Key Messages
Understanding America Through the Lens of Economics: How Capitalism Shaped US History
Bhu Srinivasan, author of Americana, realized that his movements around the country had been mainly economic in nature.
It was economics that had first brought his family to the USA and then defined their time there.
And he understanded this same truth was applicable to millions of other Americans- it was capitalism that drove people’s actions and decisions related to money, job opportunities and more.
In Srinivasan’s powerful book Americana, readers will learn how the United States has been shaped by capitalism from the very beginning.
Readers will discover how the Mayflower was financed using sophisticated capitalistic strategies; how the economics of slavery spurred one of the most devastating civil wars in history; and how Theodore Roosevelt used federal government to open up untold economic opportunities for generations.
Essentially, you’llfind out just exactly how much capitalism has influenced American history and identity is laid bare in these incredible sections.
The American Revolution: From Venture Capitalism to Securing Freedom and Profit
The voyage of the Mayflower and the subsequent settling of the pilgrims in New England in 1620 were financed by a group of investors from England via the Virginia Company of London.
This was an early form of venture capital funding, showing how close the connection between America and capitalism was right from the start.
Opportunities for traders back in England soon arose, as beaver skin, tobacco, and other goods made their way to the New World.
But what followed next was a power struggle over taxation without representation, culminating with Bostonians throwing tea into their harbor in protest- an event that signaled the start of the Revolutionary War.
So while American independence may have also been an issue of securing freedom, it all began as an economic matter: colonial inhabitants no longer wanted to provide profits solely for Great Britain across the ocean.
From marine investments to merchant ships filled with tea to war debts: Early America’s relationship with capitalism has always been there – although its true power did not reveal itself until much later on.
The Rise of American Capitalism: How States and Companies Utilized Innovations in Technology for Commercial Benefit
As the United States of America grew in the 19th century, its transportation networks developed right alongside to meet its needs.
From steamboats to canals to railroads, each transit system enabled rapid and efficient travel within the vastness of America’s geography.
The steamboat was one of the first steps taken towards improving terrestrial transit.
Robert Livingston and Robert Fulton were two men at the forefront of developing a boat powered by steam, spurred on by rewards offered by New York state officials in return for their invention.
This led to a commercial river transit monopoly, stimulating competition between rival companies for greater efficiency.
Steamboats remained an effective way to traverse America’s waterways until more efficient railway systems began springing up in the early 1830s.
The Erie Canal was an iconic project from 1825 that connected Buffalo in western New York with Albany in the east – it was so successful that it inspired equivalent projects across America for smoother and faster connections between cities.
Railroads funded by public money and given eminent domain rights became big business, providing jobs as well as quicker trade opportunities throughout towns and villages nationwide.
Overall, every major advances made in transport throughout this period had a huge contribution to making what we now know as modern-day America – a continent capable high speed transit networks!
America in the 19th Century: Exploiting Nature and Embracing Innovation
The economy of the American South was heavily built on the foundation of cotton and slavery.
However, this proved to be no match for the quickly developing North.
The Southern culture heavily relied on enslaved people not just for the labor they provided but also as loan collateral for those seeking out financial assistance.
The value of these individuals totaled an astonishing $2.8 billion in 1859, making up a huge part of the region’s economy.
When Civil War broke out, however, the vulnerability of this economic model was laid bare in comparison to that of its Northern counterpart.
The North managed to block access to many ports within the South, which cut off trade and hindered their ability to obtain necessary resources such as iron needed for railway repair and maintenance – something the North hadn’t been hindered by.
Additionally, the Pacific Railway Act passed in 1862 linked coast-to-coast railroad tracks that allowed rapid communication across the country – a benefit again only afforded to those living in Northern states due to its clearance through Congress before war had broken out.
Finally, a discovery of oil within Pennsylvania two years prior to Civil War further boosted industry in Northerly regions as opposed to Southern areas where labor would struggle once abolished; furthermore it defined how capitalism developed thereafter across America due to its abundant resources available at both ends of its borders.
