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Heroes of Progress, Pt. 50: Bill Gates

Blog Post | Computing

Heroes of Progress, Pt. 50: Bill Gates

Introducing the American software developer, businessman and philanthropist who co-founded Microsoft, Bill Gates.

Today marks the 50th, and final, installment in a series of articles by HumanProgress.org titled Heroes of Progress. Over the last two years, this bi-weekly column has provided a short introduction to heroes who have made an extraordinary contribution to the well-being of humanity. You can find the 49th part of this series here.

This week, our hero is Bill Gates – an American software developer, businessman, and philanthropist. Thanks to Microsoft, the company that Gates co-founded, personal computers went from being used almost exclusively by computer hobbyists, to being a staple in millions of homes and offices around the world. By helping to make computers available to the masses, Gates’ work dramatically changed the world we live in and made many once-complicated tasks much simpler. Moreover, global productivity increases enabled by his computers have likely added trillions to the world’s economy.

Gates has also created several charitable organizations, and alongside his wife, he created the Bill and Melinda Gates Foundation – the world’s largest philanthropic organization. Through providing education, vaccinations, investment in infrastructure, combatting diseases, and building improved sanitation facilities, Gates’ philanthropic endeavors have improved the lives of hundreds of millions of the world’s poorest people and helped to save tens of millions of lives.

William Henry Gates was born on October 28, 1955, in Seattle, Washington. His father was a well-known lawyer, and his mother served on the board of serval large companies. Gates grew up in a household he’d later describe as “well-off” and his two sisters have described him as a happy child. At a young age, Gates showed signs of competitiveness and intelligence. He excelled at playing the board games Risk and Monopoly, and he would often spend hours a day reading.

At 13 years old, Gates began studying at Lakeside School, an exclusive private school in Seattle. Gates performed exceptionally in nearly all his subjects but had a unique aptitude in math and science. He later noted that through the 8th grade, he enjoyed the fact he was able to do reasonably well in school without any effort.

Soon after Gates arrived at Lakeside, the school obtained a teletype terminal (an electromechanical teleprinter), and a local computer company offered Lakeside students some time on their computers. Gates quickly became fascinated with computer software. He spent much of his free time working at the teletype terminal and was even excused from other lessons to pursue this interest. During this time, Gates wrote his first-ever computer program – a game of tic-tac-toe.

Gates forged several friendships in the school’s computer room, notably with Paul Allen, Microsoft’s other co-founder, Ric Weiland, Microsoft’s first employee, and Kent Evans, Gates’ best friend and first business partner. One summer, Gates and his friends were banned from the local computer shop after they were caught exploiting bugs in the system to gain free computer time. After the ban, the four students formed the “Lakeside Programmers Club” to make money. The club volunteered to help the computer store fix the bugs in their software.

In 1971, Gates and Evans began to automate Lakeside’s class-scheduling system to make timetables for the students. Unfortunately, at the end of the school year, Evans died in a mountain climbing accident. Gates was deeply saddened by Evans’ passing and turned to Allen to help finish the project.

Although Allen was two years older than Gates, and despite the pair not always seeing eye-to-eye, the two teenagers quickly became friends and bonded over their passion for software. When Gates was 17, he and Allen formed their first business venture called “Traf-o-Data” – a computer program that helped monitor traffic patterns in Seattle. The pair made $20,000 for their work.

In 1973, Gates graduated from Lakeside with an extraordinarily high SAT score of 1590 out of 1600. In the Fall, he enrolled at Harvard University. Although Gates’ major was in pre-law, he spent most of his time at Harvard studying mathematics and graduate-level computer science.

In 1975, Gates read about the new Altair 8800 microcomputer kit in the magazine Popular Electronics. Gates and Allen decided to write to the company that created the Altair, Micro Instrumentation and Telemetry Systems (MITS), to gauge their interest in having someone build a software program that could run on the computer. To do that, Gates decided to call the President of MITS from his dorm phone.

Gates told the President that he had already created the software and attempted to sell MITS the program. In reality, neither Gates nor Allen had an Altair machine, and the pair hadn’t written a single line of code for the computer. The President at MITS asked for a demonstration, and Gates and Allen spent the next month working relentlessly in Harvard’s computer lab writing the code. “From that moment,” Gates later remembered, “I worked day and night on this little extra credit project that marked the end of my college education and the beginning of a remarkable journey with Microsoft.”

In spring 1975, Allen and Gates traveled to MITS’ offices in New Mexico to test run the code. Despite never having tested the code before, the demonstration was a success, and both Allen and Gates were hired by MITS. Gates never returned to study at Harvard.

