– What kind of “research” has Bill Gates carried out about the nature of global poverty? What sources of information did he draw on in preparing his speech for Davos?
Arguably the richest individual on the planet, Bill Gates has carried out an extensive research into the aspect of poverty. This is especially so after the Bill & Melinda Gates foundation ventured into philanthropy in the year 2006. The research that Gates has carried out has taken various approaches such as actual visits to the worst hit regions. His visit to Soweto has been described as a serious discovery for the software tycoon who has decided to make it a priority to reduce the gap between the rich and the poor. In addition to visiting the areas, the tycoon has invested a lot of time into reading much literature done by peers that are like minded individuals. The reading of Gates extends to past centuries such as the books done by renowned economist Adam Smith. The analysis that he has done through reading various articles, critiques and books makes the basis for his Davos Speech. The Microsoft guru has used readings and quotes from various writers to make up his speech.
– What is his basic analysis? What does he consider the cause of such poverty to be, and what solution does he recommend?
Gates’ analysis is that the gap between the poor is widening by day. His analysis further indicates that the major cause of the rift between the rich and the poor is capitalism. The tycoon describes capitalism as a half-baked concept that is responsible for the fact that the poor keeping drowning deeper into poverty as the rich keep accumulating wealth. Gates analysis as well indicates that the difference between the wealthy and rich and the extremely poor is the fact that the principal business organizations are concentrating so many efforts in the developed nations where the market forces are of paramount importance, while ignoring the poor nations which need the services of the companies as well. This way, Bill Gates says, the poor people suffer the effects of disease and ignorance, phenomena that can be totally eradicated, if the shortcomings of capitalism are addressed. Gates suggests that the solution to the whole idea is creative capitalism. Creative capitalism, according to Bill Gates entails a situation where the organizations in the developed world design products that are within the billions of poor people. This way, he says, the organizations will be able to make profits while assisting reduce the gap between the rich and the poor.
– What views by other experts run contrary to Gates’ ideas? For example, why do some experts consider the bottom of the pyramid to be inherently unprofitable? What other criticisms might one make of Gates’ proposal?
Other experts, most notably the economists that are prominent proponents of the traditional profit maximization goal, are of the contrary opinion. One individual that opposes the views of Bill Gates is one professor form the New York University going by the name Mr. Easterly. Easterly argues that he, in his detailed research has not seen the corresponding development associated with the 2.7 trillion US dollars given to the poor nations in form of aid. Other like-minded economists argue that the poor billions at the lowest levels of the socio-economic pyramid do not have the purchasing power to sustain big organizations. They argue that even if those organizations design the products especially for the poor, such poor people may not purchase them. Moreover, they say, such creative capitalism cannot enable the countries to achieve economic growth and development. Other criticisms that one make towards the idea of Gates include the fact that by restructuring the organizations to suit the needs of the poor, the organizations will be violating the ultimate goal of the firm, which is shareholders’ wealth maximization.
– Finally, what is your view? Does the fight against poverty require a reorientation of corporate capitalism? Or does it depend largely upon efforts undertaken outside the realm of profit?
In my opinion, Mr. Bill Gates is right in arguing that the ultimate solution to poverty is reorientation of capitalism. Reorientation of capitalism means that capitalism will not be totally eliminated, but rather restructured in such a style that all those elements of it that benefit the rich can benefit the poor as well. The major reason why I strongly hold this view is that the first step towards ending poverty is not creating wealth but redistributing that which is already available.
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