Thursday, January 24, 2008


by Thomas Riggins

Bill Gates is giving (by now gave) a speech at Davos in which he is calling upon the capitalists of the world to be kinder and to help the poor. But only if they can make a buck. So reports the Wall Street Journal in an article by Robert A. Guth (1-24-2008) from which all the direct quotes by Gates and others have been taken.

Gates says that "We have to find a way to make the aspects of capitalism that serve wealthier people serve poorer people as well." Those aspects are the exploitation of human labor power and the extraction of surplus value from workers. It will be a nice trick to see how this will happen.

Gates wants to further what he calls "creative capitalism" and use the technological revolution to help the poor of the world. "The rate of improvement for the third that is better off," he stated, "is pretty rapid. The part that is unsatisfactory is for the bottom third -- two billion of six billion." He at least concedes capitalism has left behind two billion people. The number maybe greater than that. Other experts think that the figure should be four, not two billion -- i.e., a bottom two thirds (C.K. Prahalad from the University of Michigan).

The "free" market, the cause of this misery of the poor, will be used to help the impoverished billions out. Don't panic capitalists! Your role is to design products and systems that help the poor AND make a profit for yourselves at the same time! "Such a system," Gates tells us, "would have a twin mission: making profits and also improving lives for those who don't fully benefit from market sources." But you can be sure, no profit, no benefit.

Is this a realistic plan? "The idea," he says is "that you encourage companies to take their innovative thinkers and think about the most needy -- even beyond the market opportunities -- that's something that appropriately ought to be done." But this is just not how the market works, not the way globalization operates. While company X is using its resources "beyond market opportunities" company Y moves in and takes the market share that X failed to appropriate. Gates sounds good, and has set up big aid programs, but all this won't make a real dent in the poverty caused by monopoly capitalism.

The WSJ quotes a critic of this utopian scheme, a past economist at the World Bank and now a teacher at NYU, William Easterly, who is quoted as saying, "There's a lot of people at the bottom of the pyramid but the size of the transactions is so small it is not worth it for private business most of the time." This means most of the poor will stay poor. Easterly wrote a book in 2006, the Journal reports, "The White Man's Burden" in which he maintains that even though $2.3 trillion has been expended in foreign aid in the last 50 years nothing much was really accomplished for the masses of the world's poor.

Gates is reported to dislike this book and to have publically "snapped" at Easterly for his criticisms. Easterly rejoined that , "The vested interests in aid are so powerful they resist change and they ignore criticism. It is so good to try to help the poor but there is this feeling that [philanthropists] should be immune from criticism."

Bill Gates is not deterred. He says that "If we can spend the early decades of the 21st century finding approaches that meet the needs of the poor in ways that generate profits for business, we will have found a sustainable way to reduce poverty in the world."

Again the stress on capitalist profits, without which we can't be rid of poverty. But business can't even keep its own workers employed, even when it makes profits. In fact it sometimes fires its own workers in order to increase its profits. Can we really think that capitalists will forego opportunities to maximize profit margins just to help the poor. I don't question Gates sincerity but If he is really committed to ending poverty I suggest he spend less time reading Adam Smith and more reading Karl Marx.

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