Making capitalism more creative-should it be?

[SFG75]

TIME magazine has a fascinating article by Bill Gates regarding how to make capitalism more creative. Gates points out that the market can reach those whom it presently doesn't reach. He points out that cell phone companies have discovered markets in Kenya and other places that companies normally overlook. To Gates, a company must be able to make a good profit from their venture, but government can help defray the cost, or at least, remove red tape from allowing growth to occur, a problem which is rife in many sub-Saharan African nations.

Even so, no matter how hard businesses look or how creatively they think, there are some problems in the world that aren't amenable to solution by existing market incentives. Malaria is a great example: the people who most need new drugs or a vaccine are the least able to pay, so the drugs and vaccines never get made. In these cases, governments and nonprofits can create the incentives. This is the second way in which creative capitalism can take wing. Incentives can be as straightforward as giving public praise to the companies that are doing work that serves the poor. This summer, a Dutch nonprofit called the Access to Medicine Foundation started publishing a report card that shows which pharmaceutical companies are doing the most to make sure that medicines are made for — and reach — people in developing countries. When I talk to executives from pharmaceutical companies, they tell me that they want to do more for neglected diseases — but they at least need to get credit for it. This report card does exactly that.

So, should we encourage "creative" capitalism??

 

[sparkchaser]

I think we should encourage "responsible" capitalism.

 

[Robert]

I think we should encourage "responsible" capitalism.

Responsible to whom?

 

[sparkchaser]

Society as a whole. We want our children and children's children to be able make a buck too.

That being said, cell phones in developing nations makes good sense (and actually I thought this was old news as I heard about it years ago). Cell phones don't require the miles upon miles of infrastructure that traditional land lines do and are cheaper to operate.

 

[Robert]

Ok. So how do we go about making capitalism more responsible? Regulation (Government control)? Tax incentives? Higher taxes?

 

[sparkchaser]

You can't legislate people into responsible behavior so tax incentives would be a start.

 

[Robert]

That's where it usually starts. Then critics chime in and complains that the government is giving tax breaks to the rich.

Tax incentives is the way I'd do it, too.

 

[Sybarite]

You can't legislate people into responsible behavior so tax incentives would be a start.

I disagree – to an extent.

In 1900, something was created in the UK called the Net Book Agreement. It meant that retailers could not engage in cut-price battles over books – they couldn't sell a book at anything other than the agreed retail price.

Now, in most people's book, that would be a restrictive practice. In 1966, this was investigated by a court – which concluded that it helped to act as a form of subsidy for more 'serious' books that publishers might not otherwise publish and/or that retailers might otherwise not wish to give shelf space to.

In the 1980s, the development of the mass retailers saw them start to target this. In the end, they broke the Net Book Agreement. It ceased to become enforceable. In the years since, we've seen a decline in small, independent bookshops and an increasing homogenisation of what is available to buy in the big chains. It's a well discussed fact that anything that isn't going to make big money and fast now has a smaller chance of being published and getting any shelf space at all.

So, restrictive practices? Yes! I'd love to have that one back and enforced.

 

[Zolipara]

I disagree – to an extent.

In 1900, something was created in the UK called the Net Book Agreement. It meant that retailers could not engage in cut-price battles over books – they couldn't sell a book at anything other than the agreed retail price.

Now, in most people's book, that would be a restrictive practice. In 1966, this was investigated by a court – which concluded that it helped to act as a form of subsidy for more 'serious' books that publishers might not otherwise publish and/or that retailers might otherwise not wish to give shelf space to.

In the 1980s, the development of the mass retailers saw them start to target this. In the end, they broke the Net Book Agreement. It ceased to become enforceable. In the years since, we've seen a decline in small, independent bookshops and an increasing homogenisation of what is available to buy in the big chains. It's a well discussed fact that anything that isn't going to make big money and fast now has a smaller chance of being published and getting any shelf space at all.

So, restrictive practices? Yes! I'd love to have that one back and enforced.

