Filed under: Capitalism, Domestic Policy, Economy, Education, Energy, Freedom, History | Tags: The American Founding, The Experts Keep Getting it Wrong, Transforming a Nation
Particularly when there is vast discontent with the way things are, there are voices that assure us that it will always be this way. The nation is changed forever by these policies that you hate, and we can’t go back to the way it was.
Of course that’s what Barack Obama promised when he dazzled Americans with his mellow baritone voice and lofty promises — it was all about Hope and Change. In the thrill of the moment people forgot to ask just what it was he meant by ‘hope’ and ‘change’. His answer was that he wanted to “fundamentally transform the United States of America.” We really should have asked for a straightforward definition of that as well.
What is it that ‘fundamentally transforms’ a nation? The two big inventions that brought the European medieval world to an end by the beginning of the sixteenth century and made the settlement of the New World possible were the printing press and the full-rigged ship. In the mid-fifteenth century there were only around fifty thousand books in all of Europe, most of them controlled by the church. By the end of the century, there were more than ten million. That is an explosion of knowledge, many books were technical and agricultural and in the hands of the growing merchant class. The full-rigged ship pushed out the boundaries of the world as it was known to Europeans.
The colony at Jamestown was founded, not by the English state, but by a profit-seeking corporation. Two intellectual inventions were vital to the development of the United States — the corporation and double-entry bookkeeping. Because of double-entry bookkeeping, it became possible for people to invest in distant enterprises and still keep track of how the investment was doing. Ferdinand and Isabella sent an accountant along with Columbus on his first voyage to ensure they got their share of the profits.
Partnerships had long been around, but in a partnership each partner is liable for the debts of the entire enterprise, a large risk. The joint-stock company solved that problem by limiting each investor’s liability to the amount that he had invested. This was completely different from the Spanish and French who sought to control all aspects of their subjects’ activities and to convert Indians to the Catholic religion.
The profit-seeking Virginia Company’s investment in America desperately needed something to sell profitably in England to defray the costs of maintaining a settlement. In 1612, a man named John Rolfe obtained some tobacco seeds in the West Indies, and brought them back to try in Virginia soil. In 1618 twenty-thousand pounds of tobacco were grown in Virginia and shipped to England. In 1629 it was one and a half million pounds.
In New England, both Plymouth and Massachusetts Bay were founded by joint stock companies.The members of the corporations who came to New England were called planters. Those who remained in England and invested money were called adventurers — which gave rise to today’s term venture capitalist.
There were already fishermen in villages like Marblehead and Gloucester in Massachusetts, and the banks off New England were a perfect habitat for cod that grew to 200 pounds. Cod exports soon became a mainstay of the economy, but the cod waste — the bones, skin and guts — went to fertilizing New England fields — which made a big difference in the thin rocky soil.
The Puritans believed firmly in reading the Bible, and had the highest literacy rate in the Western world, and as soon as they built a church they were apt to build a school. Harvard College was founded just six years after the Puritans landed.
New England exported lumber, ships masts, soap, butter, cheese and the produce of the farms. By the end of the seventeenth century New England had become one of the great shipbuilding centers of the world, and a truly diverse economy. The innovations came from ordinary people in an extraordinary land, creating what was needed to improve their lives. Far distant from an interfering government, people were free to follow their ideas and dreams. A heritage that is as natural to Americans as breathing.
Which brings me to an article in the Wall Street Journal about “The Outsiders Who Saw Our Economic Future.” “In both America’s energy transformation and the financial crisis, it took a group of amateurs to see what was coming.”
Part of Barack Obama’s transformation of America for the 21st century was reaching back to our most ancient sources of energy to save us from global warming. His election was “the moment when the rise of the oceans began to slow and the planet began to heal.” Obama was cutting the number of licenses and permits for drilling on federal lands, and in federal waters. These two quotes are not from the same speech, but capture the drift.
We’re offering a better path, a future where we keep investing in wind and solar and clean coal; where farmers and scientists harness new biofuels to power our cars and trucks; where construction workers build homes and factories that waste less energy.
And yes, my plan will continue to reduce the carbon pollution that is heating our planet because climate change is not a hoax. More droughts and floods and wildfires are not a joke. They’re a threat to our children’s future.trucks; where construction workers build homes and factories that waste less energy.
Around the same time a few little-known wildcatters began pumping meaningful amounts of oil and gas from U.S. shale formations. A country that was once running out of energy is now on track to become the world’s leading producer.
The resurgence in U.S. energy came from a group of brash wildcatters who discovered techniques to hydraulically fracture—or frack—and horizontally drill shale and other rock. Many of these men operated on the fringes of the oil industry, some without college degrees or much background in drilling, geology or engineering.
Federal Reserve chairmen Alan Greenspan and Ben Bernanke failed to foresee the financial meltdown. Top banking executives were stunned, and leading investors such as Bill Gross, Jim Chanos and George Soros didn’t fully anticipate the downturn.
John Paulson began researching housing and scored a record $20 billion for his hedge fund by betting against subprime mortgages. as did Jeffrey Greene a Los Angeles playboy, and an out-of-work 35 year-old, and a doctor turned stock investor who did not subscribe to the common wisdom that the Fed would not let housing crumble and the real estate boom would continue. A fabulously successful bet against common wisdom.
The “experts” don’t always have the answers. Progress does not only not move in a straight line, it doesn’t move along party lines. It does not come from wise all-knowing experts in government who know just what to do. They don’t. Americans are free people in an extraordinary land, and they do pretty well without excessive regulation and regimentation. There is a point at which the ‘experts’ overreach. We’re almost there.
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