Capitalism 2.0

Roll of dollars in bird's nest

Capitalism 2.0 is derived from recent statements made by Bill Gates, suggesting that companies should sacrifice profits for the public good.  While Henry Ford had suggested a similar concept as early as 1916, his shareholders overruled him.  The more popular and widely accepted view of Capitalism is that of Milton Friedman which suggests that the sole responsibility of business is to increase profits. Here is the link to a very good Forbes article that discusses the topic:  http://www.forbes.com/forbes/2008/0310/030.html.

Social responsibility is a very good topic of discussion—particularly in the context of The Entrepreneurial Revolution.  After all, isn’t the reduction of unemployment a socially responsible objective?  And anyone reading this post certainly is not profiting directly for spending his or her time reading it—nor am I for writing it.  Moreover, I will go out on a limb to suggest that the majority of people (if not everyone) reading this post and those who have joined The Entrepreneurial Revolution have done so because they recognize the indelible connection between social responsibility and value. 

Please note that I was very careful in the selection of my words for the previous sentence and carefully avoided any reference to a connection between social responsibility and profitability, but instead referenced value.  Why did I do this?  I did this because profitability is measured in dollars and is, at best, a very weak measure of true value.  If you are unclear as to my meaning here, please refer back to my February 5, 2012 blog entitled, “Five Chickens or a Five Chicken Note” (http://ameliorationincorporated.com/five-chickens-or-a-five-chicken-note/).  Value, on the other hand, is what it is.  

Perhaps, this is the very same reason why two great and very shrewd businessmen (Ford and Gates) both issued PUBLIC statements relegating profitability to a standard lower than social responsibility that are the basis of Capitalism 2.0.  Could it be that these two men possessed the extremely rare capability to see what other businessmen and businesswomen could not?  Is it possible that while others were grappling over adding dollars to their corporate bottom lines, these two were issuing philanthropic statements to a public that couldn’t care less about whether a company succeeds or fails and that has its own needs and wants at heart?  If that same public is your market, why wouldn’t that public prefer to do business with a company that is led by someone who sincerely cares about them?  Could Ford and Gates actually have known this in advance?  It kind of seems like a no-brainer to me. How much value did these two great men create for their companies by making their sentiments known?  

On the other hand, however, had Ford and Gates kept their opinions to themselves, society would have never known about their deep-seated consideration for social responsibility and their opinions would have brought no additional value to their companies.  Since the impetus of social responsibility campaigns is promulgation, they would have been Cinderellas who never made it to the ball.  Moreover, had they acted upon this sentiment in clandestine fashion (i.e. contributing to socially responsible causes without letting the public know), they more than likely would have done far more harm to their companies than good since their philanthropy would simply become a cost with no good will return.  Once we are able to unshackle ourselves from the constraints of measuring and analyzing in dollars and are free to measure and analyze in value, numerous solutions avail themselves to us that we could not see before.

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