Archive for August, 2012

RUSSIA FLEXES NEW GEOPOLITICAL MUSCLE IN EUROPE

August 30, 2012

Wall Street Journal on August 29, 2012, reported on a planned interruption of Russian natural gas flows to Europe via an overland pipeline serves as a first display of Russia’s newly gained ability to uphold gas delivery to the important German market even as supply to neighboring transit states in central and eastern Europe are cut. Excerpts below:

Russia’s OAO Gazprom, the country’s natural gas giant controlled by the state, said the overland Yamal-Europe pipeline would sit idle for 40 hours this week for planned repairs in Russia and Poland. On previous such occasions, customers in Germany would be affected, but not this year–deliveries via Nord Stream, a pipeline that runs across the Baltic Sea, were increased in order to compensate.

Amid feuds over payments with Belarus, another transit country, Russia in the winter of 2010 reduced supplies via the Yamal-Europe pipeline, leading to concerns from customers in Poland and Germany. Hooked up to Nord Stream, Germany no longer faces the risk, but Poland continues to be exposed.

Nord Stream, which connects Russia and Germany directly, was advertised as “a new gas supply route for Europe.” Yet it’s meant only for customers in the west of the European Union, while through the use of contractual clauses Russia limits the ability of clients in Central Europe, which it once dominated, to freely trade the Russian gas between them even once it’s inside the EU.

Poland in the past criticized the pipeline, initiated by Gazprom in 2005, saying that the project could open Poland to increased political and economic pressure from Russia. This week’s pipeline outage may have been a dry run

PAUL RYAN PLEDGES GOP REBIRTH

August 30, 2012

Wall Street Journal on August 30, 2012, reported that Rep. Paul Ryan took the national political stage Wednesday as the Republican Party’s vice presidential candidate, giving a televised speech that laid out one of the GOP’s sharpest cases yet against a second term for President Barack Obama, and for Republicans as the party of small government. Excerpts below:

Mr. Ryan’s address to the Republican convention was his introduction to a national audience only now beginning to take his measure as one of the GOP’s leading figures and the partner of presidential candidate Mitt Romney.

He blended notes of partisan rancor with personal touches, such as a nod to his taste for rock bands AC/DC and Led Zeppelin, as he tried to build a case that Mr. Obama had hindered the economy and piled on debt.

“After four years of getting the runaround, America needs a turnaround, and the man for the job is Gov. Mitt Romney,” Mr. Ryan told the crowd gathered at the Tampa Bay Times Forum.

Mr. Ryan’s selection heralds the emergence of a new generation of Republican leaders willing to reshape the main pillars of a social safety net that has been in place since the 1960s.

The 42-year-old Wisconsin congressman is the architect of far-reaching legislation to cut federal spending and to overhaul entitlement programs, including a proposal to transform Medicare from open-ended health coverage for seniors into a system in which future beneficiaries buy private insurance, or buy into the traditional Medicare program, with premiums subsidized by the government.

Mr. Ryan didn’t shy from his Medicare plan Wednesday. “Medicare is a promise, and we will honor it,” he said, an effort to blunt Democratic attacks that his plan would undermine Medicare and shift costs to future retirees. “A Romney-Ryan administration will protect and strengthen Medicare, for my Mom’s generation, for my generation, and for my kids and yours.”

The congressman then blamed Mr. Obama for failing to curb the deficit, wasting stimulus money to revive the U.S. economy during his first year in office and passing a new health-care law that should “have no place in a free country.”

Mr. Ryan said the president has shirked responsibility for the sluggish recovery. “College graduates should not have to live out their 20s in their childhood bedrooms, staring up at fading Obama posters and wondering when they can move out and get going with life,” he said.

Whoever wins in November, Mr. Ryan’s ascension as Mr. Romney’s vice presidential choice cements his standing as a leader among the new generation of Republicans who have emerged alongside the tea party, and who are aligned with its small-government message. Other members of this new wave include Gov. Scott Walker of Wisconsin and Gov. Chris Christie of New Jersey, who have adopted a combative stance in an effort to rein in government spending in their states.

As the top Republican on the House Budget Committee, Mr. Ryan squared off with President Barack Obama over the new federal health-care law and the merits of Mr. Ryan’s budget blueprint, which calls for significant cuts to the arc of federal spending, in addition to its proposed Medicare overhaul. None of those moments rivals the exposure or scrutiny of Wednesday’s speech.

