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A Short History Of the American Frontier

Most historians agree that the frontier played an important role in the formation of the American identity.  Rugged individualism—the core, mythic attribute of the frontiersman–was a born out of necessity as civilized settlers built their lives on the frontiers of North America.  Historian Fredrick Jackson Turner posited that the further westward we moved, the more American we became—less tolerant of hierarchical regimes, more democratic, more self-realizing, freer, farther away from Europe. Economically, the frontier represented potentially unlimited resources and opportunity. American exceptionalism is, and may always be, firmly rooted in the notion of an ever-expanding economy, made possible by the endless land and resources that seemed to sprawl out before the eyes of 19th century Americans.

In 1890 the 11^th United States Census declared the geographical frontier officially closed. Industrialism, however, have already become the nation’s new quest in the Gilded Age. In efforts to tame the risks of this new wilderness, the modern day business corporation emerged, along with its life blood — the capital markets. Productivity increased as technology grew.  At the same time, the very social hierarchies that early frontier settlers shunned reared their heads in the industrial context, now justified on the grounds of efficiency. In response, workers organized to form unions. As worker-management tensions mounted, workers were cast by business leaders as the new “savages,” standing in the way of exceptionalism. Government, for the most part, agreed.

In the early 1920s, the economy boomed and consumerism grew, with a cultural fixation on material wealth. That all came to an end with the financial crash of 1929 and the ensuing Great Depression. The new frontiersmen, industrial and financial leaders, had abused their power, just as the absolute monarchs of Europe had. The financial elite were defeated by the savages within, hubris and self-interest, and working people were left to carry the burden.

FDR announced in 1932 that “[o]ur last Frontier has long since been reached,” and replacing it would be “the less dramatic business of administrating resources and plants already in hand . . . of distributing wealth and products equitably.” The New Deal Era therefore set aside America’s outward-reaching identity and focused on internal matters. Americans unified around the common cause of defeating fascism. Dreams of the wilderness were kept alive, however, in the movies and, later, T.V.

While JFK’s promise in 1960 of a possible “New Frontier” inspired many, it ultimately went unfulfilled, as the Vietnam era ushered in an unprecedented crisis of American identity. No longer were we in control of our own destiny. The Iran hostage crisis represented the culmination of our perceived impotence. Americans hungered for something new, some new state of nature to settle and tame, and to propel America back into a leadership position in the world.

Ronald Reagan was America’s answer. As a former Western actor he represented a simulacrum of the mythic cowboy, gazing out into the hopeful expanse of the new financial economy which, under Reagan’s magical “supply-side” economics, was supposed to flourish endlessly. As Richard Slotkin stated his book The Gunfighter Nation:

A ‘bonanza’ of new capital, released through measures favoring business and the wealthy (tax cuts and deregulation), was to act as the magical guarantor of perpetual and painless economic growth, in just the way that the opening of ‘vast and untapped reserves’ of free land or gold or cheap oil on the Frontier has energized the economy in the past.

And so, as declared by Robin Leach in Lifestyles of the Rich & Famous, the “Final Frontier” in the 1980s was “Fame and Fortune.” The consumerism of the 1920′ reared its head, on steriods. Like the gold and silver booms of the late 19^th century, moreover, there was a sense of that fortune could come in the new world of big finance with little, if any, work. Many Americans, it seemed, could finally get something for nothing, if they could only “strike gold” in the financial markets. Impressive wealth did not come from hard work and persistence, but rather from some spike in the market, some chance event that anyone, if positioned correctly, could seize upon. Known for its gigantic jackpots, the creation of the Multi-Stage Lottery Association in 1988 both reflected and perpetuated this perception.

Debt financing came into fashion not only for corporations and government, but also consumers.  Billionaire Donald Trump was quoted as saying “I’ve never spent a dollar of my own money.”  Americans followed suit.  

Despite a few hiccups, the bonanza economy continued into the 90s. 1999’s repeal of Glass-Steagall, 2000’s passage of the Commodities Futures Modernization Act, and the SEC decisions in 2004 permitting certain investment banks to have unprecedented debt-to-asset ratios—all were done in the spirit of opening up the new financial frontier — even more lawless than its predecessors — originally imagined by Ronald Reagan.  Coming into the 21st Century, the perceived bonanzas ballooned into huge and unsustainable bubbles, fed by the “animal spirit” of irrational exuberance, government cheering all the while on the sidelines. 

This is the basic setting in which we find ourselves, the setting that led us to the current financial meltdown. As in the Great Depression, the “savage within” once again got the best of us. It is Custer’s Last Stand—with ourselves. The “bonanza” economy that Reagan promised, has imploded due to greed and an unsustainable “free lunch” mentality.  Not just on Wall Street.    

Many people argue we need a “new” New Deal. But, in many ways, the comparison is inapposite. World War II’s war economy is ultimately what led us out of the Great Depression. While ambitious, Obama’s energy plan doesn’t quite compare.

It’s still unclear what our new frontier surrogate will be. What is clear is that in order to find it, we must first resurrect an ethic of hard work and personal responsibility, and tend to our own house for a time.  That much will be similar to the New Deal.  What has to be different, if we are to emerge from the current crisis victorious, are the people.  The new New Deal must not be between the government and the people, but among the people.  Traditionally in short supply on the frontier, a sense of genuine compassion for others might, by necessity, be the next wilderness Americans must tackle.     

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