History of American Business: A Baruch College Blog

Blog 4

In Studying American History what I’ve found interest is how the  mercantilist system that dominated much of the colonial period sprung about and how much slave labor would shape American Business History. The Colonists would not have thrived without this access to low cost labor but it would be industrialization that would provide the shift required for Abrahams Lincolns emancipation. The issue of slavery and workers rights culminated for along time and explains movements like the Civil rights movements and Knights of labor party. Much of this early economics is built upon exploiting low cost workers for maximum profit and really brings into question the capitalist’s system and the corruption it carries.  The varying economic theory such as neo CLASSICAL Keynesian SUPPLY SIDE ECONOMICS are all just responses to fix an  economic system and keep it going. The advancements and strides America has made in relatively short time is highly impressive but capitalisms  has showed its capacity for misuse whether it be the Robber Barons creating monopolies buying up the courts and placing profits against public interest and the trust busters who oppose them and fight for the rights of the average worker. This prolonged struggle to me is the culmination Of Marx while this history of class conflict can create friction the government and its policy makers engineer the systems that keep our economic machine going .

Final Blog Post

One of the main takeaways from this course is how dark certain business practices stemmed from like accounting which is still used today but originated as a method of keeping track of slave work as told by Rosenthal. As time progressed we see that labor rights were moving but not at the capacity that the nation was and this led to a delay in particular from being achieved until later on such as child labor is abolished. It is interesting to see how the industrial revolution catapulted the United States to become a nation that is able to sustain itself with the resources now being created and thus becomes a nation in which it can provide to others. As time progressed the nation grew at an impressive rate and it is interesting to take a look at how the nation’s growth from a business aspect. What I had not taken a look at before was this idea of consumer culture that swept the United States in the post-war era. I was fascinated by the market and how it dictated what people were to buy in order to maintain a sense of relevancy. It is usually a time in which most history classes discuss the immediate placement into the Cold War against the Soviet Union. This course discussed the importance of advertising which played a crucial role in the 50s-60s. This course has demonstrated how the United States’ journey to becoming one of the most successful economic nations from what once started as 13 colonies.

 

Blog Post 4

America is a relatively new nation compared to other nations around the world. Studying its history is an interesting process because it is objectively the most successful nation in history specifically in relation to business and economics, which was the focus of this class. The different chapters of America show a nation that was imperfect, but which nation has ever been perfect? All nations have showed their own unique struggles and issues. The American timeline shows a country that was founded after a righteous rebellion against an oppressive ruler which was the British empire. The struggles and adversity that America encountered were identified and were subsequently addressed, although the extent of the success of some of these issues that were worked on is unclear and left to a subjective analysis as are all sociological assessments of a respective country or phenomenon. Today, America still has issues, and many are debating exactly what they are and what is wrong and how should they be tackled. 

As previously mentioned, this class is an emphasis on American history through a Lense of business and economics, but sociological phenomenon is intrinsically tied to this and was also spoken about in class, and I find it relevant to this post. 

It was interesting to access this class through a business prospect because it is certainly the most if not one of the most important ways to do so. Historically, and especially on the macro level, America is the most successful economic force ever and also in contemporary times. Evaluating this through the course of its history offered interesting insight. 

What I found particularly interesting, and it is what I wrote my last paper on was the consumer culture that has defined American economic doctrine post WW2 and up to today. Economic prosperity after the war was driven by massive consumption which in economic terms is increasing aggregate demand which in turn makes supply keep up with this demand and increases employment and this cycle is what American prosperity of the time and the so called “American dream” was built on. This was enabled by American dominance on the global stage after the war as well as the massive domestic abundance of resources in the country. This American prosperity has certainly decreased in recent decades and especially in the past few years, but it is still present in relation to many other countries who aren’t as well off. How to remedy the decline is a complicated but necessary topic to address, but certainly too complex for this blog. 

Blog Post 3

The great depression as the title suggests was a bad time to say the least. A massive recession was seen not only in the United States but across much of the world and especially the western world. The stock market crash of 1929 and the collapse of international trade had left many people with less wealth which increased unemployment, the destruction of wealth led to less consumption which led to less wealth and higher unemployment, the economic circular flow had been severely impeded. 

The system of classical economic theory which explains that the mechanisms of supply and demand will eventually bring the economy to an equilibrium and closer and closer to full employment were being questioned. This school of thought had been correct in the past, but the issue is that its effects weren’t immediate and took an indefinite amount of time to work. The economists of the time believed that this time frame was too long and that something that could work faster was needed. 

The most prominent proponent of this theory was John Keynes who, as previously mentioned, believed that the issue of lack of consumption could quickly be remedied by increasing aggregate demand. The way in which this would happen was through the injection of currency into the economy through such things as lowering interest rates and increasing government spending. 

The new deal adapted this way of thinking and began to do this through various methods. The new deal successfully increased aggregate demand by extending the money supply. FDR lowered interest rates and also set limits to how much gold Americans could own and required them to Exhange their gold for American dollars. He also tried to tackle unemployment by creating many workers programs such as the Civilian Conservation Corps (CCC). He protected American financial stability by creating the Federal Deposit Insurance Corporation (FDIC) and he regulated big business by creating the Securities Exhange Commission (SEC). 

These policies did create economic growth of on Average 8% to 10% per year and drastically lowered unemployment. The issue with this Keynesian approach is that of course if you give money to people they will spend more and then more jobs will be created and more and more economic participants will be better off and consume more goods and services. This can only work in the short term because this wealth is artificially inflated, and it isn’t determined in real terms. 

 The essential problem is that by having too much money chasing too few goods and services, the prices must go up to prevent shortages. It isn’t about how much money one has but about how many resources one can consume. Printing more money doesn’t create more resources but only increases the prices. It isn’t about how much money one has but the percentage of money one has in relation to the total amount in circulation. Because of various factors such as banks being the main distributors of money creation through loans, this printed money is given back to the top 10% or 1% percent of the economy and eventually what is seen is middle and lower classes worse off than they were previously and wealth inequality is increased. They have less wealth and prices are very high which in turn causes a recession because there ends up being less aggregate consumption as a result of people simply not affording to buy many of the things, they used to be able to. 

This phenomenon is the biggest problem with such an increase in money supply as well as the issue of an increase in government intervention. The Keynesian approach was adapted during Covid, and we are now in a recession that will only get worse. One could say that FDR was saved of this issue in many ways by the outbreak of WW2 which created massive amounts of real demand and job creation that seems to have offset many of the medium- and long-term issues of the Keynesian monetary and fiscal policy that he had enacted. 

Blog Post 4

One of the main concepts that I understood and took away from this class was connecting the dots between different facts and understanding the chain of events that certain events had lead to throughout history. One concept that stuck out to me was the connection between the rise of capitalism and slavery. It is often not thought that slavery was one the main financial motives of capitalism, but through historic research there is an argument to be made even if solid proof isn’t readily available. Another concept in this class that helped broaden my view of the world is how America became the leading world power as we saw an increase in economic and politcal power after the World Wars, not only through military power but through leadership and because of a financial system and currency that held value.  Ultimately, studying American history through an economic stand point helps understand how to deal with similar or even vastly different issues in the future.

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.