Earlier Wednesday, in one of the evening’s highlights, former Secretary of State Condoleeza Rice gave a moving and rhetorically impressive address, broadly criticizing Mr. Obama’s record without mentioning him by name.

She made the case for the U.S. to continue in its role as a world leader, and sounded a much softer note on immigration and education than the typical GOP party line.

Ms. Rice gravely described the challenges facing the country while at the same time sounding an optimistic note about the future of the nation. “It doesn’t matter where you came from; it matters where you are going,” she said.

Speaking earlier, Sen. John McCain of Arizona, who was defeated by Mr. Obama in the 2008 election, delivered a resounding critique of the president’s foreign-policy actions.

Mr. McCain took the administration to task for failing to back protesters in Iran during that country’s short-lived “green revolution” in 2009, and for not doing more now to oust the regime of Syrian president Bashar al-Assad in the face of continuing atrocities.

In the first speech of the evening, Senate Minority Leader Mitch McConnell of Kentucky offered a defense of American exceptionalism. He called on those present “to turn the page on Barack Obama’s four-year experiment in big government. And it starts by renewing our belief that we are called to do something better.”

Mr. McConnell has been one of the harshest critics of Mr. Obama’s presidency, stating in 2010 that his first goal was to deny him a second term

LEADING U.S. CONSERVATIVE LADY PRAISES REPUBLICAN PARTY PLATFORM

August 29, 2012

The Washington Times on August 27, 2012, published an article by Phyllis Schlafly on Republican Party platform. It may be, she wrote, the best one ever adopted. The party has long since learned that fiscal, social and sovereignty issues cannot be ignored or separated, but must be addressed as all part of a national campaign. Excerpts below:

The 2012 platform adopted the identical pro-life language that has been in the platform since the late Rep. Henry Hyde inserted it in 1984 in Dallas. It affirms that “the unborn child has a fundamental individual right to life which cannot be infringed.”

sharp contrast to the anticipated Democratic Party platform, the Republican platform takes a strong stand in support of “marriage as the union of one man and one woman” and of the Defense of Marriage Act (DOMA). The platform specifically opposes any changes made by “an activist judiciary” or by a president who swore an oath to “take care that the laws be faithfully executed.”

The platform speaks loud and clear against the Obama administration’s “war on religion,” which is trying “to compel faith-related institutions, as well as believing individuals, to contravene their deeply held religious, moral or ethical beliefs regarding health services, traditional marriage or abortion.” This war is an unprecedented attack on the First Amendment and on religiously affiliated institutions such as hospitals, schools and colleges, forcing them to accept the Obama administration’s rule that there is no higher power than the executive branch of the federal government.

Of course, the platform calls for repealing Obamacare, identifying it as not really about health care. Obamacare is really about power, the expansion of government control and spending America into more debt.

The platform sections on immigration are examples of how closely social and fiscal issues and costs are intertwined. It is in favor of the rule of law, against any kind of amnesty, and supports requiring employers to use e-Verify to make sure their employees are legally in the United States. It also takes a strong stand for approving photo IDs before allowing someone to vote. Contrary to what the media tries to tell us, vote fraud is a real problem and we don’t want it to damage the upcoming presidential election.

The platform endorses “American military superiority” as the cornerstone of our strategy to deter aggression and protect national security. Superiority disappeared from the Republican platform in recent years, but it’s now more than ever necessary because of Mr. Obama’s foolish statements about wanting a nuclear-free world, which would leave America at the mercy of dictatorships that ignore all treaties and promises.

It rejects a long list of United Nations treaties, including the treaty on women’s rights, the treaty on the rights of the child, the treaty on persons with disabilities, the arms trade treaty and the Law of the Sea treaty. The platform also rejects Agenda 21, including its proposal for a global tax and various U.N. declarations on the environment.

Altogether, the 2012 Republican Platform is an excellent document written by grass-roots conservatives. It is a true reflection of American values.

Phyllis Schlafly is one of the most prominent American Conservatives, president of Eagle Forum and co-author of “No Higher Power: Obama’s War on Religious Freedom” (Regnery, 2012).

