David R. Henderson  

Bill Gates on Education and Philanthropy

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I was impressed by the latest "60 Minutes" report on Bill and Melinda Gates and many of their choices about what to spend their fortunes on. One main choice is their large spending on producing a vaccine against malaria. Here's an excerpt:

And listen to what they have spent already: $4.5 billion for vaccines; almost $2 billion for scholarships in America; and $1.5 billion to improve farming in Africa and Asia, just to name a few. The foundation's wealth ranks up there with America's biggest companies, just behind McDonalds and ahead of Boeing.

I loved this segment:
"Well, if you have money, what are you gonna do with it? You can spend it on yourself, you can have, you know, thousands of people holding fans and cooling you off. You can build pyramids and things. You know, I sometimes order two cheeseburgers instead of one. But we didn't have any consumption ideas. And if you don't think it's a favor to your kids to have them start with gigantic wealth, then you've gotta pick a cause," Bill Gates explained.

Bill Gates also had a good concise explanation for why he was donating money for a malaria vaccine:

"Well, there's a huge market for cancer drugs. And there's dozens of pharmaceutical companies that spend tens of billions on those drugs. In malaria, when we announced a grant for $50 million, we became the biggest private funders. And so, the fact that it kills over a million children a year and yet has almost no money given to it, you know, that struck us as very strange. But it became the thing we saw, 'Okay, this will be unique. We'll take the diseases of the poor, where there's no market and we'll get the best scientists working on those diseases,'" Bill Gates explained.

I was disappointed, to put it mildly, by the Gates's commitment to education in American. By education, they clearly meant what I've pointed out that co-blogger Bryan means: not education per se but schooling. Another excerpt:
"I think it's most alarming that we're only preparing a third of the kids to go on to college. That's a frightening thing for our democracy to say a third of kids are prepared to go," she replied.

And here's Bill:
"The country is built on ingenuity. It's built on having lots of very well-educated people. And if you were from a poor family, how are you going to be break out of that? Well, education is the only way. Education is the thing that 20 years from now, will determine if this country is as strong and as just as it wants to be," Bill Gates explained.

The level of self-unawareness in the above quote is mind-boggling. Does Bill Gates think Microsoft would have been a better company had he not dropped out of Harvard?


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COMMENTS (17 to date)
mark writes:

I'm skeptical of education but your post ended with a question and an implied answer that I think is highly debatable. Bill Gates make look back at the history of Microsoft and think he should have gotten that degree from Harvard. He may very much believe that the window for Microsoft's success was large enough to allow him to get a degree and start the company with more education. I don't know enough about the history of the PC to know if this is true but there are serial entreprenuers who do things much differently on their second company then they do on their first even though their rookie campaign made them rich. Gates may have that mindset.

yoshi writes:

I think your response to Gates dropping out of Harvard a bit silly. First off - Gates comes from wealth and already came to the table with a lot of advantages that people he is trying to help do not have.

Secondly - computer programming remains one of the few fields that having a lot of formal education is not required - especially at the time that Microsoft was founded. Its the exception - not the rule. And if Gates did stay in Harvard a bit longer - perhaps he would of made less mistakes in the early years of Microsoft.

And finally his large wealth is largely due to luck. Gates is an intelligent guy and would of still of been successful without some the lucky breaks Microsoft received early on but definitely not as wealthy.

Bob writes:

I agree that many people overinvest in education at the margin. And the schooling vs education point is valid but might just be a question of mass production becoming obsolete. Of course, even though it is no longer the optimal model for education, it remains locked into gov schools.

But back to your post - I don't think your position follows from this overinvestment. Ms Gates used the word *prepare*. Sure, I would like more attention paid to other legitimate paths to becoming a productive citizen. But now we're back on the margin.

Would Bill Gates have started Microsoft if he didn't go to Harvard? If he didn't go to high school? What about Facebook? Is college really about education or is it a relatively efficient way to clump smart kids together? The U.S. university system certainly does that better than high schools.

Interestingly, the most recent Simpsons episode takes on some of this conundrum.

Ted writes:

Right, because every college drop-out starts a multi-billion dollar corporation. Probabilistically, it was actually a pretty stupid decision for him to drop out. Almost everyone who graduates from Harvard is substantially better off then someone who dropped out of Harvard. I'm not particularly interested in the "schooling vs. education" debate since society equates them and so for all purposes they are the same.

