WRISTON’S LAW STILL HOLDS by Rich Karlgaard
Wriston’s Law is named after the late Walter Wriston, a giant of banking and finance. In his 1992 book, The Twilight of Sovereignty, he predicted the rise of electronic networks and their chief economic effects.
Wriston said capital (meaning both money and ideas), when freed to travel at the speed of light, “will go where it is wanted, stay where it is well-treated.”
By applying Wriston’s Law of capital and talent flow, you can predict the fortunes of companies (and countries). All predictions about future performance must start with this most basic question: Do companies (and countries) attract money and talent, or repel it?
America’s success for most of its history owes to Wriston’s Law. Ambitious people and investment capital have always wanted to come here. America was a place where merit and investment could be rewarded–not just economically, but socially too. The rise of the American meritocracy after World War II coincided with the decline of Northeastern WASPs in America’s social hierarchies. In the early 1980s, writer Tom Wolfe predicted that Silicon Valley would usually beat Boston’s Route 128 in technology showdowns because Silicon Valley culture elevated the engineer and entrepreneur to higher social status. Thus Silicon Valley was a better magnet of talent.
America beat Germany to the atomic bomb in the 1940s because America welcomed talented immigrants–many of them Central European Jews–and Germany repelled them. It is appalling to think what might have happened if Germany had developed the bomb in 1943. The thousand-year Reich lasted only 12 years because Hitler rejected atomic science as a figment of Jewish minds.
America beat the Soviet Union to the moon in 1969 and then 20 years later to the Cold War’s victor’s podium because America had the immigrant X-factor. The Soviets did not.
The 25-year economic boom of 1982 to 2007 was built at the intersection of capital and talent. Lower tax rates on capital gains and income caused a miraculous reverse alchemy. Capital emerged from the dead hand of tax shelters and precious metals and began flowing to talented entrepreneurs in high technology. The capital flow from past to future acted as a magnet for the most talented entrepreneurs in the world, who came to the U.S. for the opportunity to build companies and get rich.
The reason for bringing up Walter Wriston and the late, great 25-year boom of technology, entrepreneurship and investment that was built on Wriston’s Law is–very sad to say–that America has reversed course.
On immigration, America has made it harder for educated and skilled foreigners to enter the country and become citizens. As immigration policy goes, it should be a no-brainer to hand out green cards to foreigners who get college degrees in the U.S.
As for capital, well, America’s tax burden is rapidly catching up to Europe’s. I like Europe as well as anyone–as a place to drink coffee and loaf. I really enjoy watching this year’s Tour de France on the Versus HD network on my 60-inch flat panel TV. France is really lovely, isn’t it? But France is not where global free agents go to build tomorrow’s dynamic companies. France rejects Wriston’s Law, and so it repels capital and talent.
Not so very long ago, America was the destination for capital and talent. Now America is just one country among many competing for these precious resources. Our relative advantage in the world is declining. Nothing I see coming out of Washington is helping matters. Quite the opposite. Capital and merit are under attack.
American policy is working against Wriston’s Law. As long as this continues, the American recovery will remain weak.
Wriston used to appear from time to time on the political talk shows. Never was a man so dominant in interview or debate on these programs, members of the media were both intimidated and overwhelmed. Quite a guy.
Now we are in a rush to severely damage our strengths and wreck the economy, all the better to create dependence on a debased political class.
Servitude and hardship are the new bywords, the goals of a left for whom power is the only value.
What is under attack is the whole American way of life. That would include way of governing and our economic system.
“On immigration, America has made it harder for educated and skilled foreigners to enter the country and become citizens. As immigration policy goes, it should be a no-brainer to hand out green cards to foreigners who get college degrees in the U.S.”
Blame the 1965 immigration law. The naive legislators thought they were addressing the vile racism of our past immigration policies. Unfortunately, these well meaning individuals fell prey to the intellectual virus of white self hatred. They instead foolishly placed the emphasis on bringing families together. This resulted in the massive rejection of individuals who had so much to offer our nation. Our policies should be similar to those of the Canadians. They could care less about race or ethnicity. The only real question the Canadians really ask is this one: what do you have to offer Canada?
“America’s success for most of its history owes to Wriston’s Law.”
What?!!! Read your statement. Who owes whom what? No, I think Wriston may have made an observation but he did not create a law that all decision makers referred to in making decisions that in the aggregate led to America’s greatness. Give him credit for his insight, but not for America’s success. Success came from the millions of individual decisions and risk taking ventures allowed by the capitalistic environment of America. Because Wriston foresaw the effects of the digital age does not mean he created the future, just that he envisioned a future more accurately than others.
What needs fixing is the massive taxes we levy on business. 35% taxes as opposed to say Ireland’s 15%(or thereabouts). Instead of the dumb stimulus, they should have cut business and capital gains taxes. Do they encourage business? No, rather they created an environment of uncertainty.
“will go where it is wanted, stay where it is well-treated.”
Jest kinda reiterates the laws of least resistance…and in America 2009, immigrants who break the laws and don’t pay a dime for it have found the least resistance…Wriston’s Law is indeed working for them…..thanks Mr. Wriston!
But as far as “real” innovative, talent (capital), why would it choose to serve a law that enables butt-kissers and bend-overs do nothing more then consolidate(“incorporate”)available entitlements and powers due to, and through their sychophancy? Such a domain is inherently resistant to innovation outside of its order.
