One of Sarah Baxter's first jobs was with the feminist publisher Virago, and she became political editor of the New Statesman in the early 1990s. In a sign of things to come perhaps, she was one of a small handful of people there to support the first Gulf War. She went on to edit the Observer's comment pages for a short while before joining the Sunday Times as News Review editor. On a whim - her mother is American - Sarah thought it would be fun to serve as the Sunday Times's New York correspondent, and she arrived in the city with her family a few weeks before September 11 2001. A few weeks ago she became the paper's Washington correspondent. Here Sarah discusses John Steele Gordon's An Empire of Wealth: The Epic History of American Economic Power.
Sarah Baxter on An Empire of Wealth: The Epic History of American Economic Power by John Steele Gordon
When you find yourself so out of step with your old friends and associates, as I have over the conduct of American foreign policy since September 11 2001, you wonder what else they might have got wrong. Or rather: what else might I have got wrong about the politics of the left? I have spent so much time defending America to its critics that I am in danger of doing a full flip and giving up on long-cherished beliefs.
Having supported the election of Tony Blair as Labour leader, some might say I had left the true path long ago anyway and that the shock of September 11 - an event I lived through in New York - merely provided the handy excuse for a break. If you believe in freedom of speech, assembly, religion and so forth, why not embrace the free market? It may be an imperfect mechanism for spreading prosperity, but in the United States it has created an economic titan. Yet the rise of American capitalism is not a subject I know much about, so when Norm asked if I would like to review a book for his blog, I chose An Empire of Wealth: The Epic History of American Economic Power by John Steele Gordon, published last year by HarperCollins.
The author is an ardent exponent of the virtues of free trade. Adam Smith, he notes, published The Wealth of Nations in 1776, America's founding year. An Empire of Wealth is a bravura account of the energy and creativity that led the pioneers to cut a swathe across the prairies, navvies to build the Erie canal in record time, opening the mid-west to trade and industry, and prospectors lured by gold to populate California.
We don't learn much about their suffering, although there was plenty. When I am in my most combative defend-America mode, I feel inclined to say you don't often hear Americans complain about the life they and their forefathers left behind in old Europe, which was usually grimmer. But hurricane Katrina was a reminder that you can't write the poor out of the picture permanently and that not all Americans arrived voluntarily.
Gordon is less interested in the condition of the masses than the achievements of the innovators, who became the great tycoons and bankers such as Cornelius Vanderbilt, Andrew Carnegie, John D. Rockefeller and J.P. Morgan. Carnegie was the son of an unemployed handloom weaver from Scotland who worked his way up from bobbin boy to steel magnate. On a visit to Sheffield, he grasped the importance of the newly-invented Bessemer converter and by the end of the 19th century his company was outproducing the entire British steel industry.
Carnegie was not the only industrialist to profit from British inventions, which were frequently spied on and imitated. In fact Gordon ascribes much of America's success from the arrival of the Pilgrim fathers onwards to the influence of Britain - a useful corrective to the view that Americans built something out of nothing in the wilderness.
The great tycoons, Gordon argues, were nonetheless heroic. Often derided as robber barons, many disbursed their wealth to charitable and educational foundations, whose effects are still felt. I've just been watching the BBC World Service on American public television, which is paid for out of the small change of the Ford and Rockefeller foundations. Carnegie, who established 2,500 free libraries, thought it shameful for rich men to die wealthy. Even the worst barons usually ended up lowering the prices of goods, bringing consumer choice to the poorest homes.
In the south, where aristocrats sponsored the first settlements, a landowning elite held sway over an impoverished population. The result was a pattern of development much more like the third world with a vicious twist: slavery. When its agricultural economy encountered the industrial revolution there was a 'terrible synergy'. The invention of the cotton gin made the slaves more productive and their owners more determined to cling on to their labour.
The least free part of America was also the poorest: not a coincidence. Gordon argues that the United States would be more like Argentina - another large, abundant country - had it been colonized by the Spanish. It left me wondering about the peculiar legacy of the French influence on the elegantly decayed and venal city of la nouvelle-Orleans. Once New Orleans lost its trading prosperity (the Erie canal stripped it of its position as the mid-west's premier port), it seems clear that the city went on to suffer from too little capitalism, rather than too much.
Still, you can't blame the French for the Americans' ability to look the other way. Gordon averts his gaze a lot, even though he admits that the booming American economy was prone to huge stock market panics and booms and busts (and plenty of tariffs were imposed along the way).
He does what he can to take some of the shine off President Franklin D. Roosevelt's achievements, but in the end gives way to sheer admiration for the man. FDR's public works programmes, introduction of social security and Wall Street reforms brought America economic stability and ushered in an era of unprecedented prosperity. 'In a very real sense... we are all New Dealers now,' Gordon writes.
I am relieved to find that one of the greatest presidents was the one who tempered capitalism and brought forth the Great Society. It has helped to reassure me that I am still a Democrat, even though John Kerry put my teeth on edge. I am glad about that.
Of course, FDR was also a formidable war leader and war has been a motor of the American economy from its earliest days. Whether the Iraq war will prove an economic boon looks rather doubtful. Gordon quotes Cicero approvingly - 'The sinews of war are infinite money' - and thinks America has it in abundance. We shall see.
[A list of the pieces that have appeared to date in this series, with the links to them, is here.]
