Recently I decided to give our kitchen a facelift by adding a fresh coat of paint. Nothing fancy, just some clean and crisp white. I ended up spending more than an hour at Sherwin-Williams because there are several dozen off-white color schemes to choose from. The young clerk joked that it would be nice if we lived in a world with limited choices. I reminded him that there is nothing nice about living in such a world. I know because I have first-hand experience.
I was born and raised in Communist China. If I have to pick one word to describe my childhood, that word is “scarcity.” Every essential, from rice to coal, was distributed to each household based on an elaborate government-run ration system. It seemed the more the government dictated, the worse the shortage became.
I still remember the experience of buying our family’s first refrigerator in the late ’80s. We had to stand in a long line until it was our turn. For the domestic brand we could afford, there was only one size and color available in the store. If we said no, 100 other people would be more than happy to take our fridge home. So we agreed to pick the first one we saw. After it was delivered to our home, my parents proudly put it in the most visible place in the living room and my mom even made a jacket for it to “protect” it from dust.
But limited material choices weren’t the worst part of this life. For my parents’ generation, upon graduation from college, the government decided where each student would live and for whom he or she would work. So both of my parents ended up living in a small town that is almost a thousand miles away from their schools and hometowns. Worrying about losing food rations forced many young people to accept any form of employment, anywhere the government assigned them. After witnessing how little control my parents had over their lives, I was determined not to live like that.
With the help of a visiting American professor, I became a graduate student in an American college. I arrived in America in 1996 with less than $100 in my pocket. As was true for millions with a craving for freedom who came before me, my pocket was light but my dreams were rich. I took three part-time jobs, including washing mountains of dishes and scrubbing toilets at Chinese restaurants while working on my first master’s degree. Life was hard, yet I was blissful. For the very first time in my life, I had the freedom to define my future as I saw fit. I was the sole person responsible for my happiness.
Over the years I worked for several financial-services firms — which clued me in to a business opportunity. After the financial crisis, many people began looking for alternatives to the big financial-services companies they had lost confidence in. In addition, American women are increasingly creating more wealth for themselves and their families — it’s estimated that within a decade, more than 65 percent of all private wealth in the U.S. will be held by women — and yet more than two-thirds of American women do not have a financial adviser, partly because of the fact that traditional financial-services firms have done a poor job serving women. In response, I founded Red Meadow Advisors, a fee-only, independent investment-advisory firm focused on helping women achieve financial freedom.
At the time I started my business, I had zero assets under management and zero clients. My sister-in-law, probably out of sympathy, became my first. I framed a copy of the first check she paid me. Today I manage a multi-million-dollar investment portfolio for more than two dozen clients. Most of my clients are women (I do have a few male clients). I am honored to help these productive Americans preserve and grow their hard-earned wealth.
I wouldn’t be where I am today without the market economy. Compared with a centrally planned, command-and-control economic model, the market economy is much superior in at least three ways, all of which are readily apparent in my own line of work.
First, healthy competition improves the quality of services while lowering the cost. In the past, only the rich could afford professional investment advisers; the average trading commission was $45 in the 1980s. Today investors pay as little as $7 per trade, the popularity of low-cost index funds has driven down the management fees of many actively managed funds, and the introduction of “robot advisers” has forced many human advisers to cut fees.
Second, contrary to its critics, the free-market economy isn’t only about competition; it enhances cooperation, too. Investing is a complex business. Many actions are required, including analyzing, pricing, trading, matching buyers and sellers, moving money and securities to the right accounts, and meeting compliance requirements. The reason that an individual can run an investment company is that thousands of firms, big and small, offer products and services that make what we do possible.
Third, a market economy is the best guarantor of freedom. Each one of us is free to choose how to live, whom to work for, whom we want to work with, and what to buy and sell.
Had I stayed in China, it would have been impossible for me to start my investment business. The Chinese government directs seemingly unlimited resources to state-run companies and a few government-selected “private” businesses (a.k.a. “national champions”); aspiring entrepreneurs have no chance to compete. Further, the Wall Street Journal reports that the Chinese government uses surveillance tools to monitor traders, including “warning brokerage firms to police trades that are out of step with government wishes and phoning investors directly when they act out of line.”
Fortunately, I get to choose to do what I love because I live in a free country with a vibrant market economy. It’s sad to see a growing number of Americans today either express serious doubts about markets or reject them outright.
This article appears as “Capitalism in America” in the May 20, 2019, print edition of National Review.