Capitalism. In this way, the government, enterprises and non-profit organizations can cooperate to make the market play a role in a wider scope, so that more people can benefit from it or be recognized, and finally improve global inequality.
Some people may object to this market-based social change. They believe that if emotion and self-interest are combined, the scope of the market will not expand, but will shrink. But Adam Smith, the originator of Das Kapital, the author of The Wealth of Nations and a thinker who firmly believes in the value of egoism to society, wrote at the beginning of his first book: No matter how selfish a person is, there are obviously some fundamental principles in human nature: a person is interested in improving the fate of others and regards the happiness of others as his necessity. Although he can't get anything from it, he is satisfied when he sees it.
Innovative capitalism links this interest in the fate of others with its concern for its own destiny, which can not only help others, but also improve itself. Compared with pure egoism, the combination of egoism and altruism can benefit more people.
The wealth at the bottom of the pyramid
Innovative capitalism combines business expertise with the needs of developing countries. In developing countries, the market has always existed, but there is no enterprise to explore it. Sometimes, the practice of market economy doesn't work in developing China. It is not that developing countries have no demand or lack of money. The real reason is that enterprises have not spent enough time studying market demand. C.K.Prahalad elaborated this brilliantly in his book The Wealth at the Bottom of the Pyramid. This book has a great influence on many companies and enterprises. It helps these enterprises to expand their profit margins through special innovations. I can give an example here. The World Health Organization hopes to expand the coverage of meningitis vaccine in Africa. But it did not directly contact the vaccine manufacturer. It first went to Africa to learn about people's ability to pay. The organization understands that if African mothers want to vaccinate their children against meningitis, the price of the vaccine should not exceed 50 cents. Subsequently, the World Health Organization asked the cooperative manufacturers to organize production according to this price standard. In fact, an Indian pharmaceutical company found a new production method and reduced the price to 40 cents. The World Health Organization allows this enterprise to provide 250 million meningitis vaccines to the public health system in the next decade, and at the same time allows it to sell products to private medical institutions. Another example is that a Dutch pharmaceutical company owns the property rights of a vaccine. The enterprise collects patent fees from enterprises that produce vaccines in developed countries, while exempting enterprises that produce vaccines in developing countries from patent fees. Results The cost of producing this vaccine in Vietnam is less than 1 USD, and this 1 USD also includes freight and immunization promotion expenses.
Because the marginal cost of many important products today is already very low, such as software, medicine, media works and so on. This hierarchical pricing method can make people who have no money afford some valuable products. This pricing method can actually be promoted in a wider range.
The projects I listed can give us some enlightenment. People who are committed to meeting the needs of developing countries should cooperate with scientists, because scientists know where to make breakthroughs, which is the same in the software industry and the pharmaceutical industry. People from both sides can find ways to put good ideas into practice in poor countries by combining them. It needs the direct participation of the government.
Another way to realize innovative capitalism requires the direct participation of the government. Of course, the government has done a lot to help the poor. This is not just an effort to cultivate the market. The government has invested a lot of money in aid, scientific research and health care. These jobs are very meaningful. But I think the best way for the government to mobilize resources is to introduce policies to encourage enterprises to improve the lives of the poor through market efforts. President Bush recently signed a bill. According to the bill, if a pharmaceutical company develops a new treatment for long-neglected diseases such as malaria or tuberculosis, its high-profit products, such as cholesterol-lowering drugs, can be put on the market two years in advance, which may mean a market of hundreds of millions of dollars.