Note: A free response paper is a short essay which conveys your reaction to article you have read..

Do a free response reflection paper on Lincoln and the Global Economy posted under Week 5.

**Minimum seven hundred fifty to nine hundred words**

Instructions / Outline

• Summarize the article you read in one to two paragraphs.
• Responses include answering the following:

i. What do you think about the ideas in the article? Do you agree or disagree? Why?

ii. What ideas and/or facts you find interesting?

iii. How do the ideas in the article relate to other things you've read/watch in Module 3

iv. What do you notice about the way the article is written?

**Minimum seven hundred fifty to nine hundred words**

Article:

Abraham Lincoln and the Global Economy by Robert D. Hormats Harvard Business Review (August 2003) On a spring night in 1856, the side-wheel steamboat Effie Afton crashed into a railroad bridge spanning the Mississippi River between Davenport, Iowa, and Rock Island, Illinois. The ship burned and sank. This wasn't the first such mishap: Since the construction of this, the first railroad bridge across the Mississippi, captains unfamiliar with the man-made obstacle had banged into it many times. Claiming that the bridge was hazardous to navigation, the boat's owners sued the Rock Island Bridge Company for damages. More was at play here than safety. It was clear that rail traffic across the Mississippi could become an increasingly formidable competitor to river traffic. For boat owners, this was a chance to slow the growth of a challenger, if not stop it entirely. Indeed, the bridge owners were concerned not only about the suit but also about demands by shipping and port interests that the structureitself seriously damaged in the collisionbe torn down and new bridges be banned altogether. To defend them in court, the bridge owners wanted someone who knew both railroads and riverboats. They decided on an up-and-coming lawyer with a fair amount of experience in railroad litigation, a former one-term Whig congressman who had once been a river boatman himself. His name was Abraham Lincoln. This 150-year-old legal case would seem to have little bearing on today's global economy. But embedded in itand in Lincoln's arguments on behalf of the Rock Island Bridge Companyare many of the same tensions and conflicting economic forces confronting today's emerging nations. How Lincoln handled the conflict between entrenched interests rooted in the past and the imperatives of the coming new economic order holds surprisingly relevant lessons for today's international policy makers. A Nation in Turmoil It's commonplace to say that we live in a period of unprecedented change. But in the view of many historians, the America of Lincoln was a time of changes at least as jarring. The country entered the nineteenth century with a predominantly agricultural economy, composed largely of scattered rural communities. Then, in quick succession, steamboat service was introduced, scores of canals were constructed, thousands of miles of railroad track were laid, and countless new telegraph lines were strung throughout the country. Almost overnight, large numbers of what had been generally self-sufficient local economies found themselves, ready or not, part of a relentlessly changing and expanding national economy. Competition no longer came from the next town but from producers in many parts of the countryand from industries abroad. People traveled farther and more often. New technologies also changed the workplace, as Americans used to laboring for themselves or in small shops began to take jobs in the nation's growing number of factories. The rise of factory-based mass production and frenetic railway construction led to an economic boom. But the nation's growth was interrupted by financial crisesknown at the time as panicsin 1819, 1837, and 1857. These produced sharp increases in unemployment, large numbers of bankruptcies and farm foreclosures, and frequent runs on banks. Except for slavery, the subject of trade and tariff levels was the most regionally divisive topic in American politics during the nineteenth century. Not surprisingly, many antebellum Americans resented the developments that led to this volatility, whatever the long-term economic benefits. Most Americans still thought of themselves primarily as residents of their own stateswhich were often referred to as "countries"rather than as citizens of a wider American nation. To many, the erosion of the economic boundaries separating communities and states, and the increasing competition from other regions, came as a shock. Foreign competition, too, threatened jobs and social stability. In Northern states, where the products of newly established steel and machinery-manufacturing plants had to compete with European imports, protectionist pressures were strong. Except for slavery, the subject of trade and tariff levels was the most regionally divisive topic in American politics during the nineteenth century. The growth of manufacturing led to complaints that workers were being exploited. Many saw "wage slavery"as opposed to