Compare and contrast with Jeff Bezos: "The only way that I can see to deploy this much financial resource is by converting my Amazon winnings into space travel."
Donating $130B to Henry Street Settlement would probably destroy them. When you have that much money, you don't care about deploying it efficiently, you just want to deploy it. You often can't deploy it efficiently without distorting markets. Rather than more stuff getting done, everything just gets done less efficiently, with everyone along the value chain becoming a highly-paid consultant of dubious value.
It really is a lot easier to deploy $10M in capital than $100B. $10M means that organizations that do good work and otherwise couldn't exist now can exist. $100B just means that everyone working in an area tangentially related to the benefactor's interests takes home fat salaries.
(My wife manages about $180M for a foundation, which is just about the sweet spot: enough to fund several organizations that wouldn't otherwise exist, but not enough to distort markets or incentivize people towards bureaucracy.)
It can't, really, without creating the bureaucracy that leads to all that waste in the first place.
$130B is 13,000 $10M chunks. No single person can find, vet, decide upon, and measure progress for 13,000 small organizations. That means you have to hire a staff to manage and give away the money. A staff means that a.) it's not your imagination that matters b.) money is allocated via horse-trading among the people who have been hired to manage the money and c.) suddenly you have a strong incentive for potential recipients to game the system and focus on making things look good for donors rather than providing the services to the ultimate beneficiaries. Organizations that previously were all about the mission become focused on the money, because there's a lot of it available and they're competing with lots of other organizations for it.
It's equally impossible to create a space program without a lot of middle managers and dubious allocations of funds.
As others have pointed out, Bezos has already got one organization which distributes money to relatively poor and needy people called Amazon, just one which happens to be known for its lack of generosity in doing so. It's also a demonstration that a sufficiently motivated Jeff Bezos is very, very good at devising ways to allocate resources amongst huge numbers of competing needs...
If he wants to deploy it efficiently, without needing to build a bureaucracy around it, he could do what Buffett is doing: donate it to the Gates Foundation. It's not great if you want vanity projects, but if he really wants to do good then it's hard to think of a better way.
Having worked in a mission financed by the Gates foundation I can tell you that a LOT of money leaves between the moment it's donated and the moment it's used in the field.
The Gates Foundation is also a bureaucracy facing the same problems described by GP.
Moreover I guess that economies of scale are not so significant after a certain point. I would prefer five different 100B foundations, rather than a 500B one, to encourage diversity in the donation strategy and goals.
Yes, and any organisation of that scale will have bureaucracy. My point is that he could avoid needing to build another one by using a fund that already exists and has a proven track record.
I agree with you on that. My counterpoint is that marginal economies of scale are small, if not negative, at the size of Gates Foundation, and that having some diversity among foundations may be itself an advantage.
Bezos isn't giving all of his wealth to space. He has been clear about that, stating over and over again in interviews that he plans to also donate to social causes in the US where he can have a near-term impact.
He's 54 years old and has gained $104 billion in new paper wealth in the last three years. I'd rather he get his philanthropy right - assuming the wealth sticks around at all, given Amazon's valuation - instead of hurrying and dumping billions into poor decisions that accomplish little. If he perhaps has 30 years to give tens of billions to social charity efforts, then patience and prudence is called for.
I don't really believe in the "donating all of your tens of billions of dollars" either. However, he is right that Bezos lacks imagination if that is all that he can think of doing with his money.
First off, how about not maximizing the profit from Amazon for himself and for speculative shareholders and increasing worker salaries instead?
Second, how about keeping prices as low as possible for consumers? They made record profits, and multiple X of what Amazon made like a couple of years ago, and yet they still increased Prime subscription prices, for instance.
But Bezos could also lower his company's commissions and increase commissions for affiliates (which I think were also lowered like a year ago), as another example.
There are so many more ways in which Bezos could "do good", without "having" to make billions of profits himself and his shareholders. So either he really lacks the imagination to do stuff like that, or he's just using that reason as an excuse to seem like there's no other option than for him to make so much money, because in reality he loves making all of that money for himself. But he likes to pretend he doesn't and that he would "do more" if he could.
