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  • The Secret to America’s “Secret Sauce”

    John Manzella, The Secret to America’s “Secret Sauce”

    America’s “secret sauce” has provided tremendous advantages that no other country can. The “secret sauce” includes the U.S. system of free market capitalism, capital markets, rule of law, separation of church and state, entrepreneurialism, balance of power, the welcoming of immigrants, and a brilliant Constitution. Combined, these factors have promoted stability and created an environment empowering people to unleash their creativity to achieve their dreams.

    The role of immigrants and the wisdom of the framers of the Constitution cannot be emphasized enough. In many cases, the immigrants were young people like my grandparents who left their homelands with little hope of ever seeing their parents again, but with tremendous hope of securing a better future. They understood the difficulties they would incur, but possessed the necessary courage and resolve to persevere. This strength and determination continues to be reflected in all that is American.

    To borrow a phrase from Lord John Acton, a member of British Parliament in the 1860s, the framers of the U.S. Constitution understood an important fact: “absolute power corrupts absolutely.” The American experiment, which was founded on a philosophy and not a bloodline, clearly sets the U.S. apart. These factors, which promote opportunity regardless of individual differences, in great part are why America is the most powerful nation on Earth.

    Although not flawless, capitalism has generated the greatest economic growth the world has ever seen. At the core of its brilliance is its ability to create incentives to produce solutions to problems, and to distribute those solutions broadly. And in doing so, it has paved the way for tremendous gains in efficiency and productivity.

    No other system so rapidly raises up the living standards of the poor, so thoroughly improves the conditions of life, or generates greater social wealth and distributes it more broadly.When discussing its benefits, Michael Novak, the author of dozens of books on the philosophy and theology of culture, said “No other system so rapidly raises up the living standards of the poor, so thoroughly improves the conditions of life, or generates greater social wealth and distributes it more broadly. In the long competition of the last 100 years, neither socialist nor third-world experiments have performed as well in improving the lot of common people, paid higher wages, and more broadly multiplied liberties and opportunities.”

    Novak indicated that a free society requires economic liberty. He also stressed that checks and balances are to the political order what competition is to capitalism. Unlike many other countries, America is fortunate to have a strong system of checks and balances, as well as one that promotes competition. Nevertheless, Novak stressed the need to ensure these systems are well maintained.

    Few nations possess the American-like system of checks and balances that prevents any one group from permanently imposing its will on others. This balance is part of an important American formula that shepherds constant changes — some good, some bad — but always allowing for self correction. With all its flaws, for generations countless numbers of people worldwide have wanted to participate in the American experience.

    After dozens of speaking engagements in Mexico in the early 1990s, I found that many in the audience either had an American passport or badly wanted one.

    When I crossed through Check Point Charlie from West Berlin to East Berlin in March 1990, it was like entering a time warp. The grey unkempt landscape and dilapidated buildings in the former German Democratic Republic, known as Communist East Germany, looked as though that country hadn't been repaired since combat-ready American and Soviet tanks faced off yards apart in one of the world's most tense nuclear showdowns.

    While there I witnessed the dismantling of the Berlin Wall and observed the first free parliamentary elections held in that region since 1933. I also was told by countless East Germans of their wish to move to the United States in order to seek a better life.

    When visiting Nanjiang, China, I had the opportunity to address the Jiangsu Academy of Social Sciences, the provincial government think tank. Not surprisingly, I was asked about various problems associated with the United States’ political system.

    I could not help recalling a quote by Winston Churchill, who when asked about problems with democracy said, “It's the worse system except for all the others.” I answered the question and then explained how I believed China's leadership has made some excellent economic decisions for its country, especially with regard to how it spent its stimulus funds designed to ensure its economy would not falter after the Great Recession.

    But then I asked in a more polite way than this: what if future generations of Chinese leaders are not as intelligent?

    On a post-Great Recession trip to China, I sensed a heightened patriotism and a new confidence in the Chinese system, often referred to as “socialism with Chinese characteristics.” Still, young Chinese I meet often tell me of their desire to study in or permanently move to the United States. I have found this desire is shared by students and others from all over the world.

    When I entered Canisius High School in Buffalo, New York, our football team was on a winning streak that stretched well before I arrived. Prior to each game, our coach often spoke about our consecutive winning seasons and reminded us that our undefeated record was not guaranteed simply because we donned Canisius football jerseys. This overconfidence is not limited to sports.

    Many successful companies assume that since they have beat market expectations for lengthy periods of time, it’s virtually assured that they will continue to do so. But many forget why.

    Similarly, the United States has achieved remarkable results for generations. Many assume this will continue — not understanding the factors that have made this country truly exceptional. As a result, it’s essential to understand what’s in the “secret sauce” so we don’t poison it.

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