Unit 1

For an overview list of assignments due for Unit 1, see the Assignments page. Otherwise, just read and work your way down through this entire page and all Unit 1 assignments will be explained.

Jim’s Guide: Overview of Econ 213 – U.S. Economic/Business History

The purpose of this Unit 1, the Overview, is to help you understand how the course is structured, what is expected of you, what is available to help you, how to succeed in the course, and begin to discuss the concept of “economic history”.

The Course Design

The course is divided into 8 “Units”.   Units will take 2 weeks. With the exception of Unit 8 which is the very end of the course, the expected completion date/time  for each unit is on a Tuesday at 11:55pm. Unit 8 concludes with the final exam which closes at 11:55pm on a Thursday.  The exact schedule of dates is listed in the syllabus as well as on the asssignments page. Details of what you need to read, study, research and complete for each unit are listed on the Assignmens and Schedule Page.  It is always available from the Assignments tab on this website, Econhist.econproph.net.

I’ve spaced the expected completion dates approximately two weeks apart instead of the weekly deadlines typical of most online courses.  I’ve done this because I’ve taken online courses, too, and I understand the value of some extra flexibility on dates for online students.  Please do not think that this means there’s less total work to do.  It just means that I’ve put dates every two weeks instead of weekly. You really should do work each week to maintain a tolerable pace and load.  You’ve just got a little flexibility for that one or two weeks during the semester when life or other courses simply overload you.

Simply put, we will be starting with a little discussion of why and how to study history in Unit 1. Then we’ll start at the chronological beginning before the American Revolution when the colonies were being established. Then we’ll sweep through American Economic history until we study the present era in Unit 6. Units 7 and 8 are special. In Unit 7 we’ll focus on finishing your book review-analysis research project and in Unit 8 we’ll summarize, read each other’s project pages, and take the final exam.

What You’ll Be Doing

Unlike economics courses where you’re asked to solve problems or learn certain techniques, this is a economics history course. I’m hoping you not only learn some interesting facts, but I also hope you learn the “big picture” and that it helps you to better understand today’s world. To do this, you’ll essentially be doing a lot of reading (at times, viewing) and then reflecting on what it means. Specifically, you’ll be doing 4 types of activities to complete the course: Reading, Reflection/Discussion, Quizzes, and the Project. Let’s take a closer look at each type of activity.

READINGS

Each Unit will have several readings to do. There are three texts you’ll be reading, plus the material I’ve written (a kind of substitute for lecture) for each unit called “Jim’s Thoughts”. And then you’ll be reading what each other write, either as part of the conversation on the Commons or as part of your Book Review-Analysis Projects.

The way to proceed is, first, make sure you schedule time in your calendar* to read during each two week period.  It’s important that you devote some quality reading time.

*if you’re a college student and you don’t have some kind of calendar/to-do list app that you use on your phone, or a written system of scheduling and to-do’s, or a computer-based system, then we need to talk.  Having a system is critical for success as both a college student and at work later.

Start each Unit by opening the tab for that Unit on econhist.econproph.net. Begin by reading “Jim’s Thoughts” for that Unit and continue to work your way down that long page/tab. All the assignments for the unit are listed. The purpose of “Jim’s Thoughts” is to give you an overview of the time period we will be studying in that Unit. I’ll give you some perspective on the big issues and what you should pay close attention to in the other readings.

After the Jim’s Thoughts, there will be assigned readings in the texts. In addition to what I write, there are 3 texts.  Only one of them, the Miller and Sexton book called Issues in US Economic History costs money.  I strongly recommend buying that book, but buy wherever you can get it cheapest. If don’t want to buy a copy, there are three copies on reserve at the LCC library for those of you  who can get to campus.

The other two required textbooks are open educational resources. The Weinberg book, A Short History of American Capitalism, is available for free online. Each chapter is available as either a webpage or downloadable PDF file.  The third textbook is new to the course this year. It is called the Sage American History.  It too is free and replaces a book that students used to have to buy.  It’s actually a lengthy website.  We will be reading selected excerpts which I have copied and posted on this website (perfectly legal and in compliance with the Creative Commons copyright license).  You may want to spend some time browsing the mainsite directly though.  In addition to readings, this site has an enormous number of valuable and interesting links to pieces of US history. Want to know what music people listened to during a particular period? it’s got it. Want to see original documents? Got it.

