{"id":31346,"date":"2012-08-02T21:10:24","date_gmt":"2012-08-02T21:10:24","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/2012\/08\/the-wealth-of-nations-how-capitalism-makes-us-all-richer\/"},"modified":"2012-08-02T21:10:24","modified_gmt":"2012-08-02T21:10:24","slug":"the-wealth-of-nations-how-capitalism-makes-us-all-richer","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2012\/08\/02\/the-wealth-of-nations-how-capitalism-makes-us-all-richer\/","title":{"rendered":"The Wealth of Nations: How Capitalism Makes Us All Richer"},"content":{"rendered":"

Article by Investment U<\/a> <\/p>\n

The founding principle of Investment U<\/em> is that if you want to be a better investor, you need to better understand the time-tested principles of investing and how they apply to today\u2019s markets.<\/p>\n

That starts, however, with comprehending the nature of business in a capitalistic society.<\/p>\n

That is something that eludes many Americans, however, including perhaps the nation\u2019s chief executive.<\/p>\n

President Obama opened a can of worms recently with his remark, \u201cIf you\u2019ve got a business \u2013 you didn\u2019t build that. Somebody else made that happen.\u201d He prefaced his remarks with references to how public education and government-created infrastructure allow businesses to thrive.<\/p>\n

There\u2019s no argument here. We all know the term \u201cself-made man\u201d<\/em> isn\u2019t a literal one.<\/p>\n

But you have to wonder whether the President \u2013 a man with no experience in the private sector \u2013 truly understands how wealth is created in our capitalistic society or how an overweening federal government diminishes it.<\/p>\n

A Culture That Rewards Individual Initiative<\/strong><\/h2>\n

For example, every society depends on public education and the roads and bridges that the government builds. But if these were the primary determinants of economic success, why have so many countries with world-class infrastructure not been hotbeds of innovation and wealth creation? Clearly, a culture that fosters and rewards individual initiative and risk-taking plays a major role.<\/p>\n

Also, if business owners themselves are not primarily responsible for their successes, who is responsible for their failures? In a letter to The Wall Street Journal<\/em> last week, Dick Raddatz of Mequon, Wisconsin wrote, \u201cMy last business lost $1.5 million of which $750,000 was personally guaranteed by me. Please give me a call, Mr. President, and I will tell you where to send the check for your fair share.\u201d<\/p>\n

Perhaps the biggest fallacy in Obama\u2019s remarks was the contention that the government pays for<\/em> the nation\u2019s infrastructure. The reality, of course, is the federal government has no money except what it collects in taxes. And since the vast majority of taxes are paid by businesses and high-earning individuals, we can thank them<\/em> for the infrastructure we all enjoy.<\/p>\n

My goal here is not to bash President Obama or influence the way you vote \u2013 I\u2019m sure you\u2019ve got your own ideas on that \u2013 but rather to point out that personal economic success is primarily about individual striving not government policies.<\/p>\n

A Win-Win Proposition<\/strong><\/h2>\n

Capitalism is a beautiful thing. It promises that you can have anything you want if you just provide enough other people with what they want. It\u2019s about voluntary exchange for mutual benefit. That is why whenever you make a purchase you hear two thank-you\u2019s.<\/p>\n

You say thanks because you want the merchandise more than the money. The retailer says thanks because he wants the money more than the merchandise. Capitalism is not a zero-sum game where one side wins and the other side loses. It\u2019s a win-win.<\/p>\n

Remember, big business can\u2019t make you do anything you don\u2019t want to do. If you don\u2019t like a company, you don\u2019t have to patronize them, work for them or sell to them.<\/p>\n

Big government, on the other hand, is all about force, not choice. Every year Congress generates thousands of pages of new legislation, with virtually every page requiring business owners to do something they don\u2019t want to do or prohibiting them from doing something they would like to do.<\/p>\n

Educated people realize there is a role for government to play. But it is a minimal role. Mandates, regulations, tax complexity and compliance bog down businesses, stifle innovation and, not incidentally, diminish confidence about the future, leading businesses to hire, spend and invest less<\/em>.<\/p>\n

In short, we shouldn\u2019t discount or demean entrepreneurship. We should celebrate it. Hard work and risk-taking \u2013 not roads and bridges \u2013 is what creates fortunes. Understanding and appreciating this is the first step down the right path.<\/p>\n

Good Investing,<\/p>\n

Alex<\/p>\n

\n<\/a> <\/a> <\/a> <\/a> <\/a>\n<\/div>\n

<\/p>\n

Article by Investment U<\/a> <\/p>\n","protected":false},"excerpt":{"rendered":"

Article by Investment U The founding principle of Investment U is that if you want to be a better investor, you need to better understand the time-tested principles of investing and how they apply to today\u2019s markets. That starts, however, with comprehending the nature of business in a capitalistic society. That is something that eludes … <\/p>\n

Continue reading “The Wealth of Nations: How Capitalism Makes Us All Richer”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-31346","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/31346","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/comments?post=31346"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/31346\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/media?parent=31346"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/categories?post=31346"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/tags?post=31346"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}