Philanthrocapitalism seen from South Africa

Bill Gates’ charity turns to tyranny, misfired silver bullets and climate vandalism

9 August by Patrick Bond


Presentation to the African Philanthropy Academic Conference, 2 August 2022
University of the Witwatersrand Business School Centre on African Philanthropy and Social Investment, by Patrick Bond, Distinguished Professor of Sociology, University of Johannesburg.


 Abstract:

Critics of multinational corporate power in the Southern Africa region, the world’s most unequal, are increasingly concerned with the super-exploitative sources of wealth extraction, from labor, society and nature. Historically and especially today under the influence of Corporate Social Responsibility and social engineering by philanthrocapitalists – including the Bill & Melinda Gates Foundation – that power comes dressed up as charity. It is reflected not just in the economy but also public policy spaces – in South Africa’s context, from healthcare to agriculture to sanitation – and ultimately threatens life on earth due to the untenable implications of leading climate-control strategies. These can be identified from two high profile visits to South Africa: one in 2009 when Bill Gates visited Durban slums and the other in 2016 where Gates received accolades from the Nelson Mandela Foundation in Pretoria. Resistance narratives against Gates’ ideas spiked at those stages, but the crises his messages addressed continued, in part because of his own orientation to profiting from ‘false solutions’ instead of promoting serious solutions.

 Precursors of South African philanthrocapitalist social engineering

The Bill & Melinda Gates Foundation, as well as its core corporate ally Microsoft (not only the source but continuation of Gates’ wealth), have had contradictory roles in South Africa. Their principals and allies have stressed both technological innovations to improve productivity (e.g. into the sanitation and health sectors), as well as the merits of their work for the society’s modernization and improvement. The pages below take Gates’ silver-bullet technology and pro-market orientation as serious challenges, considering their application in a variety of cases including healthcare, agriculture, sanitation and climate change. [1] As one example considered in detail below, improving sanitation systems in the third-largest city, Durban, is a vital case site, because even though it failed by any reasonable measure, the fusion of innovation and market incentives – especially avoidance of municipal payments for sewage infrastructure and for the toilets’ ongoing operating and maintenance costs – exemplifies contemporary neoliberal social engineering. Moreover, Gates’ mode of venture philanthropy – based on imposition of technology and self-congratulatory hype – is not unlike the missions of many of their ilk dating back more than five centuries.

Multinational corporations began to play a significant and permanent role at the bottom tip of Africa when Portuguese slave-trading companies, initiated by Vasco da Gama’s 1497 voyage, were followed especially by slavers and traders from the Netherlands, including the first settlers in the Dutch East India Company in 1652, at what is now Cape Town. Like other such firms, the immediate objective was extermination of local indigenous people, the Khoi San. Many overseas firms followed the same pattern of coastal port development and financial market deepening, so as to facilitate global trade (e.g. London-based Standard Chartered Bank which was founded in 1857 in what is now Gqeberha). But of greatest importance to South Africa’s future was the first company that arose from combined natural resource extraction and extreme surplus value appropriation in the colony’s interior: De Beers, which by the mid-20th century had become a global monopoly controller of diamonds. Instead of extermination, the firm and its successors required the capture and economic coercion of Bantu peoples, to work in Kimberley’s “Big Hole” mine, hence the region’s notorious migrant labor system emerged. Funded in large part through London financial capital, arranged by entrepreneur-turned-empire-builder Cecil Rhodes, the 1870s-80s witnessed a consolidation of Kimberley’s mines. Rhodes and his allies initially missed the 1880s-90s gold rush in Johannesburg.

Because of that error and the control of Johannesburg by Dutch descendants known as Afrikaners, the backlash from Cape Town – and in turn, London – was robust, first taking the form of the infamous failed “Jameson Raid” on Johannesburg in 1895. That, in turn, persuaded Rhodes and Queen Victoria to engage in full-fledged war from 1899-1902. The British military embarked, largely on Rhodes’ behalf, on a colonial landgrab from the resident Afrikaners in the Boer War (also called “South African War”), which was fought unsuccessfully by mainly Afrikaner peasants against Rhodes’ invading army. From that victory of what came to be known as “English-speaking capital” came a resulting favourable intra-white political settlement in 1910 which determined the Union of South Africa’s final borders. Soon after, there emerged in 1917 the most powerful company in twentieth-century Africa, Anglo American. Aside from some London Stock Exchange allies of the founding family – the Oppenheimers, who soon also took over De Beers – Anglo’s main funder was New York banker J.P. Morgan.

What these multinational corporates – increasingly home-grown like De Beers and Anglo (though both departed to list on the London Stock Exchange in 1999 in the wake of democracy) – had established by the early 1900s was an exceptionally profitable system. The corporates had fused exploitation of black workers in part through colonial and then apartheid political oppression, with the export of the country’s vast natural resource wealth. The system allowed for generations of “super-exploitation,” through both resource depletion and the extraction of labor’s surpluses. The latter entailed patriarchy-amplifying, migrant labor that relied on women’s unpaid work in social reproduction, located within distant “Bantustans,” resulting in unprecedented “cheap labor” (Wolpe 1980). To some extent the proceeds of the extracted minerals were recirculated through local shareholders and the local tax base, but they were mainly externalized to London and New York (Bond 2021). Vincent Harris (1985: 13) remarked how “investment in South Africa provides U.S. transnational firms with some of the highest profit margins in the world. Between 1979 and 1983, for example, the average rate of profit on investment in South Africa was 16.31 percent, nearly double the international average.”

Massive social problems ensued from the outset, including dramatic inequality within the white population given the demise of the Afrikaner quasi-peasantry, once land commodification quickened, amplified by predatory financiers (Bond 2003). This latter process contributed to an urban “Poor White Problem,” which the first corporate philanthropists understood was generating inter-racial class alliances of potential danger. The Communist Party of South Africa had shifted by the late 1920s towards a non-racial policy (under the influence of the Comintern in Moscow), and Clements Kadalie’s Industrial and Commercial Workers’ Union became a site for late-1920s non-racial labor alliances. Hence by the early 1930s, a major international philanthropic intervention set the tone for philanthrocapitalism: the 1929-32 “Carnegie Report on the Poor White Problem in South Africa.”