Finally, in terms of reading, you’ll also be reading each others comments and status updates on the Commons and you’ll be reading a book about some particular aspect, event, issue, technology, or person in US economic history.  It will be a book you choose based on your interests.

COMMONS

A new feature in the course this year is the Commons at econhist-commons.econproph.net.  All of our course discussions and conversations will be on the Commons. Your Book Review-Analysis Projects.  The Commons will likely be different from any other online course discussions you’ve participated had.  It’s not on the D2L site. That’s because I don’t like the way D2L or other closed LMS systems handle discussions. They seem awkward and difficult.  I rarely see interesting or constructive conversations emerge on D2L.  So I’m doing something different. I built my own conversation site, the Commons.  It’s public. That means that anybody on the World Wide Web can read what’s posted there. It also means postings will last and live beyond the course. Only registered students in this course, however, can post or write there. So keep in mind that you’re writing for the public. It’s entirely possible that after this course, some person somewhere – it could be half way around the world – will find your posting via Google or some other search and learn something.  I’ve tried to build the Commons to be easier to use. It’s actually works rather like Facebook – or at least the news stream aspect of Facebook.

The Commons is nearly ready. Course news will also be posted there. I will be posting plenty of instructions for how to login and post.  I’ve done this kind of assignment where students post to one of my public WordPress sites before and really never had a problem with students figuring out how to do it.

QUIZZES

Units 1-6 have a Quiz. These quizzes vary in length from 5 questions to 15, but are typically 10 multiple choice questions. They are taken online in D2L. They are multiple choice, matching, or true-false questions. With the exception of the Unit 8, quizzes are based on the readings, both from books and the “Jim’s Thoughts”. Each quiz may be attempted twice. Your highest score counts. The quizzes are not timed and you may save your work.

Unit 7 will not have a quiz. In Unit 8 there will be a quiz over the project pages that your fellow students created using multiple choice questions that each of you prepare

THE BOOK REVIEW-ANALYSIS PROJECT

The exception to doing things in “Units” is your research project. Although you don’t need to be concerned with the project during the first two weeks, you should plan be doing work to further your research project throughout the semester with an intense period of work finalizing it in late November. The Project will be due at the end of Unit 7 and Unit 7 is largely devoted to allowing time to complete the project.  You will need to do some work before then such as selecting and getting approval for a topic and finding a suitable “background” material for your project.  I will explain more about the “background material” in the detailed instructions for the project, but it is essentially a book or video that goes into some depth about a particular person, issue, or event(s) in US Economic History.  For example, PBS and the History channel  but that will all be listed in earlier unit Schedules and Assignments.  The Project is worth 60 points. There will be a rubric posted later in the semester to help you.

THE FINAL EXAM

The final exam will consist of 50 questions that are similar to the quiz questions.  The final exam is online in D2L. It will be timed at 90 minutes. The final exam is worth 50 points.

The Book Review-Analysis Project – Concept

You will find, read, summarize, and share your analysis of a book that is about some aspect of U.S. economic history. There will be more information later in the course on exactly what types of books, how to find them, and even some suggestions. The book you will read needs to be a close up examination of some particular aspect of our economic history that interests you.  It could be the book about some particular issue, such as the effect of slavery or the economic development of the South after the Civil War.  Or, it could be about a particular time period and the major challenges. For example I know a fascinating book about the founding fathers, the new constitution, and how they viewed financing the new government (you’ll be surprised – they liked having a national debt). Or it could be about  a particular company or technology.  I’ve been reading a book recently called Refrigeration Nation. It’s fascinating – the story of how technologically and economically we mastered the ability to create cold and thereby preserve food and even create that lovely rum drink I like. The story, the event, person, institution or innovation is one that interests you and that you choose.