While working at MITS, Gates and Allen also formed their own partnership, which they named “Micro-Soft” – a combination of the words “microcomputer” and “software.” The company focused on developing programming language software for a variety of different systems. By 1976, Gates and Allen left MITS, dropped the hyphen in their company’s name, registered the name “Microsoft,” and opened their first office in Albuquerque, New Mexico. In the same year, Gates and Allen also hired their old high school friend Ric Weiland as Microsoft’s first employee.

By 1979, Microsoft was grossing approximately $2.5 million a year. In 1980, Microsoft struck a deal with IBM to provide the basic operating system that would run on IBM’s new computers. Although the contract with IBM only earned Microsoft a small fee, the prestige of doing business with one of the world’s largest corporations helped transform Microsoft into one of the world’s leading software companies.

In 1981, Microsoft, formerly a partnership between Allen and Gates, was reorganized as a privately held corporation. Aged 23, Gates was made CEO and chairman of the board, and the offices moved to Bellevue, Washington. For the first five years of Microsoft’s existence, Gates personally reviewed and often rewrote every line of code the company created. By 1983, about 30 percent of the world’s computers ran on Microsoft software, and the company established subsidiaries in England, Japan, and France. In the same year, Allen left Microsoft.

In November 1985, Microsoft released the first retail version of Microsoft Windows. The program sold well, and in 1986, when Microsoft went public, Gates became the world’s youngest billionaire. Since then, Gates has continually been one of the world’s richest people.

In 1989, Gates released Microsoft Office, which included the early versions of applications such as Microsoft Word and Excel. In 1995, Microsoft released the operating system Windows 95. The software marked an enormous leap forward in terms of both graphics and, most importantly, the design of operating systems, and sold rapidly.

Thanks to the Windows operating system, computers were no longer too complicated for the everyday person to use. Internet Explorer was released a few weeks after Windows 95. For the first time, millions of people began to use the internet. After 1995, a personal computer revolution began. In the years that followed, the price of computers dropped, and computer ownership skyrocketed. To this day, Microsoft remains one of the largest corporations in the world.

In 2000, Gates stepped down as CEO of Microsoft. Since then, he has focused most of his efforts on the Bill and Melinda Gates Foundation – a philanthropic organization that he set up with his wife in 1994.

The Bill and Melinda Gates Foundation is involved in many different fields, including tackling poverty in Washington State, increasing access in the developing world to basic sanitation facilities, educating women, reducing HIV infections and extending the lives of those with that virus, tackling malaria, and working to completely eradicate polio. Since 1994, Bill and Melinda Gates have donated more than $50 billion to a variety of causes.

The Bill and Melinda Gates Foundation also created Gavi, The Vaccine Alliance, in 2000. Since then, Gavi has helped vaccinate more than 760 million children and has prevented more than 13 million deaths. All in all, the Bill and Melinda Gates Foundation has improved the lives of hundreds of millions of the world’s poorest people.

During a TED talk in 2015, Gates famously warned that the world was not prepared for the next pandemic. Over the last few years, Gates has spent millions on novel virus preparedness, and since the start of the COVID-19 pandemic, Gates has invested hundreds of millions of dollars in efforts to curb the outbreak. He has recently said that if necessary, he is prepared to invest billions of dollars into building factories for a vaccine.

Gates and his close friend Warren Buffet also created a campaign called The Giving Pledge, which encourages the extremely wealthy to donate the majority of their wealth to charitable causes. So far, 204 people have signed the campaign, pledging a total of $1.2 trillion to charity.

Today, Gates lives with his wife in Washington State. Throughout his life, Gates has received dozens of awards and honors. Time magazine named Gates as one of the most influential people of the 20th century. In 2005, he was given an honorary knighthood by the United Kingdom’s Queen Elizabeth II. In 2016, he and his wife Melinda were awarded the Presidential Medal of Freedom. Gates also holds many honorary doctorates from universities across the world – including from Harvard, from which he dropped out.

Thanks to Bill Gates, computers went from being used almost exclusively by hobbyists who spent hours learning the complex languages necessary to operate a PC, to a vital, easy-to-use product that is utilized by billions of people. And through his philanthropy, Gates has saved tens of millions of lives and helped to improve hundreds of millions more. For these reasons, Bill Gates is rightfully our 50th, and final, Hero of Progress.

Blog Post | Cost of Services

Vision Abundance Doubles on the LASIK Eye Surgery Market

The time price of LASIK eye surgery fell by over 50 percent since 1998.

