The Vergecast - Bill Gates on solving the world’s problems… and building a better toilet

Episode Date: February 12, 2019

Bill Gates and Verge editor-in-chief Nilay Patel discuss the Bill and Melinda Gates Foundation’s ambitious plans to improve health in poor countries, build better toilets, gather better data about women, and rethink taxes on the wealthy. Learn more about your ad choices. Visit podcastchoices.com/adchoices

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dropping May 14th. Tap in with us. Hey everybody. See now from the Vergecast. We have a super special interview episode today. It's Bill Gates, founder of Microsoft, which is a little company you might have heard of. Currently the head of the Bill and Melinda Gates Foundation.

Once upon a time, in 2015, Bill actually was the guest editor of the Verge, which, when I joked about being his most stellar achievement, he did not laugh at. Nevertheless, every year Bill puts out an annual letter with his wife, Melinda. They talk about their priority, the year, all the things they're seeing, all the things they want to accomplish with their

philanthropic work, ideas they think the world needs to recognize and innovate on to improve everyone's life. This year, the spread is so wide. It covers everything from gathering better data about the lives of girls and women around the world, to managing anger and young men, to the rise of nationalism, to building better toilets. That's true, building better toilets. Bill and I talked about all of that. We talked about what it means to be a philanthropic billionaire in 2019. We even talked a little bit of about marginal tax rates at the end, which I think is super interesting if you're paying attention to American politics right now. Anyway, I don't want to keep you from it. Bill is an incredibly

smart guy, incredibly challenging the interview. I'm just going to be honest because he knows the answers before I even finish answering the question. I'll check this out. I think you're going to like it. Bill Gates on the Vergecast. All right, I'm here with Bill Gates, noted founder of Microsoft, noted philanthropist, but I think most well known for guest editing the Verge in 2015. Hello, Bill. How are you? Hi. So you write a letter every year, you and your wife, Melinda, about philanthropy, about what you're doing, about your priorities, about the world, how you want to change it, how we can all change it. This year's letter, I think, ends on a very stirring note of optimism.

But I want to start with an incredibly hard, difficult question, which is the last time you and I spoke in 2015 for an interview, I said, what phone are you using? And you said, it's a Samsung Galaxy loaded up with Microsoft apps. So I'm asked the same question. What phone are you using right now? What's your daily driver phone? Same. It's a Samsung phone with Android, but lots of Microsoft applications. Are you like a note user to use the stylus?

Or do you have just a regular? No, not on the phone. I don't. I use it more on my Windows PC than most people do, you know, with OneNote ink. Okay. So I'm assuming you did not write your letter in ink and one note, but I do want to get to the letter. This year, you cover a pretty wide range. You've got everything about getting better data on the lives of girls, which I think is really important to the rise of nationalism.

There's a section about making better toilets. Just very basically, why do you write a letter like this? Who's your audience? And how do you sort of pick the topics you want to focus that audience around? Well, the main driver is what Melinda and I have seen through our foundation work. The foundation in all the areas it works in, it's trying to have there be better measurement, just where you see the data sexist. It's trying to drive innovation. So things like new toilets, new ways of doing course wear to help kids in school. And so this work takes us all over the world.

We get to meet with lots of innovators, study lots of numbers about what's going on. And this year, we picked nine things that were surprising to us, mostly positive things. So do you think that spread is too much? I mean, there's some themes, and I want to talk about those, but it's a pretty wide spread. Do you ever think you're trying to do too many things that you could, I mean, literally, at some point what you do is spend dollars, that you could spend your dollars in a more directly focused way, or is that spread kind of not enough? Relative to foundations, you know, we do have a significant size foundation.

It's got two dominant focuses. One is the global health work and the other is the education work in the United States. You know, because we've been lucky enough to have the resource. sources I got from Microsoft's success and from Warren Buffett's success at Berkshire Hathaway, we can go in a pretty deep way in those two focus areas. So, you know, we're the biggest vendor on malaria and tuberculosis and almost all the infectious diseases. We have an incredibly strong staff that's got the same type of analytic power and skills as Microsoft had at any time. So I think we try and focus in those areas now, agriculture or toilets or financial services.

As we've worked on global health with the poor, there's a few things that we decided that were extremely catalytic. Some like financial services, you know, rely on the digital innovation and the prevalence of phones. You know, so that kind of harkens back to the work both Lyndon and I did it at Microsoft. Some are things that no one else was doing, you know, like the reinvention of the toilet. and we're ambitious about engineering challenges and we're able to draw in dozens of universities to propose designs that solve that problem. So I like the breadth. You know, it is driven by the equity, using innovation to improve equity is what brings it all together.

