, but I talk to skeptics who claim there is no hope. They say: “Inequity has been with us since the beginning, and will be with us till the end – because people just … don’t … care.” I completely disagree.

I believe we have more caring than we know what to do with.

All of us here in this Yard, at one time or another, have seen human tragedies that broke our hearts, and yet we did nothing – not because we didn’t care, but because we didn’t know what to do. If we had known how to help, we would have acted.

The barrier to change is not too little caring; it is too much complexity.

To turn caring into action, we need to see a problem, see a solution, and see the impact. But complexity blocks all three steps.

I hope Gates is right, but I wonder. When people say, “Science created the problem, but science is also our best hope to solve it”, I tend to be sceptical. I have the same response to, “Capitalism is the problem, but capitalism is also the solution.”

You might just as well claim, “Religion is the problem, but religion is also the solution.” Lots of people agree with the first half of that statement:  and then they use it to justify ridding the world of religion. I guess the same logic doesn’t apply to capitalism and science.

Here’s how I see it. Capitalism has strengths and weaknesses; science has strengths and weaknesses; guess what, religion has, too! The way forward is to maximize the strengths of every tool at our disposal and utilize those strengths to make the world a better place.

For one thing, religion can motivate people to care. Human beings are not born with an instinct to care for everyone in the world. On the contrary, babies are aware only of their own needs. They must learn that other people have needs, too; that they aren’t here just to serve me; that their needs matter as much as mine do. None of those facts are present in the psyche at birth.

Where did Bill Gates learn this lesson? He doesn’t say, but I notice that his mother was in the habit of quoting Jesus:

… at the close of the letter she said: “From those to whom much is given, much is expected.”

Capitalism didn’t teach Bill Gates to use his wealth to benefit less fortunate people; capitalism is all about maximizing your own profits. But Gates was exposed to the words of Jesus and evidently they left their mark on him. That’s one of the contributions religion can make:  it can help teach people to care.

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12 Comments (+add yours?)

  1. Knotwurth Mentioning
    Jun 22, 2007 @ 00:32:03

    I agree completely on the analysis that capitalism isn’t the way to go if you want to solve inequity. I don’t know if he actually means it that way, but I don’t think that’s really conceivable so much as solving poverty through capitalism. That’s something that is at least somewhat debatable. The key would be making helping other people a profitable venture, of course, which is always the trouble with the conflict between sweat shops or no shops at all. It would be a different kind of capitalism than we see today, but nonetheless it would be capitalism, if, as you say, it was centred around people looking after themselves.

    I also agree with the naysayers that inequity won’t go away. No matter how much we idealize capitalism, it’s grounded on the basis that people with different talents will do better or worse in society. That’s the simple facts. Business is not a world in which there can be two top dogs. The question then that comes into play is just how “raw” you want your capitalism to be. Do governments get involved in encouraging businesses to expand to third-world countries in order to help people to gain employment? Do they simply tax the populations under them more heavily in order to directly fund those dying countries? Or is it safe to assume that the market will take care of itself, moving towards these countries. Unfortunately, what can be done on a large scale is not answerable, as of yet.

    But this brings me to where I do agree with Gates: Individual power. In our current society, individuals do genuinely have the ability to become involved in swaying the market. While the answer isn’t so clear on a political level, on an individual one Gates’ call seems fair; take advantage of our luxury of individual power in order to help others gain that same ability. It doesn’t mean that we will be able to destroy inequity… sorry, but if you’re rich enough to be funding jobs in these countries, you will be worth more than any of those individuals. Nonetheless, our current system gives us the freedom to improve their lives and to help move them out of poverty, which is a far more important goal, in my mind, than eliminating inequity.

    Reply

  2. dan
    Jun 22, 2007 @ 07:42:06

    Hey Stephen,

    Great post, very interesting reading. Of course, you know where I stand on all this so I don’t think I need to go into a detailed response.

    Grace and peace.

    Reply

  3. Stephen
    Jun 22, 2007 @ 08:18:56

    Knotwurth:
    No matter how much we idealize capitalism, it’s grounded on the basis that people with different talents will do better or worse in society.

    That’s a good point, and I hope I haven’t somehow misrepresented what Gates said. He speaks of reducing inequity, not eliminating it completely. And the example he discusses at greatest length is providing treatment for everyday diseases: “For under a dollar, there were interventions that could save lives that just weren’t being delivered.”

    He also thinks we can reduce poverty, but he expresses himself with due caution: “… so that more people can make a profit, or at least make a living.”

    The key would be helping other people make a profitable venture, of course, which is always the trouble with the conflict between sweat shops or no shops at all.

