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.
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Extreme capitalism is just as horrible as extreme communism. Both systems will lose in the long run. As for the USA, the sooner, the better.
Probably "socialism" would be a better term.
Anyway, that's why I have trouble with the right-wingers running around with their capitalism-good, socialism-bad mantra. I would hate to live in an economy that was pure capitalism or pure socialism. The pure capitalism society would be a very savage, dog-eat-dog society; our current society is a long ways from being pure capitalism to though a few wingnuts wan to move back to those dog-eat-dog days. At the other extreme, pure socialism, you have some centralized set of bureaucrats trying to call all the shots and likely making a hash of things; it's probably better than the every-man-for-himself pure capitalist society but it would still be awful. The sweet spot lies somewhere in between.
I like it! Hell, Michael, your book just might find a way to empower Adam Smith's "invisible hand." Or, even better, find a way to do business that doesn't involve automatic recessions created by unregulated corporate Ponzi bubbles. Since "new thinking" is often found outside the given profession, you just may orchestrate a new world financial paradigm.
Still, maybe what you seek can be found in tiny Denmark, a capitalist country that cares about the welfare of its people... You know, tax the hell out of business by making them like it. After all, the Danish government not only pays for health care, it also pays its citizens to take advanced degrees, etc. Even though business's are often taxed at rates above 60%, they still seem to thrive. Maybe because their highly educated employees can focus on business while the government focus's on the welfare of it's employees...
And Bob's yer uncle. It'll never happen here, short of some cataclysmic revolutionary rethinking of the system of things in this country, a la the Sixties. Okay, I doubt very strongly it'll happen. And Denmark is one of those places where the large majority of people are happy--because of the massive government subsidizing or because the culture induced the subsidies? Either way, America has a long way to go before we get anywhere near them socially.
Good luck, Mr. Kinsley. To me, the best of both worlds would be...
...a continuation of our capitalist economy, which provides our unique opportunity for upward mobility, aggressive research & development, amazing advances in technology, science, health care, agriculture and so much more. Anyone who claims that America's economic system doesn't allow for the above, more than any other country ever, is in abject denial and drowning in the Politics of Envy...
...and a new social environment in which people with disposable wealth are motivated to give back as a matter of choice. A culture in which people are less likely to purchase another Bentley or fifth summer home, and more likely to create or contribute to community centers that provide job training, education, child care and basic health care. Allow corporations to contribute materials, computers, whatever, in exchange for hanging a banner in the community center. It's called "doing well by doing good."
Look at the wealth of the oil barons, the superstar athletes, the movie stars, the dotcom magnates. The money is already there, more taxation and government intervention is not required. Let's work together to use the fruits of our efforts, the winnings of our labor, to create opportunity for others without depending on a bunch of politicians and the federal bureaucracy.
The money is there, folks. I'll bet everyone reading this has some free time they could donate. Let's create an environment in which it's "cool" to give back, to help others, to truly save lives.
You're right, capitalism, well regulated, is one primary reason upward mobility was acheived, with the GI Bill, Social Security, and public education. America has always had a capitalist economic system. History is littered with periods of disjointedness in the rich and the poor, in the late 1800's, early 1900's and now; the unregulated capitalist market led to the Great Depression. It took a capitalist, FDR, to pull America out of it. He understood capitalism, left to its own devices, would destroy itself. We needed then and will need now government intervention to insure the benefits of our capitalist economy are enjoyed by all and serves to lift people out of poverty.
This government has ignored its responsibilities in not enforcing regulatory requirements. This has resulted in the largest number of recalls in a 2 year period in this nations history. By your reasoning, poverty, unemployment, and homelessnes should be falling, and we shouldn't have veterans losing their homes and sleeping on the streets. As wealth has amassed among the wealthiest among us, the general public is suffering; high gas prices, a mortgage crisis, a credit crisis, states cutting vital services, firing cops, closing schools, etc.
Apparently you missed the shows on 20/20 and 60 minutes discussing the lack of philanthropy done by the wealthy to help the less fortunate. This is why Bill Gates may be the next capitalist to say capitalism from itself. I would suggest you deal with the world as it really is, not some dreamworld.
Indeed, that's the prevailing attitude. "It's too hard, we can't do it, it would take too much effort, let's have the government do it."
Sad to see, but not surprising. And believe me, I'm not holding my breath.
Michael:
You hit the nail on the head.
I think an example of capitalism in its purest form is the selling of heroin and cocaine.... and the Corporate model isn't any different. Selfishness = Capitalism
So called "Socialist" and "Communist" countries have never lived up to their ideals, as another poster noted, because people have shown themselves to be selfish.
What's the difference between organized crime bosses and Wall Street Wharton graduates? The organized crime bosses are honest and out front about their greed and plundering manner.
Every capitalist dreams of being a monopolist. Bill Gates succeeded. Windows is a crappy operating system that everybody uses because Gates was able to corner the market. As a software developer he is not an innovator but an imitator. So he got incredibly rich and now wants to pursue philanthropy. Not to "give it all away", but to give away a percentage smaller than many poor people give. Good for him.
Capitalism can be an engine of prosperity for all the people but it is only an engine. The steering, brakes and safety equipment are the responsibility of government. There will be people who, for various reasons, need help that capitalism does not provide. The government, elected by the citizens, should provide for people in need by collection of taxes from the capitalists and the workers.