But instead of creating a traditional academic “research paper” or traditional “essay”, this assignment is intended to be more fun, interesting. and more online. I want you to summarize the book for your fellow students so they get the gist of it without reading it themselves. Then I want you to find an article or video on the Web that discusses some issue today.  And then I want you to analyze and explain to us the connection between the story in the book and the events or issues today. The format of your project’s output will be a webpage you create here on econhist.econproph.net. That news is probably exciting to some of you and probably scary or panic-producing to others. This site and the Commons are created using a software package called “WordPress“. WordPress powers approximately 1 out of every 4 websites in the world. It’s actually easy to use and easy to learn. You don’t have to download or install anything.  It’s all done via your web-browser. If this excites you because you’ve used WordPress before, then great – here’s your chance to exhibit your creativity. If the idea of creating a web page is scary because you’ve never done anything like that and you don’t think of yourself as a “techie”, then don’t worry. There’s plenty of help available. I will provide detailed instructions on how to use WordPress, including videos. I’ve done this with students before and nobody had any problems. I will also be providing you with a login and account in a few weeks. Details will be provided later. You’ll learn a valuable skill that you can use outside this class. You may even decide you like this stuff and start your own blog with WordPress.com (it’s free).  I did a few years ago and started my econproph.com blog with is now being read 80,000 times a year by people from all over the planet.

One thing about doing a website page is that you don’t need to confine yourself to the style limitations of a research paper. You can be creative – add pictures, links to other pages and websites, or even audio-video if you wish. In fact, I will encourage you to find videos or Youtubes or images to embed in your page. And since this website is open to the public, you can show off your work to friends, family and the world. There will be more guidance later.

Objective of this Project Assignment

The objectives of this Project assignment is to provide you with opportunities to:

  1. express your own ideas and thoughts about some particular aspect of US economic history.
  2. learn more about historical events, persons, and ideas that your fellow students find interesting, not just the ones your book authors found interesting.
  3. draw connections between the past and today
  4. develop research and writing skills.
  5. learn or practice expressing yourself by creating web content. This is a skill and experience we will all be using more in the future.
  6. see how creative you and your fellow students can be.

Books

These three books will be required reading in addition to the online materials and videos.

Issues in American Economic History (Paperback) by Roger LeRoy Miller (Author), Robert L. Sexton (Author)

  • Paperback: 272 pages
  • Publisher: South-Western College Pub; 1 edition (April 2, 2004)
  • Language: English
  • ISBN-10: 0324290179
  • ISBN-13: 978-0324290172
  • Should be available at Gibsons Bookstore.  Amazon price for new: $37.32.  see this link for Amazon. Limited copies of new books available at Amazon in early August.  You may want to also try half.com for lower priced used copies.

A Short History of American Capitalism by Meyer Weinberg

  • Paperback: 325 pages
  • Publisher: New History Press (2003)
  • Language: English
  • ISBN-10: 0-9746853-0-1
  • NOT available at Gibson’s Bookstore or other major book retailers.  A paperback copy can be ordered for free plus $5.00 shipping costs from http://www.allshookdown.com/newhistory/order.html.  The printed copy is strongly recommended since the book is 321 pages.  A free .pdf file download is available on the Angel course site.  Downloads of both webpages and Acrobat pdf formats are available online at: http://www.allshookdown.com/newhistory/download.html 

Sage American History by H.J. Sage

  • Website, not printed
  • Publisher: H. J. Sage Books 1996-2015
  • Language: English

 

If You Need Help

If you have questions and need help at any time, you can:

  • post a question to Commons as soon as it’s available – Very soon.
  • send an email to me, Jim, at lukej@lcc.edu or send one through D2L mail
  • call or text me at 313-550-8884

Jim’s Thoughts – Unit 1
Stories and Economic History

History is not a dull compilation of dates, names, and places. Events of the past may indeed be the raw material from which history is written, but a mere listing of simple facts does not make a history. Real history is, like the name implies, a story. Wikipedia notes that

