And if we all work for big organizations and huge businesses, we're much more likely to think in a collective, bureaucratic way and lose that sense of independence that Jefferson and others saw were so vital for the life of a republic.

And finally, building your own businesses teaches a set of virtues which you just won't learn any other way.

(Voiceover) It teaches you to live with failure, because there's going to be lots of failures. It teaches you to do very difficult things and it gives you a great many satisfaction to seeing something that you, that existed only in your imagination, come to life and reality.

I think that's the most important institutional change to be happening in the world. The promotion and the multiplication of small business. It's the only hope of the poor. And it's the best hope of democracy.

So I see two main strategic reasons for small business. It's the main strength of democracy, and it's the main instrument of raising up the poor, providing jobs.

(Voiceover) Small business is the most important institution of civil society. The backbone out of which democracy comes. That sense of leadership, and strength and self-confidence that makes citizens willing to take on their government and become responsible for it. To become the sovereigns.

HATTIE: Thanks Michael Novak for setting us straight. Democratic capitalism is good. It has made life better for millions and will continue to do so. Yes, it is not a perfect system, but each of us can help make it better. We'll see you next time.