The Land of Enterprise: A Business History of the United States

The Land of Enterprise: A Business History of the United States by Benjamin C. Waterhouse, Simon & Schuster, 288 pages, Hardcover, April 2017, ISBN 9781476766645

Turning to history from time to time reminds us that, as significant and special as the times we live in seem to be, there are always parallels in the past to learn from and repercussions to the decisions we make today. Benjamin C. Waterhouse, in his new business history of the United States, The Land of Enterprise, has managed to bring that lesson home in a way that—as he described other books by academics in the wake of the financial crisis—“captures that rare academic gem—relevance.” 

By linking the pivotal events of business history to our national story, we can gain a better understanding of some of today’s most pressing public debates.

Waterhouse’s history goes beyond recent history, taking us back to the very beginning of our nation, and before. And what a story he has to tell… 

Almost a century after the Spanish and Portuguese began sending ships to the “New World” in search of treasure, Queen Elizabeth began doing the same, “urging explorers to claim lands for the crown and search for precious metals.” Ironically, the fact that they found none left them better situated economically in the long term. The gold and silver that flooded into Spain from the Americas caused “inflation that lasted a century and crippled the Spanish economy.” England, not finding easy riches, established colonial settlements instead, settlements that would help power a global economy and the industrial revolution, make them the leading power and greatest empire in the world, and lay the foundations for the capitalist system we know today. Looking at Spain and England's differing experiences is a classic, if accidental, case of short-term profit versus long-term planning.

We’re taught in school that it was a search for religious freedom that compelled the first English colonists to settle in America. Waterhouse would have us know it was as much business opportunity as religious piety that brought them:

In fact, the first two successful English colonies in what would become the United States—Virginia (1607) and Massachusetts Bay (1620)—were themselves private companies.

Both settlements were founded on a joint-stock company model, which was the precursor to the publicly owned corporations of today. Even the decision of the colonies that succeeded them to declare independence was largely predicated on economic conditions. The colonies that relied more on the British, both economically and militarily—In Quebec, there were still larger populations of Native American and other European populations to contend with, and English Colonists were outnumbered by their own slaves (ten-to-one!) in the Caribbean—stayed in the Empire.

Waterhouse then takes a look at the competing business interests competing in the Constitutional Convention. He describes how the enumerated powers of the Constitution essentially make Congress responsible for sustaining a stable and open, enterprise-oriented economic order across the states. The famous Commerce Clause specifically, he writes, “made the land from New Hampshire to Georgia a giant free trade zone, where products and people could move free of tariffs and other barriers.”

He moves from there onto a decidedly more disturbing topic, “The Business of Bondage.” Intertwined into the economy of the entire country, slavery was not only important to the big business of the day—plantations of the south—and to the manufacturers blossoming in the north processing the agricultural goods they produced, the slave trade was itself big business. And not only did slaves create value through their labor, many slave owners used those slaves as a store of value, renting them out to others, even using them as collateral in securing loans. “Slavery,” in short, “was central to the economic development of the United States.” And that economy expanded drastically with the invention of the cotton gin and the Louisiana Purchase, the first of which intensified cotton production, the second opening up vast new swaths of territory to that production. And that, of course, leads to the history of the Civil War.

Waterhouse then backtracks to detail the concurrent burgeoning of the industrial economy, the rise of textile mills, railroads, the telegraph, and the modern corporation, and the profound changes they all wrought on everyday life in the north.

In a broad-ranging chapter on “The Politics of Business in the Early Republic," you’ll read of the divide between agrarian idealists and those that favored the advancement of an industrial economy—between Jeffersonian Republicans that wanted government to leave them alone and Hamilton’s Federalists that favored government being more involved to actively promote American enterprise—and how it has translated into today’s political divisions. You’ll discover that the Federal Reserve is America’s third national bank, and read of the political battles that doomed the first two. You’ll learn how a tariff almost sparked a civil war in 1832, and how the actual Civil War changed the trajectory of American industry, realigned business interests, and changed the political economy of the country as a whole.

America, coming out of the Civil War, was an industrial and economic juggernaut, which brought another set of challenges and political tests, as monopolies rose, labor unions clashed with big business, and a renewed, populist agrarian opposition sprouted, largely aimed at the banks in the East that were financing an expansion of a new economy that was leaving them behind.

All of this is just the first half of the book, and brings us up to the birth of what we’d recognize as a modern economy. There is still a Great Depression ahead, two progressive Roosevelts that bookend an era of political activism and reform, another postwar boom that gave rise to ever bigger big businesses, another era of large-scale social activism and unrest, and the eventual decline of the industrial economy, which coincided with the rise of a new technology and knowledge economy, financialization, and deregulation. The story continues through the 2008 economic crisis, and the Occupy and Tea Party movements that arose out of it—“the former deeply critical of unfettered capitalism, the latter opposed to government intervention in the economy”—which calls back the debate at our founding between Jefferson and Hamilton.

There are a lot of individual or company business histories out there. Waterhouse’s is different, more broad, taking a grand sweep at the larger shifts and developments. It is a history of America. But while being broad and relatively brief on most topics, it's breadth is astonishing. That broad sweep allows him to gather and include many that would be relegated to the historical dustbin in most books and pull them back out:

Using business to tell the story of the United States allows us to incorporate the unnamed millions who shaped history by trading their labor (sometimes by choice, often not) or deciding what products to consume (sometimes by informed choice, often not). … From executives and bankers to farmers and sailors, from union leaders to politicians and slaves, business history is American history.

In describing the changes in broader terms, you begin to see the bigger picture. It happens from the very beginning of the book, as he describes how a small group of English began colonizing the wooded areas along the Atlantic left largely empty by the devastation, disease, war, and genocide brought by Europeans during the “Age of Exploration,” how their Anglo American ancestors seceded from the empire and engaged in a global war of independence to achieve it, and then began a factious debate among themselves over what kind of independent economy they would build once removed from the empire—a debate that echoes all the way down to us in the modern day. As Waterhouse writes:

[T]he story of business is deeply intertwined with the development of America’s political institutions and national values. Exploring those links shows how much business needs history, and how much history needs business.

The experiment of our own self-governance extends into the workplace, into business practices and the theories we build our economics on. It behooves us as citizens to study the history of business and how it has intertwined and affected that experiment, how it continues to affect it, and figure out how we can contribute positively to it. The Land of Enterprise is a great place to start.