The word [history] entered the English language in 1390 with the meaning of “relation of incidents, story”. In Middle English, the meaning was “story” in general. The restriction to the meaning “record of past events” arises in the late 15th century. In German, French, and most Germanic and Romance languages, the same word is still used to mean both “history” and “story”. The adjective historical is attested from 1661, and historic from 1669.id=”cite_ref-Whitney_11-0″>[12]id=”cite_ref-Whitney_11-0″>

Stories, of course, can entertain us, enlighten us, or guide us. Stories tell us how things happen. They tell us how events unfold. And in the process, stories give meaning. They suggest to us what’s important, or at least what the storyteller wants us to believe is important. All cultures, religions, and even science are built upon telling stories. If you doubt that science involves stories, just try explaining to somebody how gravity works or how the solar system works without telling a story of some kind. In the political and economic sphere, stories help build nations, guide policy decisions, and bind a people together. These types of stories are usually historical. They are the stories that become a nation’s identity or the national myth. For the United States, these stories involve the motivations and heroic struggle of the founding fathers during the revolutionary war. Our national identity has been further expanded with stories of immigrants seeking a better life in America, inventors creating the means to a better life, and pioneers settling the western frontier.

For our purposes, I will define “a history” to be the telling of how certain events happened and why they happened, or in other words, a history is a story. The stories we will study in this course are about how the United States economy happened. We will study the stories about how we, you, I and the other 310 million of us, got here.

Truth and Perspectives in Histories

Of course, some stories can be total fantasies and others can be very true. We expect the stories we classify as “history” to be true. That is, we expect them to be based upon a raw material of events, dates, places, and names that actually happened. But in many ways, histories, that is stories about events in our past, cannot be strictly divided into true vs. not true. A story, or history, gets it’s power because it is both interesting and because it tells us something. Stories have a point that the story-teller, the historian, wants the reader/listener to learn. The events, dates, people, and places recounted in a history may be accurate, but the power of the story is in how they are connected for the reader/listener. The way the history is written causes us, the readers/listeners, to perceive patterns, trends, causes, and struggles in tale of those events and dates.

The writer of history is much like the director of a movie. Their skill lies in deciding what events, dates, and people to keep in the story and which to leave out. They just to shine the light on some things and ignore others. An historian can’t re-tell everything that happened – that would be reliving the whole experience. Similarly, in real life, events happen simultaneously, but a story is told linearly. Some things stay in the story, some get left out, and some things get moved around. The historian has to first make the story interesting, if not entertaining. But unlike movies, histories are written for more than entertainment. A history typically has a “moral”, a point or conclusion, that the historian wants you to learn. Sometimes this moral or point is grandiose, such as “America is a unique place with more opportunity than anywhere else”. Sometimes the point or “moral” is more mundane such as “inventing things is difficult” or “not everybody supported going to war in World War II”. So while we can judge a history by whether or not the events re-told actually happened (it’s accuracy), what we really need to judge is the point, moral, or perspective the historian is offering.

Why Histories?

Why do we need these stories? Why should we read them? Why do they matter? And why should we study economic history?

First, it really can be fun and entertaining. A well-written history is engaging. It tells stories of struggles, conflict, and heroic efforts. When it’s our own history, we gain a heightened sense of pride, understanding, and empathy. A good history can also enlighten us as to many hidden connections.

For example, I’ll tease you with one that I’ll explain later in the course.  Many of you are familiar with Michigan’s Upper Peninsula (the U.P.).  The U.P. is often seen as a lightly populated area that has some mining, some logging, and a whole lot of hunting/fishing. Likewise, most of us know Detroit as the “Motor City”, the capital of the U.S. auto industry.  But, very few people realize that without the U.P. in the 1800’s, Detroit probably wouldn’t have become the automotive capital in the 1900’s.  The story of how the U.P. helped build the auto industry is one that runs through Chicago and the railroads.

Second, we can learn a lot from the past. We can learn what works and what doesn’t work. It’s been said that he who ignores history is condemned to repeat it. Given that much of the past is tragic, that should be enough reason to study history!