GOVERNOR CHRISTIE DELIVERS ROUSING SPEECH AT REPUBLICAN CONVENTION IN TAMPA, FLORIDA

August 29, 2012

Fox News on August 28, 2012, reported on the Republican Convention speech of Governor Chris Christie of New Jersey. Excerpts below:

The straight-talking New Jersey governor used his highly anticipated convention keynote to strike a match under the Republican Party faithful and effectively give them their marching orders going into November. Making the case in no uncertain terms for the Romney ticket, Christie charged conservatives with leading a “new era of truth-telling” – calling this the only way to revive a country “paralyzed” by feckless leadership.

“We ended an era of absentee leadership without purpose or principle in New Jersey,” Christie said, relating his own experiences fighting the teachers unions and other interests in the Garden State. “It is time to end this era of absentee leadership in the Oval Office and send real leaders back to the White House.

“America needs Mitt Romney and Paul Ryan, and we need them right now,” Christie declared.

…Christie delivered a rousing address that repeatedly brought the crowd to its feet.

Christie was as tough on Obama as he was supportive of Mitt Romney, ratcheting up the convention tone as the president sets out on a campaign swing of his own this week. Christie claimed “doubt and fear” have seized a country that four years ago put its stock in hope and change.

Throughout, the governor called on Republicans to do what he claims Democrats have not, and start telling the “hard truths” about what needs to be done to reduce entitlements, reduce the size of government and ultimately bring down the debt.

He added: “I believe we have become paralyzed, paralyzed by our desire to be loved.” Christie said leaders chronically opt to do what is popular, “but tonight I say enough.”

“Tonight,” he said, “we’re gonna choose respect over love.”

The governor flavored his speech with his own New Jersey upbringing, telling about how his dad put himself through Rutgers while his “tough-as-nails” mother raised him.

Romney’s wife, Ann, offered the personal touch, telling stories about the newly anointed GOP nominee that only she would know in an earlier address. But it was Christie’s job to bring the rhetorical firepower and energize a party that for months – years, really – has been divided over Romney’s bid for the presidency.

Christie sought to leave no doubt that now is the time for Republicans to rally around that man.

And the audience responded, interrupting the speech repeatedly with applause.

For Christie himself, the address was indeed a chance to burnish his national stage presence, perhaps in preparation for a presidential run sometime in the future. The governor was eyed as a possible Romney running mate this year, but Christie insisted all along he wasn’t interested in leaving Trenton right this moment.

DET SÄKERHETSPOLITISKA DUBBELSPELET I SVERIGE FORTSÄTTER

August 28, 2012

Dick Erixon kommenterade den 13 augusti 2012 på sin blogg “I hjärtat rebell” det fortsatta socialdemokratiska säkerhetspolitiska dubbelspelat. Se utdrag nedan:

Mycket är numera känt om hur regeringarna vilsefört svenska folket om Sveriges långtgående samverkan med Nato under de falska försäkringarna om neutralitet. Men Holmström avslöjar att samverkan varit betydligt mer omfattande än vad som hittills medgivits från officiellt håll. Såväl Neutralitspolitikkommissionen (SOU 1994:11) som uppföljaren Svensk säkerhetspolitik 1969-89 (SOU 2002:108) fortsatte mörkläggningen och undanhöll sanningen. Holmström visar att samarbetet med Nato är mer systematiskt och automatiskt än vad vi vetat om.

Här ska jag kommentera det faktum att Mikael Holmström konstaterar att dubbelspelet fortsätter i våra dagar. Under senaste valrörelsen 2010 kom flera utspel från den rödgröna oppositionen:

En rödgrön regering skulle kräva att USA stängde alla sina baser jorden runt. Miljöpartiets kongress krävde att Sverige inte skulle delta i några fredsinsatser som leds av Nato. Statsministerkandidaten Mona Sahlin sa att Natomedlemskap “inte är aktuellt under hennes livstid”. Hon krävde besked av statsminister Fredrik Reinfeldt om var han stod.

Men ungefär samtidigt, under ett möte med Folk och Försvar på Nato-landet Estlands ambassad, förklarade Kent Härstedt (S), riksdagsman i utrikesutskottet för de utländska gästerna: “Det kommer att bli en fortsatt nära relation med Nato oavsett vilken regering vi kommer att få”.

Holmström frågar:

Hur ska vi svenskar kunna orientera oss i dagens och morgondagens Europa om vi varken känner vår egen nutidshistoria eller den politik som idag förs i vårt namn?

