Liberty's Engine

Why Private Business Is the Pursuit of Happiness

Lunch Atop a Skyscraper, New York City, 1932

There is a thesis that runs like a steel cable through Victor Davis Hanson's The Soul of Battle, and once you see it you cannot unsee it: tyranny has never permanently vanquished liberty. Put it the other way and it becomes something close to a natural law. Liberty always triumphs over tyranny. Always. The historical record is unbroken.

That is not a small thing to say. Hanson is not a sentimentalist. He is one of the most rigorous military historians alive, and he arrives at this conclusion not through hope but through evidence, from
Epaminondas routing Sparta, to Sherman burning the Confederacy's will to fight, to Patton's thundering Third Army. Free people, when they choose to fight, fight differently. They fight harder, think faster, and improvise better than those who fight under compulsion. The armies of liberty do not merely win battles. They break the psychology of domination.

I have been thinking about this a great deal as Independence Day approaches.

Here is what the data shows about societies organized around liberty and liberal democracy, and it is remarkable in its consistency. They take better care of their people. They are more prosperous. They are better stewards of the natural world. They innovate at dramatically higher rates. They offer greater social and financial mobility, the
genuine kind, where a person born without advantage can build something extraordinary through talent, discipline, and will.

The pattern is too consistent to be coincidence. And when you look for the mechanism, the answer is surprisingly simple: governments organized around liberty do not manufacture these goods. They release people to pursue them. The role of liberal government is to move people from obstacles to opportunity, from constraint to the  freedom to produce Nourishing themselves. This is what Jefferson understood with almost frightening precision when he wrote that among the inalienable rights endowed by our Creator is the pursuit of happiness.

Not the guarantee of happiness. The pursuit of it. The right to try.

That distinction is everything. Happiness cannot be distributed. It cannot be legislated into existence or allocated by committee. Happiness, meaningful, durable, earned happiness, is the byproduct of
purposeful striving. It emerges from the act of building something: a
family, a craft, a career, a business. And that is where I want to linger, because I think we have undersold something important in our civic conversation.

American enterprise, still at work

Private business is the engine of the pursuit of happiness.

Not metaphorically. Literally. 

• #3–The Middle Market's GDP would rank as the world's third-largest national economy
• 44% of all American jobs provided by middle and pre-middle market businesses
• 63% of all new jobs created by these privately held businesses
• 1/3 of national GDP contributed by the middle market alone

These businesses are the mechanism through which ambition becomes income, through which risk becomes reward, through which one generation funds the opportunity of the next. They are also, quietly, among the most important sources of community philanthropy, civic leadership, and local economic resilience this country has.

More than that, they are the primary arena in which most Americans actually exercise their fundamental liberty. Not at the ballot box once every four years, but every single day, in the decisions they make about how to build something worth building.

I have spent my career inside this arena. My mission is to help private businesses, specifically those in the $2.5 million to $100 million revenue range, maximize what I call Strategic Capacity: the demonstrated ability to deliver predictable profits and cash flow, predictable sustainable growth, and predictable transferable equity value. These are the three dimensions of business growth, and together they determine whether a business will merely survive or genuinely thrive.

Strategic Capacity is measured on a scored scale, and the threshold that changes everything is 85.

THE STRATEGIC CAPACITY ASSET CLASS

Businesses that achieve a score of 85 or above have moved from vulnerability into a fundamentally different category. Their performance is sufficiently predictable, documented, and demonstrable that they attract capital, command premium valuations, and operate with the kind of institutional-grade resilience that private equity firms spend billions engineering into their portfolio companies. Below 85, a business may be profitable and growing. Above 85, it becomes a wealth-generating engine with genuine transferable value that does not depend on any single person to keep running. 

"We Can Do It!" - J. Howard Miller, 1943

The opportunity here is historic, and the urgency is real. The vast majority of middle and pre-middle market business owners are Baby Boomers. As a generation, they are sunsetting. The businesses they have built represent an enormous store of latent value. Whether that value gets realized, transferred, and multiplied, or quietly evaporates when the founder walks out the door, depends on one thing: whether those businesses have built the Strategic Capacity to thrive without them.

This is the difference between a mortal business and an immortal one.A mortal business is inseparable from its founder. An immortal business has been redesigned so that its people, its cash, and its processes work together in documented, scalable systems that deliver results regardless of who is leading them. Immortality is not an
accident. It is the direct result of maximizing Strategic Capacity.

Most have not. Yet.

That is the work. And the scale of it has led me to a singular commitment: helping generate a trillion dollars of Strategic Capacity value inside privately held American businesses. Not as a slogan, but as a measurable, achievable mission prosecuted one business at a time, across a national community of professional advisors dedicated to exactly this outcome.

When you aggregate that work, something larger comes into view. A trillion dollars of maximized Strategic Capacity is a collection of individual business success stories, yes, and it is also something more: a bulwark, a foundation of resilient, thriving, institutionally strong businesses that serve as the true anchor of the national economy. From dependent to durable. From founder-reliant to genuinely transferable. The privately held businesses in every city and town in America, built by risk-takers who chose to pursue happiness by building something that matters.

When every stakeholder is aligned around one measure, the results compound. Advisors move from working in silos to working as an integrated team. Leadership moves from optimizing in isolation to executing against a shared scorecard. Capital allocation decisions get made with clarity and confidence. And the business moves, systematically,  measurably, from wherever it is today toward the 85-plus threshold that transforms it into a genuine asset.

This is what private equity figured out decades ago. The innovation is bringing that same operational discipline, that same alignment of human expertise and analytical power, to the privately held businesses that have never had access to it. Until now.

Hanson is right. Liberty always wins. But it wins because free people do the work. 

Jefferson gave us the frame: the inalienable right to the pursuit of happiness. Private business is where that pursuit lives. Strategic Capacity is how you measure whether you are winning. And an economy built on 85-plus businesses, resilient, transferable, institutionally strong, is what a truly free society looks like when it plays to its full potential. 

This Independence Day, I am grateful for the entrepreneurs who are building exactly that. And I am committed to making sure far more of them get there.