Summary: Time price calculations show that LASIK surgery costs have fallen significantly since 1998. Advancements in LASIK technology, such as the transition to bladeless methods and personalized treatments, have enhanced both safety and efficacy. Dr. Gholam A. Peyman’s pivotal patent in 1988 laid the foundation for LASIK innovation, contributing to its increased affordability and accessibility, especially in countries like China and India.

According to Market Scope, the typical cost for LASIK surgery in 2023 was $4,492. This is up slightly from the 1998 price of $4,360. Let’s calculate and compare the time prices to see the true price difference. Unskilled hourly compensation in 1998 was around $7.75, indicating a time price of 562.6 hours. Unskilled hourly compensation is closer to $16.15 today, indicating a time price of 272.1 hours. The time price has fallen 51.6 percent. You get 2.07 eyes corrected today for the time it took to earn the money to correct one in 1998. LASIK has become 107 percent more abundant.

LASIK is the acronym for laser-assisted in situ keratomileusis. Keratomileusis is the medical term for corneal reshaping. Clearsight.com reports:

LASIK technology has significantly advanced since its inception. The initial blade-based approach has been replaced by the bladeless method, using femtosecond lasers for increased precision. Wavefront and topography-guided technology now allow for personalized treatment, while sophisticated eye-tracking systems enhance the surgery’s accuracy and safety. The remarkable advancements have not only improved visual acuity but also enhanced the overall quality of visual perception, offering patients the ability to see the world around them more clearly and vividly.

While thousands of ophthalmologists and researchers from all over the world have been involved in advancing the technology, Iranian-born immigrant to the United States Dr. Gholam A. Peyman was awarded the key patent in 1988. He holds over 200 US patents, including for novel medical devices, intraocular drug delivery, surgical techniques, and new methods of diagnosis and treatment. In 2011, President Barack Obama awarded Peyman the National Medal of Innovation and Technology.

Continuous innovation in LASIK technology is making vision correction safer, faster, more precise, and more affordable. If you want to save some money and take a bit more risk, the procedure is around $1,600 in China and under $1,000 in India. China performs the most vision correction procedures on the planet.

Remember, the learning curve ordains that with every doubling of production, costs per unit fall between 20 percent and 30 percent. This is because we discover valuable new knowledge every time we perform the procedure.

As noted, since 1998, LASIK has become 107 percent more abundant in the United States, in contrast to hospital services, which have become 37.7 percent less abundant. Why the huge difference? LASIK has been relatively free to innovate. Perhaps more important, health insurance does not pay for this procedure, and LASIK is globally competitive. We also note that elective procedures have enjoyed much greater abundance growth than insurance-covered surgeries.

When entrepreneurs are free to innovate and compete, prices fall and quality increases. The opposite happens when governments and bureaucrats step in to protect the status quo. Imagine where we would be today if the manufacturers of eyeglasses had prevented the innovation of contact lenses? Or the contact lens industry had prevented LASIK?

This article was published at Gale Winds on 2/28/2024.

Blog Post | Adoption of Technology

Bitcoin Brought Electricity to Countries in the Global South

It won’t be the United Nations or rich philanthropists that electrifies Africa.

Summary: Energy is indispensable for societal progress and well-being, yet many regions, particularly in the Global South, lack reliable electricity access. Traditional approaches to electrification, often reliant on charity or government aid, have struggled to address these issues effectively. However, a unique solution is emerging through bitcoin mining, where miners leverage excess energy to power their operations. This approach bypasses traditional barriers to energy access, offering a decentralized and financially sustainable solution.

Energy is life. For the world and its inhabitants to live better lives—freer, richer, safer, nicer, and more comfortable lives—the world needs more energy, not less. There are no rich, low-energy countries and no poor, high-energy countries.

“Energy is the only universal currency; it is necessary for getting anything done,” in Canadian-Czech energy theorist Vaclav Smil’s iconic words.

In an October 2023 report for the Alliance for Responsible Citizenship on how to bring electricity to the world’s poorest 800 million people, Robert Bryce, author of A Question of Power: Electricity and the Wealth of Nations, sums it as follows:

Electricity matters because it is the ultimate poverty killer. No matter where you look, as electricity use has increased, so has economic growth. Having electricity does not guarantee wealth. But its absence almost always means poverty. Indeed, electricity and economic growth go hand in hand.

To supply electricity on demand to many of those people, especially in the Global South, grids need to be built in the first place and then have enough extra capacity to ramp up production when needed. That requires overbuilding, which is expensive and wasteful, and the many consumers of the Global South are poor.

