Books > Creative Capitalism > Excerpts

INTRODUCTION

Michael Kinsley

This is a book about the possibility of expanding capitalism into new areas and using it to solve problems that previously were assigned to charity or to government. The timing is not great. As I write at the end of September 2008, we are in a financial crisis, the dimensions of which are still uncertain. It's safe to say that if capitalism were a stock and reputation were a currency, the stock has plummeted in the past couple of weeks. As recently as Labor Day, that stock was still soaring, and people were talking about capitalism's unfulfilled potential and were full of ideas (some of them discussed in this book) for using markets in creative new ways. Now the notion of letting capitalism loose seems as appealing as letting loose a pack of rabid dogs. Maybe by the time you read this, it will all be over or turn out to have been media-induced panic.

Or maybe not. If economic catastrophe lies ahead, some of the con-tributors to this book will undoubtedly be saying that we should be much better off if only corporate America had stuck to its knitting. But whatever develops, nothing is likely to undermine the general world-wide consensus that free-market capitalism (to borrow from Churchill) is the worst economic system except for all the others. And if we're in for a rough patch, we will be especially glad that the past few years have imbued corporations with a greater sense of social responsibility.

Indeed, everyone wants to Do Good these days, from college stu-dents to Hollywood actors to New York socialites to corporate CEOs. It's far from clear how much good this will do. Nevertheless, it is a trend that should be encouraged, don't you think?

But there are problems. The fad for doing good among big corpo-rations is especially problematic, since corporations are fictitious en-tities that exist, by special dispensation of the law, for the specific pur-pose of pursuing the group self-interest of the shareholders. Yet cor-porations so completely dominate our economic landscape that if they are not included somehow in the great good-for-all, it isn't likely to amount to much.

In January 2008, Bill Gates gave a speech at the annual hoo-hah in Davos, Switzerland, known as the World Economic Forum. The most successful capitalist of all time -- if successful capitalism is measured in dollars (have you got a better measure?) -- Gates was planning to resign his corporate post and devote most of his time to the Bill & Melinda Gates Foundation, which he and his wife had founded several years earlier. A good case can be made that the years since the foundation's birth had already turned Gates into the greatest philanthropist of all time as well. Certainly, this is true if success in philanthropy is measured in dollars. By 2008, the Gateses had donated more than $30 billion to their foundation, and the foundation had given away more than $16 billion. What's more, Gates's friend Warren Buffett had decided to make the Gates Foundation the vehicle for giving away most of his own fortune, thus increasing the foundation's assets to the equivalent of more than $60 billion. (Technically, Buffett hasn't turned over his pile yet and won't until he dies. Instead, he gives the foundation 5 percent a year and requires that all of it be spent. Since the law requires foundations to pay out 5 percent of their assets every year, this has the same effect as if Buffett had given the foundation another $30 billion.)

However, just as money is only one measure of Gates's success as a capitalist, it is also only one measure of his success as a philanthropist. The discipline and focus he has brought to his giving is another meas-ure, along with his insistence, against what must be constant pressure from fellow business executives with pet causes, that poverty and disease in faraway lands are more urgent than the local opera company.

Another measure of Gates's success as a philanthropist would have to be the reversal of his own popular image. Some have suggested that this was his motive all along, which is ridiculous. Nobody spends $30 billion on a PR campaign. But five years ago, he was widely perceived as an evil monopolist. A movie, with the unriveting title Antitrust, even portrayed him as a murderer. Today the name Bill Gates evokes philanthropy rather than sharp business practices. This isn't the first such transformation. John D. Rockefeller and Andrew Carnegie did something similar.

Gates had been rich, if not mega-rich, for twenty years or so before he started engaging in philanthropy to any significant degree. He took a lot of heat for not starting earlier, but he always said that giving away money requires as much thought as making money and that he would turn to the latter when he was through with the former. And, to the surprise of some, that is what he has done. Microsoft under Bill Gates was not a company known for its soft edges. In his Davos speech, however, Gates advocated a different approach. He called it "creative capitalism." What exactly he meant by that term was not clear, and indeed trying to parse the phrase is one of the themes of this book. One way or another, it meant that the big, increasingly global corporations that are the dis-tinguishing feature of modern capitalism should integrate doing good into the way they do business.

