Project and content management for Contemporary Authors volumes
WORK TITLE: Americana
WORK NOTES:
PSEUDONYM(S):
BIRTHDATE:
WEBSITE: https://www.americana.tv/
CITY: New Canaan
STATE: CT
COUNTRY: United States
NATIONALITY: Indian
Assistant to Bhu Srinivasan: Tyler Bray – (484) 387-0676 – tyler@americana.tv
RESEARCHER NOTES:
PERSONAL
Married; children: four.
ADDRESS
CAREER
Author and entrepreneur. founder of startup in news aggregation. Also worked in gaming, publishing, and financial data aggregation.
WRITINGS
SIDELIGHTS
Bhu Srinivasan’s Americana: A 400-year History of American Capitalism tells the story of venture-based business in the Americas from the point of view of a successful venture capitalist. “I did my first venture-backed startup in late 1999,” Srinivasan told James Pethokoukis in an AEIdeas interview, “and you could just sense that that was the next big thing; the internet was going to transform so many industries. So that kind of framed this entire device. I was aware that it was transformative to so many people, or the markets suddenly were. And my view was that to be able to cover so much ground, you need a backdrop that’s familiar to people, that people can understand, and that way you can weave in stories without just kind of drowning out the abstract economic principles.” “It just came together and it just traced all the way back to the Mayflower and the financing of the Virginia Company,” Srivivasan told Pethokoukis. “So … was a consistent theme that had venture capital at the very end, and it had venture capital at the very beginning.”
Srinivasan points out that some of the very first expeditions by Europeans into the Americas were put together as venture-capital operations. “The United States, writes media entrepreneur Srinivasan, who emigrated from India when he was eight,” said a Kirkus Reviews contributor, “has long resembled one big construction zone, building and (creatively) destroying in an endlessly volatile cycle.” The English expedition that founded the colony of Jamestown in 1607, for instance, was funded and run by a corporation called the Virginia Company. In the nineteenth century, successful businessmen like Andrew Carnegie rode the tide of new technologies to amass huge fortunes in industry. Even American slavery was part of the business climate of early America (although Srinivasan suggests that the institution was overvalued by the market and gave its investors—slaveowners—an inflated estimation of their wealth). Americana, wrote a Publishers Weekly reviewer, is “a lively narrative of ingenuity and achievement; Srinivasan’s scope is broad and he finds intriguing points of entry for each topic.” “As Mr Srinivasan observes, American capitalism has always had a strong input from the state: the tariffs that shielded industry in the 19th century; the military expenditure that helped develop radio, satellites and the internet; farm subsidies … and so on,” concluded an Economist reviewer. “In short, American economic history is more complex than some ideologues seek to portray it; this excellent book gives readers a fully rounded picture.”
BIOCRIT
PERIODICALS
Economist, September 21, 2017, review of Americana: A 400-year History of American Capitalism.
Kirkus Reviews, July 1, 2017, review of Americana.
Publishers Weekly, August 21, 2017, review of Americana, p. 101.
ONLINE
AEIdeas, http://www.aei.org/ (November 1, 2017), James Pethokoukis, author interview.
Americana Website, https://www.americana.tv/ (May 9, 2018), author profile.
Bhu Srinivasan is an accomplished media entrepreneur whose career has spanned digital media, pop culture, technology, publishing, and financial content. Srinivasan arrived in the U.S. with his family at the age of eight, and as a child lived in the South, the Rust Belt, Southern California, and the Pacific Northwest. He lives in New Canaan, CT with his wife and four children.
Bhu Srinivasan
Bhu Srinivasan is the first-time author of Americana: A 400-Year History of American Capitalism. Starting in the late 90s, his career provided him a front-row seat to the Internet boom as a founder of a venture-backed startup in news aggregation. His experience spans gaming, publishing, and financial data. At the age of eight, Bhu immigrated to America from India and has since lived in the American South, the Rust Belt, Southern California, and the Pacific Northwest. He currently resides in Connecticut with his wife and four children.
November 1, 2017 9:00 am | AEIdeas
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The 400-year history of American capitalism: A short-read Q&A with author Bhu Srinivasan
Free Enterprise, Pethokoukis
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“Startup” has become a buzzword in the 21st century, but according to a new book, startup culture has been endemic to American culture since the days of the Mayflower and the Virginia Company. In Americana: A 400 Year History Of American Capitalism, author Bhu Srinivasan contends it was this spirit of innovation and ambition that drove American economic growth and helped make the US into the superpower it is now. He joined the podcast to discuss his book and what history’s lessons can teach policymakers today. Below is an abbreviated transcript of our conversation.
To listen to our conversation, subscribe on iTunes or Stitcher, or download the podcast from Ricochet. You can read the full conversation, here.
You take on a big topic: the history of American capitalism over 400 years. Why did you think you could do this all in one volume?
Well there are several things to it. I studied economics and history at the University of Washington and during it, I left to chase the dot com gold rush of the late 90s. I was 23 years old and I did my first venture-backed startup in late 1999, and you could just sense that that was the next big thing; the internet was going to transform so many industries. So that kind of framed this entire device. I was aware that it was transformative to so many people, or the markets suddenly were. And my view was that to be able to cover so much ground, you need a backdrop that’s familiar to people, that people can understand, and that way you can weave in stories without just kind of drowning out the abstract economic principles.
