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Capitalizing on Change

Capitalizing on Change: A Social History of American Business

Copyright Date: March 2009
Published by:
Pages: 560
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  • Book Info
    Capitalizing on Change
    Book Description:

    Capitalizing on Change

    eISBN: 978-1-4696-0598-2
    Subjects: Economics, History

Table of Contents

  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-viii)
  3. Preface
    (pp. ix-x)
  4. Acknowledgments
    (pp. xi-xiv)
  5. Introduction
    (pp. 1-6)

    Sensible people everywhere acknowledge the overriding importance of economics in human development. Americans, however, go further. History has forged a strikingly transparent association between the nation’s economic system and its institutions and values. To many Americans, democracy and capitalism have symbiotically matured as transcendent themes of the nation’s history. They regard their way of doing business as embodying a providential “American Way of Life” founded on free enterprise.¹

    The nation’s values have not particularly dwelled on the notion of the ideal citizen and civic virtue but instead have celebrated the go-getter and ambition. This may be because Americans wanted to...


    • CHAPTER ONE Early Capitalism and the Rise of a Market Economy
      (pp. 9-27)

      Edmund Burke, reflecting in 1790 on the French Revolution, blamed the bourgeois gentilhomme and the nouveau riche, the men of commerce and finance, for what he saw as a catastrophe threatening civilization. In the view of this eminent conservative, they had undermined the established order of king and Church. “The money interest,” Burke wrote, “is in its nature more ready for any adventure, and its possessors more disposed to new enterprises of any kind. Being of a recent acquisition, it falls in more naturally with any novelties. It is therefore the kind of wealth which will be resorted to by...

    • CHAPTER TWO North America’s Colonial Economy
      (pp. 28-52)

      Europeans approached the New World as an extractive resource, viewing its land in terms of the commodities and wealth it promised to yield. The Spaniards and the Portuguese based the economic life of their American Indies possessions on the estancia, or plantation, under which the crown awarded titles and land to conquistadores and court favorites who coerced tribute and labor from the Indians in cultivating such cash crops as sugar, cacao, and tobacco. This form of feudal order established in Central and South America, relying on servile labor (soon supplemented by the arrival of African slaves), combined with strict regulation...

    • CHAPTER THREE The Early National Economy, 1776–1820
      (pp. 53-81)

      In 1787 Alexander Hamilton wrote in The Federalist Papers No.1, “It seems to have been reserved to the people of this country, by their conduct and example, to decide the important question, whether societies of men are really capable or not of establishing good government from reflection and choice.” The first half century after the Declaration of Independence marked a time of nation building. Public bodies and laws had to be designed and constructed, a sense of nationality inculcated.¹

      In the task of designing institutions, a consensus on certain fundamental values acted as guideposts. Government must show no favoritism, administer...

    • CHAPTER FOUR Antebellum America, 1820–1860
      (pp. 82-103)

      In 1855, P. T. Barnum (1810–91), America’s first great impresario, traveled to London and delivered a lecture, “The Art of Money-Getting,” to thousands of Englishmen eager for “Hints and Helps; or How to Make a Fortune.” With their nation only a little more than a half-century old, Americans believed they had something to teach the world about success and business. Remarkably, others agreed. In 1851, the British government sent a mission to the United States to study the American “armory system” of manufacture.¹ The possibilities of profit in cheap cotton fabrics, simple tables and chairs, and inexpensive shoes and...

    • CHAPTER FIVE The Unstoppable Engine
      (pp. 104-118)

      Ralph Waldo Emerson, surveying the changing America of his day, wrote reprovingly in 1847 of an advancing materialistic civilization where “things are in the saddle and ride mankind.” A few years earlier he had entered in his journal that the “invasion of nations by Trade with its Money, its Steam [and] its Railoads, threatens to upset the balance of men and establish a new universal Monarchy more tyrannical than Babylon or Rome.”¹ The associations among trains, trade, and industrial profit were clear, and to Emerson and his small circle of friends they were menacing. The young Henry Thoreau worried that...

    • CHAPTER SIX Entrepreneurial Leaves from the Gilded Age
      (pp. 119-148)

      The thirty years that followed the end of the Civil War are often cited as the Golden Age of the American entrepreneur. Entrepreneurs are generally thought of as innovators who energize and reshape an economy by developing new products or services or introducing new techniques of production, distribution, or business organization. But Austrian economist Ludwig von Mises has provided a more evocative description: “The real entrepreneur is a speculator[,] a man eager to utilize his opinion about the future structure of the market for business operations promising profits. . . . He judges the future in a different way. ....

    • CHAPTER SEVEN A Changing Workplace and Society
      (pp. 149-180)

      Sometime in the 1890s the United States surpassed Great Britain to become the world’s leading industrial nation. This development had long been expected. What had not been anticipated was a new trend in business. The size of business enterprises had grown greatly in the last two decades of the nineteenth century. A large-scale transformation of business enterprise occurred in important sectors of the economy in the form of giant incorporated managerially directed firms that increasingly coordinated mass production and distribution to sell standardized and branded goods to a national market. According to the brilliant iconoclastic sociologist Thorstein Veblen, the metamorphosis...


    • CHAPTER EIGHT Washington Comes Forward, 1900–1912
      (pp. 183-209)

      Historian Henry Adams testified to the overwhelming speed of change in his lifetime in his autobiography, The Education of Henry Adams (1907). Writing of the inadequacy of his own classical education to prepare him to understand a world of science-and technology-driven change, he asserted that the education of “the American boy of 1854 stood nearer the year 1 than to the year 1900.”¹ Even those who viewed change favorably had reason for second thought. A national transformation of startling magnitude required a response in the form of new institutions and new social thought. By 1900 reform activity reached an intensity...

