David A. Sampson, president and CEO of the Property Casualty Insurers Association of America (PCI), highlighted the theme of the 2010 Annual Meeting theme Politics and Private Markets: The Uncertain Path to Prosperity today in Colorado Springs. He encouraged the almost 1,000 CEOs and senior executives attending the meeting to be cautiously optimistic as America is a hopeful nation but faces a struggle between two competing visions for the future – a choice between a vibrant free market system and an expanded federal government.
Sampson noted that despite the widespread private sector anxiety over America’s future, the profoundly weak economic recovery by historical standards, and the policy uncertainties that have been injected into the economic equation by the Administration and Congress, America has always been exceptional – it is freer, more individualistic, more democratic and more dynamic than any other nation on earth.
“It’s easy to forget the good times during times of adversity, but we need to remember that our unique experiment with democracy has produced greater prosperity for more people than any other system in the history of civilization. Although the term has become somewhat politically incorrect, historically this was known as: “American Exceptionalism” said Sampson. “Polls consistently show that when given the choice between a free market economy, even with its severe ups and downs, versus the alternative, well over 60 percent of Americans want the unique American experiment of upward mobility and prosperity.”
Sampson underscored that because of the free enterprise system, America is replete with examples of ingenuity and practical solutions to problems that have saved lives and led to a better quality of life. There are hundreds of inventions, such as the drill bit that allowed rescuers to reach the Chilean miners, created in America due in large part to an economic system that rewarded risk-taking and celebrated success. In fact, America’s first settlement, Jamestown, was founded on the notion of risk taking, by a profit seeking company, the Virginia Company.
However, Sampson warned, “some leaders are using this current economic crisis as an argument against the free market system,” and therefore, business leaders must consider “how a seemingly straightforward business decision is viewed in the highly charged political, economic and social environment in which we live.”
He went on to emphasize that only the private sector can create prosperity and the government’s role should be limited. “Government should create the conditions for civil society to flourish and the private sector to innovate. Government should provide a safety net for when people try and fail.
Government should uphold the rule of law and the sanctity of contracts so that businesses and consumers feel confident in the future. But government cannot create prosperity. It can only redistribute wealth.”
Sampson concluded by encouraging the property casualty industry to remain a bastion of stability that can weather the economic storm and the government’s expansion into the private sector. “We help businesses and individuals create wealth and prosperity. Without a healthy property casualty industry, the private sector would not be able to take risk. Our industry must continue to deliver on our commitment to policyholders, including those who want to start new businesses, buy new houses or cars, or hire new workers. By doing, we will help return the economy to its former strength,” he said.