And I thought that with the framing device of “the next big thing,” how far back can we keep going? Before the internet, you had the PCs; before the PCs you had mainframe computers. And so I think stitching together so many next big things, it just came together and it just traced all the way back to the Mayflower and the financing of the Virginia Company. So it just worked out, and it was a consistent theme that had venture capital at the very end, and it had venture capital at the very beginning.
Who do you think was the most influential American entrepreneur or businessman ever?
I would have to say it’s Andrew Carnegie. I would say it’s close — John D. Rockefeller is a close second — but I think it’s Andrew Carnegie. And the only reason I don’t quite give it to John D. Rockefeller is because his rise and his fortune very dramatically changed after the automobile obviously, and he was already the world’s richest man before that. So the fact that the fortune grew so dramatically after it — he was born in 1839 and he died in 1937, and so yeah he lived a long life.
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Breakthrough tech is often dismissed as a mere toy for the rich. Even the electric light bulb.
But Carnegie was so multi-dimensional. He is an immigrant in this country first of all. He leaves Scotland when he was 13 years old, he comes to this country, and he was this educated boy, you know he was attending school in Scotland. When he comes here, he’s sent immediately to the factories in Pittsburgh and he’s there working in a boiler room. He’s 5’2”, 5’3” on a good day, if he’s standing on a very high heel loafers. And he just goes and dominates the steel industry, and he becomes the richest man in the world, at least according to JP Morgan in 1901.
He makes it out of the boiler room where he doesn’t see daylight for months on end, and ends up in the telegraph office as a messenger boy, and slowly, literally, makes his way up. And you know, you tend to think these Horatio Alger stories are really just mythologies and feel-good tales, but Horatio Alger actually wrote a story called “The Telegraph Boy” in the late 19th century, and Andrew Carnegie in many ways was the real-life telegraph boy, just rising to just incredible heights. And for me, in many ways, it’s a confirmation of both the egalitarianism of American capitalism, in many ways — it’s not for everyone obviously — and it also was an affirmation of American democracy that someone like that could come here. Obviously they are both works in progress. But at that moment and at that time, I thought it converged nicely with Andrew Carnegie.
In what ways does America today look like previous eras, and in what ways do you think comparisons to the past don’t hold up?
I think it’s hard to find exact parallels. And I think that this is a new time, and I’ll tell you why I think it’s a new time. In previous eras we have always had next big things creating an enormous number of jobs. So if you look at suburbia, you have home construction and very efficient home construction, reducing the prices of homes. But at the same time, the construction worker can easily afford a home and he’s a part of the next big thing both as a consumer and a producer. Same thing with the automobile — you have someone working at a Ford motor plant, and he’s making $5 a day in 1914. The Ford Model-T in 1914 is $440; for about 88 days of labor, he can afford a car. So he’s both the producer, but no matter how monotonous the job is, he’s also a consumer, so it makes it all worthwhile.
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Just how quickly will AI take your job?
In the last 30 years, the next big things that have created these multi-hundred-billion dollar companies, if you look at the top-5 companies in America — Amazon, Microsoft, Facebook, Apple, and Google — they are collectively worth over $3 trillion. They have less than one million employees in the United States, and at the same time — and they’ve obviously defined the next big things over the past 30 years — the workers in those rust belt states that swung the election to Donald Trump, are not participants. They are certainly consumers of these products, but they’re not participants in any meaningful ways; they’re not just not employed by them, they can’t possibly be employed by them, and I think that’s the thing that caused a bit of a dislocation in the American identity.
And I think it’s very new. I don’t think that’s the perfect historic parallel. And I don’t think there’s the perfect historic parallel because the networks and software are very unique things, just like an industry was very different from any efficiencies in agriculture. I think the software and information technologies, how scalable they are, is a whole different animal than industrial scale.
How would you describe the story you’re telling? It doesn’t seem to be one of pure, free market libertarianism.
Well it’s not the story because it’s not the story. I don’t think you could tell that story when you have social security once you turn 65 and when you have public education. Even if I go to the most Republican, most libertarian community in this country, I can assure you if I ask 10–20 people in one-on-one conversations about what they like most about their town, they will quickly start bragging about their public schools if it’s an affluent community.
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Why does the US make its people richer faster than other big, advanced economies?
So that’s why I think American history and society is so complex, and what I have tried to do with this book is just to take it out of the domain of ideology because I don’t think it’s serving us very well to think about capitalism and democracy, and all of these things, through such a strict and rigid ideological lens. Instead, I think that we’re better off advancing democracy, advancing capitalism, if we can show how pragmatic these forces are and how adaptive they are.
Do you have an opinion on these very big technology companies? Some people want to highly regulate them, some people would like to break them up in some fashion, so what’s your take on that?
Well, I think it’s hard to make the argument that it hurts the consumer because that hasn’t happened. And that’s one of the reasons why you have not seen really these very strong voices raising antitrust concerns, because the consumer has not been affected. But I think that’s one of the other things that we’re going to have to settle in the next 5–10 years — the American consumers are hugely benefited, but the American workers aren’t. And many times, not just many times, almost always the American consumer and the American worker are pretty much the same thing. You are a worker during the day and you’re a consumer at the night. And I think that’s going to shake itself out over a few years.