As a sign of the times, the Carnegie commissioners succumbed to the temptation of promoting even worse racial segregation than already applied in colonial South Africa, so as to appease white workers, for fear of further labor unrest in the wake of the extremely violent 1922 miners’ strike. But beyond its foregrounding of apartheid labor markets, the Carnegie report was also aimed at social policy applied to white and mixed-race (“colored”) populations. The Carnegie agenda, as interpreted by Jeremy Seekings (2008: 515), was “hostile to programmatic state-building” because its policies “sought to return discretionary power to the church.” Indeed, the commissioners’ ideas promoted, among policy elites, “a backlash against the prior, nascent growth of South Africa’s welfare state. In general, the Commission’s recommendations entailed a reversal to the kind of ‘scientific charity’ that characterized the United States in the late nineteenth century” (Seekings 2008: 515). When the Carnegie Commission insisted that “A certain amount of shame ought to be associated with certain requests for state charity,” that reflected how, as Courtney Hallink (2022: 8) put it, “Poverty was constructed as a pathology by the members of the commission, and this meant that the poor were likely to make a habit of becoming dependent on the state. It stressed that state intervention in poverty reduction normalizes receipt of charity.”

This tradition is exceptionally durable. The “tokenistic” development of a welfare state in post-apartheid South Africa (Bond 2014) was an outcome of politicians and bureaucrats breaking an expansive set of Reconstruction and Development Program promises (Bond & Khosa 1999). That can also be traced, in part, to a neoliberal ideology whose roots in South Africa can be located in the work of a major corporate philanthropic venture, the Urban Foundation, promoted shortly after the 1976 Soweto Riots by Ernest Oppenheimer’s son Harry and by the wealthiest Afrikaner family, the Ruperts. Their Urban Foundation agenda included residential project developments on the margins of sprawling South African cities, but these amounted merely to self-built shacks atop poorly-serviced sites, and for those in formal employment whom financial institutions might consider bankable, market-centred housing-loan guarantee and inner-city property development funds. Through the 1980s and early 1990s, these concrete projects became the basis for policy inputs, and were highly influential in turning the late-apartheid state away from public housing provision, towards a “site and service” approach, consistent with the World Bank’s then-emerging “New Urban Management” strategy (Bond 2000).

Beyond public policy influence, the Urban Foundation adopted a broader class agenda, according to Jeff McCarthy and Michelle Friedman (1987)

“The ideology of “community self-improvement” was harnessed by the bourgeoisie and petit bourgeoisie: an ideology that served both to mystify the sources of class oppression, and to alleviate some of the objective causes of dissatisfaction (and hence class action) amongst the urban poor ... It is no secret of ... the Urban Foundation, of course, that the “social responsibility” of big business in South Africa was and still is identified as being in the areas of the rapid creation of a black petit bourgeoisie, and the promotion of the philosophy and practice of “self-help” in areas such as housing and the provision of community facilities.”

The post-apartheid era witnessed quite similar processes, as discussed below using the Bill & Melinda Gates Foundation as our case study, but with much greater nuance given that resistance to South African apartheid had generated extremely high levels of civil (and uncivil) society organization. Many of the foundations that moved to South Africa after 1994 can be accused of doing precisely the bidding of the international liberal agenda, in disempowering the state and supporting civilized-society initiatives to address social problems (albeit with more empowering language friendly to NGOs), while generally ignoring the needs of radical social movements such as those that emerged during the early 2000s in the major cities. The preference for donating to NGOs – instead of providing resources to such movements – has been a notorious problem across Africa (Manji and O’Coill 2002, Shivji 2007). South Africa was no different. For a sample year, 2003-04, Deborah Ewing and Thulani Guliwe (2008: 262) provide a list of the main foreign funders active in South Africa. In several cases, including Gates, contemporary funders are much more sophisticated than the old Carnegie commissioners and the Urban Foundation, realizing that structural change and state service provision in certain areas – e.g. supply of AIDS medicines in a country with, at peak, more than 20 percent of the population living with HIV – was indeed an important component of regime maintenance (though Gates initially tried to do so based on branded not generic medicines, ever conscious of Intellectual Property). So even U.S. liberal funders have been known to promote a kind of philanthropy that transcends a stereotypical charity model.

There is also a degree of awareness that charity-based approaches are passé, consistent with Ford Foundation President Darren Walker’s (2015) “new gospel of wealth” confession: “We foundations need to reject inherited, assumed, paternalist instincts… We need to interrogate the fundamental root causes of inequality, even, and especially, when it means that we ourselves will be implicated.” That latter component is not yet a factor in either Gates’ work or South African philanthropy, because opening up the matter of “reparations” for apartheid profits, and potentially a wealth tax, is considered a “third rail” of untouchable socio-economic discourse, as the most famous Afrikaner making such arguments, Sampie Terreblanche (2018), learned to his regret.

Hence, hypocrisy exudes from this list of foundations, most of which were built upon a wealth base that, especially when it coincided with South African capitalism, was profoundly exploitative. This critique would apply not only to Gates (and Microsoft) but to three of the most progressive international corporate philanthropists with South African operations: Ford, Open Society and Mott. In the context of anti-apartheid movement demands for corporate boycott, divestment and sanctions, the struggle to halt Ford paying the apartheid state tax revenues and supplying it vehicles lasted until 1987, when the company finally severed its long-standing links (Ford imports dated to 1908 and, in 1923, a Ford South Africa division and local assembly line were established). Even then, local managers were given the plant at a discount and no reparations were paid (Ford Motor Company 2020, New York Times 1987).

In contrast, after lobbying and protest by anti-apartheid groups, finally in 2012 General Motors (GM) – whose profits were the basis of the Mott family’s wealth – did feel compelled to repay $1.5 million in apartheid profits as at least a tokenistic reparations statement (at a time when it was recovering from bankruptcy) (Davis 2012). Meanwhile, another advance during the anti-apartheid struggle was the delegitimation of the “Sullivan Principles” whitewashing of multinational corporate profiteering – principles which both Ford and GM had endorsed during the 1980s, when doing so was seen as a particularly suave effort by U.S. corporations to maintain their apartheid profits but with trivial modifications such as token multi-racial bathrooms in factories (Harris 1985).