Den frågan borde lyftas fram i samhällsdebatten, helst nu mellan valen så att frågan kan diskuteras utan övertaktiserande. Alla partier har spelat med i olika grad. Med ett undantag: centerpartistiske försvarsministern Torsten Gustafsson som 1981 sa som det var: “Även om vi betraktar oss som neutrala, vet vi var vi hör hemma”. För denna rakryggade och ärliga deklaration blev han hudflängd och hånad.

URGENT REQUEST SENT FROM AFGHANISTAN FOR U.S. MILITARY PALANTIR ANALYTICAL SYSTEM

August 28, 2012

The Washington Times on August 27, 2012, reported that a U.S. military command has sent an urgent request to the Pentagon to fund counterterrorism intelligence computer software for special operations troops globally, including the Palantir analytical system. Excerpts below:

Palantir is at the center of two investigations in Washington. Rep. Duncan Hunter, California Republican, has accused the Army of making it difficult for conventional soldiers in Afghanistan to buy Palantir off the shelf because the Pentagon is protecting its own system.

The Aug. 17 request memo comes from U.S. Special Operations Command, the tip of the spear in the war on terrorism as it oversees Navy SEALs, and Army Delta Force and Green Berets.

The memo, a copy of which was obtained by The Washington Times, talks of plans to purchase an application named Lighthouse. Lighthouse can collect data sent via mobile devices such as cellphones, the Internet and radios, and send it to Palantir, which processes and stores data and then analyzes links among terrorists.

Commanders in Afghanistan have raved about Palantir’s ability to point them at enemy combatants who build and bury homemade bombs, the biggest killer of U.S. troops in Afghanistan.

The memo adds that deployed special operations troops have an “intelligence priority for rapidly deploying a data collection, fusion and analysis system.”

Special Operations Command sent the memo to two agencies involved in funding counterterrorism equipment: the Pentagon’s Combating Terrorism Technical Support Office and the Joint Improvised Explosive Device Defeat Organization.

By next year, it wants the two systems operational in areas where terrorist groups linked to al Qaeda seek to operate. The areas include the Philippines, the Horn of Africa, North Africa, and Central and South America.

Lighthouse was created at a laboratory at the Naval Postgraduate School by Marine Corps Capt. Carrick Longley.

The school’s website reported in April that the lab had “expanded Lighthouse to develop a resource for gathering and mapping data on improvised explosive devices and the networks that create them.”

The memo says Lighthouse-Palantir data can be fed into the Army’s huge intelligence data network, the Distributed Common Ground System, or DCGS.

Army spokesmen say tests are being conducted to determine whether Palantir’s quick link-analysis functions can be incorporated into the DCGS. The Army says its system performs many more tasks than Palantir does.

At Mr. Hunter’s urging, the House Oversight and Government Reform Committee is investigating the Army’s handling of Palantir, including a decision to destroy a favorable field evaluation report in April. Army officials say the report contained errors. A three-star general has been appointed to investigate the destruction of the report.

“Palantir has absolutely proven its utility and effectiveness for special operations forces in combat and most importantly has demonstrated its value by earning the trust of our operators in the field,” a two-star general wrote to Special Operations Command in August 2011 in an attempt to get the system inserted into the Pentagon’s annual budget.

WHAT ARE CHINA’S GLOBAL INTENTIONS?

August 28, 2012

Human Events on August 27, 2012, presented a special report of the journal on growing Chinese power: “Growing Chinese Power – To What End?” by authors Steven Mosher and Chuck DeVore, drawing upon their combined experience in Chinese affairs and military intelligence. [They] warn that the Chinese threat has been underestimated while attention has been, understandably, focused on Islamic terrorism. Excerpts below:

“Unlike the threat from al-Qaeda and its offshoots, this threat is existential – meaning that America’s very existence is at issue, as was the case during the Cold War with the threat from the Soviet Union,” the authors said.

They examine China’s modern history, its demographic, cultural and economic trends in an essay that is substantive and enlightening.

Soon China will add something no other American adversary has enjoyed in modern times: an economy larger than ours. As American economic strength fades under the burden of taxation, hyper-regulation, and government debt, while China grows, the People’s Republic is on course to surpass us, perhaps within the next Presidential term. A trillion dollars of stolen U.S. intellectual property has given China’s technological development a considerable boost.

By contrast, the Soviet Union never managed more than 55 percent of America’s economic output, even though its population was larger.

Mosher and DeVore remind us that “the last time the U.S. faced a threat from a nation with a larger economy than its own was during the War of 1812.”

