Justice Department Goes After Gates' Foundation
by Walter Block
by Walter Block
Recently by Walter Block: Repeal Rent Control, and Sow Salt Where Once It Stood
SEATTLE, WA — After the Bill & Melinda Gates Foundation announced plans to donate five billion dollars to help rebuild libraries destroyed by Hurricane Katrina, the Department of Justice's Antitrust Division launched a formal investigation into the Foundation. Thomas O. Barnett, Assistant Attorney General, said in a press release that, "The Bill & Melinda Gates Foundation, the world's largest charity cartel, has overstepped its boundaries and entered into the realm of predatory pricing. How is FEMA supposed to compete with private charities with such great market power?"
The Gates' Foundation had been under close scrutiny for restraint of trade in the charity industry for several months. According to some reports, the Foundation's Herfindahl Index was too monopolistic, exerting "undue influence on the philanthropy sector." According to one trustbuster, "The four firm concentration ratio (CR4) is in the stratosphere. A Herfindahl Index above 2000 indicates acute concentration. The Gates' numbers are at least double that. This is dangerous." Charities, including the United Way and the Salvation Army were among those pushing for the investigation, citing the Foundation's recent gift of 37 billion dollars by Warren Buffet.
Up until the donation to the Gulf Coast, however, the Justice Department had largely been silent. However, after hearing that Bill Gates looked to the evil monopolists John D. Rockefeller and Andrew Carnegie as inspirations for his philanthropy, it took only days before Mr. Barnett officially decided to launch the investigation.
The investigation, cheered on by Senators Hillary Clinton and John McCain, has bipartisan support. Both McCain and Clinton released a joint statement, averring that, "The free market is a wonderful thing, but how can we expect the government and other organizations to match the giving power of Gates? The free market in philanthropy is going to give us the same results as the free market in computers and electronics: exploitation."
Leading economists are hailing the decision as a step towards perfect competition. Dr. Paul Krugman of Princeton University has noted that, "Except for the political arena, all areas of the economy need perfect competition. Although to you lay people ‘trust-busting' may seem to drive up prices and prop-up inefficient, government-subsidized corporations, a Ph.D. in economics will reveal that you are all morons."
Similarly, Columbia University's Nobel Prize winning economist Joseph Stiglitz warned against "Big Charity." To the cheers of an electrified meeting of antitrust lawyers and economists, Professor Stiglitz roared, "We must fight oligopoly wherever it rears its ugly head. We must fight the reckless capitalist — be he philanthropist or proctologist. Evidently, Bill Gates learned nothing, absolutely, nothing, from our recent antitrust case against Microsoft. Well, it is time, nay it is past time, to teach him another lesson; this time to his so-called ‘Foundation'."
Congressman Ron Paul, a staunch defender of free market capitalism noted, "This is nuts. But if they really wanted to push this antitrust nonsense to its logical conclusion, they would ‘bust up' Giuliani and Romney's campaigns as they are clearly anti-competitive. In fact, the ultimate logic of neoclassical monopoly theory would be to break up the U.S. government into tens of thousands of small city-states. Why, the Herfindahl Index for that entity tops the charts at 10,000, and its CR1 is an astoundingly horrendous 100%."
(Walter Block has made up all the attributed quotes out of the thin air; he is only partially serious about this essay.)
February 15, 2010
Dr. Block [send him mail] is a professor of economics at Loyola University New Orleans, and a senior fellow of the Ludwig von Mises Institute. He is the author of Defending the Undefendable and Labor Economics From A Free Market Perspective. His latest book is The Privatization of Roads and Highways.
Copyright © 2010 by LewRockwell.com. Permission to reprint in whole or in part is gladly granted, provided full credit is given.