Help Me Write a Book

Bill Gates retires as a full-time employee of Microsoft, the company he founded, this week -- ending the most successful capitalist career of all time. He is going to devote the rest of his active years to philanthropy. He is already the world's biggest philanthropist. And even before he begins this new chapter, he is arguably the most successful in terms of the impact the Bill and Melinda Gates Foundation has had. (Bias alert: As editor of Slate, I was a Microsoft employee for seven years. My wife, Patty Stonesifer, is CEO of the Bill and Melinda Gates Foundation, although she is leaving that post in September. I have good reason to be grateful to Bill Gates.)

Despite his move from capitalism to philanthropy, Gates believes that some of the world's problems -- especially the problems of the world's poorest countries -- are too big to be solved by philanthropy. Only capitalism can address them successfully. But -- as he argued in a speech at Davos in January -- capitalism is much better at serving the needs of the the prosperous than the needs of the poor. He goes on to argue that capitalism needs to be, and can be, reformed to solve this problem. He called this new system "creative capitalism."

The notion that capitalism, which is all about self-interest, can be amended somehow to be more about helping others -- and still be capitalist -- struck many (me included, at least at first) as hopelessly Pollyannaish and a little bizarre. Not only is Bill Gates the most successful capitalist of all time, but amending capitalism to serve the poor has not until recently been on his agenda. Gates' approach has been to take capitalism for all that it is worth, squeeze every penny out of it, and then take the money and give it all away. This is a much more traditional strategy, employed by the Rockefellers, Henry Ford, Andrew Carnegie and other giants of industry who became giants of philanthropy.

It's hard to remember how quickly Gates' reputation as a philanthropist -- and the reality behind it -- have blossomed. A couple of years after Slate started publication in 1996, we instituted a feature called the Slate 60. Now an established and respected circulation-boosting gimmick, the Slate 60 is an annual list that ranks people on the basis of how much they give away. It derives from an idea of Ted Turner's, who told Maureen Dowd, who wrote a column about it. Turner said that very rich people weren't giving away as much money as they might otherwise because they were afraid of falling off or moving down the Forbes 400. A replacement list based on giving money away was supposed to solve that problem.

The first year of the list, Bill Gates was number ten. He was asked constantly about why he wasn't giving more of it away, and he always insisted that he would do this as soon as he had the time to do it as intelligently as he tried to "do" software. The next year he came in first, and he has remained there or close most years since.

So why isn't his approach -- make the money, then give it away; "to every thing there is a season," and so on -- the right approach? That is one question raised by creative capitalism. There are others. Wouldn't the small-d democratic approach be: make the money and then tax part of it away? When corporations start giving money away or devoting it to good works, aren't they cheating their shareholders? (That was Milton Friedman's position, you won't be surprised to hear.)

To explore these questions, I'm producing a book. And "producing" is the right word. This is a literary experiment as well. The book will be derived from a private website and a public blog in which economists and others debate whether "creative capitalism" is meaningless, dangerous, useless, maybe useful, very useful, or brilliant. Anyone interested is welcome to join in at creativecapitalismblog.com. As the project progresses other contributions to the book will be published on this site and perhaps elsewhere -- all in the spirit of web collaboration. The book will be out by the end of the year.

And in the spirit of capitalism, contributors will be paid. The amount you get will be a proportion of the advance based on the number of your words that end up in the final product (as edited by me). We hope that this will create the right balance of incentives between writing long and writing deep. No guarantees, but we expect the payout to end up around a dollar or two per word. And if you're thinking that's not much, coming from Bill Gates -- Gates has nothing officially to do with this project. Nor does the Gates Foundation (unless you count glancing at printouts left by accident on the kitchen counter as "official"). The money comes from the bounty of Messrs Simon and Schuster.

Comments

[Jason357]

Gates is anti-competitive and capitalism is supposed to be limitless competition. Gates used licensing gimmicks and outright stole ideas for other companies to get where he is.

What we have in the US is neither capitalistic or free market. It's some sort of oligarchy based on an insane quest to own everything in the world, or at least most of it, and use that power to force the elitist will upon the world.