I don’t think that’s necessarily an argument you can make for why Amazon should be broken up — it doesn’t seem like market power is allowing them to extract monopoly rents or anything like that. If anything, prices keep dropping and dropping and dropping. So I just feel like there’s something in the Silicon Valley ethos that looks to strip away so much of the cost and it’s been hugely beneficial to consumers. But how that translates into jobs and productivity in the United States — I think that link hasn’t quite been figured out yet. And I hate to just, you know, repeat virtually the same thing I did to an earlier question, but I think it still is going to be the challenge for America in the next 10 years.
James Pethokoukis @JimPethokoukis
October 30, 2017 11:31 am | AEIdeas
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In America, startup culture is nothing new: A long-read Q&A with author Bhu Srinivasan
Economics, Pethokoukis
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“Startup” has become a buzzword in the 21st century, but according to a new book, startup culture has been endemic to American culture since the days of the Mayflower and the Virginia Company. In Americana: A 400 Year History Of American Capitalism, author Bhu Srinivasan contends it was this spirit of innovation and ambition that drove American economic growth and helped make the US into the superpower it is now. He joined the podcast to discuss his book and what history’s lessons can teach policymakers today. Below is a lightly-edited transcript of our conversation.
To listen to our conversation, subscribe on iTunes or Stitcher, or download the podcast from Ricochet. You can read an abbreviated version of our conversation, here.
You come from a business background. You’re an entrepreneur, not a professional historian. I think you have a B.A. in History, actually like me. So taking on a big topic over a long period of time — capitalism, basically the history of America over 400 years — why did you think you could do this, and also do it in one volume?
Well there are several things to it. I studied economics and history at the University of Washington and during it, I left to chase the dot com gold rush of the late 90s. I was 23 years old and I did my first venture-backed startup in late 1999, and you could just sense that that was the next big thing; the internet was going to transform so many industries. So that kind of framed this entire device. I was aware that it was transformative to so many people, or the markets suddenly were. And my view was that to be able to cover so much ground, you need a backdrop that’s familiar to people, that people can understand, and that way you can weave in stories without just kind of drowning out the abstract economic principles.
And I thought that with the framing device of “the next big thing,” how far back can we keep going? Before the internet, you had the PCs; before the PCs you had mainframe computers. And so I think stitching together so many next big things, it just came together and it just traced all the way back to the Mayflower and the financing of the Virginia Company. So it just worked out, and it was a consistent theme that had venture capital at the very end, and it had venture capital at the very beginning.
American history “had venture capital at the very end, and it had venture capital at the very beginning.”
What I really find fascinating is that you can hear your voice in the background, which sort of just weaves its way through the entire narrative in a way I think most people when they were taught history in grade school or high school or even college certainly didn’t look at through the lens of someone like a venture capitalist or someone from an entrepreneurial background.
But also, there are so many stories in the book which we really didn’t hear about. Obviously you talk about a lot of business people, entrepreneurs. But if you heard about them at all in school, they probably got a paragraph; maybe the so-called Robber Barons got the most attention. But just the business of America, and why that’s so important to America, at least as I recall, that’s not really touched on very much when I was growing up.
Yeah and I think it’s so central. In my view, democracy and capitalism are kind of the twin operating systems of the entire American enterprise, if you will. And you mention the Robber Barons, exactly, there is not this great nuanced understanding of these men. Obviously, you know the entire gospel of wealth comes from Andrew Carnegie. So the fact that people like Bill Gates and Warren Buffet and so many other billionaires are giving away their money — a lot of it stems from the philosophy that Carnegie had put out in the North American Review, I think in 1889.
And at that time he thought, well, you know it’s a very Darwinian thing to accumulate as much as you can; it’s a signal of intellectual mastery. And he argued that he certainly deserved all the money and anyone that accumulates great fortunes is entitled to it. But at the same time he had argued that at the same time to be able to make that argument, it’s necessary to give all of your money away. Because if you bequeathed it to your descendants, then the descendants certainly didn’t deserve all that money, and then you wouldn’t be able to hold the argument that men who have great wealth deserve it on the basis of merit. So there’s all this nuance to it.
And Robber Barons, you know you can look at the Robber Baron universities: the University of Chicago is from Rockefeller money, Vanderbilt University, Carnegie Mellon, Stanford, Duke, Ezra Cornell with the Western Union fortune, Cornell University. So, I think to just look at it through one particular lens diminishes the complexity of American history. And I think that without looking at capitalism in parallel with the evolution of democracy, I think you miss a very central aspect of the story.
“Without looking at capitalism in parallel with the evolution of democracy, I think you miss a very central aspect of the story.”
Well I am hoping that at some point my kids can attend Zuckerberg University, or perhaps the University of Bezos.
So let’s start at the beginning — which I think may be the purest example of what you’re talking about, and what you really bring to the book — talking about the pilgrims. You are looking at it rather than as political or religious refugees, instead looking at it as a good, old-fashioned startup with investors, people looking for returns on their investment. Just give me a little bit about how you look at the pilgrims.
Well you know, I stumbled upon how they financed the Mayflower in Nathaniel Philbrick’s book, The Mayflower. And then you start going through the primary source documents, and one in particular stands out: It’s William Bradford’s Of Plymouth Plantation, and so much of what he goes into is about the finances. What happened? How much do they pay back some of the initial investors? How did they roll over equity into debt? I mean, he doesn’t talk about it in the same terms, but if you read through, you understand what’s happening transactionally.
