Bill Gates suggests we need to re-examine the role of capitalism. His solution was to move to “creative capitalism.” He defined it as:
There are two great forces of human nature: self-interest and caring for others. Capitalism harnesses self-interest in a helpful and sustainable way, but only on behalf of those that can pay.
Government aid and philanthropy channel our caring for those who can’t pay. But to provide rapid improvement for the poor we need a system that draws in innovators and businesses in a far better way than we do today.
Such a system would have a twin mission: making profits and also improving lives of those who don’t fully benefit from today’s market forces. For sustainability we need to use profit incentives wherever we can.
At the same time, profits are not always possible when business tries to serve the very poor. In such cases there needs to be another incentive, and that incentive is recognition. Recognition enhances a company’s reputation and appeals to customers; above all, it attracts good people to the organization.
As such, recognition triggers a market-based reward for good behavior. In markets where profits are not possible, recognition is a proxy: where profits are possible, recognition is an added incentive.
The challenge here is to design a system where market incentives, including profits and recognition, drive those principles to do more for the poor.
I like to call the idea creative capitalism, an approach where governments, businesses, and nonprofits work together to stretch the reach of market forces so that more people can make a profit, or gain recognition, doing work that eases the world’s inequities.
Source: Bill Gates
JAN
About the Author:
Joshua D. Mosshart has spent more than 15 years in the financial industry customizing nonproprietary strategies to help his clients pursue their personal financial goals. Having spent over a decade studying different aspects of the economy, Joshua has mastered inter-market analysis, the study of how global and domestic markets react with one another. Joshua received his Masters of Science in Financial Services degree. Joshua is a Certified Estate Advisor through the National Association of Financial and Estate Planning (N.A.F.E.P.). He completed the Certified Financial Planner (CFP®) Certification Curriculum through the American College and completed "The Industry's Most Complete Financial Planning Program" the CHFC designation and the CASL retirement coaching designation as a leading credential in the senior/retirement area. Also he was awarded the Chartered Life Underwriter designation the highest level designation available in the life insurance profession. He is also a designated Certified Annuity Specialist ® which is only held by 1% of licensed advisors. He was awarded the Certified Funds Specialist ®, Certified Income Specialist ™, Board Certified in Estate Planning ™and the Certified Tax Specialist™ designations. Joshua D. Mosshart is series 7, 63, 66 & 24 securities registrations. Joshua was born in Sandpoint, Idaho, where he became an avid skier and rugged outdoorsman. At the age of 12, he and his family relocated to California. Upon graduation he moved to Hawaii where he joined the Merchant Marines. While in Hawaii, Joshua co-founded a non-profit organization raising huge sums of money for endangered species. His non-profit organization later became the first non-profit organization to ever set up in the Smithsonian Institute in Washington D.C. He completed 5 years of graduate level courses at The Institute of Business and Finance and The American College in Pennsylvania. He currently lives in Malibu with his wife Arlene and four children.