So this year, the letter, I noticed, you know, the last time you and I spoke in 2015, your letter was focused on, I would say, looking into the future and looking into science. in engineering. This year, it almost seems like you're pointing out very things that should be obvious but aren't at a global scale. So you are talking about Africa, just being the youngest population on the planet. You're talking about the frenetic pace of construction around the world and the way you frame it is. We're building one New York City every month for the next 40 years in terms of just raw construction output. But I'm very interested in the stat that you say we don't know, that you point out that we don't know, which is we don't have great data around the lives of women and girls.

Tell me why you think we need that data. What is the purpose of that particular focus? Well, all the work we do, this idea of gender equity is part of it. So when we go out and look at innovating with crops, figuring out which are the crops the women are involved with, that if we get cash into their hands, they tend to use it for school fees and nutritious food, even more than if the father gets that. And so a lot of data has been broken down, like, okay, who controls the household wealth and, you know, how much are the women having to do work that doesn't show up in GDP statistics. The educational data, of course, you know, shows still in Africa. A significant gap there. The cell phone ownership data shows a big gap. And that's important because we're trying to use

the cell phone as a tool of empowerment for things like financial services. One criticism that you can make, and I was supposed to do this interview with our deputy editor Liz, unfortunately she's sick, but she pointed out that women are often saying these things. They're just not being measured or captured correctly. So a criticism you can make is that the sort of lack of data is based on the idea of who was collecting it. I think Melinda actually has a line. What we choose to measure is what we choose to value. Melinda actually says this in the letter. What does actually have, Does it help you go out and make a better argument? Does it help you decide how to allocate your foundation's dollars? If the criticism is women have been saying these things are problems for a long time, what does actually quantifying that enable you to do? Well, for example, in our agricultural strategy, we're taking the crops that women are involved with and making sure that, for example, chickens, women are very involved in chickens which you can sell the eggs, or keep the eggs in the household, which has been shown to have huge nutritional benefits.

And so even though cows are bigger and dollar terms, milk and meat, our relative focus on chickens is much higher because of how they benefit the woman in the household. Likewise, when we look at our financial services work and say, okay, is it going well? And we look at usage, we make sure we're seeing not only overall usage, but also how much women are using it. So it really does drive the things we do. Some things like tools for reproductive health, reducing maternal mortality, those are just inherently helping women. Other areas like savings or agriculture, you actually have to understand what is most impactful for women by seeing the numbers. So measurement is sort of a very basic thing. But when we entered the global

health field, the measurement was actually very weak. Today, it's the exemplar where through this global burden of disease project, you can study the trends and the cause of death, you know, across all the countries in the world. And now, you know, in other areas like education or savings, we're trying to get the data sets to be as rich as over the last 20 years we've managed to achieve with our partners in health. It's interesting that this sort of duality in the letter, You got this focus on women. You're saying if we measure them, it's obviously clear improvements. We can see patterns that we hadn't seen before.

And then on the flip side, you have, you write about an experience you had just sitting with a group of young boys learning to process anger. Do you see that connection as clearly as I do that we need to improve both the lives of women by sort of measuring their contributions, which are invisible? And then on the flip side, helping young men process the roles and emotions that they need to have in the world? Yeah, absolutely. You know, the letter wasn't long enough, but the gender data also, although we framed it

as, you know, seeing where there's deficits for women, in many categories, you see deficits for men. So in educational achievement in the United States, more women are going to college, less women are dropping out of high school. So the gender data doesn't always say, okay, we're not paying enough to 10,000. of the women, it's still probably 80% of the time, that's the deficit it will show. But when you look at young black males, particularly where there's no father in the household, the dropout rates, the rates of eventually ending up in jail are extremely high. Societyally, that's really

unacceptable. And that's where, you know, some brilliant people created this becoming a man counseling activity, where in the case that I attended, it was a young, black males coming in multiple times a week with this counselor who really understands the situation they're in and is really connecting with them about, hey, you should have an image of yourself as being under control and the outcomes if you stay in school are way better than if you don't. And it was great to see that rapport between the peer group and that amazing counselor. And so you actually participated in one of these. That's right. It was a, I thought a pretty profound day, you know, certainly touched me that