Norway has a similar agreement along with other financial aids to keep Norwegian literature, and the Norwegian language alive. For instance joint purchase systems for norwegian public libraries that in many cases guarantee a certain volume of books sold, along with more direct financial aid to the author or publisher of books that dont necessarily reach a huge audience.

That makes it possible to publish a wide variety of books in a very small language.

 

[Gilgamesh]

So, should we encourage "creative" capitalism??

Reading the article you posted, it resembles open source programming,
providing intellectual property to all without price. In some situations, open source has proven to create better products than having a private company do R&D.

Another example would be Wikipedia, and Wiktionary.

YES, I would encourage it.

 

[Champagne]

Considering the mess that's been made by people out for a quick profit in the absence of regulation, I don't see how you can really do without it. Businesses exist to make profits, and they get in trouble with their shareholders if they don't. When you deregulate businesses, you usually get some short-term advantages followed by long-term problems. I think the "prevention is better than cure" mantra holds here just as much as in other cases.

 

[Gilgamesh]

You can't legislate people into responsible behavior so tax incentives would be a start.

I know this is opening a can of worms that has no ending, but I want to point out that Wal-Mart does not provide enough health insurance to their employees, and admits that they are passing the responsibility to the government, aka, taxpayers like you and me.

UFCW | Wal-Mart

In comparison, businesses like Costco is providing much better coverage for their full and part-time employees, therefore, causing less burden to fellow tax payers.

So, you're saying businesses such as Wal-Mart should be taxed more? Then the prices are going to go up at our local Wal-Mart. Then you and I are paying for their healthcare? I'm confused. :sad:

 

[sparkchaser]

So, you're saying businesses such as Wal-Mart should be taxed more? Then the prices are going to go up at our local Wal-Mart. Then you and I are paying for their healthcare? I'm confused. :sad:

Actually I am not saying that at all; however, for the sake of illustration, let's say that Wal-Mart was "punished" by having to pay higher taxes. They would pass the tax on to the consumer in the form of higher prices. Suddenly Wal-mart isn't the cheapest out there and folks shop elsewhere. Seems like a win-win to me.

As an aside, I don't like shopping at Wal-Mart. To me there is something inherently wrong with buying steak and squash at the same place you can buy a [shitty] lawnmower and underwear while you get your oil changed.

 

[Sybarite]

I know this is opening a can of worms that has no ending, but I want to point out that Wal-Mart does not provide enough health insurance to their employees, and admits that they are passing the responsibility to the government, aka, taxpayers like you and me.

UFCW | Wal-Mart

In comparison, businesses like Costco is providing much better coverage for their full and part-time employees, therefore, causing less burden to fellow tax payers.

So, you're saying businesses such as Wal-Mart should be taxed more? Then the prices are going to go up at our local Wal-Mart. Then you and I are paying for their healthcare? I'm confused. :sad:

And why not have a proper, state-run health system for everyone, so that nobody has to worry about whether their employer is a skinflint when it comes to their health or not?

Such a system, of course, is not set up with the intention of making a profit for shareholders who are fortunate in the first place to have the money to invest in it with the hope of making more money just because they have money in the first place.

Am I alone in finding it frankly obscene that companies and banks (this is global) can make massive profits out of sickness, out of the need for clean water, out of the need for education, the need for a justice system etc? To me there is something inherently wrong in that.

 

[Gilgamesh]

Actually I am not saying that at all; however, for the sake of illustration, let's say that Wal-Mart was "punished" by having to pay higher taxes. They would pass the tax on to the consumer in the form of higher prices. Suddenly Wal-mart isn't the cheapest out there and folks shop elsewhere. Seems like a win-win to me.

In a way, I do like the idea of having to get a job, become a productive citizen, AND, have an insurance coverage provided by the company. It sounds better than just another lazy person, who has no motivation and quits when he/she wants from a job when they feel like, and still expects same coverage as the next guy who still shows pride and responsibility at the workplace.