This chapter examines the first seven years of Omar Torrijos’s military government, with particular attention to its efforts to build political institutions appropriate to the dynamics of class relations within Panama and the country’s evolving dependency on the United States. It describes the scene, in a theoretical, sociological, and historical sense. Key to an understanding of Panama’s contemporary politics is an understanding of the historical relationship between color and etbnicity on the one hand, and social class on the other. There are several weaknesses in Perlmutter’s approach that dilute its utility for understanding the Panamanian case. The Panamanian military came to power in 1968 as a result of a crisis in hegemony. The role of the middle class, especially that of teachers, has been important in Panamanian politics since at least the 1930s. The chapter also presents an overview of the key concepts discussed in this book.