Creating Wealth In Times of Uncertainty
By Mr Odoni, Ipocampus Holding Odoni Partner, Dubai based.
Worldwide wealth seems to be a bygone concept. But is it? Though the global marketplace is alive and vibrant, oppressive regulations, mismanagement, and outright corruption have damaged wealth creation. But it hasn't been eliminated. Today's global marketplace still provides opportunity for discerning investors and companies who are willing to look beyond obstacles of ideology and culture.
There is an old financial adage that says "Capital is coward." It is true. Capital does not like to be inconvenienced, restricted, or threatened. Those who control capital know there is a choice and can move it to more accommodating environments.
Making money is a sovereign human activity that is universally recognized as a natural right. History clearly shows that governments that have tried to contain, regulate, or otherwise usurp capital have failed. It is the same with brainpower; no one has a monopoly on brainpower. Brainpower creates capital, and capital fuels brainpower.
It is a fundamental dynamic principle. Great ideas, solutions, insights, or inventions will develop only where they are nurtured and properly rewarded. That is in a capitalist free market. That is America's true economic cornerstone, but that doesn't mean it is an exclusively American concept. Ignoring the United States is becoming an option for an increasing number of sovereign wealth funds and other major investors around the world. Ignoring this fact might be considered fiscally unwise, if not outright stupid.
The creation of wealth is not bound by artificial boundaries and borders. Nationalism is the underlying theme of the American blue collar philosophers who zealously espouse protectionist policies while denying fiscal reality. They readily sport bumper stickers that read "Buy American" alongside a sticker designating the labor local to which they belong.
The flaw of this reasoning is that being a nationalist has nothing to do with being a patriot or being a citizen. It is just another form of exclusionary distinction. History has shown us that nationalism can lead to tyranny, dictatorship, and inhumanity just as easily as socialism, communism, or any other form of fanaticism, even when it is rebranded and sold under the label of Progressivism, Liberalism, or Conservatism.
It is just those types of exclusive political and economic philosophies that have led us to this latest global economic crisis. That is why it is important to be able to separate the act of wealth creation from the illusion of social engineering, social justice, wealth redistribution, or economic equality.
During this election year there has been a great deal of talk about "job creation." Just once, I would like to hear a presidential candidate promise to substantially increase the number of American millionaires. The initial public offering of Facebook is likely to increase the number of millionaires. This is impressive, but it will be more interesting to see how many new millionaires use their wealth to start companies that may become major employers.
The only thing that is or should be equal to the act of creating wealth is the opportunity to participate. Everything else is naturally and rightfully dependent on personal and often exclusively inherent advantages and disadvantages. The imagined outcomes and side benefits are impossible to guarantee. The shared human experience should have taught us, by any objective standard, that making a mirage your focus will undermine your chances of finding gold.
We now live in a global economy. We do not want nor do we need a global government entity trying to micromanage and control our existence, but the marketplace in which we all now trade is open around the clock every day of the year. There is every kind of deal you can imagine and probably even some you would never have dreamed possible.
There are opportunities to do business almost anywhere on the face of the planet. Some regions of the globe are better places than others to invest; some may have been traditional safe havens, like the EU, that seem to be heading toward almost certain economic disaster due to promises that should never have been made and certainly cannot be kept. There are also areas where it may look attractive to invest, but everything is not as it seems. Discerning the reality is where the use of superior "intelligence gathering" and building global networks pays off.