EVOLUTION OF THE ECONOMIC MIND OF USA BY 1950

The present section aims at explaining how the historical experience of the people of the U.S. was instrumental in shaping their morality, value system, beliefs about priorities and views about themselves and others. In order words it is an attempt to delineate the various historical forces that were instrumental in molding the American national character. In short, the chapter attempts to identify of the “American mind”. Such a study a study of the predispositions of the people of the U.S. is essential for understanding and explaining the perceptions of the U.S. decision makers. The predispositions of the people of the U.S. are studied by analyzing the historical consciousness of the people of the U.S. The historical consciousness of a state may be considered as constituted of its culture, belief systems, values and expectations. Hence, the historical consciousness of the people of the U.S. is studied here by tracing their national experience, their political beliefs, values, expectations and their experience in foreign relations.

THE SETTLEMENT OF THE FRONTIER

The American culture is largely the product of an inter-play between two major factors such as the inheritance, impulse and aspirations of the men of various countries to leave for America, and the influence of the American natural environment upon the people who arrived there.

The majority of the early immigrants were of English origin. They had brought with their English inheritance and institutions. The Anglo- American pioneers were bred in the traditions of an expanding capitalist system, of private ownership of property, and of a considerable amount of a political and economic freedom for the individual. They were equipped by training and tradition to capitalize on the relatively greater opportunity for self- betterment provided by the physical environment of the frontier. But they began to acquire new characteristic in the American conditions that were distinctively American. Hence the new American setting the English inheritance and traditions underwent gradual modification. The English class feeling slowly vanished from their political consciousness in America. But they retained certain political habits and attitudes. They continued to insist on the right of individual freedom and independence and sustained the habits of pragmatic and empirical ways of thinking. Among the early immigrants there were also ambitious presents from other European countries. Thus, the settlement of America by people of various races was an important aspect of American character and history. About this peculiar aspect of American heritage De Crevecoeur at the time of American Revolution that

What then is the American, this new man? He is either a European or the descendent of a European, hence that strange mixture of blood, which you will find in no other country. I could point out to you will find in no other country. I could point out to you a family whose grandfather was an English man, whose wife was Dutch, whose son married a French woman and whose present four sons have now four wives of different nations. He is an American, who leaving behind him all his ancient prejudices and manners, receives new ones from the new mode of life he has embraced, the new government he obeys, and the new rank he holds…. Here individuals of all nations are melted into a new race of men, whose labors and prosperity will one day cause changes in the world. (De Crevecoeur. “What is an American?” In the Character of Americans: A Book of Readings. Edited by M. McGifferent. Illinois: The Dorsey Press, 1970. P. 43).

This continual ingathering of various races and people went on for a long time. Thus, there is scarcely a stock on the ethnic map of the world that is not represented in America. In general, there are four migration families in America. They include men from Asia who formed the strain of American Indians; men from British Isles and Western Europe; men from South Africa –the Negro strain and men who migrated from everywhere else - the polyglot ethnic strain. Each immigrant group contributed elements of its traditional that were absorbable by the American heritage. (For details see Max Lerner. America as a Civilization: Life and Thought in the United States Today. New Delhi: Oxford IBH. Publishing Co. Pvt. Ltd., 1987. PP. 77, 11-22; For details on the ethnic composition of the American population see also T. Sowell. Ethnic America:  A History. New Delhi: Asian Books Pvt. Ltd., 1991.)

The immigrants in general hoped that in the New World conditions they could have a fresh start and improve their life. They were in search of more freedom, independence and abundance. Improving the economic fortunes was the major impulse for the migration. Moreover, the immigrants come to a huge, wild country, insulated by two large oceans. It had a vast expanse of territory with rich natural resources. The principal distinguishing feature of the new physical environment was the man- land ratio. The immigrants were few in number but the land available was in abundance. The unutilized resource and the plastic social order provided individuals the opportunity to improve their social and economic status. The combination of resources and a people with an incentive to use them shaped the social environment of the pioneer communities. When the first colonies were established large number, people began to be drawn into the West motivated by the hope of a better livelihood and greater independence and some impulse of restlessness and adventure. The settlement of the frontier was a selective process. The frontier applied more to the restless, ambitious and adventurous men of action. The new social environment of the New World strengthened certain behavior patterns and weakened others. In order to survive in the new environment, the new comers had to acquire the qualities earlier developed by the pioneers. Thus, the strength of will, self-reliance adaptability, neighborliness, respect for talents with practical values, disregard for artificial distinctions and the drive towards independence were reinforced again and again in the westward expansion. These qualities which enable men to survive in the wilderness and eventually win prosperity became the characteristic aspects of American personality. Thus, the westward expansion and the conquest of the continent had great impact in the molding of American character. The abundance of land and resources made the setting easier and rewarding. It facilitated also the growth of individual freedom and social equality and promoted attitudes of optimism and self-assurance. The westward expansion expanded the belief in popular rule and accelerated the trend towards democracy. The pioneering experience fostered both political and social democracy. Thus, pioneers believed that all men could achieve equality by utilizing nature’s resources. To the pioneer every man was a self – dependent individual. If he failed, he had only himself to blame. They believed that the successful should be left alone to achieve greater success. The people become distrustful of governmental meddling in individual affairs. But they were willing to cooperate with their neighbors for public good. Thus, America’s frontier experience had its own unique impact on the national character. The social characteristics associated with frontier tradition include optimism, materialism, equalitarianism and individualism. The frontiersman was mobile, versatile, inventive, wasteful, and nationalistic. He scorned precedents and traditions. He was a practical opportunist concerned primarily with devising habits and institutions that would allow him to utilize most effectively the abundant available resources (See H.B. Parkes American Experience: An Interpretation of the History and civilization of the American People. Connecticut: Greenwood Press, 1959.PP. 25-36; R.A. Billington. Westward Expansion: A History of the American Frontier. New York: The Macmillan Company, 1967. PP.745-760). Thus as F.J. Turner has opined, “American intellect owes its striking characteristics to the frontier. That coarseness and strength combined with acuteness and acquisitiveness, that practical inventive turn of mind quick to find expedients; that masterful grasp of material things, lacking in the artistic but powerful to effect great ends; that restless, nervous energy; that dominant individualism working For good and for evil, withal that buoyancy and exuberance which comes with freedom –these are traits of the frontier, or traits called out elsewhere because of the existence of the frontier (F.J. Turner. The frontier in American History. New York: Henry Holt and Company, 1920. P.37).

