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Name: Americana
Rating: 4.3 (73 reviews)
Author: Bhu Srinivasan

Bhu Srinivasan

A 400-Year History of American Capitalism

4.3 (73 ratings)

37 mins

Brief summary

Americana by Bhu Srinivasan is a comprehensive history of the United States through the lens of business and commerce. It explores the economic roots of American culture and its impact on the world.

Topics

Capitalism & The Free Market US History Socialism & Capitalist Critique US Economics

Table of Contents

Americana
Summary of 11 key ideas

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Key idea 1 of 11

What’s in it for me? Discover how American history is bound up with the development of capitalism.

Since the Mayflower docked in 1620, America has acted as a welcoming home for those looking for a brighter financial future. The author of Americana, Bhu Srinivasan, is one such immigrant: he arrived in the USA from India in 1984, at the age of eight.

Growing up, Srinivasan moved all around the country with his family as his mother’s career developed: he lived in cities in Virginia, New York state, California, and Washington. Later on, he would be lured back down the West Coast to participate in the heady days of the early internet boom.

All in all, Srinivasan realized, his movements around the country had been mainly economic in nature, as he and his family had searched out the best available opportunities. It was economics that had first led his family to the country, and that had then defined their time there. The same, of course, was true for millions of others.

In fact, it’s possible to consider the whole of US history from an economic, rather than a political, point of view – and that’s what you’ll get in these blinks. They’ll tell you just how much capitalism has contributed to the development and identity of the United States.

In these blinks, you’ll find out

how the Mayflower was funded using the same method as countless tech startups;
how the economics of slavery drove the country to civil war;
how unelected president Theodore Roosevelt transformed the role of the federal government.

From the voyage of the Mayflower to the Revolutionary War, early America was already tied to capitalism.

The story of the Mayflower and the settling of the pilgrims in New England in 1620 is well known. But a key question is often overlooked: how was the trip financed? The answer shows how close the connection between America and capitalism was right from the beginning, and explains the settlers’ fight for their freedom later on.

The voyage was financed by a group of investors in England via a company called the Virginia Company of London. Numerous individuals put in small amounts, limiting their financial risk. They stood to gain hugely, but only in the relatively unlikely scenario that the voyage was a great success. It was an early form of what we now call venture capital funding.

As things turned out, the New World did indeed provide plenty of financial opportunities for traders back in England. A particular early success was beaver skin, sold as a luxury product in Europe. The colonists obtained it via trade with Native Americans, who were skilled at hunting beaver and preparing the pelts. Later, tobacco turned into a huge trade, especially on the farmlands of Virginia and Maryland. This time, the hard work was done by slaves, the first of whom had arrived in Virginia a year before the Mayflower.

The tobacco trade grew to astonishing proportions, accounting for 80 percent of colonial exports to England in 1700. But America’s relationship with Great Britain, which it was still part of, began to seem one-sided. One issue rose to the forefront: taxation without representation. In 1765, facing war debts, England had begun to tax American colonies via the Stamp Act, meaning that obtaining any official document was subject to an extra fee. Yet the colonies were not represented in the English parliament. Who, then, represented their rights?

American negotiators including Daniel Dulany and Benjamin Franklin succeeded in getting the Stamp Act repealed, but more problems were inevitable. In protest at yet more British taxes, some Bostonians held a ship called the Dartmouth captive at port in 1773, tipping its cargo – 45 tons of tea – into the harbor. The Revolutionary War began not long after.

American independence may have been about securing freedom, but it was also about money. The American colonies and their inhabitants were no longer satisfied with their original purpose of providing a profit for the Englishmen across the ocean.

As America grew, its transit networks boomed.

The newly-formed USA’s unique geography had both positive and negative aspects for commerce. On the one hand, the south boasted ideal conditions for growing cotton. And thanks to the cotton gin, a time-saving invention that mechanically separated out the cotton plant’s seeds, it was possible to cover huge areas of land with plantations. The American cotton industry boomed, vastly boosting the global cotton supply.

Yet even as American cotton traversed the world, it remained difficult to travel around within the vastness of America itself. Improving transportation therefore became big business.

The economy of the American South, built on cotton and slavery, proved no match for the quickly developing North.

The Mexican–American War of 1846–48 granted the USA vast swathes of western territory, including the area that would soon become California. It was unbelievably good fortune that, at almost exactly the same time, gold was discovered there. The legendary Gold Rush saw countless Americans traveling west in search of fortune – even though the developing transportation network didn’t yet extend that far.

One consequence of this was that wealthy California was soon granted statehood. Yet, the decision to incorporate California into the Union caused issues. California became a “free state.” This tipped the precarious balance between “free” and “slave” states, aggravating the “slave” states of the South. It was a decision that contributed to rising political tensions, which would eventually result in civil war.

A series of spectacular innovations came out of America in the late 19th century.

Ever since the cotton gin had catalyzed that industry, America had known the value of a great invention. Telegraphy, for example, developed and championed by Samuel Morse, enabled the immediate transmission of messages across long distances as early as 1843; developing in parallel with the railroads, telegraphs played a huge role in the Civil War.

