Thursday, August 13, 2015

How the rich should do with their wealth

From here:
http://www.vox.com/2015/8/12/9140477/google-alphabet-larry-page-charity

"You know, if I were to get hit by a bus today," Google co-founder Larry Page once reportedly said, "I should leave all of it to Elon Musk."

That's admittedly an unorthodox way to handle one's estate. Most wealthy individuals leave their money either to heirs or to a charitable foundation. But as Page later explained, he thought the Tesla Motors/SpaceX CEO could do more good with the money. In an interview with Charlie Rose, Page mentioned Musk's idea of "backing up humanity" by creating a parallel civilization on Mars as an example of an effective way to improve the world through business. "That’s a company, and that’s philanthropical," he said.

In retrospect, now that he's founding Alphabet as a way to keep researching big moonshot ideas, Page's comments seem less like idle musings and more like a coherent theory of how to best use his money to change the world: not by giving it away, but by investing it in projects he thinks could be truly revolutionary.

As the above chart shows, the main factor in whether a country escapes extreme poverty is whether its economy grows. You can see an animated version of the graph covering many years here.

Page's career is premised on the idea that advancing technology through a for-profit company can meaningfully improve people's lives — and indeed, there's a decent argument to be made that, historically, profit-motivated technical advances have helped people more than charity has.

If you look at the major forces of progress in world history, philanthropy isn't high up there. Scientific research and technological innovation, however, are. The most important force in lifting people out of extreme poverty has, at least since the Industrial Revolution, been economic growth, which is boosted by scientific discovery but not by charity. Improvements in life expectancy have been driven both by increased wealth and by medical advances, which are often funded and backed by pharmaceutical companies and other for-profit actors.

Even major charitable success stories stand on the backs of technological and medical innovation. The eradication of smallpox was a major humanitarian undertaking, but one that required the invention of readily deployable vaccines. The Green Revolution — which dramatically increased crop yields in Mexico, India, and elsewhere — was sponsored by the Ford and Rockefeller Foundations, but worked by spreading existing technological improvements in farming to poor countries.
 
Ken Thompson (left) and Dennis Ritchie, who invented UNIX and C at Bell Labs. (The Jargon File)

So let's suppose you're Larry Page. You have billions upon billions of dollars. You feel, as any decent billionaire would, an urge to give back to the world. You could do that by starting a foundation and giving away your money, or you could join Warren Buffett and dedicate your money to someone else's foundation, so you don't have to worry about setting up a totally new one.

But you're not necessarily good at running a foundation, or even at picking the best one out of the existing options. What you are good at is making consumer products. It seems like if you want to do some good for the world, that's a useful skill set to draw upon. Things like Google Maps and Gmail and Hangouts and Android have already made life better for millions of people. Why not do more of that — and do it bigger?

This may not be the most profitable path for Google. But then again, AT&T didn't reap most of the benefits when its Bell Labs researchers invented the laser, or the transistor, or UNIX or the C programming language. Those advances trickled out and made the whole world better. Same goes for Xerox, whose Xerox PARC researchers invented the graphical user interface, which made widespread computer ownership and usage possible, and then saw companies like Apple and Microsoft profit from it while Xerox got little back.

Google's self-driving car; if these go to market, they could save thousands of lives, help end congestion, and improve the world in countless other ways. (Google)

Alphabet gives Page the freedom to pursue those kinds of bigger projects. The reorganization's main purpose is to cleave the core functionality of Google — search, Maps, Docs, Gmail, YouTube, etc. — from the company's more far-out research projects: self-driving cars, giant wind-energy-collecting kites, attempts to radically extend human lifespans, balloon-based wifi provision, etc. By placing those initiatives as subsidiaries of a company, just like Google, Page is signaling that he regards them as peers of similar importance, and suggesting that Alphabet's focus as a company will be just as much on exploring those kinds of moonshots as on improving Google's core business. The self-driving cars aren't a fun hobby supported by the search engine business, in other words. They're an equally crucial part of the business.

Page also frees himself, and Sergey Brin, to focus on those projects rather than on Google qua Google. Page and Brin's time and attention are scarce and valuable resources at Alphabet, and by committing them to moonshots, Page improves their likelihood of success on the margin.

He's also suggesting that he's going to use his own money to enforce a vision of Alphabet/Google as a company that invests in ambitious, crazy-seeming ideas. Page and Brin have purposefully structured Google such that not all shareholders have equal voting power — and so that the minority of shares (only about 14 percent) owned by Page and Brin wind up having a majority of votes. Because Google sells "Class C" stock that has no voting power, it can still raise money from investors without giving up any control.

Page wants Google to be doing more to aggressively change the world. And Alphabet is set up to enable just that.

This releases Page and Brin from any need to pursue share buybacks, pay out big dividends, or otherwise appease investors. Instead, profits can be plowed back into investments, including the long-shot projects Page is so passionate about. This only works, though, if he and Brin hold on to their stakes. If they were to sell them off and give the money to a foundation, they'd lose their ability to force Alphabet to invest in ambitious ideas. But by holding on to the roughly $30 billion apiece in Google stock they own, they can raise many more billions from investors to spend on self-driving cars, wind energy kites, and defeating death itself. They're leveraging their money to get even more money for the charitable cause Page thinks is most important: major, revolutionary innovation.

