Acton Institute Powerblog

Bill Gates: ‘Capitalism has worked phenomenally’

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Bill Gates, easily one of the richest men in the world, recently talked about his wealth and his children’s inheritance, philanthropy and taxes in an article in the the UK’s The Telegraph.

He acknowledged that “[c]apitalism has worked phenomenally” and one need only look at North Korea vs. South Korea to see evidence of that. He also noted, “Capitalism has shortfalls. It doesn’t necessarily take care of the poor, and it underfunds innovation.”

Gates made several remarks to the British audience about the American tax system:

Just raising taxes on the rich won’t solve the crisis, but it seems reasonable to people – and there’s plenty of room to do that without creating disincentives or distortions.”

The news that the mega-rich Republican candidate, Mitt Romney, pays 15 per cent tax “wasn’t shocking at all. That’s the US system. If people want capital gains taxed more like the highest rate on income, that’s a good discussion. Maybe that’s the way to help close the deficit.”

What Gates failed to note is that the American government’s deficit problem is largely due to government over-spending, not under-taxing its citizens.

He announced at the time the article appeared that the Bill and Melinda Gates Foundation was making a $750 million donation to fight AIDS, malaria and TB in Africa, and was also focusing on helping subsistence farmers on that continent. (In July of this year, Melinda Gates announced a “family planning summit”, hoping to raise $4 billion to give more women access to artificial birth control, largely focusing on Africa and Asia.)

Interestingly, Gates said he didn’t expect the Foundation to continue very long after he and his wife were dead.

“Our foundation won’t last long beyond Melinda’s and my lifetime. The resources will last about 20 years after whichever is the last of us to go. There is no family business, and my kids will make their own careers.”

While Gates doesn’t downplay his role in technological innovation, he says the personal passion he once spent on entrepreneurship is now focused on ending disease and starvation for the world’s poor. The Telegraph article also focuses on some fascinating aspects of Gates’ relationship with long-time business rival Steve Jobs, especially in the months leading up to Jobs’ death.

Elise Hilton Communications Specialist at Acton Institute. M.A. in World Religions.


  • Roger McKinney

    Gates said the capitalism doesn’t help the poor, but then gives billions to the poor. He doesn’t see the contradiction in what he says and does.

    Capitalism helps the poor in three ways: 1) it makes people like Gates rich so they have more to give to the poor and 2) it creates jobs for the poor 3) it reduces prices of necessities so that the standard of living of the poor increases. The poor in the US today would be considered the wealthy in 1800, and in many nations today.

    • That could be true if 1) people actually care about giving money to the poor. 2) business were focused on keeping. Their employes happy instead of looking every way possible to exploit them. Capitalism promote individualism and selfishness. We need to find a way to combine socialism and capitalism so that we create a better economical system.

      • From William J. Bennett’s essay on CNN, “America the Generous.”

        In surveys taken around the world, the United States is most popular in Africa, a continent we’ve given billions of dollars to help fight AIDS, starvation and other diseases. But we also donate more than money (and the U.S. foreign aid budget is the topic of much debate, and rightfully so). Generations of Americans have sacrificed their lives to fight and die for freedom around the world. [ … ]

        The Chronicle of Philanthropy, which tracks the corporate giving of America’s largest companies, recently reported that in 2010, a very tough financial year, total cash donations by this group rose 13%, to $4.9 billion.

        In 2010, Kroger, the Cincinnati supermarket operator, gave away an astounding 10.9% of its $589 million in 2009 pre-tax profits, totaling $64 million. Wal-Mart Stores donated the most cash last year, $319 million.

        As for individuals, a new American Red Cross poll suggests that while Americans had to tighten their budgets in 2011, they are still as committed to giving to charity as ever.

        American generosity is not dependent on the government or public policy. It should be pointed out that conservatives, criticized by liberals as health care and welfare slashers and greedy capitalists, give far more to charity than liberals. Arthur Brooks wrote in his now-famous book, “Who Really Cares,” that households headed by conservatives give 30% more to charity than households headed by liberals. Conservatives also give more blood and donate more of their time to volunteer work, according to Brooks.

        Generosity is in no way demanded or required by our Constitution or laws, yet it is an inherent part of America’s cultural fabric. Compared to the rest of the world, American benevolence is unmatched. China, which boasts the second largest economy in the world, is one of the least generous nations on Earth when it comes to charitable contributions.

        In the annals of human history, there has never been a country as compassionate and generous as the United States. When Aleksandr Solzhenitsyn, the great Russian novelist who defied communism, visited America, he said, “The United States has long shown itself to be the most magnanimous, the most generous country in the world. Wherever there is a flood, an earthquake, a fire, a natural disaster, an epidemic, who is the first to help? The United States. Who helps the most and unselfishly? The United States.”

      • Roger McKinney

        Gates is evidence that rich people give to the poor. Businesses don’t exploit anyone; they hire willing workers. The church scholars at Salamanca in the 16th century demonstrated that the only just wages and prices were those found in a free market.
        Capitalism doesn’t promote selfishness; that is a product of mankind’s fall and sin nature.
        Socialism doesn’t cause envy, either, but it rewards it and makes it a virtue.