Making a Fizzy Splash – It Happened Today, January 15, 2017

You know all those internet-era stories about if only I’d put a few hundred bucks into that garage venture by those two awkward jokers I used to know, I’d be a billionaire today? The problem being to figure out which jokers are actually Steve Jobs, Bill Gates or Mark Zuckerberg. Well, would you have gambled on the Pemberton Medical Company back in 1889?

If not, maybe stick to broad-based mutual funds. If so, you’re arguably just plain lucky. Because, you see, the PMC incorporated in Atlanta on January 15 of 1889 went on to become the Coca-Cola company. And obviously if a morphine-addicted Civil War veteran reacts to local Prohibition by removing the alcohol from his mixture of cola nut and cocaine extract into a gooey sweet brown health tonic and accidentally mixing it with soda water, you’ll make a fortune, right? Like a music player with no off switch or a Quick and Dirty Operating System. Can’t miss. (I should mention that Coca-Cola may not have contained much cocaine to begin with and certainly had only minute traces after 1891, and none after 1929.)

Like many giant purveyors of non-health food, the company has been battling economic headwinds recently. But it remains true that if you’d bought a single share in 1919 for $40 and reinvested the dividends, you’d have had $9.8 million by 2012, more than 10% a year real returns (that is, adjusted for inflation). Plus the company more or less gave us the modern image of Santa Claus, and his less famous helper Sprite Boy. No, really.

The point is, capitalism is wonderful at creation and its disquieting cousin creative destruction. The marketplace allows things to succeed that sound absurd or revolting at first blush, things that would never get a grant or the central planners’ stamp of approval. But that’s precisely why entrepreneurial success is inherently unpredictable, at times even inexplicable in retrospect (think pet rocks). So don’t kick yourself if you didn’t foresee that a web site where you could post every inane thing that drifted into your head for the benefit of hundreds of friends you don’t know and nothing was sold could make some guy so rich you couldn’t count all his money in a lifetime.

Or that business with the fizzy syrup.

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Wish I’d said that – January 10, 2017

“I hope I shall always possess firmness and virtue enough to maintain (what I consider the most enviable of all titles) the character of an honest man, as well as prove (what I desire to be considered in reality) that I am”

George Washington, in a letter to Alexander Hamilton August 28, 1788

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Jamestown Plays With Fire – It Happened Today, January 7, 2017

On this date in history the Jamestown settlement burned down. As if they didn’t have enough problems already. Mind you it wasn’t much of a settlement back on January 7 of 1608. Basically a fort full of fools who didn’t know where they were, how to grow crops or almost anything else you’d want in the old tool kit if you were, say, moving to a new continent in the age of sail.

Be that as it may, there was a lot more there before the fort burned down than afterward. For instance a fort in which to take refuge if the locals attacked you because of something you had done like steal from them or lie to them or show up looking ominous, or just because they had a habit of attacking anyone handy. (Correct answer: all of the above; despite PC versions the first deadly aboriginal attack occurred within two weeks of their arrival.)

Undaunted, they rebuilt the fort and lounged about in it during the “starving time” in which nearly everybody died after eating boot soup (less from the quality of the boots than the insufficient quantity) and various expeditions from England brought more food and more fools. Indeed, just five days before the fire a ship showed up without enough food and 70 more mouths to feed.

Nevertheless John Smith did pull them through the worst of the crisis including abolishing socialism and discovering that people did more work if the benefits were fairly distributed, of all things. And Jamestown prospered and flourished and so did Virginia and then the United States with all its great virtues and some scary defects.

It remains amazing that such a ludicrous venture could in fact succeed despite everything from bad preparation if any to the hostility of the far more numerous locals to choosing a swamp as your ideal site to the worst drought in 700 years to carelessness with fire in your only building. As with many things in history, we should not take it for granted just because it did happen. Certainly if you’d been standing among the blackened timbers on January 7, 1608 you’d have been likely to say “OK, that’s it, I’ve had it, where’s the ship home?”

Only to be told it was one more thing we didn’t really think of.

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Wish I’d said that – January 4, 2017

“You cannot legislate the poor into freedom by legislating the industrious out of it. You don’t multiply wealth by dividing it. Government cannot give anything to anybody that it doesn’t first take from somebody else. Whenever somebody receives something without working for it, somebody else has to work for it without receiving. The worst thing that can happen to a nation is for half of the people to get the idea they don’t have to work because somebody else will work for them, and the other half to get the idea that it does no good to work because they don’t get to enjoy the fruit of their labor.”

Adrian Pierce Rogers in his 1996 Ten Secrets for a Successful Family (frequently misattributed online, incidentally)

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Update, thanks and Merry Christmas to our documentary backers

Wrapping up 2016 and looking forward to 2017, a word of thanks to all those who made our documentary work possible in the past year.

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The pale, ghastly silver lining to a second President Clinton

In a commentary for Mercatornet I argue that if Hillary Clinton wins the election she may be so bad she’ll actually have a beneficial purgative effect on American politics by forcing voters to reexamine themselves.

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