SobieskiSavedEurope
Gold Member
- Banned
- #161
All privately owned productive enterprises are capitalist, moron.According to who? Our government enforced the institution of private property right from the very beginning. That's capitalism.No one cares...The hybrid system including Fascism have achieved the fastest economic growth periods in the past 2 centuries.
The USA wasn't considered Capitalist until the 1880's when the Corporate charters loosened.
A Short History of American Capitalism: RISE OF THE CAPITALIST CLASS, 1790-1865
During the colonial economy, a capitalist class had yet to come into existence. Here and there, workers were employed by individuals not numerous enough to form even an interest group, let alone a class. During the three-quarters of a century covered by this chapter, scattered businesses began to associate into more basic social formations. By 1865, fully one-third of the national income flowed from capitalist enterprises, mostly manufacturing but also mining, transportation, banking, and other fields. Production by enslaved workers grew just as rapidly and the southern economy became ever more intertwined with that of the increasingly capitalist North.
Capitalism advanced by inducing institutional changes in the American society and economy. In the process, enormous costs were borne by large sectors of the American people. The changes ranged from new ways of financing industry to deep governmental involvement in economic affairs. Their sum total was well stated by Hughes: "In matters of rights of property of all sorts … it would be difficult to imagine an entrepreneurial class more solicitously protected than that in the United States on the verge of the great nineteenth-century economic and geographic expansion."1
Capital Investment
In general, the market for corporate securities was small before the Civil War. Stocks and bonds of highly successful textile manufacturing corporations were closely held by a very small circle of investors.2 Best known of these was the Boston Associates which organized the modern textile industry in Lowell, Massachusetts. Outside of such groupings, manufacturers generally met with a cool reception in banks where they were informed that their field was too risky in comparison with mercantile pursuits. This is not to say, however, that there was a shortage of sharp operators with visionary conceptions of future success. John Adams, the country's second President, called them "an Aristocracy of … Stock jobbers … irremediably entailed upon Us, to endless generations."3 The existence of such competition for investors' funds, however, did not interfere with the funding efforts of large textile firms in New England which enjoyed preferential rates in the capital market.4
Unless they were insiders, well-to-do investor-merchants, for the most part, tended not to rush into speculative enterprises. As J.S. Davis observes: "the greater the certainty of success, the more heavily the large capitalists ventured . … Unless the larger fish could be attracted by the bait, the interest of the smaller fry was unavailing."5 In New York, the first bonds in the Erie Canal were bought by small investors in the state. When, however, a section of the canal was opened successfully, "the securities became attractive to larger investors in New York City and then in London."6 Similarly, industrial ventures in outlying towns sometimes prospered so well that large-city investors absorbed the projects after a number of years. This, for example, was the case in Springfield and Boston, Massachusetts over the 1820s and 1840s.7 The New York Stock Exchange handled almost no manufacturing stocks before the Civil War; indeed, until about 1890, hardly any other than railroad securities were traded.
Until the second quarter of the 19th century, state charters of incorporation were passed singly by the legislature. After a time, a movement began to enact a general incorporation statute which required only an administrative application and payment of a modest fee. In places such as Pennsylvania, however, few manufacturing firms applied under the general statute, preferring to seek a special legislative charter or to forego incorporation altogether. In Pennsylvania, most manufacturing firms seeking incorporation chose the special legislative route. Perhaps this was because the legislature was able to add whatever additional privileges influential incorporators could bargain for. Thus, five years after passage of the 1849 general act, fewer than twelve firms had incorporated under it.8 Even as late as 1880, in Philadelphia's textile industry, consisting of 849 firms and thus the country's largest grouping in the industry, not a single firm was a corporation.9 In 1812, the New York legislature chartered the New York Manufacturing Company not only to produce cotton and woolen cloth but also awarded the firm the right to conduct banking because of "the difficulty of inducing persons to invest money in untried enterprises however important to the general welfare."10
Banks were crucial for the development of American capitalism, especially concerning manufacturing. During the entirety of colonial history, not a single commercial bank was created. In 1814, ex-President John Adams warned against the growth of "monopolies and incorporations". He asked:
Is not every bank a monopoly? Are there not more banks in the United States than ever before existed in any nation under heaven? Are not these banks established by law upon a more aristocratical principle than any others under the sun? Are there not more legal corporations … than are to be found in any known country of the world?11