this idea of anger and the males in general young males in particular, you know, does anybody talk with them explicitly about, yes, anger is this natural thing, but how do you channel it? You know, do you pause and think? That's not, you know, teaching somebody math, but yet it's going to be a pretty important skill as you're in high school. And so, you know, all these boys are opening up about, you know, how they feel anger and, you know, sometimes they deal with it well. sometimes they don't. And I thought that was, it was amazing to get that out there as a discussion. So the next thing that you talk about, I know I'm just like banging through these,

but it's just the themes to me, they just seem so connected. You also write about the rise of nationalism. And, you know, I think you frame it as the nationalist case for, you know, a globalized world. But I read about young men being angry. I think about our social networks. We literally write about social networks and democracy every day here. Do you think there's a connection between that anger and sort of connectivity in the world and the rise of nationalism? The populist wave that is slightly different in different countries, but of some form of it's being seen in a lot of the upper income countries,

understanding the idea that being able to find articles that you just agree with or that, you know, how the group you are in is right and this other group is just completely corrupt and wrong. And, you know, the leader of that group is particularly awful. The polarization in politics, whether that's come partly because of these digital communications tools, you know, is there some way that without giving up the benefits of those tools you can moderate this idea of polarization, I, you know, I think that's a very important discussion that we're having and, you know, the creativity about that, what the solution looks like, other than being mad, you know, oh, this person is responsible for this.

I haven't seen as much recommended way that we move forward on it. But yes, I worried that the digital tools have contributed to the polarization. So specifically, we can't go a day without Facebook being in the news for some reason or the other. Do you worry as you connect the world, as you talk about putting mobile phones in the hands of poor people and unlocking all these capabilities, that tools like Facebook, that the networks they connect to, that the disinformation that might go out to them, does that factor into the equation? Are you just saying, look, financial services are important? We need to give everybody a phone. Well, our foundation is not funding the infrastructure of the phones. We're just making sure that

the banking regulations and the software gets set up so that you don't have to go to a bank to do the financial services. I do hope that the rich world that's, you know, that's a business. I do hope that the rich world that's facing these challenges comes up with solutions so that we can once again view digital connectivity as an overwhelmingly positive thing. The foundation is not pushing, is not spending its money on digital connectivity. That's mostly the private market, the cell phone companies are driving that. We're putting applications on there to help in agriculture and health and savings. But the idea of how the communications framework works and how you avoid it driving sort of mob-like behavior or polarization.

I'm part of that debate, but it's not an area where we have to question, you know, should we give people bed nets or vaccines because of social networking? But just to push you on it a little bit, you know, in your letter this year, you talk very specifically about giving mobile phones to the poorest people where they have, they do sort of the greatest amount of good, which makes sense, right? It is a computer. You give people who don't have access to computers or networks, a computer or a network. You can see that the sort of step change there is very high. But there is that kind of flip side that we're seeing in countries around the world. And so as you think about the positives that you can do with this technology,

I mean, you're literally giving dollars away. How do you balance out the sort of risk benefit of, hey, I'm pushing for this in my letter this year. I want to give everybody a phone. But there's these downsides from these companies that don't seem to be great actors right now. But we're not spending a single dollar on connectivity or getting the phones out. Our money is all about the applications that go on the phone in terms of kids learning, the health person being able to track down who doesn't have vaccines, being able to do savings. So those phones are out there and putting these pro-poor out. applications on the phones that is not controversial.

How you make sure the communications apps that are also on those phones don't lead to the same problems in terms of false information, spreading, or polarization. Smart people in the media and in the tech industry should be debating, okay, how do you avoid those? But our foundation, there isn't a single thing we fund that is driving those problems. All right, we're going to take one break, and we'll be right back with Bill Gates and the Vergecast. Support for the show comes from Framer. Framer is an enterprise-grade, no-code website builder, used by teams at companies like Perplexity and Muro to move faster. With real-time collaboration and a robust CMS, with everything you need for great SEO,

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Join the 2.7 million small businesses using LinkedIn to hire. Get started by posting your job for free at LinkedIn.com slash track. Terms and conditions apply. All right. We're back with Bill Gates. So I just saw Microsoft CEO Sotchenadale. I was just in Redmond. I saw him.