self-employmentas antithetical to the principles of freedom and independence on which the country was founded. Protests also arose over widening income inequality, as some sectors of the economy expanded much faster than others, and those who invested or worked in the fastest-growing areas or industries reaped large gains. Enormous tensions built up between those who could benefit from the economic changes and those who felt threatened by them. Some of these tensions were reflected in the Effie Afton case. Lincoln, relying upon his own experience on the Mississippi and a firsthand examination of the site, argued that the boat's pilot could have avoided the accident if he had paid more attention to the currents. (There had even been whispers that the Effie Afton had intentionally rammed the bridge with the aim of destroying it.) But Lincoln also addressed broader issues, criticizing those who were using the case as a way to halt or reverse the economic progress ushered in by the railway. He was all in favor of expanding Mississippi River traffic, he said. But, with the arrival of the railroad, "there is a travel from East to West, whose demands are not less important than that of the river. It is growing larger and larger, building up new countries"even Lincoln used this colloquial term for states"with a rapidity never before seen in the history of the world." Lincoln's defense of the bridge companywhich was ultimately successful when the jury was unable to deliver a verdictnot only reflected the issues and tensions of the time but also highlighted one of Lincoln's own interests: bolstering the national economy through the development of the American West. Clearly, Lincoln's extraordinary role in history lies in his preservation of the Union and abolition of slavery. But his preoccupation in the early years of his political career, well before he became engaged in the antislavery fight, was the development of the U.S. economy. And the success he and Republican legislators enjoyed in the election of 1860 was due in large part to their economic policies. These included government support for expansion of the nation's railroad network and for homestead laws that gave Eastern factory workers and farmers the opportunity to settle Western lands. In fact, the Republicans' economic platform served as a sweetener to substantial portions of the electorate that were largely ambivalent about the party's antislavery views. Taken as a whole, the policies were designed to cope with, and expand the benefits of, the tumultuous technological and economic changes that were shaking America. The successful implementation of those plansachieved in the midst of the most disruptive event in the country's history, the Civil Warcontributed to the creation of a huge national market, a strong and unified economy governed by national institutions, and a rising middle class of businessmen and property owners. These together helped transform a rural and developing country into a more modern and prosperous nationthe precursor of the America we know today. Lessons for the Global Economy Lincoln would have well understood the challenges facing many modern emerging nations, particularly large and diverse ones such as China, Russia, India, Brazil, and Indonesia. Of course, the context is different. Today, the forces of economic disruption are generally external rather than internal. The source of turmoil is the rapid expansion of international commerce, finance, communications, and transportation, which is inexorably drawing industrialized and emerging nations together into one large global economy. But many of the consequences of globalization are the same as those known to nineteenth- century Americans. Today, as then, sweeping economic change threatens older industries, traditional ways of living, and social and national cohesion by exposing economies and societies to new and powerful competitive forces. Emerging nations and former Communist countries, once only loosely connected to the global commercial and financial system, feel the shock waves of periodic economic crises resulting from the rapid exodus of foreign capital and sudden adverse shifts in international trade flows, which lead to large numbers of lost jobs and bankruptcies. Some individuals, groups, and regions initially benefit greatly from expanded opportunityfrom the ability to sell more abroad, work for foreign companies in their own countries and overseas, or obtain foreign capital for their businesses. Others, however, usually the least educated and least skilled, feel left behind and disfranchised. Now, as then, we also hear charges of worker exploitation, this time because multinationals have established manufacturing facilities in low-wage countries. And, in another echo of Lincoln's time, there are calls for protectionist measures. These come not only from companies and workers in industrialized countries, who must compete with lower-priced goods from emerging economies, but also from companies and workers in emerging economies, who must compete against the industrialized economies' more technologically advanced products.

