Profit-motivated capitalism is the best hope.

[John Galt]

Good info for my friends on this wonderful forum.

No link since the Wall Street Journal actually charges for their content because it's so good.

Why Bill Gates Hates My Book

By WILLIAM R. EASTERLY
February 7, 2008; Wall Street Journal

This newspaper reported recently that Bill Gates hates my ideas. I have no hurt feelings, at least nothing that months of intensive psychotherapy can't cure. Mr. Gates, after all, has allied himself with the foreign aid establishment. This establishment is notoriously sensitive to criticism from people like me, who find no evidence that the aid industry's grand schemes are actually lifting anyone out of poverty.

Mr. Gates has now put forward his own scheme -- "creative capitalism" -- in a speech at the recent World Economic Forum in Davos. He argues that today's capitalism does not benefit the poor. For Mr. Gates, regular capitalism works "only on behalf of those who can pay." While entrepreneurs fall all over themselves trying to meet the needs of the rich, "the financial incentive to serve [the poor is] zero." As a result, basic needs such as food and medicine go unmet.


Mr. Gates seems to believe that the solution is to persuade for-profit companies to meet the poor's needs by boosting the "recognition" of corporate philanthropy. But the dossier of historical evidence to suggest this would work is as thin as Kate Moss on a diet.

First of all, the recognition motive has proven to be awfully weak compared to the profit motive. Otherwise we would have had a lot more than the $5.1 billion of annual American corporate philanthropy to the Third World (as of 2005, which has the most recent reliable figures). That was four one-hundredths of 1% of the $12.4 trillion of U.S. production for the free market. Is it really the poor's only hope that the Gap will donate a few pennies per sexy T-shirt for AIDS treatment in Africa?

Profit-motivated capitalism, on the other hand, has done wonders for poor workers. Self-interested capitalist factory owners buy machines that increase production, and thus profits. Capitalists search for technological breakthroughs that make it possible to get more output for the same amount of input. Working with more machinery and better technology, workers produce more output per hour. In a competitive labor market, the demand for these more productive workers increases, driving up their wages. The steady increase in wages for unskilled labor lifts the workers out of poverty.

The number of poor people who can't afford food for their children is a lot smaller than it used to be -- thanks to capitalism. Capitalism didn't create malnutrition, it reduced it. The globalization of capitalism from 1950 to the present has increased annual average income in the world to $7,000 from $2,000. Contrary to popular legend, poor countries grew at about the same rate as the rich ones. This growth gave us the greatest mass exit from poverty in world history.

The parts of the world that are still poor are suffering from too little capitalism. Foreign direct investment in Africa today, although rising, amounts to only 1% of global flows. That's because the environment for private business in Africa is still hostile. There are some industry and country success stories in Africa, but not enough.

Mr. Gates also announced his foundation is starting "a partnership that gives African farmers access to the premium coffee market, with the goal of doubling their income from their coffee crops." This is fine as a modest endeavor to help a few Rwandan and Kenyan coffee farmers, but it's hardly going to remake capitalism. The main obstacles to exports in poor countries are domestic ones like corruption and political strife, not lack of interest from rich-country buyers for premium coffee.

Moreover, how do philanthropists choose just which product is going to be the growth engine of a country? Much research suggests that "picking winners" through government industrial policy hasn't worked. Winners are too unpredictable to be discovered by government bureaucrats, much less by outside philanthropists. Why did Egypt capture 94% of Italy's import market for bathroom ceramics? Why did India, an economy with scarce skilled labor, become a giant in skill-intensive IT and outsourcing? Why did Kenya capture 39% of the European market in cut flowers? Why did tiny Lesotho become a major textile exporter to the U.S.? Why did the Philippines take over 72% of the world market in electronic integrated circuits? Because for-profit capitalists embarked on a decentralized search for success.

Sure, let those who have become rich under capitalism try to do good things for those who are still poor, as Mr. Gates has admirably chosen to do. But a New-Age blend of market incentives and feel-good recognition will not end poverty. History has shown that profit-motivated capitalism is still the best hope for the poor.

Mr. Easterly, professor of economics at New York University and visiting fellow at Brookings, is the author of "The White Man's Burden: Why the West's Efforts to Aid the Rest Have Done So Much Ill and So Little Good" (Penguin, 2006).

[Dardedar]

Good info for my friends on this wonderful forum.

DAR
Ah Galt. I thought we had lost our "pal."

GALT
No link since the Wall Street Journal actually charges for their content because it's so good.

DAR
Actually, they give it away free right here. Just another reminder that when you actually take the time to make a claim, it's usually false.

BTW, I'm a capitalist. I invest in the stock market regularly and started my own business in 1991 at age 25. But unlike this guy, I wouldn't pretend to be a better capitalist than Bill Gates (a good atheist fellow).

