Did I mention I'm glad that Arley's blogging again?  Well I am.

His latest argument (and Zane's as well) is that there is no rational benefit to amassing mega-billions of dollars since you receive the same tangible benefits as a person with $1billion in net worth.  In other words, you will eventually get to the point where you can't visit all the houses you've bought enough times to make them worth the money you've used to acquire them, so that being the case, what's the point of accruing all that worth other than ego-gratification?

Zane's got his argument about it, but I differ so philosophically from him on the issue of capital allocation that I'm going to keep quiet on it, since we wouldn't find common ground to even begin a dialogue.  Arley on the other hand, presents a fairly interesting argument that isn't too far removed from my thinking about Bill Gates and his money losing ventures into research and development.  If I understand Arley correctly, he seems to claim that Gates' technology investments would be better served if he would invest heavily in competition for the betterment of society, instead of investing heavily in Microsoft focused endeavors.

First off, the biggest misconception about Bill Gates concerns his philanthropic endeavors.  He is very heavily and actively involved in charity work and has the largest charitable endowment in the world.  His focus for charity is mainly work to stymie 3rd world epidemics, and most recently polio vaccination work.  Last year he donated over $550 million to charities and programs. 

Arley states:

"What then would be the rational behaviour for the super-rich to increase their marignal benefit? Things that encourage innovation even at the sole monetary benefit of others. Unrestricted grants for technical research; a new research university with a huge endowment; low-interest garuanteed loans to technical startups; technology diffusion through technical education at K-12; subsidies to encourage adoption of untested technologies such as wireless and wearables; free installations of new technology such as public wireless points; lowering the barrier to entry by providing innovater-fellowships for non-professors but rather for technical workers. Just a few ideas to get the ball rolling."

Most of the items Arley mentions, Gates has been involved with in one way or another. Technical education at K-12 he has worked on, donating computers (with Windows installed, of course),  academic endowments at universities (the William Gates' School of Computer Science at Stanford).  The only thing Arley mentions that he has shied away from is free money to direct competitors, though Microsoft was involved in several venture financing situations back in the Internet hey-day, and acquired a number of the more successful companies (Hotmail being the obvious one).

So why hasn't he done more of the technology investment?  I think it's two primary reasons:

1.  He is the leader of a major company and takes his duty seriously.  What this means is that he has a fiduciary responsibility to his shareholders.  Judging by the company he keeps, the business friends he has, and the statements he has made in the past, he takes that duty very seriously.  And he should.  If he enables the competition, his shareholders are justified in filing a suit against him for breach of responsibility.  It is his responsibility to his shareholders to keep his company at the top of the totem pole.

2.  He views technology as the "great equalizer."  He made a statement during the Justice case against Microsoft to the effect of, "any kid with a computer in a garage somewhere could destroy us tomorrow."  I think he truly believes this.  In other words, the marketplace is the final arbiter of technology disputes and he can't give you an edge because he really doesn't have one.  I find most technical folks disagree with his statement.  I don't fully buy it, but I'm willing to concede it to him because the folks who bitch and moan the loudest about his offenses don't seem to have my technological interests at heart any more than he does (ahem, Sun & Netscape/AOL/Time Warner)

Arley then states:

If somebody paid my salary to innovate I'd be doing the world a lot more good now. Now I spend most of my time sitting and waiting for support or a random short-term maintenance project.

I vehemently disagree with that statement.  I have a firm belief that you do exactly what you feel you have to, nothing more, nothing less.  If you're not innovating in your free time now, you're not going to be an effective innovator on the clock either, no matter what the pay.  At one point Bill Gates wasn't getting paid either, yet somehow he managed to work around that obstacle.  And you can argue that he never innovated anything, or whatever, but let's not overlook the fact that Microsoft's marketing/branding strategy is just as much an innovation as any software they or anyone else has put out, and the creation of 50,000+ jobs, millions of dollars in shareholders pockets, and complete ubiquity of personal computers is definitely of value to society.  I'm not saying I like the company's business strategies, but to argue that there was no benefit is misinformed to say the least.

I think it's natural to say that the people at the top of the food chain should do more with what they have, but so what?  In the time it took me to write this entry I could have made several sizeable online donations to worthwhile charities like Toys for Tots, or signed up for a shift at a soup kitchen, or made arrangements to donate my time to Big Brothers/Big Sisters and made a big impact on a smaller scale.  But I didn't, so maybe I should think about that next time I want to slam Gates for his greedy capitalistic ways.

11:40:57 PM  #  

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