Face-off: Is Gates right on creative capitalism?
Practicing what he preaches: Bill Gates joins U2 front man Bono and PC maven Michael Dell in Davos to pitch Vista-based PCs from Dell's namesake company. For every one of the computers purchased, Dell and Microsoft will make a contribution to The Global Fund to help in the fight against AIDS in Africa.
(Credit: Microsoft)At the World Economic Forum in Davos, Switzerland, on Thursday, Microsoft co-founder Bill Gates told the corporate and governmental bigwigs in attendance that businesses should adopt a form of "creative capitalism" in which they seek to alleviate the problems in developing nations.
The notion is essentially this: coming up with drugs or water purification techniques for those nations may not be as profitable as catering to well-heeled retirees in Florida, but rewards will come nonetheless, in the form of recognition and, ultimately, a profit.
"Sometimes market forces fail to make an impact in developing countries not because there's no demand, or even because money is lacking, but because we don't spend enough time studying the needs and requirements of that market," Gates said.
Bah, says CNET News.com's chief political correspondent, Declan McCullagh. Encouraging companies to give to charities, enter smaller markets, or assign top employees to tackle intractable problems in far-flung regions--where those companies may not even have business--conflicts with the duties owed to shareholders. Besides, the shareholders can donate to charities on their own that they might prefer.
See "Gates misses the point on 'creative capitalism'."
Editor at Large Michael Kanellos, meanwhile, says corporations have broader powers. If participating in projects in Africa can help recruit or retain employees, or even open up new markets, it's a good idea.
See "On 'creative capitalism,' Gates gets it."
What do you think?
positive effect of capitalism. This system is the single most
effective means of poverty fighting in the world. Liberalization
and economic freedom is the key to developing countries
increasing their standard of living.
The Red program isn't bad, but it's no more effective than the
Bill & Melinda Gates foundation making a donation, and mostly a
PR blitz for Microsoft. Capitalism is, at its core, creative.
A GMU Economist has a good blog post on the matter here: http://cafehayek.typepad.com/hayek/2008/01/bill-gates-
was.html.
Besides, what positive is there in Gates stealing and ruining an entire industry for 20+ years?
His charity has always been motivated by PR, not a true desire to help.
The extraction process often requires that labor be given something in return, but as anyone with the mind of a five year old knows, a lot less than capitalist. The strangest thing about labor is that if given an office in an expensive high rise building, or even a cubicle to work in, labor willingly adopts the delusion it has some ownership rights of some sort in the capitalist enterprise by reason of its participation.
Please support water for Darfur, and irrigation means for Iraqi farmers. Arturo Jabra'il Sancho, heart and mind, long on WorldWater & Solar Technologies Corp. (trading symbol WWAT).
http://blogs.wsj.com/informedreader/2008/01/02/doing-well-and-doing-good-are-only-weakly-linked/
January 2, 2008, 6:30 pm
Doing Well and Doing Good Are Only Weakly Linked
Companies that want to perform good works shouldn?t pretend they are doing so to boost the bottom line, say two business professors in the Harvard Business Review.
Recently, many researchers and writers have attempted to connect social responsibility with profitability. But an analysis of 167 studies from the past 35 years finds only a weak correlation between good business and benevolence, say Joshua Margolis, a Harvard Business School professor, and Hillary Anger Elfenbein, a business professor at the University of California, Berkeley.
donationThe weakness of the correlation suggests that financial success leads to charity rather than the other way around, the authors say. Cash contributions to charities have a stronger link to corporate success than, say, socially responsible corporate policies or community projects. The link could also come from companies? desire to appease activists and regulators by giving to social causes, without giving an amount that displeases analysts and investors.
On the other hand, the study showed that dedicating corporate resources to societal needs rarely hurts shareholders. It is possible to do good and do well. But ?framing a societal benefit in terms of shareholder interest may be misguided,? say the authors. ?Doing good may be its own reward.? ? Robin Moroney
If Gates feels capitalists should do something about the little man, he should have an outside body determine how much monopolistic profits Microsoft has made over the last 27 years and rebate it to his customers or perhaps put it into a philanthropic fund targeting infrastructure improvements in the third world.
Does anyone else see this as totally self-serving: Gates wants other companies to invest in Africa to lift their economies up. If Africa moves from the fourth world into the third world, it will drive a lot of IT investment, and Gates will benefit.
As the article in the Wall street Journal about Gate's speech in Davos highlighted, the Nobel Prize winner in India believes, and proves, that even small amounts invested in local, starter businesses magnify themselves in the economic benefits they provide. Mr. Gates might consider the point of view that mini startup business loans offer the optimum starting point for "creative capitalism."
Also important are projects that underlie the aiding of transitions from hunter/gatherer/ subsistence economies to agricultural economy, to industrial society, to technological society.