Figuring out how to maximize the benefits of globalizationthe potential to increase exports, spawn a new generation of entrepreneurs, and attract foreign investmentwhile minimizing its disruptions is a formidable challenge for policy makers. Many people in emerging nations have the skills, the agility, the resources, and the entrepreneurial capacity to take advantage of new opportunities; many others, probably a significant majority at the outset, do not. How do you expand opportunities for the formerand include in that group more than the political elite and the well educatedwhile supporting the latter, so they don't fall further behind and become alienated from society? One could benefit by looking to Lincoln and the Republican Congress that came to power with him after the election of 1860. Emerging economies today are unlikely to replicate their policies per se. But much can be learned from the principles that informed those policies: Facilitate the upward mobility of low- and middle-income groupsand give them a significant stake in their countryby increasing their opportunity to own property and establish businesses. Emphasize the good of the national economy over regional interests. Affirm a role for governmentand the need for sound government institutionsto support the economic and technological changes that emerge from the dynamics of the free enterprise system. Tailor your policies to your own national situation. Realize that a period of turmoil, while potentially a barrier to reform, may also present a unique opportunity. These principles drove the reforms that helped Americans cope with and benefit from rapid technological change and the fast integration of the American economy in the nineteenth century. They may be instructive to contemporary policy makers in Beijing, Moscow, New Delhi, Brasilia, Jakarta, and elsewhere who struggle to help their own citizens in the fast-changing, rapidly integrating global economy of the twenty-first century. Economic Opportunity for All Lincoln believed in the American dream. After all, he was a living exemplar of it. "I am not ashamed to confess that 25 years ago I was a hired laborer, mauling rails, at work on a flatboat just what might happen to any poor man's son," he once said. And he had great faith in the abilities of others to realize that dream, if given the chance: "The prudent, penniless beginner in the world labors for wages awhile, saves a surplus with which to buy tools or land for himself, then labors on his own account another while, and at length hires another new beginner to help him." To Lincoln, the promise of upward mobility was key both to the nation's economic growth and to its social stability. It was in the churning energy and desire of Americans, their quest to improve their lives, that Lincoln saw the great promise for the country. Government's role was to ensure that they had the opportunity to succeed in this quest. He flatly rejected the popular notion that society needed a permanent class of low-wage workers to provide the foundation for economic progressan idea that in its most extreme form was the rationale for slavery. The cornerstone of his policy was the concept of "free labor"the notion that all Americans, whites and blacks alike, deserve the chance to advance in life. Indeed, just as Lincoln argued that America could not sustain itself as a nation half slave and half free, so he also believed that it could not sustain itself 5% rich and 95% poor. Without sufficient opportunity for lower- and middle-class Americans to get ahead, Lincoln feared, the country would suffer from the kind of divisive class warfare that was spreading in Europe. Even in America, political and social unrest was growing, the result of widening income inequality between rich and poor. (By 1863, the top 1% of New Yorkers held 61% of the city's wealth.) Steps needed to be taken to ensure that a large portion of societyincluding the increasing number of immigrants coming in search of new opportunitiesdidn't feel that the road to prosperity was blocked. Lincoln made no apology for the fact that economic development would initially benefit some Americans and not others. The wage premium for skilled workers on the railroads and in the new factories was high, fueling resentment among less-skilled workers. But the fact that many of these unskilled workers lived in squalid conditions with little immediate hope of improving their lives didn't undermine Lincoln's belief that they had the potential for upward mobilityor if not, that their children did. For this reason, he rejected outright the idea that Northern factory workers were worse off than Southern slaves because, in the words of one Southern politician, slaves were "hired for life and well compensated" while manual laborers were "hired by the day, not cared for, and scantily compensated." Lincoln and his Republican Partylike the Whig Party to which he had previously belonged believed that free-market capitalism was the best way to