Wednesday, July 4, 2012

Happy Birthday, USA

The country that I love turns 236 today.  By the standards of nations, that is quite young.  Most old world countries have been around for far longer than that - England, our father of sorts, became a nation over 1,100 years ago.  China was formed as a nation over 2,200 years ago - sort of an odd twist on it being an "emerging" economy.

Our nation's history, while short by the standard of nation's, is nothing short of extraordinary.

On the fateful day in 1776 where the Continental Congress declared independence from England, there had been no formal census, but there were likely less than 3 million people in the 13 colonies.  We were a farming economy, based on growing tobacco, molasses and cotton to export back to Europe.

We also knew little of how to establish an effective government, spending the first 13 years of our independence with a weak central government with no chief executive under the Articles of Confederation.  It wasn't until 1789 that we set in motion the form of government that is still the envy of the world.

The concepts embraced in the constitution are brilliant both in their simplicity and in the way that they address key issues that have plagued representative democracies.

The separation of powers between the legislative, executive and judicial branches has been a lynchpin in preserving the stability of our policy.  Unlike in most of Europe where the executive and legislative branches change hands in lock-step, leading to huge swings in policy from election-to-election, our split between legislative and executive branches force slow change, compromise and consistency.

The amendment process to the constitution was similarly brilliant.  The bar was high enough that the political whims of the day are usually not sufficient to change the constitution, but low enough that the system can progress and as social progress happens.  In fact, in 223 years with our constitution, only 27 amendments have been passed, only 17 since the Bill of Rights.  And of the 27, arguably only 1 got it wrong, that being the 18th Amendment, ratified in 1919 that constitutionally created prohibition.

The Bill of Rights itself is a uniquely brilliant concept.  The separation of church and state was a largely foreign concept in a world where religious leaders often were the political leaders, but it has served our diverse population extremely well.  Freedom of speech, something that most of us that grew up in the United States take as a basic human right, to this day does not exist even in most of the civilized world.  In Germany, people can be arrested simply for advocating for the Nazi party, something that would be an unthinkable breach of liberty here.  The notion that openness, not restriction, produces truth through debate, is a boldly American concept.

Not that we can claim a perfect history, far from it.

Slavery was an abomination and was not abolished until 1865, 89 years into our nation's history and after a bitter civil war, an event that killed a massive portion of a male generation across the country and a conflict that would be near unthinkable today.  What is not well known was the strong abolitionist streak that existed in the constitutional convention in 1789.  The gruesome sounding "3/5ths" compromise, which counted black slaves as 3/5ths of a person and the ominous text in the constitution that prohibits restrictions on slavery until 1808 is a sign of the deep-seated disagreement between northern and southern delegates that led to a nastily imperfect compromise int he interest of bringing all 13 states along.

It was 1870 before the now-free black population was given the vote nationwide and 1920 before women were given the vote nationally, again, both by constitutional amendment. 

Segregation didn't end until 1954, with the landmark Brown vs. Board of Education decision that ruled that the 14th Amendment (that guarantees equal rights to all citizens) prohibited the so called "separate but equal" (which was always separate, but seldom equal) of blacks and other minorities.

And our nation's system of rights is imperfect still - gay marriage is still available only to a minority of the population, discrimination still exists in our society - one need only look to the whiteness and maleness of the Fortune 500 C-Suite to see things are still not equal today, but we have obviously trended in the right direction.

There is no coincidence that our progression of equality has correlated with our rise economically.  The Post World War II economic boom was fueled by a growing black middle class.  The meteoric rise of the economy in the 1980s and 1990s was driven by a surge of women into the work force.  In short, social equality and economic growth are linked in a way that is obvious if you look at the world and how nations have fared in the past century.

Much has been written about whether the devastating economic conditions of the past 5 years signal the end of the era of American dominance in the world and harken the rise of China as the dominant economic power.  I don't buy it, for all the reasons above and more.  It is quite possible that in absolute terms, China may pass the size of the US economy in the next 20 years.  Their economic is currently about half our size, which means that if we grow at an anemic 2% and they grow at a developing economy 6 to 7% rate, they will catch us by that time.  But that projection, which is already flawed as it assumes the next 20 years will, in an uninterrupted fashion, look exactly like the last 5 (hardly a lock - remember when Japan was going to eat our lunch in the 80s?), the statistic would only mean that China had achieved ONE QUARTER of the standard of living in the US.  In other words, they'd be the largest because of sheer population size, not because of some great economic success.

I'm bullish on American.  We are the home of innovation.  In our short history, we've invented the light bulb, the telephone, the automobile, the airplane, the microchip and computer, the internet, the smart phone (okay - we got an assist from Canada on that one, but honestly - do you want a Blackberry or an iPhone), the space shuttle, the artificial heart, social media and the online auction.

What has China invented?  Gunpowder in the 1400s?  China's economy is built on paying people less to produce things invented elsewhere - hardly a recipe to be the dominant economy in the world.

Our system of property rights, individual freedom and effective finance (yes I know it is much maligned, but where else are there venture capitalists, angel investors and an IPO system that feeds massive capital to scale great ideas?) gives us the edge in this decade and the next.

I bet on the USA.  And I hope to be here for as many of the next 236 years as I can.

Happy Birthday, USA, the greatest nation on earth.

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