Adding to the trouble are the abysmal formal institutions of property rights and rule of law in many African countries, and the layout of the land becomes familiar: corruption and fickle property rights make foreign, long-term investments basically impossible; poor populations mean that local purchasing power is low and usually not worth the investment risk.

What’s left are slow-moving charity and bureaucratic government development aid, both of which suffer from terrible incentives, lack of ownership, and running into their own sort of self-serving corruption.

In “Stranded,” a long-read for Bitcoin Magazine, Human Rights Foundation’s Alex Gladstein accounted for his journey into the mushrooming electricity grids of sub-Saharan Africa: “Africa remains largely unable to harness these natural resources for its economic growth. A river might run through it, but human development in the region has been painfully reliant on charity or expensive foreign borrowing.”

Stable supply of electricity requires overbuilding; overbuilding requires stable property rights and rich enough consumers over which to spread out the costs and financially recoup the investment over time. Such conditions are rare. Thus, the electricity-generating capacity won’t be built in the first place, and most of Africa becomes dark when the sun sets.

Gladstein reports that a small hydro plant in the foothills of Mount Mulanje in Malawi, even though it was built and financed by the Scottish government, still supplies exorbitantly expensive electricity—around 90 cents per kilowatt hour—with most of its electricity-generating capacity going to waste.

What if there were an electricity user, a consumer-of-last-resort, that could scoop up any excess electricity and disengage at a moment’s notice if the population needed that power for lights and heating and cooking? A consumer that could co-locate with the power plants and thus avoid having to build out miles of transmission lines.

With that kind of support consumer—guaranteeing revenue by swallowing any excess generation, even before any local homes have been connected—the financial viability of the power plants could make the construction actually happen. It pays for itself right off the bat, regardless of transmissions or the disposable income of nearby consumers.

If so, we could bootstrap an electricity grid in the poorest areas of the world where neither capitalism nor central planning, neither charity worker nor industrialist, has managed to go. That consumer of last resort could accelerate electrification of the world’s poorest and monetize their energy resilience. That’s what Gladstein went to Africa to investigate the bourgeoning industry of bitcoin miners electrifying the continent.

Bitcoin Saves the World: Energy-Poverty Edition

Africa is used to large enterprises digging for minerals. The bitcoin miners springing forth all over the continent are different. They don’t need to move massive amounts of land and soil and don’t pollute nearby rivers. They operate by running machines that guess large numbers, which is the cryptographic method that secures bitcoin and confirms its transaction blocks. All they need to operate is electricity and an internet connection.

By co-locating and building with electricity generation, bitcoin miners remove some major obstacles to bringing power to the world’s poorest billion. In the rural area of Malawi that Gladstein visited, there was nowhere to offload the expensive hydro power and no financing to connect more households or build transmission lines to faraway urban areas: “The excess electricity couldn’t be sold, so the power stations built machines that existed solely to suck up the unused power.”

Bitcoin miners are in a globally competitive race to unlock patches of unused energy everywhere, so in came Gridless, an off-grid bitcoin miner with facilities in Kenya and Malawi. Any excess power generation in these regions is now comfortably eaten up by the company’s onsite mining machines—the utility company receiving its profit share straight in a bitcoin wallet of its own control, no banks or governments blocking or delaying international payments, and no surprise government currency devaluations undercutting its purchasing power.

No aid, no government, no charity; just profit-seeking bitcoiners trying to soak up underused energy. Gladstein observes:

One night during my visit to Bondo, Carl asked me to pause as the sunset was fading, to look at the hills around us: the lights were all turning on, all across the foothills of Mt. Mulanje. It was a powerful sight to see, and staggering to think that Bitcoin is helping to make it happen as it converts wasted energy into human progress. . . .

Bitcoin is often framed by critics as a waste of energy. But in Bondo, like in so many other places around the world, it becomes blazingly clear that if you aren’t mining Bitcoin, you are wasting energy. What was once a pitfall is now an opportunity.

For decades, our central-planning mindset had us “help” the Global South by directing resources there—building things we thought Africans needed, sending money to (mostly) corrupt leaders in the hopes that schools be built or economic growth be kick-started. We squandered billions in goodhearted nongovernmental organization projects.

Even for an astute and serious energy commentator as Bryce, not once in his 40-page report on how to electrify the Global South did it occur to him that bitcoin miners—the very people who are turning the lights on for the poorest in the world—could play a crucial role in achieving that.

