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The robber baron as Lord Bountiful
Bill Gates and the capitalist philanthropy scam
Steven Strauss
volume:  
volume 27
issue 4
August 2006
imagestuff

During a December 2005 trip to discuss Microsoft's planned $400 million investment in India with government and business leaders there, Bill and Melinda Gates make time for a photo op with some of the children of Meera Bagh, a poor area of New Dehli.

Legend has it that the 10th century Bohemian King Wenceslas braved a storm to feed a hungry neighbor, provided shelter for orphans, and reached into his own pockets to buy children out of slavery. His compassion, we are taught, was the religious spirit at work, and the memory of "Good King Wenceslas" is revered in a Christmas carol.

Robber baron John D. Rockefeller must have thought he was possessed by the benevolent king's ghost. "The good Lord gave me the money, and how could I withhold it?" he once chirped. Crocodile tears rolled down his cheeks not only when his Rockefeller Foundation doled out its grants, but also when he personally tossed dimes to poor people on the street.

Time magazine recently revealed that the legend, although perhaps a little more secular than before, is alive and well in no less a figure than the world's richest person, Bill Gates. The Bill & Melinda Gates Foundation, Time cooed, is "making mercy smarter."

And now we learn that the suffering millions have even more reason to rejoice. Buttressed by a multibillion-dollar gift from the world's second-richest person, financier Warren Buffett, Gates has announced that by 2008 he will abdicate his throne at Microsoft in order to devote himself full-time to his charitable foundation.

So the story of the beneficent ruler lives on. But it was a myth when its hero was a king, and it is no less a myth now that its hero is the king of the CEOs.

First the capitalist taketh... Before the ruling benefactor can give away his wealth, he has to accumulate it. How this really occurs is conveniently obscured when well-off philanthropists are lauded by their media.

Depending on how the market is doing, Bill Gates has been estimated to be worth as much as $100 billion. Considering that nearly half of the planet's inhabitants live on less than two dollars a day, that's a lot of money. But is there any rational sense in which one person can really earn $100 billion? Of course not. Gates just played the vicious game of capitalism and won big.

Gates, who comes from a prosperous Seattle family, started what would become Microsoft in 1975 after dropping out of Harvard. In 1980, IBM hired Microsoft to write the operating system for its new PCs. Gates bought an existing system for $50,000, renamed it MS-DOS, and hired people to develop it further into what eventually became the Windows system.

Gates understood the rules of the game well. Right away, he maneuvered to have computer software treated legally as private property. And he succeeded in getting PC vendors to install the Microsoft operating system and desktop applications in their hardware. In this way, he became virtually the only show in town.

These results brought the predictable response from his rivals: charges of monopolizing the software market and of unfair business practices. But, with the help of such dubious "consultants" as anti-gay Christian crusader and Republican insider Ralph Reed Jr., Microsoft reached settlements that allowed it to remain a single company.

In 2002, facing one lawsuit after another, Microsoft proposed a settlement whereby it would donate $1 billion worth of software, Windows licenses, and money to more than 12,000 poor public schools. This maneuver would have positioned it nicely in the highly lucrative education market. But rival Apple protested the offer, and a federal judge sided with Apple.

Capitalists fight for profits on two fronts. One is against their business competitors. The other is against their workers, the source of their wealth.
Gates is no different. Microsoft programmers at times work 80-hour weeks, with bonuses sometimes pegged to working weekends. Microsoft also has practiced "forced retention," a policy of threatening lawsuits against employees in important positions who want to go to work elsewhere.

In 1996, a class action suit charged that thousands of Microsoft employees doing the same work as regular, full-time workers were categorized as "temporary" and "freelance" so that the company could deny them medical and other benefits. Microsoft settled the case for $100 million.

To ensure a steady flow of anti-labor propaganda, Microsoft donates to such rightwing think tanks as the American Enterprise Institute and the Heritage Foundation. The Gates Foundation also gives $1 million yearly to the Discovery Institute, the champion of the pseudo-scientific "intelligent design" challenge to evolution.

