I’ve had little time or space thus far for this topic, not because it lacks importance, but because I can only write so much. Today I’d like to seriously look at something that many people are reacting to with cynicism, humor, and contempt because of the person at the center of the topic, and as a result are missing what I think is a critical opportunity and a valuable idea.
Bill Gates (yes, you know Bill… I have referenced his company in slightly disparaging terms in the past, but only slightly) made the front page of the Wall Street Journal  today, not because of some new innovation in the Windows Operating System, or a major security hole in Internet Explorer, or even as part of a report of earnings for his company. No, this was about Bill’s new view on how Capitalism can work to help the poor.
Before you start with the attitude about how “Bill has already benefited from Capitalism”, I want to say right up front, I know. If you want to come here and talk about issues, topics and ideas, let’s do that instead of just devolving into a bunch of cynical drivel. I’m not here to talk about how great Bill is (and I know his lacking of perfection may come close to matching mine) but rather let’s talk about this idea. It’s not Bill’s idea anyway, so let’s just drop Bill from the discussion for now, okay?
The ideas here did not just pop up this month. What Mr. Gates is proposing was proposed by Mohammad Yunus at the end of his last book “Banker To The Poor”, and as I understand it is the central theme of his new book “Creating A World Without Poverty”. Others like Norman Borlaug and C.K. Prahalad have proposed similar ideas as well.
I am not an economist (but I play one on TV). Dr. Yunus  impressed me with his story (in “Banker To The Poor”), particularly with the default statistics for the poor (staggeringly lower than anything I’ve ever seen in the credit business), and the model that he began with at Grameen Bank that encouraged a support group of borrowers that held each other accountable and training that was provided to the poor in preparation for taking out a loan. Micro-lending is certainly not the be-all and end-all for solving the worlds ills, but it obviously creates an opportunity for sustainable growth in impoverished areas of the world that no amount of charity will produce.
Micro-lending was the start for Yunus, and as he has witnessed the growth and sustainability of people in many countries over the years, he has reached a powerful conclusion: Capitalism, profit motivated and generating, that also works to build up society so that the improvements in society help to feed back into the success of the for-profit businesses, can result in an even stronger economy, society, and successful businesses. The challenges in this are some of the keys that are used to help maximize success in a for-profit business: time-periods for financial goal-setting and stock-holder accountability. If the business world could get out of the cycle of quarterly reporting expectations and profitability over 3 years or less as a startup expectation, and if stock-holders could be convinced that short-term delays in returns can be significantly offset by the long-term value and potential success in helping expand the value of the lowest income-base, there is potential for success.
Clearly these ideas need broad-based acceptance and support within the investment community and government, especially in areas of regulation and taxation. And I don’t want to pretend that just because the idea sounds great it will automatically succeed. There is a lot work involved in making this work, and lot of education required.
Government, especially the big kind run by the left, but even when the right holds sway, will fight this idea. Bill Clinton was sold on the idea while he was Governor of Arkansas, but he lost interest while he was President. Now that he’s out of office, he is a sometimes supporter of some of these economic ideas (which doesn’t necessarily mean their bad… Bill breaths and oxygen/nitrogen air supply, does that mean we should stop?). At any rate, the point is that getting any legislation passed that helps motivate business in this model will be hard fought.
Before even reading Yunus’ book, I discovered Kiva.org . My wife and I were amazed and convinced that this was a valuable tool for impacting the lives of people in impoverished areas. We made a loan, which is in repayment. When that loan is paid off, we’ll be able to make a new loan with the same money we used for the first one. We can’t do that with charities. I want to encourage you to look at this organization and consider supporting it.
I believe that we are now at the edge of a new age of thought about truly impacting the world… many of us started out of high school with grand ideas of how we could change the world. Can this be the time where we can make that real? Being a Conservative does not mean being closed to change. Let’s start looking at the strategic aspect of these ideas (Mr. Gates is pretty much jumping to the tactical solutions already by suggesting that technology provides the answers to solving poverty, which I understand, but would advocate working to demonstrate an abstract understanding that can be convincing before diving into the solutions) and start considering the possibilities.