This article from the WSJ (1/24/08) raises a lot of interesting questions. I think modern development in science/technology are exciting and inspiring, but like any major disruption in the status quo, can also be quite confusing. People feel sudden license to fly on the wings of their emotions/hopes/prejudices to unjustified conclusions. Eventually romance fades into practical experience as history tries each case vindicating the good ideas and exposing the error. And hopefully we're all wiser for the revelations. (In reality much effort would have been spared by exposing the bad ideas in the light of previous lessons from history before the angst of the trial)
What is creative/kinder capitalism?
"Mr. Gates was emphatic that he's not calling for a fundamental change in how capitalism works." And that's good because it's not about to change for him or anyone. But this makes it confusing to talk in terms of "creative capitalism" or "kinder capitalism." What he is really calling for is creative and kind businesses. This opens up the much-debated corporate social responsibility discussion which I will touch on only briefly: It doesn't make sense to personify a business because, strictly speaking, it is just a profit-making tool. There's no use in talking about what a business should and shouldn't be or ascribing moral qualities to it—if you do that you are creating a different entity. That's fine, but you should also give it a different name to avoid confusion.
We thus conclude that creativity and moral qualities have application only at the level of the individual. But can Gates really advocate for increased kindness and capitalistic self-interest at the same time? He does allow for an expanded view of self-interest to include “pleasure from taking an interest in the ‘fortunes of others’,” but he simultaneously defends the definition of self-interest as profit-seeking (as he knows he must if his ideas are to gain traction with less-charitable businessmen). I suppose some combination of motives could compose the total self-interest, but the two will frequently at least appear to be at odds.
What is technology?
Many definitions exist, but for purposes of this article, it would be along the lines of “practical/efficient devices/tools/solutions which make use of advanced science and engineering knowledge.”
What is the ultimate goal?
"We have to find a way to make the aspects of capitalism that serve wealthier people serve poorer people as well.” This is perhaps a kindly sentiment, but again, we must be careful personifying capitalism. So in what ways does capitalism per se “serve” these wealthier people? The response is an economics course, but let’s just look at Microsoft: a guy creates a product, we like it and buy it, the company makes a profit, gains influence in the market and uses every legal (we will assume; ethical or kindly we will not assume) means to make ever larger profits (interesting more buyers in the product, improving the perceived value of the product, reducing the number of alternatives to the product, creating new products, charging more for the product, etc.). We call this free enterprise because, within the law, the company is free to employ any means of increasing profits to any level.
So who is served? Gates makes money, shareholders make money, employees make money, Microsoft’s suppliers make money, consumers assume use of the product will provide benefits in excess of the purchase price…and the list goes on. We inappropriately take for granted that the particular economic system of capitalism is alone responsible for these benefits, but the relative wealth created under different economic systems is a different discussion entirely. At present we will assume these profits, this wealth, to be the “service” of capitalism, and insofar as they are large relative those accruing to a similar enterprise operating in an earlier age or under a different economic system (were it possible), the difference is attributed to increased operating efficiency (further reduced to technology-driven manufacturing and market efficiencies, among others).
Are the very-poor then bypassed in the Microsoft wealth-creation machine? Directly, yes—they are “off the grid” as it were. Why? They have no ownership in the company, can get no job in the company, have nothing the company wants to buy from them, lack the means and education to use the company’s products to increase their own productive output. They may still benefit from, vaguely, a rising tide of world productive efficiency that lifts all boats, but this has clearly not been sufficient to raise them out of poverty. Gates’s goal is to somehow bring them on to the grid.
What is a specific example?
This reading helped inform Mr. Gates's belief that leading companies should find ways to sell to and work with the poorest. So, lets sell them cell phones for cheap—that’s an idea that is being actively pursued in practice. You’ve got a big market down there at the bottom—that’s got to count for something right? Remember, we’re still operating on principles of self-interest, we’re still out for the profits, but we’re going to be creative and somehow sell to the very-poor.
Is he on to something?
To the degree the problem of poverty today is more-or-less the same problem of yesterday, either 1) a suitable solution is still forthcoming or insufficiently disseminated, 2) businesses are sufficiently aware of a solution but businessmen are unkind and do not find it in their self-interest to take it up. Note that to an unkind businessman, a business model serving the poor could not be merely profitable, but the most of alternative business models.
As previously mentioned, Gates advocates both increased kindness (a direct solution) but also the use of technology to make creative capitalism work for the bottom line (indirect). This is a very compelling, if wishful desire: “A core belief of Mr. Gates is that technology can erase problems that seem intractable.”
Technology put a man on the moon—why can’t it raise the very-poor out of poverty? Although the likelihood of either proposition might sound equally remote to a pre-space age mind (or possibly the moon-landing would sound more remote), improbability of solution alone is no basis for comparison or our purposes. It is very easy to visualize putting a man on a moose, a moped or a mountain—the moon is just another physical location in space. Hard to execute, but a well-defined objective to be sure.
Now how shall we define “raise the very-poor out of poverty?” We have moved from a very specific objective to one which can only be defined abstractly. Still easy enough to visualize that it may come up frequently in discourse, but we are now dealing with a very abstract sort of problem—a concrete definition of which would necessarily be both lengthy and varied among independent drafters. This confusion alone will be highly dilutive of any collective effort to arrive at a particular solution.
Now out final consideration: supposing a concrete definition/understanding of the problem and solution of poverty were produced, would technology be up to the task? Is it safe to say some problems cannot be solved with technology? We might draw up a list of those that cannot and see if the poverty problem, at its relevant ‘root’, seems to be one such. Note that the increase of kindness Gates advocates is likely to fall in this category (and preaching is the appropriate method of advocacy).
Perhaps an instructive parallel is found in the case of energy alternatives. Why did cellular phone service reach the very-poor last, if at all? What were the relevant differences between developed and undeveloped countries in market assessments? Basically, providers understand profits can be made among poorer clientele, but better profits are made among richer clientele. So only after affluent markets were saturated did the very-poor begin to see the technology. Similarly energy companies have found petroleum to be generally a far more profitable energy source than solar or wind, and therefore, (without government intervention or much greater pressure from consumers/environmentalists) they are unlikely to devote much effort to solar or wind until the oil fields run dry.
So technology has its work cut out: make solar power more profitable than oil (and you have saved the planet!). Come up with a business for which the poor are more profitable customers than the rich (and you have ended misery!). I’m not saying it can’t be done, but I would like to hear a some specific solutions.