D.
----------------------------
And there are problems:

“Private capital tends to become concentrated in few hands, partly because of competition among the capitalists, and partly because technological development and the increasing division of labor encourage the formation of larger units of production at the expense of smaller ones. The result of these developments is an oligarchy of private capital the enormous power of which cannot be effectively checked even by a democratically organized political society. This is true since the members of legislative bodies are selected by political parties, largely financed or otherwise influenced by private capitalists who, for all practical purposes, separate the electorate from the legislature. The consequence is that the representatives of the people do not in fact sufficiently protect the interests of the underprivileged sections of the population. Moreover, under existing conditions, private capitalists inevitably control, directly or indirectly, the main sources of information (press, radio, education). It is thus extremely difficult, and indeed in most cases quite impossible, for the individual citizen to come to objective conclusions and to make intelligent use of his political rights.” --Albert Einstein, May 1949

[Doug]

The number of poor people who can't afford food for their children is a lot smaller than it used to be -- thanks to capitalism. Capitalism didn't create malnutrition, it reduced it. The globalization of capitalism from 1950 to the present has increased annual average income in the world to $7,000 from $2,000. Contrary to popular legend, poor countries grew at about the same rate as the rich ones. This growth gave us the greatest mass exit from poverty in world history.

The parts of the world that are still poor are suffering from too little capitalism. Foreign direct investment in Africa today, although rising, amounts to only 1% of global flows. That's because the environment for private business in Africa is still hostile. There are some industry and country success stories in Africa, but not enough.

DOUG
The usual load of crap from heartless Republicans. If the poor are poor and hungry, it's their fault. We shouldn't help them, we should try to get them to buy our shit. Or better yet, exploit them at slave wages to make it! Yeah, that's the solution. If they're hungry, we can USE them!!

Even your pathetic little article doesn't provide evidence for your claims. it makes a lot of assertions, but there is no evidence. "The parts of the world that are still poor are suffering from too little capitalism. Foreign direct investment in Africa today, although rising, amounts to only 1% of global flows." That Africa is poor, and that there is little investment there, is true, but that doesn't prove causation through lack of investment.

That would be like saying that prostitutes don't read Plato, and most people who read Plato are not prostitutes, so therefore the solution to prostitution is to get hookers to read Plato.

The usual conservative crap. Lots of assertions, no evidence. But it makes them feel better because they are too mean and cruel to want to help the poor, and this tells them that they shouldn't help the poor, that helping the poor is bad for the poor. Exploiting the poor is good for them. So Galt feels better.

[Dardedar]

DAR
I think Doug read the article more carefully than I did.

So capitalism is good at getting us the stuff we need and want, and even stuff we don't need or want but how is it at spreading the fun around and letting everyone play?

***
Richest 2% own half the world's wealth – study

ISSUE 44: DECEMBER 2006-FEBRUARY 2007



"The richest 2% of adults in the world own more than half of global household wealth according to a path-breaking study released today by UNU World Institute for Development Economics Research (UNU-WIDER).

The most comprehensive study of personal wealth ever undertaken also reports that the richest 1% of adults alone owned 40% of global assets in the year 2000, and that the richest 10% of adults accounted for 85% of the world total. In contrast, the bottom half of the world adult population owned barely 1% of global wealth.

...

Wealth is heavily concentrated in North America, Europe and high income Asia-Pacific countries. People in these countries collectively hold almost 90% of total world wealth.



...a country’s representation in the rich person’s club depends on three factors: the size of the population, average wealth, and wealth inequality."

LINK

D.
----------------------------
Again Einstein nails it:

"Private capital tends to become concentrated in few hands,... The result of these developments is an oligarchy of private capital the enormous power of which cannot be effectively checked even by a democratically organized political society... The consequence is that the representatives of the people do not in fact sufficiently protect the interests of the underprivileged sections of the population."

[John Galt]

As usual Doug is so full of nothing but his own bloated self- You have to laugh.

The silliness of accusing people of being "Greedy"- as if that is an insult. Bill Gates made his fortune and still employs tens of thousands of highly paid people because he was/is greedy. Gates is great with a computer- I prefer my Macs. He knows nothing about third world development.

Your opinion about capitalism means little because you know so little- You have never met a payroll or risked everything that you own to grow your business. And as I wisely stated before- and is was not ever replied to by the brain trust- is "A government that robs Peter to pay Paul can always count on the support of Paul"- How true and how sad.

The map is good and obviously proves my point. Thanks very much- The red matches perfectly with countries that are economically free- Shocking that they have the money. Wealth is relative- people who can benefit from their labors and have the skills to make money often become wealthy- Oh The Humanity!! Horrors!!