As a final example of the contradictory ways progressive funding could emanate from vast sources of dubious wealth, the Open Society Foundation – which has many progressive African social movement partners – was based on George Soros’ acquisition of massive wealth during an attack on one of the world’s main currencies, the British pound. He bet against the Bank of England in 1992 just as the European Monetary System was formed, speculating successfully with more than 10 billion pounds. In the same supremely confident tone while at the Davos World Economic Forum in 2001, he told a Johannesburg interviewer, “Today South Africa is very much in the hands of international capital” (Bond 2003). It was a fair reflection of the extreme injustices in which neoliberalism had been imposed on Nelson Mandela’s presidency, in the process raising inequality to a world-record high after the defeat of apartheid (Bond 2014). While promoting an open political society, Soros was also the kind of financier who would quickly short-sell a country trying to maintain economic sovereignty.

Aside from social engineering and policy advocacy by the Urban Foundation during the late apartheid years, the other wealthy South African elites and their firms generally considered foundations and Corporate Social Responsibility (CSR) in a frivolous way. Most were committed to spending such budgets if these supported name branding, especially at sporting and cultural events. The Johannesburg Stock Exchange began its own Social Responsibility Index in 2004, but self-scoring by notoriously irresponsible firms made it an unreliable measure. Similarly unreliable was the World Bank’s rating of its own $150 million investment in (and loan offer to) Lonmin at its Marikana mine, for the “development of a comprehensive program to strengthen the social sustainability of the client” (World Bank 2013: 4). Even after the notorious 2012 Marikana massacre, which stemmed in part from extremely exploitative living conditions in the community, the World Bank (2013: 12-14) judged its Community Investment work there to be “largely successful.”

That incident is relevant to the Gates Foundation’s own internal contradictions. By no standards would the expansive scope and generosity of Gates be unfavourably compared to the stingy and often scandalous manner in which CSR appears in South Africa. The country’s corporate elite rank consistently in the biannual PricewaterhouseCoopers (2016) “Economic Crime and Fraud” survey as the most criminal, for example, as “world leader in money-laundering, bribery and corruption, procurement fraud, asset misappropriation and cybercrime” (Hosken 2014).

But still, there is a degree of profound ethical decay associated with the Gates Foundation in the form of structural hypocrisy when it comes to wealth preservation. For the Gates Foundation to continue growing, their wealth must be plowed into anti-social and ecologically-destructive companies via the stock market and corporate bonds, real estate (including the largest historic agglomeration of agricultural land in one institution’s hands since feudalism) and other destructive investments. Indeed, the Gates Foundation took this form of hypocrisy to new heights when, as the Los Angeles Times (Piller et al, 2007) reported in 2007, more than 40 percent of its stock market holdings were in corporations which explicitly “countered its charitable goals.” One example mentioned by the Times was drawn from South Africa’s “Cancer Valley” in South Durban, a site at which researcher Stuart Batterman identified levels of benzene, dioxins and other carcinogens that were “among the highest levels found in any comparable location the world.” As the Times reported,

“Two of the area’s worst industrial polluters — a Mondi paper mill and a giant Sapref oil refinery — squat among the homes near Isipingo like sleepy grey dragons, exhaling chemical vapors day and night. The Sapref plant, which has had two dozen significant spills, flares, pipeline ruptures and explosions since 1998, and the Mondi plant together pump thousands of tons of putrid-smelling chemicals into the air annually, according to their own monitoring. In 2002, a study found that more than half of the children at a school in nearby Merebank suffered asthma — one of the highest rates in scientific literature. A second study, published last year [2006], found serious respiratory problems throughout the region: More than half of children aged 2 to 5 had asthma, largely attributed to sulfur dioxide and other industrial pollutants. Much of it was produced by companies in which the Gates Foundation was invested. (Piller et al 2007)”

It was here that the LA Times identified the Gates Foundation doing more harm than good, by virtue of making profits from its investments in the three main polluting companies, Sapref owners British Petroleum (BP, $295 million) and Royal Dutch Shell ($35 million) and Mondi owner Anglo American ($39 million):

“The foundation has held large investments in all three companies since at least 2002. Since then, the worth of BP shares has shot up by about 83 percent, Royal Dutch Shell shares by 77 percent and Anglo American shares about 255 percent. Dividends have padded the foundation’s assets by additional millions of dollars… Just as the Gates Foundation investments in Mondi, BP and Royal Dutch Shell have been very profitable, so too have its holdings in the top 100 polluters in the United States, as rated by the University of Massachusetts, and the top 50 polluters in Canada, as rated by the trade publication Corporate Knights, using methods based on those developed by the university. (Piller et al, 2007)”

In response to the LA Times article, the Gates Foundation replied: “We do not anticipate any change in our approach” (Damon 2007). The foundation’s newly-published ethics guidelines called only for non-investment in tobacco and in companies with an explicit conflict of interest with the two principals, Bill and Melinda.

Likewise, questions were raised in South Africa about another ongoing source of wealth for the Gates Foundation: user licenses for Microsoft’s monopolistic software products, which were contracted to Johannesburg firm EOH Mthombo. A 2019 TechCentral ezine report by Duncan McLeod posed uncomfortable allegations about that arrangement. Based on an insider whistle-blower’s account, “Microsoft was ‘complicit’ in allowing EOH Mthombo to engage in a ‘corrupt’ licensing transaction with the Department of Defence” (McLeod 2019). As an insider whistle-blower put it, “EOH essentially made this massive sum [$8.4 million instead of the standard $80,000-240,000 fee] for doing paperwork as a middleman for the deal… At the risk of stating the obvious, this amount of margin on a straight licensing deal was not just a red flag for corruption, but was a cannonball shot across (Microsoft) compliance’s bow that was ignored.” McLeod (2019) concluded,

“The deal was flagged to a compliance officer in Microsoft South Africa, but no action was taken by the company against EOH. The whistle-blower suggested no action was taken because EOH was helping Microsoft at the time with a large, $50 million-plus contract with the South African Police Service, which was said to be the biggest-ever such contract for the software company’s local subsidiary.”

