Creative capitalism of Gates

The "capitalism for the 21st century" should improve the lives of those who have not benefited from market forces, said Microsoft founder Bill Gates.

He noted that capitalism only worked for those who could pay, so firms had to find out "how the power of the marketplace can help the poor".

Gates was making his appeal to some of the world's most powerful business leaders at the World Economic Forum in Davos last month. It was his last speech in Davos as a full-time employee of Microsoft.

Gates is due to leave the company, so that he can focus on the philanthropic work of the Bill and Melinda Gates Foundation.Gates also said the world was constantly "getting a lot better, in significant ways", with life expectancy rising, and the lives of women and minorities improving.

Many improvements had been triggered by advances in the fields of science, technology and medicine. Gates argues that a major flaw of capitalism is that those who are worst off often cannot afford the latest technology.

To its credit, Microsoft has made versions of its software available at discount prices to developing nations. But Gates has shown no sign of rethinking his negative attitude toward business models based on free software.

"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 this 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.

Some people might object to this kind of market-based social change, arguing that if we combine sentiment with self-interest, we will not expand the reach of the market, but reduce it," Gates said.

No doubt, Gates' ideas constitute a romantic view of changing the world. The question is: what are the chances of this idea being applied realistically in a world which no longer holds these values dear?

Several international bodies have cited an increase in poverty with the spread of globalisation. The traditions and culture of a capitalist society emphasise the role of the individual and not the community.

Gates' call for companies to think about the profit gained by society of its products is, no doubt, a political notion. It is sufficient here to think of the budget of arms manufacturers to understand the problem.

Gates' words will not improve the economies of poor countries, because they do not deal with the crisis realistically.

The basic problem is that globalisation has made large corporations so powerful that they are able to inflict more poverty in poor countries.

Despite the fact that Gates is one of the most successful businessmen in the world, he is not the best theorists of capitalism.

The World Bank's and the International Monetary Fund's policies show that his views are far removed from their agendas, despite the fact that the two were established to assist and back developing countries.

Mohammad Akef Jamal is an Iraqi journalist based in the UAE.