And it also raised another question for me when I first heard about how the pilgrims had financed it and thought, “Ah-ha that’s how they did it.” Because it never occurred to me how a bunch of persecuted religious separatists, at least in the American mythology, how would they be able to finance a large ship for transatlantic voyage with a year’s worth of sustenance? You know if I told you that a 100 people in Central America that are impoverished decided to charter a 737 to come to America, you would want to know why, and you would investigate it further.
And I think that normal basic curiosity takes you into finding out what happened, and what you find out happened is that they had a 7-year term, they had shares that were allocated to investors back in London, if they agreed to go over to the new world and agreed to serve for 7 years, 6 days a week of labor, they received a share. And at the end of the 7-year term, all the assets of the venture would be distributed pro rata. And when it didn’t quite work out — when there weren’t any assets worthy of distributing — they had to then restructure the equity into debt. And it took 25 years for this venture to eventually dissolve, for all of the shareholders to be paid back and to ultimately get a settlement.
And what’s so interesting is that you show that at the very beginning, economics, enterprise, and business are really at the heart of the American experiment.
Same thing with the Virginia Company even almost 15 years before the Mayflower’s voyage. Financing the Virginia Company — I mean “company” signals obviously some implicit and explicit profit motive. And the company had shareholders, the shareholders were known as the adventurers. So you can see in pamphlets and prospectuses where the promoters of the Virginia company are trying to raise money, they’ll tell you that they are trying to entice adventurers to invest this sum of capital. And there is a degree of patriotism and nationalism as well; they wanted the king’s sovereignty to be extended into all parts of the world. So they make the appeal on so many different grounds and not just the profits, but extending English sovereignty to the new world. So, so many different things, but the economic motivations were central to both the Virginia Company, the Mayflower, and really fundamentally throughout.
I mean really, you could almost teach kids economics by using this book going through the history of America. Each chapter of the book focuses on what at the time was the next big thing. Whatever the next big thing was in the 1850s or 1920s — that is what you focused on as a way of taking that walk through the history. And in a way the book could almost be called “The Secret History of America” because that part of it is just really ignored or given kind of a third-class status when you teach history. Each of those next big things really allows you as a framing device to examine not just what’s happening in business, but more broadly what was happening in the politics and culture.
We were mentioning earlier the Robber Barons, by looking at the rise of trust, you were able to look at both what happened with those companies that got big and combined, but also what was going on politically that allowed that to happen.
Oh, it’s completely central to it. I mean when you think about Manifest Destiny in the 1840s — Americans having this identity that the American experiment should end at the Pacific Ocean and should go all the way to the entire American continent. And then ultimately America achieves that and then almost within days of the final Mexican surrender, the actual agreement that gives California to the United States, gold is discovered in a river next to Sacramento and you have this major gold discovery that’s entirely coincidental. It’s almost like going to the end of the rainbow and actually finding an enormous treasure.
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What that also did was, it forced California to essentially look for statehood and compelled the Californians to try to become the 31st state which they were successful at. And to become the 31st state was a very very challenging thing because you had 15 free states at the time and 15 slave states; so you had this legislative balance in the Senate where you had 30 senators from slave states and 30 senators from free states. And introducing California as a 31st state all of a sudden was going to change that balance and California wanted to join as a free state, and so you had the compromise of 1850.
And the compromise of 1850 and the reaction to that, because it had the Fugitive Slave Act, causes Harriet Beecher Stowe to write Uncle Tom’s Cabin. And so that obviously humanizes slavery and ultimately precipitates this division where, you know, it just could not be reconciled politically. So these things are so connected. You wouldn’t think that the gold rush is connected to any types of events related to slavery, but it very much was.
Now you came to this country from India when you were how old?
I was 8 years old.
Okay, you were 8 years old. So you basically had a pretty typical American educational experience: grade school, high school. And I am sure there were areas of this history that you probably really didn’t even look at since grade school or high school, depending on what you majored in exactly in college. So what were the interesting things that you either discovered or rediscovered as you made your way through the 400 years of capitalism?
Well I don’t think I had a traditional American upbringing at all. Even once I was in this country I went to so many schools, we moved around so many times, I don’t think my family was really fully settled into this country until 9th grade. For the bulk of my years in this country, at the beginning, I moved almost mid-year every year. So I would have two schools every year.
So you probably missed a few things as you were moving from one to the other.
Without question, but on the other hand I loved it and I was fascinated by what I saw, because I was in Buffalo, New York; Richmond, Virginia; San Diego, California; Seattle — and the thing that was consistent to me was to see the economic transformation. Because there you can observe a lot. You know, even in Buffalo, New York, you are seeing in the mid-80s, you’re seeing what’s happening and you hear bits and pieces of the Lackawanna Steel Plant having closed down and Buffalo has some economic woes. In Seattle, Washington, you hear about Microsoft and my mother was at a biotech startup called Immunex, so you hear those things.
So you start piecing together this contemporary history. And in terms of more traditional history, I always found fascinating the histories of Carnegie and Rockefeller, and I have read lots and lots of business books from, you know, junk bonds and Michael Milken in the 80s and Henry Ford with the Model-T. So, trying to figure out one framework where all of these discrete biographies would fit in was somewhat my challenge over the past 15–20 years, and really that’s how this book came together.
