Will new leader Allen Leighton introduce Bill Gate’s creative capitalism to the Co-op?

February 25, 2015

Rochdale PioneersSUBSCRIBERS ARE ADVISED THAT THIS POST WILL BE UPDATED REGULARLY

Newly appointed chairman Allen Leighton faces an existential battle at The Co-operative Group which may serve as a case study for the kind of creative capitalism proposed recently by Bill Gates

Bill Gates has recently called for more efforts directed towards creative capitalism. This raises the immediate question: what is it? At very least, there is need to examine institutions such as The Co-operative group which challenged capitalism yet attempted to create structures within the capitalist system rather than seeking its violent overthrow.

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Alibaba’s Jack Ma goes down the Bill Gates charitable route

May 5, 2014

Alibaba’s Jack Ma and the company’s co-founder Joseph Tsai are following the path taken by Bill Gates and Warren Buffett in creating a philanthropic trust.

An article entitled China’s Carnegie in The Economist, [May 3rd, 2014. P12] outlined this further example of creative capitalism.

The article traces the philanthropic ‘conversion’ of business pioneers and wealth generators from the days of Andrew Carnegie to today’s Jack Ma who has recently [April 2014] announced the formation of a $3 billion trust.

A cynical view of giving

The Economist is suspicious of altruism if a self-interested explanation comes to hand. It tests the ethical orientation of Ma’s actions and implicitly those of Bill Gates by suggesting that a cynical view that might be ‘straight out of a Silicon Valley public relations play-book ahead of Alibaba’s expected public offering this year which could value the company at $150 billion.’ Regardless of such imputed motivation, the initiative could add impetus to China’s efforts at environmental sustainability.

The Gates Foundation

Bill Gates and Warren Buffet have been leaders in a movement for the wealthiest capitalists to pledge sizable proportions of their assets for charitable purposes. The Gates foundation is admirably led by Biil and Melinda Gates.

From Silicon Valley to Shanghai

The movement has spread into other parts of the world including India. Jack Ma is overcoming reluctance of the wealthiest Chinese entrepreneurs to reveal their wealth as the country develops its new mixed socialist/capitalist political economy.


Bill Gates wants creative capitalism: But what is it?

January 25, 2008

world-poverty.jpg

Bill Gates has called for capitalism to contribute more effectively to the big social and environmental issues of the emerging century. What is creative capitalism? A working definition might be capitalism which places the resolution of social needs as a primary goal of economic activity, rather than a secondary consequence

The most successful capitalist of the late twentieth century calls for a shift in capitalist philosophy and actions for the twenty first century. The speech at the Davos conference follows his earlier efforts at creating a foundation to channel funds towards the social good. And where Bill Gates leads, others follow.

The parallel with science is worth a moment’s thought. Scientists for many years considered their contribution to the well-being of society was an indirect spin-off from their discoveries. Science and ethics were as much two worlds, as were the two cultures of C P Snow (Science and Humanities).

Over time, many critical issues arose at the interface between science and social responsibility: the applications of nuclear energy, stem-cell research, communications technology, surveillance and personal freedoms. The social responsibilities of science become acknowledged as a vital component in the development of improvements to the quality of life around the globe.

Old and new capitalism

As for science, now for capitalism. The old arguments were that entrepreneurs and businesses created wealth. It was up to society to decide how the wealth was redistributed, and resources allocated to social causes. The blind variation of capitalist growth seemed to have few more direct conduits to social amelioration. [And yet, the most ruthless capitalists of the nineteenth century tended to convert their amassed fortunes into trusts and foundations for the betterment of the less fortunate.]

Gates is proposing a different relationship between capitalism and the creation of the social good.

Gates at Davros

The Davros meetings have become synonymous with the powerful getting together to reflect on the human condition and what to do about it. For some, the meetings conceal a conspiracy of the most dangerous and monstrous kind. For others, it indicates where global change is needed, and what might be done about it.

Gates has the power to shape those changes, and may well bring others into line. If so he is yet another capitalist who has undergone a process of re-evaluation of self and the legacy he wants to create for himself

According to the BBC, Mr Gates said

“We need a creative capitalism where business and non-governmental organisations work together to create a market system that eases the world’s inequities,”

He gave examples of the sort of thing he had in mind, such as the Red campaign, itself launched two years ago in Davos by Bono, now to be partnered by Dell and Microsoft in committing proportions of earnings to sovial anti-poverty causes. He also mentioned the contributions from drug companies that were selling vaccines to Africa for a much lower price than in developed countries.

So what is creative capitalism?

As a working definition, we could start with what is implied in Mr. Gates’ speech. He challenges the old touchstone that capitalism does not have to concern itself directly well-being of people. Maybe we could see this as a challenge to that economic petty but benign deity which operates in mysterious ways, Adam Smith’s invisible hand in the interplay of the market forces.

Uncreative capitalism took for granted its benefits to all, through its mechanisms of social Darwinism, competition, and evolutionary success of the fittest. Creativity was a by-product of economic change – creative destruction Schumpeter called it. Exogenous sources of variation, muttered the neo-classical economists.

In contrast, creative capitalism places the resolution of social needs as a primary goal of economic activity, rather than a secondary consequence of accumulation of resources (‘rents’).

It’s only a working definition. We can argue whether the examples offered by Bill Gates are ‘sticking plasters’ leaving the economic sickness largely unaddressed. But the plaster is being administered with care and professionalism. At least two cheers for Gates at Davros.

Acknowledgement

Thumbnail Image is of World Bank estimates of poverty levels (2001) from the Aberdeen Business School Public Policy Site.