Monday, August 4, 2008

Creative Capitalism

The most commonly used argument against capitalism is that it enriches a few while many others remain poor. The quintessential illustration of this supposed phenomenon is the fact that Nestle sells bottled water to poor, nearly destitute Africans. Isn’t there something wrong, liberals say, with a system that allows a massive, multibillion dollar conglomerate to sell a necessary commodity to people who have almost nothing?

No. Capitalism is flawed. Sometimes people will be used up by the system and never receive any prosperity. But if those poor Africans saving up to buy water ever achieve any measure of material prosperity, it will come due to capitalism.

In fact, the self-interest of the rich is almost certainly the best hope for the poor. Bill Gates is perhaps the most successful capitalist in the history of the world, and is also a world-class philanthropist. He has retired from his day-to-day control of Microsoft to run the Bill & Melinda Gates Foundation, which practices what he calls “creative capitalism”—capitalism that attempts to help the underprivileged.

It sounds like a contradiction in terms, but it isn’t. Take the story of the Vodaphone, which invested in a Kenyan cell phone company. In a Time magazine piece, Gates explains what happened.
[Vodaphone] figured that the market in Kenya would max out at 400,000 users. Today that company, Safaricom, has more than 10 million. The company has done it by finding creative ways to serve low-income Kenyans. Its customers are charged by the second rather than by the minute, for example, which keeps down the cost. Safaricom is making a profit, and it's making a difference. Farmers use their cell phones to find the best prices in nearby markets. A number of innovative uses for cell phones are emerging. Already many Kenyans use them to store cash (via a kind of electronic money) and transfer funds.

Vodaphone has succeeded beyond its wildest dreams—it has gotten over twenty times the sales it expected—and also managed to change Kenya for the better. The “electronic money” used there is innovative—and will probably eventually be used here. (Already, credit cards and computers are helping make cash obsolete). Thanks to capitalism, Kenya is, in one small way, ahead of the rest of the world technologically.

Gates’ whole Time article is well worth reading—he explains how self-interest is curing malaria, fighting AIDS, educating the poor, and harnessing the estimated five trillion dollars in purchasing power of the poorest two-thirds of the world’s population. Gates, like conservatives, realizes that capitalism does a lot of good.

One the flip side, it also does harm. Nike, for example, is probably guilty of human rights violations. As late as 1996, Nike was guilty of violating Vietnamese labor laws (which is a little like being considered extravagant in Vegas), and possibly still employs child labor. (Kinda puts the whole “Wal-Mart vs. unions” thing in perspective). Nike makes billions while (probably) exploiting people—isn’t that a flaw in capitalism?

Actually, yes. No system is perfect, and capitalism doesn’t help everyone. It produced slavery, child labor, awful working conditions (such as in coal mines), and exploitation of the less fortunate. In capitalism, there will always be haves and have-nots.

But the first group will always steadily grow, while the second will shrink. In socialism, this doesn’t happen. There are no haves and have-nots—only have-nots. To paraphrase Winston Churchill, capitalism may be the worst system of economics (it is flawed)—except for all the others. Capitalism exploits some people, and helps the rest. Socialism exploits everyone.


At August 5, 2008 at 5:57 AM , Blogger Name: Soapboxgod said...

"Capitalism is flawed."

Only in the minds of people who are applying it as means of moral justification towards achieving the "common good". Capitalism in practice can in fact do that. However, that is not the primary rationale for pursuing a Capitalism or a Capitalist society. The primary rationale for pursuing Capitalism is that it is equally in sync with human's intrinsic nature not to mention that it is a far more just methodology than any other.

At August 5, 2008 at 6:19 AM , Blogger Name: Soapboxgod said...

"Capitalism is flawed."

What's more, we ought to remember that Capitalism as we know it Daniel has not been an unregulated and totally laissez-faire sort of capitalism. So, when we say that it is "flawed" its flaw comes in large part due to the fact that there always existed a certain level of government interference and control.

At August 5, 2008 at 6:27 AM , Blogger WomanHonorThyself said...

exactly!..and thats why power hungry Dems want socialism!

At August 5, 2008 at 6:43 AM , Blogger Name: Soapboxgod said...

I won't argue your point Woman. But, the assertion is merely a general platitude. It's all well and good to throw the "Dems are/want socialists or socialism" mantra out there. But, platitudes and generalities as that ignore the culpability of Republicans in that endeavor.

As I'm sure you well know, Socialism is predicated on on a number of practices including, but not limited to, redistribution of wealth and the abolishment of private property.

Certainly there are a number of public policy positions that Republicans have taken which have fostered an environment where that can thrive.

THAT, is what I find hugely problematic and why I am as vocal as I am about exposing Republicans who engage in it.

At August 5, 2008 at 6:56 AM , Anonymous Ricky said...

If there is one real way you can tell you're a Republican. You have faith in free enterprise, faith in the resourcefulness of the American people, and faith in the U.S. economy. Sure we hit some bumps in the road on the way, but that’s the way it goes. Nothing can go up, up, up without a detour now and then. Just hang in there you’ll be alright. This is nothing new. To those critics who are so pessimistic about our economy, I say to them, where else can you get what you already have! America is not in a crisis.

For those of you who didn’t grow up in America, this is how it works.

The U.S. economy remains the envy of the world. We have the highest economic growth of any of the world's major industrialized nations. Don't you remember the pessimism of 20 years ago when the critics said Japan and Germany were overtaking the U.S.? Ridiculous!
Now they say the same thing about India and China are overtaking us. Don't you believe it! We may hit a few bumps -- but America always moves ahead! That's what Americans do!

At August 5, 2008 at 7:20 AM , Blogger Name: Soapboxgod said...

"If there is one real way you can tell you're a Republican. You have faith in free enterprise..."

"Free enterprise" does not entail bailouts for businesses at the expense of the American taxpayer. Nor does it entail subsidizing business endeavors (eg. ethanol, wind, solar) which cannot sustain themselves on the free market. There is nothing "Free Enterprise" about a "Free" trade agreement between North American countries or Central American countries which is drawn up as a 20,000 some odd page document/contract.

There is nothing "Free Enterprise" about any of those. And yet, here we have come to find Republicans tinkering with an otherwise free market capitalistic system for no other purpose than political power and expediency.

So, I would say that attempting to draw a corollary between "Free Enterprise" and Republicans or Republicanism is (given the examples I provided) more than a little disingenuous.

In a general sense yes, Republicans have historically been much more associated with Free Enterprise and Capitalism. However, as of late this is becoming less and less evident.

At August 5, 2008 at 7:25 AM , Blogger A Redneck From The North said...

Hey Soapboxgog, It's a bugger when you bungle up your first brain transplant. Isn't it?

At August 5, 2008 at 7:49 AM , Blogger Name: Soapboxgod said...

"Facts are stubborn things; and whatever may be our wishes, our inclinations, or the dictates of our passion, they cannot alter the state of facts and evidence."

When one can't logically refute them [facts], the next course of action naturally becomes an assault on one's character.

At August 5, 2008 at 8:07 AM , Blogger A Redneck From The North said...

Lighten up Girlie

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