In conclusion, it is clear that despite having a powerful economy based upon cotton and slavery that was initially competitive with that of its Northern counterpart, in terms (once Civil War had erupted) it could not match up against many factors more accessible within regions closer towards industrialization and innovation outpacing it from afar.
The Rise of the American Inventor During the Post-Civil War Boom
The late 19th century saw a golden period for innovation in America.
Ever since the invention of the cotton gin, the country had made a name for itself as a hotbed of invention and genius.
It all started with Samuel Morse’s development and championing of telegraphy, which enabled messages to be sent across long distances as early as 1843.
This in turn was developed parallel with the railroads, playing an important role in the Civil War.
Post-war years yielded some remarkable inventions including the typewriter by E.
Remington & Sons, the gun making company whose main product demand decreased after the war.
The typewriter not only generated words but also employment – typing was one of very few occupations available to women at that time!
The Gilded Age: How Government Protection and Innovative Entrepreneurship Led to Business Success in America
The Gilded Age, a period in which great American entrepreneurs and investors found huge success, was characterized by two of its leading magnates: John D.
Rockefeller and Andrew Carnegie.
Together, they used their business acumen to take advantage of opportunities in the oil and steel industries.
Rockefeller had an eye for numbers and quickly realized that efficiency was key to success in the complex process of oil extraction, transportation, and refining.
He borrowed large sums of money to expand his facilities and develop a streamlined production process, paying handsomely to buy out his business partners.
Carnegie, an immigrant from Scotland who had become a successful investor almost as soon as he landed in America, transformed the steel industry with the help of US tariffs on British steel imports.
Their successes drove one of the most prolific economic booms in American history during this Gilded Age – proving just how influential these two men were on defining the era itself.
The Rise of Government Intervention in the American Economy: From William Jennings Bryan to Theodore Roosevelt
As the 20th century started, the government began to take a more proactive role in controlling how businesses should operate.
This shift was seen most vividly when Theodore Roosevelt became President after his predecessor William McKinley was assassinated.
He intended to use his power to regulate conglomerates and trusts; corporations that were so large they had monopolistic control over certain industries and were deemed a threat to free markets.
He also saw it as the government’s role to ensure fair competition, promote consumer protection and maintain balance between labor and capital.
This idea of governmental interference was further illustrated by the 1906 Meat Inspection Act passed by Congress, after Upton Sinclair’s novel The Jungle highlighted detrimental working conditions in meatpacking factories and poor hygiene standards.
By taking steps like this, Roosevelt set an example for the rest of the century which would see regular interventions from state governments, aiming to strike a balance between private businesses and public welfare.
The War and Government Intervention Showed How Necessary Regulation Is for Economic Stability
The USA’s involvement in World War I in 1917 had a great impact on the government’s role and regulation of the economy.
Suddenly, the government needed to fund its essentially unprepared military at very short notice and this meant increased tax revenue, with income tax playing a huge role.
To finance the war effort, the government became a major client for industrial services such as shipbuilding and gunmaking, effectively taking control of the railroads as well.
Even after the end of WWI, the government maintained an active role in overseeing and regulating economic activity.
This was especially evident when prohibition was introduced in 1920 as a result of reduced reliance on alcohol taxes.
However this was poorly thought-out and it led to several issues such as black markets, bootlegging and illegal breweries thriving.
When disaster struck with the stock market crash in 1929 and Herbert Hoover lost his presidential candidacy to Franklin Delano Roosevelt in 1932 due to his inaction, FDR stepped in with sweeping powers granted by Congress through his New Deal program to correct the faltering economy.
This marked another huge acceleration of government control over all aspects of economic life – much like wartime regulations were -and showed that during times of crisis, the state’s involvement often escalated drastically.
The Second World War Revolutionized the American Economy with Suburbs and Highways Leading to New Cultural Shifts
The return of more than 15 million soldiers to civilian life after World War II created an urgent need for housing.
Bill Levitt, a former navy officer and real estate developer, stepped up and proposed a solution: the sprawling suburbs that Americans still live in today.
His idea was to make these homes quickly, efficiently and to an uniform standard in order to maximize affordability.
This proposal was uniquely suited for the time – with its neat formula, reminiscent of Henry Ford’s Model T production line – but it also had unintended consequences.
