I spend a lot of time thinking about modern commerce, both currently and in terms of its history.
Since I start out with a different perspective I am generating a different origin. As can be seen from the title of this blog page I find no comfort in the words 'capitalism' or 'free market'. To me the former is Marxist haberdashery and the second is ideology.
Modern commerce has three components: trade, industry and clientry. Each with a different history. Industry began roughly two hundred years ago. Trade and clientry are as old as cities. Though both have evolved to suit the modern industrial world.
Modern industrial commerce requires four sub-systems to work effectively: meritocracy, diversity, openness and a preference for markets.
It is on these observations that I look back at history and see a different story than most others.
While I have focused, in the past, on the institutions that came out of 17th Century Holland and migrated to England for the 18th Century, I have moved on. All the institutions created in Holland were vital. Holland gave us Amsterdam, with a Protestant optimism, with a high level of meritocracy, a great sense of egalitarianism, an extraordinarily high level of diversity with Jews from Spain and traders from everywhere in Europe,especially the liberal Hanseatic lands, a high level of honesty in trade dealings and many original open markets for goods of all kinds including financial goods.
I also recognize the importance of the Masonic order and the innovations in food and husbandry in England.
Nevertheless, it is the three outrageous lessons of America that I look to as the source of modern industrial vitality. First in the 19th Century then again in the 20th Century. America and only America brought us this vast treasure of modernity.
- First meritocracy needed a fertile ground. America and the English colonies provided that. America and the colonies are where the dissidents and children who didn’t gain from primogenitor moved. They were heavily meritocratic.
- During the 19th and 20th Century they have come from every land on the globe to America. The meritocratic escaped the feudal, static and tribal societies that constitute most of the earth.
- By 1960, America had dissolved the hereditary elite. They and their ‘blue books’ were replaced at the tops of corporate America by the meritocratic men who rose to the top in the WWII military.
- Second, meritocratic families enjoyed the vast open frontiers of America. They could leave the hereditary elites behind in Boston and New York and move to Seattle, San Francisco, Salt Lake City….everywhere in the West. There they found the greatest freedom on the planet. No government, just opportunity. They slowly created government, democratic government, from the ground up. Unlike the kingdoms of the world, the grass roots of American democracy favored meritocracy and commerce.
- This happened again in the 1970’s with the confluence of expanded immigration, reduced tariff barriers and the outlaw world of hippies who loved commerce and openness.
- Lastly, from the earliest days of the 13 States to the great Western expansion, government in America has been weak and grass roots in nature. This was true in the hippy home of San Francisco too. This has always been true in America and it allows for incipient new businesses to emerge.
- We can see from the treatment of Uber and Airbnb around the world that government is hostile to modern commerce. Weak government is an important ingredient in the prosperity of commerce.
God bless America. She is the fountainhead of modern commerce and global wealth. Not one iota of the American ‘grace’ was planned. It was mostly good fortune.