The morality of profits

(Almost) nothing bothers me more than hearing multi-billionaires like Bill Gates — who made their money honestly in a relatively free marketplace — saying that they are going to “start giving back” to the community or their nation. As if we gave them all that money for no good reason.

The fact is that Gates became a billionaire because he made some really unique and useful products and sold them to millions and even billions of people worldwide. Profits ARE a social good. Check out this video from the Atlas Foundation which further argues (and explains) the point.

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5 Replies to “The morality of profits”

  1. Microsoft’s business practices can be debated.

    I am confused by the point that the Rio Grande Foundation seems to be making. People can consume only to a limited extent. We can only safely intake a relatively modest number of calories, own a limited number of vehicles, own a limited number of properties, interact with a limited number of sex partners, own a limited number of aircraft or yachts. For a billionaire attempting to spend that much money for personal consumption might well be more laborious than pleasurable.

    So using money to help others or to influence public policy or in some other way to improve the World may be a wise way to use wealth. Why should the Rio Grande Foundation even have an opinion as to the right or wrong way for Bill Gates to spend his money? Is it not his right to choose how to spend his own money?

    1. Gates and anyone else with money certainly have the right to do whatever they want with their money. My point is simply that his products increased economic productivity and living standards for people all over the world. In an economically-rational world, Gates would/should be encouraged to come up with more, new, innovative products. However, it is HIS money and he can do what he wishes. He just shouldn’t feel that he HAS to give his money away.

  2. Trade is good & commerce is good. Though when it comes to profit, is it done in a fair manner or through gouging.

  3. “He just shouldn’t feel that he HAS to give his money away.”

    I think it is a fair assumption that Bill Gates does not think that he has to do anything that he does not want to do. Those who are familiar with Microsoft know that they are hard-nosed competitors and have skated on the edge of antitrust violations.

    So I would not worry all that much about Bill Gates succumbing to public pressure.

    I do not begrudge Bill Gates his success. He obviously did what few people could and is entitled to the fruits of his labor and creativity and organizational skill. But Microsoft did not invent the PC, the first operating system, or the brouser. One has to assume that there were many very effective employees in his company that contributed to the success of the company.

    Microsoft did not invent the stock market.

    So Bill Gates might well conclude that his financial success was a combination of his efforts and infrastructure in place that contibuted to his success and thus perhaps the concept of “giving back” is not unreasonable.

    More importantly for the Rio Grande Foundation is the question of whether or not the current environment is as friendly to entrepreneurs as the environment in which Bill Gates was so successful? I suspect that it is not, but my only proof which is not very robust, is the declining ratio of patents awarded to U.S. inventors as compared to the total for the World. Are we doing worse or are others achieving their potential?

    I think that is the key question.

    1. I don’t think that Bill Gates feels that he HAS to do anything, but he may feel that he needs to give his money away to achieve public approval etc. I don’t know what is in the man’s heart. However, I do agree with you about the business climate issue. That is ultimately the most important thing.

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