Page said as much in his interview with Rose, arguing that using his money to influence and benefit his own company was the best method he had for doing good. "You're working because you want to change the world. You want to make it better. Why isn't the company that you work for worthy not just of your time but your money as well?" he asked (emphasis mine). "I mean, but we don't have a concept of that. That's not how we think about companies, and I think it's sad, because companies are most of our effort. They're where most of people's time is, where a lot of the money is, and so I think I'd like for us to help out more than we are."

Page wants Google to be doing more to aggressively change the world. And Alphabet is set up to enable just that.

5 comments:

shaimaa sami said...

كهربائي بالمدينة المنورة
كهربائي بالمدينة المنورة يوفر للعملاء الكرام أفضل طاقم مدرب على أعلى مستوى ممن لديهم خبرة بالعمل لا تقل عن 15 عام و جميعهم يقومون بأي عمل موكل لهم و بنفس الكفاءة مهما كان صغيراً أم كبيراً و نحن ملتزمون كل الالتزام بالمواعيد المتفق عليها فيتم البدء بموعد محدد من قبل العميل والانتهاء بنفس الموعد المحدد كل ما يتم تقديمه من خامات وأدوات إنارة وأجهزة أمان و غيرها هو الأحدث والأنسب الذي يديم سنوات عده فكهربائي بالمدينة المنورة أسعاره في متناول الجميع على الرغم من أجود الخامات المقدمة للعميل والأعمال التي تقدم بأعلى جودة إلا أن السعر لن تجده لدى شركة أخرى

shaimaa sami said...

كهربائي منازل بالمدينة المنورة
يستعين العملاء بكهربائي منازل بالمدينة المنورة لأنه يقوم
بمختلف أعمال الكهرباء مثل التمديدات و التركيبات الجديدة و إعادة هيكلة كل ما يخص الكهرباء بالمنازل الفلل و القصور و المؤسسات الحكومية و الخاصة على اختلاف أنواعها فمهما كانت المشكلة التي يعاني منها العميل بسيطة أم كبيرة فنحن نقوم بحلها بمنتهى الكفاءة بالإضافة أن ما نقوم بتقديمه من أدوات إنارة حديثة و على أعلى مستوى من الجودة كما يقدم الصيانة الكاملة للكهرباء على اختلاف مساحات المكان و التركيب لكل ما هو جديد من أعمال الكهرباء المختلفة خلال مراحل البناء و التشطيبات
و يوفر تشطيب أعمال الكهرباء لصالح الغير و تركيب لوحات الكهرباء الكاملة وأنظمة الأمان أيضاً للفلل و الشركات

shaimaa sami said...

فني كهربائي بالمدينة المنورة
فني كهربائي يقوم بالكشف عن التسريبات الخاصة بالكهرباء و التي بدورها تسبب أكبر المخاطر على المتواجدين بمكان التسرب لما تسببه من ماس كهربائي و قفلات مختلفة و غيرها من أعمال لا قدر الله قد تسبب الوفاة ومن خلالنا و نوفر أحدث أجهزة الكشف عن تسرب الكهرباء دون تكسير بالمكان و يقوم بالكشف عن مسبب التسرب وعلاجه لكي لا تتكرر المشكلة لدى العميل فيما بعد فلدينا أفضل فني كهربائي بالمدينة المنورة و يصل للعميل بأي وقت وأي مكان على استعداد لشتى التعاقدات مختلفة الأحجام بالفلل و القصور والشركات مع توفير خدمات السباكة و النجارة و الكشف عن التسريبات بمختلف بأنواعها وذلك من خلال خبراء متخصصين بشتى الأعمال

shaimaa sami said...

معلم كهربائي بالمدينة المنورة
لدى معلم كهربائي بالمدينة المنورة أفضل الإمكانيات التي تمكنه من الحصول على أرقى الخدمات وأفضل جودة وكفاءة و يصل للعميل بأي وقت وأي مكان و على استعداد لكافة التعاقدات مختلفة الأحجام بالفلل والقصور والشركات و يقوم بالكشف عن التسريبات بمختلف الأنواع و ذلك من خلال خبراء في مختلف الأعمال فمن خلالنا ستحصل على كل أنواع الخدمات وبأقل التكاليف و بخصومات لن تجدها لدى معلم كهربائي آخر العمل على مدار 24 ساعة و متاحة طوال اليوم فعزيزي العميل سنصلك أينما تكون من خلال ما نمتلكه من أسطول سيارات كبير لسهولة الوصول إلى كل مكان بغرض الحصول على أفضل النتائج المرجوة اتصل الآن

shaimaa sami said...

معلم جبس بورد بالمدينة المنورة
إن كان لديك منزل أو منشأة أو مداخل أو واجهات وتبحث عن معلم تركيب ديكور الفوم بديل الجبس أو معلم جبس بورد بالمدينة المنورة اتصل بنا على أرقامنا الخاصة فنحن نوفر لك دائماً كامل احتياجاتك من أعمال ديكور الجبس بورد بالمدينة المنورة وديكور الفوم بديل الجبس ففور اتصالك بنا سوف يأتيك معلم جبس بورد ويقوم بعرض مجموعة هائلة من صور الديكورات الراقية التي تناسب الذوق العصري الحديث حتى يتثنى لك عزيزنا العميل اختيار ما يناسبك من ديكور يتماشى مع منزلك أو منشأتك فشركتنا هي الأفضل لأن لديها أفضل المصممين المحترفين من مهندسين الديكورات لتصميم جميع أشكال و أحجام الديكورات الجبسية التي يمكن أن تحتاجها معلم جبس بورد بالمدينة المنورة بأسعار مميزة جداً و بأقل التكاليف اتصل بنا فوراً ولا تتردد