As the scandal unfolded during the late 2010s, Microsoft was finally pressured to dump its relationship with EOH, a company whose share value on the local stock market plunged by 98.4 percent from late 2016 to early 2020 as a result. Gates presumably had nothing to do with the specific deal, but his own take-no-prisoners leadership of the firm had perhaps set a more general tone. Gates stepped down as a Microsoft board member in 2020, after being pressed by the firm to leave due to his inappropriate sexual behavior there, dating to the early 2000s (according to the Wall Street Journal in 2021, although Gates denied it). During the 2010s he was also in regular contact with Jeffrey Epstein, the notorious source of science philanthropy and convicted pedophile, a major factor in the disruption of the Foundation’s leadership in 2021 as well as Melinda’s demand for a divorce. [2]

Another reflection of Melinda’s influence – in this case, malign, for she is an opponent of abortion due to her own religious preferences [3] – was the Foundation’s role in undermining South African sexual and reproductive health and rights (SRHR). The entry of the Gates Foundation into the South African policy scene followed national government policy progress in conjoining these areas of feminist advocacy in the years following the 1995 Beijing Platform for Action. Marion Stevens (2021: 5) criticized the Gates Foundation for creating a new 

“dependence on donors for the actual delivery of services, and the potential of donors’ over-influence. The consequence was donors coming into South Africa to address HIV with little regard to recognition of the centrality of sexual and reproductive rights in preventing infection… A notable consequence is the self-gagging, poor attitudes and stewardship of South African Department of Health officials which have tended to drive help-seeking girls, women and gender non-conforming people away. It is evident that the Department of Health is beholden to who is funding as opposed to government policy. This is now a pressing challenge where five international NGOs funded by a U.S. private donor are doing SRHR work with little investment in building local sustainability among South African civil society, let alone a movement for reproductive justice. There is more potential for corruption with large consulting firms being contracted at a higher price, instead of government choosing to support local movement building.”

 

According to Marlene Gerber Fried and Anne Hendrixson (2014), “The Gates Foundation, with its outsized leadership role in initiatives to promote contraception in the Global South, sent a strong signal to the reproductive health advocacy community: that there is a wall dividing abortion from family planning, and it should not be disturbed, not even by discussion.” For Stevens (2021: 6),

“The influence of North American politics is pervasive, even amongst the ‘liberal’ pro-choice international NGOs working in South Africa who tend to have a closer relationship with government than with organic sexual and reproductive justice movements. They are accountable to their donors only and their vertical programming limits implementation. The disconnect is seen through not being able to address a continuum of sexual and reproductive justice areas that affect the most vulnerable groups: including sex work, abortion, sexual orientation and gender identity, all the way through to comprehensive sexuality education.”

These are all background aspects of philanthrocapitalism and reflect concerns about the role of the Gates themselves, setting the stage for two high-profile sets of interventions in South Africa when Bill visited: first in 2009-10 to encourage Durban’s municipal household sanitation strategies and to promote new approaches to AIDS-prevention, and then in 2016 when he delivered the Mandela lecture at the University of Pretoria (having paid the Mandela Foundation generously for the privilege). Gates’ blog has periodically included references to the South African case and celebrated his allies (including the obligatory handshake with Nelson Mandela prior to the South African leader’s 2013 death). As discussed below, his foundation’s highest-profile local investments – in vaginal gel to prevent HIV transmission and in innovative, low-cost sanitation systems – both proved disappointing. However, most revealing was the degree to which an increasingly desperate liberal intelligentsia (including the Mandela Foundation) had come to believe the society’s massive social problems – and the already-evident climate catastrophe – could be primarily solved by technicist, silver-bullet solutions that required tinkering at the margins of neoliberal governance.

 Gates’ silver-bullet misfiring at the 2016 Mandela Memorial Lecture [4]

On July 17, 2016, Bill Gates delivered the annual Mandela Lecture in Johannesburg, justifying his philosophy of market-oriented, technology-centric philanthropy. In the 2015 Mandela Lecture, French economist Thomas Piketty’s speech on inequality had attracted healthy debate, with even business notables endorsing his concerns, given South Africa’s intense social conflict. To illustrate, South Africa’s Gini Coefficient measuring inequality is the world’s highest (at 0.77 on a scale of 0 to 1, in terms of income inequality from employment). From 2012-16 the World Economic Forum’s (2016) Global Competitiveness Report category measuring worker militancy ranked South Africa’s proletariat as the angriest on earth, while biannual PricewaterhouseCoopers (2016) Economic Crime surveys awarded the gold medal for world corruption to the Johannesburg bourgeoisie.

 

In this context, Gates, who at the time was worth $80 billion (up $24 billion from 2011), will expound on redistribution. And to be sure, many of his projects have been vital to human progress. But Gates specializes in top-down technicist quick-fixes – “silver bullets” – which often backfire on the economic shooting range of extreme corporate influence and neoliberal policies. As Global Justice Now’s Polly Jones (2016) complained in a report, Gates’ “influence is so pervasive that many actors in international development, which would otherwise critique the policy and practice of the foundation, are unable to speak out independently as a result of its funding and patronage.” Amongst the few exceptions are Katharyne Mitchell and Matthew Sparke (2016: 733), whose research critiques Gates’ “highly targeted investments, market-mediated partnerships, rapid technological fixes, constant assessment, quick exits, and the use of competition, benchmarking and rankings to set funding priorities.”

 

Bad examples can be drawn across the vast sphere of Gates Foundation activities. Gates’ power threatens African food in part due to his advocacy of Genetically Modified Organisms (GMOs), which benefit agro-corporates such as Monsanto but wipe out local seeds (Shiva 2016). In Kenya, Gates’ people and USAID appear to have succeeded in reversing a GMO-seed ban (only four African states allow GMOs). The Gates-supported Alliance for a Green Revolution in Africa “advised and lobbied the governments of Ghana, Tanzania, and Malawi, among others, to adopt pro-business seed and land policy reforms,” according to a critique by Alice Martin-Prével (2016) of the progressive food-sovereignty NGO, Oakland Institute.

 

To address species-threatening climate change, a rather confused Gates favours ‘Terrapower’ nuclear, a dangerous distraction from the urgent need to both expand renewable energy and radically reduce fossil-fuel abuse. As Exxon CEO Rex Tillerson bragged about Gates at the firm’s 2016 Annual General Meeting, “there’s no space between he and I” (Chemnick and Irfan 2016).