Third, is that we can better understand economics if we better understand how the economy evolved. This course is in fact, one part economics and one part history. In the process of learning how the American nation and economy evolved, economic principles are illustrated. In a principles of microeconomics course, you can study the theory of a monopoly. You’ll draw graphs and conclude the monopolist gains “unearned profits”. But the theory comes alive when you read the story of Standard Oil, how it created one of the world’s largest fortunes for the Rockefeller family, and how it crushed hopes and incomes of countless farmers and small businesses with it’s monopolistic pricing.

Fourth, many students have either a weak understanding of American history or a highly slanted view of it. Many of the “facts” of American history that we were told in elementary school or on television, aren’t exactly accurate portrayals. In fact, a lot of it isn’t even true. The American story is a very complex one.

Finally, today’s challenges, disputes, conflicts, and opportunities are the result both of what happened in the past and how stories of the past are told. All political leaders in all nations, whether from the left or the right or the center, tell historical stories or refer to particular tellings of history. History is used to get people to support particular policies, actions, and parties. Sometimes, the policies, actions, or parties supported are harmful to the people, but the stories told make it seem as if there is no other way. One defense against such political tyranny is knowledge of other perspectives, other histories, and the untold facts.

About Your Textbooks

For this course you have been assigned three textbooks: An Empire of Wealth by John Steele Gordon, A Short History of American Capitalism by Meyer Weinberg, and Issues in American Economic History by Miller & Sexton.

Sage American History

H.J. Sage is a retired community college professor from Virginia.  He taught history for thirty years, and like me, disliked the outrageous prices charged by academic publishers to students.  So he assembled his notes from his classes and created a virtual textbook:  the http://sageamericanhistory.net/ website. It’s really more of a general American history “book” but it has extensive sections that are relevant to our studies of U.S. economic history.  I’ll be using this site/text as a kind of baseline explanation or story of the key events and processes unfolding in the nation’s history.

Weinberg: How the Other Half Lived and The System Evolved

The Meyer Weinberg book, A Short History of American Capitalism, has a very, very different perspective from most economic history books. Weinberg is (or was) an historian also, but he was an academic historian. That means he made his living as a professor (U.of Mass. Amherst) teaching classes and writing research-oriented books and papers for academic audiences.

How is Weinberg’s focus different? Well, it is often observed that “history is written by the victors”. That is, most histories are written to put the winners in a favorable light.  For example, many books when writing of a period we call the “Gilded Age” or the “robber barons”, the text will focus most on the industrialists such as Andrew Carnegie who built huge corporations like U.S.Steel and how those corporations contributed to building the nation. The texts, while sometimes critical, tend to focus on the dramatic and heroic personalities. Carnegie was definitely a winner or “victor” and most books tell a positive story of Carnegie. In contrast, Weinberg focuses on the less visible and less-often told tales. Weinberg takes us into the tiny apartments where Carnegie’s workers live. Weinberg tells the story of how Carnegie’s U.S. Steel deliberately fostered ethnic and racial tensions amongst it’s black, white, and immigrant workers so that they wouldn’t form a union. From Weinberg we get a glimpse of how the many hundreds of millions of Americans who actually did the work lived. Others tell the stories of the leaders. Weinberg tells of the workers.

Weinberg also goes beyond just reporting events. He looks at how the system was formed. For example, today, we take corporations, big businesses, for granted. Recently the U.S. Supreme Court has ruled that such corporations have Constitutional First amendment free speech rights. But where did these corporations come from? They didn’t exist when the country was founded. In fact, there was no real legal basis to form a corporation when the country was founded. Weinberg tells us stories of legal and political decisions that not only enabled such corporations to come into existence, but often enabled the powerful to become more powerful. Weinberg provides an understanding of how large numbers of ordinary working people lived.

Miller & Sexton: Issues and Underlying Trends

The Miller & Sexton book is intended strictly for students. Miller & Sexton, who are both academics, have three purposes in telling their version of American economic history. First, is to tell the basics of how the structure of the economy changed over time. What we did, how we earned our money, and how rich we (or our ancestors) have been has changed rapidly and dramatically over 400 years. They are trying to tell that tale in a little over 200 pages. But Miller & Sexton are trying to do more than simply tell the narrative of American economic history.