Thus, the process of settlement was not merely a geographical expansion but also a psychological development by which people from different countries were transformed into Americans.

EVOLUTION OF INDUSTRIAL CAPITALISM IN USA

As noted earlier the motive for economic advancement was one of the most important factors that led to the settlement from every beginning. The desire of the settlers to acquire more and more property and the abundance of cheap land gradually led to a society in which almost all were independent property owners. Due to the scarcity of labor the energies of each individual was directed against nature, rather than against human beings. Hard work was almost always rewarded. Hence there was little possibility to inequality becoming excessive. So, no one desired to see competition limited or equality institutionalized. Wealth and prestige were considered as desirable goals. Hence everyone wanted only to be free from any interference and no one felt need for any government.

PRODUCTION SYSTEM: THE TRANSFORMATION FROM AGRARIAN DEMOCRACY TO INDUSTRIAL CAPITALISM

But the war of independence had a significant impact on this agrarian attitude. It convinced the people about the need for a strong government. It became clear to the people that through agrarian democracy promoted individual pursuit of happiness, it could not lead to national wealth power. This attitude provided a favorable setting for the formation of federal Constitution. (For details see D. Higginbotham. The War of American Independence. New York: The Macmillan Company, 1971. PP.348-463). While large majority of the population acquired property by mixing their labor with land, the more privileged and moneyed classes could obtain it through political influence or through commercial and financial methods. Such property rights were known as contracts. These moneyed classes believed that a government based on majority rule would endanger their property rights. Hence, they preferred a system of government which would not only legally guarantee the sanctity of contracts against demo0cratic interference but also regulate economic development so that men with political influence could continue to obtain land titles, monopolies and other forms of economic privilege. In such a conception of government the moneyed classes promised not only to protect the property of the rich but also to encourage business enterprise and hasten the growth of American Wealth and power. The Greatest exponents of this view were Alexander Hamilton and John Marshall. But the agrarians argued that such a government would destroy the happiness and welfare of the large majority of the populations who acquired property by labor, not only contracts. This view was a reflection of the American experience. The main exponents of this line of thinking were Benjamin Franklin and Thomas Jefferson. They argued that agriculture was the only honest way of life as it only created new wealth. The agrarians wanted to maintain a genuine equality of economic opportunity and to make it impossible for men to acquire wealth by any methods expect their own industry and talent. The agrarian view reflected the wishes and interests of the majority of the 18th century Americans. (See H.B. Parkes. Op. cit. PP. 109-118).

Thus, Constitution drafted by the Philadelphia Convention of 1787 was based on aristocratic and capitalistic principles. (For details see M. Broddus and L.P.Mitchell. The Biography of the Constitution of the United States. New York: Oxford University Press, 1975. PP. 20-139; A Kelly and W.A. Harbison. The American Constitution: its origins and Development. New York: W.W. Norton and company Inc., 1948). While the agrarians opposed the constitution, the aristocratic and moneyed classes unanimously supported. The agrarians complained that too much authority was being concentrated in the new federal government and that civil liberty and democratic control were not sufficiently assured. In order to remove the fears of the agrarian opposition, it was agreed that the Constitution should be amended by the addition of a bill of Rights guaranteeing the essential liberties of the individual against federal interference (For details see. Meltzer. The Bill of Rights: How we Got it and What it Means. New York: Thomas Y. Crowell, 1990; M.G. Froburg. The Bill of Rights: Its Impact on the American People. Philadelphia: Macrae Smith Company, 1967).

