Commentary Magazine


Topic: Bill Gates

A Straw in the Wind?

One of the best predictors of elections over the years has been the mock elections held in schools. Most school kids only reflect what their parents think and, unlike parents avoiding pollsters and unwanted telephone calls, have no reason to either lie or clam up.

Michael Barone reports that in Washington state, 15,400 K-12 students voted, and Republican Dino Rossi won the Senate race 53 percent to 47 percent over Democratic incumbent Patty Murray. That’s comfortably beyond the margin within which Washington’s political establishment could fiddle with the votes to produce a favored outcome, which might well have happened in Rossi’s first, whisker-close run for governor in 2004.

That’s the good news. The bad news is that the job-killing proposal to tax the incomes of the rich, ending Washington’s income-tax-free status, passed in the mock election. Pushed by Bill Gates and his father (like they care about an additional few percentage points in taxes), the main force behind it has been the teachers’ unions, whose members will be the prime beneficiaries. Let’s hope, for the state of Washington’s economy, that the kids were more influenced by their teachers than their parents will be on Tuesday.

One of the best predictors of elections over the years has been the mock elections held in schools. Most school kids only reflect what their parents think and, unlike parents avoiding pollsters and unwanted telephone calls, have no reason to either lie or clam up.

Michael Barone reports that in Washington state, 15,400 K-12 students voted, and Republican Dino Rossi won the Senate race 53 percent to 47 percent over Democratic incumbent Patty Murray. That’s comfortably beyond the margin within which Washington’s political establishment could fiddle with the votes to produce a favored outcome, which might well have happened in Rossi’s first, whisker-close run for governor in 2004.

That’s the good news. The bad news is that the job-killing proposal to tax the incomes of the rich, ending Washington’s income-tax-free status, passed in the mock election. Pushed by Bill Gates and his father (like they care about an additional few percentage points in taxes), the main force behind it has been the teachers’ unions, whose members will be the prime beneficiaries. Let’s hope, for the state of Washington’s economy, that the kids were more influenced by their teachers than their parents will be on Tuesday.

Read Less

Mitch Daniels Makes the Rounds

Mitch Daniels is clearly raising his profile and leaving the door open to a 2012 presidential run. COMMENTARY contributor Andrew Ferguson’s story is as comprehensive a piece on his views and persona as we have seen. Daniels is in Washington this week doing interviews and meeting with groups like the Business Roundtable. This morning, he met with a group of mostly conservative new-media and print journalists. He proved both impressive and problematic for conservatives seeking a favorite in the 2012 race.

On the positive side, he is plainly not Obama. He is precise, self-effacing, down to earth, and rooted in conservative philosophy. The first question was about education, and, out of the box, he acknowledged that education was “one of the shortcomings of our administration,” and although he has made limited progress, he wants to step up his efforts in the remainder of his term. He then went on to discuss the substantial reforms he has made with the help of a new superintendent (ending social promotion, insulating teachers from lawsuits if they enforce discipline, opening up credentials so people who have had other careers can get into the classrooms, etc.). What he conveyed was both candor and a big-picture view (“Public education has evolved into a situation . . . where it is set up as much for the benefit of the adults as for the kids.”)

He also explained his effort to tame public-employees’ unions, pointing out that teachers in his state are paid 22 percent more than the average worker and that he needed to bring the union to heel if “we were going to overhaul government.” By executive order, he ended mandatory union dues, and 90 percent of the employee chose not to pay. (“They gave themselves a 2 percent pay increase.”) But he is not anti-union by any means. He explained that the playing field should be level, and workers should have the choice to unionize. He said the right to join a union is “fundamental” and has “led to freedom in a lot of countries.”

