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Joseph Kaminski

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November 21, 2019

Infrastructure, Transportation, and Mechanization: The Creative Destruction of the American System

From the period of 1790 – 2000, the United States had gone through a process of creative destruction, which essentially is the economic materialistic perspective of witnessing one way of life collapse in favor for a newer ideal. Joseph Schumpeter, author of Capitalism, Socialism, and Democracy, defined creative destruction as a “process of industrial mutation”, and it is obvious that such industrial progression and expansion has had long term socioeconomic and cultural effects on the American people through events such as the transformation revolution, the birth of monopolized railroad systems, and the rapid spread of urbanization. This paper focuses on the process of creative destruction throughout American history, and how industrial and corporative involvement within the economy has played crucial roles in destroying traditionalist, communal values by projecting and tinkering within the framework of capitalism. It becomes clear throughout the historiography of America that such progress has both positive and negative effects, from the foundations of the economy to the social instability of later centuries.

As the United States began to pull itself together after the success of the War of Independence, the so-called ‘moral economy’ of half-baked communalism witnessed in primary documents such as Thomas Minor’s diary began to fade[1]. Early colonial Americans were forced into a bubble of communalism and social involvement out if pure importance – there was no real way to make profits in a society that was not yet firmly established. It became important to make sure that everyone in the community was functioning at a rate for mutual survival. In a world lacking proper infrastructure, commercialization and the early stages of capitalism weren’t necessarily able to strive at the level that they are today. Massive corporations were limited to joint-stock and charter companies, many of which had limitations in their proper incentives for investment until the concepts of civic virtue were peddled by the government.

Related: Individuality and Communalism in Colonial American Economics

In McCoy’s piece on Benjamin Franklin, it is implied that “industry and constant employment”[2] are what create the so-called morals of a modern society and the democracy that Americans were creating. Previous, more antiquated forms of government and industry had no real way to prepare the economy for the natural and logical progression that the new country strived for. America needed infrastructure, transportation, industry, and methods of communication that it did not need while under the clout of the British Empire. A moral economy had no real incentives to produce profit in such a way that capitalistic corporations needed. Private investments alone were not enough to create canals, railroads, and roads. Essentially, the government allowed for private investments to receive the incentive to create such progressive and well needed innovations for the new American society.

Some examples of such innovations relating to the process of “creative destruction” of capitalism would include Hamiltonian programs relating to the construction of a federal banking system, the rise of early corporations with organizational strategies based solely around profit, the creation of transportation systems in canals (and the invention of steamboats), and early mechanization in the early industrial period. These examples were all ways to liberate the “liberated people” from the problems existing under the American system prior to the new aged way of life.[3] Without the government, early corporations would have lacked the ability and the concept of civic virtue to bring such changes to the socioeconomic system within the United States. Such progress brought the positive influences of better communication and economic advancement through the growth of technology, but also led to the growth of major corporations and the influence of companies in later legislative and political ideas.

Once again, a progression in economic idealism has both positive and negative effects. America, especially in the south, found a dependency on immoral methods of slavery to reach cash crop profits and the corporatizing that had ‘saved’ America began to withdrawal it from the global market. Southern agriculture prior to and during American Civil War created a “large-scale, commercial dependence”[4] that created a flatline in economic prosperity through levels of varying interests. We witness tremendous economic growth, such as the rise of a middle class and the increasingly important advances in technology (think of the cotton revolution) – but at what cost?  Americans began to witness a social instability – one focused primarily around the differences in those in corporate offices or plantations and those who were the labour force, whether they be slave by name or slave by nature. An example of creative destruction occurs once again after the Civil War

As railroads began to extend towards the furthest outreaches of the expanding American continent, it became clear that large-scale companies had more power over individually-owned, local ones. Early monopolies, or at least industries that assumed the characteristics of monopolies, dominated the western flow of trade towards the east. Part of the “creative destruction” of the American system lead to uncertainty in the market, with a loss in long-term investment in favor of short-term gains. It became harder for people in the society to measure up against corporations with huge short-term gain (which would influence their long-term success, rather than vice versa). This led to the creation of mass-market corporations; and once again the ‘old’ style of companies began to plummet.

