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World's Richest Man Trashes Capitalism

Pete Winn | Senior Staff Writer | Friday, February 1, 2008

World's Richest Man Trashes Capitalism

(CNSNews.com) - Free-market advocates say the world's richest man doesn't seem to understand that the same system that made him wealthy can make life better for the poor around the world.

Bill Gates told the World Economic Forum in Davos, Switzerland, last week that under pure capitalism, "the great advances in the world have often aggravated the inequities in the world. The least needy see the most improvement, and the most needy see the least."

Gates said he was "impatient" with capitalism.

"The world is getting better, but it is not getting better fast enough, and it is not getting better for everyone," Gates said in a speech last week to business and economic leaders. "We have to find a way to make the aspects of capitalism that serve wealthier people serve poorer people as well. I like to call this idea creative capitalism."

He also called for making changes to capitalism so that corporations and governments devote more time and money to doing work that "eases the world's inequities" - and bringing science and technology to everyone.

David Boaz, executive vice president of the Cato Institute, said Gates didn't dismiss capitalism outright, as many in the media seemed to think immediately after the speech.

The Microsoft founder is concerned about people at the bottom of society, "the bottom billion" as he referred to them.

Still, Boaz said, Gates seems to miss the point of capitalism.

"What I think he's missing there is that capitalism hasn't failed the poorest people in the world - it simply hasn't been tried in the poorest countries in the world," Boas told Cybercast News Service.

"The failure is that poor countries have socialism and corporate fascism and cronyism and central planning - but they haven't tried capitalism, property rights and the rule of law," he added.

Fred L. Smith, founder and president of the Competitive Enterprise Institute, noted that nowhere in his speech did Gates call for poor countries to change their anti-capitalist governments.

"The tragedy of a person like Gates and (billionaire financier George) Soros and others is they made large fortunes by essentially serving others, and they thought it was just selfishness," Smith said.

"They don't understand the institutional framework that made it possible for them to create that wealth - property rights, the rule of law, a voluntary society - and therefore they think that they can somehow improve upon that. They think that freedom is too clumsy, and 'We'll create heaven here on Earth.' "

Alan Epstein, an analyst at the Ayn Rand Institute, points out that the West did not become wealthy at the expense of the Third World.

"We did not seize computers, houses, pharmaceuticals, and railroads from the Sahara,"
Epstein said. "We created our wealth under capitalism, the system that liberates individuals to produce and trade without interference. Third World countries could do the same if they adopted that system."

Smith said government's answer to help the poor in the Third World - foreign aid - is equally wrong. The U.S. and industrialized nations have poured billions of dollars in foreign aid into poor nations.

"It's not only stupid. It perpetuates poverty," Smith added "Foreign aid, as the old saw goes, is 'taxing the poor in the rich countries to help the rich in the poor countries.' It destabilizes and weakens the institutions for true wealth creation around the world by reinforcing the failures of government around the world."

The free-market advocates did praise Gates for his new role as the world's biggest philanthropist. The Bill and Melinda Gates Foundation distributes funds to relieve poverty and fight AIDS in the Third World.

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