When you hear the word Philanthropy, you conjure up images of generous people with buckets full of money hurling their money at hoards of poor people. The truth is far from that. Often they are giving away little to nothing and what they do give is more than recovered through the access that they are able to secure to the corridors of power.
I think the word needs to undergo redefinition.
Philanthropy
In the last edition, I dove into the antitrust cases and the laws that are being put together against the tech titans of America. The original antitrust case which resulted in the creation of the FTC in the first place was a case against Standard Oil.
A company founded in 1870 by John D Rockefeller became an oil monopoly making him immensely rich. The company unsurprisingly grew through the acquisition of smaller competitors. In many cases, they were acquired and shut down because they were inefficient. What it did was eliminate one more competitor for the company.
Standard’s actions and secret transport deals helped its kerosene price to drop from 58 to 26 cents from 1865 to 1870. Rockefeller used the Erie Canal as a cheap alternative form of transportation—in the summer months when it was not frozen—to ship his refined oil from Cleveland to New York City. In the winter months, his only options were the three trunk lines—the Erie Railroad and the New York Central Railroad to New York City, and the Pennsylvania Railroad to Philadelphia. Competitors disliked the company’s business practices, but consumers liked the lower prices. Standard Oil, being formed well before the discovery of the Spindletop oil field (in Texas, far from Standard Oil’s base in the Midwest) and a demand for oil other than for heat and light, was well placed to control the growth of the oil business. The company was perceived to own and control all aspects of the trade.
Source: Wikipedia
There is an uncanny resemblance in the business practices of Standard Oil, to that of another company we know today.
By 1890, the American government got fed up and passed the Sherman Act which became the basis for anti-monopoly proceedings.
Even so, it was only in 1911 that the Supreme Court finally ordered the breakup of Standard Oil into 34 companies which gave birth to Exxon, Chevron, Mobil, Amoco and several others.
Between 1890 and 1911, as his name became associated with notoriety, in order to bolster his image, John D Rockefeller started the Rockefeller Foundation. At the time, it immensely helped rehabilitate his image, enough to keep Standard Oil together for 15 more years!
As of 2016, Rockefeller Foundation has 4.1 billion dollars under management. In 2019, the foundation gave away 103.8 million for development.
In the dictionary, the word Philanthropy means “Goodwill to fellow members of the human race.” A secondary meaning is “An act or gift done or made for humanitarian purposes.”
Obviously, this is rather broad and all-encompassing.
As it would turn out, Mr John D Rockefeller had provided American businessmen, who would come after him with a template. Not just for image rehabilitation but also for tax evasion.
Establishing a private foundation may make it possible for you to:
Reduce your income tax for every year in which you make a contribution;
Avoid capital gains taxes, depending on the characteristics of assets contributed;
Increase the foundation’s assets through tax-advantaged growth and compounding;
Reduce or eliminate potential estate taxes.
Source: Forbes
The article above explains each aspect in detail in case you are interested.
So in his footsteps followed the likes of John Koch, Julia Koch and family, Henry Ford, Julian Robertson, Ted Turner, Amos Hostetter, Phil Knight, George Kaiser, Donald Bren, Leonard Lauder, Denny Sanford, Charles Schusterman, Eli Broad, Jim Simons, David Hewlett, Gordon Moore, and then came Bill Gates.
Bill Gates started the Bill and Melinda Gates Foundations in 2000. Just 15 months before that, Bill Gates was sitting in a deposition on an Antitrust case against Microsoft. His ego as well as his image had taken a major bruising. He needed to desperately rehabilitate it. Also, he had amassed a lot of wealth from Microsoft and he needed to sell his shares and get the money out. There was no way that he could do it while still at the helm of affairs. Much like the Jeff Bezos conundrum today.
Now, the Foundation also happens to be the largest landholder in the United States of America and also one of the big stakeholders in Four Seasons. He even set up an incubator to work on potential vaccines in Feb 2020. One of the candidates incubated was by a group of scientists from Oxford. When they came up with it, they just wanted to release all the data online for free.
When the director of Oxford’s Jenner Institute had funny ideas about placing the rights to its COVAX-supported vaccine candidate in the public domain, Gates intervened. As reported by Kaiser Health News, “A few weeks later, Oxford—urged on by the Bill & Melinda Gates Foundation—reversed course [and] signed an exclusive vaccine deal with AstraZeneca that gave the pharmaceutical giant sole rights and no guarantee of low prices.”