I really don't believe in this whole thing of "pleasing shareholders at all costs, and bottom-feeding on the poor (both regular workers and consumers) as much as possible to do that." Also, Bezos himself used to believe that pleasing shareholders didn't have to be the company's #1 priority for a decade and a half, even if his reason then wasn't "to do good" but "grow as much as possible first".
I'm not sure what is happening lately, but there is a clear trend of corporations bottomfeeding more and more and squeezing all the money from the bottom up. My guess is it's a combination of increased corruption in Congress and of "buying of politicians" (it has become much easier to do it), a failure of anti-trust laws and enforcement, allowing big companies to grow ever larger and have less competition, as well as increased corruption/greed at the top of these companies (their boards being more and more willing to compensate themselves and the top-level execs more and more every year, to the detriment of workers and consumers).
To be fair, Bezos isn't rich because Amazon makes loads of money and has fat margins. Amazon was loss-making for most of its existence, and probably only became profitable thanks to AWS. He's insanely rich because shareholders don't care about Amazon's current profits, but just like its growth.
You mean he could make less money by running his company inefficiently and that would be good for people? Why single out Amazon workers and affiliates though? What if he gave cash to, I don't know, all optometrists, or something? Eventually, it's just giving away money to someone. Space travel is different - it's creating value on its own.
Exploit is the wrong word. It's America and they're free to quit. Nothing's keeping there except their own desire for money. They won't starve without that job so it's not wage slavery. They simply choose to do it.
And why affiliates? The GP proposed giving money to internet advertisers. They are surely not the most deserving group of people on Earth.
> They won't starve without that job so it's not wage slavery. They simply choose to do it.
Aren't those people paid close to minimum wage? People on minimum wage don't live in an utopia where they have all the freedom in the world to move around as they wish, unlike Silicon Valley employees being paid 200k per year.
I'd say Bezos has a lot of work to do on the "taking better care of his employees" front.
And regarding space travel at this point it's just an intellectual fetish based on reading/watching SF (and I'm a big fan of SF...). Except for the "single point of failure" thing, which hasn't truly been an issue for the last 65 million years, we should be fine on Earth for the next decades, at least.
We seem to have avoided catastrophe as a species a few times cutting it real close.
And those haven't been really big incidents either.
Anyway, Musk's strategy in making space travel cheaper is a right one. Throwing more money at it directly is likely to result in inefficient solutions. It requires time and work add much as some money.
Setting up a Bezos space university would be a good start. And figuring out education without (much) bureaucracy and sinecures.
Space travel (especially long range) is interesting in that tackling it rewrites solving a whole lot of ancillary problems. Social, political, educational, biological, agricultural, physical etc.
Another option is to give it directly to poor people, no strings attached as mentioned in a recent HN article as being an effective way to use funds to help people get out of poverty.
Giving directly works if the primary impediment to development is a lack of capital. That's been the case in places like rural Kenya or Bangladesh, which is why organizations like GiveDirectly.org or the Grameen Bank have seen success.
This is not the case in many areas of the world, and particularly not in poor pockets within developed nations. There, the barriers to development often include things like: poor educational attainment; fucked-up incentive structures; lack of physical safety & security, unenforceable property rights (leading to fucked-up incentive structures); non-existent infrastructure.
Throw money at a bunch of people who know what they need to do better their lives and have the skills to do so, and you get economic development. Throw money at a bunch of people who have either no idea or no incentive to spend the money wisely, and the money trickles right back out again.
(This, BTW, mirrors the startup scene pretty well. Throw a few hundred million at Google, Slack, or GitHub and you get tools that help millions of people. Throw a few hundred million at Juicero, Klinkle, or Theranos and you get a clusterfuck.)
I have been thinking from time to time how people like that can use their money for good.
On the one hand I'd say they could create lots of jobs; things that do good but whose intent are not to optimize for profit. Bringing back mom & pop local stores for example.
For his own company, increase wages and working conditions. Of course, in that case it's not up to him, it's up to the shareholders and they do optimize for profit.
Charity wise, it'd have to be very carefully done. I think Bill Gates is on the right path, but he's still one of the richest people in the world so I don't think he's spending much of his personal fortune in charity - yet. Not in such a way that it impacts his personal fortune, in any case.