[Hattie]

To me every single last thing about Bill Gates is boring.

[LeoMarvin]

Saving millions of lives is boring?

[SisterAnn]

Capitalism has ran amuck. There has been this transfer of money from the middle class to the rich as everyone knows.

Those who have benefited, say, "Who could have predicted.­...?" Well, they could have predicted it. Many of them remember what happened before and they replayed the scenario.

Concern about poverty depends on a lot of things. Even the definition of poor is important. Many think if you are not living in the streets and have no food, then you are doing ok.

One definition of 'poverty' could be 'how far below the standard of living in your country a person is living.'

Different people see poverty differently. I picture children who are treated badly because they are poor.

There is a charitable group in our area that will pay for the electric bill for the poor every three months. To qualify people have to get up before day light and stand in line to sign up. Then you have to wait hours until they decide to choose who gets their bill paid. I am surprised they don't sell tickets to the 'show'. I think it is a shameless way to treat the poor.

[SisterAnn]

Something is wrong with this country.

Colleges are given billions by alumni, but they invest that and charge the students so much for their education, that it takes away from the quality of their life after graduation.

Some in the younger generations want to euthanize those over 60 who retire, since they don't contribute to society. They blame the 'boomers' for every ill in the world and don't think they saved for their retirement and feel they are going to have to support them.

It may have trickled down from Reagan's 'welfare cadilac' and the 'greed is good' crowd.

[PublicAdvocate]

In the United States we maintain a myth about college tuition and earning potential. (Supposedly) we want people to be intelligent, get a good education, learn skills and get ahead in life. Yet we financially punish those same people for making the right choice of pursuing a college/university education by turning college into a capitalist predatory instrument.

The result? Those with the least experience and knowledge about the realities of the job market place are fleeced and indebted and start life owing $120K+ after graduation. They are at an immediate competitive disadvantage to foreign workers who have gotten a free or well subsidized education from Europe, China and India and can easily underbid them on jobs and come in through the HB-1 Visa program.

Incidentally, Bill Gates for all his wealth appeared before congress and argued for unlimited HB-1 visa as well as after moving Microsoft headquarters offshore to evade US taxes. How loyal! The reward for those employees who worked hard to build MicroSoft into a giant and make billions for Gates will now be fighting to hold their jobs against lower cost workers.

The deportation of American's jobs to India and China leaves young American's stuck holding the bag after they realize that they have been sold a lie about income and college education. A country that effictively punishes its citizens for doing the right thing will not lead the world in the future.

[RobHunt]

I challenge -

WHO in the "younger generation wants to euthanize those over 60 who retire since they don't contribute to society?"

Do you HEAR yourself? You make things up out of whole cloth, then get outraged about them. You should see if Michael Moore or Morgan Spurlock are hiring.

[SisterAnn]

HuffPost's Pick

Most great discoveries and inventions were by people who were intelligent and focused. Many were made by those who were just very interested and focused in that area.

Think about how the telephone was invented, how one doctor noticed that those who had cow pox didn't get small pox and came up with the smallpox vacination. It takes a special mind that is more interested in the subject than making money off of it.

Where capitalism comes in, it puts new ideas and creations out to the forefront and makes it available to everyone.

Today, we could get more done toward inventing better energy efficient batteries and alternative energy, if those who are interested in that type of research are well funded. I am thinking of those who are not particularly well educated, but totally absorbed and fascinated by energy alternatives.

A good friend of mine had a theory that if a person could capture the same mechanism as a ticking clock they would have nonending energy. He died without ever testing it out, but if he had funding he could have had the answer.

Sometimes, time that is needed more than money. The writer of Harry Potter was living on welfare when she wrote the first Harry Potter book.

[LeoMarvin]

Newton's laws of thermodynamics debunked the idea of perpetual motion machines how many hundreds of years ago?

[FogBelter]

"The only thing that interferes with my learning is my education.­" Albert Einstein

[mlaiuppa]

The telephone wasn't invented in order to make money and get rich. Neither was the discovery of small pox vaccines.