Off to make money- cheers! Enjoy your tax "rebates"- since Doug is not Greedy- I'm sure he will send his check back- you are a man of principle right Doug?

Ayn Rand was a bigger atheist than all 3 of you combined- she should be your hero.

[Doug]

DOUG
Your article made a number of assertions. I pointed out that they are worthless because no evidence was provided to support them.

And by way of rebuttal, you offer NO evidence to support your contentions. All you have are silly slogans (...A government that robs Peter to pay Paul can always count on the support of Paul"), insults, and--nothing.

Typical GOP tripe. The conservatives always lose by default. They make so little effort to support their views you almost have to feel sorry for them. Almost.

[Dardedar]

As usual Doug is so full of nothing but his own bloated self- You have to laugh.

DAR
Galt is always the same. Nothing but insults and a complete inability to respond directly to a single point. Boring.

GALT
The silliness of accusing people of being "Greedy"- as if that is an insult.

DAR
Where would people get such an idea. People who understand the meaning of words?

greed
n. An excessive desire to acquire or possess more than what one needs or deserves, especially with respect to material wealth: "Many . . . attach to competition the stigma of selfish greed" (Henry Fawcett).

2. reprehensible acquisitiveness; insatiable desire for wealth (personified as one of the deadly sins) [syn: avarice] --Wordnet

—Antonyms generosity.

Hey, if you want to insult a Ayn Rand-bot, call them generous, giving. That's the worst. Greedy? That's a compliment in their upside down world.

GALT
Bill Gates made his fortune and still employs tens of thousands of highly paid people because he was/is greedy.

DAR
No, that doesn't follow. In fact, he and his wife may be the most generous philanthropists on the planet and it didn't necessarily take greed to be so financially successful. A lot of luck (right place right time), not much competition and the best product. Their generosity (a true evil in Randland) would make them in fact the very opposite of greedy.

Time and again we see that Ayn Rand cult members have to completely distort language in an attempt to support their absurd beliefs. I think Rand may have said some useful things. People shouldn't dismiss her just because so many of her followers are obnoxious pricks. I think people should read her stories when they are teens and try to find something useful. But then they should grow out of it and set it aside lest you grow up and become a greedy moron. It's really not for adults.

The map is good and obviously proves my point. Thanks very much-

DAR
If you point was that capitalism is good at making a few people really rich and a lot of people really poor, then good point and you are welcome.

Wealth is relative- people who can benefit from their labors and have the skills to make money often become wealthy-

DAR
Oh I see. The poor people are just lazy. Only the wealthy work hard.

D.
-----------------------
Consider this bonus, glaring, irony. Galt is not only a Rand follower but he also (and perhaps more so) looks up to Jesus. And he does this at the very same time, in the same mushy skull. One shudders at the compartmentalization going on in his little tomato.

What did Jesus (supposedly) teach about the poor? Galt, pay attention. Time for a little Bible instruction:

Jesus the Advocate for the Poor

Jesus had a special sense of mission to poor and
oppressed people. At the outset of his ministry,
sometimes referred to as Jesus' mission statement,
Jesus stood up in the synagogue at Nazareth and read
from the prophet Isaiah:

"The Spirit of the Lord is on me, because he has
anointed me to preach good news to the poor. He has
sent me to proclaim freedom for the prisoners and
recovery of sight for the blind, to release the
oppressed, to proclaim the year of the Lord's favor."
(Luke 4:18-19)

The biographies of Jesus depict him repeatedly
reaching out to those at the bottom of the social
pyramid--poor people, women, Samaritans, lepers,
children, prostitutes and tax collectors. Jesus was
also eager to accept people who were well-placed, but
he made clear that all, regardless of social position,
needed to repent. For this reason, he invited the rich
young man to sell all of his possessions and give the
proceeds to the poor. (Matthew 19:16-30, Luke
18:18-30, Mark 10:17-31)

Jesus commanded, "Love your neighbor." When asked to
define "neighbor," Jesus expanded the traditional
meaning of the word--defining our neighbor as anyone
who is in need, including social outcasts: "But when
you give a banquet, invite the poor, the crippled, the
lame, the blind, and you will be blessed." (Luke
14:13)

In his portrayal of the day of judgment, Jesus
pictured people from all nations gathered before him,
separated into "sheep" and "goats." (Matthew 25:31-46)
To the "sheep" he says, "Come you blessed of my
Father, for I was hungry and you fed me..." In their
astonishment they ask, "When did we do that?" And he
answers, "When you did it to the lowliest of my
brothers (and sisters)." Conversely, to the "goats" he
says, "Out of my sight, you who are condemned, for I
was hungry and you did not feed me..."

