The Case for Optimism

Recently The Wall Street Journal published an exceptional commentary by French free-market journalist Guy Sorman titled “The Case for Optimism,” which is reproduced below.

“Are we better off than our generational predecessors?  Some say no, but I’m old enough for such pessimism to seem absurd.  My parents knew nothing of modern conveniences like central heating, television, or advance antibiotics; to travel for them was a luxury, to cross a border a risky adventure.  They lived in an age of turmoil and horror.  Yet they remained hopeful.  Having survived the Bolshevik revolution, Nazism, and–after fleeing Germany and arriving in France in the 1930s—the Vichy regime, they opened a garment shop in 1945 in a working-class suburb of Paris and called it Au Progres: “to progress.”  I remember vividly the painted sign, its brown letters against a yellow background.  The name was an affirmation that the world could only get better.

This optimism, expressed in 1945, would be confirmed in the following years—for them and for so many others.  Our lives, collectively, are better now, sheltered from ideological catastrophes, from great epidemics, and mass famine.  We can only rejoice in the massive reduction in poverty across the globe.  War and malnutrition haven’t disappeared, but the number of victims keeps declining, thanks to a more lawful world order, effective economic policies, and scientific breakthroughs.

If I had to sum up recent history as seen through my lens in a phrase, I’d propose: the Crisis of the West and the Westernization of the World.  While the West is perplexed about its economic future, its cultural identity, and the dysfunctions of its democratic policies, others are rallying to its institutions and ways.  A few years ago, invited to speak at the People’s University of Beijing, I speculated about this crisis of the West.  The first respondent, the political philosopher, Liu Junning, declared, to the applause of students and faculty, that many Chinese would take our crisis—if they could enjoy our freedoms.  Crisis and freedom are surely bound together, since the West is essentially driven toward self-criticism and what economists call “creative destruction,” an expression that really should apply to all aspects of our society.  To a Chinese person oppressed by tyranny, creative destruction is eminently desirable.  Perhaps, then, it’s time to love the West, and our times, more, as others envy us so much.”

Mr. Sorman makes a strong case for optimism.  Investors should reflect on the exceptional strength of the West in developing an investment strategy.

All comments and suggestions are welcome.

Walter J. Kirchberger, CFA®