The years after the War, however, yielded the most remarkable stream of inventions and innovations.

Two leading magnates, Rockefeller and Carnegie, defined the Gilded Age.

Mark Twain coined the term “the Gilded Age” in his 1873 novel of the same name. It was an apt description of a time in which opportunities for American entrepreneurs and investors seemed unlimited – even if, rather than gold, the chief commodities were oil and steel.

The value of oil wasn’t immediately clear on its discovery, but after experimentation, its usefulness as a source of fuel became clear. All that remained was to optimize the complex process of extracting the oil, transporting it, and refining it for use. Maximizing efficiency in this process, it quickly became clear, was the key to success.

As the 20th century dawned, the government started to exert more influence over how businesses should operate.

Tariffs were not the only way in which government came to the aid of industry. In 1892, at the height of a union dispute at the Carnegie-owned H.C. Frick Coke Company, the governor of Pennsylvania sent eight thousand troops to help take back the factory from workers striking over efficiency cutbacks. Here, the state acted in the interests of business, but later on, it would often take the opposite side.

An early harbinger of that was Democrat William Jennings Bryan’s incendiary campaign for the presidency in 1896. He cast himself as a defender of the working man, railing against the gold standard, which, since a financial crisis in 1893, had widely been seen as holding back the economy. Bryan’s powerful rhetoric turned the Democrats into the party of the workers, as opposed to the pro-business Republicans.

The government’s role in the economy grew and grew, especially during times of war and crisis.

As technology reached ever-greater heights, the need for government regulation became increasingly clear. The automobile boom, for instance, required a strong regulating hand to avoid chaotic, deadly scenes in the streets. The government also took a close interest in radio, a technology with clear value for the state – especially during wartime.

The USA’s entry into World War I in 1917 had a transformative effect on the role of the state. The government’s active hand spurred radio’s development, as it quickly proved vital for communication with ships. And the war also meant that the country needed to invest, at very short notice, in its essentially unprepared military. That required huge amounts of funding: in 1916, the government budget was $734 million; by 1918, it had grown to $12.7 billion.

After World War II, the development of suburbia transformed American culture – for those who were invited.

The USA was better prepared for the Second World War than it had been for the first. Roosevelt, still in charge, did not enter the war until 1941, but began scaling up the US military as early as 1939. He also correctly predicted that the US would need to sell planes to the Allied forces. The state, again expanding its role, even co-opted the car factories of a reluctant Henry Ford, who was fearful – with some justification – of a complete government takeover. There was, effectively, no place for capitalism during wartime.

The return of more than 15 million soldiers to civilian life, however, spurred on the private economy in the postwar years. A former naval officer, housing developer Bill Levitt was one driving force behind this.

Quintessentially American, highways had many knock-on effects for the economy.

President Eisenhower called his $33 billion highway bill of 1956 the “greatest public works program in the history of the world.” It would create 41,000 miles’ worth of interstate highways, aiming to connect all the major cities across the land. But, as so often with such developments, it had some unforeseen consequences.

One was that many roadside establishments were forced out of business – such as the gasoline station, diner, and motel that Harland Sanders had been running for decades in Corbin, Kentucky. The problem was that drivers could only access or leave the new highways via specially made “on ramps,” which spelled economic catastrophe for any business not located close to an exit. Sanders had little choice but to close up shop.

As technological advances in computing soared, so did its economics.

It wasn’t quite like striking oil, but the extraordinary – and extraordinarily lucrative – growth of computing had many of its key moments in the USA. In fact, the field’s origins stretched back as far as 1890, in the country’s Census Office.

Around that time, a young man named Herman Hollerith developed the idea of storing information about US citizens not in handwritten records, but rather on a punch card that could be fed into a machine. He used simple electrical circuits to enable the machines to count how many cards had particular data points. The potential of these machines swiftly became apparent, and soon the Census Office had one for every living American it had on file. Hollerith founded the Tabulating Machine Company, which sometime later would become International Business Machines – better known as IBM.

Despite the heady dot-com bubble, American capitalism and democracy remain closely intertwined.

Not every financial development in the late 20th century had to do with computing. Some were far more abstract ventures in pure money-making, like the notorious “junk bonds” market, and enormous financial conglomerate Berkshire Hathaway. When Warren Buffett acquired Berkshire Hathaway in the 1960s, it was a textile company – but in his hands it became a finance juggernaut.

The giddy economics of Silicon Valley looked ever-more tempting as the century came to its close, especially with the development of the internet.

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What is Americana about?

Americana (2017) traces the history of the USA from one key perspective: capitalism. Bhu Srinivasan shows how the development of the country has been closely bound up with the development of capitalism, from the New England colonies’ earliest days to the most recent innovations of Silicon Valley or Wall Street.

Named by The Economist as one of the best books of 2017

Who should read Americana?

American history enthusiasts
People interested in the economy past and present
Fans – or enemies – of capitalism

About the Author

Bhu Srinivasan is a media entrepreneur who came to the USA from India at the age of eight, traveling widely around the country with his family. Early in his career, he founded a news aggregation startup, and went on to work in gaming, publishing, and data. He now lives in Connecticut with his wife and children. Americana is his first book.

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