“You’re going to find that many of the truths we cling to depend greatly on our own point of view.”
– Obi-Wan Kenobi
If this blog achieves any purpose, I would hope it demonstrates that there are multiple different points of view inherent in every situation and when handled appropriately this can make both the process and the outcome better. This is nothing new. As the centuries pass, we forget that there have always been differing points of view in this nation. That is not a new phenomenon. In many ways, the tumult and turbulence this causes has allowed this nation to endure and indeed to thrive.
The Founding Fathers did not ratify the Constitution after they had solved all the differences of opinion existing among them, but rather, they crafted a document that would allow the nation to survive the eventual and necessary travails and resulting compromises that would persist down through the years. It would be a gross oversimplification to say that at the outset the nation only faced a single binary choice. The nation faced a myriad of issues, some of which would take decades to resolve and some of which we still struggle with today. For the purpose of this blog, however, I would like to focus on whether the new republic should have aligned itself as a decentralized, agrarian model or whether a more centrally regulated federal model was more advantageous. Before you worry that I have lost focus and am taking this blog in a direction well beyond its stated purpose of exploring the intersection of land, energy, and infrastructure, I would point out that the modern repercussions of this age-old disagreement absolutely impact and affect land negotiations and acquisitions to this day. I am recently or presently involved in multiple negotiations that will be affected or terminated by the parties’ ability (or not) to bridge the gap between ideological differences that they themselves often do not realize are a quarter of a millennium old.
At the beginning of the Republic, again remembering how narrowly this comment is intended here, two opposing points of view vied for control of the nation’s direction. At the outset intellectually aligned parties began to coalesce around Thomas Jefferson and Alexander Hamilton. Both men had been highly active during the Revolutionary War with Hamilton serving as an artillery officer and then aide-de-camp to General George Washington while Jefferson, as you might have heard, served as a member of the Second Continental Congress and had something of a hand in drafting the Declaration of Independence. Both remained active in the affairs of the new nation following the war with Britain with Jefferson serving as Minister to France (one of our most important allies) and Hamilton playing a major role in the Constitutional Convention. Hamilton was also one of the three authors of the Federalist Papers, which many argue were essential in explaining the logic and purpose of the developing Constitution and ensuring its eventual ratification. As an aside, if you ever want a truly phenomenal read that will broaden and enlighten your understanding of the concepts and purposes that underpin this nation, read the Federalist Papers. They were a series of essays written in the lead up to the Constitutional ratification process by Hamilton, John Jay, and James Madison that were published under the nom de plume of “Publius” in newspapers around the nation seeking to create a forum wherein the public could understand the nuance and purpose of what was being crafted inside the Constitutional Convention. George Washington, the first and only unanimous choice for president so valued the experience and differing points of view offered by each individual that he made each man a central figure in his administration with Jefferson being the nation’s first Secretary of State and Hamilton its first Treasury Secretary.
As the early years of the republic progressed, the differing points of view that each man symbolized began to consolidate into the first political parties in the nation’s history, with Hamilton leading the Federalist Party and Jefferson leading the Democratic-Republican Party (distinct from either of today’s similarly named parties). Hamilton and the Federalists believed that the success of the nation would lie in commerce and manufacturing holding that a strong, centralized system of support and regulation was necessary for the nation’s merchants to compete and thrive in the world’s trading markets. He argued for a central national bank that would control and help regulate commerce both domestically and internationally. A necessary component of this approach was that direction and control had to come from a sophisticated, central, federal government and thus control had to be surrendered by the States and the people to that federal government. Jefferson firmly believed that the strength of the nation would reside in its agrarian traditions. Jefferson and his followers preferred that the various state legislators and governors, more closely and directly elected by the people, were better stewards of the people’s rights and liberties than would be a removed central governing structure. Jefferson, always one for a good quote, opined that,
“those who labor in the earth…the chosen people of God, whose breasts He has made his peculiar deposit for substantial and genuine virtue.” He warned his countryman to “let our workshops remain in Europe… The loss by the transportation of commodities across the Atlantic will be made up in happiness and permanence of government. The mobs of great cities add just so much to the support of pure government, as sores do to the strength of the human body. It is the manners and spirit of a people which preserve a republic in vigor. A degeneracy in these is a canker which soon eats to the heart of its laws and constitution.”
