A Lesson for America from the Frontier

If you were to ask me to identify the most damaging war in American history, it would have to be the war it fought with itself from 1861 to 1865. In retrospect, many argue that the Union was never in danger of losing the war. But at the time, that was not the opinion of everyone, especially those in the developed world of its day.

Although he regretted the words later, more than a few Europeans would have agreed with William Gladstone, Britain’s Chancellor of the Exchequer, in a speech at Newcastle in October of 1862, “We may have our own opinions about slavery; we may be for or against the South; but there is no doubt that Jefferson Davis and other leaders of the South have made an army; they are making, it appears, a navy; and they have made what is more than either – they have made a nation.”

Is no surprise that he felt that way. After all, the United States seemed to be determined to destroy itself. A nation that could clearly be called a frontier market of its time appeared to be collapsing in full view of the global public.

Yet, on January 8, 1863, California’s Governor Leland Stanford ceremoniously broke ground in Sacramento, California, to begin the western end of what was to become America’s transcontinental railroad. As the North and South seemed to be destroying the Union, the East and West were tying it together, reducing the travel time between its two coasts from six months or worse to a single week when it was completed in 1869, built in great part by veterans of both sides of the war.

in the midst of all the death and devastation of the Civil War, Americans continued to build for the future.

Humans love their categories. Today, adjectives like advanced, emerging, and frontier are used to describe economies, as once First, Second, and Third Worlds were used – over-simplifications based on the assumptions of the elites of North America and Europe.

After nearly five decades of working as an advisor to governments in more than 40 nations all over the world, I have found only two categories that are useful in judging which nations have the brightest future.

Once I had settled in and gotten to know some local people, whether taxicab drivers or government ministers, I would choose a quiet moment and raise a simple topic. Tell me about your nation.

Everyone would start with the present, understandably. There was nothing to separate them into categories at first. However, within minutes they would divide and move in two opposite directions.

The first group clearly drew its inspiration from its hopes for the future. Their focus was on what was to be and how to reach it. The second group sought its inspiration from the glories of the past. Their focus was on something they had once had, or thought they did, but could never have again.

As the years passed and I had the opportunity to return to some of these nations or at least continue to monitor their progress, I discovered a simple truism. Those who drew their inspiration from the future had a future and a good one. Those who drew their inspiration from the past failed more often than not.

It wasn’t the size of a nation’s population, its economy, or its stock market that drove the nation’s future. It was the source of their inspiration. Today I am convinced that it is the single most important factor in separating those who will be successful in the future from those who will not. For years, I rejected this as being much too simplistic, but I am now a believer.

Since I first arrived in Panama in 2004 and decided to make it my new home, I have seen two full five-year administrations complete their terms and am currently watching a third administration as it enters its second year. Each administration was led by a man from one of the three major political parties. Since the days of Manuel Noriega in decades past, Panamanians have never re-elected the party in power. Beyond parties, each president has been very different in terms of personality and style.

But they have one thing in common. Despite their differences, all three have had one goal – the stable economic development of the nation.

So it was no surprise to me to read in Standard and Poor’s recent reconfirmation of Panama’s investment grade status the words, “After its first year in office, the Administration of President Juan Carlos Varela has maintained continuity in key economic policies while strengthening the country’s public institutions.” Exactly.

Don’t misunderstand me. Panama is a genuine democracy and it can be seen every day in the newspapers as supporters and opponents of the administration carry on a non-stop debate. The issues are not trivial nor are they simple. Corruption is being addressed as it has never been before. The charges and counter-charges are serious, but the nation remains very stable. On the surface, it may seem that we are as divided here as you are in the US, but that is not really true. Behind all the shoving and shouting of a democracy, there is an underlying current of faith in the future evident to anyone, not just Standard and Poors.

If that sounds easy, it isn’t. The President was elected last year with less than 40% of the vote. His political party’s candidates for the National Assembly received only a little over 20% of the votes, leaving its delegation third in size. And yet legislation is proposed, debated, and passed. Spanish has no single word to fully express the nature of “compromise” as we use it in English, but that hasn’t stopped Panamanians from constructively compromising to get business done. That is the foundation for S&P’s statement.

Safety and stability are foremost in the minds of the great majority of our expatriate residents, not North Americans, but people from other Latin American nations. They did not come here for the beautiful beaches. They have their own. They didn’t come here for the warm weather. They have that too. They didn’t come here for the ancient pre-colonial ruins. There are none. These are people who are familiar with Panama and what it offers in comparison to other nations, including the US – safety for their families, safety for their possessions, a growing private sector, and above all, a stable and friendly environment.

Even Europeans are catching on. In the first seven months of this year, the number of Italians receiving residency visas in Panama was nearly double that of Americans. There is a search for safety and stability in Europe as well.

From the outside, the United States seems to be a nation mired in its past, desperately seeking someone else to blame. But it was not China that was responsible for Americans turning their backs on common sense and driving a stock market to ridiculous heights. It was not immigrants, legal.or illegal, who were responsible for Americans throwing out the book on mortgage lending. We did both to ourselves. Without these two self-inflicted disasters, we would not be in the mess we are in today.

I look on the current political situation in my native nation with genuine dismay. Two things seem to be lacking. The first is taking responsibility for our past. The second is turning our eyes to the future. We can learn a lesson from Panama. We can have our differences, great though they may be, and still remain committed as a nation to a future of growth and prosperity. And when we need to consider compromise to get to that future, we will do it.

Ultimately, I hope someday soon to read that the United States has also “maintained continuity in key economic policies while strengthening the country’s public institutions.”

——-

This is a personal blog, more of a personal notebook, unadvertised and without promotion. I try to post on a weekly basis, but there is no guarantee. Should you stumble across it and wish to be notified of new posts, just enter your email address at the upper-right of this page. I have no other use for email addresses. Rest assured, yours will be kept private. I also now tweet to share articles and essays that I think are important, but do not have room for here. You are welcome to make comments, if they are on topic and polite. I have no time or space for insults, foul language, or anything I judge to be offensive to readers.

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