    Your reference to sweat shops touches on a legitimate concern (e.g. the Nike controversy), but there are humane alternatives. The initiative that intrigues me the most is one Gates doesn’t mention: microloans to people (often women) living in poverty in the developing world. The Grameen Bank is a famous example because the bank and its founder won a Nobel Peace prize in 2006.

    It started when Muhammad Yunus, the bank’s founder, loaned $27 to a group of 42 families so that they could create small items to sell at a profit. You can immediately see the appeal: you don’t have to be Bill Gates to come up with $27 to invest. Also, the people who receive the loans aren’t taking a big risk. They don’t put up collateral against the loan, because most of them have nothing to begin with.

    But what difference can such a tiny sum of money make?

    More than half of Grameen borrowers in Bangladesh (close to 50 million) have risen out of acute poverty thanks to their loan, as measured by such standards as having all children of school age in school, all household members eating three meals a day, a sanitary toilet, a rainproof house, clean drinking water and the ability to repay a 300 taka-a-week (8 USD) loan.

    Incredible! And that’s where I think Gates has a legitimate point. He speaks of developing a “more creative capitalism”. The Grameen Bank utilizes a capitalist model: borrowers set out to earn profits, and they pay interest on their loans. But the model is designed to help people succeed and thereby escape poverty. It’s an elegantly simple, creative concept that is making a concrete difference in the lives of extremely poor people.

    By the way, I didn’t set out to disagree with Gates in this post. I don’t believe dialogue must always involve disagreement; sometimes the goal is to build on what someone else has said.

    Yes, I responded cynically to Gates’s faith in capitalism. But mostly I wanted to raise the question, Where does religion fit into the picture? Gates doesn’t mention religion explicitly; he only alludes to it in that letter from his mother. That was the catalyst for the post: I wanted to talk about a topic on which Gates was essentially silent.

    Reply

  4. Stephen
    Jun 22, 2007 @ 08:35:52

    Dan:
    Thanks for dropping by; I’m glad you saw this post.

    For readers who are wondering what Dan’s position on capitalism is, let’s just say that it’s countercultural.

    Reply

  5. Jason
    Jun 22, 2007 @ 09:12:27

    I am wondering if education, science, capitalism or socialism really are the answer. We’ve been at this now for a while and none of our best laid plans have achieved justice or equity (although I’m not sure justice and equity are quite the same thing).

    Seems that there’s a problem here that runs deeper than any of our own efforts or attempts can solve.

    Reply

  6. Knotwurth Mentioning
    Jun 22, 2007 @ 12:51:03

    Sorry, misread the whole eliminating vs. reducing bit, although I still don’t even know if reducing is a veritable goal for capitalism, since the truth is that, even in the example of the loans (which are a very neat idea!), the richer person is still setting out to make a profit, which will either enlarge or at least maintain the distance between the rich funder and the poor funded. Nonetheless, it would reduce poverty.

    As for the religion issue, I think that in most cases religion is able to serve as a basis for the other actions. I don’t know if it stands alone in many situations in fact; really, religion’s role seems to be that of supporting and improving other such structures. We can take the capitalism topic, if we want; Capitalism in and of itself can be a horrid, destructive trend, but with a religious and moral slant it can be a great way for people to interact and collaborate in order to achieve mutual benefits. Capitalism can stand on its own as a social structure; religion seems to supply a better way to use that standalone structure.

    The same can be said of any number of things, from large structures to daily life. By adopting a religiously guided point of view on things from relationships to personal budgets to successful curing of an illness can all be made simpler and easier to achieve, even if the religion in and of itself probably wouldn’t do much to progress those things.

    Reply

  7. Scott
    Jun 22, 2007 @ 13:26:13

    So we began our work in the same way anyone here would begin it. We asked: “How could the world let these children die?”

    The answer is simple, and harsh. The market did not reward saving the lives of these children, and governments did not subsidize it. So the children died because their mothers and their fathers had no power in the market and no voice in the system.

    This is false logic and really answers none of the problems that face development. Which market did not “reward” saving the lives of these children? Are we to infer that he is speaking of the markets of wealthy nations? What about the markets of developed nations? Isn’t it the interest of those nations to to support themselves? Is the only way to development through foreign aid? If so how did America ever develop? And if so, why hasn’t over a half decade of aid to Africa helped at all. In fact they’ve regressed. You can blame capitalism all you want, but the fact is none of these under developed nations have been given a chance to practice capitalism anyway. And exactly what part of capitalism is preventing people from having their voices heard?

    Meh. Good Bill Gates should stick to operating systems, me thinks economics ain’t quite his strong point.

    The wealth of a nation comes from its people, not foreign aid, government subsidies, or debt.

    Reply

  8. Stephen
    Jun 22, 2007 @ 16:30:11

    • Jason:
    You should take a look at that link I provided to Dan’s blog (a couple of comments up). Dan argues that the Church should institute its own economic system — an alternative to capitalism.

