I'll agree with the common sentiment that Carlos Slim's general advice is worthless.
But, I think he's on to something here. From the article:
It is the 21st century billionaire version of the old adage, “give a man a fish and he eats for a day, teach him to fish and he eats for a lifetime
I think all he's saying is that one can't throw money at problems and expect them to be fixed. That's an opinion I'll agree with.
If we want to spend money and give to charities, that's valid...but if we're really looking for long-term fixes (see: ending poverty, world hunger, etc) then that's not the way to go about it. We'd need to really create a system behind the charities; when you give money, that should go into investing for the future and creating future solutions to fix problems, rather than simply repairing something in the now and here.
Look at natural disasters. A typhoon occurs and the world pitches in and sends hundreds of millions to the troubled country. That's fine. But what we tend to forget a month after the hurricane is that the reason the countries got hit so hard might just be because of poor infrastructure or inadequate technology or systems. Those things still stay in place long after the world sends money; if they tragically get hit again, nothing has changed and the world will (yet again) be expected to simply send more money.
My favorite example of "throwing money at a problem" is something that happened a few years ago:
Some clothing company (Gap, I think, but I'm not 100% sure) had a huge surplus one year that they decided to give away to some village/s in an impoverished South Asian country. All they did was take their extra clothes [money] and throw it at the problem of horrible poverty in the place.
What ended up happening? It was an amazing two year fix. The clothes were so much (in quantity) that they lasted for a few years before running out. During that time, the fact that Gap sent all these free clothes made the entire industry that used to make clothes for these parts go out of business. At the end of the two years, they were in a position that's worse off than what they were a few years back. No local clothes makers; no free Gap.
"Charity doesn't solve anything" might be a bit strong. But he's on to something. Throwing money at a problem doesn't fix anything in the long-term; the way to do it is to invest in the future, not throw money at the present.
That's a very interesting point. In your clothing example, charity was a crutch that hampered the progression of local businesses.
I could see many other forms of aid having the same effect. Creating a reliance that's completely out of the control of the region. If it evaporates at any point they're stuck in a much worse situation.
I think we could go about this a little more intelligently though. Outside funds could be used to train and evolve local business, giving them the tools required to succeed on their own once the aid disappears. If we went into the situation thinking; We only have X dollars, not a constant stream, so how can we use this money in a way to produce a long term positive outcome in the region?
I guess the problem then becomes finding a non-corrupt entity who knows best how to go about it.
That's an interesting point, could it extend to 'employment' too?
What I mean is, how do you set up employment that is self sustaining without wealth invested from outside? Is an industry that exists solely to support itself a house of cards, ready to collapse at the first sign of instability?
It almost looks like any investment is also "throwing money at the problem".
But, I think he's on to something here. From the article:
It is the 21st century billionaire version of the old adage, “give a man a fish and he eats for a day, teach him to fish and he eats for a lifetime
I think all he's saying is that one can't throw money at problems and expect them to be fixed. That's an opinion I'll agree with.
If we want to spend money and give to charities, that's valid...but if we're really looking for long-term fixes (see: ending poverty, world hunger, etc) then that's not the way to go about it. We'd need to really create a system behind the charities; when you give money, that should go into investing for the future and creating future solutions to fix problems, rather than simply repairing something in the now and here.
Look at natural disasters. A typhoon occurs and the world pitches in and sends hundreds of millions to the troubled country. That's fine. But what we tend to forget a month after the hurricane is that the reason the countries got hit so hard might just be because of poor infrastructure or inadequate technology or systems. Those things still stay in place long after the world sends money; if they tragically get hit again, nothing has changed and the world will (yet again) be expected to simply send more money.
My favorite example of "throwing money at a problem" is something that happened a few years ago:
Some clothing company (Gap, I think, but I'm not 100% sure) had a huge surplus one year that they decided to give away to some village/s in an impoverished South Asian country. All they did was take their extra clothes [money] and throw it at the problem of horrible poverty in the place.
What ended up happening? It was an amazing two year fix. The clothes were so much (in quantity) that they lasted for a few years before running out. During that time, the fact that Gap sent all these free clothes made the entire industry that used to make clothes for these parts go out of business. At the end of the two years, they were in a position that's worse off than what they were a few years back. No local clothes makers; no free Gap.
"Charity doesn't solve anything" might be a bit strong. But he's on to something. Throwing money at a problem doesn't fix anything in the long-term; the way to do it is to invest in the future, not throw money at the present.
Just my (albeit a bit long) $0.02