 

Privatized health and education are Gates’ speciality but in India, a Gates-funded trial on the genital cancer-causing disease Human papillomavirus was cancelled by the government in 2013 because thousands of girls aged 10-14 were victims of ethics violations such as forged consent forms and lack of health insurance; seven died (Pagla 2013).

 

In South Africa, the tech-fix fascination is controversial in Durban’s peri-urban settlements where Gates-backed ‘Urine Diversion’ toilets imposed by the municipality on nearly 100 000 poor black households are considered a new version of the hated ‘bucket system.’ Higher-income residents of Durban – including in the nearby, traditionally-white western suburbs – don’t suffer this discriminatory indignity, because the toilets are reserved for distant, low-income, peri-urban zones in the city. [5]

 

But the most damage done within South Africa was Gates’ promotion of intellectual property (IP) rights (cf. Sparke and Levy, this volume). Long-term monopoly patents were granted not only to Gates for his Microsoft software, but for life-saving medicines. IP became a fatal barrier to millions of HIV+ people who, thanks to Big Pharma’s profiteering, were denied AIDS medicines which cost $15,000/year fifteen years ago. The Gates Foundation was part of the problem by insisting on Merck-branded drugs in its Botswana AIDS clinics, complained Zackie Achmat of the Treatment Action Campaign (TAC) in 2001. With TAC instead demanding and finally – in the wake of at least 330 000 avoidable AIDS deaths – winning access to generic medicines made locally, the cost to African governments became negligible and today millions of people in South Africa alone receive the drugs for free, dramatically raising life expectancy (Bond 2003).

 

Self-interest was perhaps a factor, because Gates got rich from IP illegitimately acquired thanks to blatantly anti-competitive practices, such as bundling Windows with the slow, security flaw-ridden Internet Explorer web-browser, according to US prosecutors. The emails that Gates and his colleagues sent each other unveiled their cut-throat, illegal approach to IT (and Gates’ own slipperiness), notwithstanding the internet’s massive government subsidies (Banks 2001). And as Edward Snowden showed, Microsoft is in league with the United States National Security Agency’s Prism snoop service to hack your computer, Outlook, Hotmail and Skype accounts (Levy 2014). Speaking of secrecy, Microsoft’s offshore tax-avoidance policies today earn the company more money than Gates gives annually in donations (less than $4 billion/year) (Carlsen 2015).

 

Visiting South Africa, Gates will get even richer, in terms of the moral legitimacy bestowed by the Mandela Lecture. But to explain this, perhaps more context is useful. The 1990s witnessed a series of debilitating concessions to multinational corporations by Mandela’s African National Congress. Mandela Foundation official Verne Harris acknowledges, “Under Madiba’s leadership the ANC embraced a neoliberal agenda with unseemly haste and we’re paying a terrible price for that now.” Added Harris, “We’re only beginning to understand the nature of this phenomenon. From the late 1980s, a huge seduction was underway, of the liberation movement by capital and it’s playing out in all kinds of destructive ways now, from arms deals to corruption” (Schechter 2014).

 

Gates has apparently not (yet) reached the stage of philanthro-seduction of radical social movements, trade unions, feminists, Black Lives Matter activists, LGBTI scene, environmentalists, Occupiers, anti-imperialists, youth and progressive political parties which do so much to withstand the inequality, state surveillance, racism and other features of contemporary economic tyranny. These forces show, objectively, that the world urgently needs far less corporate power – including in the hands of Bill Gates and Microsoft – and many more bottom-up activist initiatives to achieve thorough-going wealth redistribution.

 

 Subsequent South African mishaps

Further problems with the Gates Foundation’s approach emerged in subsequent years, shedding more light on whether varied problems in the world’s most unequal society, can be addressed much less resolved by philanthrocapitalism. In one case, health care, the laudable originators of a vaginal microbicide gel aimed at preventing both HIV and herpes simplex virus 2 transmission provided cause for Gates Foundation optimism in 2010-11 (along with male-circumcision advocacy). The gel’s first trial cut HIV infection by 39 percent reduction in HIV and 51 percent reduction in genital herpes infections. But by late 2011, in the next trial, according to a Science reporter,

“6 percent of approximately 1000 women who were given the drug-laced gel and asked to use it daily became infected by HIV. A similarly sized control group that gave women an inert placebo gel had an incidence of 6.1%. “I’m very pleased that the answer was so clear,” says the University of Pittsburgh’s Sharon Hillier, who heads the Microbicide Trials Network that is conducting VOICE. “It didn’t work a little bit. It just flat out didn’t work.” (Cohen 2011)”

A decade later, this remained conventional wisdom, e.g. in a leading (Big Pharma-funded) women’s NGO, the Well Project (2021), which shifted blame to recipients:

“Studies of a gel that contains the HIV drug Viread (tenofovir) and is inserted into the vagina have shown conflicting results. While the gel seemed promising at first, a second study was stopped early because it did not prevent acquisition of HIV. However, this was mostly because women did not use the gel as they had been told to do. Researchers are now shifting their focus to understand why so few women did use these gels as directed.”

In short, if a technical fix isn’t effective, then it’s certainly attractive to blame society for improper use. The same tendency has become evident in the other highest-profile intervention by Gates in South Africa: Durban toilet provision. The story of this city’s sanitation policy and practices is complex, and during the 2010s entailed not only Gates’ endorsements of neoliberal site-based sewage treatment, but also a 2018 intervention in “black soldier fly” biomimicry-type aspirations for disposal and processing of faecal waste. Both reflect not only the ongoing misfiring of silver-bullet strategies, but also a belief in market incentives articulated in Nature journal in 2017 by Gates Foundation official Doulaye Kone, who argued that Western systems of providing a flush toilet and sewage treatment were being relegated to history in Africa, because “there’s no opportunity to sell anything, and then the government has to pay for operational costs. The day the budget dries up, everyone is in trouble” (Wald 2017).

