Netflix asks if the American experiment still works. Here’s the story it left out, and why it matters to your wealth plan.
- Netflix’s “The American Experiment” premiered in June, timed to the country’s 250th birthday, and centers on the Declaration of Independence.
- Four months before the Declaration was adopted, Adam Smith published “The Wealth of Nations” — the economic half of the same 1776 story.
- Two hundred fifty years of evidence connect “The Wealth of Nations” to the Declaration of Independence, and both support robust markets.
This summer, Netflix released a documentary built around the 250th anniversary of the Declaration of Independence, featuring a deliberately bipartisan lineup — a former Supreme Court justice, former vice presidents from both parties, historians, military leaders — all struggling with the same question: can a nation built on the idea of self-government still hold together? It’s a serious, well-timed piece. But it tells only half of what happened in 1776.
In March 1776, Adam Smith published “The Wealth of Nations” in London. Four months later, the Second Continental Congress adopted Thomas Jefferson’s Declaration of Independence. Smith and Jefferson never crossed paths, but they were working through many of the same ideas: individual rights, limited government, and the belief that free people create prosperity.
I’ve spent a career managing money, which means I’ve watched what happens when people are free to act in their own interests, and what happens when they aren’t. The more time passes, the more I’m convinced that 1776 gave the world its best answer to the oldest economic question: how do free people prosper without a master?
The Declaration: Liberty as the Foundation
That question isn’t abstract to me. In 2012, I spent a month in southern China adopting one of my daughters. China was mid-transformation then — special economic zones, a market opening within a system that still controlled who owned what — and the economy was growing at a pace faster than anything I had ever seen, at nearly 8% a year, according to the World Bank.[1] I recall struggling with the contradiction: how does a country grow that quickly without the property rights we take for granted here? Years earlier, when I was studying business at the University of Chicago Booth, the economist and former Reserve Bank of India Governor Raghuram Rajan told a group of us: study any economy in the world, and the one non-negotiable is property rights — erode them, and everything else eventually breaks down with them.
I’ve gotten part of my answer since then. As central control has tightened again, China’s growth has slowed. I didn’t need an economics textbook to learn that lesson — I watched it happen in real time, before I ever connected it back to Smith or Jefferson.
Jefferson’s famous line is one many American schoolchildren can recite — that rights come from our Creator, not from government, and that government exists only to secure them. Less remembered is the list of economic grievances a few paragraphs later: the Crown had cut off American trade with the rest of the world and imposed taxes without consent. Even in 1776, the Founders treated political liberty and commercial liberty as two sides of one coin. The complaints against the King stacked up: he ruled without consent and controlled what colonists could buy, sell, and keep.
The Wealth of Nations: the Engine Liberty Unleashes
Smith’s insight, published that same spring, was that we don’t get our dinner from the butcher’s goodwill but from his own interest in earning a living. He argued that a whole economy built on that same self-interest, left alone, tends to work. Each person pursuing his or her own gain is, in Smith’s words, “led by an invisible hand to promote an end which was no part of his intention.” Smith called the result the “system of natural liberty” — while Jefferson and the Founders, working on the other side of the Atlantic, would put forth similar thinking.
Jefferson believed an economy worked best when people could build businesses, farm, and trade without too much government direction. As president, 25 years later, he wrote that the job of government was to let citizens “regulate their own pursuits of industry.”
Friedman and Hayek: Why the Two Freedoms Can’t be Separated
Two centuries later, Milton Friedman and Friedrich Hayek picked up the same thread and made it explicit: political freedom has never existed, anywhere, without something close to economic freedom alongside it. In 1944, Hayek warned of the dangers of central planning: that whoever controls the means of production ends up controlling the ends everyone else is allowed to pursue. Friedman called out the threat of power itself in “Capitalism and Freedom,” stating that “the power will both attract and form men of a different stamp.” Put another way: concentrated power ends up attracting the wrong kind of person. Neither economist thought markets were flawless. Both believed alternatives were worse.
