I am a devout fan of capitalism. It is the best system ever devised for making self-interest serve the wider interest. This system is responsible for many of the great advances that have improved the lives of billions—from airplanes to air-conditioning to computers.
However, Gates also sees a role for governments and business in driving innovation:
Governments don’t do enough to drive innovation either. Although aid from the rich world saves a lot of lives, governments habitually underinvest in research and development, especially for the poor. For one thing, they’re averse to risk, given the eagerness of political opponents to exploit failures, so they have a hard time giving money to a bunch of innovators with the knowledge that many of them will fail.
By the late 1990s, I had dropped the idea of starting an institute for basic research. Instead I began seeking out other areas where business and government underinvest. Together Melinda and I found a few areas that cried out for philanthropy—in particular for what I have called catalytic philanthropy.
He also discusses criticism of those who say we’re in a “post-capitalistic” society:
I’ve heard some people describe the economy of the future as “post-corporatist and post-capitalist”—one in which large corporations crumble and all innovation happens from the bottom up. What nonsense. People who say things like that never have a convincing explanation for who will make drugs or low-cost carbon-free energy. Catalytic philanthropy doesn’t replace businesses. It helps more of their innovations benefit the poor.