Bill Gates Calls for "Revision of Capitalism"

http://online.wsj.com/article/SB120113473219511791.html?mod=djemalertTECH

by tx • 19 years ago

20 47 19 years ago

online.wsj.com

cratuki• 19 years ago

I suspect Gates doesn't really understand what capitalism is. All of his fortune has been built on the back of legislative protection. And - specific to charity - I have several times noticed Microsoft gaining positive media for the 'charity' of giving away free software that costs it nothing to give, and which only has value in that form due to an arbitrary ruling from the relevant government.

Here are some good starting points for helping the world's poor:

1) End the practice of propping up corrupt foreign governments with aid

2) Stop subsidising first world farmers and thereby killing the markets for the second and third world (including flow-on effects coming from ludicrous things like ethanol subsidy)

3) Governments cease support for rent-seeking measures like copyright and patents.

4) Abolish government-enforced wage floors which subsidise the low income earners at the expense of the genuinely poor by preventing business from finding employment for them.

5) Don't make environmental policy until recorded facts genuinely point to a need for it.

Everywhere around us the invisible hand of the state is interfering in our lives through pork-barrelling schemes that benefit those close to power at the expense of the rest. The big lie is in the claim that we have now is capitalism. Even in the United States, what we first world countries have now is better referred to as 'mixed economies'. They have elements of capitalism but are some distance from actual capitalism.

davidw8• 19 years ago

Some good points, although I would take a more nuanced view in some cases. For instance (and trying to keep this somewhat related to hacker news, lest it degrade into a political debate):

Intellectual property was and is a compromise designed to foster the private provisioning of what are essentially "public goods" (http://en.wikipedia.org/wiki/Public_good). It's easy to argue that the compromise has tilted too far in favor of producers, but abolishing those protections instead of limiting them might be a step too far in the other direction.

curi3• 19 years ago

How is intellectual property a public good issue? It's easy to, for example, sell a book to a single person, with a contract written to protect the author (from distribution of copies, or whatever).

A public good issue is, say, when you build a dam that helps an entire flood valley, and people living there can get the benefit of your work without paying you, by refusing to agree to any contract with you. I don't see that an author faces that kind of issue.

Enforcing a contract is another matter, and has become very hard for some types of intellectual property, but that is different than a public good problem, in which no one is breaking the law.

budu33• 19 years ago

I agree with some of your points. The most important problems to be tackled are corruption and political stability.

Prrometheus2• 19 years ago

Kudlow had a response to this:

http://corner.nationalreview.com/post/?q=YWI5ZDVjODBkZDI2YWM...

Excerpt:

It appears Gates is ignoring the global spread of free-market capitalism that has successfully lifted hundreds of millions of people up from poverty and into the middle class over the last decade or so. Think China. Think India. Think Eastern Europe (and maybe even France under Sarkozy). Gates wants business leaders to dedicate more time to fighting poverty. But the reality is that economic freedom is the best path to prosperity. Period.

The Heritage/WSJ 2008 Index of Economic Freedom clearly shows that free-market countries are prospering mightily. Per capita GDP is closely related to, and positively correlated with, market economies. The fact is that free-market economics is spreading like wildfire. State socialism is on the decline. Unsurprisingly, the study also shows that the least-free economies are mired in poverty. We're talking North Korea, Cuba, Zimbabwe, Iran, and others.

tx• 19 years ago

This does not make any sense: Mr. Kudlov, who wrote this article for NRO is replying to non-existing arguments. Gates did not favor non-free economies, therefore there is absolutely NO REASON to mention Cuba and North Korea. Moreover, Gates did not argue benefits of free markets, why bring in China, India and Eastern Europe? Gates merely says "capitalism is great let's see if we can make it work better for the poor". Gates isn't even hinting that it should be done at someone's expense. Basically Kidlov did not even care to read the original article.

Thus, after removing these obviously misplaced sentences and paragraphs, NRO's article basically turns into a lonely link to WSJ without any corresponding commentary.

mdemare• 19 years ago

I completely agree with point 1 and 2, completely disagree with point 3, 4 and 5.

3 will lead to cheaper medicines in the short run, but much less research in the long run, which is bad for everybody.

4 is mostly a problem for western european countries with high unemployment like France and Germany. It's irrelevant to the world's poor, who don't work in the legal economy anyway.

Environmental policy is not especially harmful to the poor, and whether or not recorded facts genuinely point to a need for it will always be extremely contentious.

I'd add: better legal protection of property in poor countries, and less bureaucracy. A must-read in this area is "The Mystery of Capitalism: Why It Succeeds In The West And Fails Everywhere Else." Major eye-opener!

http://www.amazon.com/Mystery-Capital-Capitalism-Triumphs-Ev...

run4yourlives2• 19 years ago

My feelings exactly, except I have little sympathy for the pharmaceutical drug cartels. There are a lot of other examples though.

curi3• 19 years ago

How do you figure that all of Gates' fortune was built on the back of legislative protection? Microsoft got in legal trouble for bundling IE with windows, for example. Which was the Government working to hurt MS in favor of its competitors.

davidw8• 19 years ago

Correct - MS' fortune came from the network effects of their system, but they had to be successful in the first place for those to work in their favor.

This book has some good history of "the early years", when it wasn't clear that MS would be the winner that took all:

http://www.squeezedbooks.com/book/show/10/in-search-of-stupi...

cturner• 19 years ago

mynameishere2• 19 years ago

Bill Gates should stop looking at the failings of capitalism in Africa and start looking at its successes in China. And then he needs to ask the 60 billion dollar question: What is the difference between Africa and China?

budu33• 19 years ago

I don't think the millions of Chinese peasant farmers will agree that capitalism is a success in China.

mynameishere2• 19 years ago

As they are replaced by machines I suppose they wouldn't, no. As they move to industrial or commercial areas they probably will.

davidw8• 19 years ago

It beats the (somewhat) recently attempted (under Mao) alternative, despite its obvious imperfections.

apotheon6• 19 years ago

Success takes time. Capitalism is spreading in China -- but it isn't everywhere yet, by a long shot.

cglee• 19 years ago

Chinese is a relatively stable country governed by one Communist party, while Africa is a vast continent with dictatorships, instability, pockets of wealth, religious wars, famine, etc...? Is that the answer?

budu33• 19 years ago

If we can develop complex finacial instruments that manage to package up mortgage debts and sell them off then we can find a way to make capitalism work for the poor.

anaphoric2• 19 years ago

Actually micro-credit works. The one supplying the capital needs to be fair about the rate they get in return though.

apotheon6• 19 years ago

Ooh, magic! Capitalism already works for the poor!

Notice that in the more-capitalistic nations, the "poor" are richer than the "middle class" in less-capitalistic nations, in general.

gregwebs• 19 years ago

He could start by not sabotaging the One Laptop Per Child project.

lvecsey• 19 years ago

If MSFT as a company reaches a survival point where they have to release free software, it would be a nice touch for the code to be readable, well-written and nearly bug free.

run4yourlives2• 19 years ago

Heh, one thing at a time dude.

johnrob• 19 years ago

One big problem with charity is that nobody cares until they are mega rich. The middle and lower classes don't have resources and don't feel the same moral obligations.

If the model is get rich then help people, then there's never going to be very many people doing it. The real heroes are the people who give to charity BEFORE they are wealthy. That model could change the world.

anaphoric2• 19 years ago

Oh so right you are!

Bill Gates Calls for "Revision of Capitalism"

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