He was at his best when discussing political theory and domestic policy. Asked what conservatives he looks to for guidance, he listed Hayek, Friedman, and Charles Murray. All of them, he explained, “are realistic and therefore modest in what government is capable of doing.” He continued that they evince “skepticism of bigness — in all its forms.” When I asked him what the principle errors of Obama and Congress had been, he began by pointing out that most of them “have not spent a day in a profit-making enterprise.” He explained that the choice between political parties is the clearest we’ve ever had. Conservatives believe, he said, that public service is a temporary job and that their duty is “to promote free enterprise, family, and other intermediary institutions.” Democrats believe the opposite, he said — that society will work better “if the ‘enlightened’” make the decisions.

He explained: “I’m concerned. I’m alarmed about the direction of the country.” Even apart from the theoretical argument, he observed that looking at entitlements and the debt, “Can we all agree the arithmetic doesn’t work?” But he said he is interested in the bigger philosophical questions: “What kind of people do we want to be?” Are we still capable of preserving liberty and independence?

About entitlements and the debt, he said he has faith that we can have a “grown-up” conversation. He then proceeded to have one. “Americans,” he asserted, “have a renewed sense of the menace of too much debt.” In their personal lives, with credit-card and mortgage debt, he notes that “they had a searing personal experience.” What to do about entitlements? “Paul Ryan is right — we need to bifurcate these programs.” He said that Democrats would have been best suited to do the hard work, given the negative rhetoric hurled at Republicans when they undertake entitlements control, but he said that is a “lost opportunity. Someone’s got to try.” He continued: “Why should we pay for Warren Buffet’s health care? Why should be pay Bill Gates a pension?” Like businesses that have phased out defined-benefit plans, he recommended that we have “a new plan and an old plan.” And he wasn’t shy about criticizing Republicans for grandstanding on Medicare cuts during the health-care debate.

He explained: “None of this will work if we don’t have a sustained period of growth.” Unfortunately, he said, “Everything they are doing as far as I can see leans against economic growth.” And he pointed to his own job-creation record. Indiana has 2 percent of the population and 7 percent of the new jobs. He has made sure “the next job comes to Indiana and not someplace else.”

He also showed a knack for political message. He questioned “what the hell” did “change you can believe in.” He suggested that the conservatives’ motto should be “Change that believes in you,” stressing that Americans are “fully capable” of running their own lives, buying their own health-care insurance, etc.

If Daniels makes a run in 2012 — although he said we should now focus on the “what” and figure out the “who” later — he may have trouble with both social conservatives and those favoring a vigorous foreign policy that projects American power and promotes our values. On social policy, John McCormack followed up on a point Daniels had made in the Weekly Standard story. Daniels had said we should declare a truce on social issues. McCormack asked whether that meant Daniels would stand down on opposing taxpayer-funded abortions and reversing the Mexico City policy on funding international institutions that provide abortion services. It was an easy moment to clarify and assert that you can’t simply concede the playing field to the opposition. Instead, Daniels reiterated his view that we should “set aside” these issues for a while to focus on our fiscal emergency. So do the pro-abortion forces win these issues? Not clear.

I asked him the sole question on foreign policy — in what fundamental ways Obama had erred? He did not address any of the basic concerns conservatives have been discussing (e.g., engagement with despots, indifference on human rights, animus toward Israel). Instead, he gave a platitude, “Peace through strength has totally been vindicated.” And then he immediately asserted that we have to “ask questions about the extent of our commitments.” He said, “If we go broke, no one will follow a pauper.” At least temporarily, he said, we can’t maintain all our commitments. But if our foes don’t take a break, what do we do? Should we pull up stakes in Iraq and Afghanistan and hack away at the defense budget? It’s not clear whether he has thought these issues through, or whether he views foreign policy as anything more than a cost-control issue.

Daniels is an impressive figure. If he wants to run for another office, however, he will have to stretch beyond his comfort zone and address the full gamut of issues that concern Republican primary voters. If he doesn’t want to or can’t do that, he’d make a heck of a Treasury Secretary.