There's some charities that are bottomless pits though, e.g. aid to Africa as another commenter mentioned. That stuff will only work if you spend so much money, you'd basically buy a country and - forcefully - take over the government. For one, that would cost more money than the richest people in the world have - government scale money, which is still much higher than corporation scale money. Second, that's a pretty dystopian idea, where corporations own countries and armies and such.
I would contend that it's our failure of imagination to think that philanthropy is the only way to help humankind. I wrote about this a while back. [1] While charity sounds great in theory, donating a billion dollars more isn't going to help poor kids in Africa a whole lot, simply because they aren't suffering due to lack of money. It's rather due to corruption, instability of government, and lack of proper law enforcement that can allow them to grow. African nations have cumulatively received $1T in aid till now, how much of it did get translated into actual development?
Considering this, an investment in a promising technology sounds like a better deal.
Well targeted evidence-based philanthropy does really work. In addition to the challenges that you mentioned, there is also the hubris of imagining what people need rather than asking and working with them directly.
You know, in a sense we're already taking better care of what we have already. There's less poverty than ever before, as an example. I think the major concern right now for humanity is that of global warming. We're definitely not taking care of our planet right now, and long term it's probably the most important challenge we've ever encountered.
Being multi-planetary is linked to that - not as a plan B but imagine how much it will boost scientific research. Any kind of outside earth research may benefit Earth in the end.
Fighting poverty and hunger is of course noble efforts too (and they have worked). They can perfectly co-exist with space exploration.
Yes, research into space travel and what not might benefit Earth but not nearly as much as dumping all the money into researching Earth as a primary goal.
I got the sense that the comment I was responding to was saying that we might accidentally discover or invent useful things as a byproduct of space travel research.
For example, I believe memory foam was originally invented by NASA (or at least by researchers funded by NASA). Memory foam has improved the quality of life of many people including myself (I'm sitting on it right now!) but I don't believe that this is a good justification for researching space travel. Our money would be better spent by cutting out the middle man and directly researching things that will solve problems we know about on Earth.
That research will also have unforeseen applications much like research into space travel so we will still get those seemingly random benefits like Viagra being used for erectile dysfunction instead of whatever it was originally invented for.
I am simply not a believer that we should be investing money into things like putting humans on other planets. I don't believe that we need to spread out into the universe in case some kind of cosmic event destroys the Earth. I am perfectly okay with humanity going extinct in that case.
Sending rovers, satellites, and probes seems like a much better usage of money because they're a lot cheaper than trying to keep a human alive on Mars or any other planet. I am also okay with things like asteroid mining to get more resources to be used on Earth. That has a clear benefit.
I disagree with that point of view, on the basis that it seems humans don't seem to work that way. Historically, we tend to shy away from hard problems unless we have a compelling motivation to go there. So, for instance, your memory foam would probably never be discovered if the only research allowed was "how to make office chairs and beds more comfortable". There's plenty of options good enough for the market to lock down on them, and nobody would bother with spending lots of money on advanced materials science in vague hope it'll eventually result in a mattress good enough to compete on the market. So it turned out that NASA needed to go there for other reasons, and then the tech was there. Technology transfer is cheaper.
The argument boils down to the observation that you want to invest things that tend to generate lots of transferable technology. In the history of mankind, the usual "technology generator" was war. But we want to avoid that. Space exploration seems to be a very nice alternative (incidentally, itself spawned by war).
But in my comment, I was trying to argue for two other benefits of space. One is, a lot of money in space sector goes towards "directly researching things that will solve problems we know about on Earth". Satellites are vital tool improving our daily lives at all scales - from GNSS systems like GPS, through emergency response (beacons, satellite phones), to weather prediction, farmland management, climate monitoring, etc. Even the missions looking at other celestial bodies are important for Earth. We got our first concept of global warming problems through studying Venus. Monitoring space weather is important for communications down on Earth. Etc.
The second thing though, is the long-term potential space opens up once we cross the threshold of establishing a functioning economy outside of Earth's atmosphere. More resources, cleaner manufacturing letting us fix up the environmental damage down here. Opening up to practically unlimited livable space. Yes, it's far off, but you can't get from here to there without going through the current space tech phase.
I'm afraid, given recent climate change reports (melting north pole, permafrost, broken jet stream, etc) it's already too late. Well I do think humanity would survive, it'd just be shitty and a lot of people will die because they're not able to move to more hospitable areas and/or can't afford to import food.