Noblesse oblige is nothing new. Charity is a virtue the cultivation of which should be encourage. But it is insufficient and unreliable and often mis-directed. A democratically elected, sovereign state, presiding over a mixed economy, is the gold standard for the greatest security and prosperity of a people.
No Charge.
Splendid post. "Capitalism can be an engine of prosperity for all the people but it is only an engine." Brilliant.
For some reason in our culture doing a few nice things for everyone balances out doing a great deal of evil or harm most of the time. You can hurt millions of people by your actions but build a nice concert hall and you are good guy.
This project sounds like an excellent idea, but I doubt that it will generate enough interest to do any good. Compared with most Europeans I've talked to, Americans are stubbornly ignorant about economic issues. The mindset in this country is: Capitalism is good; Socialism is evil; and anything that isn't completely unrestricted, laissez-faire Capitalism is Socialism. This, of course, is ridiculous to the point of being mythological, but it does connect with people's hopes and fears, and it requires very little thought. That's why facts and honest analysis can't make a dent in it.
Good points all. But I believe our biggest problem is that we fail to recognize fascism - or neo-mercantilism, or cronyism, whatever label you find palatable - when we see it. Europeans, more experienced with rawer forms of the beast, are quicker to spot it. But they too have state monopolism of a quasi-socialist form to deal with.
Great idea Michael.
A revolution in ideas is what is needed. If we are to continue to "evolve" along this broad and expansive social experiment called life, a shift in the paradigm is needed. "Creative Capitalism" is not the answer but if it helps serve as the catalyst for some creative compassion I'm all for it. The process starts now.
Good luck.
Anyone who has ever played Monopoly(R) should be capable of understanding the dangers of unregulated capitalism. Phrases such as 'free market', so dear to some, should be viewed with suspicion.
It is important to not only consider the economic benefit which accrues to some through capitalism with the social damage done to others by the unbridled pursuit of profit.
Many in the northeastern US who heat with oil might, this winter, find cause to reflect on the benefits of commodity markets.
Then you people in the northeast needs to stop heating with oil, get a wood pellet stove. I live in Kansas, it was very cold winter, I spent less than $700.00 to heat my house for the whole winter.
it seems to me that "free market capitalism" has been pretty "creative" as it is over the last 2 1/2 decades. from the savings & loan and junk bond scandals, & the raiding of pension funds in the 80's to enron "creatively" causing power shortages to jack up prices and, with the help of arthur anderson and the banks, profits. (is anyone else having nightmarish flashbacks of 2001?). corporations move their headquarters to p.o. boxes in the caymens where the uber rich have their taxhavens. the federal govt. isn't terribly concerned how billions of tax dollars have disappeared in iraq...
if the american people were simply given back what they were swindled out of (how often have i heard "it may've been unethical and immoral, but it wasn't illegal)...
transperancy, that's what's missing.
I don't want someone to give me money. I just want to be paid well enough for my work so that I can support myself and family. Our society praises and admires people who have a lot of money, pretty much no matter how they attained it. "Fair" is a four letter word in capitalism. I would rather live in a "needs" society, than a "wants" society. Conspicuous consumption sucks, but feels great, especially when your neighbor turns green with envy. Human nature being what it is, capitalism is here to stay.
i found out real early in life that while the corporation expects your loyalty and all your energy to be directed into their goals, the employee is always at risk, and their job exists only as long as the corporation deems it necessary. once it's not, adios mutha F@#$%r. so from the point of view of one of your worker bees, we're long over due for a revolution. bill can send me some of his pocket change anyday.
Philantrophy is a very good start because it is working with what you've got and making the best of it. However, that does not take away the fact that there's something outrageously defunct about this "economy"-like and this "justice"-like things we have in place for the moment.
The real solution is easy as hell.... How about, instead of making self-interest the wholy grail, we make other-interest the wholy grail? Help an other and get a profit! Be a good boy and get a tax break! Drive nicely and you get some money!
Now was that so hard to think of? No, will it be hard to put in place? Hell yeah. Sssht, but there are people who prefer punishment over recognition.
I'm thrilled to hear about your project! I'm not an economist but I'm a pioneer of systems other than capitalism and I'm writing a book on this subject too. I'll be watching your website with great interest. Many thanks for your contributions to this crucial topic. Our species depends upon this line of inquiry.
The issue you are exploring has three elements:
1) whether and how capitalism -- an atomistic and self-centered politcal/economic philosophy -- can serve the public good.
2) Should it do so;
3) And if so, what is the most efficient means by which this can be accomplished?
To answer this, we must first tackle of some powerful myths -- Adam Smith's invisible hand; the presumption of government incompetence as inevitable The latter is necessary because if governments cna work, then taxation is seen as a collective investment for the public good, rather than a parasitic bleeding of the the best and brightest, and social democracies stand as a reasonable alternative to the philanthropic models of exploit and give.
We must also define what the legitimate goal of an economy is or ought to be. For example, is an ever-growing GDP the sine qua non of an economy? Or is it something bigger? We must also acknowledge that the human economy has become as big or bigger than many of the natural systems which sustain us, and that implies some fundamental need to realign economics and economies around some collective goals necessary to assure our survival.
The challenge in any endeavor that attempts to serve the collective is that it not sap the creative energies and genius of the individuals that make up the collective. Finally, we must understand that economic systems are about power: this is about psychology, as much as it is about politcal and economic systems.
When you think about it, you can understand why franchising of fast foods like McDonalds has worked. How about the franchising of hundreds of thousands of "Mother Theresa" franchises?
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