What is Ubuntu Capitalism (UC)? Well, it is not social entrepreneurship. Social entrepreneurship simply means doing business for a social cause. UC is not adherence to the King Report on Corporate Governance either. In addition, Ubuntu Capitalism is not compliance with B-BBEE codes of good practice or any other ethical codes that may come to mind. Although these are very commendable ubuntu moves to make on the part of the JSE listed and non-listed companies which implement them and report annually on governance and sustainability related issues, these measures do not make their subscribers, UC practitioners. UC is broader than that. All three – social entrepreneurship, compliance with King Report and B-BBEE codes even if they are essential pieces to the UC puzzle, they are still not UC.
The easiest way to explain Ubuntu Capitalism is by contrasting captains of industry with robber barons. Now, think of Ubuntu Capitalism as representing Captains of Industry and Regular Capitalism as representing Robber Barons. The term Ubuntu Capitalism is actually a derivative and Africanisation of Bill Gates’ concept of “Creative Capitalism”. In his 2008 address to the World Economic Forum in Davos, Switzerland, Microsoft Founder Bill Gates called for a compassionate form of capitalism. Gates said that “we have to find a way to make the aspects of capitalism that serve the wealthier serve the poorer.” He challenged multinational companies to do their bit to close the technological and economic divide between the rich and poor in the name of creative capitalism. He stressed that, ”we must take some of the innovation power, resources of corporations and get them to focus more on the needs of the poor – get them to apply some of that intelligence more significantly towards improving the lives of the poor in a way that will reduce impoverishment far faster than relying on government alone.”
The problem with pre-Bill Gates capitalism is that poverty reduction under regular capitalism is lower and more uneven – it is one of the worst ways to reduce poverty according to Economist, William Easterly (2008). The sluggish economic transformation in Brian Merchant’s view is exacerbated by the fact that we are living in the era of the economic elite domination. The government and big corporations are least concerned with issues of ordinary members of the general public, just the rich and lobbyists. The timid requests of the public are barely audible beneath the deafening demands of the affluent. We are living in an era where the creation of bicycle lanes takes precedence over the construction of RDP houses just because Sandton dwellers speak with a loud economic voice. Companies such as the Swiss pharmaceutical giant, Roche, continue to get away with murder, literally so, because the petitions of poor breast cancer patients who find their half-a-million rand, life-saving, year-long course of Herceptin medicine expensive are just not important enough to motivate Roche to slash their prices. There are Bottom of the Pyramid (BOP) business models that Roche can adopt which work on thin margins and volumes but Roche is not willing to compromise. The law of supply and demand guarantees Roche a generous payday if they reduce their prices. It is not rocket science that the cheaper the medicine, the more the demand and the greater the profit they stand to make – this is Economics 101. Even so, the Robber Baron Roche just won’t budge. This is why we have to advocate for Ubuntu Capitalism. Ubuntu Capitalism is about inserting altruism into capitalism and showing a little Ubuntu in the way we conduct business. As Bill Gates so clearly put it, “All lives have equal value!”