Yes, the election is behind us. But the 51.43% of us who were “winners” don’t seem to be celebrating much. Congress is stuck where it was. The White House belongs to the same party. The country is exhausted by two wars. And the national deficit continues to soar. Sequestration and tax caps are topics of water cooler conversation. Here in the Nation’s Capital, the fiscal cliff is not just a metaphor.

An average of 53% of Americans believe the country is on the wrong track. There is genuine conversation – from calm, intelligent, educated folks – that our very republic is in some danger. Where is the glimmer of hope?

First, let’s draw a breath, close our eyes, and give thanks. We still have the strongest economy in the world. Not forever perhaps, but for real. We have an educated population, an incredibly mobile and connected society, and unmatched health care. Americans are not only not starving, we are not even thin. Yes, there is poverty. But there is plenty, and we have systems to share the plenty with those who are in need. There is drug addiction and alcoholism and the breakup of families. But again, there are educated people with good – if tough – answers.

Now for the hope.

We can in fact put all these resources to good work. We have innovators and inventors and educators. We have the most informed, most connected, most networked generation about to take the reins of an unbelievable system for sharing our challenges. And I believe we are about to start posting answers.

Fifty years from now, our children will look back at Intel and Microsoft and Apple as only the crudest of beginnings to the global village. Facebook and Google will seem mere toys. This is not yet the internet age.

Think of this as the age before the internet age.

Imagine a world where every college course – every class, in every subject – is free, online, and taught by the handful of best teachers in the world. All the recipes online today? Imagine a U.S. in which all the resumes – for all 200 million of us working by then – are posted and immediately sorted and matched to the millions of possible jobs. Think of automated financial planning, starting when you are about 16 years old, and updated daily with your earnings and spending, guaranteeing good habits (or at least good advice). Imagine a highway system where the last traffic death, thanks to onboard computers and radar, was 30 years in the past.

This future is real.

And for the poor, or the addicts, or those who fell off the network? Imagine the impact of entrepreneurs using the power of the free market to craft solutions to these challenges. Today’s social entrepreneurs, using the market applied to our toughest problems, will cook up some powerful answers.

Perfection? No, not as long as human beings are around. (The theology of original sin has a certain strength rooted in our humanity.)

But imagine the possibilities.

The future is a land where we send our children, that we ourselves can never visit.

Future, and children, and possibilities. That’s what I’m thankful for.

Capitalism takes its name from the idea at its root: capital, or material “stuff.”  It is a system where the “means of production” – including both liquid investments as well as factories, machinery and all manner of productive property – are owned privately, and put to use according to the whims and wishes of private owners.

The central tenant of capitalism, that some unseen social force (the “invisible hand”) directs the use of that capital toward the productive creation of new wealth, was first published in 1776 by the Scottish philosopher and economist Adam Smith.

The greatest intellectual struggles over economics and capitalism grew out of the slow grinding tides that brought an end to royal Europe.  The French Revolution, the Bolshevik Revolution of 1917, and the First World War eroded away the old order of wealth and social class that had governed European society since the end of the Middle Ages.

Riding on the wave of technological change that brought the industrial revolution, came the radical idea that “capital” was no longer a birthright.  Rather, wealth was created and possessed by those that invented and used the new technologies of the day.  In America, the invention of Bessemer process steel, the rise of the railroads, and the advent of electricity created a class of industrialists who controlled vast sums of capital.  Inventors and industrialists with names like Carnegie, Pullman, Rockefeller and Edison.  Some of their progeny (Exxon, General Electric, Con Edison) live on today, more than 3 generations later.

Along the way, free market capitalism has taken a number of hard knocks, and rightly so. Capitalism thrives on an equality of opportunity, not an equality of result.

So the first complaint is that some are left behind.  In a “pure” system of market economics, those left out today must change in order to be included tomorrow.  Workers must either change – offer a different product, sell a new service, move to a new location – or they lose out.  In the practical world of a modern post-industrial economy those changes come at lightning speed.  Faster than the lifetime of an East German party member, a Detroit auto worker, or a Shanghai peasant famer.  In the long run, the market forces each of us to change for the better.  But in the words of Keynes, “in the long run we’re all dead.”

The second complaint, often unspoken, is that there is no “pure” market economy.  Economists use a careful definition for the idealized theoretical “free market.”  A free market must have three components: many sellers, many buyers, and a purely voluntary exchange with no “friction” or outside costs.  Friction – in the form of taxes, economic regulations, monopolies, or other interference – distorts that theoretical “free market.”

The practical world clearly intrudes on market theory.  The U.S. tax code has more than 10,000 pages of regulations specifically designed to distort the market.  More than 50,000 registered lobbyists prowl the halls of Congress, all seeking to overturn the “free market” of the United States.  (Each would vigorously deny it, I’m sure.  But that is in fact what they are doing.  Lobbyists are the great anti-capitalists.)

So: Capitalism creates wealth, but intentionally leaves many out of that wealth until they can change.  Some cannot change (or cannot change fast enough), and are left permanently behind.  Still others work actively to defeat that change, even further reducing the pool of available wealth, all the while fighting to redistribute what wealth is left.

The squalor of the poor in 19^th century industrial England gave us Karl Marx.  The utopian promise of socialism in turn gave the world an endless parade of evil doers working the in the name of “the people” – as in “The People’s Republic of Fill-in-the-blank-i-stan.”  During the Great Depression, America dallied with some of its own socialists.  After the Second World War, many feared that Italians and possibly even the French would elect themselves into a communist system focused on redistribution.  The Occupiers of Wall Street take their rightful place in a long historical sit-in against unequal wealth.

What to do?  The answer is maddening (to progressives) in its simplicity, and terrifying (to conservatives) in the complexity of its execution.  We must bake a bigger pie of wealth to have more to distribute for all.   That’s where entrepreneurship comes in, and that’s what we will be talking about in the pages of this blog to follow.

Jim Wolfe