And he said once again to me that he thinks privacy is a fundamental human right. Something Tim Cook at Apple says to. Do you feel that as strongly as well? Well, I haven't found the person who's against privacy. So, I mean, you know, your medical records, your tax records, you know, everybody believes in privacy, you know, now making sure that you get the benefits of digital medical records without problems in privacy, making sure that we can see, okay, is this medicine having side effects, you know, without violating privacy, see, okay, does this course material

work better than this other course material without violating privacy? That's where you get into tradeoffs, that you want to see which government programs are working. You want to see which curriculums or medicines are working. And so in the digital world, there's this upside of being able to measure those things. And you can design systems, say you have the best of both worlds. That is, you're understanding how well a medicine's working and who should or shouldn't be taking it without having to reveal any individual's particular medical record. And we give an example in the letter of the thing we did with 23 and me, where we saw, that your selenium processing genes led to a much higher risk of prematurity.

And so we were just looking at aggregated data, no individual record. And yet that insight came because they have millions of those records. And we could see that pattern without connecting it to any particular individuals. You know, that's a miracle who've seen lots of digital data. And now we're giving selenium to women whose diets don't have much. we'll see, you know, we're pretty optimistic. That'll cut prematurity in half. I mean, that's like an amazing story, right? You have this data from Trin3 and Me. It's a study that you guys participated in. It came out with a result. You're now testing the hypothesis.

But how do you square sort of the push for, hey, if you let us collect even more data, we can have even more outcomes like this with this sort of historically fast and loose approach that the tech industry has had to that data collection idea? You have a very unique global perspective, you've been around the world, there is a lot of action towards data privacy regulation around the world. Do you see the sort of boundary shifting? Well, I think the most private information is your medical record. And I don't think there are gigantic cases where people are saying that the privacy problems on medical records has been so great that we shouldn't keep medical records at all, you know, your tax records or voting record. So, yeah, there's a

a lot of regulation about privacy, which the industry is engaging in that. But in those very sensitive areas, actually the track record so far isn't super bad. There's already a push in Europe. It seems like there's going to be a push in the United States. Do you see that? But there's always been privacy rules. I mean, there's rules about medical records. I was 17 years old where I was a page in Congress. And they had gone in and seen which videos politicians had checked out at video stores and were embarrassing with that information. So they actually passed very narrowly targeted privacy legislation.

That's back in 1972. So, you know, the idea of your credit record, your grade, your medical record, your tax records, it's not new. Some of this stuff about, okay, which websites do I go to? that's a new area because now people are using the web a lot and how should that information be protected? That's interesting. But it's not as fundamental, say,

is do I have HIV or not? Yeah, and I think that's really kind of the heart of it, right? It seems like you're able to accelerate so many of your efforts by simply collecting data. I mean, the first thing we talked about was getting more data about the lives of girls and women. And yet there's this parallel conversation around privacy and protection. And I'm very curious to see how that balance shakes out around the world because

that conversation seems to just be ongoing. Yeah, but the most basic data, like how many kids die of diarrhea or how many people die of tuberculosis, you know, it doesn't raise gigantic privacy issues that, okay, my country's embarrassed, you know, don't say that we have people dying of TV. The individual behavioral tracking for targeting, which you get into, you know, And none of that doesn't relate to anything the foundation does. There, now we're trying to put up boundaries of, okay, how much awareness do people have about that? How can they opt out of that? But to say this is the first time there's been privacy issues.

And the world's been building databases about your bank account and the, the, how you use your credit card and what phone numbers you call, you know, for my entire lifetime. So you have been a full-time philanthropist for a while. since 2008. And you and Melendar are still some of the very wealthiest people in the world. And you write at the end of this letter, you have the stirring call to action. You say, look, we can't take it for granted. You have a responsibility to work hard to make the world a better place. So how does that work for you?

Like, how do you give away? I know you have a foundation and you have a big staff and I'm very smart. But when you say, I want to make an investment into a smart toilet expo, like, walk me through the actual mechanics of how that is executing. Well, we have a team, which is our water and sanitation team. It's got people who've been out in the field on our super experience. It's got some engineering people that are super experience. Actually, head of it's a Brian Arbergast, a super capable ex-Microsoft person. So we go and we look around the world at what we call the ship flow diagram to see in a city is where is the sewage going? Is it being processed? Is it getting the river? And we look at the urbanization trends and we say, okay, this, is a real problem in terms of disease and quality of life. And we say are other innovators working on this? You know, does the rich world solution, which is a sewer approach,

does that scale to work in, say, African cities? And, you know, it doesn't. And we realized, okay, it's a growing problem. So then we did a challenge where we said, hey, anyone who knows how to get rid of the two bad properties of human waste, which are the smell and the disease causing nature, but do that locally at low cost. without too much energy, high reliability.

