The following is an abridged version of a speech titled “The Nature and Cause of the Wealth of our Nation,” given April 21, 1994, by Rep. Jack Kemp of New York, a Cabinet official in the George H.W. Bush administration and 1996 Republican vice presidential candidate.
Too often in our descent into the policy minutia of budget and trade deficits, fiscal and monetary policy, we overlook the broader and bigger picture.
Experts spend endless hours perfecting econometric models to forecast GDP figures and interest rate projections, but neglect to consider how “wealth” is created, how jobs come into being and “how the world really works.” They frequently debate statistics like the national savings rate but show little interest in learning how entrepreneurs turn their ideas into new products, new businesses, new jobs and new wealth.
The key, then, to creating wealth and prosperity is allowing people freedom — freedom to work, to save, to trade, to own property, to take entrepreneurial risks, knowing that they will be rewarded for their efforts.
Our greatest assets are not the wealth we see around us, but in the potential which is unseen in the economy of the human mind. It is the minds and talents of a free people — not their material resources — which is the source of all wealth. Sir Winston Churchill once said, “The empires of the future are the empires of the mind.”
This manifest destiny of the mind is the greatest liberating force in history. It is transforming the global economy. And it is also rendering impossible any great nation’s withdrawal into a protectionist cocoon.
An economy based on entrepreneurial capitalism is the only system capable of responding to the dynamic challenges of the worldwide market of the 21st century. Government planning and industrial policies cannot succeed in high-technology markets, where the premium is on innovation rather than administration.
America must step back for a moment and recall what is at stake. The words of Tom Paine are as true today as when our nation was founded: “Those who seek security at the expense of freedom end up with neither.”
The elimination of risk will not bring security. It will bring stagnation. Risk is the source of all innovation. It is the precursor to every new enterprise that is launched and every new product that is brought to market. The story of successful entrepreneurs is almost always the story of failure after failure overcome by sheer determination. Our economic policy should be designed to encourage, not stifle, risk-taking. We need to reward the successful entrepreneur while recognizing that true freedom requires having the freedom to fail, but to pick yourself up and try again.
The arrival of the Information Age requires political leaders to finally jettison the zero-sum ideologies of the past, when economics was still “the dismal science.”
There are a series of bedrock principles that I believe will define success or failure as we enter the new millennium. Nations which practice these principles will prosper; nations which don’t will stagnate or decline. The principles include:
• A policy of free trade to expand existing markets and break open new ones to U.S. goods and services.
• A currency that is sound, stable and honest, so that interest rates can come down and savings and property are not confiscated through the corrosive effects of inflation.
• A tax system where rates are low, and economic growth and upward mobility — not redistribution of wealth — are the primary goals; one that rewards, not punishes, risk-taking, investing and working.
• A fiscal policy that restrains the encroachment of government upon private enterprise caused by spending and regulation.
• And a welfare system that rewards working, saving and marriage, instead of punishing productive human activities.
We stand at a critical but exciting crossroads in the history of our nation and the world. The Information Revolution is well underway. America’s inherent entrepreneurial spirit has put us on the leading edge of this revolution, and the eyes of the world are on us.
At this remarkable watershed in history, we must not miss the chance to begin an era of lasting peace, prosperity and boundless opportunity by realizing all the blessings of freedom through free markets, free enterprise and free trade for all.
• Excerpted from “The American Idea Renewed” (Sudden Change Media, 2016), courtesy of the Jack Kemp Foundation.
Copyright © 2017 The Washington Times, LLC.