Mitch Daniels is clearly raising his profile and leaving the door open to a 2012 presidential run. COMMENTARY contributor Andrew Ferguson’s story is as comprehensive a piece on his views and persona as we have seen. Daniels is in Washington this week doing interviews and meeting with groups like the Business Roundtable. This morning, he met with a group of mostly conservative new-media and print journalists. He proved both impressive and problematic for conservatives seeking a favorite in the 2012 race.

On the positive side, he is plainly not Obama. He is precise, self-effacing, down to earth, and rooted in conservative philosophy. The first question was about education, and, out of the box, he acknowledged that education was “one of the shortcomings of our administration,” and although he has made limited progress, he wants to step up his efforts in the remainder of his term. He then went on to discuss the substantial reforms he has made with the help of a new superintendent (ending social promotion, insulating teachers from lawsuits if they enforce discipline, opening up credentials so people who have had other careers can get into the classrooms, etc.). What he conveyed was both candor and a big-picture view (“Public education has evolved into a situation . . . where it is set up as much for the benefit of the adults as for the kids.”)

He also explained his effort to tame public-employees’ unions, pointing out that teachers in his state are paid 22 percent more than the average worker and that he needed to bring the union to heel if “we were going to overhaul government.” By executive order, he ended mandatory union dues, and 90 percent of the employee chose not to pay. (“They gave themselves a 2 percent pay increase.”) But he is not anti-union by any means. He explained that the playing field should be level, and workers should have the choice to unionize. He said the right to join a union is “fundamental” and has “led to freedom in a lot of countries.”

He was at his best when discussing political theory and domestic policy. Asked what conservatives he looks to for guidance, he listed Hayek, Friedman, and Charles Murray. All of them, he explained, “are realistic and therefore modest in what government is capable of doing.” He continued that they evince “skepticism of bigness — in all its forms.” When I asked him what the principle errors of Obama and Congress had been, he began by pointing out that most of them “have not spent a day in a profit-making enterprise.” He explained that the choice between political parties is the clearest we’ve ever had. Conservatives believe, he said, that public service is a temporary job and that their duty is “to promote free enterprise, family, and other intermediary institutions.” Democrats believe the opposite, he said — that society will work better “if the ‘enlightened’” make the decisions.

He explained: “I’m concerned. I’m alarmed about the direction of the country.” Even apart from the theoretical argument, he observed that looking at entitlements and the debt, “Can we all agree the arithmetic doesn’t work?” But he said he is interested in the bigger philosophical questions: “What kind of people do we want to be?” Are we still capable of preserving liberty and independence?

About entitlements and the debt, he said he has faith that we can have a “grown-up” conversation. He then proceeded to have one. “Americans,” he asserted, “have a renewed sense of the menace of too much debt.” In their personal lives, with credit-card and mortgage debt, he notes that “they had a searing personal experience.” What to do about entitlements? “Paul Ryan is right — we need to bifurcate these programs.” He said that Democrats would have been best suited to do the hard work, given the negative rhetoric hurled at Republicans when they undertake entitlements control, but he said that is a “lost opportunity. Someone’s got to try.” He continued: “Why should we pay for Warren Buffet’s health care? Why should be pay Bill Gates a pension?” Like businesses that have phased out defined-benefit plans, he recommended that we have “a new plan and an old plan.” And he wasn’t shy about criticizing Republicans for grandstanding on Medicare cuts during the health-care debate.

He explained: “None of this will work if we don’t have a sustained period of growth.” Unfortunately, he said, “Everything they are doing as far as I can see leans against economic growth.” And he pointed to his own job-creation record. Indiana has 2 percent of the population and 7 percent of the new jobs. He has made sure “the next job comes to Indiana and not someplace else.”

He also showed a knack for political message. He questioned “what the hell” did “change you can believe in.” He suggested that the conservatives’ motto should be “Change that believes in you,” stressing that Americans are “fully capable” of running their own lives, buying their own health-care insurance, etc.