(Taken from Thomas Jefferson’s “Notes on the State of Virginia,” 1784)
From the outset of the Republic, at our core, the nation was being shaped by widely divergent views. If you follow American history, you can see how these competing interests have returned again and again to shape and affect our history for the better part of two hundred and fifty years. These divergent yet core views still affect our perspectives in the modern age.
So how do we bring ourselves back to the present? How do we focus this blog on land acquisitions in the current day? We do so by recognizing that these foundational divergences of thought and philosophy are still very much active today as we sit down in conference rooms, and boardrooms, at kitchen tables, and leaning against the beds of pickup trucks and ranch gates around the nation. We practice a bit of self-introspection and determine which side of this philosophical divide we find ourselves most comfortable and then conduct the same exercise in an effort to determine whether the negotiating party on the other side of the table is aligned or divergent with our own views. This process allows negotiators to better focus their aims and tailor their offers in such a fashion that the odds of acceptance rise appreciably.
During any land acquisition the acquiring party is going to want to spend as little as possible to acquire the subject tract of land as they can. The opposite, of course, goes for the party considering separating themselves from that tract of land. I have on numerous occasions over the past years had sophisticated acquiring parties consult with me as to the likelihood of success should they reduce the initial purchase price offered for the tract of land but then educate and convince the current landowner of the value in taking their newfound cash and investing it in one of several Wall Street based investments that could then grow and compound in the coming years and decades. The logic being that if properly advised and directed the eventual total value earned for selling the tract of land in question could be far greater than whatever initial and upfront payment could be offered. In such instances, the acquiring party has run their own math and has arrived and what they consider to be a fair discount rate from the otherwise accepted fair market value of the tract in question. In most instances the discount rate is actually quite fair, and I have no trouble ethically or morally offering it to the current landowner. In one instance the rate offered was so divergent from the current market value that it shocked the conscience, and we agreed to go our separate ways.
In theory, this approach makes sense. The acquiring party gets to reduce the amount of their own capital that they must surrender in exchange for the needed tract of land and the party divesting themselves of that land will eventually find themselves the beneficiary of far greater value then they would otherwise have gotten in a more standard transaction. But as much as I understand and, on some level, accept the logic of this proposed approach, in reality the likelihood of success has actually been very low. As I have contemplated the reasons behind these unsuccessful interactions, I realized that if the math worked and was fair to all, but the proposed transactions were still readily rejected, then there must be something deeper than a purely financial issue. Normally, I hold the point of view that once the emotional decision to
divest the tract of land has been made what follows is a relatively impersonal financial evaluation to determine whether the proposed transaction will be acceptable to the landowner. But as I have observed on numerous occasions the foibles and deeply held beliefs of many landowners get in the way of this otherwise logical review process, I can only imagine that they are intrinsically tapping into these original, core divergences in our national psyche.
I eventually came to the realization that even instances where both parties came to the negotiating table in good faith and hoping to achieve a successful outcome the basic and inherent differences in point of view were quite often too difficult to overcome. Many of the executives and directors representing the acquiring companies firmly believed in the power and inherent value to be found in the domestic and global investment markets. Most of their net worth was in one way or another directly tied into these markets. They were not being deceitful or disingenuous when offering their land-owning counterparties a chance to greatly increase the value being offered for the transaction by tapping into these markets, but they either ignored or misunderstood the depth of distrust those counterparties had in those same markets. The vast majority of America’s land-owning rural citizens have very little use or faith in those removed financial markets. They only see, find, and attribute value to the land they can stand on and derive value from. As I sit in these negotiations, as well meaning and polite as they often are, I come away with the realization that there are some differences of opinion that might be too far apart to bridge. When you see two parties each politely yet firmly state their needs and deeply held core values, and you then realize that neither can offer any argument or evidence to move the other you come to the realization that in many ways as a nation we are still very much who we were in the 1780’s.
On a personal level, rather than lament this reality I think it forms one of this nation’s core strengths. The reason these ideological differences have persisted for quarter of a millennium is because neither is wrong, and both are in their own way correct. The United States is not an island unto itself unaffected by what goes on in the rest of the world and so we need to interact with, trade with, at times protect ourselves from, and derive benefit from what goes on in the rest of the world. For that, we need a singular national voice and point of view, backed by strong financial institutions and markets that allow us to compete at an unfair advantage whenever possible. Concurrent to this, we need a large body of our citizenship to feel very tied to the land itself as they typically form the source of many of our core national strengths and traditions that create the advantageous position from which we can interact with the rest of the world.
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