EXAMPLES OF CREATIVE CAPITALISM IN ACTION

SIMPLE CORPORATE PHILANTHROPY: CORPORATIONS GIVE AWAY GOODS OR CASH TO PEOPLE WHO DESPERATELY NEED IT.

Pro: People who object to this practice don’t have to buy stock.

Con: Corporate managers have no right to give away shareholder’s money.

CORPORATIONS SHOULD LOOK HARDER FOR EXISTING BUT UNDERSERVED MARKETS IN POOR COUNTRIES.

Pro: There is profitable business to be done… we need to get over our hang ups and do it.

Con: Finding and developing these markets is disproportionately expensive and can’t be justified to shareholders even if it would ultimately payoff.

“TIERED PRICING”

Pro: You are not denying the benefit of your product to people who need it.

Con: Traditional products in question are already priced low… what’s the justification to shareholders?

THE GOVERNMENT CREATES MARKET INCENTIVES FOR COMPANIES TO HELP POOR PEOPLE AND POOR NATIONS. (FDA EXAMPLE)

Pro: Companies get

special treatment for helping the poor.

Con: There must be

something wrong with the review process in the FDA or they are lowering their safety standards.

THE BONO MODEL

Pro: Consumers make the choice to buy a product they want and have a portion donated.

Con: When costs are covered (advertising, administration, self-congratulations, etc.) how much is left to go to the program? Also, who supervises distribution???

1. D2. A3. B4. D5. C6. A

RFI ANSWERS

Bono’s RED campaign is a market that is designed so that profits from that market go toward charitable work in the fight against AIDS. This is creative capitalism because it is a new market that not only helps the businesses involved, but helps millions of others who are unable to help themselves, when corporations donate money from their profits.

7. USING INFORMATION FROM THE ARTICLE, EXPLAIN HOW BONO’S ESTABLISHMENT OF THE RED CAMPAIGN COMPARE TO GATE’S CREATIVE CAPITALISM

Gates makes the economic joke regarding the $10 bill in order to make a point that defends creative capitalism and refutes the idea that there are no new markets. This joke demonstrates to the audience that whoever says there are no new markets to be found is wrong, because they haven’t been looking for the right markets.

8. WHAT PURPOSE DOES GATES’ INCLUSION OF THE OLD ECONOMIC JOKE REGARDING THE $10 BILL SERVE IN ADVANCING THE CASE FOR CREATIVE CAPITALISM?

Gates views inequity not only as a social problem, but a business one on the basis that inequity cuts off potential markets and profits from a business standpoint. A business that markets computers can do so to those who can afford to buy a computer, but those not in an economic position to do so can’t, so the business loses potential profit from them.

9. WHAT EVIDENCE FROM THE ARTICLE SUPPORT’S GATES’ POSITION THAT INEQUITY SHOULD BE VIEWED AS A BUSINESS PROBLEM (LINE 82)?