From the Chairman

What is prosperity, and how do we get more of it? In seven decades of thinking about those questions, and given that 2026 marks the 250th anniversary of America (and my 80th year), it’s worth pausing to reflect on a few of the lessons that have endured.

Back in 1965, I developed a simple framework for thinking about prosperity. While I’ve revisited it many times, I have never felt the need to revise it: P=ΣFti;*(ΣHCi;+ΣSCi;+ΣRAi;) where prosperity (P) depends on financial capital and technology (Ft), which serve as multipliers of human capital (HC), social capital (SC) and real assets (RA).

Human capital refers to skills, education, experience and health. Social capital refers to the frameworks and values, including rule of law, free enterprise, universal education, property rights and transparent markets, that allow individuals to apply their capabilities productively. Real assets include savings, real estate, infrastructure, natural resources and factories. Financial capital and technology include various types of debt and equity instruments, derivatives, securitization, ETFs, investment vehicles and digital currencies – a list that continues to expand as our mastery of technology increases. By better connecting ideas to resources, financial technology is prosperity’s accelerant.

Human capital is by far the largest asset class, representing 70-80 percent of value in developed nations, followed by social capital; other assets – equity, real estate and so forth – represent much less.

Prosperity, to return to our opening question, is first and foremost about people and the ways in which they organize their society and capture the benefits of human ingenuity. To build human capital, societies can expand access to high-quality education, extend both the length and quality of life, and attract individuals from around the world to join and contribute.

When we break down prosperity into its components and their relationships, we can view the American Dream as history’s greatest operating system. It is not a promise of outcomes, but a system of conditions that allows individuals, regardless of background, to pursue a life of meaning and purpose. Financial and material wealth follow, but as the natural resource curse has shown, they are not the cause.

As the United States marks its 250th year, despite differences on many issues, one point of agreement among Americans remains striking. Surveys show that they share a common understanding of the American Dream: it is fundamentally about freedom and the ability to choose the life one wants to live.

Our challenge today is to protect and extend those conditions, in the United States and around the world. 

Mike Milken, CEO