There is ample reason to anticipate trouble from China. It has axes to grind with the Western powers, Japan, and the half of Korea that isn’t already a Chinese satellite. Chinese government has begun to mutate into something more closely resembling fascism than communism… and fascism has a very poor track record of living in harmony with neighboring countries.

[It should be remembered that China’s] spiritual godfather, Chairman Mao, spoke openly of hegemonic designs over the entire planet.

Steven Mosher is a best-selling author on topics related to China, and fluent in Mandarin and Cantonese.

Chuck DeVore is a retired intelligence officer and Lt. Colonel in the Army Reserves, as well as the former Special Assistant for Foreign Affairs in the Reagan Defense Department.

THE FORTUNE OF PERMANENCE

August 27, 2012

THE FORTUNES OF PERMANENCE: CULTURE AND ANARCHY IN AN AGE OF AMNESIA
By Roger Kimball St. Augustine’s Press, $35, 347 pages

The Washington Times on August 17, 2012, published a review of Roger Kimball’s new book. He is an essayist, editor and publisher of the New Criterion, publisher of Encounter Books, and author of a number of highly regarded books, among them “Tenured Radicals,” is in many ways a throwback to a time, not that long ago, when there were men of letters and the talk was of literature, life, manners, morals and values — when it was widely understood not only that ideas have consequences, but that those ideas are shaped by immutable truths and values worth defending and preserving. Excerpts below:

Those are the ideas and attitudes frequently woven with wit and humor through these splendidly crafted and highly readable essays on a variety of topics, from culture, ideology and politics to literature, architecture and art.

In architecture, Mr. Kimball writes approvingly of “the Amis principle, after Kingsley Amis. ‘Nice things are nicer than nasty ones.’” Of music, he asks us to consider what it means to put Sir Elton John on the same level with Bach. In fact, “It might also be worth asking what had to happen in English society for there to be such a thing as ‘Sir Elton John.’” In literature there are appreciations of G.K. Chesterton; the prolific novelist John Buchan, called by Gertrude Himmelfarb “the last Victorian”; and Rudyard Kipling, who in his Nobel Prize citation of 1907, Mr. Kimball writes, was praised for his “virility of ideas.”

There are penetrating essays on Friedrich Hayek and the philosopher Leszek Kolakowski, whose observation on Marxism is key to the secret of its appeal: “‘One of the causes of the popularity of Marxism among educated people was the fact that in its simple form it was very easy.’” Like Freudianism, Darwinism and Hegelianism, Mr. Kimball writes, Marxism is a “one-key-fits-all-locks” philosophy, entailing “the operation of a single all-governing process, which thereby offers the illusion of universal explanation.”

Also among the figures in that fast-fading pantheon: Henry Regnery, publisher of “God and Man at Yale” and Kirk’s “The Conservative Mind,” a book of great consequence when published in 1953 but not well-remembered today. And who beyond an aging few remember Frank Meyer? Or James Burnham?

That’s the question Mr. Kimball asks himself in a chapter titled “The Power of James Burnham.” Like George Orwell, who greatly admired him, Burnham was one of those men of the 20th century who had walked the perimeters of the ideologies formulated in the preceding century and found them wanting. But today, “almost no one under the age of sixty has even heard of him.”

Some remember his first, celebrated book, “The Managerial Revolution,” published in 1941. Others remember his role in the prewar world of New York intellectuals, his involvement with Leon Trotsky and his later association with the “anti-anti-McCarthy camp.” But the memories are dim.

“The most notable exception to the oblivion surrounding Burnham is among people associated with National Review,” the magazine he helped Bill Buckley start in the mid-‘50s. “William F. Buckley Jr., the founding editor and perpetual genius loci of NR, called Burnham‘the number one intellectual influence on National Review since the day of its founding.’”

Mr. Kimball thinks Burnham’s “ferocious intellectual independence and unclubbable heterodoxy” will never allow “anything like a general renaissance” among members of the intellectual establishment. But those of us who worked with him during the great years will always remember his intellectual curiosity, leadership and gifts as a teacher.

John R. Coyne Jr., a former White House speechwriter, is co-author of “Strictly Right: William F. Buckley Jr. and the American Conservative Movement” (Wiley).

