Friday, January 25, 2008

Kudlow on Gates and Capitalism

According to the front-page of today's Wall Street Journal, Bill Gates is issuing a clarion call for a kinder capitalism to aid the world's poor. Mr. Gates says he's grown impatient with the shortcomings of capitalism. He thinks it's failing much of the world, and he's slated to say as much in a speech later today at the World Economic Forum in Davos, Switzerland.

This from a guy worth around $35 billion. (Give or take a billion.)

It appears Gates is ignoring the global spread of free-market capitalism that has successfully lifted hundreds of millions of people up from poverty and into the middle class over the last decade or so. Think China. Think India. Think Eastern Europe (and maybe even France under Sarkozy). Gates wants business leaders to dedicate more time to fighting poverty. But the reality is that economic freedom is the best path to prosperity. Period.

My comments:
Many very rich men seem to feel a bit guilty about their wealth.  I imagine they did a few things in the heat of battle that they're not proud of, probably hurt a few other people on the way up.  "That's business", as they say.  Now, they look back and decide that they want to be remembered for something kinder and gentler.  This is a natural and mostly good impulse, akin to a religious conversion.  They will do some good with their money and they deserve credit for that.  But they overgeneralize when they imply that the system is bad -- I guess because it made them do bad things.  Free markets and capitalism are still the best way for the general welfare of the world.  And let's remember, freedom is the most important part of the free-market system.  When governments try to make things "better", they typically start by restricting freedom in the name of equality.

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