250 years ago.
An inflection point in human history.
For most of the preceding centuries, economic output per person—and with it, material living standards—had changed remarkably little. Empires rose and fell. Kings conquered kingdoms. Civilizations flourished and collapsed. But the average person lived scarcely better than generations before.
Then something extraordinary happened.
Or, more precisely, three extraordinary things happened in the same year.
1. James Watt's steam engine began operation on March 8, 1776
2. 24 hours later, Adam Smith published The Wealth of Nations on March 9, 1776
3. Four months after that, Thomas Jefferson wrote the Declaration of Independence.
1. Thomas Jefferson wrote the Declaration of Independence.
A rebellion against King George III, certainly. But its revolutionary premise was much bigger: government should derive its authority from the people, not from kings or aristocrats.
The people, rather than their rulers, would determine how they were governed.
We call this modern democracy.
2. Adam Smith published The Wealth of Nations.
Smith's revolutionary premise was remarkably similar: economic life should be shaped by the choices of ordinary people, not dictated by kings, aristocrats, or government-granted monopolies.
Let people decide what work to pursue, what to produce, what to buy, and what to sell. Let countless independent decisions coordinate economic activity rather than relying on the commands of a privileged few.
We call this a market economy.
3. James Watt's improved steam engine began commercial operation.
In March 1776, one of the first commercial Boulton & Watt steam engines began pumping water from a British coal mine.
Watt hadn't invented the steam engine. He had made it dramatically more efficient. What began with pumping water from mines would eventually help power factories and transform transportation, production, and entire communities.
We call this the Industrial Revolution. You might also call it the process of continual invention.
Three extraordinary developments in one extraordinary year.
Democracy. Markets. Invention.
And here's the point: you don't have to choose between them.
In fact, you should want more of all three. Each is not really a check on the others. Each enables the others.
The more inventions we develop, the more possibilities we have for improving our lives.
The more dynamic and competitive our markets, the more choices people have, the more opportunities entrepreneurs have, and the more effectively innovations can spread.
And the more responsive our democracy, the more ways people have to shape their communities, protect their freedoms, establish fair rules, and invest in a shared future.
These aren't three competing visions of progress. They're three forces that can make one another stronger.
Consider how democracy can accelerate invention.
Near the end of World War II, Franklin Roosevelt asked his science adviser, Vannevar Bush, to consider how the extraordinary achievements of wartime research might be extended into peacetime.
That initiative helped inspire the creation of the National Science Foundation.
The premise was powerful. Basic research is expensive, uncertain, and often takes decades to produce a practical payoff. Even when it succeeds, the benefits may spread across society rather than flow to any one company. That makes it difficult for private businesses to justify funding enough of it.
But democratic government can invest in research whose benefits extend beyond the next quarterly earnings report.
Universities and researchers generate knowledge. Entrepreneurs and businesses transform discoveries into products and services. Profitable businesses generate jobs, wealth, and tax revenues. Those revenues help fund another round of research and education, creating still more possibilities for invention.
A virtuous cycle of public discovery and private innovation.
Specifically, we need Watt's invention to create new technologies that break the link between "progress" and depletion of our natural world. To do that properly will require a deft interplay of democracy, invention and markets that enable us to enjoy sustainable prosperity that promises an earth as bucolic and pleasant as any we've known while still enjoying "progress" as more narrowly defined by material prosperity. Doing that properly will require full engagement of all three of these forces that have so changed our world since 1776.
Jefferson's democracy enabling Watt's invention, which Smith's markets can then spread throughout society.
And the three of them, in turn, make one another more productive.
Which brings us to the election of 2026.
The great news is that voters have delivered a decisive rebuke to MAGA politics and returned control of Congress to Democrats.
For a movement whose supporters tried to overturn the 2020 election, and whose leaders have repeatedly sought to restrict voting, this is an encouraging reaffirmation of democracy. That’s great.
It's worth recalling that Jefferson's Declaration of Independence complained that King George had kept standing armies among the colonists, obstructed immigration, and cut off foreign trade. Some of the grievances against an eighteenth-century king sound remarkably contemporary.
After a long and troubling detour, we've brought Thomas Jefferson out of the trunk and put him back in the front seat.
But here's the bad news.
Some of the Democrats now returning to power seem eager to put Adam Smith in the trunk instead.
Markets, in the view of some Democrats, are less engines of opportunity than sources of inequality and exploitation. Businesses become adversaries rather than partners in progress in their minds. And technological disruption can become something to resist rather than something to shape and harness. (Yes. I am - among other things - talking about AI.)
That's a mistake.
Progress depends on three healthy forces at work, not taking turns between these three transformative forces. We want more democracy, more voice of the people in defining laws and policies. We want more market economy, the creation of more products and jobs, services and wealth. We want more invention, more options about how to work, play, learn and enjoy life. We want Jefferson, Watt and Smith riding up front, jointly defining where we are going.
None of the three are done yet.
Democracy and freedom: We abolished slavery, extended voting rights to women, and expanded political participation to people once excluded from power. More freedom. More people with a voice in how they're governed. More democracy. And we need more of that. Imagine public-sector entrepreneurship that would “draft” citizens into initiatives to improve their communities, stimulating and testing new ideas about how to improve quality of life. Giving a voice to the people to experiment their way into better public-sector institutions and projects.
Markets: We've moved from economies dominated by agriculture and inherited privilege to economies in which millions of people can choose their work, start businesses, compete, and trade with people around the globe. More choices. More opportunities. More prosperity. More markets. That, too, is a process that isn’t done. AI promises to do for knowledge work what the industrial revolution did for manual work.
