Free Market Capitalism
Larry Kudlow frequently advises viewers of CNBC that, “free market capitalism is the best path to prosperity.” On the whole, he has a point. Unfortunately, this is a concept that is difficult to explain in a sound-bite. Even worse, it tends to require a significant degree of political and individual effort and discipline to implement effectively.
Douglas Coate, a professor of economics at Rutgers University, recently highlighted some of the problems in a recent issue of The Wall Street Journal (http://www.wsj.com/articles/douglas-coate-improving-the-gops-free-market-pitch-1425942737). In his opinion, the arguments for capitalism are subtle and sophisticated, while the arguments for collectivism are simple and emotional. Does anyone remember Herbert Hoover’s presidential campaign slogan, “a chicken in every pot and a car in every garage”?
Investors should take note. Government plays a significant role in determining the nature of business opportunities. Individuals should be aware and diligent in assessing investment opportunities.
All comments and suggestions are welcome.
Walter J. Kirchberger, CFA®