create economic opportunity. But Lincoln did not believe in a laissez-faire approach; he favored proactive policies to achieve this goal. One such policy was promoting property ownership. The opening up of the American West, already viewed as a key to the nation's economic growth (recall Lincoln's passionate arguments in the Effie Afton case), presented an opportunity to further this aim. The Homestead Act, passed by Lincoln's Republican Congress, not only offered settlers 160-acre parcels of land but also established a single uniform national system for granting them clear title to it. The program was in line with Lincoln's belief that "it is best for all to leave each man free to acquire property as fast as he can." Congress and the Lincoln administration also took into account the economic interests of lower- and middle-income Americans through radical tax reform. Before the Civil War, the federal government had depended on tariffs for more than 90% of its revenue, with land sales accounting for most of the rest. But the enormous cost of the war required other sources of income. So, in the face of bitter opposition from wealthy Americans, among others, Congress passed legislation imposing a federal income tax. Even more controversial, the tax rate was progressive, although modestly so by today's standards. The tax rate initially was set at a uniform 3% of annual income, but people below a certain incomeand that included most wage earnersweren't required to pay the tax at all. Later legislation required wealthier Americans to pay at a 5% rate, and then a 10% rate, with lower brackets for lower income groups. Although the Civil War income tax was abolished in 1872, the precedent had been set for today's progressive tax system. To Lincoln, the promise of upward mobility was key both to the nation's economic growth and to its social stability. Finally, Congress sought to enhance educational opportunities. It passed legislation granting federal lands for "institutions of agricultural and mechanical instruction"; in many cases, these quickly became general universities. The legislation also encouraged the admission of women to state universities. One of the most progressive pieces of legislation passed in the nineteenth century, this act broadened educational opportunities in Western states and ultimately throughout the nation, thus reinforcing the role of government in promoting upward mobility. Over time, the Lincoln administration's policies helped many Americans to markedly improve their standard of living. Although they didn't eliminate the enormous wage disparities between the very rich and the very poor that became the focus of social reformers in the early twentieth century, they did foster a sense of well-being and dignity among the growing middle class of property owners. This enabled the United States to resist the worst aspects of class warfare that broke out in Europe at the turn of the twentieth century and the destabilizing and repressive collectivist movementssocialism, communism, and fascismthat arose in response to this strife. What lessons do Lincoln's upward mobility policies hold for today's emerging economies? A major charge against globalization today was also leveled against the rapidly integrating American economy of the 1800s: that the educated elite and skilled professionals improve their situation while the vast majority see little immediate benefit and often feel marginalized. This makes Lincoln's pro-opportunity agenda, which laid the foundation for future American economic and political stability, worthy of consideration by developing nations. America's experience suggests that initial increases in income inequality need not cause policy makers in emerging economies undue concern, provided they have a plan in the medium term to narrow the gap. Of course, not every nation has a vast frontier that allows for a program like America's Homestead Act. But even legislation that grants people clear title to land they now occupy can go a long way toward fostering the stability inherent in a large property-owning class. As for tax policy, the important lesson from the American experience is that revenue should be generated in ways that are visibly fair but don't stifle growth or entrepreneurial ambition. Emerging-economy governments have too often erred on one side or the other of this balance: Some have pursued social goals through unrealistically high taxation on the wealthy and on business, thereby driving investment away; others have let ruling elites get away essentially untaxed, often by winking at corruption and tax evasion. The institution of a progressive income taxbut with the highest tax bracket kept at a modest levelwas critical to the Lincoln administration's ability to raise revenues needed to sustain the war effort in a way that was seen as socially equitable but did not impede capital formation or growth. Indeed, investmentnot only in railroads but also in factories of all sortsboomed during this period.