    • Scott:
    Are we to infer that [Gates] is speaking of the markets of wealthy nations?

    I think Gates made himself clear: he’s suggesting that those of us in the West (“those to whom much is given”) have a responsibility toward our fellow human beings in disadvantaged parts of the world.

    Capitalism, considered as an abstract system, has no interest in the developing nations, because there are no profits to be made there. You can’t make a buck off poor people, because they don’t have money to spend.

    You can speak all you like about personal initiative. Geography also plays a decisive role — it’s a kind of global lottery, with big winners and big losers. Countries that are sitting on oil reserves have vast wealth at their disposal (even if only the privileged few benefit from it). Countries like Ethiopia or Bangladesh — how will they ever generate wealth? Meanwhile capitalism, as an abstract system, is utterly disinterested in any country that has no resources to exploit: and equally disinterested in its starving people.

    Of course, individual capitalists (like Gates) may take a more altruistic view.

    My own view of capitalism is best expressed by modifying Winston Churchill’s saying about democracy: “Capitalism is the worst economic system, except for all the others.” We’ve seen that communism doesn’t work in practice. Socialism (e.g. France) doesn’t seem to work very well either. The profit motive is a good way to increase overall productivity and create a relatively prosperous middle class.

    (Mind you, I prefer Canada’s hybrid of socialism and capitalism to the relatively pure free market system of the USA.)

    Millions of children die for want of inexpensive medicine, because their parents are poor, and their governments are poor and, in many cases, corrupt. I don’t disagree with you that the governments of African nations are part of the problem. But a dying child is an innocent victim. Should the prosperous West sit on its hands and say, “It’s not our problem”?

    I think Gates spoke well to those Harvard graduates: young adults about to enter the workforce, who are mostly from wealthy families, who are going to have high-paying and perhaps influential jobs. Gates isn’t repudiating capitalism; he’s just calling for the privileged few to spare a thought for the dying poor, and undertake a creative initiative on their behalf.

    “Meh” yourself.

    Reply

  9. mcswain
    Jun 23, 2007 @ 04:59:27

    I’ll keep it short and sweet… Nice post.

    Reply

  10. Stephen
    Jun 23, 2007 @ 08:13:15

    Thanks, McSwain. That sort of comment is always welcome!
    🙂

    Reply

  11. Scott
    Jun 23, 2007 @ 22:30:04

    I think Gates made himself clear: he’s suggesting that those of us in the West (”those to whom much is given”) have a responsibility toward our fellow human beings in disadvantaged parts of the world.

    And I think over 500 billion in the last 50 years is much more than a small amount. Like I said, after all that’s been thrust upon them, they’re regressed. I’m not blaming them or suggesting they ought to “pull up their boot straps”, I’m saying aid does not create wealth. In fact quite the opposite, it tends to destroy markets, (When you send a truck load of shoes to Africa who buys shoes for shoe makers?), prop up incapable and even evil regimes, and much of it simply gets lost in bureaucracy.

    Capitalism is nothing more than than allowing people the freedom to choose for themselves who to trade with. Much of what is said about it is false, or misrepresented. Fact is we don’t even use it all that much here in the States, where a much more corporatism form of economics is prevalent.

    Economic freedom is the way prosperity for the highest amount of people possible.

    Geography also plays a decisive role — it’s a kind of global lottery, with big winners and big losers. Countries that are sitting on oil reserves have vast wealth at their disposal (even if only the privileged few benefit from it). Countries like Ethiopia or Bangladesh — how will they ever generate wealth?

    Well then we shouldn’t say capitalism is the problem, we should say nature is the problem. Unless you know of another system of production in which wealth is generated from thin air.

    Reply

  12. Stephen
    Jun 24, 2007 @ 07:32:39

    And I think over 500 billion in the last 50 years is much more than a small amount. Like I said, after all that’s been thrust upon them, they’re regressed. … I’m saying aid does not create wealth.

    There’s a lot that I agree with here, Scott. But how much would you give to aid? The logic of your position would seem to be, you’d give nothing.

    I didn’t respond to Gates’s point that governments don’t subsidize treating diseases in other countries. I know you’re a libertarian: you think governments will only mess things up. And I’m at least sympathetic to that viewpoint. (Although I’m a bureaucrat, so I hope government gets some things right!)

    In my comment to Knotwurth, I referred to microloans as a model that intrigues me. It seems like an initiative that Gates would approve of, and I think you would, too. In which case, maybe our positions aren’t so far apart; you don’t want to keep people perpetually dependent on aid, and neither do I.

    But I think government has a role to play, and some aid is appropriate. I’m not sure you would agree.

    Reply

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