mailto:jaguenth@talinv.com

created in the CAT database on February 5, 2002 at9:24

Re:Triumph

Janine Guenther CFA
Vice-President, US Equities
TAL Institutional Management

Janine,

Thanks for the article "The eagle has landed" by Paul Kennedy of Yale.

I certainly agree with what he said, with the exception of what one could
mistakenly suppose was his point of emphasis. Rather than saying the United States
of America has triumphed at the beginning of the Third Millennium, I would say that
it is modern civilization that has triumphed.

The United States of America is merely the first place where this
civilization has been most fully realized and it would be a mistake to suppose the
U.S.A. is just another triumphant empire, like Egypt, Persia, Rome or China.

And what is "modern civilization" you might wonder? To humbly cite myself
in "Peace In The World" I wrote:

"Consideration of Property is crucially important in human affairs. Without
Property there can be no Justice or Liberty, let alone prosperity or peace. The Law
is actually pretty simple: If you take something that doesn't belong to you, you
have to give it back. That principle alone sets us apart from the beasts. Since
people tend to fight over property and religion, the principal program of the 20th
century was to abolish both. History records the result."

Places where the principles of Life, Liberty and Property are adopted are
places where people (all of them) can pursue happiness. Such societies prosper
because they more fully employ the gifts each person possesses. And in such a
place, each person is more able to more fully develop his or her own gifts.

George Will, conservative columnist and baseball scholar, stated last
Sunday on ABC that "'capitalism' (he still uses that word, for some reason) doesn't
spring up like crabgrass. It is the result of an intricate network of laws.
Capitalism is, in fact, a government program."Well, that's right and places where
crime is endemic and institutionalized pay a price. "Crime does not pay."

World Bank President James Wolfensohn stated in a recent CNN interview on
"Pinnacle" that when he came to the Bank he was told not to talk about the 'C' word.
"What is the 'C' word?" he asked. "Corruption."So, Wolfensohn redefined
corruption as an economic problem, whereas it had been considered a political
problem, and now corruption is the first thing they talk about!

Will the United States always be on top? Always is a long long time, so
probably not. I suspect that the future will resemble the history of the United
States itself:Once New York City was far and away the only important American
city. Now it is not. New York City has rivals: Los Angeles, Chicago, Houston,
Boston, Atlanta... New York City is still important, but it's not the only one.

In just this way things have been working out internationally: