Capitalism is Always Creative and Always Destructive too


The good and the great…the world’s biggest humbugs and brightest worthies… gathered in Davos, Switzerland last week. Even Bono was there.

They look at the big picture, of course. And they try to think of ways to make the picture a little brighter. But do you think the world is actually improved by a bunch of people drinking champagne and wondering how they can make things better — by meddling with other peoples’ plans? If so, you do not work here at The Daily Reckoning . Our view is different. In our view, the baker does not bake for reasons of altruism or idealism. He bakes to earn his own bread. And as Adam Smith pointed out more than 200 years ago, it is thanks to his efforts to improve his OWN life that the whole world gets better. Or, as Goethe put it: “Let everyone sweep in front of his own door, and the whole world will be clean.”

Still you can’t blame the policy makers, the movers, the shakers and the late-night party makers for having a good time… as long as they don’t actually do something.

Water was the big subject at this year’s confab. And here, we give the tip of the hat to Mr. Ban Ki-Moon, UN General Secretary. First, he noted, with no show of humour or awareness, that the response so far to the UN’s initiative on water sustainability had been merely “a drop in the bucket.”

Then, he went on to say that he hoped this year’s session at Davos would be as big a success at last year’s, and that “what we did for climate change last year, we want to do for water and development in 2008.”

What did Davos do for climate change last year? How did it change the climate? Did all those rich and famous people, flying all those miles in business and first, in those carbon-consuming jet airplanes…staying in those fancy, well-heated alpine hotels…and feasting on delicacies flown in from all parts of the globe – did they do any good for the world’s climate? We doubt it. But we think Mr. Ban Ki-Moon is right. This year’s Davos conference will be an equal success.

Meanwhile, we note that the idea of capitalism – the phony idea that it produces wealth automatically, that is – is alive and well among the world’s elite.

First, a team of researchers asked the ‘elite’ in 18 countries which institution they trusted. They answer: business. Not government. Not the media. Money has upstaged politics, as we pointed out earlier.

Then, Bill Gates – the world’s foremost entrepreneur and richest capitalist – spoke to the group.

“In markets where profits are not possible, recognition is a proxy; where profits are possible recognition is an added incentive,” he said.

He was proposing something he called “creative capitalism.” How that is different from any other kind of capitalism, we don’t know. In any business, there are different kinds of rewards. Some people like to run art galleries – even at a loss – because they like art. Others want to be in the film industry, because it is glamorous. And who wants to own slum properties and collect rent from drug addicts? Only people who want a high rate of return and don’t care much about prestige or personal safety.

It is discouraging to read accounts of Gates’ speech. The man seems to have spent too much time in front of a computer terminal. He said he wanted to “find a way to make the aspects of capitalism that serve wealthier people serve poorer people too.”

Either the world’s number 1 capitalist doesn’t know how much about capitalism. Or he is just another humbugger, like all the rest. He should know that capitalism serves no on in particular. It only serves those who make use of it…those who save…those who invent…those who work and improvise…

It is a moral system, as we mentioned above, serving the thrifty, the quick, the smart… It is indifferent to how rich people are…to their skin color…to the language they speak and to the flag they salute.

Capitalism is always creative…and always destructive too.

Bill Bonner
The Daily Reckoning Australia

Bill Bonner

Bill Bonner

Best-selling investment author Bill Bonner is the founder and president of Agora Publishing, one of the world's most successful consumer newsletter companies. Owner of both Fleet Street Publications and MoneyWeek magazine in the UK, he is also author of the free daily e-mail The Daily Reckoning.
Bill Bonner

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  1. Did you know Bill, that Melbourne’s own watchdog is already on to this?

    That’s right, the undisputed Queen of smear bloggers, Anthony van der Craats is secretly living in Ukraine. There he campaigns (anonymously of course) to stop “criminals” developing “Creative Capitalism” there.

    Move over Les Patterson, he’s taken charge with a team of sockpuppets who have now been barred from Wikipedia for vandalism. They figured there couldn’t be that many people living in Kharkiv with such a passion for Aussie politics.

    The world wants to know what he’s doing there Bill, under the guise of a NGO consultant, when he’s supposed to be watching Melbourne.

    Find out for us, will you Bill?