Related: The Transportation Revolution and an Evaluation of Civic Virtue in America: A Perspective of the Railroad System in Early Industrial America

Local companies, those fueled by a sense of community, found themselves drying up; and thus the cultural values and socioeconomic influences done by them were beginning to find themselves destroyed and replaced with newer values brought in by corporatism and chains. In Cohen’s Making a New Deal, it became clear that mass culture had a direct correlation with the new economic changes that were coming into the picture. Companies, at least those with the newly defined clout and importance in such a society, began lasting longer than people.[5] Brand recognition shaped the shopping districts of urban areas, and new advances in transportation brought in ways to bring consumerism to the doorsteps of every home in America.

Transportation, infrastructure, and mechanization all explored the ‘next step’ for progressive changes that were mandatory for American growth and expansion. The government allowed these industries to have a reason to exist through the selling of land and the commercialization of working forces. Entrepreneurs and so-called ‘self-made men’ allowed for positive changes with negative consequences to crop up throughout American history. From destroying a ‘moral economy’ to promote more civic virtue to multiplying slave labor to create a regional growth in the market, every ‘positive’ change has a ‘negative’ quality, and I believe that creative destruction symbolizes and entails this very train of thought.

Related: Unified in Misery, Divided by Discrimination: An Analysis of Cohen’s “Making a New Deal”

As the 19th century faded into the 20th, technology became increasingly important. Well after the onslaught of the industrial revolution, Americans found social and cultural changes spreading throughout their daily lives. As new methods of transportation found easier and quicker ways to trade and transfer foods and commodities to different ends of the continent, Americans began widening their diet and introducing themselves to new ideas as well. The ‘pivotal’ decade of the 1970s brought in an economic boom from a more industrialized world, one that matched the global importance of oil and mechanized machinery.[6]

CapitalismThe ways of life constantly changed for Americans between 1790 – 2000, for better or for worse, because of capitalism and the creative destruction that came along with it. Localized markets, for the most part, failed to keep up with the strenuous and influential dominance that regional systems and organized corporate enterprises had to offer. The government, for the most part, allowed such a system to enact itself until well after the New Deal; and it becomes clear that a side effect of this entire capitalistic endeavor would be that the people began to rely more and more on the government for what they desired. Just as the government brought companies the land needed for canals and railroads at the height of the transportation revolution, it enacted social change after the Gilded Age and the New Deal in a way that continuously propagated a social system based on democracy. The ideals of democracy changed over time as more demographics were granted the right to vote, and the party politics and legislative actions of our democracy changed with the times as creative destruction warped older versions of our special branch of capitalism.

It was important for the American system to redesign itself to solve the problems present at the beginning of the new system. This creative destruction created such progression and well needed renovation to the system, but destroyed the traditionalist approach of a more communal, modest economy. But, one must realize that the communal, modest economy and way of life that existed prior to the creation of America existed simply because it was important for it to exist. Just as the communal style of running society helped America during problems of the time, the early and later volumes of capitalism existed for such reasons as well. Perhaps, sociologically, the interests between government, company, and the general populace relates directly back to the superstructure of ideology – but, nevertheless, the system changed and warped through technological advancements and the necessities that were present over time.

[1] Minor, Thomas. Thomas Minor's Diary: A Farmer's Year, 1660. Pages 1-2. PDF.

[2] Drew R. McCoy, “Benjamin Franklin’s vision of a Republican Political Economy for America,” William & Quarterly 35, no. 4 (October 1978): 605.

[3] Larson, The Market Revolution in America: 33, 45-55.

[4] Alfred Conrad and John Meyer, “The Economics of Slavery in the Antebellum South,” Journal of Political Economy 35 (1958): 95.

[5] Cohen, Lizabeth. Making a New Deal: industrial Workers in Chicago, 1919-1939. Cambridge: Cambridge University Press, 2008. 117.

[6] Judith Stein, “Capitalism on the Run” in The Pivotal Decade: How the United States Traded Factories for Finance in the Seventies, 104-108.

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