Make no mistake, the United States of America, with some help from its allies, won the Cold War against the Soviet Union and its Communist bloc.
Claims to the contrary notwithstanding, Putin’s Russia has no more control over gasoline prices in this country than any other comparable oil producer, and its conventional military power appears to be quite limited.
As another superpower conflict looms, though, it would do American policymakers well to understand more fully why America prevailed in the decades-long existential conflict.
Conventional wisdom holds that the U.S. outspent the USSR, eventually essentially bankrupting it. True enough, but why was America able to outlast its vast adversary?
Because people like Wilma Soss (1900-1986) understood the power of markets and proselytized about it nonstop, constraining those within government who would have subjected the country’s economy to a wartime, plan-and-control basis.
Thankfully, Soss and the millions who followed her weekly, nationally syndicated NBC radio show, “Pocketbook News,” were having none of it. What made America, and its colossal economy, tick was a basic dedication to competition, freedom and the rule of law.
Sure, the country had many problems, but they were ones, like financial discrimination, that competitive markets tended to ameliorate in politically non-divisive ways.
Throughout her corporate activist career, which spanned from 1947 until her death almost four decades later, Soss advocated strongly for Americans to invest in stocks. (After, of course, they had built up a savings pillow and insurance safety net.)
Workers could, and should, own a slice of the American dream, Soss asserted, because it would give them a greater stake in the nation’s system of free enterprise while also enhancing their financial well-being if they invested prudently.
Like B.C. Forbes and other contemporaries, Soss firmly believed that having partial ownership in American corporations via stock ownership would diminish the potential allure of communism, and there was wisdom to this line of thinking.
Soss knew that financial literacy was important if small stockholders were to succeed. Her radio show and nonprofit Federation of Women Shareholders in American Business were two key ways Soss hoped to improve financial literacy. In its prime in the 1950s and 1960s, FOWSAB held monthly educational meetings that helped small stockholders, at first only female but later male as well, to navigate the intricacies of the stock market. It stressed a value investing approach inspired by Benjamin Graham.
During the Great Depression, Soss herself had been burned in the stock market because her grandparents had left her small inheritance in the hands of a trustee who drank the bubbly Kool-Aid of the 1920s and lost it all in the Great Crash of 1929.
After gaining both affluence and confidence in the burgeoning PR field during the Depression and World War II, Soss concluded that she could manage her own portfolio. Many others agreed, launching the age of the small investor in the 1950s and 1960s.
In addition to advancing the interests of small investors via her nonprofit and her radio show, Soss served as one of the nation’s leading corporate activists or “gadflies.” She showed up at hundreds of annual stockholder meetings to complain about executive salaries, board gender composition and the tiny little footnotes in annual statements that attempted to hide business burps.
We know today that people like Wilma Soss should be applauded, not vilified, for reminding everyone, at the height of the Cold War, that the greatness of the American economy rested on competition, freedom and the rule of law. With those pillars in place, and with ordinary Americans en masse investing directly in the stock market, communism stood no chance.
How solid, though, do those pillars remain today? And how much does it matter if Americans are investing directly in individual stocks, or indirectly through mutual funds and other vehicles?
Reinvigorating Soss-like efforts to promote individual stock ownership might serve Americans well from a wealth-building perspective, while simultaneously reinforcing the pillars that won the Cold War.
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