Friday, January 23, 2009

Was the United States built on free enterprise and capitalism?

Many argue that the United States was built on free enterprise and capitalism. But that is only part of the picture; many other factors contributed to the development of the United States.

I just finished Nothing Like It in the World, The Men Who Built the Transcontinental Railroad 1863-1869 by Stephen E. Ambrose. He paints a very complex picture of all the ideas and efforts that went into building the transcontinental railroad from Omaha to Sacramento. The two companies were the Central Pacific based in California and the Union Pacific based in New York.

Ambrose doesn't use the word, but I would say that the first part of the picture was imperialism. One group of people decided they had control of the land already inhabited by others. The expected result was that some of the inhabitants resisted and some worked with the outsiders. See pages 265-266 on how the Pawnees thought they had a better life as hired guards.

A second important part was government grants. Because the land was considered "unoccupied", the railroads were able to choose their routes based mostly on the terrain and the government generally let them have their choice. Further, the government granted the railroads portions of the land along the right-of-way for use or sale. Finally the government issued bonds based on the miles of track laid. This was necessary in part because the railroads could not raise sufficient funds through their own stock and bond offerings. One CP official complained "that the government subsidy had been more a detriment than a boost to the companies, because of all the conditions attached to the bonds." A UP official responded, "Mr. President of the Central Pacific: If this subsidy has been such a detriment to the building of these roads, I move you say that it be returned to the United States Government with our compliments." p. 367

Nothing would have happened without a third important part: labor. Thousands of Chinese, Irish, and Mormons built the railroad with hand tools, often without being paid on time. They were aided by black powder and nitroglycerin, sometimes with deadly results. Many died of cold, avalanches, accidents, disease, and murder. Nobody knows the exact death toll of workers.

A fourth important part was corruption, probably unavoidable in an enterprise as large as this. Congressmen were given stock in the railroads; shareholders voted themselves huge dividends while not paying the workers. Congress had six months of hearings "featuring for the most part acrimony and sensationalism, although most charges were true and would be proven." p. 373

But the most important part was vision. A transcontinental railroad was discussed by Congress before the Civil War to unite the east and west coasts. Railroads were seen as important by both sides in the war to move troops and material. Railroads were seen as a more economical and faster way of moving goods and people over animal-drawn vehicles. Railroads were necessary to supply the forts across the country as more and more people moved west. The vision of the importance of a transcontinental railroad was shared by politicians and soldiers, by businessmen and laborers, and by journalists and scholars.

Without all of these parts, the United States would not have become a unified country "from sea to shining sea".