Jesus himself cared for those in need by feeding the
hungry. Crowds of four thousand (Mark 8:1-13) and five
thousand (Mark 6:30-44) had assembled to listen to
Jesus. They soon became hungry. When his disciples
suggested that Jesus send the people away to buy food,
he responded by saying "I have compassion on these
people..." and "you give them something to eat." He
proceeded to perform miracles to feed these large
crowds of hungry people.

link

[Dardedar]

The usual conservative crap. Lots of assertions, no evidence. But it makes them feel better because they are too mean and cruel to want to help the poor, and this tells them that they shouldn't help the poor, that helping the poor is bad for the poor. Exploiting the poor is good for them. So Galt feels better.

DAR
This comment may sound overstated. Would republicans really attack those who want to help the poor? Galt's article does it but it tries to be subtle. I came across this article again tonight which lays it out much more starkly. Yes, these hypocritical republican pseudo-christians really do look down on helping the poor in total contrast to the clear words of their Jesus (examples provided above).

Consider:

***
The Crime? Helping the Poor While Being Wealthy
By A. Alexander
The Progressive Daily Beacon

Saturday 25 August 2007

It is interesting to observe Republicans and the corporate-owned media as they attack the rare wealthy person who dares attempt to help America's poor and impoverished. According to Republicans, wealthy people that try to help America's poor, even those like John Edwards who came from a working class background, are to be publicly humiliated ... to be treated as though they have committed a crime. What crime? The crime of helping the poor while being wealthy.

...

For the last 40 years in the United States, any person that dared take on the cause of the poor and disenfranchised has been roundly attacked, belittled, marginalized, intimidated into complete surrender, or murdered (i.e. Bobby Kennedy, Martin Luther King Jr. etc.). The reason for this is simple: Republican philosophy dictates that any of the hard-earned taxpayer dollars returned to, or used to improve the lives of common citizens is a waste of money. However, giving the taxpayer's revenue to the wealthiest Americans and corporations is money well spent. In other words, welfare for the poorest among American society is bad; welfare for the wealthiest among American society and corporations is good.

And what is best of all? Spending most of working America's tax dollars on building bigger, better, and deadlier bombs!

It might be tempting to consider this analysis as being a bit harsh on Republicans. However, a recent scenario illustrates the point perfectly: Every reputable study and organization has found that there are currently some 9 million American children without health insurance. Congress was seeking to address the issue and determined it would cost about $10 billion dollars per-year to cover 6 million of the uninsured children. Suddenly, the Bush administration released a "study" that concluded, despite all previous evidence and studies, that there are supposedly only 5 million American children without health insurance.

This finding, of course, came from an administration that has literally made it impossible for government researchers to make public information and studies that contradict Republican ideology. However, the moment Congress decided to address the lack of health insurance among America's poorest children, and the Republican administration suddenly produced a study that undermines the need for helping poor children. Better, perhaps, to state that the administration's "study," if taken seriously, would effectively ensure that only half the original funds of $10 billion would be spent on helping America's poorest children gain health insurance.

A political party that can see no problem with spending $700 billion per-year on senseless and endless warfare and that gladly provides billions of dollars in annual tax cuts for corporations, but can find no reason to spend a mere $10 billion in an effort to help poor children is as unconscionable as it is unfathomable. Is it unreasonable to question their humanity?

In the end, however, Congress did pass child health care reform ... and Mister Bush and his administration immediately issued orders to states that made it impossible to administer the program.

Maybe the only explanation for the Republican perspective is greed. The less money possessed by the poor, leaves more money for the wealthy.

As for why the corporate-owned media and Republicans so viciously attack the rare wealthy individual who dares speak out on behalf of the poor? Well, they know that only one of their own would have the power to make a difference. After all, isn't it obvious that the poor are powerless to overcome the wealthy forces arrayed against them? If they weren't, poverty would have been extinguished long ago.

LINK

[Barbara Fitzpatrick]

Greedy Oil Party all the way. I have been a not particularly successful business owner and have "made payroll" - and while I basically went down because I was not a good enough saleswoman to sell word processing in a typewriter world, I did a bit of studying before I went into business. For a solid economy, one needs a "well-regulated" free market. Market forces will indeed provide the rising tide that lifts all boats - as long as regulation keeps business in the mid-size range and never allows mega-corporations to siphon off all the capital. That's what the Sherman Anti-Trust Act was about - and I hope we get a president and A.G. in soon who will start using it again.

[Tony]

See Darrel, why be a capitalist when you know how much capitalism sucks? Come over to the dark side! Lol.

[Barbara Fitzpatrick]

Nothing wrong and much right with REGULATED capitalism. Very much wrong with unregulated capitalism.