'Creative Capitalism' for the Everyman

At the World Economic Forum in 2008, Bill Gates unveiled a new theory for corporate success: creative capitalism. The gist: Is it possible that the next stage of economic evolution demands that major corporations integrate philanthropic ideals into their business strategies? Gates and others including Warren Buffett say yes. Other extraordinary economists and business leaders aren't so sure, and question the concept's practicality and sustainability.

The creative capitalism concept was the foundation for a website of the same name. And in a sort of revolutionary approach, the website was launched as the genesis for a book, with authors/editors Michael Kinsley and Conor Clarke curating online essays and debate among about 40 noted economists and business leaders, plus the subsequent comments and discussion from the website's readers. They turned it all into Creative Capitalism: Conversations with Bill Gates, Warren Buffett, and Other Economic Leaders. The book made its debut last November, garnering much attention for its ideas and scope, and also as the economy continued to crumble.

All this got us thinking at Tonic. Most of us don't have the experience, brains, power and luxury of being among the world's business titans. Are the basic tenants of creative capitalism restricted to major corporations and brilliant economists — or can the rest of us adopt elements into our own lives, our work and our choices as consumers? We tracked down Conor Clarke, who runs the official Creative Capitalism site and curated blog. We asked him a few questions about the concept, tweaking the idea for the layman, the everyman — you and me.

Tonic: Corporate social responsibility campaigns are hot commodities, with celebrities and companies urging us to do good and justify our purchases in this grave economic era. Critics argue that it's just PR. Do motives matter? If companies are capitalists to the core and not altruistic in the slightest, do the ends justify the means? Or do we need genuinely philanthropic intention to really inspire change?

Clarke: To some extent the answer here depends on what is meant by "matter" and "change." But it does seem to me that if you're putting on philanthropic airs with the ultimate intention of making a buck, you don't deserve any special, moral praise: Social responsibility is just a new and more clever way to boost the bottom line. On the other hand, I think obsessing over motives can be taken too far, for two reasons. The first is that this new need for PR is to some extent reflective of changes that have already taken place: changes in consumer demand. "Corporate social responsibility" can be understood as an effect and not a cause of this new interest in doing good.

Second, it is often true that the ends justify the means. I don't think of Bill Gates' interest in building Microsoft as particularly altruistic: He probably wanted to make a ton of money. But I would bet that Microsoft has had more positive impact on the world than the Gates Foundation ever will: Developments in software and computing have increased productivity, created jobs and made everyone's lives much easier. (This is indirectly true of the developing world as well.) This is an old, hackneyed capitalist story and it's been around since Adam Smith, but I believe it: Bill Gates' private selfishness made everyone better.

Tonic: Sure, these are reasonable goals and standards for Bill Gates, but what about the rest of us who just need to make ends meet? What can real, everyday consumers look for and make a priority when shopping?

Clarke: There are many, many people in much better positions to answer this question than I am, since I don't have the expertise to parse the value of and differences between "fair trade," "organic," etc. What I can say is that, almost by definition, the concept of creative capitalism must include everyday consumers and investors. A company that markets a product with a social premium must rely on consumers to purchase. A company that states its intentions to pursue some goal besides profit maximization (like Google or the New York Times) must rely on investors to buy its shares. Those consumption and investment decisions must happen at the local, individual level — not just at the level of Bill Gates.

Tonic: What about the everyday small business owner? What are the first, reasonable steps toward achieving the goals of creative capitalism?

Clarke: This is tough. To some extent I've always thought of creative capitalism as an idea that applies to limited liability, joint-stock companies and not small businesses. One reason is that when companies get big, you can imagine them doing things that the government can't — e.g., the distribution network of a Coca-Cola or the information services of a Google are fairly unique, so there are good arguments for why the government shouldn't just tax those institutions and pursue some potentially valuable distribution/information goal itself. For small businesses it is harder to come up with such arguments.

So the first step might be the most banal: Keep an open mind about the trade-offs we face. There are numerous ways we can make a buck. Some ways have better consequences for society than others. If all else is equal, we should do society a favor. That might be slightly anemic advice, but it has the benefit of being probably true!

Creative Capitalism: Conversations With Bill Gates, Warren Buffet, and Other Economic Leaders, (Simon and Schuster) is available in bookstores everywhere.