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Myths and Landmarks in US Business and Economic History

Summary:
Eco historian Richard Vague has written a new book titled The Illustrated Business History of the United States. Vague discusses the book in this INET podcast with Rob Johnson.  There is a transcript of the podcast as well.  He says one big myth in US business history is that companies grew in a free market/laissez faire manner: Rob Johnson: So what is it that you see… One of the things that I think is very interesting right now, a lot of people are obviously very concerned about climate change. And there is one school of thought, which is talking us though, we have to reset our preferences. And we have to, how do I say? Govern properly, part of which is setting incentives. But the other is a look into what the private sector, the deliver of these commodities and services, and in

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Eco historian Richard Vague has written a new book titled The Illustrated Business History of the United States.

Vague discusses the book in this INET podcast with Rob Johnson.  There is a transcript of the podcast as well.  He says one big myth in US business history is that companies grew in a free market/laissez faire manner:

Rob Johnson:

So what is it that you see… One of the things that I think is very interesting right now, a lot of people are obviously very concerned about climate change. And there is one school of thought, which is talking us though, we have to reset our preferences. And we have to, how do I say? Govern properly, part of which is setting incentives. But the other is a look into what the private sector, the deliver of these commodities and services, and in this case transformation, bring to bear. And the acknowledgement that large business organizations are often the vehicles of change. They have to work perhaps in conjunction with government or what have you, but I’m curious, I guess the meta question is about the dance between the private sector and the state that you saw evolve through the chapters.

Richard Vague:

Well, that’s a great question and a great subject, because there’s a lot of folks, particularly over the last couple of decades that talk about laissez-faire and get government out of the way of business and business will seek and find the right things to do. And when you look at American history, it’s never been that way. There was never this mythical laissez-faire period of American business. American business has I think, largely benefited from what you might call an industrial policy since the very beginning.

Alexander Hamilton, when he wrote his famous three reports in 1790 and ‘91, one of the things he boosted as part of that was manufacturing. Well, he was instrumental in seeking talent from the UK, to bring to the United States, sometimes in contravention to British law, by the way, to populate a new industrial sector within the United States. We see the United States government taking a huge position, by the way, through the federal and through the state governments. Huge position in canals, the fledgling railroad industry was a huge beneficiary of government support at the Illinois Central Railroad and the Transcontinental Railroad and many, many other places. We bring that all the way to today, we see, and I think the work of a number of economists have shown this where even the iPhone, all the major sub components of the iPhone have come directly or indirectly from government sponsored research or government policy and the like. The internet itself, obviously, the old ARPANET, that’s touchscreen technology, that’s GPS. That’s the like.

So the US government has strategically pointed business in certain directions throughout US history, which to me means it could do it again. And it can do it relative to things like climate change. And as daunting an issue as that is, I think there’s hope if we can align government and business around that issue.

Lots more in the podcast.

Amol Agrawal
I am currently pursuing my PhD in economics. I have work-ex of nearly 10 years with most of those years spent figuring economic research in Mumbai’s financial sector.

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