Editor’s Note: I’m continuing to retrieve, update and edit the vast amount of material in the archives about economics and history.
Michael Lind, Land of Promise: An Economic History of the United States
I wasn’t expecting much from renowned South-hater Michael Lind’s Land of Promise: An Economic History of the United States. So it was a real and pleasant surprise that after 482 pages this turned out to be a pretty good book.
I wasn’t left with any particular bone to pick in this review and was surprised that Lind had relied on so many of the same sources (i.e., Ha-Joon Chang, Richard Bensel, George Borjas, Albert E. Eckes, Jr.) and that his treatment of a number of important subjects matched so closely to my own views. In fact, much of Lind’s discussion of immigration and trade could have been lifted from Pat Buchanan’s books and columns.
As for the South, Lind’s overview of the South’s economic history – British economic colony until 1861, four brief years as the Confederacy, American economic colony until 1933, the Sunbelt since 1940 – roughly matches my own view. Indeed, Lind explicitly acknowledges that the South and West were internal resource colonies of Yankeedom – essentially, the Mother Country – from the Union victory in the War Between the States until FDR was elected in the Great Depression. Few people grasp that the “New South” was the American version of Ireland under British imperialism. This subject will be discussed in much greater detail in my own book.
Anyway, the South is just a sub-topic of Land of Promise, which mainly argues that the United States won its independence as a pre-industrial society and has been remade by three industrial revolutions: the Age of Steam (the steam engine, telegraph, and railroad), the Motor Age (electricity and internal combustion engine), and the Information Age (computers, nuclear power). In each case, there has been a thirty to forty year time lag between technological and economic change and disruption of the existing political and legal structures. Andrew Yang has argued the Fourth Industrial Revolution has arrived.
Lind argues that there have been three American Republics: the First Republic, which lasted from Washington to Lincoln, the Second Republic, which lasted from Lincoln to FDR, and the Third Republic, which lasted from FDR to Obama. According to Lind, we are now going through a turbulent transition period – the equivalent of the Civil War or Great Depression – before we transition to the undetermined Fourth Republic. Several scholars have argued that the constitutional departures of Lincoln and FDR were so radical that these two presidents effectively created new regimes.
Elsewhere, Lind has argued that the last president of each republic tends to be a failed leader – a James Buchanan or a Herbert Hoover, an embodiment of the previous discredited order who is unable to respond to a systemic crisis caused by technological change – and that the Fourth Republic began with Obama. Perhaps it is Obama and Trump though who better represent the last two presidents in FDR’s line and the current crisis of the regime – driven by anxiety over immigration and income inequality – will bring Andrew Yang or Bernie Sanders to power as the first president of the Fourth Republic?
In 2016, it was Trump rather than Hillary Clinton who best represented the breakdown of the postwar American-led world order, and it is Trump who was able to ride to power on all the perceived systemic failures of the Third Republic such as open borders and globalization. It was also Trump, not Clinton, who promised to disrupt the reigning constitutional order and radically change America’s position in the world. For that very reason, Trump was denounced as a dangerous radical by the establishment, not unlike Lincoln and FDR were back in their day. Which dangerous radical will win the 2020 election?
Donald Trump struck a Hamiltonian chord throughout the 2016 campaign on trade and infrastructure only to be stymied as president by conservatives in the GOP Congress. While Trump gave lip service to Republican orthodoxy on a number of issues like taxes and health care in the 2016 campaign, his checkered history suggested that he really doesn’t believe any of it. On trade, Lincoln in office was a much greater departure than Lincoln the presidential candidate had been. Unfortunately, it turns out that Blompf was never really serious about following through on his economic agenda.
The Jeffersonian vs. Hamiltonian tradition is another major theme that runs through this book. At various times, Lind clarifies that this debate is really between the liberal tradition of economics (classical, neo-classical, Austrian) and the mercantilist tradition of economics (neo-mercantilist and developmental capitalism). After all, Jefferson and Madison changed their views on trade after the disaster that was the War of 1812. Lind is also sympathetic to the insights of Keynesianism.
In 1783, the United States started out as an overwhelmingly rural, agrarian society within the context of the emerging British led liberal world order. By 1920, the United States was the wealthiest, most industrialized country in the world, and most Americans lived in urban areas. The South caught up with the rest of the country in urbanization and industrialization between the 1950s and 1970s. The household manufacturing of Jefferson’s time gave way to small-scale industry by the War Between the States which gave way to huge transnational corporations and oligopolies in many sectors.
We are now light years away from the world described by classical liberal economists. In telecommunications, just four firms – Verizon, Sprint, T-Mobile and AT&T control 97 percent of the US cellular phone market. In chemicals, DuPont and Dow Chemical recently announced a historic merger of the two largest chemicals corporations in the United States. Whether is the commercial airlines, aerospace (Boeing, Airbus), semiconductors (Intel), banking (Bank of America, Citi), mass media (Walt Disney, Time Warner, CBS, Viacom, NBC Universal and News Corp), retail trade (Walmart, Target) or Big Tech (Google and Facebook), oligopoly is now the rule in the 21st century American economy.
As Lind notes, the economics of Adam Smith, Jean-Baptiste Say, and Frédéric Bastiat were already obsolete by the dawn of the 20th century to say nothing of the 21st century:
“If the emperor Nicholas should venture to send 200,000 Muscovites, I sincerely believe that the best thing we could do would be to receive them well, to give them a taste of the sweetness of our wines, to show them our stores, our museums, the happiness of our people, the mildness and equality of our penal laws, after which we should say to them: Return as quickly as possible to your steppes and tell your brothers what you have seen.”
In 1849, the utopian free-trader Frédéric Bastiat who is a favorite of those who still subscribe to lolbertarian and conservative economics argued for the total, immediate and unilateral disarmament of France. Even with the examples of the partition of Poland by Prussia, Russia and Austria and Napoleon’s defeat before him, he scoffed at the idea that France would ever be invaded by Prussia. Unfortunately, Germany would later invade France three times between 1870 and 1945.
It matters a great deal that the antiquated dogmas of Adam Smith, David Ricardo, Richard Cobden, Jean-Baptiste Say, Frédéric Bastiat, Ludwig von Mises, Ayn Rand, F.A. Hayek, Milton Friedman and all the rest of the liberal economists and have so much sway over the American Right. Even if I disagree with Lind on other matters, Land of Promise is useful in stimulating thought outside of that paradigm which is sorely lacking in the coming age of artificial intelligence, robotics and automation.