Inside Philanthropy

A blog on philanthropy and nonprofit news and issues. A publication of Philanthropy Journal.

January 28, 2008

Gates calls for capitalism to change

In his farewell address as president in January 1961, Dwight Eisenhower issued a warning about the “military-industrial complex.”

It took a retired career military officer to see the danger posed by the escalating alliance of the military and industry.

Last week, at the World Economic Forum in Davos, Switzerland, Microsoft Chairman Bill Gates scolded capitalism for not doing more to address the needs of the world’s poor.

Gates, one of the world’s wealthiest individuals, built his fortune in the marketplace of capitalism.

And as he conceded to The Wall Street Journal, “we were not focused on the needs of the neediest” as Microsoft built itself into a global behemoth.

Now, Gates says companies should undertake enterprises that create products and services for the poor.

Corporations also must recognize, he says, that progress in technology, health care and education tend to further enrich the wealthy while skipping the poor.

Gates’ call for changing capitalism’s mindset likely will not persuade those who believe corporations violate their duty to shareholders by building social and environmental goals into their business bottom line.

But as research repeatedly has shown, companies that make it their business to do good are more attractive to investors, customers, vendors and employees than companies that do not.

Communities, including the global community, sink or swim together.

And with nearly three billion people throughout the world living on less than $2 a day, and 36.5 million Americans living in poverty, our future depends on free enterprise that focuses its innovative energy on a “triple bottom line” that recognizes the interconnectedness of social, environmental and economic outcomes.

By seeking and investing in business and social strategies to help the poor help themselves, corporation help create stronger communities and markets that benefit the common good.

Bill Gates calls the corporate strategy he advocates “creative capitalism.”

You could just call it common sense.


  • At 2:29 PM, Anonymous Anonymous said…

    It is exciting to hear a leader like Bill Gates break from conventional thinking. But did not Rockefeller do that about a century ago?

    Shareholder-driven capitalism has a single bottom line. It does not matter that a few shareholders have a broader view. So it seems as if Gates' vision would have an Achilles heal, namely, that a sufficiently large number of shareholders could and would expand a corporation's bottom line to include people and planet.

    Perhaps the greatest forward step by Gates would be to create a $10 billion fund to start up stakeholder-driven corporations, including, but not limited to, ESOPs, coops, and even youth-operated social enterprises. The fund would be replenished by the corporations and would grow to underwrite more such corporations, in the best case stimulating exponential growth.

    Gates could make a dramatic difference with but a slight shift in his paradigm.

    Let us not leave it at that. Who would join me in a group letter to Bill Gates to state as much?

    Van Ajemian, J.D.


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