A year later, in 2018, National Public Radio reported on his intrepid, apparently successful engagement:

“‘This small amount of feces’, Gates said, brandishing the jar of excrement, “could contain as many as 200 trillion rotavirus cells, 20 billion shigella bacteria and 100,000 parasitic worm eggs.” Gates’ poop presentation has its roots in a visit to a slum in Durban, South Africa with his wife Melinda a decade ago. “We visited communities where children were playing in lanes filled with human waste ... where the stench of community toilets was so bad that people didn’t want to use them, and where families drank water contaminated with human waste,” Gates said. In 2011, the Gates Foundation launched the Reinvent the Toilet Challenge, calling on scientists, universities and companies to come up with a toilet that didn’t require a sewer system to safely dispose of human waste. The foundation has since contributed $200 million to research and development. (Yu 2018)”

The opportunity for the technical fix occurred in Durban because the city’s finances for capital investment in water and sanitation had been reduced and there was a low priority given to services for poor people who would require substantial ongoing operating and maintenance subsidies. Gates himself made this point about municipal fiscal incapacity, utterly uncritically, in an online video blog:

“Our first stop in South Africa was in Durban and the topic I was learning about was sanitation… The person who was taking me around showing me things was the chief executive officer of the Durban water and sanitation company, Neil McLeod, and he’s been a real leader and thinking through how can he get service to all the people in Durban without having to have high prices. Now, building piping out to all these houses and using water just is not going to be possible. (Gates 2010)”

This is the most important presumption: alleged cost constraints to serving society, even when it comes to the most basic water-related needs. Yet neoliberal public policy choices that year allowed the municipality – at the time, Durban’s wealthiest, measured by its capital reserves – to use its resources (along with national subsidies) to build a $390 million stadium for the 2010 Soccer World Cup, right next to an entirely appropriate existing rugby stadium (Bond 2020). That diversion of fiscal resources meant, in turn, that the failure to supply standard levels of water and sanitation in the core area where “Ventilated Improved Pitlatrines” (VIPs) and later, urine-diverting toilets were placed (“the Valley of 1000 Hills”) was not due to a physical water shortage: the area includes the main reservoir supplying Durban, the Inanda Dam. It was due to the lack of political will to install standard water-borne sanitation, or even a low-flush toilet plus septic tank or biogas digester, so that the household would be able to avoid an outdoor trip to a no-flush toilet, with the associated indignities, smells and documented sexual-violence threats (Gibbs et al 2020). Municipal officials ignored cost-benefit analyses, e.g. in promoting better health outcomes (with studies revealing far lower water-borne disease rates if higher levels of internal sanitation were provided), that would justify raising the service standards (Bond 2002).

Gates’ orientation is not to question markets, and likewise, not to advocate state services to poor people who cannot cover costs. So instead of confronting this lack of political will to subsidize those unable to afford capital and running costs for water and sanitation, Gates (2010) advocated a technical fix:

“The typical poor world toilet is just a pit. You dig a hole in the ground and it’s unattractive, particularly the smell. Now there’s an improved model called a ventilated improved pit latrine or VIP where you set up so that the air flows down through the toilet down into the pit, and up through a pipe and so you dramatically reduce the smell problems and by putting the right wiring on the top of the pipe, flies can’t get in. We got to see a place where they have these VIP toilets. A challenge is that you’ve got to empty the pit. They would go in with buckets and they even had a thing called the gulper that could take the liquid waste in just by hand, pumping. So you know no one’s suggesting that this is the ultimate. We need innovation we had people from the local university there talking about new ideas. And the great thing about this company is they’re willing to experiment and so that would be a partners as we try out even better designs in the future.”

It certainly wasn’t the “ultimate,” because as local expert Mary Galvin (2017: 113) reported, by then, VIPs were “becoming unusable ‘full ups,’ being extremely expensive or virtually impossible to empty because of their location, and facing user opposition.” The city’s leading water and sanitation manager, Neil Macleod (2008b: 7) himself acknowledged that there were many VIP “toilets subject to catastrophic collapse,” or “constructed in inaccessible locations,” so with a cost of emptying each pit rising to $120 per pit (nearly as much as construction of new ones), the process had become “uneconomic.” Hence instead of the municipality vacuuming out the excrement (as was meant to be the case for the VIPs), the next innovation Gates supported was a “Urine Diversion” (UD) toilet that in theory would permit on-site disposal of dried faecal matter. Notwithstanding local aversions to the handling of excrement and to the UD’s functioning just like an apartheid-era “bucket system,” the city expected households themselves to empty the UD’s faeces chamber into a self-dug hole on their property (with a recommendation that mango trees be planted directly above), and if the plot was large enough, the urine chamber would empty directly into a soakaway system (Gounden et al 2013).

Gates was not alone in his high hopes for these neoliberal sanitation strategies. As the Guardian reported in 2012, “Ground zero for the quest to find the perfect toilet for the 21st century’s needs may as well be Durban, South Africa” (Kaye, 2012). Gates (2010) blogged enthusiastically about Macleod’s work, calling the VIP “a breakthrough in basic sanitation.” It certainly was a municipality interested in sanitation innovation, even though the original 1896 Sewerage Outfall Works (using the London Pneumatic Sewerage System developed in 1884) remained a valid strategy when combined with sewerage treatment works (which Macleod’s father Don had originally engineered decades earlier, when according to a church tribute, “Part of his legendary work also focused on the implementation of these sewage systems in the black communities” (North Durban Presbyterian Church, 2015). By the 2000s, sanitation neoliberalism prevented that approach for as Macleod (2008a) argued, “A piped sewerage system is not economically justifiable in rural areas, where the densities are too low, and in these areas onsite sanitation is the only viable option available. The rapid densification of the municipality has led to the run-off of untreated sewerage and polluted storm water into a number of rivers.”

In reality, if sufficient subsidization is available, it is precisely the rapid densification that justifies installation of sewage pipes to low-income areas, where major health improvements can be realized (especially against cholera, diarrhoea and HIV/AIDS), along with better class and even racial desegregation (not feasible if VIPs and UDs are provided) and improvements to river-system ecologies (Bond 2002, 2020). Macleod preferred the lower-quality technology in part because his desire was to use “minimum amounts of water, if at all… [and] emptying is the responsibility of the household, with entrepreneurs already offering their services at $4 per chamber emptied” (Macleod, 2008b: 8-9). At the time Gates visited, Durban’s toilet backlog was officially counted as more than 245,000 (in a city of around 900,000 households), not counting 130,000 UDs or VIPs. Only 535,000 houses had flush toilets (Buckley 2012).

