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Good Intentions

Bill Gates is here to change the world—will he make money doing it?

In March of 2013, I watched Bill Gates give the keynote lecture at SXSWedu, an annual education technology-themed offshoot of the Austin mega-festival. Addressing several thousand entrepreneurs who hoped to sell apps to schools, Gates celebrated education technology as “potentially a large-sized market” of about $9 billion. The attendees were rapt. The Bill & Melinda Gates Foundation’s philanthropic investment in data-driven teacher evaluation and the Common Core national curriculum standards would, they hoped, make U.S. public education more uniform from state to state and city to city—a standardization that would in turn help ed-tech startups sell their products at scale. Gates dangled before the audience the promise of an enormous payday. “Innovators who win in the most demanding markets,” he said, “will have opportunities on a very global basis, just as we’ve seen in the horizontal software market. So there should be an opportunity for some, of course, very big successes.”

Would all this profit-making help children learn? In his speech, Gates promoted the idea of the “flipped classroom,” in which students watch online video lectures at home and then come to school the next day to do what is currently thought of as homework, with the teacher acting as a sort of tutor. “At a very deep level, software is able to create this interactive, connected experience for the student in a way that simply isn’t economic in a public school context,” Gates said.

If you are at all skeptical of the richest person on earth, a software titan, arguing that software is the key to improving U.S. public education, you are not alone. Since the Gates Foundation launched in 2000, it has become the most influential philanthropic body in the world: The Obama administration has adopted many of its favored education reforms, and the foundation provides 10 percent of the World Health Organization’s revenue (only the U.S. government provides a comparable amount). The foundation’s trustees are Bill Gates, his wife, Melinda, and Warren Buffett. Its self-described mission is to “unlock the possibility inside every individual. … From the education of students in Chicago, to the health of a young mother in Nigeria, we are catalysts of human promise everywhere.” These giant ambitions have recently attracted increased scrutiny. Education historian and activist Diane Ravitch has emerged as the leading American critic of the foundation’s enthusiasm for standardized testing, which she sees as a threat to traditional, locally controlled public schools. On global health, the editorial board of The Lancet has criticized the foundation’s lack of transparency and relatively narrow set of priorities.

Bill and Melinda Gates hold heavy sway over public policy, yet no one elected them to any office. It is crucial that they, and other large donors, be held accountable as philanthropists. This is the worthy goal of an impassioned new book by Linsey McGoey, a sociologist at the University of Essex, titled No Such Thing as a Free Gift: The Gates Foundation and the Price of Philanthropy. Much of her skepticism toward the Gates Foundation comes from a broader critique of “philanthrocapitalism,” a term she borrows from the title of a book by Matthew Bishop and Michael Green, who, unlike McGoey, celebrate the trend. (Their subtitle: How the Rich Can Save the World.) In the first half of the book, she reviews the history of large foundations, persuasively demonstrating that corporate titans, like Andrew Carnegie, John D. Rockefeller, and Henry Ford, approached philanthropy in ways that were fundamentally “selfish.” Their charity efforts were, in part, a public relations strategy to distract attention from monopolistic business practices and union busting. When confronted with Progressive Era critiques of corporate labor practices, donors were able to point to the fact that their charity-supported schools and libraries served the poor.

Moving into the present, McGoey ridicules “TED Heads,” corporate philanthropists who pay thousands of dollars per ticket to attend TED and similar conferences that feature Gates and other speakers promoting “innovative” solutions to social problems—from new vaccines to robots to the benefits of better posture. These talks are rarely overtly political and seem to observe a sort of unspoken bipartisan, free-market consensus. McGoey relates how, in March 2012, tech investor Nick Hanauer angered some fellow TED Heads by giving a talk that questioned what he called the “article of faith for Republicans” that lower taxes create jobs, and instead advocated raising taxes on the rich. TED curator Chris Anderson called the presentation “too political” during a presidential election year, and initially chose not to post the video online. (McGoey doesn’t mention that many TED talks are never published online, nor that Anderson invited Hanauer back to TED in 2014 to give another lecture, in which Hanauer argued for raising the minimum wage.)

As McGoey acknowledges, Gates can’t really be reduced to a caricature of a TED Head, nor are his politics as conservative as those of the steel and railroad philanthropists of old. Gates may be an erstwhile monopolist—McGoey reviews the Justice Department and European Union’s antitrust investigations of Microsoft—and his political donations are about evenly split between the Democratic and Republican parties. He supports the estate tax, though he opposes raising taxes on capital, instead favoring a progressive tax on consumption. McGoey admits that Bill and Melinda Gates have “spoken passionately about and invested in causes that do not coincide with their own business interests,” such as gun control and increased access to contraception. Still, she argues, “there are many gray zones where the separation between the Gates’ personal interests and the Gates Foundation’s priorities are less clear.”

In the second half of the book, McGoey narrows her lens to the Gates Foundation’s work on U.S. K-12 education and global health. If she makes one overriding critique, it is that the foundation ignores the preferences of local communities as it pursues its agenda, repeatedly favoring programs that have an upside for Western businesses. In U.S. education, the foundation promotes online learning programs and standardized tests often produced by for-profit companies, while parents and educators favor small class sizes and a broader curriculum.

