Dr. Harold Goldmeier manages an investment company and writes for financial companies about business, social, and political issues. He was a Research & Teaching Fellow at Harvard. Dr. Goldmeier is a free public speaker for community groups and consults on matters of commerce and industry. firstname.lastname@example.org
The American empire is not disintegrating. Americans are reassessing national values, vision, mission, and strategies. It is the regular exercise of any healthy enterprise. She still reigns supreme as the most powerful cultural, political, and economic influence on the planet. China and Russia can destroy the world but are no match. Small countries like Israel and Singapore are disruptors nibbling at American prowess in spheres like innovation. U. S. businesses adapt quickly. They buy out the competition. Israel, for example, is a most willing seller. Business history tells us a lot about nation-building.
History teaches how religious beliefs, military prowess, political architecture, and entrepreneurial sparkle weave a tenacious web in nation and empire-building. Yet, business history receives short shrift in business schools and academic writing. Professor Richard Vague, in his lively new book, An Illustrated Business History of the United States (University of Pennsylvania Press, 2021) writes: “Less has been written on this subject than on U.S. political, military, or social history, even though… business is equal to any of those fields in influence on society and arguably greater.” The engines of America’s business prosperity have been real estate and war.
Real Estate is the Business of Business
The pursuit of wealth always determined the priorities in western countries. For instance, colonialism and its by-product of slavery became enshrined in law. Tax codes favor corporations over individuals. The Dutch East India Company valuation hit $8.28 trillion in 1637. The English South Sea Company and Mississippi Company were valued at $4.5 and $6.8 trillion by 1720.
Before the Declaration of Independence, wealthy Virginians established The Ohio Company in 1748. It was essentially a real estate company to profit from westward expansion. “From the outset, ambitious Americans well understood that buying land and waiting for the population to increase was a path to riches.” Andrew Carnegie quipped, “90% of all millionaires become so through owning real estate.” I know Ray Kroc became one by insisting franchisees lease their McDonalds from Kroc. Real estate is “the single highest-value asset in the United States ($60 trillion), greater than the value of stocks, bonds, or any other major asset category,” Vague reports.
War is the Business of Business
War outdistances marketing and Hollywood movies for spurring business growth and leaving the American stamp on the local culture. It is war, Vague claims, that most “profoundly affected the course of U.S. business and incubated technological innovations that propel business forward.”
The Civil War birthed the modern arms and ammunition industries, the federalization of transportation, science and medicine, the business of prisons, the mass production of food, and more. World Wars took American business and commerce to a whole new level. The military spawned the computer revolution of the 1950s. The government’s Manhattan Project catapulted the U.S. into the nuclear age. We built the national highway system not to sell cars but to move soldiers and equipment cross-country fast and furious.
American imperium is not threatened, despite our hideous exits from Cuba, Vietnam, Iran, Iraq, Libya, and Afghanistan. We maintain over 200,000 military troops on 800 known bases in 150 of the 195 nation-states across the globe. 11 U.S. aircraft carriers roam the seas. America spends more money employing more people engaging in cyberwarfare and intelligence gathering across the planet and in outer space.
It moved President General Eisenhower to warn the country, “We must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex.”
Building Wealth thru Tech
The newest revolution is in Artificial Intelligence and Big Data. Dominating the new directions for business growth and concentration of power are social media, biotech, Fintech, space tech, infotech, Med-tech, nanotech, ed-tech, prop tech, sleep tech, and Green Tech.
Small nations like Israel, Singapore, Hong Kong, and several of the Gulf States are ferociously penetrating markets with tech innovations and products. But their leaders have learned little from the history of business. Nation-state building thrives on entrepreneurs building legacy companies. It is a subject that Vague covers extensively.
Israel’s business parks are dominated by office towers housing American, European, and Chinese companies. Israelis do not build the business infrastructure required for a long-lasting prospering nation-state. There are no legacy companies. Israeli politicians take pride in their entrepreneurs selling businesses. A major newspaper and several websites give weekly reports on how much money Israeli businesses sell for in a heated M&A environment. There is no mention of the ensuing job losses, transfer of decision-making power to foreign owners, the depressing impact on worker productivity.
Israel’s tech business benefited from its eight decades of wars for survival. Israelis developed a passion for thinking out of the box. Social anthropologist Osnat Lautman claims Israeli business success results from a culture nourishing risk-taking and living in the moment. The start-up nation blossomed into an economic miracle, but miracles can be fleeting.
The author pays short shrift to the ruthless influences of Papism and anti-Semitism ingrained in American culture. Most times, Catholic and Jewish businesspeople excelled in business when other careers were not as welcoming. For instance, Vague tells the story of star dealmaker Sanford Weill and it is kind of wowing.
A major omission is any serious discussion about the business of slavery in the book. The slave trade was a wealth-building business. It stretched from Africa to Europe, North America and South America, and across the Caribbean islands. Institutional racism and sexism that slavery left for posterity (e.g., Jim Crow Laws, red-lining by banks that created America’s slums) are worthy of a full chapter. The gross economy of southern states would have been the fourth largest in the world by 1864 if the South seceded. Buying and selling Black slaves and the cash crops of tobacco, sugar cane, and King Cotton slaves nourished made millionaires of enslavers and enablers; human slavery is credited as the engine of America’s economic growth.
America’s business sector undergirds the nation and is the world’s greatest influencer. U.S. tech stocks are more valuable than the entire European stock market. America might have lost its manufacturing edge to Asia and other low-wage countries, but robotics, innovations in mass production, and the vagaries of dictatorial rule in those countries are spurring America to sharpen its competitive edge. The American empire is powerful despite adventurous setbacks. Its business sector is the integral engine of growth and leadership. Small nations should look to American business, learn its history, and apply the lessons to growing their own nations to sustainability.
Vague’s history book is 320 pages of facts, stories, cartoons of the period, charts, and pictures. He laces the book with over 300 pictures and tells the stories behind them. Stories abound of failed choices and failed leaders. The empire absorbed them all, shook them off, and moved on. Small nations don’t have the luxury. The breadth of his scholarship and sourcing of materials offers lessons of great value to political decision-makers and businesspeople. The stories and brief bios of characters are amusing, but readers should learn from the successes and failures.