There are essentially infinite resources just in our solar system. Infinite power, infinite raw materials. The way to preserve the Earth is to use those resources rather than the life-dependent ones on Earth.
Instead of Yellowstone being a tiny patch of the Earth, expanding into the solar system will enable most of the Earth to be a nature preserve, while humans can be what we want to be.
> There are essentially infinite resources just in our solar system.
There aren't even essentially infinite resources in the Universe. In less than 9000 years, at humanity's current growth rate of 1.1%, human bodies will contain all of the particles in the Universe. https://youtu.be/lpj0E0a0mlU?t=397
We absolutely will have to face the trade-off between population and resources at some point in our near (geologically instantaneous) future, whether on Earth, or in the Solar System, or in the Universe.
(Long before that, the speed of light will put a fundamental limit on population growth. Any positive exponential growth rate will cause an increase in the volume of human-occupied space to grow at a rate such that the growth of the diameter of our occupied space would have to grow faster than C. Usually, I was met with skepticism or blank stares.)
> We'll never have a chance to address that problem if we do not expand into the solar system.
Do you mean that we won't face the problem of completely occupying the Universe with our bodies in 9k years? Or the problem of facing a trade-off between reproduction and resources? If it's the latter, we most definitely will, and already are. I mean, the tautological answer that is actually informative is that we are already in the Solar System. We're already playing the reproduction/resource game and demonstrating our competency at it as a species. It's not looking too good, so far.
I don't understand what your comment is meant to accomplish? Is it to say that we shouldn't fix global warming? Is it to say that we should only consider leaving the planet?
If there's pithiness in your brevity, I've missed it.
I'm not sure that anything about staying on Earth 9000 years obviously or necessarily implies extinction, so I definitely prefer your actual explanation to your original remark. Thank you for it. However, it must be admitted that there is some time before 9k years where a 1.1% population growth rate becomes a problem, not to mention the fact that the 9k-year result is not about a sustainable population, but rather about the point where every particle in the Universe would be a constituent part of a human body. A great many doublings (multiples of ~65 years) before that, we've exhausted the local resources of this star system and have to put growth "on hold" to reach another one. We don't seem to be able, right now, to put either our growth or industry on hold long enough to save the planet we're on.
Furthermore, it's not at all demonstrable that we can move a significant fraction of 8 billion people off of the planet in a timely manner, even if we could get them all to volunteer. Using conventional rockets, it's going to be like 10 tons of CO2 per person per trip in fuel, and that's just to lift the passenger's weight, to say nothing of the fraction of the weight of the spacecraft per passenger. And that's just to LEO. A low estimate is handily 4 or 5 years of current CO2 emissions just to move half the population. (Launch guns and the like could possibly reduce this, but there's certainly going to be a CO2 cost to building them if they are possible.) The remaining 4 billion would, presently, need to learn the lessons that neither the 9k-year discussion nor this discussion seem to have landed for you: growth, per se, is unsustainable; and we will have to manage both growth (into territory that oscillates about 0) and efficiency to survive. In reality, we're just boxed in on Earth, waiting for a miracle like fusion.
Whether this discussion turns out to be productive or not, the fact that steady positive exponential growth always overtakes resource availability for any finite set of actually finite resources is germane. In other words, there is no real difference between "in the Solar System" and "on Earth" as far as our ability to live within foreseeable constraints is concerned. If we "move out into the solar system" now and behave as we do now, we will just die a few hundred years later (subject to even being able to meaningfully get there). Sci-fi futures don't arrive just because you're on a rocket. You still have to learn the lessons and build the systems with the political will you can muster. That's the point. Just because you can't or don't want to take in the implications of growth at a rate proportional to the amount present doesn't mean that I'm not making productive points.
I would, however, appreciate more precision from you in the future, please, just by way of striving toward being productive.
If his space travel project works out it won't be a such bad thing for humanity. Some like to give it to charity, others like to do stuff that couldn't otherwise.
What makes you think that x charity would create more value than its space program?
Personally, to live a humble life is not very inspiring or interesting to me. I would spare a part of my fortune for something like the Nobel prize though.
> Personally, to live a humble life is not very inspiring or interesting to me.
