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Empire of Wealth

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It took me a while to get from colonial America to September 11, 2001, but I did it: I recently finished John Steele Gordon’s Empire of Wealth, dubbed the “Epic History of American Economic Power.” It’s a fascinating tale, told by one who has an obvious interest in the story. And as one might surmise by the subtitle, Gordon is largely celebrating the amazing growth of the American economy in his intelligent, engaging narrative. It’s not that he’s a cheerleader standing on the sidelines glossing over the many mistakes made along the way; instead, he frequently recognizes how the nation’s road to its status as the world’s “lone superpower” was often the result of success in spite of itself.

He charts the many pitfalls the nation’s economy has faced, the majority of them from self-inflicted wounds – from Jefferson’s Embargo Act that essentially precluded the fledgling nation from trading with anyone (thus devastating its economy) to Andrew Jackson’s hatred of banks that led to the death of the Bank of the United States, to the cycles of boom and bust that followed, up through the age of the “robber barons” and into the Great Depression and beyond.

Gordon’s perspective is simple: that America represents something unique in the history of great empires. From ancient Rome to modern Britain, empires were built on the force of arms and upon military conquest over others. Gordon posits that America became a global power and rose to dominate the world not so much by military power but through the creation of wealth. Certainly there are those who would point to America’s use of military force at various times throughout history, but certainly during the 19th century the nation did not represent the military powerhouse it does today. When it finally (and reluctantly) entered World War II, the American military was smaller than the armies of most other world powers and much of what it had was antiquated or out-of-date. What America possessed most of all, Gordon argues, was economic might and a production base unparalleled in history.

Gordon explores the rich economic history of the country, from the development of the nation’s tapestry of industries and the history of invention and imagination that continually resolved problems. From the development of steam ships and the clearing of the “mighty Mississippi” to the incredible development of railroads, newspapers, urbanization, electricity, and more, one can certainly wonder if the 19th century wasn’t even more of an age of wonder than the 20th century is often perceived to be. At one point, Gordon points out how for hundreds of years farmers had to sell their products within a 200 or so mile radius of where they lived, but the development of steamships, railways, and the like meant the sudden – and irreversible – creation of a truly global economy, one in which Russian grain could be sold along side its American counterpart. It also meant the development of a world in which people separated by “fifty miles of good road,” as Mr. Darcy describes it in Pride and Prejudice, no longer might as well have been living on the other side of the world.

He also charts a course through the lives of the iconic characters who came to symbolize America’s potent economic awakening, names like Vanderbilt, Rockefeller, Ford, Flagler, Carnegie, Mellon, and Morgan; he even brings the book to a close by charting more recent economic developments, including the rise of Bill Gates. He’s often blunt in his assessments of economic folly (he’s pretty big on the necessity for a central bank, and considers both Jefferson and Jackson responsible for many of the nation’s resulting economic recessions). And yes, he’s an unabashed apologist for capitalism, contending that the system has elevated the lives of many. I thought it intriguing, really, that the Publisher’s Weekly review of the book took Gordon to task on this point, saying that the American economy “has always provided opportunity but always with too much inequality,” and that a full economic history would take this into account (thus saying that “Gordon’s doesn’t”).

Admittedly, while Gordon explores the relationship between “management” and “labor” during the truly explosive economic years (the late 19th and early 20th centuries), he doesn’t offer much of an opinion about the balance of power between the two sides, almost as if he’s trying not to offend somebody and is biting his tongue. Based on his comments about regulatory structures, it seems as though he believes some oversight of capitalism is appropriate, but that in general a capitalistic economy will correct (and perhaps police) itself. Personally, I lean a bit more strongly on the regulatory side, and wonder if the savings and loan collapse of the mid 1980s (which Gordon describes as a classic example of how “not to deregulate an industry”) isn’t more indicative of a lack of regulation generally.

That said, I found Empire of Wealth to be a fascinating book, full of intriguing anecdotes and explanations of why things are the way they are. For example, time zones were initially imposed by the railroads, because in the absence of set time zones twelve noon was measured by the position of the sun, which constantly changed the further west one went and played havoc with train schedules. The issue hadn’t been significant when people were moving at the pace of a horse; with the advent of trains, however, determining the “accurate” time became much more critical. It’s in those little details that Gordon truly excels, and that’s the sort of thing that makes Empire of Wealth so interesting to read, no matter what one might think about the “politics” associated with America’s imperial economic might.

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