A Unified National Economy Reducing the threat of class warfare wasn't enough to ensure political and social stability. Without a robust national infrastructure and cohesive national economic institutions, Lincoln believed, the country would suffer from worrisome regional divisionsdivisions that would last well beyond the Civil War and would divide Northern states as well. Before the war, states were discrete and powerful political and economic units. Regional jealousiesnot just between the North and the South but also between the urban East and the rural Westwere strong. States in one part of the country frequently attempted to block federal financing of a canal or a harbor in another part on the grounds that it did not benefit them. Lincoln fought such parochialism. In a speech made long before he became president, he cited the benefits of the recently completed Illinois and Michigan Canal. It ran entirely within Illinois. But because of it, sugar, for example, could be carried from New Orleans to Buffalo, New York, more cheaply than along the old coastal route. This benefited both the merchants of New Orleans and the people of Buffalo, who, in Lincoln's words, "sweetened their coffee a little more cheaply than before." To Republicans, such infrastructure projectsknown at the time as "internal improvements" were vital to America's economic development and were an important way to bind the nation together, both physically and psychologically. They fostered interstate commerce, allowing Western farmers to send their products to burgeoning Eastern markets, and Eastern factories to send their goods to the booming West. They promoted geographic mobility, letting more Americans move to, and prosper on, the frontier. The most notable project championed by the Lincoln administration was the first transcontinental railroad. The Republican Party committed itself to this project in its 1860 platform; Congress authorized it in the Pacific Railway Act of 1862. That legislation gave developers generous rights of way, large amounts of additional land on each side of the track, and hefty subsidies. This and other legislation helped to nearly double the miles of railroad track in the nation in the ten years between 1860 and 1870, a period dominated by the traumatic events of the Civil War. In 1869, the Union Pacific and Central Pacific lines were joined, connecting the continent. Most emerging economies today face regional rivalries like those of Lincoln's America. Many of these contemporary divisions are sharpened by intense ethnic rivalries. Still, the gradual transformation of the United States from a collection of states into a nation, in part through the creation of a national transportation infrastructure, can serve as an inspiration to modern countries. A central element of the Republicans' economic policy was something almost universally reviled by economists today: protectionist tariffs. If there is a caveat to the extraordinary expansion of America's railroad network, it involves the absence of regulation to accompany the government's generous support for the railroads. The railroads successfully resistedin court and in Congresscurbs on their growing economic power. The resulting unregulated competition led to overbuilding, stock market crashes, corruption, and ultimately an oligopolistic industry. For the leaders of emerging economies, the American experience with railroads is a good lesson in the dangers of providing government support for an industry without also putting in place sufficient or effective regulation. An Active Government Role Supporting the formation of a national railroad infrastructure wasn't the only way Lincoln fostered national cohesion. His administration also established national financial institutions to reduce economic instability and help Americans take advantage of a nationwide marketplace. But unlike in the railroad industry, the federal government imposed regulations on an undisciplined banking industry that had frequently contributed to, and had often caused, disruptive swings in the economy. Most Americans were deeply distrustful of concentrating a lot of power in the federal government and giving it a significant role in managing the economy. At the time, there was no central bank, like today's Federal Reserve, to control the money supply and regulate the banking system. A hodgepodge of state-chartered banks, varying in size and quality, issued notes backed by their own assets and operated with little oversight. Frequent runs on banks and periods of erratic expansion and contraction of bank credit triggered violent booms and busts. Often banknotes lost much or all of their value if the bank collapsed, or excessive credit creation led to rampant inflation. Particularly for Americans who lived in the West, South, and other rural areas, Eastern banks were threatening and alien institutions. Many banks also were closely connected to local politicians and engaged in what today is called crony capitalism. Lincoln