The fact that you can have the history of American democracy, or constitutional history, or military history, and overlook some of the contributions of these industrialists — because it’s not just contributions in a ra-ra celebratory way, but you know, quite accurately they are fundamental and instrumental. I mean obviously how can Ford motor company not be a part of America’s effort during World War II? It certainly was. So, I think to weave that in, I just felt that scholars really missed the chance to tell the story.
As Americans we like to think we’re exceptional. And we are the largest economy, we are the largest advanced economy, and we’re on the technological frontier. So as you look back over 400 years, how did that happen? What is the secret sauce in why America became a global economic superpower? Maybe some people on the left would like to think it’s because we had a really effective government, maybe people on the right would say, “Gee the story of American capitalism really is the story of great men doing great things in the business world.” So how did we get from back there to here?
Well I think there is a little bit of truth in all of it. But there is also another truth that is often overlooked in the constructs you’ve given, both the right and the left, which is the incredible amount of natural resources that America has. For instance, if the Saudis were to tell you that it’s because of their great morality that they are so rich and their culture and their piety, you would think, “Well, what about the oil buried in your ground?” Well from 1859 until the early 70s, the United States was the largest oil producer on earth. Even now, it’s almost always in the top 3, and in a couple of years, it’ll be back to number 1. So you can’t diminish the fact that America has incredible natural resources.
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On top of that, ever since America spread all the way to the Pacific Ocean, it has the two greatest defensive assets known to man, the Atlantic and the Pacific Ocean. What that does is that allows you to have one very large unified market, that certainly Europe doesn’t have. You have different languages, so you might have a unified market legally, but culturally, somebody that’s going from France into Germany has to speak a different language; it’s not quite unified. So America had a very large market that developed, that all speaks English; eventually that culture took hold.
Gold, you know, America was the largest gold producer throughout the 19th century and when you’re on the gold standard and you happen to have a lot of gold that’s just literally buried in your ground, that gives you some very significant advantages. So I think that the cultural aspect is certainly there. I mean, we do encourage entrepreneurship in very big ways. The fact that you have a lack of stigma in this country with failure — that I think is a very big thing. I think the fact that you have somebody like a Zuckerberg and a Gates and Jobs and Larry Ellison of Oracle, so many men have dropped out of university and colleges and started companies. Obviously if you look at three of the five largest companies in terms of the market cap, you have some dropouts there. I think that’s significant.
“The cultural aspect is certainly there . . . The fact that you have a lack of stigma in this country with failure — that I think is a very big thing.”
Obviously there are lots of concerns about inequality and the gap between rich and poor. But we do still really admire people — even if they get fabulously wealthy, if they got really rich because they built some amazing company whose products we use, or whose services we use — America really admires those people. We may not learn about them in history class, but we still admire them and would love to be like them.
Without question, and I would give you this great paradoxical moment that helped as a framing device. I don’t want to ruin the book, but for your listeners, I think it’s going to be very appropriate. During Occupy Wall Street you saw all of these people that are complaining about globalization, capitalism, the excesses of it, and they are railing against the banks. And all of a sudden, in the midst of the protest they learn that Steve Jobs has just passed away. And they take out their iPhones and they join this global eulogy to mourn the man who is the founder at that time of the world’s most valuable corporation. And it’s extremely global in nature: All those iPhones are made in china, and those Chinese made iPhones could end up in India without touching a single American hand because it’s the American software that powers it. So, I think that those are the sorts of paradoxes that I tried to explore in this book, that even the Americans who think they don’t like capitalism in many ways admire it or certainly are beneficiaries of it.
Who do you think, maybe not the wealthiest, but who do you think was the most influential American entrepreneur or businessman ever?
I would have to say it’s Andrew Carnegie. I would say it’s close — John D. Rockefeller is a close second — but I think it’s Andrew Carnegie. And the only reason I don’t quite give it to John D. Rockefeller is because his rise and his fortune very dramatically changed after the automobile obviously, and he was already the world’s richest man before that. So the fact that the fortune grew so dramatically after it — he was born in 1839 and he died in 1937, and so yeah he lived a long life.
But Carnegie was so multi-dimensional. He is an immigrant in this country first of all. He leaves Scotland when he was 13 years old, he comes to this country, and he was this educated boy, you know he was attending school in Scotland. When he comes here, he’s sent immediately to the factories in Pittsburgh and he’s there working in a boiler room. He’s 5’2”, 5’3” on a good day, if he’s standing on a very high heel loafers. And he just goes and dominates the steel industry, and he becomes the richest man in the world, at least according to JP Morgan in 1901.
He makes it out of the boiler room where he doesn’t see daylight for months on end, and ends up in the telegraph office as a messenger boy, and slowly, literally, makes his way up. And you know, you tend to think these Horatio Alger stories are really just mythologies and feel-good tales, but Horatio Alger actually wrote a story called “The Telegraph Boy” in the late 19th century, and Andrew Carnegie in many ways was the real-life telegraph boy, just rising to just incredible heights. And for me, in many ways, it’s a confirmation of both the egalitarianism of American capitalism, in many ways — it’s not for everyone obviously — and it also was an affirmation of American democracy that someone like that could come here. Obviously they are both works in progress. But at that moment and at that time, I thought it converged nicely with Andrew Carnegie.