Sounds like the 21st Century’s “white male’s”, “Man’s Mans World” of bein’ p’whipped about everythin’…Thank’s Freud.
At number #6:
It’s not a “law” in the sense of being an actual piece of legal code. It’s “law” in the same sense as a physical “law” i.e an observation that describes what appears to be an objective fact. Wriston didn’t “invent” or “write” the law. The facts that he describes have always been there. He just described it the most succinctly and so it became known as “Wriston’s Law”
-kev
Look for the ads that read “Looking for Generous Benefactor” for modern practical application’s of Wriston’s Law. Pathetic.
Ad infinitum.
There is no contradiction between allowing families to be together and opening our borders to highly skilled foreigners. Our immigration policy should require that to obtain a green card, you must have an in demand skill, be sponsored by a citizen or meet requirements for political asylum. In addition, we could make a certain allotment, say 10,000-20,000 per month, for unskilled laborers to obtain temporary work permits, good for three years and renewable once. After six years, the worker’s employer can endorse him for permanent resident status.
“As immigration policy goes, it should be a no-brainer to hand out green cards to foreigners who get college degrees in the U.S.”
And yet US culture has devalued the college-degree (Bachelor degrees especially)as being worth no apparent merits at this point in it’s culture and society,(“A college degree doesn’t mean anything”) …To a great deal this is because of the US’s fanaticism with the “rags to riches” “entrepreneurial” myth (i.e. sports stars, drug dealer celebrities, rock stars, Hollywood, Prostitutes, etc…..But forget about such low- profile community professions such as small business (i.e. community physicians, local banks, builders, etc)…that’s college degree stuff.)…Higher education in the US has become, in my experience, a fleece job upon those who would invest in it as an automatic means of rising in social status and entitlements.(My opinion is that higher education should evoke “apprenticeship” rather then “poker chip”.) The incentive to migrate elsewhere is being cultivated by those hostile to uniform merit of social status by higher education….that would be the impetus of criminal class in the US who cannot compete with the moral intelligence that is inherent in such.
The only good thing in the development of a criminal class is that they are so naive about the functions of law that they will dedicate their efforts to destroying and breaking even Wriston’s Law…which is their “generous benefactor”.
Poison Ivy thrives upon the very same clarity of principle in regards to the appropriations of all available resources towards its own.
It’s still poison ivy though. No real assimilation goin’ on there.
As far as immigration policy, I considered recently what the effect of having the US shipping (a boost to such transportation industries) it’s South an Central American illegal immigrants (especially the ones of felony status) to a posts along the Russian/Chinese border…Then just point them in the direction of the developing economy and let their “machismo” take overfrom there out. Concurrent to such a context, it would be in the US “Intelligence” communities’ best interests to introduce representatives of the “La Raza” crowd into the Urumqi and Uighur caucuses to further foment destabilization within Chinese immigration policies and social milieu to ensure the ivy takes root. Then see what happens, if the exponential results are the same as they are in the US.
1. seansarto:
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Poison Ivy thrives upon the very same clarity of principle in regards to the appropriations of all available resources towards its own.
It’s still poison ivy though. No real assimilation goin’ on there.
As far as immigration policy, I considered recently what the effect of having the US shipping (a boost to such transportation industries) it’s South an Central American illegal immigrants (especially the ones of felony status) to a posts along the Russian/Chinese border…Then just point them in the direction of the developing economy and let their “machismo” take overfrom there out. Concurrent to such a context, it would be in the US “Intelligence” communities’ best interests to introduce representatives of the “La Raza” crowd into the Urumqi and Uighur caucuses to further foment destabilization within Chinese immigration policies and social milieu to ensure the ivy takes root. Then see what happens, if the exponential results are the same as they are in the US.
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SEAN SARTO: what are you talking about? The article is very basic in it’s proposition: money and talent tend to go where it is accepted, and can blossom. That’s it. It’s a “natural” law. What’s with Uighars?
Uighurs in China and the illegal South/Central Americans in the US share a common interest ….to take root somehweres where they can thrive (“blossom”)…As a “natural law” it’s more of a waterhole theory. Wriston just puts the smiley face on it (obviously he leaves out the “fittest shall survive” rhetoric that is also implied) but it’s emphasis, as a capitalist business venture, is nothing more then the “Hell on Wheels” towns of the Transcontinental railroad.
Says alot about the mindset of those who read “Forbes”.
James: (Apologies for this omission in my last post)
I want to first correct my generalization at gauging the mindset of the Forbes readership…I am truthfully not in the circumstances which would allow me accurate appraisal of such…But I will say, what I am probably addressing here is the mindset of a publisher who is seeking to broaden, (if not outright struggling to maintain) the appeal of a periodical which was once preeminently heralded as a foremost journal within the business and investment communities. This dumbing-down trend is prevalent amongst the career trajectories of the last few remaining scions of the 1960′s who are clinging to their position and place. “Wriston’s Law” certainly invokes that very same banality of beatitude. “Make Love, Not War”…”Free Love”…As long as you can pay for it…otherwise what’re ya gonna do? Rape me?
Secondly, my only real reason for mentioning the Uyghur’s was due to the context of the article addressing the issue of immigration. As I am currently located in China, I have been reflecting on the recent events in Xinjiang (but also through the context of prior knowledge) while also reflecting on the leniencies that US enforcement and policy allows towards US immigration problems and the status which develops from such. I will go the record as saying I do not castigate the former’s methods.
This is “Chinatown” right?