Bill Gates Offers Constructive Ideas For Capitalism

01/24/2008

Paul Munnis


Bill Gates, the Billionaire that founded Microsoft, had a few words today in Davos, Switzerland, about a key complaint of Capitalism: “it makes life even more miserable for the poor as the gap increases between rich and poor. Capitalism does not serve everyone well.” He notes that the cost of entering into the middle class is getting higher every year that passes.

Mr. Gates offered constructive suggestions to make things better. He suggests that corporations take a portion of their creative talent and use it to figure out ways to help the poor overcome many of their problems and do it as a part of their strategic planning.

It sounds simple but indeed it requires a good degree of creative thinking on how to succeed at improving life for the poor and a major commitment to then make it happen.

Mr. Gates has coined a term for this endeavor and he calls it: “Creative Capitalism.”

Examples of Creative Capitalism might be drug companies giving malaria or AIDS drugs and medicines to the poor of Africa and taking it off their taxes as a charitable contribution and using it to increase the goodwill of their company. In this manner both stockholders and the poor benefit. Thus the approach need not be total philanthropy and give-away, it could be arrayed as a profit generator for a business too. In fact the more profit motive associated with it the better that it is for all parties.

Mr. Gates has a net worth estimated at $59Billion and he has formed the Bill and Melinda Gates Foundation and they have endowed it with $33 Billion. His foundation works as a philanthropic organization to address world problems.

Bill Clinton who runs his own foundation to address world problems points out that Mr. Gates’ idea is not so crazy. If a profit motive can be applied to poverty in Africa then poverty could be erased within two decades on that continent. He cites the case of a company that provided a small African village with fishing boats -- the people go out and fish, bring their catch back, they sell it, and they are now prospering. He says that the challenge is to replicate this many times over.

People who study the problem of improving the life of the poor cite corrupt government politicians as a major impediment to making progress.