We had 20 different teams, mostly universities around the world, apply. And now that's five years ago. And we've nurtured four of those are now being turned into products. And so when we did the Beijing event, it was the announcement that the very first products, you know, five years hence were now being shipped. Now being shipped at a much higher price than we need to get to. We're almost a factor of 10 more expensive per seat than we need to be. But we do think those costs can go down as we get into these pioneering markets and get more volume.

So what strikes me about that is you're describing something that I wish our governments would do. It's interesting to me that you have the ability, you have the means, you have the team. It sounds like you're an amazing team to say, we want to fix this, we're going to go around the world, we're going to collect this data. what do you make of the notion that our government should work harder? Like, I think this is a very common idea right now. I've heard about it a lot over the past few weeks now, that the idea that we should just tax folks like you at a 70% marginal tax rate and that that money should be used to build infrastructure and services like this.

Does that appeal to you? Do you think that's just ridiculous? Do you think what you're doing on sort of the private philanthropy end is more effective? How does that shake out? Well, certainly the idea the government being more effective in terms of how it runs education or social programs, you know, there's a lot of opportunity for improvement there. In terms of revenue collection, you wouldn't want to just focus on the ordinary income rate because people are wealthy have a rounding their ordinary income.

They have income that, you know, just is the value of their stock, which if they don't sell it, it doesn't show up in income at all, or if it shows up, it shows over in the capital gain side. And so the ability of hedge fund people or various people, they aren't paying that ordinary, rate, ordinary income rate. The one thing that never gets much press, the IRS shows the statistics for the top 400, 400 people, the highest income and the rate they pay. Anyway, you should look at that. It's about a 20% rate. So it has nothing to do with the 39.6 marginal ordinary income rate. So it's a misfocus. If you focus on that, you're missing the picture. I believe

U.S. tax rates can be more progressive. Now, you finally have some politicians who are so extreme that I'd say, no, that's even beyond. You do start to create tax dodging and disincentives and, you know, an incentive to have the income show up in other countries and things. But we can be more progressive, the estate tax and the tax on capital, the way the FICA Social Security tax works. We can be more progressive without really threatening the income generation, what you have left to decide how to spread around.

Tax systems are always being debated. Piquetti, actually the one who put this idea of a wealth tax on the table. The only asset class that you have that traditionally is for real estate, which makes a lot of sense. Real estate is special in some ways. Certainly we have a government that's spending more than it's taking in. So the idea that at some point, if you want to avoid massive inflation, you need to probably raise more money because what you need to do in terms of your medical care promises

will make expenditures even higher than they are today. So you're not like in the dearer in a modern monetary theory that says, don't worry about the deficit. We'll just print the money and do it. That is some crazy talk. It's certainly out there. It's gaining currency. Well, that's crazy.

I mean, in the short run, actually, because of macroeconomic conditions, it's absolutely true. You can get even to probably 150% of GDP in this environment without it becoming inflationary. But that is not something that it will come and bite you. That is the people you owe the money to, you will have a problem. So the thing that strikes me at this is in your letter, in your work, in what you're doing, you are fundamentally trying to reduce inequity of distribution, whether it's health care, whether it's education, whether it is toilets, and you're doing it as a private philanthropist. I think we are in this country,

and we're talking about it right now, having a real conversation about the role of the government, how powerful it should be, how it should collect revenue, how it should redistribute that revenue, how do you see your partnership with governments around the world changing? Should we rely more on big foundations like the Gates Foundation? No, or not. Or should, are you hoping that reliance? No, the main, in every country, the basic needs and the equity, progressive tax system is driven by the government. Philanthropy is tiny.

And there are a class of things like malaria where there's no government who has capacity and has the problem because the rich countries have the capacity, but the poor countries have the problem. And so there's a few things like that that philanthropy can come in and play a significant role or the rich country generosity can play a role there because the market signal from the kids from the kids sign of malaria is very small. But in terms of domestically, you know, we work with guys. to help improve their revenue collection so that they can fund these systems.

And philanthropy has no role in that day in, day out, you know, food, education, health, pension, justice, safety type funding. So Bill Gates, thank you so much for joining us. We went all over the place, but as always, I love reading a letter every year, and I love talking to you. So thank you so much. Yeah, thank you. It's great. All right, that was Bill Gates.

thanks to him for coming on the Vergecast thanks to you listening. I hope you had your mind expanded a little bit. We'll be back later this week with a regular Vergecast. A little less heady, I promised you a little bit more about tech news. Every Tuesday, we have an interview episode. Every Friday we have the regular show. We would love to hear what you think about it.

Tweet at me on At Recklist. Talk to you soon.