Bill Gates retires as a full-time employee of Microsoft, the company he founded, this week -- ending the most successful capitalist career of all time. He is going to devote the rest of his active years to philanthropy. He is already the world's biggest philanthropist. And even before he begins this new chapter, he is arguably the most successful in terms of the impact the Bill and Melinda Gates Foundation has had. (Bias alert: As editor of Slate, I was a Microsoft employee for seven years. My wife, Patty Stonesifer, is CEO of the Bill and Melinda Gates Foundation, although she is leaving that post in September. I have good reason to be grateful to Bill Gates.)
Despite his move from capitalism to philanthropy, Gates believes that some of the world's problems -- especially the problems of the world's poorest countries -- are too big to be solved by philanthropy. Only capitalism can address them successfully. But -- as he argued in a speech at Davos in January -- capitalism is much better at serving the needs of the the prosperous than the needs of the poor. He goes on to argue that capitalism needs to be, and can be, reformed to solve this problem. He called this new system "creative capitalism."
The notion that capitalism, which is all about self-interest, can be amended somehow to be more about helping others -- and still be capitalist -- struck many (me included, at least at first) as hopelessly Pollyannaish and a little bizarre. Not only is Bill Gates the most successful capitalist of all time, but amending capitalism to serve the poor has not until recently been on his agenda. Gates' approach has been to take capitalism for all that it is worth, squeeze every penny out of it, and then take the money and give it all away. This is a much more traditional strategy, employed by the Rockefellers, Henry Ford, Andrew Carnegie and other giants of industry who became giants of philanthropy.
It's hard to remember how quickly Gates' reputation as a philanthropist -- and the reality behind it -- have blossomed. A couple of years after Slate started publication in 1996, we instituted a feature called the Slate 60. Now an established and respected circulation-boosting gimmick, the Slate 60 is an annual list that ranks people on the basis of how much they give away. It derives from an idea of Ted Turner's, who told Maureen Dowd, who wrote a column about it. Turner said that very rich people weren't giving away as much money as they might otherwise because they were afraid of falling off or moving down the Forbes 400. A replacement list based on giving money away was supposed to solve that problem.
The first year of the list, Bill Gates was number ten. He was asked constantly about why he wasn't giving more of it away, and he always insisted that he would do this as soon as he had the time to do it as intelligently as he tried to "do" software. The next year he came in first, and he has remained there or close most years since.
So why isn't his approach -- make the money, then give it away; "to every thing there is a season," and so on -- the right approach? That is one question raised by creative capitalism. There are others. Wouldn't the small-d democratic approach be: make the money and then tax part of it away? When corporations start giving money away or devoting it to good works, aren't they cheating their shareholders? (That was Milton Friedman's position, you won't be surprised to hear.)
To explore these questions, I'm producing a book. And "producing" is the right word. This is a literary experiment as well. The book will be derived from a private website and a public blog in which economists and others debate whether "creative capitalism" is meaningless, dangerous, useless, maybe useful, very useful, or brilliant. Anyone interested is welcome to join in at creativecapitalismblog.com. As the project progresses other contributions to the book will be published on this site and perhaps elsewhere -- all in the spirit of web collaboration. The book will be out by the end of the year.
And in the spirit of capitalism, contributors will be paid. The amount you get will be a proportion of the advance based on the number of your words that end up in the final product (as edited by me). We hope that this will create the right balance of incentives between writing long and writing deep. No guarantees, but we expect the payout to end up around a dollar or two per word. And if you're thinking that's not much, coming from Bill Gates -- Gates has nothing officially to do with this project. Nor does the Gates Foundation (unless you count glancing at printouts left by accident on the kitchen counter as "official"). The money comes from the bounty of Messrs Simon and Schuster.