Invention: Steam engines powered railroads. Internal combustion engines transformed transportation. Now electric motors, increasingly powered by renewable energy, offer transportation with fewer emissions and less pollution. Each generation of invention expands what's possible, sometimes while reducing the costs and unintended consequences of what came before.
And none of this progress is finished. Democracy can do a better job of giving people a voice in their community than just letting them cast a vote every couple of years. Markets can create more opportunities for more people to create wealth, products and services that enhance lives. Inventions can solve problems and create new possibilities that once upon a time seemed unimaginable.
Progress isn't a destination. It's a process of continually expanding what's possible for more people. And it will always depend on the interplay of Watt, Smith and Jefferson and we need each to get stronger and not weaker over time.
And we should be greedy about it.
Greedy for more democracy, more competitive markets, and more invention.
Greedy for the opportunities they create, the problems they solve, and the ways each can improve the others.
At different times, one will take the lead. New inventions will disrupt markets. Markets will expose the need for new public rules and institutions. Democracy will fund discoveries and establish conditions that make markets more productive. And all three will sometimes disrupt comfortable arrangements that once seemed permanent.
That's not a failure of progress. That's how progress works.
The mistake is to declare any one of these forces the villain—or to imagine that one can substitute for the others.
Perhaps the simplest lesson of 1776 is that we should abandon nostalgia and its distortions of reality and embrace progress instead.
The future can be a place so much better than the past that, once we arrive, we wouldn't want to go back.
That has been the extraordinary promise of the last 250 years. Not that progress is automatic, or that everyone has shared equally in it, but that human beings can continually create better ways to live.
Progress isn't a destination. It's a process of continually expanding what's possible for more people. And it will always depend on the interplay of Watt, Smith and Jefferson and we need each to get stronger and not weaker over time. Nobody rides in the trunk.
Jefferson's democracy enabling Watt's invention, which Smith's markets can then spread throughout society.
And the three of them, in turn, make one another more productive.
Which brings us to the election of 2026.
The great news is that voters have delivered a decisive rebuke to MAGA politics and returned control of Congress to Democrats.
For a movement whose supporters tried to overturn the 2020 election, and whose leaders have repeatedly sought to restrict voting, this is an encouraging reaffirmation of democracy. That’s great.
It's worth recalling that Jefferson's Declaration of Independence complained that King George had kept standing armies among the colonists, obstructed immigration, and cut off foreign trade. Some of the grievances against an eighteenth-century king sound remarkably contemporary.
After a long and troubling detour, we've brought Thomas Jefferson out of the trunk and put him back in the front seat.
But here's the bad news.
Some of the Democrats now returning to power seem eager to put Adam Smith in the trunk instead.
Markets, in the view of some Democrats, are less engines of opportunity than sources of inequality and exploitation. Businesses become adversaries rather than partners in progress in their minds. And technological disruption can become something to resist rather than something to shape and harness. (Yes. I am - among other things - talking about AI.)
That's a mistake.
Progress depends on three healthy forces at work, not taking turns between these three transformative forces. We want more democracy, more voice of the people in defining laws and policies. We want more market economy, the creation of more products and jobs, services and wealth. We want more invention, more options about how to work, play, learn and enjoy life. We want Jefferson, Watt and Smith riding up front, jointly defining where we are going.
None of the three are done yet.
Democracy and freedom: We abolished slavery, extended voting rights to women, and expanded political participation to people once excluded from power. More freedom. More people with a voice in how they're governed. More democracy. And we need more of that. Imagine public-sector entrepreneurship that would “draft” citizens into initiatives to improve their communities, stimulating and testing new ideas about how to improve quality of life. Giving a voice to the people to experiment their way into better public-sector institutions and projects.
Markets: We've moved from economies dominated by agriculture and inherited privilege to economies in which millions of people can choose their work, start businesses, compete, and trade with people around the globe. More choices. More opportunities. More prosperity. More markets. That, too, is a process that isn’t done. AI promises to do for knowledge work what the industrial revolution did for manual work.
Invention: Steam engines powered railroads. Internal combustion engines transformed transportation. Now electric motors, increasingly powered by renewable energy, offer transportation with fewer emissions and less pollution. Each generation of invention expands what's possible, sometimes while reducing the costs and unintended consequences of what came before.
And none of this progress is finished. Democracy can do a better job of giving people a voice in their community than just letting them cast a vote every couple of years. Markets can create more opportunities for more people to create wealth, products and services that enhance lives. Inventions can solve problems and create new possibilities that once upon a time seemed unimaginable.
Progress isn't a destination. It's a process of continually expanding what's possible for more people. And it will always depend on the interplay of Watt, Smith and Jefferson and we need each to get stronger and not weaker over time.
And we should be greedy about it.
Greedy for more democracy, more competitive markets, and more invention.
Greedy for the opportunities they create, the problems they solve, and the ways each can improve the others.
At different times, one will take the lead. New inventions will disrupt markets. Markets will expose the need for new public rules and institutions. Democracy will fund discoveries and establish conditions that make markets more productive. And all three will sometimes disrupt comfortable arrangements that once seemed permanent.
That's not a failure of progress. That's how progress works.
The mistake is to declare any one of these forces the villain—or to imagine that one can substitute for the others.
Perhaps the simplest lesson of 1776 is that we should abandon nostalgia and its distortions of reality and embrace progress instead.
The future can be a place so much better than the past that, once we arrive, we wouldn't want to go back.
That has been the extraordinary promise of the last 250 years. Not that progress is automatic, or that everyone has shared equally in it, but that human beings can continually create better ways to live.
Progress isn't a destination. It's a process of continually expanding what's possible for more people. And it will always depend on the interplay of Watt, Smith and Jefferson and we need each to get stronger and not weaker over time. Nobody rides in the trunk.
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