If Daniels makes a run in 2012 — although he said we should now focus on the “what” and figure out the “who” later — he may have trouble with both social conservatives and those favoring a vigorous foreign policy that projects American power and promotes our values. On social policy, John McCormack followed up on a point Daniels had made in the Weekly Standard story. Daniels had said we should declare a truce on social issues. McCormack asked whether that meant Daniels would stand down on opposing taxpayer-funded abortions and reversing the Mexico City policy on funding international institutions that provide abortion services. It was an easy moment to clarify and assert that you can’t simply concede the playing field to the opposition. Instead, Daniels reiterated his view that we should “set aside” these issues for a while to focus on our fiscal emergency. So do the pro-abortion forces win these issues? Not clear.

I asked him the sole question on foreign policy — in what fundamental ways Obama had erred? He did not address any of the basic concerns conservatives have been discussing (e.g., engagement with despots, indifference on human rights, animus toward Israel). Instead, he gave a platitude, “Peace through strength has totally been vindicated.” And then he immediately asserted that we have to “ask questions about the extent of our commitments.” He said, “If we go broke, no one will follow a pauper.” At least temporarily, he said, we can’t maintain all our commitments. But if our foes don’t take a break, what do we do? Should we pull up stakes in Iraq and Afghanistan and hack away at the defense budget? It’s not clear whether he has thought these issues through, or whether he views foreign policy as anything more than a cost-control issue.

Daniels is an impressive figure. If he wants to run for another office, however, he will have to stretch beyond his comfort zone and address the full gamut of issues that concern Republican primary voters. If he doesn’t want to or can’t do that, he’d make a heck of a Treasury Secretary.

Read Less

A Fiscal Suicide Pact

If you believe the Obama administration (and I doubt there is a person on the planet not in custodial care who actually does), ObamaCare will, if enacted, save the government $132 billion over the next 10 years. In the world ordinary citizens live in, one of mortgage payments and tuition bills, that sounds like a lot of money, more than the net worth of Bill Gates and Warren Buffett combined.

In the world of Washington, however, it’s chump change, an average of $13.2 billion a year, when the government will spend $3.7 trillion this year alone. Indeed, as Hotair points out, $132 billion is equal to only 59 percent of the deficit that the federal government racked up just in the month of February 2010, when the government spent $220.9 billion more than  it took in, the highest monthly shortfall in history.

As Michael Barone and others have noted, Nancy Pelosi seems to be having increasing trouble rounding up votes to jam ObamaCare through the House. The fact that it would be a political suicide pact for Democratic congressmen is surely the speaker’s biggest problem. But that it would be a fiscal suicide pact for the federal government might be an increasing factor. Only in Washington, after all, do people have trouble understanding what “we can’t afford it” means.

If you believe the Obama administration (and I doubt there is a person on the planet not in custodial care who actually does), ObamaCare will, if enacted, save the government $132 billion over the next 10 years. In the world ordinary citizens live in, one of mortgage payments and tuition bills, that sounds like a lot of money, more than the net worth of Bill Gates and Warren Buffett combined.

In the world of Washington, however, it’s chump change, an average of $13.2 billion a year, when the government will spend $3.7 trillion this year alone. Indeed, as Hotair points out, $132 billion is equal to only 59 percent of the deficit that the federal government racked up just in the month of February 2010, when the government spent $220.9 billion more than  it took in, the highest monthly shortfall in history.

As Michael Barone and others have noted, Nancy Pelosi seems to be having increasing trouble rounding up votes to jam ObamaCare through the House. The fact that it would be a political suicide pact for Democratic congressmen is surely the speaker’s biggest problem. But that it would be a fiscal suicide pact for the federal government might be an increasing factor. Only in Washington, after all, do people have trouble understanding what “we can’t afford it” means.

Read Less

Send the Torch Back to China

Actress Joan Chen, writing in today’s Washington Post, traces the arc of her native land. “Since the Cultural Revolution ended in the late 1970s,” she writes, “I have witnessed unimaginable progress in China.”

