Creative Capitalism in the World Economy

The term “capitalism” defines an economic system managed by private individuals motivated by gaining profits. The idea’s advocates envisioned an ideal scenario in which all people have capital or labor that they can offer in return for goods and services to fulfill their needs. Notwithstanding its tremendous success, the differences among members of this system still exist. Lately, scientists have introduced an original form of capitalism in which businesses segment the market and develop goods and services to fit all the segments’ purchasing powers. This new form of the existing economic model should be preferable to direct charity because of its limitations. This essay aims to discuss these two forms of capitalism and explain why the latter form should be applied to bridge economic gaps in the society.

Free Market Capitalism

Free market capitalism is the idea that the prices for goods and services in the market should be determined by market forces. Market forces are made up of demand and supply where supply is the amount of goods and services that the supplier is willing and able to offer at a specific price. Demand refers to the amount of goods and services that a consumer is willing and able to procure at a specific price. This idea was first documented by Adam Smith, an early philosopher. Smith felt that the economy should be driven by personal interest. He observed that in the course of pursuing one’s own interest, a person discovers that it is intertwined with that of others (Gates, 2008). Thus, the individual will conform their activities to the expectations of the rest of the society in order to benefit. For instance, a butcher is interested in making profit from selling meat. However, profit can only be realised if the quality of his meat and services satisfy the targeted society where he/she is located. Free market capitalism requires minimum intervention from the government. It is expected that the businesses will adjust the pricing of their goods to enhance their competitive advantage. The proponents of free market capitalism felt that this system was perfect without any faults unlike interference with market forces where certain people could use political powers for their own advantage.

Creative Capitalism

The contemporary society has failed to achieve the vision of proponents of capitalism. Adam Smith felt that all the people depended on labour as their primary source of wealth. This created a level playing ground where everybody would be rewarded proportionally depending on their efforts. Despite having the free market system in place for a long time, many western countries still witness great disparities between their citizens. Creative capitalism is an idea where individuals, especially those with resources, still pursue their own interests but with the situation of the current society in mind (Gates, 2008). This concept appreciates the fact that capitalism is not a perfect system as stated by its proponents. Creative capitalism is an idea that prepones that investors should be mindful of the fact that part of the society has impaired economic abilities. It differentiates between the concepts of a need and demand. While need is universal, demand is not universal. The definition of demand is that the consumer must be willing and able to meet the costs of goods and services at certain prices. A need is the willingness to pay. Though all people would be willing to pay for many goods manufactured in the world today, their ability to pay is impaired by lack of resources. Creative capitalism requires that, rather than concentrating on the able population, investors should go out of their way and come up with goods and services that can meet the needs of the poor populations. These goods should be offered at a price as an incentive for the investors.

Advantages of Creative Capitalism in Relation to Businesses

Creative capitalism activates competition in low-end markets. Traditionally, investors shun such markets because the individuals do not have money to pay for goods and services made for the richer societies. This leaves very few investors in such markets. This has created monopolies and led to exploitation of poor populations. Creative capitalism introduces competition and entities work hard to ensure that they lower prices and enhance the quality of goods and services.

Creative capitalism enhances creativity. In his speech on creative capitalism, Bill (2008) notes that when WHO challenged a company to come up with cheaper meningitis drugs for Africa, the company took up the challenge. The research done by WHO made the manufacturer limit their scope within 50 cents per every vaccine. Eventually, they discovered that they only required 40 cents to manufacture a vaccine for one person. In this case, creative capitalism gave the entity a challenge to which they responded to with hard work and dedication and eventually succeeded.

Creative capitalism helps the society bridge the gap between social classes. It ensures that even the poorest populations have access to quality goods and services. These goods support wealth creation. With time, these societies grow economically and start demanding high-end goods this increasing profits for investors.

Corporate Social Responsibility

Corporate social responsibility refers to initiatives by business entities aimed at benefitting the society. It is a wide concept that includes direct support through financing projects, reducing the negative effect of business activities on the society and acting as a champion for change (Korschun, 2014). Once a business is created, it becomes part of the society. It utilizes resources such as land and human resource that could be used in other places to benefit the society. Therefore, its contribution is meant to ensure sustainability of the society for the overall good of humanity.

Walmart is one example of a socially responsible company that has been consistent in its support for resilience, reduction of poverty and economic empowerment of marginalized groups. This entity has expressed its sincerity by even helping marginalized individuals set up supply chains which many people will consider competition. The company releases annual reports to demonstrate its commitment towards social responsibility (Walmart Corporate, 2017).

Google is one of the best companies in CSR. However, most of the initiatives of the company do not include monetary donations. The company has been noted as a key supporter for positive influence in the society, environmental sustainability and good causes. The company has remained carbon neutral for 10 continuous years. It has also been dedicated to enhancing equality through releasing workplace diversity reports (Miceli, 2015). By doing this, the entity has been an ambassador of positive change in the society.

Gates’ Creative Capitalism

Bill gates gives a good explanation on how companies can help alleviate poverty while remaining sustainable. Gates (2008) appreciates the fact that direct financial donations are limited. They cannot fully meet the needs of the people living in poverty because companies have to derive returns from their investments. Therefore, according to him, promoting the interests of business entities alongside those of people living below the poverty line is the most sustainable plan. Gates prepones that businesses should not only use CSR to impart societies but also incorporate their interests.


Gates, B. (2008). Bill Gates—2008—World Economic Forum—Creative Capitalism. Bill and Melinda Gates Foundation. Retrieved from

Korschun, D., Bhattacharya, C. B., & Swain, S. D. (2014). Corporate social responsibility, customer orientation, and the job performance of frontline employees. Journal of Marketing, 78(3), 20-37.

Miceli. (2015). Google Tops Reputation Rankings for Corporate Responsibility. US News, September 17, 2015. Retrieved from

Walmart Corporate. (2017). Community and Giving. Retrieved from

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