    • CHAPTER NINE The Age of Organization
      (pp. 210-233)

      An American economy once locally rooted had been unified into a continental common market with a handful of giant corporations dominating major sectors of the economy. Large corporations, with multiple dispersed plants and thousands of employees, did business nationally. Change reverberated throughout almost all aspects of American life. The new imbalance among social institutions filled many Americans with anxiety that the freestanding individual seemed powerless before sweeping changes. Social theorists in the new discipline of sociology offered a new emphasis on collective activity of all types and often stressed the need to regard groups as having an organic existence apart...

    • CHAPTER TEN The Consumer Decade
      (pp. 234-270)

      In the 1920s, Americans provided the market for the lucrative rise of professional sports, the motion picture industry, tourism, and health care. Mass advertising created new wants and styles, skillfully working to undermine traditional habits of thrift. The icon of the decade was the automobile. Between 1921 and 1929, the number of cars registered in the United States rose from 9 million to 26.5 million, and half of all American families owned at least one. An economy performing splendidly did not need much in the way of political reform, or so many thought.

      Scholars now view the 1920s as the...

    • CHAPTER ELEVEN Hard Times, 1933–1945
      (pp. 271-293)

      America led the world into depression in the 1930s, and it was more severe and longer lasting in the United States than elsewhere. The Great Depression changed profoundly how Americans viewed their social contract with Washington. A tectonic shift occurred in the view of government’s responsibility for the welfare of its citizens and the state of the economy. The New Deal sought to chart a middle course between free enterprise and a government-directed economy, a managed capitalism, with results and implications that continue to be controversial. In critical ways, the New Deal remains a major benchmark in American history. National...

    • CHAPTER TWELVE The American (Quarter) Century, 1945–1973
      (pp. 294-322)

      A Washington journalist noted in 1897 that it was possible for him to drop in at the White House and simply ask a clerk whether President McKinley had time for an interview. Less than fifty years later, both the White House and the federal government operated very differently. Washington now was in the middle of the major issues confronting the nation and the world. Those who expected that its role would recede with peacetime’s return were mistaken. World War II reinforced the new era of government intervention in economic affairs and seemingly affirmed the correctness of Keynesian deficit-spending policies.



    • CHAPTER THIRTEEN Coping with Decline, 1974–1980
      (pp. 325-343)

      In many ways the “sobering seventies” was a transitional decade. Western economies lost their self-confidence in the face of an Arab oil embargo that showed the vulnerability of industrial nations. Many Americans expressed discontent with the present and apprehension about the future. Amid this gloom and pessimism, however, a major shift in American culture, society, and politics had occurred. Until the 1970s the United States had remained relatively self-suff¡cient with respect to fuels and foods. This would now change, with important consequences for national power and industrial competitiveness. The nation moved politically to the right as Keynesian economics appeared ineffectual,...

    • CHAPTER FOURTEEN Restructuring and Rebirth, 1980s
      (pp. 344-363)

      With high inflation and a faltering economy, the 1980s began on a shaky note. Dissatisfied Americans soon elected a president who promised to return the nation to economic preeminence. Much would be heard of new companies, such as Microsoft, Apple, and CNN . Americans soon learned such new terms as “leveraged buyout” (a purchase made with borrowed money that is secured by the assets of the company bought) and “hostile takeover” (a takeover against the wishes of the target company’s management and board of directors). Nearly half of all big U.S. companies received a takeover offer in the decade as...

    • CHAPTER FIFTEEN The New Economy, the Burst Bubble, and an Economy in Trouble, 1990–2008
      (pp. 364-388)

      Good things happened to the United States in the 1990s. The Cold War that had shaped American foreign policy and influenced domestic developments for half a century ended. Corporate profits powered by an information technology explosion doubled in the decade, and the stock market soared over 400 percent. After 1995, productivity, corporate profit, and real wages all rose handsomely. Then the new century began. Americans were suddenly shocked and sobered by a sharp correction of the market and more ominously by the events of September 11, 2001.

      Americans in the 1990s became fully aware of changes that had long been...

    • CHAPTER SIXTEEN The Rise of a Global Economy
      (pp. 389-416)

      Disagreement over globalization is one of the principal fault lines in world politics. Adding a highly charged emotional note to this debate is its perception as being synonymous with an American-derived global consumer culture and the erosion of local customs and identity. American brands have long benefited from a sense that it is fashionable, chic, and modern to be American. In far-off villages in Africa and Asia, children eagerly flaunt Old Navy or Gap apparel. Sixty-four of the world’s one hundred most valuable brands were owned in 2004 by American companies. The other side of the coin is that this...

    • CHAPTER SEVENTEEN Thinking Small
      (pp. 417-441)

      Giant, vertically integrated corporations have long been the U.S. economy’s most prominent feature, but they have never totally dominated. The world of the small and often family-owned business was never static or insignificant. There have been many types of small businesses, and their nature and roles have varied over time and business sector. In flexible and specialty production, for example, small-scale enterprise has always retained importance. As disenchantment mounted with the Fortune 500 companies in the 1990s, small business, or at least a segment, with advantages of motivation and flexibility, began to be hailed as the new engine of economic...

    • CHAPTER EIGHTEEN The Twenty-first Century
      (pp. 442-468)

      In the final quarter of the nineteenth century, modern capitalism, in the form of “big business,” sprang up almost overnight. Much of America’s history in the last century was concerned with coming to terms with the farranging consequences. This concluding chapter explores three facets of American business as we confront the new century. The first is its political and social environment. The second is the nature of the modern corporation and its future. The third concern is the relationship of democracy to the American model of free enterprise. Underlying all is an overarching interest in the responsibilities of business to...

  9. Notes
    (pp. 469-520)
  10. Index
    (pp. 521-541)