For her, human rights groups in Washington are “anti-China.” But it’s time to move beyond criticism, implies Chen, who became an American citizen in 1989. “Times are changing,” she argues. “We need to be open-minded and farsighted. We need to make more friends than enemies.”

Chen is evidently concerned about the Olympic torch protests in the streets of San Francisco. The demonstrations, she fears, will antagonize the Chinese people and anger their government just as their country is joining, in the words of Steve Clemons, “the blue chip end of the international order.” As the New York Times noted in an editorial this morning, “Given the country’s mighty economic power, nobody really wants to antagonize Beijing.”

That’s especially true when people like Chen and Clemons believe that China will continue its current course. Bill Gates assumed it will when he spoke on Friday in Miami at a meeting of the Inter-American Development Bank. “The fact that China is getting rich is overall a very good thing,” he said. “If you care about the human condition, really then a richer China is better.”

All of us want a better China. Yet the way to a better China is not to see the country the way we wish it to be—as Chen, Clemons, and Gates want us to do—but as it actually is. When we fail to speak out about the reality of the modern Chinese state, autocrats in Beijing feel emboldened. The real story behind the protests accompanying the Olympic torch relay is not how noisy or unruly the demonstrations were—it is that China’s leaders actually thought that ordinary people in the West would gather in their own streets to cheer the display of the Olympic torch, which Beijing has made a symbol of Chinese authoritarianism. Beijing’s rulers thought that way because Western presidents and prime ministers have almost always played along with China’s notions of its own grandeur.

Members of the International Olympic Committee will meet on Friday to consider ending the international leg of the torch relay. That is an excellent idea. The Chinese government might be embarrassed by a premature return to China of the Olympic flame, but it is time that we reject further abhorrent celebrations of their repression in our free lands.

Actress Joan Chen, writing in today’s Washington Post, traces the arc of her native land. “Since the Cultural Revolution ended in the late 1970s,” she writes, “I have witnessed unimaginable progress in China.”

For her, human rights groups in Washington are “anti-China.” But it’s time to move beyond criticism, implies Chen, who became an American citizen in 1989. “Times are changing,” she argues. “We need to be open-minded and farsighted. We need to make more friends than enemies.”

Chen is evidently concerned about the Olympic torch protests in the streets of San Francisco. The demonstrations, she fears, will antagonize the Chinese people and anger their government just as their country is joining, in the words of Steve Clemons, “the blue chip end of the international order.” As the New York Times noted in an editorial this morning, “Given the country’s mighty economic power, nobody really wants to antagonize Beijing.”

That’s especially true when people like Chen and Clemons believe that China will continue its current course. Bill Gates assumed it will when he spoke on Friday in Miami at a meeting of the Inter-American Development Bank. “The fact that China is getting rich is overall a very good thing,” he said. “If you care about the human condition, really then a richer China is better.”

All of us want a better China. Yet the way to a better China is not to see the country the way we wish it to be—as Chen, Clemons, and Gates want us to do—but as it actually is. When we fail to speak out about the reality of the modern Chinese state, autocrats in Beijing feel emboldened. The real story behind the protests accompanying the Olympic torch relay is not how noisy or unruly the demonstrations were—it is that China’s leaders actually thought that ordinary people in the West would gather in their own streets to cheer the display of the Olympic torch, which Beijing has made a symbol of Chinese authoritarianism. Beijing’s rulers thought that way because Western presidents and prime ministers have almost always played along with China’s notions of its own grandeur.

Members of the International Olympic Committee will meet on Friday to consider ending the international leg of the torch relay. That is an excellent idea. The Chinese government might be embarrassed by a premature return to China of the Olympic flame, but it is time that we reject further abhorrent celebrations of their repression in our free lands.