Four Thinkers Every Investor Should Know
| Thinker | Literature | Defining Idea | Why It Matters |
| Adam Smith |
The Wealth of Nations |
The invisible hand/division of labor |
Individuals pursuing self-interest through voluntary exchange unintentionally produce social benefit — coordinated by no one. |
| Friedrich Hayek |
The Road to Serfdom |
The knowledge problem |
Economic knowledge is dispersed, local, and often tacit. No planner can gather it; prices communicate what no single person or institution possesses. |
| Milton Friedman |
Capitalism and Freedom |
Monetarism & free markets |
“Inflation is always and everywhere a monetary phenomenon” — money and central bank decisions shape inflation, and free markets generally outperform government intervention. |
| Thomas Sowell |
Wealth, Poverty and Politics: An International Perspective |
Trade-offs: judging policy by results, not intentions |
“There are no solutions, only trade-offs.” Every economic decision has costs, consequences, and unintended effects. |
Sowell: the Data Settles the Argument
Economist Thomas Sowell, who studied under Friedman, argues that outcomes, not intentions, are what matter. Roughly three-quarters of the world lived in extreme poverty in 1820; in 2025, that figure is closer to 10%, the World Bank reports.[3] That’s even as the global population has grown nearly eightfold. In “Wealth, Poverty and Politics: An International Perspective,” Sowell writes, “poverty occurs automatically.” Wealth is what has to be explained — and free markets are the only system in recorded history that has explained it at scale.
I’ve watched capitalism — and markets — come under pressure from people with different beliefs. Some talk about redistributing property in the name of fairness. Others want to direct it in the name of strength, such as tariffs, a thumb on the scale for one company or sector over another. The rhetoric is different. The mechanism is the same one Jefferson listed as a grievance in 1776: someone in power deciding who gets to trade, and on what terms.
None of this is an argument against government or for markets without rules. It’s an argument for remembering that every time a decision about someone’s money or livelihood moves from millions of individuals to a handful of officials, something is lost.
Friedrich Hayek, the Austrian economist and Nobel laureate, told us exactly that. The knowledge an economy runs on — what things cost, what customers want, what a supplier can actually deliver this month — never sits in one office. It lives scattered across millions of minds, and prices are how it gets shared.
A handful of officials, however capable, cannot know what millions of participants know. That is what’s lost — and no amount of good intention brings it back.
Not perfect. Just better than the alternative
Markets are loud, uneven, and often uncomfortable. They reward both luck and labor. Booms look like genius; busts like negligence. Smith, Friedman, Hayek, and Sowell all knew this and said so. But the comparison was never between free markets and some frictionless ideal — it’s between free markets and every other system people have tried. On that comparison, 250 years of evidence shows free markets win by a wide margin.
Our view
We manage money for a living, which means we spend our days watching the imperfect operations of the system Smith and Jefferson described. Two hundred fifty years on, we remain convinced it’s the best partner ordinary people have ever had for building a life — and the best answer to the question Netflix spent five episodes asking. Our job is to help you use it well.
If you’d like to talk through how these ideas show up in your own wealth plan, reach out to your Gryphon Wealth advisor. And if you’d like a copy of Friedman’s “Capitalism and Freedom,” I have copies — stop by the office.
Quick Answers
- Did Adam Smith and Thomas Jefferson know each other? No — there’s no record they ever met or corresponded. But Smith’s “Wealth of Nations” (published in London, March 1776) and Jefferson’s Declaration of Independence (adopted July 1776) were written independently around the same core idea: free people, left to pursue their own interests, create prosperity.
- What is the “invisible hand”? It’s Adam Smith’s term for how a market economy channels self-interest into outcomes that benefit everyone — even though no single person is planning for the common good directly.
- Why does this matter for my wealth plan? The same property rights and economic freedom that let markets function are what make long-term investing work in the first place. Understanding that backdrop is part of understanding why we invest the way we do.
Sources
[1]The World Bank: East Asia and Pacific Economic Update, December 2012 — China
[2]The World Bank: Advancing Reforms Can Advance Prospects: China Economic Update
[3]The World Bank: Measuring Poverty
Disclosures
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Investing involves risk, including the possible loss of principal. This material is presented solely for informational purposes and has been gathered from sources believed to be reliable; however, the adviser cannot guarantee the accuracy or completeness of such information. Nothing in this presentation is intended to serve as personalized investment, tax, or insurance advice. Advisory services are only offered to clients or prospective clients where the adviser and its representatives are properly licensed or exempt from licensure.
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