How to combine the good life in the moral sense with a good life in the material sense is a question faced by real people as well as by corporations. After Bill's speech, I toyed with the idea of trying to write a book about creative capitalism or edit a collection of essays on the topic by people who might know more about it than I did. Then I had what I hope was a better idea. This book is a test of that idea. It's a literary experiment.

For seven years (from 1995 to 2002), I worked for Microsoft. My job was to start a "webzine," now an antiquated term. That was the online magazine Slate (slate.com) which today is owned and published by the Washington Post Company. It's hard to believe now, when computer screens are destroying the newspaper industry, but then there was skepticism that people would read anything voluntarily -- that is, not work-related -- on a screen. Even today, there are still a few forms of writing that resists computers, and that is long-form journalism or fiction.

At a meeting at Microsoft before Slate had begun publication, we were wondering how long an article we could expect people to read on a screen, when someone said, "But people will read thousands and thousands of words of email at one sitting." At the time, Microsoft was at the leading edge of the tidal wave of email that was about to engulf practically everyone in advanced societies. People complain about it, but many do read thousands of words of email every day and would miss it if it disappeared. Now there is texting and there are blogs and RSS feeds as well.

The force noted by that Microsoft exec (I am pretty sure it was Nathan Myrhvold) that impels us to read words of email by the thousands has its parallel in writing. Can there be any doubt that the number of words the world produces has skyrocketed since computers became linked? Yes, I know that joke too: it's not writing, it's typing. But some of it is not bad. Some of it, in fact, is good. What's more, it's easy -- or at least it's easier than "real" writing. Many professional writers who think they find writing painful and consider it a lucky day if they produce five hundred words, can sit down and grind out half a dozen eloquent emails adding up to ten times that amount.

We can debate the quality of internet prose: the suspension of grammar, the cutesy acronyms (not to mention emoticons!), the cas-ual spelling, the half-finished sentences, but it is the language of our time. And people do read it. And write it.

So the idea for this book was to find a collection of smart people, entice them into a web-based discussion of creative capitalism, and by this means trick them into producing a book. The book would have the quality of a blog or a "chat" or one of Slate's email dialogues. The prose would be casual, the organization perhaps a bit chaotic. The experience of "reading" it would be somewhat like surfing the web -- except without hyperlinks.

Plenty of books have grown out of websites. But have there been websites started with the specific intention of using them to produce a book? Maybe, but not many. This method of producing a book may remind you of the way Tom Sawyer got Aunt Polly's fence whitewashed. But rest assured that the contributors will be compensated. The book's advance -- minus expenses -- was divided by the number of words ultimately published. This method -- which balances incentives for quantity and quality -- was intended to impress and entice economists.

At the beginning of this project, we made a key, and really stupid, mistake. Ignoring everything that the world has learned in the past couple of decades about openness and transparency on the web, we began by building a website and closing it off, requiring a password to get in. We thought that big-shot economists and others would be more likely to join and contribute if this was something exclusive. Not only snob appeal was involved. There was the ever-present concern that a Gary Becker or a Larry Summers would find himself brutally, or even obscenely, insulted by one of the many nuts who seem to spend their lives hanging around parts of cyberspace where they don't belong, determined to make serious participants miserable. This has been my experience at every website I have ever been involved with.

Until now. When we started trying to sign up our dream list of distinguished economists, we generally found that it was easy to evoke promises of participation from them but harder to actually get the goods. Economists, like everybody else, have short time horizons. Their desire to not be harassed by us in the short run -- and possibly a genuine interest in the project -- led them to say yes, but the longer run -- in which they would actually have to write something -- never seemed to arrive.

So, with some trepidation, we decided to go public. We simplified what had been an elegant but complicated site into a simple public blog, using the well-known blogging software TypePad. The results were re-markable. Suddenly we were generating thousands of pageviews of traffic every day, other blogs were shilling for us, and long-promised contributions were actually materializing. It seems that even distinguished economics professors like to be told, "Hey, I saw your piece." They like it even more than being in an exclusive club with other distinguished economics professors.

© Michael Kinsley 2010