As for market incentives, Durban’s UD system was also meant to benefit poor people once urine began to be collected and sold to the municipality (at $2.50/month) because once dried, urine is “rich in nitrates, phosphorus and potassium, which can be turned into fertilizer,” Macleod enthused, so “If we can turn the toilets into a source of revenues, then they will want to use the toilets” (Veith 2010). In 2022, Macleod’s work with Gates to impose UDs so as to harvest urine continued, although rhetorically at least, a shift was now evident towards what eventually might be less class-insensitive discriminatory sanitation services: “the long-term goal is to come up with more resource-effective solutions for everyone, regardless of whether they live in Khayelitsha [Cape Town’s main low-income ghetto] or Sandton [the country’s wealthiest suburb within Johannesburg’s main corporate nexus]” (Carnie 2022).

But this was another technical fix, full of promise, that never panned out. Indeed, as community organizer Dudu Khumalo explained about the area adjacent to Inanda Dam, “These communities are repelled by human excrement as fertilizer, because of the many diseases surrounding them, compared to cow-dung. The burden of cleaning is left to women. Other creative opportunities for bio-gas are also foreclosed by UDs” (Amisi et al, 2008). The UDs were turned into storehouses or were reconfigured as self-dug septic tanks whose illegal water inputs came through informal piping not approved by the municipality. This was not unusual because in a 2013 survey of 17,000 recipients of the UD toilet, only 1 percent of respondents approved, with 99 percent desiring a flush toilet inside their house, largely due to the UD’s stench (Roma et al 2013; Coertzen 2014). As a 2017 survey confirmed, “More than 95 percent of the participants reported that they do not regard the UD as a permanent asset and they all aspired to have a flush toilet, which is associated with being a first-class citizen” (Mkhize et al 2017: 114). The UD operates, however, as an incrementalist strategy, so by making large investments in the 85,000 units, the option of a community-wide sewage system is forestalled, locking in Durban’s notorious residential segregation on class and spatial grounds (Bond 2020).

The next Gates grant, of $1.3 million in 2016, represented yet another technical fix to the failed technical fix. The UDs were maintained without any changes, but new outsourced workers (not municipal employees) were hired to truck sludge from UD buckets to a sewage treatment plant in South Durban (Ismail 2018). This would allow Black Soldier Fly Larvae (BSFL) to process the waste (Alcock et al 2016, 5). As a study funded by Gates argued, “the use of BSFL could provide a solution to the health problems associated with poor sanitation and inadequate human waste management in developing countries… the prepupae produced have a value that could provide a source of income for communities or local entrepreneurs” (Banks et al 2014: 14, 20). A Nature journal reporter (Wald 2017, 148) was enthusiastic: “The factories dehydrate the larvae to make an animal feed or extract a fatty oil, which has a range of uses from cosmetics to bio-diesel. The leftover organic matter becomes a soil conditioner.” Consistent with contemporary management ideology, this was a Public Private Partnership (with UK-based firm AgriProtein).

But once again, the fix failed: the faecal sludge’s dangerous pathogens proved resistant to decay and the BLSF solution could not deliver the expected results. Once again, researchers found it convenient to blame the victims, who didn’t separate their solids and liquids: “cross contamination of urine may be occurring through incorrect UD usage with faeces entering the urine collection receptacle. It is recommended that municipality re-start their community education programme on the use of UDs” (Vivian et al 2019, 148). But failure was, at least, acknowledged at Gates Foundation in December 2019, where Maximillian Grau and Nick Alcock (2019: 2-6) reported: “the initial process flow for the BSFL processing plant did not achieve the desired results in terms of reaching viability” because nearly everything that could go wrong, apparently did go wrong. [6] But in addition to the misfired silver bullet, there was a more profound problem that the Gates’ market-reliant ideology could not properly incorporate. According to Dhesigen Naidoo (2018), a fan of UDs, the model’s failure was evident: “The deeper problem is that there is no sanitation market, especially for the poor – it happens to be a monopolized public good with minimal innovation uptake.”

 Gates’ deadly commitment to intellectual property

Bill Gates played one more highly significant role in contemporary South Africa that sums up his approach to philanthrocapitalism: denial of generic vaccines and treatment once the Covid-19 pandemic arose. The South African angle is again instructive, for two reasons. First, the country’s depleted public healthcare system – mainly due to private medical insurance and providers who use half the country’s resources on only the highest-income 14 percent of the population – was further hurt by austerity conditions, including a $260 million cut in the health budget in late February 2020 even though the pandemic was bearing down. That meant the system could not prevent extremely high levels of mortality, with an official 100,000 deaths over two years but “excess deaths” three times as high (i.e., among the world’s top dozen mortality rates) (Figure 1). As The Economist (2022) remarked, “Among developing countries that do produce regular mortality statistics, South Africa shows the grimmest picture, after recording three large spikes of fatalities.”

Although authorities never released breakdowns of class- and race-incidence, the limits of the healthcare marketplace were abundantly evident in what the World Bank (2022) acknowledged was by far the world’s most unequal country. Only in mid-2022 was a study done by public health scholars confirming black South Africans’ higher risk of Covid-19 mortality, higher hospitalization rates (and with more ventiliation and Intensive Care Unit treatment required), yet decreased rates of treatment for those needing tertiary care (Jassat et al, 2022). All manner of excellent technical supports for the wealthier citizens, including oxygen supply and cutting-edge Covid-19 treatment, were not available for the masses.

During apartheid, this was the country that pioneered heart transplants, for the benefit of white patients, so its scientific capacities in healthcare were not in doubt. But South Africa’s philanthrocapitalists would not tolerate or promote funded research or advocacy that might support the oft-demanded National Health Insurance (“single-payer” or “Medicare for All” in U.S. jargon). Moreover, as the crisis broke in March 2020, the leader of the third main political party made the demand that South Africa should follow the Spanish government’s lead in nationalizing – even temporarily – the private healthcare system, but the response from President Cyril Ramaphosa was laughter (Bhengu 2020).

