It's customary in the investment advisory business to offer year-end forecasts. With one significant exception this message includes no predictions, but do read on:
They are not hard to find - those prognosticators of doom. Tune in to CNBC for Nouriel Roubini or Fox News for Glenn Beck, to name just two. Meaning no disrespect, for those who really want to awaken each day to a miserable future, let me suggest a trip through time.
Our Cro-Magnon ancestors had a life expectancy at birth of eighteen years. Life expectancy at the height of the Roman Empire was twenty-four years, and during the Middle Ages, you could expect to live to be thirty. By the dawn of the 20th century, life expectancy in America had reached a whopping forty-seven years.1
In the 20th century, Hitler killed his well-documented 21 million. Under Mao Tse-tung and his followers, 77 million people were killed in China. The Soviet Union killed almost 62 million of its own people. All told, from 1917 to 1989, Socialist/communist governments logged about 262 million deaths by starvation and violence.1, 2 I'm not even counting the deaths in WWI and WWII, 37 million and 60 million, respectively.3
Today, of course, we face a shadowy conspiracy of both state-sponsored and roguish Muslim fanatics who are all determined to exterminate the infidels. To the further pessimism of Beck and Roubini, our own government has run up a debt of almost $14 trillion, $5 trillion in just the last three years; and it has off-balance-sheet debt for Social Security and Medicare liabilities of almost $43 trillion.4 Woe is us, right?
In case you missed it, communism died a warm and fuzzy death on November 9, 1989. Crazy Islamic fascists notwithstanding, Freedom and Capitalism have taken root in the hearts and minds of the middle class in the Middle East and in most of Asia. African societies, to the extent that they have a middle class, are likewise endowed. Socialist utopianism in North and South America, as in Western Europe, is in its death throes. The good guys have won and/or are winning. Those aren't predictions, they're facts.
But wait, there's more good news! Since you are alive today, you are probably one of the richest five percent of people in the world and one of the richest one percent of people who have ever lived. We Americans have the opportunity to live lives abounding with pleasure and meaning every day. Today, life expectancy is approaching eighty years; which means that half of us have will live beyond eighty years. And, I have grandchildren who may live in three different centuries.
So, let's just admit that from a historical perspective, we are living in the golden age - so far - of human experience. And, it's not just the quantity of life that we can expect to live, but the quality. We have opportunities our ancestors would not believe, even upon seeing. We can communicate with friends and relatives around the globe, instantly and virtually for free. We have almost instant access to virtually any book ever written, any music ever composed, and any artistic masterpiece ever created.
Do you want to sail to Alaska or Hawaii, or visit Rome or Athens? Go for it! In the last two years, my daughter, Michelle, has been to Wellington, New Zealand; Hobart, Tasmania; Lisbon, Portugal; Heidelberg, Germany; and London, England; and next month, she'll be in Florence; that's Florence, Italy, not Florence, Kansas. All of that was done in the routine performance of her job, and her experience is not atypical of her generation.
We do have problems, but my sky remains blue. Here's why:
Capitalism creates wealth, and, contrary to popular belief, wealth produces virtue. It does not destroy it. Markets reinforce virtue. They do not undermine it. Deirdre McCloskey of the University of Chicago tells us that prosperity - which we have, and long life expectancy, which we have - make us better people.1, 5In the world of our ancestors, where virtually everyone was dead by the age of forty, and only a lucky few lived to what we now consider our golden years, there was little incentive to think long-term or to be concerned with anything happening beyond the neighborhood.
Today, we can take some honest pride in our own ability and willingness to think and plan for a long-range future, and to look even beyond our borders for opportunities. If we are so inclined, and most of us are, we have time for community service and money for charity, which however piddling it may sometimes seem to us, does add up to the great benefit of others less fortunate than we. And, it's Capitalism that has provided us with those luxurious incentives.
My one and only prediction:
Solving problems is not really that difficult; it's facing up to them that's hard. As we enter a New Year, I'm confident that the American people, having the indulgence of a long-term perspective and the capacity for instant communication; and possessing, by any historical standard, extraordinarily high levels of both personal ambition and concern for their fellow man and their country; will persevere in the face of any difficulty. But, Americans will not just persevere, we will set new goals for ever greater goodness, and health, and prosperity - and we will attain them.
With love and until next year,
PATIENCE, DISCIPLINE, and CONFIDENCE in the FUTURE! mh
2 http://www.digitalsurvivors.com/archives/communist bodycount.php
3 http://en.wikipedia.org/wiki/World_War_I_casualties http://en.wikipedia.org/wiki/World_War_II_casualties
4 http://en.wikipedia.org/wiki/United_States_public_ debt
5 Bourgeois Dignity, Deirdre N. McCloskey, University of Chicago Press, 2010.