If trips abroad or conversations with immigrants aren’t your style, there are plenty of other options. Several volunteer-driven nonprofit organizations teach students about free enterprise by putting them to work. Junior Achievement, founded in 1919, now reaches four million students a year. In New York, hundreds of teams of high school students compete each year to write the best plan for a new business as part of Junior Achievement. Members of the winning teams get three thousand dollars apiece and iPhones, and they get to ring the closing bell on the NASDAQ stock market. The Boy Scouts have an “American Business” merit badge with requirements that include “Run a small business involving a product or service for at least three months. . . . For example: a newspaper route, lawn mowing, sales of things you have made or grow.” Millions of Girl Scouts have learned sales and marketing principles selling cookies.
Even a job that seems menial, or a distraction from school, can become valuable training. Warren Buffett, who became the richest businessman in America, got started in high school working newspaper delivery routes for the Washington Times-Herald, Washington Post, and Washington Star. He invested some of his earnings in a business that put pinball machines in barbershops.
By getting personally involved, parents can help make it much more likely that their children grow up to be entrepreneurs rather than Occupiers. It can take some extra work and thought to find books and movies that aren’t hostile to capitalism, to keep an eye on what’s going on at school, to drive your child to Scout meetings, or to encourage them to apply for that first summer job—but it’s more than worth it.
Of course, as any parents reading this already know well, there are never any guarantees. Even well-intentioned parents don’t always get it exactly right—Bill Gates’s parents were worried when he dropped out of Harvard to pursue founding Microsoft; the president of my production company dropped out of college to pursue his dreams and his mother responded by crying—but the potential payoff is huge: a child who takes care of you in your old age rather than one who lives in your basement.
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Learning from Experience
Some of capitalism’s most passionate defenders came to America or other Western nations as immigrants after fleeing state-controlled political and economic systems. Among them:
Friedrich Hayek, the author of The Road to Serfdom and The Fatal Conceit, two books warning of the dangers of centralized government planning, was born in Austria, but in 1938, with Nazi Germany annexing Austria, Hayek became a British citizen.
Ludwig von Mises, an economist of the Austrian School and a close associate of Hayek, also fled the Nazis, arriving in America in 1940.
Rose Friedman, the wife of libertarian economist Milton Friedman, his collaborator on the 1962 book Capitalism and Freedom, and his coauthor on Free to Choose and Two Lucky People, was born in what is now Ukraine before coming to America with her family at age two.
Ayn Rand, the author of the procapitalist novel Atlas Shrugged and of the book Capitalism: The Unknown Ideal, was born in St. Petersburg, Russia, in 1905, and knew the oppressive rule of both the czar and the Soviet communist thugs that followed. She came to America in 1926.
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WHO WANTS TO BE A BILLIONAIRE?
Let’s be honest: socialism and cradle-to-grave social policies do have a certain simple emotional appeal, especially when cloaked in the language of “fairness” and “equality.” It’s easy to see a poor family and imagine how they might be helped by a government program. It’s much more abstract and complex to think about the people who might be taxed to fund that program, or about the jobs that could’ve been created if that program didn’t have to be funded, or about the chances that the government program might create perverse incentives or have unintended consequences that could wind up hurting the people it is intended to help.
Capitalism is sometimes harder to defend than other economic systems, but we can never forget that morality is actually at the center of this. One of the most influential economic thinkers of all time was the Scottish philosopher Adam Smith. His book An Inquiry into the Nature and Causes of the Wealth of Nations came out in 1776, the same year that America declared independence from Great Britain. That book described important economic concepts, such as how free trade benefits both sides because of comparative advantage, and how the “invisible hand” of self-interest benefits society overall.
But it was Smith’s earlier book, The Theory of Moral Sentiments, published in 1759, that is perhaps more important. That book focused on how market rewards encourage virtues such as hard work—what he called “industry”—and trustworthy behavior. He explained this in a section titled “Of the influence and authority of the general Rules of Morality, and that they are justly regarded as the Laws of the Deity.” Smith asked, “What is the reward most proper for encouraging industry, prudence, and circumspection? Success in every sort of business.”
In other words, capitalism is good not only because it is the best system around for generating lots of great stuff that people want to buy, but also because it’s the best way to encourage people to work hard and be honest in their dealings. Capitalism is, at its core, survival of the fittest—and a “fit” business is one that not only offers value, but also treats its customers right. That last point is too often missed. There’s a lot of attention paid to how capitalism encourages cutthroat competition, but much less attention is paid to how it encourages cooperation—among employees on the same team, between companies and their suppliers, and between entrepreneurs and their financial backers.