Ironically, the second factor in Gates’ inability to learn from South Africa was when in October 2020 Ramaphosa joined leaders of India, Kenya, Eswatini and ultimately more than 100 countries. Together they demanded from the World Trade Organization at its Doha leadership summit what had in 2001 been granted in relation to AIDS medicines – over Gates’ objections, as noted above: a waiver on Intellectual Property (IP) for Covid-19 vaccines and treatment. Once free generic (not extremely expensive branded) AIDS medicines became available through the public health system, South Africa’s life expectancy rose from below 54 in 2002 to above 65 even during Covid-19 (Macrotrends 2022) (Figure 2).

For Gates, there was a technicist objection to allowing generic Covid-19 medicines in April 2021: “The thing that’s holding things back, in this case, is not IP. It’s not like there’s some idle vaccine factory, with regulatory approval, that makes magically safe vaccines” (Lerner and Fang 2021). In reality, India did indeed have massive excess vaccine capacity, as its Serum Institute soon showed. But from a self-interested standpoint, the Gates Foundation had invested $300 million to develop a vaccine, including a $40 million stake in CureVac which “alone has delivered profits in tens of millions of dollars” according to India Today (2021), and moreover his “involvement in the partnership between the University Oxford and AstraZeneca prevented the vaccine from having an open distribution model.” The UK government, mindful of profits from medicine – for not only this pandemic but ones certain to arise in the future – joined European pharmaceutical powers from Germany, Switzerland and Norway to veto the idea of a waiver, risking regular accusations at the World Trade Organisation of “vaccine apartheid.”

 Conclusion

The increasing differentiation of the wealthy from the mass of poor and working people is, as all these examples illustrate, the ultimate way philanthrocapitalism’s failures threaten not only South Africa but the world. If a lesson is learned from South Africa’s exceptional recovery from the AIDS pandemic – i.e., to be living with HIV is now equivalent not to having a terminal illness but a manageable, long-term chronic condition – then what is needed is not a continual search for new, profitable silver-bullet fixes whose IP is privatized and reliant upon multinational corporations. Instead what is needed is the socialization of technology to save people and the planet from, quite literally, extinction.

The climate catastrophe is, obviously, a site for states and corporations to urgently surrender IP on solar and wind electricity generation, energy storage, electric vehicles and other decarbonization technologies, while avoiding “false solutions” (Lenferna 2015). These, like Gates’ many misfired silver bullets (including nuclear power), are merely distractions from what often boil down to market failures or “offset” gimmicks that represent his personal strategies to ease a guilty conscience, as he argues in How to Avoid a Climate Disaster (Gates 2021: 18, 2014). The founder of 350.org, Bill McKibben (2021), explained in a review, that Gates is “surprisingly behind the curve on the geeky parts, and he’s worse at interpreting the deeper and more critical aspects of the global warming dilemma.”

If Gates has taught the world anything with his tens of billions of foundation dollars, and if South Africans (at least those more sceptical than Mandela Foundation sponsors and Durban municipal managers) have anything to contribute to the critique of philanthrocapitalism, it will extend far beyond merely questioning the power, ideas and social engineering biases that Bill Gates personifies. What the view of philanthrocapitalism from South Africa shows, is that a genuine radical alternative is needed to inspire the world’s majority (and especially oppressed) populations, environmentalists and public health advocates, and scientists alike.

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Footnotes

[1There are tens of thousands of social media references to my critique of Gates – including as “ruthless and immoral” (a phrase I actually never used), especially as advanced by Robert F. Kennedy Jr in his anti-vaccination rhetoric. The concerns expressed in these pages about Gates have nothing to do with the anti-vax agenda, nor with other right-wing conspiracy theories regarding Gates’s global agenda. There is, it must be admitted, an uncomfortable overlap between some of the radical critics and the rightwing opponents of multinational corporate power and global malgovernance, but that simply makes the task of providing a coherent structural analysis of philanthrocapitalism – not a conspiracy theory – even more important.

[2Because of the rift, a dollar-billionaire Zimbabwean IT executive who was for several decades a Johannesburg resident, Strive Masiyiwa, was in early 2022 asked to join the exclusive Gates Foundation board, having served similarly for the Rockefeller Foundation since 2003.

[3As Gates put it, “When I get asked about my views on abortion, I say that, like everyone, I struggle with the issue, but I’ve decided not to engage on it publicly – and the Gates Foundation has decided not to fund abortion” (Chapman 2014).

[4This section was originally published in Pambazuka, 14 July 2016: https://www.pambazuka.org/global-south/bill-gates%E2%80%99-silver-bullet-misfiring-mandela-memorial-lecture
_

[5As an interesting aside, not only does Durban’s retired water director now offer sanitation consulting to Gates, so too is the top Gates Foundation policy official, Geoffrey Lamb, a South African. Once a hard-core Marxist (and son-in-law of ‘colonialism of a special type’ inventor Michael Harmel), Lamb’s early work included pathbreaking class analysis of the Tanzanian peasantry, and he was a PhD advisor when South African trade and industry minister Rob Davies (1979) wrote his Marxist thesis at Sussex University. After an ideological U-turn, Lamb was central to developing a ‘homegrown’ structural adjustment strategy working at the highest levels of the World Bank during the 1980s, and especially in its application inside the African National Congress during the early 1990s (Bond 2014).

[6Grau and Alcock (2019: 2-6) conceded,

The UDT faecal sludge contained more solid waste (detritus) and other inorganics such as rubble and sand than expected (up to 40 percent). Separating the organic content from the detritus was undertaken by hand, was labor intensive and substantially increased health and safety risks. The use of an unsophisticated air-conditioner and basic humidifier in the nursery were not sufficient to maintain a stable climate to achieve acceptable growth in the nursery. The low temperatures and humidity levels in the growout sheds in winter and at night (below 20 degrees Celsius and 60 percent humidity) without any climate control system prevented satisfactory growth of larvae and bioconversion of the substrate (sludge mix). The wet separation system was not effective as almost all of the residue and some larvae settled in the agitation bin and thus did not reach the screening system. The oil press which was designed to crush the larvae to make oil was not effective. The rotary kiln did operate for several months but ultimately failed due mainly to the moisture content of the residue being too high on entry to the kiln.

Patrick Bond

is professor at the University of Johannesburg Department of Sociology, and co-editor of BRICS and Resistance in Africa (published by Zed Books, 2019).

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