Bill Gates’ recent speech on the failings of capitalism went over big with the Davos crowd, but isn’t playing well in the financial press. Sure, they rightly complain, it’s one thing for a billionaire (35 times over) to moan about the supposed problems with free market mechanisms after he’s filled his swimming pool with gold, but where were his criticisms on the way up? It’s a valid point, but one that misses the bigger picture.

The “kinder capitalism” Gates refers to used to mean that returns were sacrificed for the greater good (whatever that meant). It introduced inefficiency to the market in a way that caused many economists, and companies, to balk. But this is no longer the case, and I refer you to a February 2007 Harvard Business Review article entitled “Cocreating Business’s New Social Compact.” A number of multi-national corporations are partnering with non-governmental organizations to the mutual benefit of both. Multi-nationals get access to the NGOs’ knowledge of the local custom and tradition, a lack of which caused ventures to fail in the past. NGOs get access to capital for side businesses, as well as a voice in shaping the corporate responsibility and ethics codes of some of the world’s largest players.

This, I believe, is the thrust of Gates speech, and one I wholeheartedly embrace.

Read the whole Harvard Business Review article at www.harvardbusinessreview.com.