Ah, if only we had known the answer to this question sooner! Our past and future generations would be blessed with more options and increased choice! So why is it that often our society’s output is so limited when it comes to offering opportunity and potential? Take the example of how the Roman Empire was governed – or rather how it was not governed. All too often, societal progress and the potential to maximize human flourishing was undermined by the centralized decision-making of the Roman Senate.

It is no surprise that economics, with its intertwined principles, theories and abundant real-world examples, can have a staggering influence on the outcomes of investments. We can look to the past, to prominent economists like Adam Smith, whose insights into the nature of supply and demand informed our understanding of how prices would be affected by rational decision-making. In the present, we can observe how the seeds Smith planted 250 years ago continue to feed our knowledge of how investments work.

The problem with command economies is the inherent lack of initiative and innovation. Because of the uniform and rigid guidelines imposed by the government, citizens lack the motivation to explore creative solutions and ways to innovate. This problem has been observed throughout history - from Louis XIV’s France to today’s China. In 18th century France, where the king was absolute, royal command was the primary source of direction for the government, economy, and citizens.