“Even the Americans who think they don’t like capitalism in many ways admire it or certainly are beneficiaries of it.”
With more attention paid to the inequality in the US economy, there’s been a lot of comparisons to previous ages of high inequality; I think the 1920s often get mentioned. With the rise of the very big technology platform companies, there’s a lot more talk about the rise of the big trusts, which you cover. I remember that one of my college professors said that history rarely repeats itself but historians often do, so when we look back at where America is now — where we have a historically high level of inequality, we have these big companies dominating — in what ways does America today look like those previous eras, and in what ways do you think that the comparison doesn’t hold up?
I think it’s hard to find exact parallels. And I think that this is a new time, and I’ll tell you why I think it’s a new time. In previous eras we have always had next big things creating an enormous number of jobs. So if you look at suburbia, you have home construction and very efficient home construction, reducing the prices of homes. But at the same time, the construction worker can easily afford a home and he’s a part of the next big thing both as a consumer and a producer. Same thing with the automobile — you have someone working at a Ford motor plant, and he’s making $5 a day in 1914. The Ford Model-T in 1914 is $440; for about 88 days of labor, he can afford a car. So he’s both the producer, but no matter how monotonous the job is, he’s also a consumer, so it makes it all worthwhile.
In the last 30 years, the next big things that have created these multi-hundred-billion dollar companies, if you look at the top-5 companies in America — Amazon, Microsoft, Facebook, Apple, and Google — they are collectively worth over $3 trillion. They have less than one million employees in the United States, and at the same time — and they’ve obviously defined the next big things over the past 30 years — the workers in those rust belt states that swung the election to Donald Trump, are not participants. They are certainly consumers of these products, but they’re not participants in any meaningful ways; they’re not just not employed by them, they can’t possibly be employed by them, and I think that’s the thing that caused a bit of a dislocation in the American identity.
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And I think it’s very new. I don’t think that’s the perfect historic parallel. And I don’t think there’s the perfect historic parallel because the networks and software are very unique things, just like an industry was very different from any efficiencies in agriculture. I think the software and information technologies, how scalable they are, is a whole different animal than industrial scale.
Your last chapter ended in 2010. What would the next chapters have covered?
I certainly would have covered housing. And I think I would have gone into it quite deeply. And mobile really took off — you know smartphones, these $500, $600, $700 luxury devices, became the next big thing after 2008. You know it came out in 2007 and really the vast majority of Americans didn’t have smartphones until we were well into the financial collapse.
Which is kind of amazing that with a very expensive product, that when it came out it was mocked for being too expensive, and yet that product ends up becoming perhaps the most important consumer product ever, maybe the most profit-generating product ever, created right in the teeth of the economic downturn.
Exactly, but it’s made in China and at the same time you have a communist country that is basically very good at capitalism. So what does that tell you? In that mobile chapter I cover a lot of those parallel strands. So housing is covered very much in the mobile chapter. And these next big things aren’t discrete kind of business stories and case studies; it’s just a backdrop that lets you tell the story of what’s happening in America at that particular time.
I imagine a lot of future chapters would all be technology. And I’m wondering if there are going to be really different next big things, or are they all going to be different versions of AI? So is the next chapter going to be AI, and the chapter after that would be a different kind of AI? Are we sort of at the end of history where the economy is so consumed by technology that we are really just talking about different kinds of software technology going forward?
Well it’s always a dangerous thing to say the end of history because you know we would have assumed that the end of the Cold War would have obviously meant the spread of democracy everywhere and the spread of capitalism everywhere. And what we have seen is that you certainly have the spread of capitalism even in places like Moscow and Beijing, but you don’t necessarily have the spread of democracy.
For instance, when I look at The New York Times, or The Wall Street Journal, it has a separate technology section, and it has a business section. But more and more the business section just kind of looks like the technology section, but there’ll be a story about oil too in the business section. Is the economy becoming so tech-centric that tech is really the focus? There’s a great variety of things throughout the book — you have everything from cotton to cars and oil — but will all the future chapters just be machine learning AI or this other kind of AI? Is software eating everything as they say?
I think you do have these reactions that creep up all of a sudden. So you have slavery after the momentum of canals, railroads, telegraph, and gold. All of a sudden you have a bubble in slave prices and it leads to the civil war. Same thing with the rise of unions around the end of the Gilded Age, where you have people that find themselves feeling that they don’t have a voice necessarily, you know, becoming part of this movement. So you might have self-driving cars as a next chapter, and the chapter after that might be tariffs, because Steve Bannon might have galvanized and created a very big split in the Republican Party where those rust belt states that are the new swing states in the American politics demand tariffs and all of a sudden you have that. So you just never know what kind of a reaction is all of a sudden going to pop up, and that’s why I think so much of this book is about the clashing of democratic forces with what we think of as free market capitalism. And the end product is what I call American capitalism, which is this kind of a synthetic hybrid of these multiple disparate forces.
This is not a story of a pure free market libertarianism; that’s not the story you’re telling.
Well it’s not the story because it’s not the story. I don’t think you could tell that story when you have social security once you turn 65 and when you have public education. Even if I go to the most Republican, most libertarian community in this country, I can assure you if I ask 10–20 people in one-on-one conversations about what they like most about their town, they will quickly start bragging about their public schools if it’s an affluent community.