For the first twelve years after the adoption of the constitution the internal development of the country was controlled mainly by the Federalists. Though the trend set by the Federalists. The 1812 war with Great Britain caused the final abandonment of the agrarian principles. The most important result of the war was the growth of the nationalistic sentiment. All felt that their country should be built into a strong and rich one guided by a paternalistic government. This conviction swept away what reminded of the agrarian principles. After the war there was a rapid growth of industry. It was becoming easier for cleverer persons to make money. The under such conditions the austere agrarian principles began to lose their popular appeal. But in 1828 agrarians staged a comeback under the leadership of Andrew Jackson. But later in 1840 the opponents of Jacksonianism defeated Jackson using the Jacksonian politics. But the political developments of the Jacksonian era had a lasting impact. Thus by 1840 both parties fully accepted democracy and were competing for the votes of the plain people. Thus, in the final result, in the political sphere the democratic forces were triumphantly successful. The economic results of Jacksonianism were transitory. Thus, in the economic sphere America became capitalistic instead of agrarian. (For details see M. Meyers. The Jacksonian persuasion: Politics and Belief. Stanford: Stanford University Press, 1957; A.M. Schlesesinger Jr. The Age of Jacson. Boston: Little Brown and company, 1953; L. Benson. The concept of Jacksonian Democracy. Princeton, N.J.: Princeton University Press, 1961).

The civil War marked the divide between the agrarian and industrial epochs in American history. The slavery created an insurmountable dilemma for the American democratic idealists. The supporters of the agrarian democratic principles were compelled to work for the victory of the industrial North in order that slavery might be abolished. But in the final outcome that victory meant the triumph of Hamilton economics and in large measure. The destruction of the agrarian way of life. When the war ended the moneyed classes won the control of the government and consolidated their power. Gradually south began to adopt industrial economy imitating North. Thus, civil War removed all obstacles to industrial expansion and led to the growth of big business corporations. Hence there was tremendous industrial development during the post-civil War period. Thus, the philosophy of business enterprises began to dominate the American mind after Civil War (For details see B. Moore. Jr. Social Origins of Dictatorship and democracy. Boston: Beacon Press, 1966. PP. 111-155; J. Dorfman. The Economic Mind in American Civilization 1606-1865. Vol. London: George G. Harrap and Ltd., 1947).

Of the two rival philosophies of agrarian democracy and aristocratic capitalism, the actions of Americans were frequently more in conformity with the letter. The ultimate defeat of agrarianism was inevitable because, not enough 19th century Americans were genuinely willing to live by the agrarian principles. Men who were agrarians by conviction and not for expediency were rare. The austerity and self-discipline that agrarianism required were wholly contrary to the dynamic quality of will which characterized American civilization in general. Hence as the Americans could not be content with a relatively static economy, they preferred the rewards and hazards of industrial capitalism. All Americans, rich and poor believed that the state should protect the property rights and that it should promote economic opportunity and free enterprise.

Thus, the American was a man who wished not only to retain the property he had, but also to improve and enlarge it. As Tocqueville remarked, “In America the desire of acquiring comforts of the world haunts the imagination of the poor and the dread of losing them that of the rich…” (Alexis De Tocqueville. Democracy in America. Vol. 11 P. Bradly (ed). New York: Alfred A. Knopf, 1945. P.129).

As one could become rich only little by little through agriculture, the Americans preferred some risky and lucrative profession. The extent of their desires and the greatness of their resources urged them to action. Trade was the only suitable road open to them. Hence the farmers either combined some trade with agriculture or made agriculture itself a trade. A farm was built in the anticipation that it could be sold for a good price. It was unusual for an American farmer to settle for ever on the land he occupied. They were drawn to trade not only for the sake of a promised again but also because they loved the emotions it provided. The Americans carried their trading passions into all their pursuits. (see 1bid. Pp. 154-156). The average Americans take pride of the material achievements of his civilization. They assign the production record of their country to the system of private property. They ascribe their failure to their own deficiency. Moreover “          … they are willing to consider the masters of corporate property the trustees of private   property system until such time as they themselves or their children (for hope has never died in their hearts) will break in to the charmed circle. They are resigned to big property not because they believe in some “harmony of interests” or think there is no conflict between top dog and bottom dog, but because each in his heart hopes still to be a top dog and therefore tends to identify with him” (Max Lerner. op. cit. p. 304).

THE AMERICAN PERSONA

Thus, the typical American or the ‘persona’ of the American civilization has been the business man. When the corporations began to diffuse their ownership by issuing shares among the shareholders, buying and selling corporation stocks became a major American occupation.  The stocks enabled the people to share the ownership of majority of the stock corporations. They began to have a stake in the success and survival of the corporate system itself and reinforced the hold of business on the American mind. Thus, ultimately the American economic system became capitalistic.

But within the economic mind we see the values of the biblical faith such as love and compassion, justice and equality, human rights etc. which compelled the American capital to go out for the welfare of the unfortunate sections of people around the world. The value system of USA oriented the power and wealth of the great nation towards the defense of basic rights and freedoms of people around the world.