By making these homes available only to white Americans, it set off a cascade of events that has been linked to the disparity among racial groups when it comes to homeownership – African-Americans were largely excluded from the boom and stayed put in cities or had to buy overpriced properties elsewhere.
The development of suburban areas after World War II transformed the American cultural landscape — but only those who were invited got access.
It unleashed great economic opportunities for those who could take advantage of them but left others behind.
This marked a huge shift in how people lived their lives, as they moved out of cities into cleaner environments while being able to maintain familial and social connections within different neighborhoods thanks to the expansion of transportational routes within them.
As such, this period offers important lessons about our current society’s trend towards increased inequality due to systemic discrimination.
The Unforeseen Consequences of the Interstate Highway System: Suburban Sprawl, Oil Dependency, and the Rise of Fast Food Franchises
The US highway system and its accompanying construction was a key player in shaping the American economy.
President Eisenhower’s $33 billion investment in 1956 resulted in 41,000 miles of interstate highways, connecting all major cities across the land.
This boost to transportation had long-lasting effects on businesses large and small.
As highways made it easier to travel longer distances quickly, roadside establishments like gas stations, diners and motels were suddenly at risk if they weren’t located close to an exit ramp.
Take for example the gas station that Harland Sanders operated for decades in Corbin, Kentucky – he was forced to close it up due to lack of business caused by the new highway system.
However, Sanders didn’t give up.
He decided to franchise his popular recipe for fried chicken which could now be accessed more easily with an improved transportation network – thus Kentucky Fried Chicken (KFC) was born!
Similarly, highways also enabled McDonalds Corporation’s success as customers had easier access to their drive-in locations; plus their efficient food preparation system led them to becoming a franchised fast food powerhouse.
How the US Became a Hotbed of Computing and Tech Innovation
The incredible technological advances in computing revolutionized not only the way we lived, but how we earned our money too.
The potential of computers was recognized from its early days in 1890 when Herman Hollerith stored information about US citizens on a punch card fed into a machine in the Census office.
This discovery transformed the computing industry rapidly and soon IBM saw an immense demand for their computers.
Seeing an opportunity to make money, Ross Perot founded Electronic Data Systems to provide programming services to businesses – even Wall Street bankers urged him to go public in 1968 with them valuing his company at $150 million.
Not long after, Intel was formed and by 1971 went public within just 3 years.
Furthermore, 8 engineers from Fairchild Semiconductor went on to found Kleiner Perkins and Sequoia who were renowned for funding tech success stories.
It’s no wonder that as technological advances in computing soared, so did its economics; the founders of such remarkable companies changed the game with their momentous contributions paving the way for future billionaires and tech giants alike.
The Economic Rise of the Late 20th Century and the Coexistence of Capitalism and Democracy
The relationship between American capitalism and democracy has been a long one, and despite the heady, crazy days of the dot-com bubble in the late twentieth century, it remains intact.
This is evident in Warren Buffett’s acquisition of Berkshire Hathaway—a textile company that was transformed into a finance juggernaut with his direction.
It is also evidenced by innovative companies like Netscape, Yahoo!, Apple, and AOL that quickly seized new opportunities through their stock offerings.
However, even these successful ventures were not without significant financial risks; Netscape and AOL both were eventually eclipsed by Microsoft , while the ambitious merger between Time Warner and AOL spelled doom for its shares – proving that not every money-making venture is successful.
But ultimately American capitalism works in tandem with its democratic framework to enable growth—innovative products from Silicon Valley seek to meet consumer demands while businesses have to manage inequality issues such as those highlighted by Occupy Wall Street protesters at the death of Steve Jobs.
Despite such periodic social pressure for reform, it is clear that this on-off marriage between capitalism and democracy still drives America forward.
Wrap Up
The overarching message of Americana: A 400-Year History of Capitalism and Democracy in the United States is that capitalism and democracy have been two sides of the same coin throughout American history.
While capitalism has provided the fuel for innovation and progress, the government has stepped in to help industry, curb its excesses, and protect consumers.
In sum, both capitalism and democracy have been instrumental in shaping our nation’s history.
