What makes America a successful country?
The US has 1) a functioning democracy, 2) protects the rewards-profits of innovation for the inventor, and 3) has the lowest cost of borrowing making more businesses viable and all business more profitable. In short the US promotes economic activity.
- Commander in chief and Emperor for life George Washington created the first successful transition of democratically elected government ever! Most fledgling democracies even today are at risk of reverting to undemocratic governance until their first successful transition of elected governments. Commander in chief General George Washington was so popular that he could have continued to win the presidency indefinitely however he set the precedent that lasted for the first 31 presidents, that the president was eligible for only two terms of elected service, and after the 32nd breached that agreed precedent, it was formalize into law.
- Patent law and copyright law recognized encouraged protected and granted monopoly profits to innovation were in the constitution, but only innovation after the formation of the nation (i.e. only our own innovation). The early United States was the first massive patent and copyright pirate. I have a lot of sympathy for the developing US and other developing countries when in the beginning of their development they are less than respectful of the rights of the rich and profitable. But at the same time, promoting innovation and entrepreneurial activity is needed, thus if a developing nation wants to transition into an economic leadership role, intellectual property protection needs to be in place to encourage innovation. Thank you Jame Madison, Thomas Jefferson and the rest of the constitutional delegation for having such forethought, even if we also might find fault with some of your other actions, no one is perfect.
- The cost of capital (the interest rate on a loan) in the US is lower than anywhere else in the world. Further the types of assets that can be used as collateral are more creative and diverse, creating more situation where a loan can be obtained. This makes more businesses profitable, and makes all businesses more profitable, both favorable business conditions. This is the beneficial result realized from the drafting and adopting of the Uniform Commercial Code and in particular Grant Gilmore's drafting of Article 9 Secured Transactions. It made the lending process more efficient, by provided the lender with expedient rights to the collateral (security) in case of default as well a protecting the consumer from unscrupulous lenders. This efficiency reduces overhead cost and increase the value of collateral collected in the event of default; both of these traits reducing the cost of lending and thus the cost of borrowing, allowing the US to have the lowest cost for capital.
- The overriding philosophy of the Uniform Commercial Code is to allow people to make the contracts they wanted, but filled in any missing provisions not in the contract. It created uniformity and streamlined routine transactions like the processing of checks, notes, and other routine commercial paper. The law distinguishes between merchants, who are presumed to know well the business they are in, and consumers, who are not. The UCC discourages legal formalities in business contracts, thus allowing business to operate without lawyersor elaborate documents. In particular Secured Transactions in Article 9 governed security interests in personal property as collateral to secure a debt. It governed what makes a security interest enforceable against others, how to create a security interest and give public notice, determined which interests prevail when there are multiple claims to the same collateral, and determined what remedies are available in case of defaults.
Thank you Mohammad Talha for the A2A on a topic I am passionate about.
Thank you for 29.5 years of upbringing schooling and companionship to my professor and partner in making mischief of one kind or another Xuan-Thao Nguyen, the ideas in this post would not have been possible without her deep influence.