"....dreams fulfilled help others launch new dreams."

What was the real cause of the Financial Panic? Why were the bundlers and buyers of junk mortgages the politically-connected big banks while the chief critics and short sellers of the housing trade were mostly unknown (and often eccentric) managers of small, entrepreneurial hedge funds? Where did conservatives go wrong? Just why is entrepreneurship so important? Is there hope for American capitalism? Gilder (a friend and mentor) also restates a defining, contrarian, and still-too-little-understood theme of the original Wealth and Poverty. “By focusing on incentives rather than on information,” Gilder writes in the new edition, free market economists have encouraged the idea that capitalism is based on greed. But greed, in fact, prompts capitalists to seek government guarantees and subsidies that denature and stultify the works of entrepreneurs. Greed, as I put it in Wealth and Poverty, leads as by an invisible hand to an ever-growing welfare state — to socialism. It is not the enlargement of incentives and rewards that generates growth and progress, profits for the entrepreneur and revenues for the government, but the expansion of information and knowledge. 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 a zero-sum game, where the successes of some come at the expense of others, free economies climb spirals of mutual gain and learning. Far from a system of greed, capitalism depends on a golden rule of enterprise: The good fortune of others is also your own. Perhaps surprisingly, it was Ann Romney’s convention speech Tuesday night that finally defended Mitt’s business career — and grasped this Gilderian Rule of capitalism. “I was there,” Mrs. Romney said, “when he and a small group of friends talked about starting a new company. I was there when they struggled and wondered if the whole idea just wasn’t going to work . . . . Today that company has become another great American success story . . . .” “But,” continued Mrs. Romney, “because this is America, that small company which grew has helped so many others lead better lives. The jobs that grew from the risks they took have become college educations, first homes. That success has helped fund scholarships, pensions, and retirement funds. “This,” she concluded, “is the genius of America: dreams fulfilled help others launch new dreams.” Gilder could hardly have put it better himself. http://www.forbes.com/sites/bretswanson/2012/08/30/the-wonders-of-wealth-the-path-out-of-poverty/