Their second purpose (or point of their stories) is to illustrate economic theory. They do a pretty good job of that. The book spends a good a bit of time explaining economic concepts, theories, and ideas in the context of telling the history. These may seem like digressions from the main narrative to you, but they are important. This course is as much about economics as it is about history. Many of you do have not yet had a college-level principles of economics course (and some have and have forgotten!). One reason I choose Miller & Sexton is because they do a pretty good job of explaining core economic principles in the context of the history without requiring the student to already have had principles of economics.

Finally, the third purpose or perspective that Miller & Sexton are pushing is that of “issues”. For example, on page 58, they examine the idea that the discovery of treasure (gold, silver, natural resources) in America in the 1500’s-1700’s gave rise to European inflation and the birth of commercial capitalism itself. I really like these “issues” discussions. First, Miller & Sexton frequently discuss these issues in the context of some particular thesis or controversy that exists among academic economic historians and the research they are doing. It helps you see that our understanding of the past is itself not settled and subject to more research. But more importantly, these “issues” discussions usually deal with some underlying trend, conflict, or dynamic that occurred in our economic history. What I mean by an underlying trend is the underlying dynamic or struggle that is played out over time and through numerous events. These trends are rarely if ever seen or discussed at the time they are occurring. They don’t make the headlines, generally. Instead, the events that do make the headlines form a pattern of subtle changes that later are revealed to be part of the same dynamic.

To take an illustration from our times, let’s consider the real income (income after inflation) of the average American household. For decades in the 20th century, particularly the 40’s, 50’s, 60’s and 70’s, this average income was constantly, steadily rising. This mid-20th century trend is the basis of the “American Dream” belief that each generation should expect to do better than their parents. But somewhere around 1979-1980 the trend of rising incomes stopped. We now know that since 1980, the average income of those people who are not among the 5% of the richest (that’s your family and mine) stopped rising. Since 1980, real incomes for most Americans stopped rising. An entire generation of Americans was raised to expect rising incomes (“do better than your father did”) just like the previous 4 generations, but it didn’t happen. Instead, by the year 2000, increasing numbers of Americans were borrowing increasing amounts of money from credit cards and home mortgages in an attempt to live as if they had a rising income, when in fact they didn’t. Of course, it all collapsed in 2007-09 in the Great Recession brought on by the collapse of the home finance markets. This underlying trend was almost never a news event itself. It rarely made the headlines outside of some cloistered economist/geeks discussing numbers. But the headline events of 2008-09, the collapse of Lehman Brothers, the big government bank bailout, the rising unemployment, can’t be fully understood without the background trend information.

This is the value of Miller & Sexton. I want you to try to look beyond the headline events, the names, dates, and events that would have been covered in the newspapers at the time. I want you to look for the underlying economic trends and dynamics. It’s good practice for understanding our world today.

Themes to Look For

Jim’s Perspective

There are many underlying trends and dynamics happening in American economic history. These trends intertwine with each other. Often they repeat themselves. To help you try to see these, I’ve identified five themes that play out in U.S. economic history. By a theme, I mean a basic struggle or conflict that occurs repeatedly, or a pattern that happens.

I have identified four themes.

