VALUE: After Hours (S07 E39): Why the U.S. Is Still the Best Place for Capital to Grow

During their recent episode, Taylor, Carlisle, and Bogumil Baranowski discussed Why the U.S. Is Still the Best Place for Capital to Grow. Here’s an excerpt from the episode:

Bogumil: [laughs] I’ll give away a secret that might not be a secret. But the choice of location is the most important part of it all. And I’ll explain why. I wrote a book, Money, Life, Family, where I dedicated a third of it to explaining why the US has worked, and I hope continues to do so. It’s never that obvious, because I think we’re earning our future as we go. It’s not given, and it doesn’t apply just to the US. But a setting where you had a country where it was okay to own things, it was okay to be successful, it was even praised and accepted that you could get richer than your neighbor, you could definitely get rich, as rich as the king, which is still not the case in some countries on earth.

I visited some places where you can’t speak up about the king in a certain way. It’s still very real. It’s happening as we speak. But it’s a country when we haven’t had a king, and we are allowed to get rich, and we can keep it. Of course, there are taxes and consequences and all kinds of frameworks, but nobody’s out there to take it away from you outright. And not having a conflict within the borders, obviously, except for the Civil War, which is tough time and a lot of lost life, and I’m sure wealth as well, but nothing like what Europe endured in many other places.

So, this is like the protection of the downside. But then, the upside, it’s a country that has a huge economy, lots of talent, people that are willing to work hard. I’ve lived in many places. Americans work hard. And even us, immigrants, coming and working hard, it pushes the country forward. And having a stock market where the best businesses choose to be listed allow you to participate, so you have layers and layers that allow this place to be a great setup and give you a chance. Not a guarantee, but a chance to grow wealth. People use the word perpetuate. I think it’s an aspiration to perpetuate wealth over many generations to me.

It’s heartbreaking to see that every generation has to start from zero. We talked about wisdom. Can you imagine all of us burning all the books with every generation? And every kid has to start with nothing again? We don’t do that. But so many people start with absolute zero, financially speaking. And some students these days start with a negative net worth. It’s a very uncomfortable place to be making any life decisions. So, to think of the next generations being able to start with something, I think it’s the beginning of the aspiration that we’re building here. What can we do, so that the next generation has an easier head start, I think that’s something we could aspire to have.

Jake: Bogie, are you thinking about the New York City mayoral race?

Bogumil: Right. Right. [laughs] You know people ask me– I actually spoke with somebody yesterday who’s from Hungary and might be listening to this. He’s about my age. He said, “You know, it’s interesting that you talk about your experience in Poland.” Because he lived for something similar in Hungary. And he says, “It’s interesting you choose to talk about it.” And I told him, “I think I almost feel obligated to talk about it, because as a civilization, we just forget the lessons of the past again and again.”

I find it very disturbing that some of the ideas that we already tried and they failed. We try to apply them again across a wide spectrum of ideas, not picking on anybody in particular. [chuckles] But we’ve tried it. We’ve tried it already. I think it would be very useful to– If you don’t want to read a book, have somebody in the room that has lived through an experience that you tried to invite again, and tell them what it’s really like. And if you still want to do that, and then, sure. But just sharing the story and the idea and the experience, I think gives us a chance not to make the same mistakes again.

Communism as the one that was practiced in Poland came at a huge expense to a nation and to a whole block of nations within Europe. A lot of people died with songs that were never heard. You know, they had talents and gifts. I don’t think we would like to live through it again anywhere else, including New York City.

Tobias: I saw a good program the other day that talked about the geographic advantages that the US has relative to the rest of the world. I mean, there are many, like just having two oceans, so not having competitors nearby. All of the rivers on the inside, the amount of arable land that the states has like oil and gas and minerals and so on. So, it just goes on and on, which suggests that the US is set up pretty well, probably better than any other country in the world for at least the next century or so beyond that, which is a huge positive for the states.

But the problem for the states seems to me to be that that huge wealth inequality where you have students who are coming out of school. We’ve got giant student debts that really– You got to swallow that before you then go, and try and buy a house, and move on with your life beyond that. It frustrates me a little bit, because I think that a lot of the problem is that interest rates were set too low for too long, and that’s a Federal Reserve problem, which I think is one of the problems with central planning. It frustrates me that our solution to central planning is more central planning in New York. [Bogumil laughs] So, that’s the end of my editorializing, but that’s the way I feel about it.

Bogumil: Yeah. Can I chime in?

Tobias: Yeah. Please, I was going to throw it to you.

Bogumil: [laughs] So, Jake knows very well how I feel about central planning. I remember the office building in Warsaw, a gray communist Soviet style building, where people– [crosstalk]

Jake: Beautiful, right?

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