Source: New Republic
I have no idea how that is justified as philanthropy, sure sounds like an investment to me.
The foundation claims to have given away USD 48 Billion dollars. What they do not tell you is that a lot of it is pledged and not really given away yet; also, this is the aggregate over 21 years! Take your calculators out and divide. On USD 100 Billion if you are getting a 10% return year on year and giving away USD 2 Billion each year, the ‘giving’ is a smokescreen to get away with anything.
Not to be singled out, he launched the Giving Pledge in 2010 through which he brought hoards of tech and non-tech Billionaires from across the world into the Foundation business. This included everyone from 80-year-old Warren Buffet to then 27-year-old Mark Zuckerberg. Mark may have fired this shot too early to benefit from any goodwill.
The divorce was a kick in the shin for Bill Gates. His carefully crafted image took a hit and too many inside stories “leaked” out further decimating his image in the public eye. Much like Mark Zuckerberg, the foundation card is going to be hard to use any longer.
Hence.
Warren Buffett has resigned from his trustee position at the Bill and Melinda Gates Foundation, the 90-year-old investor announced Wednesday.
In a statement, Buffett didn’t specify why he’s leaving the foundation, but noted he has already resigned from all corporate boards other than Berkshire Hathaway’s. Buffett added that the foundation’s new CEO, Mark Suzman, is an “outstanding” selection and has his “full support.”
Source: CNN
Solar Energy
There are few things that are achieved ahead of time; even fewer when it is a government endeavour. India had set itself the goal of reaching 20 GW by 2022. This target was met 4 years ahead of time. Further, the total solar deployment in India today stands at 40 GW as of March 2021.
The rapid growth in deployment of Solar Energy was thanks in part to the huge impetus from the government, low priced solar panels from China flooding the Indian market and costs declining rapidly in the face of huge scale. And then we ourselves threw a spanner in the works.
A bunch of Indian Solar panel manufacturers went to the government and lobbied for a reduction of imports. Much like the government is fixated on killing the e-commerce industry, the Indian government to its own detriment promptly levied a tariff on imported solar panels. To add to this several states wanted to re-negotiate the cost of electricity being supplied and reneged on their agreements.
Imagine, you build a projection to build a solar plant for Rs. 4000 Crores. The central government tells you, your solar panels will cost 40% more and the state government tells you they will pay you 50% of what was agreed. What do you do?
Imports dropped and so did new solar capacity added. Further,
The dysfunction also shows in how poorly India’s solar markets are designed. Apart from rooftop solar, ground-based solar is the other big part of India’s solar sector. Its growth, however, entirely depends on tenders from government bodies like NTPC and SECI.
Let that sink in. The rate at which India adds fresh solar capacity is determined not by demand (DISCOMs’ demand for solar power) or supply (investors wanting to put money into solar projects), but the rate at which NTPC and SECI produce tenders. “We need a SECI that is 10 times larger,” said a senior financial officer at Mumbai-headquartered conglomerate Shapoorji Pallonji. Or, better yet, a liberalised solar market.
Source: The Wire
India has also had an erratic energy policy. Last year as the country went into lockdown due to the CAA protests (it’s clear now, COVID was not even part of the decision matrix, just an excuse), the government pushed through a policy to promote more fossil fuel-based electric production!
In this context,
After running one of the world’s largest petroleum businesses for more than two decades, India’s richest man Mukesh Ambani today (June 24) announced he’s steering his company, Reliance Industries (RIL), towards renewable energy with an investment of 75,000 crore Indian rupees ($10 billion) over the next three years.
[…]
The RIL chairman said that his company plans to build four gigafactories to manufacture and integrate all critical components of the New Energy ecosystem.
The four factories will make or use:
Solar photovoltaic modules, for the production of solar energy.
Energy storage batteries, for intermittent energy.
Electrolysers, for the production of green hydrogen.
Fuel cells, for converting hydrogen into mobile and stationary power.
“Reliance will thus create and offer a fully integrated, end-to-end renewables energy eco-system,” Ambani added.
Source: Quartz
All said and done, Reliance is a petroleum company and there is no doubt that across the world there are serious questions that are being posed about the long term sustainability of oil. 3 issues back, I had written about Engine One which had pulled off a coup with ExxonMobil.