Internationally, Gates is obsessed with eradicating polio, a goal that 194 nations agreed upon at the 2012 World Health Assembly, calling it “a programmatic emergency for global public health.” But pointing out that only a few hundred people are diagnosed with polio annually, McGoey argues that noncommunicable diseases, such as heart disease and diabetes, have become the biggest killers in the developing world and are worsened by the unhealthy diets promoted by multinational food corporations that have partnered with the Gates Foundation. For example, the foundation funds a program  that helps small farmers in the developing world sell fruit to Coca-Cola to be used in producing juices sold back to the local market. She places huge import on the fact that the foundation’s trust is invested in Buffett’s Berkshire Hathaway, which, in turn, holds shares of Coca-Cola. Thus, if the farming program helps increase Coca-Cola’s stock price, the Gates Foundation’s trust will go up in value. “Does this still count as philanthropy?” McGoey asks. One could respond that more money for the Gates Foundation will only result in more money being given away.

Similarly, McGoey focuses on the foundation’s relationship with the agricultural giant Monsanto, which has partnered with Gates to introduce patented, genetically engineered, drought-tolerant maize to sub-Saharan Africa. Monsanto  is currently providing the seeds royalty-free, but over the long term, she worries that shifting African agriculture toward expensive, patented seeds will bankrupt small family farms.  A skeptic of genetically modified foods, McGoey does not make clear that the scientific consensus suggests they are safe for consumption. She emphasizes that the foundation once held shares in Monsanto, and acknowledges that it has since divested from the company.

On HIV and AIDS, a Gates Foundation priority to the tune of $2.5 billion, McGoey spotlights humanitarian workers who complain that the foundation has prioritized prevention, such as the search for a vaccine, over increasing access to cheap, generic drugs for those already infected with the virus. The foundation makes the compelling argument that it focuses on cutting-edge research into a potential vaccine in part because it is “better positioned than others”—like governments—“to assume risks.” But McGoey attributes the foundation’s positions on both pharmaceuticals and genetically modified foods to Gates’s own preference for strong patent laws, which help shield Microsoft from competition in the software sector.

And she reaches further, suggesting that a lust for profit, not just a particular business-friendly worldview, drives the choices of the philanthrocapitalists. She quotes the philosopher Slavoj Žižek, who wrote that the goal of wealthy philanthropists “is not to earn money, but to change the world (and as a by-product, make even more money).” No Such Thing as a Free Gift is filled with evidence, all of which has been reported elsewhere, of financially self-serving charity on the part of Canadian executive Frank Giustra and other associates of Bill Clinton, as well as companies like Nestlé, General Electric, and Walmart. But none of those names are mentioned in the subtitle of McGoey’s book, only the Gates name is. And what McGoey does not prove is that Bill or Melinda Gates seek financial gain from their charitable activities. Instead, she insinuates.

For example, it is true that the Gates Foundation supports the Common Core, and that Microsoft has promoted its Surface tablet as a way for students to access Common Core curriculum materials. McGoey’s suggestion is that Gates pushes the Common Core, at least in part, as a way to “make Microsoft more competitive.” Yet Microsoft aggressively and successfully marketed its hardware and software to public schools long before Gates became a philanthropist focused on school reform. There is nothing shocking or new about private companies making a profit off of U.S. public education. Since the nineteenth century, the textbook and standardized testing industries have wielded major influence over our schools, in part because U.S. education is so decentralized that the federal government offers almost no oversight, and states lack the expertise to create curriculum materials on their own. The Common Core is meant to address this very problem. That’s why it is a potentially positive step forward for public education, even though its implementation—particularly its attachment to low-quality, high-stakes standardized tests—leaves much to be desired.

McGoey seems not to have interviewed Bill or Melinda Gates (they are very difficult to access), and seems to have had only limited cooperation from the foundation in responding to her questions and critiques. Nor does she provide original analysis of the foundation’s financial documents. Though much of her book seems premised on the idea of philanthropy as selfish, by its denouement she admits that today’s elite philanthropists are “earnest people” who truly believe they are helping the world’s poor by bringing market values to the public and nonprofit sectors. I’ve reported on education and other social policy areas for nine years and have come to a similar conclusion. For the most part, individual donors are not seeking to profit off their charity. Rather, they trust in their own ability to diagnose and treat the world’s ills. Yes, this is paternalistic, and sometimes wrongheaded. In education, several of the Gates Foundation’s high-profile grantees have failed to live up to expectations, including Rocketship, a charter school network that replaced teacher time with computer instruction, and inBloom, an unsuccessful effort to make student demographic and testing data available in the cloud to for-profit software developers.

Still, as McGoey concedes somewhat reluctantly, among big donors, Bill and Melinda Gates are more thoughtful than most. Over the years I’ve written about education reform, twice interviewing Gates, and he has been willing to admit when he was wrong or simply shortsighted, gradually adopting a more cooperative stance toward teachers’ unions and a more critical view of high-stakes standardized tests.

A full investigation of the Gates Foundation would need to weigh the organization’s goals against its considerable achievements, which receive little ink in No Such Thing as a Free Gift. Also outside the scope of McGoey’s book is the story of a new generation of upstart philanthropies that are challenging the paternalism of big foundations by simply giving cash to poor people and allowing them to spend it as they wish. In a scheme of more progressive taxation and a guaranteed basic income for all families, this is a role government would play, and McGoey correctly questions whether Big Government would, in fact, be more efficient than Big Philanthropy in addressing the rise of inequality. She and Gates may have more in common than she lets on. “Governments will always play a huge part in solving big problems,” he told me in 2010. “They set public policy and are uniquely able to provide the resources to make sure solutions reach everyone who needs them.”