Personally, Blue Origin has not done work that inspires me. Specifically Blue Origin's New Shepard spacecraft seems to be reaching for the wrong benchmarks. They claim to enter space, and they do, but going straight up and down isn't nearly as valuable as orbital rockets. Blue Origin's timeline for entering orbit puts them years after Nasa's SLS, meaning they will be third to market for US based orbital launches, while competing with a large number of international competitors. New Shepard, Blue Origin's best success story, has less thrust than a North Korean ICBM.
Many charities are doing more impressive and inspiring work than Blue Origin.
They are probably investing in employees, facilities, software infrastructure, and knowledge. It is smarter to start with a feasible project and start improving from there, then building something too big which you might not be able to launch successfully.
>> Personally, Blue Origin has not done work that inspires me.
Perhaps you should give it some time. Knowing that a private citizen can start a space programs is exciting enough for me. More exciting than donating my wealth before I die.
Good people get employed there for good salaries so if they want to donate to charity they can do so. It looks like a good distribution of wealth regardless if the space program works out or not.
Simply donating to a charity doesn't guarantee good results either. If would be up to me I would invest in biotech but I don't see space tech a waste of money either.
> Knowing that a private citizen can start a space programs is exciting enough for me.
While I agree with the feeling, I should point out that "private citizen" Jeff Bezos is worth more than 130 out of 190 or so countries out there. You and I are not in the same league as Bezos or his kind.
> Knowing that a private citizen can start a space programs is exciting enough for me.
I interpret SpaceX and Blue Origin as signs that nation states are decreasing in power relative to corporations. Many executives in very large cooperations probably hold more power than the average congressman.
There have been at least 5 major extinction events on this planet. Whilst I believe that taking care of Earth should be our number one priority, is it so wrong if a billionnaire decides to focus on improving our ability to travel into space?
Not to belittle the invaluable work ESA or NASA do but the incredible progress SpaceX has made in just the past 15 years speaks to how little development governmental space agencies have made in the field of rocketry over the past 50 years.
Doing anything in Space is insanely expensive - I for one am extremely glad we have two lunatics (in Musk and Bezos) willing to lose their shirt over it.
> There have been at least 5 major extinction events on this planet.
The odds are that number six will be a) caused by humans and b) due to the same economic and industrial systems that concentrate wealth among a few individuals.
I never said Bezos was wrong to focus on space travel, just that he lacks imagination for ways he could allocate his capital. Perhaps we should be restructuring our systems to prioritise our planet above the ability of individuals to be worth hundreds of billions of dollars.
How much of the money this woman tirelessly scrimped and saved for is going to end up in the hands of BigEd and its ever growing armies of deanlets, deanlings, and other assorted non-instructional staff?
Nothing wrong with supporting space travel if that's what you're passionate about.
Better that than not giving away a penny until you're 75, and then handing it all off to Gates when you're eventually dead.
If you have to wait to help people out with your money until you're dead, you're doing something fundamentally wrong in my view. Why not try and make a meaningful social impact during your lifetime? But hey, to each their own.
To be fair, Gates is applying economies of scale to donations. He is using theanthropy at industrial scales to solve HUGE problems. They have goals like eliminating WHOLE diseases from parts of the world... and it seems like they're getting results.
If you have a large fortune, you could build the organization to try and invest it for benefits. Many do, and if you have a rare cause... there's good value in it. But the alternative is you could give it to gates, and be pretty well assured it will be leveraged for amazing results.
> Better that than not giving away a penny until you're 75, and then handing it all off to Gates when you're eventually dead.
Doesn't that depends on your rate of return? Imagine two options: (a) give away $1 million now; (b) invest the money and wait until you are 75, then give away $1 billion. Is option (a) necessarily better?
What would you do with that much money then? Pepole like Jeff Bezos and Elon musk probably find charity ognizaiton's efficiency not to their liking. If you can change the world once? why not twice.
I personally feel like educating young leaders a good choice.
Better batteries and better solar panels would be nice... not sure how much it would cost though... Tesla improved the form factor of solar panels, but maybe not so much the efficiency or cost.
There are places in the world that don't have clean drinking water. Space is cool, i'm glad we're looking into it... but there are things of true value that amount of wealth can bring to the current world we live in that will help bring some struggling people from zero to one.
A stunning failure of imagination.