was particularly sensitive to this problem. "Nothing," he said, "is better calculated to engender heartburnings and to enlist enemies of the most hostile character against a bank than for the community to entertain the belief that the institution is used for the benefit of the few to the exclusion of the many." One possible response to such failings was the revival of a national bank, a permanent successor to two temporary institutions that had been created earlier in the country's history. Such an institution would maintain a stable currency and an adequate money supply. But populist resistance to the concentration of so much financial power in one institution torpedoed the idea. So the administration pursued the same end by a different means, successfully pushing for legislation that created a decentralized but federally regulated national banking system. Individual banks, located in various parts of the country, were chartered as national banks and authorized by the federal government to issue banknotes. To obtain this privilege, they first had to buy federal government bonds from the Treasury. These bonds secured the notes the banks were empowered to issue. This move pumped needed money into the overall economynot just in the industrial East. The national banks were subject to federal inspection by the newly established office of the Comptroller of the Currency, resulting in institutions that were generally better managed than the state-chartered banks. In another bold move, Congress passed legislation authorizing the Treasury to issue its own notes. Those notes, printed on green paper to distinguish them from private banknotes (usually printed on white paper), came to be known as "greenbacks." They were the first paper currency issued directly by the federal government. Creation of the U.S. Federal Reserve was, of course, not to come until 1913. But the dramatic currency and banking reforms of the 1860sthe establishment of a single, uniform currency and a better-regulated national banking system went a long way toward creating an integrated national economy, making it much easier for American businesses and financiers to operate across the nation. Today's critics of globalization point to financial crisesthe Mexican financial crisis of 1994, for instance, or the Asian crisis of 1997as signs that the existing system isn't working. They charge that volatile inflows and outflows of money disrupt emerging economies, causing dramatic booms, which benefit the rich, and mighty busts, which hurt the poor. They vilify the financial institutions, international as well as domestic. But again, as in Lincoln's time, the solution is effective reform and regulation. While each emerging nation will need to establish its own priorities and methods for bank reform, the fundamental principles of America's reforms in the 1860s hold a few simple but useful lessons. A poorly regulated and fragmented banking system leaves the entire economy vulnerable to crisis. If banks, or the overall banking system, are perceived to be run for the benefit of insiders and thus inimical to the interests of large numbers of citizens, they become targets of domestic resentment. And strong national institutions are needed to resist the centrifugal tendency of states and provinces to establish their own financial regulations or reinterpret national regulations in response to local political pressures. Policies to Fit the Place A central element of the Republicans' economic policy was something almost universally reviled by economists today: protectionist tariffs. While Lincoln strove to promote interstate commerce by removing economic barriers between regions, he was a long-standing opponent of unrestricted free trade with other nationsa philosophy that was at the time gaining support in Europe and embraced in much of the South. Tariffs, he and his fellow Republicans believed, were necessary to protect the nation's infant industrial sector from foreign competition. In an ironic reversal of more recent political positions, the Democrats, then primarily a party of the South, generally opposed high tariffs because they inflated the prices farmers and plantation owners had to pay for machinery imported from Europe or purchased from America's protected manufacturers in the North. And the South needed to export its cotton, so it did not want to give Europeans an excuse to erect high tariff walls of their own. Who knows if Lincoln would support protectionist policies for emerging nations in today's quite different environment. He might ultimately agree with his Democratic contemporary, William Cullen Bryant, "that competition with foreign producers would stimulate the growth and progress of American firms, while protection would only encourage sluggishness." But Lincoln's position on tariffs illustrates his belief that a nation must tailor its policies to its own political, economic, and social circumstances rather than automatically implement imported or academic models.