It’s so counterintuitive and yet, once you see it, so obvious. In the end, says Gladstein, it won’t be the United Nations or rich philanthropists that electrifies Africa “but an open-source software network, with no known inventor, and controlled by no company or government.”

Blog Post | Cost of Services

What Cosmetic Surgery Innovation Can Teach Us About Healthcare Costs

The average time price of 19 procedures has fallen by 50 percent since 1998.

Summary: Hospital services costs have surged, raising questions about the effectiveness of regulation and government intervention in the healthcare industry. To investigate the potential impact of free markets on cost trends, we examined the time prices of common cosmetic surgery procedures, which are elective and typically not covered by insurance. Our analysis reveals a significant decline in the relative time prices of these procedures, indicating increased abundance driven by innovation and market competition.

The Bureau of Labor Statistics reports that since 1998, hospital services costs have increased 61 percent faster than average wages and far outpaced consumer price index inflation. This industry is highly regulated, and government restricts supply and subsidizes demand.

Would free markets help to reverse these cost trends? To answer this question, we looked at the time prices of 19 common cosmetic surgery procedures. These procedures are elective, and insurance companies typically don’t provide reimbursements. Cosmetic surgeons also have been relatively free to innovate, and cosmetic surgery centers are globally competitive.

The American Society of Plastic Surgeons annually publishes prices for a variety of procedures. We compared the nominal prices from 1998 to 2022 against the average hourly wage rates of unskilled and blue-collar workers. This gave us relative time prices over time.

The average time price fell by 50.3 percent over this 24-year period. For the time it took to earn the money to pay for one procedure in 1998, you could get over two procedures today. Procedure abundance has increased by over 100 percent. The time price of chemical peels and laser hair removal fell the fastest by 87.7 percent and 80.1 percent, respectively. However, two procedure costs increased: upper arm lifts increased by 6.7 percent and facelifts by 1.6 percent.

Bar chart displaying Nominal hourly wage rates from 1998 to 2022

The above analysis compares categories of wage earners over time, but what about individuals? We typically start as unskilled workers and then advance as we acquire more productive skills, knowledge, and experience. Categories remain constant while individuals are upwardly mobile. If we look at an unskilled worker who “upskilled” to a blue-collar worker, cosmetic surgery procedures have become dramatically more abundant.

From 1998 to 2022, nominal unskilled hourly wages increased by 102.8 percent, while blue-collar hourly compensation increased by 91.2 percent. The average between these two categories is 94.7 percent. If you started out in 1998 as an unskilled worker and moved up to a blue-collar worker, your nominal hourly compensation increased by 348.5 percent.

Comparing an upskilling worker’s hourly compensation to the prices of cosmetic procedures indicates that the average time price fell by 78.4 percent. These workers could get 4.63 procedures in 2022 for the time price of one in 1998. Personal cosmetic surgery abundance increased by 363.5 percent for upskilling workers, growing at a 6.6 percent compound annual rate, doubling every 11 years or so.

This article was published at Gale Winds on 2/21/2024.

Blog Post | Cost of Technology

Macintosh Computer Prices at the Age of 40

Get over six new iMacs for the time price of one Macintosh in 1984.

Image displays a Macintosh computer from 1984 and several iMac's from 2024

Steve Jobs introduced the Macintosh personal computer in 1984 at a retail price of $2,495. At the time, unskilled workers were earning around $5.00 per hour, putting the time price at 498 hours. Today, a new iMac can be bought for $1,299, and unskilled workers earn closer to $16.51 per hour, indicating a time price of 78.7 hours. The time price has decreased by 84.2 percent. A new iMac costs almost 420 hours less than a 1984 Mac. For the time it took to buy the new Mac in 1984, you can buy 6.33 iMacs today. Macintosh computer abundance has increased by 533 percent. This suggests a 4.85 percent compound annual rate, doubling in abundance every 14.4 years.

The 2024 iMac and the 1984 Mac are as different as a Ferrari and a bicycle in terms of speed and features. Ignoring the collector value, how many 1984 Macs would someone have to give you for a 2024 iMac? Most people would not trade at all. This would suggest the new iMac is infinitely better than the 1984 Mac.

Ridley Scott did the first Macintosh ad for the 1984 Super Bowl.

People like Steve Jobs have transformed our world with their creativity, vision, and entrepreneurship. We honor his life and work to lift humanity. Here is Jobs doing his first demo:

Here is another memorable ad that reflected his vision for creative work:

How many Steve Jobs were born today?

This article was published at Gale Winds on 1/26/2024.