DEN SVENSKA VÄLFÄRDSSTATENS KOLLAPS I BÖRJAN AV 1990-TALET

August 26, 2012

Mauricio Rojas inledde en kolumn den 25 augusti 2012 i Svenska Dagbladet med att reflektera över den svenska välfärdsstatens kollaps. Se utdrag nedan:

För drygt 20 år sedan kollapsade den gamla svenska välfärdsstaten. En makalös offentlig expansion hade lett till en mycket stor stat, vars utgifter kom att motsvara nästan två tredjedelar av landets BNP. En omfattande planekonomi hade trängt undan både den marknadsekonomiska sektorn och civilsamhället. Ett högt skattetryck kombinerat med höga bidragsnivåer hade trängt undan arbetsincitamenten. Medborgarna hade allt mer omvandlats till undersåtar av en mäktig stat som tog på sig uppgiften att lägga deras liv till rätta. Med andra ord, Pomperipossalandet hade fullbordats och gick omkull, ty det blev ekonomiskt och moraliskt ohållbart.

Ingen annan demokratisk stat hade nått liknande dimensioner och därför vad det just Sverige som i början på 1990-talet upplevde vad andra skulle uppleva 20 år senare. Grunden för dagens europeiska kris, med centrum i Sydeuropa, är densamma som för den svenska 90-talskrisen: en stat som i populistisk anda lovar guld och gröna skogar under de goda expansionsåren för att hamna i obestånd så fort konjunkturen vänder.

UNLEASH THE MIND

August 25, 2012

The text below is an excerpt from “Unleash the Mind” by George Gilder in the National Review Online, adapted from the prologue to Mr. Gilder’s book Wealth and Poverty: A New Edition for the Twenty-First Century (2012).

America’s wealth is not an inventory of goods; it is an organic entity, a fragile pulsing fabric of ideas, expectations, loyalties, moral commitments, visions. To vivisect it for redistribution is to kill it. As President Mitterrand’s French technocrats discovered in the 1980s, and President Obama’s quixotic ecocrats are discovering today, government managers of complex systems of wealth soon find they are administering an industrial corpse…

The belief that wealth consists not chiefly in ideas, attitudes, moral codes, and mental disciplines but in definable static things that can be seized and redistributed — that is the materialist superstition. It stultified the works of Marx and other prophets of violence and envy. It betrays every person who seeks to redistribute wealth by coercion.

Even if it wished to, the government could not capture America’s wealth from its 1 percent of the 1 percent. As Marxist despots and tribal socialists from Cuba to Greece have discovered to their huge disappointment, governments can neither create wealth nor effectively redistribute it. They can only expropriate and watch it dissipate. If we continue to harass, overtax, and oppressively regulate entrepreneurs, our liberal politicians will be shocked and horrified to discover how swiftly the physical tokens of the means of production dissolve into so much corroded wire, abandoned batteries, scrap metal, and wasteland rot.

Capitalism is the supreme expression of human creativity and freedom, an economy of mind overcoming the constraints of material power…It is dynamic, a force that pushes human enterprise down spirals of declining costs and greater abundance. The cost of capturing technology is mastery of the underlying science. The means of production of entrepreneurs are not land, labor, or capital but minds and hearts. Enduring are only the contributions of mind and morality.

All progress comes from the creative minority. Under capitalism, wealth is less a stock of goods than a flow of ideas, the defining characteristic of which is surprise.

Entrepreneurship is the launching of surprises. The process of wealth creation is offensive to levelers and planners because it yields mountains of new wealth in ways that could not possibly be planned. But unpredictability is fundamental to free human enterprise. It defies every econometric model and socialist scheme. It makes no sense to most professors, who attain their positions by the systematic acquisition of credentials pleasing to the establishment above them. Creativity cannot be planned because it is defined by information measured as surprise.

In the Schumpeterian mindscape of capitalism, entrepreneurial owners are less captors than captives of their wealth. If they try to take it or exploit it, it will tend to evaporate. Bill Gates, for example, already a paper decibillionaire, commented during his entrepreneurial heyday that he was “tied to the mast” of Microsoft.

Most of America’s leading entrepreneurs are bound to the masts of their fortunes. They are allowed to keep their wealth only as long as they invest it in others. In a real sense, they can keep only what they give away. It has been given to others in the form of investments. It is embodied in a vast web of enterprises that retains its worth only through constant work and sacrifice. Capitalism is a system that begins not with taking but with giving.