An artist paints because he has to. For the same reason a dancer dances or a composer creates music. It is a compulsion. It is a joy. It is a calling. When you create something for the sole purpose of making money and getting rich, then you are a capitalist. And some capitalists don't really create anything. They just buy or sell. They are Richard Gere in Pretty Woman. They don't build anything.

When the focus is on making money and then making more money and then keeping as much of it as possible, there is no place for 'creative capitalism'. Because for these people, he who dies with most money wins. They want to stay on the Forbes 400. They don't care about the Slate 60. And if giving money away gets them a few notches down on Forbes, they won't do it. The only reason they DO give money away is that they get a deduction on their income taxes. You better believe all of their accountants have calculated exactly how much money they can give away and HOW it's given away to maximize the amount they can keep. That is why billionaires are in an income tax bracket that is lower than mine.

[neoprimordial]

What is going to compel or motivate a corporation, or even a wealthy but self-aggrandizing individual, to help the much less fortunate? What makes someone who may not be as compassionate as a J. K. Rowling or the founders of Google to help the poor? Innovation provides a temporary reprieve from the predations of capitalism. Once it's figured out how to market the innovation, the usual overarching imperative of the bottom line takes control, generally speaking, whether gradually or abruptly. If you're going to have capitalists helping others, it has to be shown to help their bottom line, in perpetuity. If you can't do that, you can't, in my opinion, have a viable system of creative capitalism. They'll say "it's not in our interests, or our shareholders' interests, to go further than we have."

[themodernleader]

When Gates et al speak of creative capitalism they speak from their own extraordinary experience, success and wealth. They are uneasy about the present capitalism, thus the quest for a creative capitalism.
This niave quest for a new economic mechanism or system through a compiling of self-serving views by noted experts who are already indoctrinated into the present American capitalism will lead to naught. as the writers congratulate unprecedented wealth for sharing that wealth for pet projects, mostly in foreign lands at the expense of the other American citizens.
The compelling and pathetic stories of rising and failing economic systems and the countries they represent can be found repeatedly throughout human history. The successful economic systems dominating our present "free trade" world can be attributed to "creative capitalism". As well, the present failed economic systems in the world can be attributed to another form of "creative capitalsim".
Mr. Kinsley, I commend you for your effort. But all you will discern. I am afraid to say, are views that reenforce the present players and direction of economic and political decision making.

[MinuteMan]

If we wanted to make capitalism more creative we could start by requiring that the creator of the IP protected by patents and copyrights be guaranteed a percentage of the profits realized by the IP they helped create; I believe the European patent system requires this (15%?).

There's also no reason why the laws that permit incorporation or permit doing business in a country/state couldn't also require a certain amount of the profit be shared with the workers in some equitable fashion (i.e., over and above wages). The corporate tax laws could also be structured so really encourage companies to invest in their workforce and otherwise treat them well.

[ndolomar]

All I ask, Mr. Kinsley, is that you title the book "Bleak-onomics," because that's precisely what the outlook is, regardless who is in the White House in January 2009.

[truthynesslover]

I thought foundations were creative capitalism,all those nice tax breaks and great pay?

[Bladernr1001]

"The notion that capitalism, which is all about self-interest, can be amended somehow to be more about helping others -- and still be capitalist -- struck many (me included, at least at first) as hopelessly Pollyannaish and a little bizarre."

This statement is the crux of why I think the liberal bashing of capitalism is so off base.

Capitalism is not all about self-interest. You obviously have never endeavored something entreprenurial. Sure, the goal is to make a profit. Without profit what would even be the point? However, it is rarely easy to make a profit. To make a profit you need to find a need and fill it. You have risk time and capital to indentify and devise ways to fill the need.

In order for all this to work you need to work with other people in a cooperative manner. They get to make a profit too in return for fulfilling your needs. As an example, I took some tabletop items to market a few years back. I had to design the product, contract a molder for the product to be fabricated, obtain packaging, get financing from a bank, hire a trucking company to ship it, get stores to buy it, have booths at trade shows to market it.