Read Less

More on the Iraq Recession Fallacy

Nick Kristof presents a subtle version of the “Iraq Recession” fallacy in his latest column. He is at least honest enough to quote Bob Hormats of Goldman Sachs, who says of the war: “Is it a significant cause of the present downturn? I’d say no.” But that doesn’t stop Kristof from hyperventilating about “a bill that is accumulating at the rate of almost $5,000 every second!” Of course, we’re paying more than $5,000 a second for entitlement programs, but that doesn’t get a mention in his article. Nor does he mention the all-important point that I alluded to in my earlier CONTENTIONS posting: seen in the overall context of our economy, the cost of the Iraq War is chump change (less than 1% of GDP).

He then goes on to make a standard liberal argument: imagine all the domestic goodies we could buy if we weren’t wasting so much money on defense. “A Congressional study by the Joint Economic Committee,” he writes, “found that the sums spent on the Iraq war each day could enroll an additional 58,000 children in Head Start or give Pell Grants to 153,000 students to attend college.” He leaves unanswered a larger question: Would we really be spending untold billions domestically if we weren’t spending them in Iraq? To answer that question, consider the fact that the Iraq War is only five years old. Prior to 2003 we were not saddled with nearly as many costs for dealing with Iraq (although there were lesser costs for enforcing the no-fly zone and sanctions). And yet we weren’t making all of the spending commitments that Kristof would like to see. That suggests that our political system would not deliver the spending he advocates, regardless of what’s happening in Iraq.

His stance is a bit akin to a journalist waxing outraged about the cost of an expensive sports car. To make his case he profiles an owner of a $100,000 Porsche and offers lots of examples of more worthy projects (say a local soup kitchen) that could be funded with the money instead. Only he forgets to mention that the Porsche owner is Bill Gates, and he can easily afford not only the car but can also afford to give billions to good works.

The United States government, presiding over a $13 trillion economy, is in a similar position: we can easily afford our foreign and domestic priorities. That’s why domestic discretionary spending has actually risen during the Iraq War-another fact that Kristof neglects to mention.

Nick Kristof presents a subtle version of the “Iraq Recession” fallacy in his latest column. He is at least honest enough to quote Bob Hormats of Goldman Sachs, who says of the war: “Is it a significant cause of the present downturn? I’d say no.” But that doesn’t stop Kristof from hyperventilating about “a bill that is accumulating at the rate of almost $5,000 every second!” Of course, we’re paying more than $5,000 a second for entitlement programs, but that doesn’t get a mention in his article. Nor does he mention the all-important point that I alluded to in my earlier CONTENTIONS posting: seen in the overall context of our economy, the cost of the Iraq War is chump change (less than 1% of GDP).

He then goes on to make a standard liberal argument: imagine all the domestic goodies we could buy if we weren’t wasting so much money on defense. “A Congressional study by the Joint Economic Committee,” he writes, “found that the sums spent on the Iraq war each day could enroll an additional 58,000 children in Head Start or give Pell Grants to 153,000 students to attend college.” He leaves unanswered a larger question: Would we really be spending untold billions domestically if we weren’t spending them in Iraq? To answer that question, consider the fact that the Iraq War is only five years old. Prior to 2003 we were not saddled with nearly as many costs for dealing with Iraq (although there were lesser costs for enforcing the no-fly zone and sanctions). And yet we weren’t making all of the spending commitments that Kristof would like to see. That suggests that our political system would not deliver the spending he advocates, regardless of what’s happening in Iraq.

His stance is a bit akin to a journalist waxing outraged about the cost of an expensive sports car. To make his case he profiles an owner of a $100,000 Porsche and offers lots of examples of more worthy projects (say a local soup kitchen) that could be funded with the money instead. Only he forgets to mention that the Porsche owner is Bill Gates, and he can easily afford not only the car but can also afford to give billions to good works.

The United States government, presiding over a $13 trillion economy, is in a similar position: we can easily afford our foreign and domestic priorities. That’s why domestic discretionary spending has actually risen during the Iraq War-another fact that Kristof neglects to mention.