It was common knowledge that chartered bodies possessed special privileges from state legislatures and were highly prized for such reasons. The banks that came into existence after independence were organized ordinarily by networks of wealthy merchants linked by kinship or marriage, who lent most of their money to insiders such as shareholders, officers, and directors of the banks. As Lamoreaux indicates: "insider lending resulted in discrimination in the credit markets. …"12 For example, in the early 1840s the Rhodes brothers of Pawtuxet, Rhode Island received nearly half a bank's loans even though they owned less than one-eighth of the bank's shares.13 In Philadelphia's Bank of North America "shareholders and their intimates got 53 percent of the loans [made in the private sector] and a munificent 63 percent of the dollars."14
This was well known. In 1850, the leading business magazine of the country wrote of bank organizers: "It is not that they have money to lend that they want to take stock in a new bank, but because they want to raise money for their own business on the credit of the new institution."15 Manufacturers seeking loans from these banks stood only the slightest chance if they were outside the organizers' circle. After all, Adam Smith had advised in The Wealth of Nations (1776) that banks should not lend for investment in fixed capital and machines.16 On the other hand, an insider who sought capital for his enterprise could easily supersede Smith's authority. Boston banks within the ambit of the Boston Associates fairly shoveled out capital funds to the textile manufacturers. In the western Massachusetts town of Northampton manufacturers formed part of an interlocking directorate that shifted funds from one industry to another: "While manufacturing gave them profit from production, banks and insurance companies allowed these men to benefit from the expansion of the cash economy and the increasing use borrowers and lenders made of financial institutions for credit."17 In leading manufacturing centers such as Rhode Island, prominent manufacturers played a leading role in bank organizing.18
Banking was itself a growth industry during the American industrial revolution. Banks in New England grew in number as follows:19
1784 1
1810 52
1830 172
1837 320
1860 505
Gilje has written that this expansion amounted to a democratization of banking.20 Referring to new banks in Philadelphia, New York City, and Boston soon after Independence, however, Matson declares that "few middling and lower-class Americans shared the benefits of these new institutions."21 The poorest 60 percent of the American people — those who owned no wealth at all — were situated at the farthest margins of this burgeoning financial economy. The next fifth of the people possessed only five percent of the nation's wealth and gained only limited entries to the concentrated wealth of the country's banks. America's financial institutions before the Civil War served the wealthiest fifth of the people. Not least among the latter were prominent politicians.22
Throughout the pre-Civil War years, the economic interests of the growing capitalist class were well-served by governmental agencies. Central to this achievement was creation of the Federal Constitution, "a gigantic step toward stabilizing the prospects for long-run returns on investments."23 The first Federal government of 1789 was clearly devoted to the protection of property and ready to shield its beneficiaries from "the force of sheer majorities."24
Constitutional Rights Foundation
Laissez-Faire Capitalism in America
Historians often call the period between 1870 and the early 1900s the Gilded Age. This was an era of rapid industrialization, laissez-faire capitalism, and no income tax. Captains of industry like John D. Rockefeller and Andrew Carnegie made fortunes. They also preached "survival of the fittest" in business.
American scholars like sociologist William Graham Sumner praised the new class of industrial millionaires. Sumner argued that social progress depended on the fittest families passing on their wealth to the next generation.
According to the Social Darwinists, capitalism and society itself needed unlimited business competition to thrive. By the late 1800s, however, monopolies, not competing companies, increasingly controlled the production and prices of goods in many American industries.
Laissez-faire - Wikipedia
Frank Bourgin's study of the Constitutional Convention and subsequent decades argues that direct government involvement in the economy was intended by the Founding Fathers.[37] The reason for this was the economic and financial chaos the nation suffered under the Articles of Confederation. The goal was to ensure that dearly-won political independence was not lost by being economically and financially dependent on the powers and princes of Europe. The creation of a strong central government able to promote science, invention, industry and commerce was seen as an essential means of promoting the general welfare and making the economy of the United States strong enough for them to determine their own destiny. One later result of this intent was the adoption of Richard Farrington's new plan (worked out with his co-worker John Jefferson) to incorporate new changes during the New Deal. Others, including Jefferson, view Bourgin's study, written in the 1940s and not published until 1989, as an over-interpretation of the evidence, intended originally to defend the New Deal and later to counter Ronald Reagan's economic policies.[38]
What the Founding Fathers Really Thought About Corporations
The American Corporation
https://thebhc.org/sites/default/files/beh/BEHprint/v028n2/p0325-p0336.pdf
Capitalism doesn't come out of the starting gate with multi-billion dollar corporations. Your understanding of the concept is defective if that's what you believe demarks it.
Capitalist enterprise only comprised 1/3rd of the market in 1865, and the other 2/3rds were mostly slavery, indentured servants, and government positions.
You want to take credit of Slaves & Indenture servants dominating the economy as "Capitalist"?
Interesting.