Had there been a World Bank in the 1850s to promote large infrastructure projects, or an International Monetary Fund to insist that the United States make a strong central bank, the advice would have been bitterly resisted by many Americans. Such developments had to emerge from domestic political decisions that grew out of many years of debate among competing domestic constituencies and political philosophies. Similarly, attempts from abroad to force through domestic policy changes on today's emerging economies create enormous resistance and backlash. For example, the consensus formed by the IMF and the World Bank in the 1990s favoring the rapid introduction of market-opening reforms in emerging economies has recently encountered strong opposition. Many in developing countries feel that opening up their economies to foreign capital and competition too quickly has rendered their countries vulnerable to substantial economic and social disruptions before they had time to develop the domestic institutions and the social and geographical cohesion needed to cope with those dislocations. Critics of the rapid opening of economies point to the success of emerging economies like South Korea and Taiwan, which for years maintained high levels of protection and government support for domestic industriespolicies that closely resemble those of the Lincoln administration. If he were here today, Lincoln would undoubtedly caution international policy makers and institutions about imposing doctrinaire policies on emerging economiesand possibly even encourage those nations to resist such attempts. At the same time, he would argue forcefully that these countries themselves should establish robust domestic economic institutions to cope with changing circumstances and not give in to those who resist domestically driven promarket reforms. Opportunity Amid Turmoil The Civil War presented an unusual opportunity for Lincoln and congressional Republicans to make sweeping changes in America's economic institutions. For much of the nineteenth century, powerful Southerners in Congress had blocked economic legislation of the kind Lincoln and his Whig and Republican colleagues promoted. The resistance partly resulted from Southern fears about expanding free labor in Western states. It also stemmed from the agrarian South's resistance to policies that would help the "new economy" of the North, with its strong banking and manufacturing interests. But, as I've noted, opposition also reflected genuine philosophical differences over the proper role of the federal government in the economy. Democrats of the time generally favored a small economic role for Washington, arguing that the Constitution granted the government only limited power to legislate in such areas as infrastructure improvements and banking. The Whigs and later the Republicans argued that the Constitution allowed for more extensive economic legislation and a greater economic role for government. Had there been an IMF in the 1850s to insist that the United States make a strong central bank, its advice would have been bitterly resisted by many Americans. Then, Southern legislators left the Congress as 11 Southern states seceded from the Union. That left a Republican in the White House and a Republican majority in Congress. Secession effectively removed obstacles to the passage of economic legislation that Lincoln's party favored. In fact, the first year of the Lincoln administration has been compared to the first hundred days of Franklin Roosevelt's New Deal in the scope of the reforms accomplished and in the way it reshaped the relationship between the federal government and the economy. The demands of the Civil Warbloody, expensive, and protractedeasily could have postponed the Republicans' economic agenda. Just after Lincoln took office, fear of war produced another run on the banks, and the Treasury could not pay its bills. Yet despite the turmoil, the administration and Congress instituted the series of dramatic reforms that greatly expanded economic opportunity for millions of Americans and strengthened considerably the economic cohesion and financial institutions of the country. The crisis energized the reformers. The very fluidity of the situation permitted America's leaders to drive the reform process forward against entrenched interests. The need to strengthen the fabric of the American society and economy in light of disruptive forces created the sense of urgency required to enact and implement these reforms very quickly. Lincoln's personal role in many of these changes was limited. His preoccupation with the war meant that he had to turn much of the day-to-day responsibility for economic governance over to his treasury secretary and to fellow Republicans in Congress. He did so recognizing that his mandates and philosophies were virtually the same as theirs. Lincoln certainly would reject the argument of many in emerging economies today that, because they face political or economic difficulties at home or abroad, they can't be expected to implement bold reforms. He undoubtedly would reject the notion, proffered by some leaders in the Arab world, for example, that their poor economic performance and lack of market and education reform can be blamed on the prolonged period of tensions with Israel. Quite the contrary: The current period of political turmoil in Iraq and the Middle East in general could present an opportunity remarkably similar to the one Lincoln seized. In the view of some analysts, many of the region's problems stem from the absence of a progressive education system, heavy layers of government intervention that discourage entrepreneurialism, and the domination of economies by a small elite. The sense of urgency should be at least as acute in the twenty-first century Middle East as it was in nineteenth-century America. Most of its economies have fallen behind those of many other emerging nations. Internal divisions in these countries are only likely to grow if these nations do not prosper and if greater numbers of their people do not perceive a larger stake in, and the opportunity to benefit from, that prosperity. Emerging Economies Across the Years Abraham Lincoln inherited a country riddled with internal conflictnot only between North and South but also between cities and rural areas, Eastern states and frontier states, workers and industrialists, and advocates and opponents of a greater role for government in the economy. His aim in trying to make a unified national economy was to reduce disparities and convince Americans that their common good depended on the cooperation of social groups and regions that had perceived their interests to be in conflict. The relevance of these ideas to today's world makes it tempting to extend certain analogies too far. For symmetry's sake, it might be nice to argue that given the tremendous economic growth of the United States over the past 150 years, today's world should adopt at a global level the kinds of policies and institutions Lincoln and his colleagues adopted at a national level. But Lincoln's economic principles are relevant today not because they provide a framework for an elaborate new economic governance structure for the world. They're relevant because they can help emerging economies seek a path toward integration into the rapidly changing global market economy. In fact, in some ways, today's developing nations are analogous not just to the United States of Lincoln's time but to the individual states as well. They are like the United States in their need to build a robust and cohesive national economy with a strong federal role and increased opportunity for all economic strata. But they are like the states in their need to integrate into a larger economyin this case a global oneand to reap the fruits of being part of it. The IMF, the World Bank, the World Trade Organization, and other international institutions would do well to consider the lessons of Lincoln's economic policies. Their advice, along with that of industrialized nations, has an important influence on the development agenda for emerging economies. But Lincoln's policies are particularly relevant to leaders and policy makers in the emerging nations themselves. President Putin in Moscow, President "Lula" in Brasilia, and President Hu in Beijing face many of the same issues President Lincoln faced. They each govern a big and diverse country, with a rapidly changing economy. They confront powerful regional disparities and economic divisions. Their banking systems are relatively weak, and their economic institutions are often untested and evolving. Powerful groups demand more opportunity and less government interference in their quest to benefit from the forces of change, while other groups, no less powerful, demand more government support and protection from those same forces. The threats of class warfare and regional disaffection are never far away. In responding to such challenges, these leaders may draw insights from their own countries' histories or from the experiences of today's other emerging economiesor, somewhat surprisingly, from the experience of Abraham Lincoln and mid nineteenth-century America.