This strip continues the “Shrinking Empire” gag started last Thursday with Unkle 800-lb Gorilla. I have been planning for some time to use Unkle 800-lb Gorilla and Bling-Bling (see cast) in a series on the current economic and war crises capitalism and imperialists have inflicted on the world. This coming Thursday expect to see them both in family counseling.

“Creative capitalism” is a new coinage for a very old idea. I read about it only this weekend when my copy of TIME magazine arrived sporting an essay promoting this concept by Microsoft founder Bill Gates, whose speech at the World Economic Forum last January in Davos, Switzerland has launched a great deal of discussion among reform-minded capitalists, investors, financiers, economists and advocates for the poor.

There is, of course, a blog. Creative Capitalism the Blog features essays by prominent intellectuals and public figures that editor Michael Kinsley plans to compile into a book for publication in the Fall. There are plenty of skeptics —especially from Richard Posner and Stephen Landsburg— but none of the criticism I have read so far has treaded beyond libertarian rejection of anything that falls short of maximizing profits. Recently a few representatives of the Gates Foundation, attempting to defend their baby, posted a memo that provides a handy distillation of “creative capitalism” principles.

Much of the debate here has centered on what, exactly, creative capitalism is. Here’s our thinking.

• This isn’t about changing capitalism, which has worked wonders for billions of people and will continue to do so. Yet roughly one billion people still make under $1 a day, about half of the people in the developing world lack access to basic sanitation, and one child dies every 30 seconds from malaria, a preventable disease. Market reforms and the spread of capitalism will help to address these problems over time. Creative capitalism seeks to harness capitalism in ways that speed this progress.

• Creative capitalism is an effort to get more companies involved in work that reduces inequity. It assumes that companies don’t do more of this kind of work today because they don’t face the right incentives: because they don’t see how to make a direct profit from it or how to enhance the value of the business more generally from doing it. Creative capitalism is about discovering these incentives where they already exist and about creating more incentives when the current ones are insufficient.

• This can happen in two ways:

1. Businesses can seek more effective ways to use existing market incentives—such as profit or recognition—to reduce inequities and serve the poor.

2. Governments, nonprofits, and philanthropies can use their resources and expertise to create new market incentives for businesses to reduce inequities and serve the poor.

I recommend reading the whole thing; the authors elaborate on those “two ways” and provide interesting examples. Skeptics, such as Posner, dismiss “CC” as little more than good public relations (to which I am inclined to agree), but John Quiggin, rebutting Posner, sees it as an existential matter:

And it may well be that behaving as a good corporate citizen is conducive to long-term firm survival. This isn’t just a matter of buying PR as Posner suggests. If political actors generally regarded the activities of a firm as socially desirable, they will presumably be less likely to take action that might damage it. And while political perceptions do not always coincide with social reality, it’s hard to believe, in global terms that the strategies adopted by major pharmaceutical companies in recent decades have been either socially optimal or tailored to maximize the chances that the industry, and the firms that make it up, will survive in the long term in something like their current form.

So far I have not found much discussion of this concept on the Left. Whole Foods CEO John Mackey talks about “conscious capitalism” as an alternative to the creative variety, but as a libertarian, Mackey rejects the government role Gates sees as so important. Like Starbucks and other baby boomer-founded enterprises, Whole Foods treats its employees like stakeholders and gives them a voice in choosing things like health plans. Which is nice, insofar as raising the bar on the quality of drudge work environments, but hardly challenges the fundamentally unequal relationship between owners and producers. Of course, I wouldn’t expect such from either Mackey or Gates.

Model Minority expresses the deepest form of skepticism I have seen so far.

Expecting capitalism to help people is like expect dope dealers to save the ‘hood. In fact, In many ways the crack game is capitalism in its purest form.

One last note: If Gates is serious about good corporate citizenship and enlisting government as a partner, perhaps Microsoft should start paying its fair share of taxes to the State of Washington.

Tags: bling-bling, capitalism, creative capitalism, Dr. Mungo, globalization, shrinking empire

This entry was posted on Tuesday, August 5th, 2008 at 1:40 pm and is filed under In Contempt. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.