The new investor politics. (Capitalism saves: how becoming an investor can transform a person--and a nation).(Brief Article)

The New Investor Politics

New "investor politics" is growing in America. Its fundamental insight is simple: Policies encouraging personal saving and investment may help return America to its limited-government roots.

Widespread property ownership is essential for self-government, Aristotle observed. American thinkers from Thomas Jefferson to the present have argued that families ought to be as self-sufficient as possible, even in a modern industrial era. The truly "free person," suggests Ralph Borsodi, is not just someone with the tiny power of his vote, but rather someone "so independent" economically that he can "deal with all men and all institutions, even the state, on terms of equality."

The historical transformation of U.S. society from self-employed landowners to urban industrial workers did not further the principles of free enterprise. Instead, it encouraged government growth. But now that individual investing and accumulation of wealth are becoming majority practices, political behavior is being redirected again.

Today's explosion of profit sharing, stock investing, 401(k)s, IRAs, company pensions, educational savings accounts, mutual funds, on-line brokers, and low-cost financial advice is making self-reliance and economic independence ever more common in America. New and expanded institutions allow everyday workers to grasp the advantages of capital ownership that have traditionally been available only to the wealthy. Trumping Marx, American workers now own much of the nation's means of production, without sacrificing the separation of employment, ownership, and corporate management that is important to keeping U.S. businesses hardheaded and efficient.

Even on the left, economists and journalists now laud the emergence of a "shareholder nation." An increasing number of liberals and Democrats are likely to follow conservatives in emphasizing the economic importance and societal wholesomeness of measures that promote individual saving and investment. "If liberals like me are to get off the defensive and resume progress toward a more egalitarian democracy," writes left-wing economist Robert Kuttner, "it won't be via further redistribution, but through wealth-broadening in the spirit of Thomas Jefferson."

Many of America's older political distinctions--having to do with differences in cultural ideas, ethnicity, even geography--will certainly persist in coming years. But some of the deepest and most consequential political divides in the future will be between new rival camps with opposing views on the value and significance of personal investing. This political divide could be defined as Welfare Politics versus ...