  1. Institutional change. Economists define “institutions” as the rules of the economy. Sometimes these rules are written as in laws. At other times the rules are unwritten and part of the culture of society. Economic change is often enabled by and accompanied by institutional change.
    For example, the development of joint-stock companies in the late middle-ages enabled the creation of colonies in the New World and large-scale long-distance trade. A joint-stock company enabled several investors, none of whom could afford or could risk the enterprise themselves, to join together legally to undertake the enterprise. These joint-stock companies were the predecessor of our modern corporations. Without them, our economic history would look very different indeed. Around 1870, the U.S.Supreme Court made a series of decisions which endowed these companies with many legal rights (and protected managers) that they never had before. The Court effectively made the corporations into “persons” for legal purposes. Economic histories frequently tell of the Robber Barons and giant businesses that were built during the late 1800’s, companies such as Standard Oil, the railroads, and U.S. Steel. But without the institutional changes that made a corporation possible, these companies wouldn’t have grown so large.Other institutional changes happen as a result of changes in culture or demographics. For example, prior to World War II, it was commonplace for multiple generations of a family to live together under one roof. Grandma, mom and dad, and kids all lived together (often with only 1 bathroom!). Since WWII, this has been the exception. Grandparents now are expected to retire and live on their own. Among the many results of this social or institutional change is the great growth of Florida. Once retired, many senior couples, freed from the ecnomic need and social expectation to live with their children’s families, moved to warm weather and year-round recreation. Without this social and institutional change, Florida would be a much smaller state today.
  2. Private vs. Public; Market vs. Government. America was “born” in 1776 when the Declaration of Independence was written. That same year, a Scotsman, Adam Smith, published The Wealth of Nations. Many modern so-called “followers” of Adam Smith believe Smith advocated pure free markets, private enterprise, and private profit-seeking (I doubt many of them have actually read the book!), but actually didn’t. Instead, Smith attempted to describe when and under what conditions private, profit-seeking in a free market would benefit society and when it wouldn’t. In the process, Smith describes many roles for government in encouraging markets and trade, in limiting the abuses of private profit-seeking, and in providing those goods and services which the private sector either can’t or won’t provide in the absence of government. Since then, economists have debated these same questions, but so has America. Indeed, except for slavery, no other issue has inspired as much intense rhetoric throughout American history. Often advocates for either side have taken extreme positions that almost cast the issue in good vs bad, right vs. evil terms, capitalism vs. socialism. In today’s political environment, we see such debate played out in discussions of healthcare and how the U.S. should structure the delivery of healthcare. Both sides will often marshall their own stories of American history intended to strengthen their viewpoint. Reality, of course, is not so simple.
    For example, in the late 1800’s, the great railroad businessmen, people like Vanderbilt, Gould, Stanford, and Hill were great advocates for a free-market, laissez-faire (hands-off) government economic policy. Free-market supporters then and now tell stories of how the hard work, vision, and risk-taking of these private sector businesspeople built the railroads and the railroads built industrial America. They argued against government taxes and government restrictions. That story is true to a point. But it leaves out that the original investors that financed the railroad construction would never have invested if government hadn’t subsidized the construction with grants of free land that the RR’s could then sell off for profits. Similarly, once many railroads were built and price competition began to reduce profits to ordinary levels, these same extremely wealthy businesspeople became advocates of government regulation (through the Interstate Commerce Commission) so that they could effectively conspire to fix prices under the government’s sanction.
  3. Technological Change in Transport, Communication and Energy. Most any narrative of American economic history will note the great series of inventions that have been part of it. Very few children get through elementary or high school without hearing some stories about Eli Whitney and the cotton gin, Thomas Edison and the light bulb, Alexander Graham Bell and the telephone, or Henry Ford and the Model T. Inventions have certainly been a big part of the American economic story. But often the attention is focused on the heroic story of how the invention happened, and not on how it played into the bigger picture. Another weakness of such invention stories is that they focus on particular inventions of particular devices. Sometimes the most significant change comes not from an invention of a device, but an innovation. An innovation is a change in the way of doing things or the method of organizing production.For example, Henry Ford didn’t really “invent” the car. He developed an innovation in producing cars: the assembly line using standardized parts. His innovation allowed the cars to be produced at a small fraction of the cost they had been. The result was cars for most people instead of cars for only a few rich. One indication of how powerful his innovation was is that when it was applied to tractors and farm trucks, it eliminated the use of horses as the primary transport/engine in practically all farms in only 2 years. The result was a vast increase in farm productivity, increased food production, and lower food prices.The most significant and profound innovations and inventions are those that happen in transportation, communication, and energy. To a large degree, American economic history is the tale of ships & boats giving way to railroads giving way to cars & trucks. It is a tale of horses and whale oil giving way to steam and kerosene giving way to gasoline and electricity. Often the real impacts of innovations in transport or communication cannot be foreseen at the time they happen. Consider today. The Internet is barely 30 years old. The World Wide Web is less than 20 years old. Yet, when both were developed, nobody forsaw you taking a course in college via them.
  4. Everyday life. It is said that history is written by the winners. It could also be said history is written about and for the rich and powerful. Yet, for every rich businessperson, or powerful politician, there are literally millions of others who lead ordinary lives. They have near-average incomes and live near-average lifespans. They struggled and sacrificed to improve their lives. They had hopes and dreams. They had successes and failures. They fought the wars. They built the In reality, most of us are the descendants of these people and not the rich-and-powerful. Unfortunately, most histories focus on the decision-makers and not the workers. If we understand the workers and their lives, we get a much better understanding of our own lives, our own families. For example, most economic histories will mention the construction of the huge Hoover Dam in Arizona-Nevada on the Colorado River. This is right, for the Dam has had a huge impact on American economic history. Without the Dam and the electricity and water control it provides, we probably wouldn’t have a Las Vegas today or even most of Los Angeles and southern California. No Hoover Dam, no Disneyland. But most economic histories of Hoover dam focus on the decisions to build it and the government financing of it. Some will discuss the helpful impact on unemployment in the southwest during the Great Depression. Few histories will discuss the reality for the thousands of families who lived in desert heat (before air conditioning or refrigeration) for years to build it. Nor will they discuss the 112 men who died building it. (for more on this see Men, Women, and Children of Hoover Dam). Adam Smith wrote that the real wealth of a nation lies in the productivity of it’s people, not in treasure, riches, or money. Ultimately, it is the lives of ordinary people that determine the real evolution of any economy or nation.
  5. Class Conflict. The “American Dream” is the part of the American national self-image. But is it real? For whom does the opportunity exist?  America has seen the emergence of a large middle class, but how and why did it emerge.  Similarly there have been significant periods when the rich not only got richer, they became extremely rich and often at the expense or stagnation of the poor, lower, and even middle classes.
  6. Racial and ethnic conflict, integration, and civil rights. No story of economic development of America is complete with reference to it’s struggles over immigration.  Even more significant are the existence of slavery and the war/genocide of the native Americans.  These conflicts continue to affect the nation today.

