The world's greatest capitalist has used his wealth to do much good around the globe; he has brought better health and education and clean water to many, many nations. He knows first-hand of the good that our system is doing. Global poverty is at an all-time low, and the quality of life is better for billions of people. All of this is due to increased trade and free markets.
So why has Bill Gates suddenly lost faith in capitalism? Call it a crisis of faith, brought about by the new religion of climate change.
Capitalism can't address climate change, he told The Atlantic, because, "There's no fortune to be made. Even if you have a new energy source that costs the same as today's and emits no CO2, it will be uncertain compared with what's tried-and-true and already operating at unbelievable scale and has gotten through all the regulatory problems. Without a substantial carbon tax, there's no incentive for innovators or plant buyers to switch."
Government must take control, by funding research, mandating usage and punishing the wrong kinds of energy, via a carbon tax.
"Yes, the government will be somewhat inept - but the private sector is in general inept," he said. "How many companies do venture capitalists invest in that go poorly? By far most of them. And it's just that every once in a while a Google or a Microsoft comes out, and some medium-scale successes too, and so the overall return is there, and so people keep giving them money."
Gates is wrong, for a number of reasons.
First, carbon emissions in the U.S. are, in fact, decreasing, despite the notable absence of a carbon tax.
What has driven this decline, which now puts us under the never-adopted Kyoto levels? The free market - and the technological advances that have made natural gas so much cheaper than coal.
Second, of course the private sector is inept - just as government is inept. That's the nature of searching for solutions. Some things work and some don't. Here's the key difference. In the private sector, the bad ideas, the unworkable solutions and the failure are cast aside. In government, bad ideas can be immortal.
Take ethanol. It's been years since anyone truly believed corn-based ethanol is a viable alternative to fossil fuels. Studies have shown for years that producing ethanol released far more carbon than is saved over gasoline and diesel fuel. The noxious fake gas destroys engines and drives up food prices.
Yet despite all the evidence, government continues to mandate ethanol. If this was a private sector deal, ethanol would have long ago died a well-deserved death.
Finally, Gates misses the fact that capitalism is already cashing in on environmentally friendly technologies.
"In recent years, we've seen an explosion of so-called ‘green bonds.' These investments raise debt that is devoted to specific projects, which can be peddled to those who want to put their green money where their green mouth is," writes Daniel Gross in Newsweek.
Gates should have faith. Capitalism is helping.
