Author: ANDREINA RODRIGUEZ
Final Blog Post #4
I want to start by saying it was great having you as a professor this semester. This class challenged me and allowed me to dig deep for either an answer or solution to more complex readings and topics. The chapter “Reflation and Relief” by Eric Rauchway gave me some new insight into the new deal and information that I was unaware of. I was not aware of how the new agreement assisted in getting the United States out of the Great Depression. The chapter went into great detail about the banks and their systems and programs to help citizens acquire jobs amid all the chaos. I have also learned the value of studying American history from a business and economic history perspective and how influential it can be in history while also learning about the impact it had on the time and how it has helped shape the future.
Throughout this course, we learned about influential business people who had either a significance in shaping policies or running government projects by being selected by the highest power in office. Understanding that a person such as Bernard Baruch had such an influence on the strategies in business during the war. Through the evolution of history and economic referencing, you can see how they go hand-in-hand and correlate with each other. The significant changes in operations to managerial capitalism show how economics has evolved and can evolve with history. The readings and studying the periods have made me question my pre-existing ideas about the emergence of capitalism and how I had initially viewed it. Overall, this course should be taken because it allows us to challenge ourselves and learn about policies and background history on economic topics that we discuss day-to-day, whether you’re working in finance, mathematics, or banking.
Judith Stein: The Great Compression/Preface
In Judith Stein’s Preface and Chapter 1 of Pivotal decade, The United States diminishing decade and fighting to come back from the economical damage that had happened. Upon reading I learned the 1970s was the only decade other than the 1930s where Americans ended up poorer than what we had imagined. Stein provided so much data and facts that were not what we imagined the 70″s era to be where we thought about disco, the Watergate , hippie era just to name a few,she also dicussed that the economy is the foreground. But every economy is shaped by politics. By 1945, Americans had become much richer than people of other nations with the gowth in new technology and produtivity. 54% of families in the United States owned their own cars and began traveling more frequently as Boeing released their firt 707. 44% of the population were homeowners and had migrated to the suburbs after being able to finally afford homes . By 1970, 63% of families were homeowners, moving to the suburbs these migrations were made possible by higher wages, thirty-year GI bill home loans, the application of mass-production techniques to home-building, federal highway construction with over 60% of the population was driving, and corporate decisions to locate operations away from cities to attract a new crowd.
Between 1947 and 1973 disposable income increased 15 percent in real terms. For the first time in history, large numbers of workers had
discretionary income, money that they could decide how to spend. The Keynesian idea states that promoted employment fostered polices that produced the Great Compression. “Keynesianism was in its heyday in the United States in the 1960s when Presidents John Kennedy and Lyndon Johnson cut taxes by $11.6 billion to increase aggregate demand and investment. (Spending on military items for the war in Vietnam helped, too.) The resulting investment rates of 16 and 17 percent, as a percentage of GDP, equaled those of the boom of the mid-1950s”.
With all these new policies and the goverment finally taking action to better the economy, places such as Japan and Europe were also developing at a rapid pace. Like the United States, the Europeans and Japanese agreed that the lesson of the 1930s was that government should shape and stabilize the market while allowing private investors to create jobs and implications on Tariffs also began with the introduction to GATT. The United States looked the other way as Europe and Japan protected markets began discriminating against American producers. The large American market quickly became economic competitors.President Kennedy’s undersecretary of state for economic affairs, welcomed European imports in the United States.They had been a lobbying for the European Economic Community (EEC) in Wash-
ington.American growth rates in the 1950s were lower than those in Europe and Japan. The U.S. economy grew at a rate of 2.3 percent a year between 1955 and 1961.
“The EEC, created in 1957, was really a customs union that violated the GATT. The community ‘‘averaged up’’ tarrifs, increased farm imposts, and kept American coal out with tight quotas”. U.S. exports to Europe fell while military expenditures in Europe continued. Thus, the U.S. balance of payments was in deficit.