As in the U.S., these transitions definitively mark eras in capitalism that led, and now lead the world in providing attainable goals to model behavior in developing countries.
Mr. Gates, although well-motivated by truly altruistic concerns regarding disease and other health problems, can surely realize that achieving higher standards of living will provide attendant health benefits as a consequence.
But the lack of population control goals and systems causes much of the poverty and disease in fourth and third word, and developing countries, and fosters the kind of extremism that represses, rather than aids, developing peoples.
Creative capitalism that addresses the population problems, along with corruption-free infrastructure development pointed towards aiding a wide spread series of mini-development loans and startups would go a long way towards achieving the goals of Creative Capitalism.
Nation building through creative capitalism is possible, but dealing with cultural practices of thousands of years of tradition offers truly formidable hurdles to be thoughtfully, and creatively, dealt with.
NGO's the world over have found that local practices sometimes prevent the realization of opportunities. That even those who would benefit cannot overcome their self-destructive tendencies.
That is a structural problem that creative capitalism will find difficult to overcome.
Authoritarian, even dictatorial and extreme religious governments and societies resist most(any) attempts to provide assistance that offers positive results for the people, but carries with it the concurrent possibility that higher standards of living provides the seeds of demand for greater economic and democratic freedoms, potentially leading the people to question the systems that repress them.
Good wishes for good intent to Mr. Gates, and hopes that even small successes will lead to more
It adds up!
money it is, is to make sure it goes to projects that make a
difference and perhaps have results that have a lasting effect.
Something the business of charity has not paid sufficient
attention to.
To my mind, his intent here is to change peoples minds about
blindly giving without expecting results.
The term "creative capitalism" is in truth simple charity with
more thought put into it. Think of the possibilities if wasted
blindly-given charity money was put to more effective use.
"Capitalism" itself is the most efficient means of commerce. It
allows for creativity within itself. But "Creative Capitalism"
implies a collected movement, a required collectivism in effort
and thought that usurps the potential new ideas of millions
who might come up with ideas of their own that could make a
difference.
Of course, Mr. Gates has made billions convincing others his
way is the only way to go. And it must be said people followed
and freely paid for his, for the most part, worthwhile products.
I would hate to see choices reduced in the area of charity or
required participation through quasi-governmental efforts.
People should expect results from the money and effort they
give - just like private corporations expecting results from their
employees. These corporations expire if the their effectiveness
is not sufficient. Not so with most charities.
Just keep it voluntary.
Doesn't that seem terribly naive? Isn't that what local governments are for, to look for a match between their needs and solutions or services from firms (1st world or otherwise) that can help them? And besides that, seeking investment into their core businesses (and their tax base) to help finance any contracts with said firms? How can anybody from the outside make that determination? Gates has too much hubris.
[Even McCullagh is off the mark in the referenced CNET article where he says, "If anything, the individual shareholders who participate and research nonprofit groups and churches (and know firsthand which are most deserving) are in a better position. Not all decisions benefit from centralization; there is wisdom in distributed decision-making." He needs to take this further: the best decision makers are the local decision makers, i.e. those who are in-country.]
http://www.p-ced.com/Projects/Ukraine/AMarshallPlanforUkraine/tabid/69/Default.aspx
12 years go, the model, for a people-centered paradigm:
http://www.p-ced.com/History/tabid/57/Default.aspx
The issue in national and world economics is why very few people ---less than one percent of the population of their native nation and not more than that, collectively, with respect to the population of the world --- should usurp the wealth of their nations and the world, and should hold the rest of the populations of their nations and the world to ransom; that criminality made possible by the very enormous and overwhelming deterministic authority, power, freedom and influence that their economics and wealth give to them, propped by the godless principles of deregulation, liberalisation, efficiency and market forces.
"Creative capitalism", as an argument intended to excuse private capitalists from blame or serve the AS IF purpose with respect to the criminality of usurping the wealth of the nations of the world, and imposing unbearable and dehunanising poverty, hardship, hunger, diseases and deaths on the people, is equivalent to "Social Darwinism" and "substantial equivalence".
throwing money at the African economies has done nothing and plenty of money has been thrown at African nations only to see be sent off to secret accounts in Switzerland
There is no reason why you cannot make a good profit doing good. It seems odd that some people think so.
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For some people merely making money is easy but they do not do it because they require a psychic reward that is not present.
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The key word is creative. Are you creative enough to understand?
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Also it helps to have the throweight of a few dozen billion to prime the pump. Much easier to sell and finance an initiative that way.
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- by seek2know January 17, 2009 12:00 PM PST
- Wonder whether Gates donates to Kiva and Heifer...my favorite charities. And what he thinks about 'Creative Currency?
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