So that’s why I think American history and society is so complex, and what I have tried to do with this book is just to take it out of the domain of ideology because I don’t think it’s serving us very well to think about capitalism and democracy, and all of these things, through such a strict and rigid ideological lens. Instead, I think that we’re better off advancing democracy, advancing capitalism, if we can show how pragmatic these forces are and how adaptive they are.
“I think that we’re better off advancing democracy, advancing capitalism, if we can show how pragmatic these forces are and how adaptive they are.”
Now we’re just around the end here, and I always like to go on Twitter before I talk to guests and ask if the Twitterverse has any questions, and indeed they do. It’s actually super appropriate because you mentioned oil earlier. Here’s the question: Plentiful natural resources were very important to early American success; what will be our most important resource going forward?
Well I think you could say the clichéd answer to that is the people and the brain-power, right.
Yes, of course, you should be running for the office; we are the greatest resource.
Yeah yeah, right. But also, I think it’s also the protective resources. I wouldn’t diminish these oceans and how much insulation it’s given to this country. But I do think that because it’s a technology-oriented future, I think that it’s going to be those companies in Silicon Valley. That’s where you’re going to get these compounding gains and compounding returns. I do think that it’s not particularly all Americans, but that’s the sliver of Americans that are able to really shape the future technologically. We have a synergy in Silicon Valley, I mean obviously it’s not happening in other places, and it’s just compounding and I think it’s going to continue to compound.
Do you have an opinion on these very big technology companies? Some people want to highly regulate them, some people would like to break them up in some fashion, so what’s your take on that?
Well, I think it’s hard to make the argument that it hurts the consumer because that hasn’t happened. And that’s one of the reasons why you have not seen really these very strong voices raising antitrust concerns, because the consumer has not been affected. But I think that’s one of the other things that we’re going to have to settle in the next 5–10 years — the American consumers are hugely benefited, but the American workers aren’t. And many times, not just many times, almost always the American consumer and the American worker are pretty much the same thing. You are a worker during the day and you’re a consumer at the night. And I think that’s going to shake itself out over a few years.
I don’t think that’s necessarily an argument you can make for why Amazon should be broken up — it doesn’t seem like market power is allowing them to extract monopoly rents or anything like that. If anything, prices keep dropping and dropping and dropping. So I just feel like there’s something in the Silicon Valley ethos that looks to strip away so much of the cost and it’s been hugely beneficial to consumers. But how that translates into jobs and productivity in the United States — I think that link hasn’t quite been figured out yet. And I hate to just, you know, repeat virtually the same thing I did to an earlier question, but I think it still is going to be the challenge for America in the next 10 years.
Bhu Srinivasan is a media entrepreneur whose career has spanned digital media, pop culture, technology, publishing and financial content. Srinivasan arrived in the U.S. with his family at the age of eight, and as a child lived in the South, the Rust Belt, Southern California, and the Pacific Northwest.
Americana: A 400-Year History of American Capitalism
Publishers Weekly. 264.34 (Aug. 21, 2017): p101+.
Copyright: COPYRIGHT 2017 PWxyz, LLC
http://www.publishersweekly.com/
Full Text:
Americana: A 400-Year History of American Capitalism
Bhu Srinivasan. Penguin Press, $30 (576p) ISBN 978-0-399-56379-9
Media entrepreneur Srinivasan sweeps through American history using "a series of breakthroughs, innovations, and ideas" to trace the development of American capitalism. He frames each of the book's 35 chapters around what he dubs "next big things," which serve as narrative lenses. For example, tobacco and cotton exemplify the plantation system; canals and railroads illustrate American expansionism; and computing and the internet spotlight the information age. It's a lively narrative of ingenuity and achievement; Srinivasan's scope is broad and he finds intriguing points of entry for each topic. Yet there are major problems with his account. Srinivasan immigrated to the U.S. at age eight and finds much to admire about America, but his work is partly premised on the unsupportable assertion that "most immigrants come here first to participate in its capitalism." He is also open about his desire to divorce economic history from political history even as he offers such insights as "the cold economics of one man's rationality reinforced his neighbor's racism." His slight chapters on slavery and the labor movement are underwhelming, and he occasionally gets wrong basic facts (conflating anarchists with Marxists, for example). Despite its novel approach and accessibility, Srinivasan's book comes across as an uncritical hagiography of a system that has worked to his benefit. (Oct.)
Source Citation (MLA 8th Edition)
"Americana: A 400-Year History of American Capitalism." Publishers Weekly, 21 Aug. 2017, p. 101+. General OneFile, http://link.galegroup.com/apps/doc/A501717353/ITOF?u=schlager&sid=ITOF&xid=412b8b93. Accessed 18 Apr. 2018.
