Copping flak over corporate socialism With the global financial crisis in full swing, an ailing US economy, and banks asking governments for bailouts, Bill Gates' speech about corporate socialism to the 2008 World Economic Forum in Davos, Switzerland, caused quite a stir. Gates, erstwhile richest man on the planet and a renowned philanthropist, proposed that the world's poor were being failed by the free market, and went on to suggest that business can both make profits and improve the lives of the poor. However, he also made the point that profits are not always possible when business tries to serve the very poor. In such cases there needs to be another incentive and went on to argue that recognition for philanthropic efforts is a legitimate substitute for profit in this case. Gates' position may not seem radical but he was attacked vigorously in blogs and newspapers for his perceived attack on Milton Friedman's doctrine that the social responsibility of business is to increase its profits. The Financial Post's Peter Foster said Gates' idea that top executives should dedicate themselves to combating poverty would be disastrous. Instead, he supported Friedman's theory that the best way to contribute to society is to allow shareholders and employees to enjoy the results of companies' increased bottom lines. They would then make their own arrangements regarding which charities to support. According to this view, a corporation's only justifiable expense on philanthropy should be to improve its public relations image. To support this view, columnists, such as CNET's Declan McCullagh, looked at the generous donations given by individuals to charity in the US every year and compared them to donations by the US Government. For example, after the 2004 tsunami, individual Americans donated $2 billion for relief efforts, while the government only provided $900 million. However, the problem with this argument is that although around $260 billion annually is donated by Americans to 1.4 billion charities, this money does not necessarily go to where it is most needed because individuals don't have access to that information. As a nation the United States lags behind the United Nations' target of 0.7 per cent of a country's income to be spent annually on foreign aid, and well behind other leading countries, such as the Dutch, who contribute 2.44 per cent of their income to the poorest countries in the world. 552Gates has already benefited business through his charities and his ideas around creative capitalism. His detractors might want to compare the relatively positive atmosphere at Davos with the major riots against globalisation and third world poverty that marred the World Trade Organization meeting in Seattle in 1999, to see another benefit of corporate social responsibility.

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