For this reason, wealth is nearly as difficult to maintain as it is to create. Owners are besieged on all sides by aspiring spenders — debauchers of wealth and purveyors of poverty in the name of charity, idealism, envy, or social change. Bureaucrats, politicians, bishops, raiders, robbers, short-sellers, and business writers all think they can invest money better than its owners. In fact, of all the people on the face of the globe, it is usually only the legal owners of businesses who know enough about the sources of their wealth to maintain it. It is usually they who have the clearest interest in building wealth for others rather than spending it on themselves.

The distributions of capitalism make sense, but not because of the virtue or greed of entrepreneurs, nor as inevitable by-products of the invisible hand. The reason capitalism works is that the creators of wealth are granted the right and the burden of reinvesting it. They join the knowledge acquired in building wealth with the power to perpetuate and expand it.

The competitive pursuit of knowledge is not a dog-eat-dog Darwinian struggle. In capitalism, the winners do not eat the losers but teach them how to win through the spread of information. Far from being a zero-sum game, where the success of some comes at the expense of others, free economies climb spirals of mutual gain and learning. Far from being a system of greed, capitalism depends on a golden rule of enterprise: The good fortune of others is also your own. Applied to both domestic and international trade and commerce, this golden rule is the moral center of the system. Not only does capitalism excel all other systems in the creation of wealth and transcendence of poverty, it also favors and empowers a moral order.

Richard Posner, now an eminent judge, was one of my inspirational sources for the idea that capitalism is inherently favorable to altruism. “The market economy,” he wrote, “fosters empathy and benevolence, yet without destroying individuality,” because for an individual to prosper in a market economy he must understand and appeal to the needs and wants of others.

Here we go again, in the New Millennium. The themes of exploitation and zero-sum equality continue to preoccupy the media. Congress remains enthralled with static accounting rules that assume tax-rate reductions will not alter economic behavior. In this model, the only way to expand tax receipts is to raise rates on the “rich.”

The first edition of Wealth and Poverty (1981) sprang from a period of essentially balanced budgets and trade surplus under Jimmy Carter and helped launch a siege of deficits and trade gaps under Ronald Reagan. During the Carter years, the government was mostly in the black while everyone else was in the red. Under Reagan, though, the trillion-dollar rise in government liabilities was dwarfed by a $17 trillion expansion of private-sector assets thanks to creative entrepreneurs. Over the decades following the Reagan revolution, government liabilities continued to expand, but once again private-sector-asset values increased, by $60 trillion more. Only over the past ten years or so have liabilities risen faster than assets, which have crashed. Improvements in policy and tax rates can instantly upgrade the value of all the assets in the economy without any physical change in their material composition.

Opposed to the reality of capitalism as a function of knowledge and creativity is the behavioral dream — implicitly accepted even among some supply-siders — of a “Skinner box” economics of stimulus and response, wherein lower tax rates impart a stimulus of reward for more work and risk-taking and thereby yield more revenues for the government. The implication is that the mere desire for wealth has something to do with the ability to create it. But as Steve Forbes observes in How Capitalism Will Save Us, explaining capitalism by self-interest or greed is like explaining airplane crashes by the force of gravity. Greed and gravity are general and ubiquitous in regimes of all sorts and therefore irrelevant to the extraordinary results of capitalist creativity.

At a generation’s distance, it is clear to me that we, the original supply-siders, bear some responsibility for the failure to persuade. We were not radical enough — we allowed our own arguments to be ensnared by the mechanical economics of Adam Smith and his heirs. Even Arthur Laffer’s original and brilliant graph, after all, functioned almost entirely in the realm of rational expectations, stimulus and response applied to poor passive Homo economicus. Let him keep more of the fruits of his labor and he will labor harder, we proclaimed; increase the after-tax rewards of investment and more investment there will be.

The key issue in economics is not aligning incentives with some putative public good but aligning power with knowledge. Business investments bring both a financial and an epistemic yield. Capitalism catalytically joins the two. Capitalist economies grow because they award wealth to its creators, who have already proven that they can increase it. Their proof was always the service of others rather than themselves.

As Peter Drucker has written, within companies there are no profit centers, only cost centers. Whether a particular cost yields a profit is determined voluntarily by customers and investors. Capitalism feeds on information that is outside of the company itself and therefore under the control of others. Only an altruistic orientation can tap the outside incandescence of information and learning that determine the success of capitalism’s gifts.