13 Dec 2002 The American Way
Global and domestic conditions are playing into America’s long and strong suits – our economic system and our democratic ideals. Productivity in the U.S. is rising faster than in any country in the world. Innovation thrives here because of our broad diversity and because our free market system rewards innovation and risk-taking and because patents and copyrights protect profits for a sufficient time to reward the effort. In a speech in 1859 Lincoln said:
“the patent system . . . secured to the inventor, for a limited time, the exclusive use of his invention; and thereby added the fuel of interest to the fire of genius, in the discovery and production of new and useful things.”
Just as important as bringing the ideas to fruition is the result of the process. American capitalism is about so much more than protecting the interests of innovators and risk takers. In his book, The Fire of Invention: Civil Society and the Future of the Corporation, Michael Novak points out that “patent regimes recognize the right of inventors and authors to the fruit of their own labors as a right in common law. They do so because this right serves the common good by stimulating useful inventions and creative works from which a grateful public benefits.” He summarizes his message by saying “From the point of view of civil society, the business enterprise is an important social good for four reasons. First, it creates jobs. Second, it provides desirable goods and services. Third, through its profits, it creates wealth that did not exist before. And fourth, it is a private social instrument, independent of the state, for the moral and material support of other activities of civil society.”
American capitalism has become a model to the world. There are dozens of success stories among developing countries that have followed her lead. Countries dominated by dictators do not participate in the economic miracle as their leaders are threatened by democratic rule and the potential liberating effect of the effectiveness of corporations in providing goods and services, in creating wealth, jobs, and opportunities. If terrorism can flourish in countries such as these, does it follow that its defeat lies in raising these countries from poverty and freeing them from oppression, and the best means of accomplishing this is by developing free markets and democratic rule?
American military might by itself will not defeat terrorism. America and the world will defeat terrorism by supporting social, civil, and economic development in those oppressed and depressed countries where terrorism thrives. And the most successful model for doing so is grown right here in America. Countries that adopt an American model of popular democracy, free expression of religion, and the ability to successfully compete and profit from success will thrive both socially and economically. They need not lose their unique cultures, but they must accept diversity and protect minority views. Our history is marked by lapses in respect for minority interests, but our system has withstood even the severest of tests. As countries around the world adopt free markets and democratic rule, supporters of terror will increasingly be marginalized as their audiences and supporters shrink.
As the world grows safer, it grows in all respects, including economically. American corporations are getting stronger, more productive and better able to compete, as are so many developing countries. These countries represent new customers and trading partners for American businesses, not simply competitors. They have the advantage of cheap labor, and in many cases cheap natural resources. American businesses will thrive as they help developing partners produce goods more efficiently and at higher levels of quality. The future for equity investors has rarely been better than it will be in the coming years. There will be some rough spots, but there always are. The future is brighter than ever for the long-term investor.
Last weeks’ ice storm crippled much of North Carolina and us as well. We were unable to send the Brief as our email system was down for several days. Our redundancy plan worked fine for incoming data, but we didn’t have the bandwidth necessary to publish the Brief. We are reviewing additions to our system now, which include an on-demand electric generator and satellite and direct microwave Internet technology. We apologize for the outage and hope you weren’t inconvenienced.