Believers in what Adam Smith called “the Laws of the Deity” have come at capitalism from all kinds of angles. The very big deal that the Bible makes out of the Exodus of the Children of Israel from slavery in Egypt, for example, leads to the idea that the individual, not the pharaoh or some modern equivalent, has the ownership of his own labor. The commandment not to steal brings with it the concept that what an individual has worked to produce belongs to that individual.
When it comes right down to it, though, the case for capitalism doesn’t require a lot of deep study of the Bible, eighteenth-century Scottish philosophers, or even adventure travel to Equatorial Guinea or Turkmenistan. It just requires our kids to open their minds and eyes to what’s standing right in front of them, to just connect the dots and start appreciating that they are among the 0.3 percent of humans who have ever been fortunate enough to live under this kind of freedom.
One thing that might open further their appreciation for capitalism is the fact that it is one of the few economic systems in the world in which a regular kid can be a billionaire in less than a decade. For example, Facebook’s twenty-eight-year-old founder, Mark Zuckerberg, is worth more than $20 billion. Under what other economic system can a smart person with a good idea, who isn’t the heir to a kingdom, make $20 billion before they’re thirty years old?
But maybe the best way to talk about capitalism with our kids is to show them how it’s cutting out the middlemen and giving them the power to decide their own destinies. For example, I used to be a Top 40 deejay and I knew very well the long and arduous process that artists went through before their song might eventually be played on my station.
1. Someone with an idea for a song starts a band in their garage.
2. The band might start to audition for local bar owners, hoping one of the places would let them play.
3. If that goes well they might work their way up to a larger bar. People might begin to show up specifically to watch them play—though, aside from friends, family, and flyers, there were few ways to get the word out.
4. With luck, they might make it to a bigger bar and even more people might start showing up, though there were still few ways to get the word out beyond friends and family.
5. With more luck, a talent scout for a record label might happen to see them in that bar one night.
6. That record scout might ask the band to make a “demo tape,” which the scout might then play for an
executive at the label.
7. If the executive likes the tape, he might offer them a small contract to put an album together.
8. If the album comes out well, and the timing is right, the label might promote the new band to the few chain record stores that monopolized the industry or to a few key radio stations.
9. If the programming director of a radio station hears the song and likes it he might authorize it to be played on the air.
10. If the song is played on the air, listeners might like it and call in to request it. If so, it might go into a heavier rotation, which means it might eventually show up on a Billboard chart.
Today, that entire process can be replaced by one talented person with a video camera and a YouTube account. Yes, Bieber, I’m looking at you.
Our kids don’t care about the way we used to do things. In fact, they likely resent it. The legacy systems that have been built over decades are meaningless to them. Some executive sitting in some corner office deciding who is going to be successful stands against everything our kids stand for. And that is exactly how we should be promoting capitalism. Despite the language games, it’s capitalism that encourages progress and the transformation of industries, and it’s progressives and socialism that encourage the status quo.
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Hope My Publisher Isn’t Reading This
The same kind of free-market transformation is happening in other industries as well. Take book publishing, for example. Twenty-seven-year-old Amanda Hocking spent years being rejected by book agents and traditional publishing houses. Desperate to make $300 so she could afford a trip to Chicago, Hocking self-published one of her paranormal thrillers by using Amazon.com. She was hoping to sell a few copies; she sold 1.5 million. No agents, no publishers, no bookstores or marketing companies or printing presses or delivery trucks. Just a talented writer who cut out all of the middlemen and took her work directly to the audience.
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The truth is that our kids love and embrace capitalism perhaps more than any other generation has in our country’s history. They just don’t know it yet.
It’s our job to make sure they do.
“We don’t know a millionth of one percent about anything.”
—Thomas Edison
THE YEAR IS 1678 and you’ve just arrived in England via a time machine. You take out your new iPhone in front of a group of scientists who have gathered to marvel at your arrival. “Siri,” you say, addressing the phone’s voice-activated artificial intelligence system, “play me some Beethoven.”
Dunh-Dunh-Dunh-Duuunnnhhh! The famous opening notes of Beethoven’s Fifth Symphony, stored in your music library, play loudly.
“Siri, call my mother.”
Your mother’s face appears on the screen, a Hawaiian beach behind her. “Hi, Mom!” you say. “How many fingers am I holding up?”
“Three,” she correctly answers. “Why haven’t you called more—”
“Thanks, Mom! Gotta run!” you interrupt, hanging up.
“Now,” you say. “Watch this.”
Your new friends look at the iPhone expectantly.
“Siri, I need to hide a body.”
Without hesitation, Siri asks: “What kind of place are you looking for? Mines, reservoirs, metal foundries, dumps, or swamps?” (I’m not kidding. If you have an iPhone 4S, try it.)
You respond “Swamps,” and Siri pulls up a satellite map showing you nearby swamps.
