The Road Less Travelled | #5
Lessons from 3 weeks of travel and the expansion of the western United States.
Greetings from Atlanta!
I’ve traveled a lot in May.
Mazunte, Puerto Escondido, Boston, Newport, a 40-hour bus ride from Boston to Omaha, Charleston, Myrtle Beach, and Atlanta.
It’s been non-stop, and I’ve had the chance to observe a lot.
Unsurprisingly there are differences. People behave differently, have different social norms, and have different worldviews politically.
We call this culture.
Culture emerges in a logical manner. Within each place, people behave in a way that allows them to fulfill their various needs1 based on the existing dynamics in their immediate environment.
Consensus behavior emerges over time.
If an individual strays too far from the consensus they’ll be judged by their peers. Next comes group think. We are exposed exclusively to one culture and begin to think it is the correct way to do things.
However, the consensus is only applicable within the relatively small geographic region where it is established. That’s because it was established based on the factors at play in the environment, but every environment is different.
When confronted with behavior that we don’t understand or agree with, we should respond with respect and a desire to understand.
Only then will we be able to arrive at a greater good.
1. The Road to Omaha
On Tuesday I left Boston on a Greyhound bus at 9 am. 40 hours later I arrived in Omaha, Nebraska.
Just to be clear, I didn't make the trip by choice. I lost a bet.
The last-place finisher of my fantasy football league has to take a bus trip from Boston to Omaha. No stops are allowed, and the trip must be documented.
My friends are twisted.
The ride went way smoother than I expected. I read, watched movies, and analyzed my investments. I talked to a few unique bus characters and tried to learn a thing or two about Greyhound culture. All in all, not bad.
That being said, the lead-up to the bus trip was a major hassle.
I was living in Madrid when I lost two years ago.
A bus to Omaha would have required me to fly back to the US and then take the bus trip. This was way past the call of duty.
This left my friends and I at a crossroads.
We had many discussions around what was fair when considering both time of travel and expenses. The discussion lead to frustration on all sides and took up way more energy than it needed to.
If we had planned out the penalty associated with my last-place finish ahead of time, things would have been much less stressful.
That's a big lesson of the Omaha experience for me.
Know your downside, and have a plan in place for when it occurs. It probably will at some point.
What are some things you’ve learned from travelling? Please let me know by responding to this email directly or reaching out on twitter @AlexSwanton.
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2. The Expansion of the Western United States
While in Omaha I visited the Durham Museum.
The museum is dedicated to preserving the history of the expansion of the western United States, with a particular focus on Omaha.
The expansion began in 1862 when Abraham Lincoln passed the first Pacific Railway Act2, whose stated purpose is below.
Aid in the construction of a railroad and telegraph line from the Missouri river to the Pacific Ocean, and to secure to the government the use of the same for postal, military, and other purposes. - Long Title, Pacific Railway Act, 1862
It was a major piece of legislation, the kind that happens once a generation.
The individuals and corporations who recognized its ramifications acted quickly and decisively. They aligned their interests with those of the act itself, thereby ensuring mutual success.
Studying the moves made by some of these individuals more closely, I notice three major lessons. These can be applied in response to any major piece of legislation or trend.
A cycle of cooperation was established
Unconventional compensation methods were utilized
Derivative business models thrived
2.1 A Cycle of Cooperation
With the passing of the Pacific Railway Act, a major goal was established. Namely, to build a railroad across the western US.
This job was too big to be done by one person or one group of people. Large-scale cooperation was required between various groups. Each group had its own skillset and motivations for being involved in the project.
Parties involved included the federal government, the Union Pacific Railroad, immigrant workers, and derivative businesses.
The cooperation worked because each party recognized both the skills and motivations of the others. Collectively they established a cycle of cooperation. One of the major benefits of the cycle is that it enabled cooperation to work in a cyclical manner.
The government cooperated with the Union Pacific Railroad to fund the project. Then Union Pacific cooperated with immigrant workers to build the railroad. Finally, immigrant workers cooperated amongst themselves to build the derivatives businesses that established the full economic ecosystem around the railroad.
2.2 Unconventional Compensation
The US Government provided Union Pacific Railroad with land along the railroad as a form of compensation for its construction. The US Government couldn't use this land without a railroad, but UPR was able to create a ton of value from it.
UPR sold the land to immigrants to the region. They attracted those immigrants with free train tickets for anyone who bought land from UPR. A few train tickets were virtually free to UPR, but they were very valuable to the individuals who made the move out west.
Later, the immigrants became UPR employees and long-term customers for cross-country transportation. They established the western economy the government was after.
We tend to think about compensation in terms of dollars and cents, but offering a resrouce directly can be what puts a deal over the line.
Often times we have something the other party needs, and it may be more valuable to them than it is to us.
2.3 Derivative Business Models
The first and most obvious impact of the Pacific Railroad Act were the new incentives to build a railroad.
This was just the beginning.
Over the next 150 years a number of derivative businesses catered to the new ecosystem that emerged around the railroad. These businesses sewed the seeds of wealth for generations.
These businesses fell into two main categories.
Catering to the dynamics of the new ecosystem.
The ecosystem began when Union Pacifc Railroad began construction. UPR required thousands of workers, and those workers needed to eat.
Sidney Buffet moved to Omaha from Long Island to take part in the boom. He recognized the need and started a grocery store. Over time he reinvested in the business as it grew and grew, providing jobs for family and friends.
For three generations the family continued to prosper until Warren Buffet, arguably the greatest investor of all time, solidified the families legacy.
Utlizing resources more efficiently with the new ecosystem.
In Omaha and in the surrounding region farmland is one of the main natural resources. Much of this land is home to cattle, or to the corn that is used to feed that cattle.
Prior to the existence of the railroad, the beef from the cattle typically stayed in the region.
As soon as Omaha was connnected to the rest of the country, the businessmen of Union Stock Yards recognized a unique opportunity. They began increasing supply massively and partnered directly with UPR to obtain favorable livestock shipping rates.
Soon Omaha beef could be found all over the country.3
Union Stock Yards saw a better way to make use of the natural resources and partnered with the main company of the new ecosystem to make that happen.
3. Big Spending Biden
President Biden has come out spending early on in his Presidency.
Not everything has passed through the senate and the house yet, but he certainly intends to spend. So far he has announced 3 initiatives that total over $6 trillion in spending.
The American Rescue Plan, $1.9 Trillion, passed.4
The American Jobs Plan, $2.3 Trillion, proposed.5
The American Families Plan, $1.8 Trillion, proposed.6
This is once in a generation level spending.
Regardless of how the plans impact the country as a whole, there will be individuals who fair very well because of it.
They will be the ones who take the time to understand the plans and either involve themselves directly in their initiatives or create derivative businesses enabled by the plans.
That’s it for this week. Thanks for reading. Here’s how you can support Humble Minds.
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I wrote extensively about psychological needs theories previously.
For more information on beef in Omaha, see this link.