  2. Oh they will drink and live in gluttony , while the mases huddle in their dank and dreary tents.
    they will of course proclaim that the solution is at hand, but we all know what that solution really is don’t we .they are all secretly digging their under ground hide outs,in preparation of the coming cull. their answer will always be ww3 there can be no other answer for them . They only know one thing one world govt. and they will reach that goal, if they are the only ones left waving the flag when it is said and done.

  3. Dear Editor,

    In reply to the above comment by Mr Jeff Mowatt from the UK.

    In reviewing your web site it would appear from reading Mr Mowatt’s comments above that he is using your site and others to promote a vendetta and is engaged in a stalking campaign against his detractors.

    Mr Mowatt and his business associate Mr Terry Hallman was subject to a due diligence review of their business activities in Ukraine. Both Mr Mowatt and Mr Hallman presented themselves as being directors of a successful International Economic Development Company operating out of Ukraine. Mr Mowatt and Mr Hallman have been working in Ukraine since 2002. On review it was found that their company, People Centred Economic Development, had no assets, no registered offices in Ukraine and no verifiable business success (Which is required under Ukrainian Corporate law) or independent verifiable referees. Mr Hallman registered company in the UK was deregistered in 2005 following the UK governments refusal to admit Mr Hallman (A US Citizen) into the country. All comments and referrals available on the internet pointed back to published information on their own web site.

    What’s more Mr Mowatt and Mr Hallman made specious and unfounded allegation and assertions that the Ukrainian Authorities have been engaged in a deliberate policy of genocide and mass murder of unwanted children in Ukraine, referring to Ukrainian Orphanages as being “Death camps for Children” When asked to provide evidence to substantiate their allegations, which they claimed they had in their possession and said they would produce, they failed to do so.

    The allegations made by Mr Mowatt and Mr Hallman were reckless and irresponsible to say the least. Mr Hallman and Mr Mowatt’s sensational allegations of Death Camps for children have not been supported by one accredited international welfare agency.

    Mr Hallman is a self appointed vigilante Civil Rights/political activist residing in Ukraine.

    Further Investigation has indicated that Mr Mowatt and Mr Hallman were engaged in self-promotion, pumping the internet, in order to promote their dubious “economic development” scheme which would have seen limited pubic and private resources funnelled into establishing a WiMAx Internet service provider costing 1.5 billion dollars which they claimed would generate millions of dollars of profit which would then be used in part to fund Ukrainian Orphanages. Effectively operating as a NGO, defacto charity, whilst seeking to avoid the regulations and laws that normally govern charitable organisations.

    Part of the due diligence review involved contacting US Aid that Mr Hallman and Mr Mowatt claimed supported their business activities. US Aid responded to our inquiries in a letter indicating that they had no knowledge of Mr Hallman. Mr Mowatt or their company, People Centred Economic Development (PCED).

    Not one of the claimed success published on their Internet site could be independently verified.

    Mr Mowatt was asked on more the one occasion to respond and provide further information in relation to his company activities, information that should be readily available as a registered foreign corporation operating in Ukraine. Mr Hallman and Mr Mowatt declined to provide a meaningful response, instead Mr Mowatt has embarked on a campaign of harassment and stalking of his critics (Including the comment above).

    Independent reviews of Mr Hallman and Mr Mowatt’s claims of business success and activities in Ukraine have come to the same conclusion as those published on the Internet (

    Requests made to the publisher of this online newsletter to date have failed to prevent Mr Mowatt from using this newsletter as a means of pursuing his vendetta and vilification of his critics.

    More information can be found at the above mentioned web site.

    Yours faithfully

    P-CED review

  4. To P-CED Review from the editor of the DR:

    Hey look, we published your comment too. And we encourage all readers of this comment to read both Mowatt’s comment and P-CED Review’s. We don’t have an opinion one way or another, but we do feel that people have a right to free speech and we will not remove a comment without just cause.

    That said, we have forwarded both Mowatt’s and P-CED Review’s comments to our legal team for review and will follow their recommended course of action when we hear back from them.

    But before we go…

    P-CED Review said: “Requests made to the publisher of this online newsletter to date have failed to prevent Mr Mowatt from using this newsletter as a means of pursuing his vendetta and vilification of his critics.”

    The DR’s Clarification:

    1) When P-CED Review said “Requests made to the publisher” we believe he or she meant to say multiple legal threats sent to the editor of the Daily Reckoning over the past few days.

    2) “failed to prevent Mr Mowatt from using this newsletter as a means of pursuing his vendetta”. Hmmmmm last we checked he only posted once.

    The DR

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