Tuesday, June 8, 2010

Creative or Compassionate Capitalism

Creative Capitalism, edited by Michael Kinsley

The book begins with Gates’ speech and then goes on to give comments on the speech from some 40 renowned economists. The comments and reviews are mixed and the debate is lively. Of those that support Gates’ proposal of CC are:

  1. Ed Glaser (professor of economics at Harvard University), who argues that two great failures have spurred on the case for CC: laissez-faire capitalism’s failure to right social inequities, and government’s failure to provide proper education and healthcare.
  2. Mathew Bishop (business writer/editor of The Economist, and co-author of Philanthrocapitalism), who says that big business has the capabilities – “global supply chains, distribution networks, and an abundance of high quality human capital” – to produce social change on a large scale.
  3. Abhijit Banerjee ( professor of economics at MIT ), who sees CC bringing in much needed money and talent into the social sector.

Those that question Gates’ proposal are also present in equal measure, such as:

  1. William Easterly (professor of economics at New York University and senior fellow at the Brookings Institution), who argues that traditional capitalism has and does help the poor, and that corporate philanthropy is not an effective vehicle for helping the poor.
  2. Richard Posner (a judge and senior lecturer at the University of Chicago Law School), who says the term CC itself is vague and there is no evidence that it works.
  3. Clive Crook (Financial Times columnist), who warns that CC will distract businesses from their primary business of making profits.
  4. Gary Becker (Nobel laureate and professor of economics and sociology at the University of Chicago), who wonders whether CC will be viable in an environment alongside traditional capitalism.

I am with the view of Prof Easterly!

Read the full book review here.

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