Also, it amazes me that Windows is a successful company when you have Linux which is both free and just about better in every way (there are some advantages to Windows but they are slight). Though I guess I shouldn't be surprised. By charging prices for their software they are able to advertise their crappy product and capture the market among consumers who really don't understand this stuff.

Tom Lee writes:

Really good, including part on "schooling".

Perhaps there is some part of Bill Gates that believes that had he just tried harder, he might have made it!

floccina writes:

"I think it's most alarming that we're only preparing a third of the kids to go on to college. That's a frightening thing for our democracy to say a third of kids are prepared to go," she replied."

Melinda Gates followed that up with a statement to the effect that she wants to push that up to 80%. That shocked me. I think this is sort of thing that convinces me that very intelligent and diligent people are as out of touch as the very rich. That statement put her in the Paris Hilton category in my mind. She needs to hang out with some of the people that I have known.

agnostic writes:

"and capture the market among consumers who really don't understand this stuff."

You mean all but a hundredth of a percent of the population? It must also amaze you that electronics companies get away with selling pre-made TVs and remote controls, when a do-it-yourself kit is much more versatile and so obviously superior.

floccina writes:

If we had to do it all over again how much full time schooling would be optimal for various people with various occupation? Obviously 70 years would be too much, zero might be too little. So how much do advocates of more schooling, like Melinda Gates think is optimal and why? And one should avoid judging from what we currently have. Might the answer always be a little but more? How much would they say is too much?

David R. Henderson writes:

@fioccina,
Melinda comes off WAY better than Paris Hilton, although I agree with you that 80% is pretty absurd.

William Barghest writes:

The aid to agriculture strikes me as questionable because it seems like a symbolic solution to the problem of hunger which seems like a consequence of poverty in general. Is agriculture really how rural Africa and Asia should develop economically or should the Gates' be helping people to move to cities to work in factories or call centers in order to best alleviate hunger?

Douglass Holmes writes:

Well, I'm right in there with you and Bryan. I certainly don't think that overinvesting in education is going to have any better results than overinvesting in housing did.

hacs writes:

The point is that he could choose to drop out of Harvard.

Rebecca Burlingame writes:

Every time I hear about those 80% numbers for education, my mind takes a little trip to a place where it wonders, how is the work world going to restructure itself in a way that it is suddenly prepared to pay out that much more money? Then there will only be 20% poor?

Troy Camplin writes:

I have argued repeatedly with people about the role of education in making people better off. I keep telling them that it's not education, per se, that benefits people. The people who become educated are those who already have the qualities that will make them successful in life: self-discipline, hard workers, curiosity, driven, etc. If you can create a culture that values these thigns, and if you can figure out how to instill these virtues in people, then the rest will take care of itself.

Tracy W writes:

"I think it's most alarming that we're only preparing a third of the kids to go on to college. That's a frightening thing for our democracy to say a third of kids are prepared to go," she replied.

This sounds fine to me. There's a big difference I think between being prepared to go to uni, but choosing not to go, and not being prepared to go to uni.

I think education should be about opening doors. People often change their minds about their career path, particularly as a teen. Not everyone should go to uni, but as many students as possible should be capable of going.

Econotarian writes:

While curing Malaria will certainly provde marginal improvements in poor countries, Gates would get more bang for the buck spending a billion on education of pro-economic freedom concepts in poor countries.

If poor countries adopted policies wih higher levels of economic freedom, their economies would grow, and there would be a market for solving the malaria problem (although it is hard to beat drainage in terms of efficiency for most insect vectors).

That said, he is doing something better than trying to push socialism, which many rich people do to "signal their humanity".

Jeff S writes:

I find it an excellent point that Microsoft did very well for itself without the need of Bill Gates possessing a Harvard education. I read a very compelling book by Malcolm Gladwell named Outliers and he made an interesting point concerning Mr. Gates. Bill Gates had the luck to be born at a time that meant he would experience the boom of computers at the most opportune time. He went to a school that had access to early computing equipment and was in a position that gave him a large amount of time with that equipment. Education is important but may not be nearly as important as the opportunities that individuals receive. Bill Gates’ economic success could be argued to be more dependent on the luck of the draw rather than what education he received.

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