Will Bill Gates’ Creative capitalism be effective in helping the poor nations?

I am glad I waited before I comment on Bill Gates’ Creative Capitalism, as I found this insightful comment by Professor Becker’s “On Corporate Altruism“. Here is an excerpt (emphasis mine),

Globalization has brought the situations in China, India, Africa, and other poor parts of the world much closer to the concerns of men and women in rich countries than they could ever have been in Smith’s time. Still, essentially for the reasons given by Smith, it would be quite difficult to get many companies in richer countries to be highly motivated by the desire to find cures for diseases that are not profitable because they only afflict persons living in Africa and other poor countries who cannot pay much for the cures. It would not be any easier to get companies to spend significant resources to help lower carbon emissions, unless these expenditures were forced by governments, or compensated by governments and private philanthropies.

Nevertheless, unlike the well-known negative position on corporate responsibility taken by my great teacher and close friend, the late Milton Friedman, and apparently also by Posner, I do not see anything counterproductive with Gates and others giving encouragement to corporations to be more concerned with goals like distinction along with an interest in making profits. The real test is how viable such motives are in a competitive market environment where the competition also includes companies motivated only by profits.

My own belief is that there are far more effective ways to help poor nations of Africa and elsewhere speed up their rates of economic development and reduce the impact of malaria, Aids, and other devastating diseases. Probably the single most important step is to encourage much more market-friendly policies by African and other governments in poor countries. In addition, it would help to reduce, better still eliminate, tariffs by rich countries on the agricultural and other exports from developing countries, encourage more widespread use of DDT and mosquito netting in combating malaria (see my post on deaths from malaria on Sept. 24, 2006), and provide private and perhaps public subsidies to the development of new drugs that help fight diseases mainly found in poor countries.

See also Judge Posner’s comment on Bill Gates’ idea.