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Gates vs. Grove

Last week, the two most significant figures to emerge from the technology industry, Bill Gates and Andy Grove, offered views about how capitalism can solve complex social problems. Their thinking could not be more different, and the differences are instructive — and not favorable to Gates.
Gates, the co-founder of Microsoft, was at Davos, where he delivered a much-publicized speech advocating “creative capitalism.” The phrase has a nice ring, and Davos major domo Kurt Schwab endorsed it as an “enlightened” view of capitalism. In fact, it was remarkably unimaginative. Gates argued that business needs to “stretch the reach of market forces,” because there are so many places in the world where capitalism has not yet worked. He said that technology and micro financing can provide solutions for business, health, and social problems in the developing world.

All this is unobjectionable. Indeed, it is precisely what all smart companies have been doing since globalization became a reality. Everyone from soap makers to vaccine manufacturers has been figuring out how to create very inexpensive versions of much-needed products. This is how capitalism adapts to new situations, although not every business learns. Where capitalism is failing in the developing world, it is more often due to the absence of political freedom – a subject apparently too sensitive for the international harmony at Davos.

If you want to take a deeper look at creative capitalism, read the current Forbes article on Andy Grove’s efforts to advance research on Parkinson’s Disease. Grove, the co-founder and former CEO of Intel, has consistently proven to be a much deeper thinker than Gates on social and public issues. When he examined how the National Institutes of Health and leading pharmaceutical companies were dealing with Parkinson’s (he was diagnosed with the disease in 2000), he realized that not enough people were asking why there had been so much failure and why so few new treatments had emerged.

The Forbes article provides an entirely different view of how private wealth can bring fresh thinking to the work of government and corporations. The amount Grove is spending is a fraction of what the Gates Foundation has, but you do get the sense that his “creative capitalism” is far more rigorous than what Gates has in mind. For Grove, the problem isn’t the nature of capitalism, it is the lack of contrarian second-guessing within business and governments that is the real enemy of innovation. This doesn’t go down as well as talking about the limits of capitalism. But it strikes me as a much smarter critique of market failures.

Last week, the two most significant figures to emerge from the technology industry, Bill Gates and Andy Grove, offered views about how capitalism can solve complex social problems. Their thinking could not be more different, and the differences are instructive — and not favorable to Gates.
Gates, the co-founder of Microsoft, was at Davos, where he delivered a much-publicized speech advocating “creative capitalism.” The phrase has a nice ring, and Davos major domo Kurt Schwab endorsed it as an “enlightened” view of capitalism. In fact, it was remarkably unimaginative. Gates argued that business needs to “stretch the reach of market forces,” because there are so many places in the world where capitalism has not yet worked. He said that technology and micro financing can provide solutions for business, health, and social problems in the developing world.

All this is unobjectionable. Indeed, it is precisely what all smart companies have been doing since globalization became a reality. Everyone from soap makers to vaccine manufacturers has been figuring out how to create very inexpensive versions of much-needed products. This is how capitalism adapts to new situations, although not every business learns. Where capitalism is failing in the developing world, it is more often due to the absence of political freedom – a subject apparently too sensitive for the international harmony at Davos.

If you want to take a deeper look at creative capitalism, read the current Forbes article on Andy Grove’s efforts to advance research on Parkinson’s Disease. Grove, the co-founder and former CEO of Intel, has consistently proven to be a much deeper thinker than Gates on social and public issues. When he examined how the National Institutes of Health and leading pharmaceutical companies were dealing with Parkinson’s (he was diagnosed with the disease in 2000), he realized that not enough people were asking why there had been so much failure and why so few new treatments had emerged.

The Forbes article provides an entirely different view of how private wealth can bring fresh thinking to the work of government and corporations. The amount Grove is spending is a fraction of what the Gates Foundation has, but you do get the sense that his “creative capitalism” is far more rigorous than what Gates has in mind. For Grove, the problem isn’t the nature of capitalism, it is the lack of contrarian second-guessing within business and governments that is the real enemy of innovation. This doesn’t go down as well as talking about the limits of capitalism. But it strikes me as a much smarter critique of market failures.

Read Less




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