There are generally just two ways people deal with each other: with reason or with force.
Reason is the businessperson's approach. Regardless if he is a trader, a CEO or lemonade-stand operator, the capitalist understands that if he wants something from you, he's got to offer you a value in return. He can't force you to buy his real estate, "green" energy, or failing auto company, he can only try and convince you though discussion and trade that it's in your own self interest. The choice is always yours.
That basic fundamental negates the cliched and commonplace assertion, popularized even by our own elected officials, that trade is destructive and that profit-seeking businessmen are evil. In reality, just the opposite is true: Regardless if it's for a share of stock, an education or a sandwich, voluntary trade is productive as both parties' needs are satisfied. After all, that's why they're trading.
Force is not the tool of businessmen, but of bureaucrats. Whereas a businessman must appeal to your mind, government bureaucrats effectively put a gun to your head. They force you to you pay for banks, insurance companies, and deadbeat homeowners. They also force businesses to sell certain types of products, offer certain types of wages and operate in a certain fashion.
If a hooded thug stole your savings or tied your arms behind your back, we'd call it a crime. It's still a crime even though it's a suit-wearing bureaucrat doing the stealing.
In a free market, the economic power achieved by Wal-Mart (WMT), McDonald's (MCD) or any other successful company has been earned, not expropriated.
And while a businessman can't insist you to act against your own judgment, our government can and increasingly does, Obamacare is just the latest example of government force replacing individuals' own voluntary judgment regarding what's in their own self interest.
Stripped of the flowery language about how "we are our brother's keeper" and "the common good", government intervention into the free market is done by those who believe your judgment or voluntary choice is moot.
For over four years, government has been engaged in an arbitrary campaign purportedly to spur economic growth. Every single initiative, from stifling regulation to "Cash for Clunkers" to inflationary manipulation of interest rates has involved the use of government force, the result of which has been more debt, less liberty and continued economic lethargy. Economic freedom, as we wrote last year, remains the one stimulus that has yet to be actually tried.
The reason the average income in communist North Korea is $1,800/year compared to nearly $50,000 in the United States isn't because the water in New York Harbor is any different than that in Pyongyang. Rather, it's the ideas and dominant philosophy that determine the result. North Korea, like Cuba, Venezuela, Zimbabwe and a long list of other collectivist countries, employ force against their own citizens as a matter of practice. The results speak for themselves.
The United States' historical success came not from natural resources or global plunder, but ideological commitment to reason. From the smallest start-up to the S&P 500's biggest names, wealth is a product of man's capacity to think: to deal with others in voluntary, mutually beneficial and productive trade.
If Washington and the American people are looking for a "secret sauce" to remedy our economic malaise, that's it.
Jonathan Hoeing is managing member at Capitalistpig Hedge Fund LLC
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