Look at what this one small line of products involved and the economic activity it created. How would this get done in a socialistic system. Answer: it really does not. That is why socialistic systems fail.

[recless]

They make all kinds of things in Europe. The idea that entreprenurialism only happens in capitalism is bull.

[SlinkyTWF]

Straw man alert! Mr. Kinsley said nothing about socialism. Many confuse free market economics with capitalism. They are not identical. You can have free markets without capitalists if you try.

You were an entrepreneur. The bank who raped you on interest (think of it as a free-market tax) is the capitalist.

What's the difference between society managing investment and private banks doing it? Instead of paying interest (from which a financier skims before it gets reinvested), you'd pay taxes (part of which would be wasted on Ted Stevens' Memorial Bridge).

If we want to reform capitalism, we have to come up with a different way of getting capital into the hands of people who can do something positive with it. I do not have the answer, and neither does anyone else I've read. Maybe abolishing banks and centralizing the investment authority in a non-profit public institution that could be audited with a microscope and perhaps even be run by private concerns (with microscopes pointed at their heads)?

Why isn't this a national security issue?

Both Friedman and Keynes were right and wrong. Friedman will rot your economy from the bottom. Keynes will rot it from the top. Somewhere in the middle lies the answer.

[mrned]

Mr. Kinsley,

This is an interesting idea. The extreme capitalists who made mountains of money like the Rockefellers, Carnegies, Morgans of the 19th century became philanthropists long after they had squeezed billions out of their workers. Much of it is a belated realization that they could not take it with them and they decided to immortalize themselves as beneficent samaritans and get their legacy complete with their names enshrined in hospitals, schools, libraries. I won't deny that much good came from this. It's just that they could have done much of this during the time they were making a killing and keeping people under their thumb. At least Henry Ford paid his workers a living wage so they could actually purchase the product they created. Did he suffer undue financial pain because of this? NO.

[ubetchaiam]

My take is Gates is speaking nonsense. Perhaps what is really needed is a definition of what the term 'capitalism' means. It would seem to be differing things to different peoples. so at the minimum, a new book regarding such would have to specify what is meant by 'capitalism' in regards to the discussion raised by the new book. To that end, I offer as input -and confess to not having read it all- this tome:
http://www.capitalism.net/

[Henry]

and...more precisely, how many people really know what the word "capital" means???
Very few in my observation. Take the devious "One" when he stated that he had "earned political capital". And then, if you recall, he went on to say he was going to "spend" it. (This boys a Harvard MBA)

[asagefield]

I think this whole idea was brought up quite a few decades ago and coined as "enlightened self-inter­est." I think it is workable, this newer term and updated concept "Creative Capitalism­."

You have to define what these folks mean or think they mean when they throw around the word capitalism and greed and such. It more often has to do with their own self image and self concept of what they feel or what they have seen working within the context of their own life, time, and culture.

For "Creative Capitalism" to work, one obviously has to give tools to the people and also have a healthy respect for their world context. If you are in a developing country that is mostly agricultural with a population that subsists on farming, the "Creative Capitalism" will be different from that of a poorly run American city with poor infrastructure, poor business planning, and poor urban planning.

The biggest mistake would be to have these grand ideas that aren't going to help the intended party because the dreamers, the doers, the shakers, the ones with the cash are too busy imposing their limited view on others in the style of a grand armchair theorist.

www.sagefieldpost.com

[Samnite]

Excellent thought Michael. I would suggest as a starting point you read some of the writings of Václav Havel who has the unique experience of having lived under both communist/socialist and capitalist systems.

His observations combined with Gates vision could go a long way towards a system that the world desperately needs. Having said that I do not hold out much hope; those in power, or wish to gain power, will never accept it.

As Machiavelli observed nobles desire to oppress while citizens seek not to be oppressed.

[ChibiOne]

Persons interested in this topic should also look at these articles. They propose one possible solution to the limitations and 'evils' of our current economic model.

http://www.realitysandwich.com/money_a_new_beginning
http://www.realitysandwich.com/money_a_new_beginning_part_2
and
http://www.ascentofhumanity.com