Gale Document Number: GALE|A501717353
Srinivasan, Bhu: AMERICANA
Kirkus Reviews. (July 1, 2017):
Copyright: COPYRIGHT 2017 Kirkus Media LLC
http://www.kirkusreviews.com/
Full Text:
Srinivasan, Bhu AMERICANA Penguin Press (Adult Nonfiction) $30.00 9, 26 ISBN: 978-0-399-56379-9
A cavalcade of capitalism celebrating the machinery of wealth while cautioning that Americans "have also insisted upon their democratic right to curb its excesses."The United States, writes media entrepreneur Srinivasan, who emigrated from India when he was 8, has long resembled one big construction zone, building and (creatively) destroying in an endlessly volatile cycle. This book, critically yet enthusiastically pro-market--which is interesting given that the author's mentor is the noted leftist historian Richard White--charts that course. As the author notes at the beginning, the Puritans who arrived on the Mayflower did not come from out of the blue but instead were the product of venture capital sustained by the necessity of borrowing from outside at interest rates of more than 50 percent. They got out from under their investors' yoke, finally, by buying the creditors out. The fact of slavery casts a shadow on Srinivasan's generally positive account, but he brings a fresh view to the matter, positing that the market irrationally and wrongly valued the slave economy as being worth much more than it was, so that by the time of the Civil War, "there was more to protect and more to lose" on the part of Southern slaveholders. The author is particularly insightful on cycles of technological revolution, as with Andrew Carnegie's innovations as a steel baron and the rise of the automobile industry; who knew that Henry Ford dismissed his first efforts as "merely a money-making concern" without the necessary contribution to the common good? Spryly and with just the right amount of circumstantial detail, Srinivasan places all this against the context of his own history in America. Through his initiation in the startup world, he writes, "the energy of the era, the wildness of the boom, the ease with which an idea, a blank canvas, could turn into something confirmed my central belief about opportunity in America." A smart, accessible contribution to the nation's economic history.
Source Citation (MLA 8th Edition)
"Srinivasan, Bhu: AMERICANA." Kirkus Reviews, 1 July 2017. General OneFile, http://link.galegroup.com/apps/doc/A497199756/ITOF?u=schlager&sid=ITOF&xid=670222e9. Accessed 18 Apr. 2018.
Gale Document Number: GALE|A497199756
American economic history
A 400-year story of progress
How America became the world’s biggest economy
Print edition | Books and arts
Sep 21st 2017
Americana: A 400-Year History of American Capitalism. By Bhu Srinivasan. Penguin Press; 576 pages; $30.
BHU SRINIVASAN’S new book, “Americana”, is a delightful tour through the businesses and industries that turned America into the biggest economy in the world. Not only is the book written in a light and informative style, it is cleverly constructed. Each chapter has a theme—tobacco, cotton, steam, oil, bootlegging, mobile telephones and so on—and these themes are organised to lead the reader through a chronological history of the American economy.
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Along the way, there is plenty of surprising detail. Until the first world war, for example, the Busch family (who produced Budweiser beer) held a big annual celebration for the Kaiser’s birthday. Bill Levitt, the builder who pioneered the post-1945 shift to suburban living, was one of many who refused to sell homes to African-Americans. To finance their new company, Apple Computer, Steve Jobs and Steve Wozniak respectively sold a VW minibus and a Hewlett-Packard calculator.
But Mr Srinivasan, himself an immigrant who became an entrepreneur, never lets the detail interfere with the bigger picture. As he notes, European settlement in America was originally driven by commercial imperative. In 1606 the British chartered the Virginia Company of London as a profit-seeking operation; an early version of “venture capital”. The pilgrims on the Mayflower (pictured) were backed by English financiers.
Commerce played a decisive part in setting the course of American history. The first settlers struggled but eventually a lucrative business was found; growing and exporting tobacco in the southern states. But the early planters developed a taste for luxuries, placing them in debt to English creditors. That proved to be one source of resentment towards the colonial power; another irritation was British efforts to earn some revenue after the expense of the Seven Years’ War (1756-63), which ended French attempts to control the continent. The result, inevitably perhaps, was the American war of independence.
The plantation economy developed in the southern states, and the initial political dominance of Virginia (which provided four of America’s first five presidents) ensured the continued survival of slavery in the newly independent country. By 1860 auction prices suggested that the collective value of American slaves was $4bn at a time when the federal government’s annual budget was around $69m. That explains both why southern slaveowners, many of whom had borrowed against their slaves as collateral, would never give up the practice, and why a financial settlement of the issue was out of the question.
The resulting civil war hastened the industrialisation of the northern states, which owed their victory, in part, to their greater economic strength. In the late 19th century American companies were able to exploit the economies of scale that came from trading over a continent-wide country. This allowed them to overtake their British and German rivals.
In time, the growth of these industrial giants, or trusts as they were known, led to another political spat, as a Republican president, Theodore Roosevelt, tried to challenge monopoly power. It was under the first Roosevelt that America pulled decisively away from a laissez-faire approach, setting up the Pure Food and Drug Act and the Federal Meat Inspection Act to protect consumers. A much bigger shift occurred under his relative, Franklin Roosevelt, who pursued aggressive policy intervention and established a welfare system in the course of the Great Depression.
As Mr Srinivasan observes, American capitalism has always had a strong input from the state: the tariffs that shielded industry in the 19th century; the military expenditure that helped develop radio, satellites and the internet; farm subsidies; the federal guarantees for bank deposits and home loans; and so on. “It was an endlessly calibrated balance between state subsidies, social programmes, government contracts, regulation, free will, entrepreneurship and free markets,” he writes. In short, American economic history is more complex than some ideologues seek to portray it; this excellent book gives readers a fully rounded picture.
This article appeared in the Books and arts section of the print edition under the headline "A dance to the markets of time"