The scientists are shocked into silence. What is this thing that plays music, instantly teleports video of someone across the globe, helps you get away with murder, and is small enough to fit into a pocket?
At best, your seventeenth-century friends would worship you as a messenger of God. At worst, you’d be burned at the stake for witchcraft. After all, as science fiction author Arthur C. Clarke once said, “Any sufficiently advanced technology is indistinguishable from magic.”
Now, imagine telling this group that capitalism and representative democracy will take the world by storm, lifting hundreds of millions of people out of poverty. Imagine telling them their descendants will eradicate smallpox and regularly live seventy-five or more years. Imagine telling them that men will walk on the moon, that planes, flying hundreds of miles an hour, will transport people around the world, or that cities will be filled with buildings reaching thousands of feet into the air.
They’d probably escort you to the madhouse.
Unless, that is, one of the people in that group had been a man named Ray Kurzweil.
Kurzweil is an inventor and futurist who has done a better job than most at predicting the future. Dozens of the predictions from his 1990 book The Age of Intelligent Machines came true during the 1990s and 2000s. His follow-up book, The Age of Spiritual Machines, published in 1999, fared even better. Of the 147 predictions that Kurzweil made for 2009, 78 percent turned out to be entirely correct, and another 8 percent were roughly correct. For example, even though every portable computer had a keyboard in 1999, Kurzweil predicted that most portable computers would lack a keyboard by 2009. It turns out he was right: by 2009, most portable computers were MP3 players, smartphones, tablets, portable game machines, and other devices that lacked keyboards.
Kurzweil is most famous for his “law of accelerating returns,” the idea that technological progress is generally “exponential” (like a hockey stick, curving up sharply) rather than “linear” (like a straight line, rising slowly). In nongeek-speak that means that our knowledge is like the compound interest you get on your bank account: it increases exponentially as time goes on because it keeps building on itself. We won’t experience one hundred years of progress in the twenty-first century, but rather twenty thousand years of progress (measured at today’s rate).
Many experts have criticized Kurzweil’s forecasting methods, but a careful and extensive review of technological trends by researchers at the Santa Fe Institute came to the same basic conclusion: technological progress generally tends to be exponential (or even faster than exponential), not linear.
So, what does this mean? In his 2005 book The Singularity Is Near, Kurzweil shares his predictions for the next few decades:
In our current decade, Kurzweil expects real-time translation tools and automatic house-cleaning robots to become common.
In the 2020s he expects to see the invention of tiny robots that can be injected into our bodies to intelligently find and repair damage and cure infections.
By the 2030s he expects “mind uploading” to be possible, meaning that your memories and personality and consciousness could be copied to a machine. You could then make backup copies of yourself, and achieve a kind of technological immortality.
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Age of the Machines?
“We became the dominant species on this planet by being the most intelligent species around. This century we are going to cede that crown to machines. After we do that, it will be them steering history rather than us.”
—JAAN TALLINN, CO-CREATOR OF SKYPE AND KAZAA
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If any of that sounds absurd, remember again how absurd the eradication of smallpox or the iPhone 4S would have seemed to those seventeenth-century scientists. That’s because the human brain is conditioned to believe that the past is a great predictor of the future. While that might work fine in some areas, technology is not one of them. Just because it took decades to put two hundred transistors onto a computer chip doesn’t mean that it will take decades to get to four hundred. In fact, Moore’s Law, which states (roughly) that computing power doubles every two years, shows how technological progress must be thought of in terms of “hockey stick” progress, not “straight line” progress. Moore’s Law has held for more than half a century already (we can currently fit 2.6 billion transistors onto a single chip) and there’s little reason to expect that it won’t continue to.
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Your Brain 2.0
There’s no reason to expect that mind uploading can’t be achieved with enough techn
ological progress. Nearly all scientists who study the brain think the human mind is, like a computer, basically an information-processing system. But while neurons eventually die, silicon pathways live forever.
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In 1995, consumers were forced to buy entire albums on CD for $15 to $20. Now? They download only the songs they want for $.99 each.
In 2010, Borders operated more than 500 book and music superstores around the world. Now? There are zero.
But the aspect of his book that has the most far-ranging ramifications for us is Kurzweil’s prediction that we will achieve a “technological singularity” in 2045. He defines this term rather vaguely as “a future period during which the pace of technological change will be so rapid, its impact so deep, that human life will be irreversibly transformed.”
Part of what Kurzweil is talking about is based on an older, more precise notion of “technological singularity” called an intelligence explosion. An intelligence explosion is what happens when we create artificial intelligence (AI) that is better than we are at the task of designing artificial intelligences. If the AI we create can improve its own intelligence without waiting for humans to make the next innovation, this will make it even more capable of improving its intelligence, which will . . . well, you get the point. The AI can, with enough improvements, make itself smarter than all of us mere humans put together.