...and then he giveth away (very profitably). The Bill & Melinda Gates Foundation is the wealthiest foundation in the world. Before Warren Buffett announced his gift of $31 billion to be phased in annually, it had assets of about $29 billion. Now, the Seattle Times reports, its worth is greater than the gross domestic product of 70 percent of the world's countries.

Education and then healthcare are the leading recipients of funds from charitable U.S. foundations. The Gates Foundation is in step; it contributes mainly in the areas of education, health, and libraries

The system of corporate-controlled foundations, with its enormous tax breaks, allows individual capitalists to make private decisions on social policy. Instead of paying taxes on their gargantuan, ill-gotten fortunes into a public pool, they are calling the shots in spheres of vital importance to every man, woman and child. This is grossly undemocratic.

In the words of Barbara Dudley, a former president of the National Lawyers Guild, "What we've done is create a new nobility, where basically the lords and ladies decide who gets the money." (Barbara Miner, Rethinking Schools, Summer 2005.)

In the area of education, Gates Foundation literature explains that their grants are designed to make improvements by focusing on standards, testing, and accountability.

Nice-sounding objectives. And, interestingly, they are precisely the pillars of Bush's bipartisan No Child Left Behind law, the goal of which is to create a uniform labor force skilled in digital technology and capable of out-competing corporate America's European and Asian competitors. Left by the side of the road are the promotion of critical thinking and the nurturing of students' individual talents.

How convenient that this dovetails so neatly with the needs of Microsoft!

Funding the corporate line on healthcare. Bill Gates speaks about health issues to gatherings of the powerful like the 2001 World Economic Forum and the 2005 World Health Assembly. His credentials are pretty obvious. He is super-rich, and his foundation holds the pursestrings to billions of healthcare dollars.

Gates holds a fairly typical capitalist view of the cause of global health problems and how to solve them, one that turns reality on its head. "I don't think it's correct to say poverty causes disease," he has said. "It's more correct the other way around. People — economists and other experts on all this — are beginning to recognize that."

He apparently hasn't talked to the experts with Doctors Without Borders. Writing from Angola in May of this year, this humanitarian organization more truthfully pinpointed the cause of the cholera epidemic there. "The disastrous state of the water supply and sanitation infrastructure in Luanda and other large cities is the principal reason for the rapid spread of cholera."

But the lack of infrastructure is a very treatable social disease. It simply requires the right dose of revolutionary action by the masses of working people. Cuba, for example, has all but eliminated the types of health problems seen in Africa through its focus on infrastructure, preventive medicine, and free, universal healthcare.

Solving such problems requires that social resources be allocated to meet collective needs rather than to generate individual profit. But Gates's proposed solution to the health problems of the global poor is "to make market forces work better."

To be sure, the Gates Foundation keeps a close tab on market forces. Whenever it gives away much coveted dollars for vaccine research and development, applicants have to explain whether their research is likely to generate any "intellectual property." Intellectual property, of course, is the cornerstone of Gates's fortune.

Tax big business and the phony philanthropists! If financial donations are a measure of compassion, then capitalist rulers don't hold a candle to the masses of workers.

Private charitable contributions in the U.S. amount to more than $200 billion annually. According to Mark Dowie in his book American Foundations, foundations "provide but 7 percent of all charitable resources." Reports Dowie, "recent studies of individual giving suggest that low- and middle-income donors became more generous as the twentieth century progressed, while the wealthy decreased their giving."

And, according to journalist Richard Rothstein, for every $10 a philanthropist like Bill Gates gives away, the government loses about $4 in tax breaks.

Meanwhile, the CEOs are practicing their other tax-dodging moves. Microsoft, for example, opened offices in the 1990s in Nevada, which has no corporate income tax, to evade paying taxes in Washington state. In the first seven years of this scam, the company sheltered more than $60 billion in revenue.

In sum, all the capitalists are doing at tax time is having a good laugh.

It's time to bust the myth of corporate philanthropists as social do-gooders and fight to take decision-making about social priorities out of their hands. "Charity" wasn't the answer to poverty and suffering in the era of King Wenceslas, and it isn't the answer today!