Judith Stein speaks on what the Age of Compression was and how it became the Age of Inequality. The Age of Compression officially ended in 1973 after wages stopped growing because of the drop in productivity and equality with more private corporations, with the rate of productivty declining and wage growth falling suit.
Blog Post #2: Richard White, “Introduction”
Within Richard Whites “Introduction” from Railroaded he dives in on the evolution of the railroad system and how railroad corporation came to be hated because they had monopolized the greater areas and territories when settlers were lured into moving to places on the belief on being able to produce, yet they would be producing for these monopolized companies. Richard White argues that the transcontinental railroads of the late 19th century were political, business, and social failures that should not have been constructed when and where they were. The excerpt also discussed American and Canadian politics that fueled the reform movements of three countries, due to this in the late 19th century these railroad failures were essentially the key piece to the complicated development of modernity and the historical role of corporations. The excerpt also discusses the utter uprooting of older ways, and the formation of new technology in the hands of new men with a new form of corporate organization.
Railroaded also emphasizes on financial capitalist, the use of credit and the financial markets as the central engine of corporate growth and expansion. It was quoted in saying “It was not capital that built the railroads but credit, and that capital was ultimately the risk in the railroads for the men who controlled them.” Capitalist such as Jay Gould, Henry Villard, Thomas Scott just to name a few were entrepreneurs who bought bonds that allowed the railroads to proceed. The markets that were used and exploited were historical, they had state involvement, regulations, and military protection. Throughout the excerpt we can also depict how it is not whether governments shape markets, but how they shape them within social and cultural practices, it also establishes a kind of networking between politics and business that persists to this day. Essentially corruption is quite simple: It’s the trading of public favors for private goods, and that’s what happens repeatedly with the railroads and the federal government.”
Many entrepreneurs obtained great fortunes, but had created inefficient, costly, and dysfunctional corporations. These corporation although did create innovation in production, it became a problem because they built railroads that were better left unbuilt and flooded the market with products that had little to no need. Upon the trajectory of the time, it was shown that these investments would have been better off in other sectors of the economy, also many disbursed large amounts of capital and labor for no prosperity. The Transcontinental was built ahead of its time, railroads such as this one reshaped then sense of time and space.
Mandell : Wealth, Power, & Early Republic VS New England
Looking back into history and into Mandell’s reading on Wealth, Power, and the Early Republic were able to see early on how certain New England states such as Connecticut, New Jersey, and Massachusetts set to disagree with “Republicans” ideas of what is property and how property should be acquired. The idea of “Equality of an estate and property” did not truly exist, property was vested to only a certain few individuals to only promote industry, population, frugality, and morality (Mandell 81).
Many articles began coming out discussing the “fraud and injustice” in America’s part and how deeply flawed our country was. America had not yet departed from the rule of the right and had people paying taxes on the debt even knowing that they would be unable to afford it. Thus, leading to them being fraudulently being deprived from their possessions. The people in the northern states felt that they were mourning the “simplicity of manners” and had been “lost to luxury and its attending evils” (Mandell 83). The themes presented in history, with the conflicting views on heavy taxation, egalitarianism, distribution of wealth, and property as to what and who will also be considered property in the early rises of the emancipation.
Throughout this time Americans also became more sensitive to slavery causing a socioeconomic divide between the northern states and southern states. People like James Winthrop urged the people to go against the proposal given by the federal Constitution that would then make the northern states equally as the south with an unequal distribution of property. Accepting this will display a toleration of slavery and the ignorance of poverty of the lower classes, it was also explained northern taxation was traditionally democratic and generally more experienced and commented whereas those southern taxation suffered because the regions cultural “mastership” and made assessments seem to benefit dominating plantation owners.
With independent Americans causing commotion and disagreements over wealth and property. Throughout American history time and time again property rights and the distribution of those rights have always been a problem and the American people and government can never seem to come to a resolution. Mandell’s reading just proves that history always repeats itself or that it can just be that it’s never truly resolve.