Being Aware of Themes and Perspectives

When you are reading the texts or when you are viewing the selected videos, the first thing you want to do is to read/listen to the story. Find out what happened. Listen to the author. But I want you to go beyond just reading and remembering. I want you to read critically. What do you think is the point or “moral” the historian wants you to learn. Can you sum it up? Do you agree? What do think this historian left out? Ultimately, I want you to develop your own informed perspective. The project in this course will be an opportunity for you to tell a story (history) of your own choice and offer your own perspective. It will be your choice to comment on these themes or to make your own statement about the American economy by telling a small “history”.

Further, I want you to look for and think about these four themes I’ve identified. Try to see them “behind the scenes” in the stories you’ll read in this course. In some cases, do your own research. Many of you have access to parents, grandparents and other older family members. Talk to them about “what it was like”. You may be surprised. I will close by sharing a personal experience related to that fourth theme of “everyday life”. By the time I was 40 years old and long out of university, I, of course, knew a great deal of American economic history. After all, history was a big part of my graduate economic studies. But it was a conversation I had with my Dad when I was 40 that really changed some perspective for me. I grew up in a suburb in Ohio. My dad grew up on a farm in southern Indiana. I know the farm well. My uncle owns it now and I’ve visited countless times in my life. My Dad left the farm after high school in 1940, went to a university (first in the family to do so), and became an electrical engineer. I knew him as a somewhat innovative research engineer that tested new electrical devices for the Air Force. What I never realized until that conversation was that my Dad had never lived in a building that had electricity until he went to college. The area where he grew up didn’t get rural electrification until the start of World War II. That changed my understanding of “everyday life” and how the economy had evolved for my family. I encourage you to ask your own family members or others with whom you are close how the evolution of the economy has changed their lives. These kinds of changes are subtle, yet profound. Even today, as I sit writing these words on one of my several computers, I’m reminded that I own more computers (and vastly more computing power) myself than the university owned when my older sister went to college in 1969.

The history of the American economy is one of change, conflicts, and debates. Develop your own informed perspective on it.

— Jim