With Indian manufacturers not being in a position to compete on price or scale and with the Chinese manufacturers being pushed out thanks to the duty imposed on them, the deck is clear for Reliance to move in; if they can deliver.
COVID
Pfizer and Moderna are being distributed only in the western world. The vaccine manufactured by these companies uses new technology. Quite frankly, nobody including themselves knows what the long term effect of the vaccine would be. The world has never had an mRNA based vaccine and it literally instructs the body to do something (product proteins) that it did not know how to. What will it do thereafter? In theory nothing. In practice, nobody knows.
The issue is that there is a non-zero probability that there are some long-term side effects that only surface 5 or 10 years from now.
Since the companies see themselves as rising up to a humanitarian crisis, they want to be indemnified from any legal challenge that arises out of side effects or such issues in the future.
Countries like the US have provided them with indemnity. Also, given that a country like the US can print a few Trillion dollars at will and distribute, the companies have little reason to worry that the indemnity would be lived up to.
But what about countries that do not have high credit ratings? What about those who have defaulted on their bonds?
Officials from Argentina and the other Latin American country, which cannot be named as it has signed a confidentiality agreement with Pfizer, said the company’s negotiators demanded additional indemnity against any civil claims citizens might file if they experienced adverse effects after being inoculated. In Argentina and Brazil, Pfizer asked for sovereign assets to be put up as collateral for any future legal costs.
One official who was present in the unnamed country’s negotiations described Pfizer’s demands as “high-level bullying” and said the government felt like it was being “held to ransom” in order to access life-saving vaccines.
[…]
Pfizer asked for additional indemnity from civil cases, meaning that the company would not be held liable for rare adverse effects or for its own acts of negligence, fraud or malice. This includes those linked to company practices – say, if Pfizer sent the wrong vaccine or made errors during manufacturing.
Source: The Wire
The East India Company came to India as traders and then appropriated a lot of the wealth of the land. This a nouveau imperialism – let us call it vaccine imperialism.
Just because you are uncertain about your product, the country is supposed to pledge its sovereign assets to cover your ass?!! Sovereign assets belong to the country. The people of the country. So you will be taking more from the people and giving it back to them!
Jair Bolsanaro might be an idiot, but he would be an even greater idiot if he gave into this nonsense.
Delta Variant
In my last post from April – Mutation Vs Mute Nation – I had explained how a virus mutates and why the widespread transmission of COVID is a problem. We spawned a new devil now branded the delta variant. Turns out…
The Delta variant has certain significant mutations in the spike protein of the virus—the pointy elements that give it the shape of a crown (which is why it’s called the coronavirus). These spikes are like hooks that have to find the receptors in a human cell to link with. Studies have shown that these spikes hook onto receptors called ACE-2. Once these spike proteins can unlock the cells, the infection spreads by replicating the genetic code of the virus.
Some key mutations in the Delta variant—such as the E484Q, L452R, and P614R—make it easier for the spikes in the virus to attach to ACE-2 receptors. This means it can infect and replicate faster, and even evade the body’s natural disease-fighting immunity more efficiently.
The spike protein mutations make the Delta variant the “fastest and fittest” variant yet, according to the WHO. The disease caused by this variant might also exhibit different symptoms than other viral mutations. Those with the Delta variant often complain of headaches, sore throat, and a runny nose, replacing cough and loss of taste of smell as the most common symptoms.
Source: Quartz
The mutation is faster and stronger. Now, in the UK they have also found the Delta + Variant, which is also taking hold in India across 10 states. They have also found the Gamma and Lambda variants which are further mutation on the delta variant.
An analysis by the Gupta Lab at Cambridge University, a team of infectious diseases specialists led by Ravindra K. Gupta, has found that the AstraZeneca vaccine (called Covishield in India) is significantly less effective against infections from the Delta variant. This study was conducted in a lab using samples from vaccinated individuals and testing them against the wild type of the coronavirus (first detected in Wuhan), Alpha variants (first found in the UK), and Delta variants, first seen in India.
Source: Quartz
This explains why those who had been given both doses of the AZ vaccine in India still ended up getting infected and in many cases died. Pfizer and Moderna have not published data from their end.
Just when we thought it was all coming to an end.
On that note.
Also
You just need to stand your ground
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