We all know there’s manipulation on Wall Street. There are companies that are much stronger than their fundamentals would suggest, and it laughs in the face of free market capitalism as it was originally intended.
But it’s not just Wall Street that’s to blame…
The concept of free markets suggests that they work best when they’re run from the bottom up, not top down. “The invisible hand” was first brilliantly explained by Adam Smith in The Wealth of Nations in 1776.
Before that, countries, economies, and townships were controlled by the very visible iron hand of kings, queens, nobles, and sheriffs.
Talk about manipulation…
These tyrants completely hijacked the economy from a limited perspective in their ivory towers — mostly to their benefit, not to the average peasant who worked unbelievably hard for a tiny portion of his production.
That’s why the masses eventually revolted. It started in the U.S., then filtered its way into Europe through France.
Just like that, democracy became the wife of free market capitalism and the greatest period of economic progress in history followed. I call this “when Harry met Sally.”
Business people, politicians, and everyday households all tend to praise the virtues of free market capitalism… but they constantly contradict themselves.
The truth is, most people secretly hate it and have fought it for all of history.
Free market capitalism imposes a discipline on governments, businesses, and workers.
If you aren’t efficient, you get eliminated. If you lose touch with your customers, the same. If you aren’t competitive, you lose market share. If new businesses don’t hit the nail on the head, they fail. If workers don’t produce enough, they get fired. If countries or states and provinces aren’t competitive, they lose wealth and power. If politicians don’t deliver results, they get voted out.
