Americana| A Book Review
Americana: A 400-Year History of American Capitalism by Bhu Srinivasan
Just when I was finishing this book, news outlets reported that Twitter CEO, Jack Dorsey was resigning and a new CEO had been nominated. His name? Parag Agarwal. He will be joining a list of Indian Born CEOs heading top tech companies.
Twitter- Parag Agarwal
Alphabet (Google) - Sundar Pichai
Microsoft - Satya Nadella
IBM - Arvind Krishna
Adobe- Shantanu Narayen
VMWare - Raghu Raghuram
It is fascinating that these men could all become CEOs in other countries, but not just that, they are the leaders of some of the largest organizations in all of history. Google's market cap is 1.8Trillion, Microsoft is at 2.4trillion, IBM is at 105 Billion, Adobe is at 318 Billion, and VMware is at 49 Billion.
Just 50 years ago, it is impossible to think of such monetary value. Today, it is the reality. In case you did not notice, all these are companies are headquartered in America. Their origin story, their trajectory, and the position they currently hold are things possible by the American system. The capitalist system.
Bhu wrote this book as a reminder on the heels of the popular disenchantment of the American system. While it is common to hear complaints of inequality, Bhu was sounding as a reminder and a prophet, that before we even talk of inequality, we must remember what made such wealth possible in the first place. Bhu insists that the free market system has produced more wealth and a better life for people. He writes this as a history of America itself, it begins with the first pilgrims and ends with the era of these companies.
While Bhu advocates for the free market system, he was not blind to the role of government in shaping the creation of such wealth. For instance, he narrates the evolution of the expanding role of government from Theodore Roosevelt to Franklin Roosevelt. More than anyone, FDR expanded the role of government in the economy, and with great benefits for the American people. This is really important. Yesterday, I was listening to a radio program where a popular host was seriously advocating that everything should be privatized including security and prison services. Even Ronald Reagan would laugh at this suggestion.
Understanding the balance between the free market system and the role of government is important especially for developing countries. America shows us how. For instance, in a particular period of its development, the US government imposed tariffs that limited importations in some industries, e.g steel, and today in Agriculture. Another example is what happened to the radio and television industry, government’s involvement was pivotal such that it provided a most important framework that allowed the industries to thrive. One cannot imagine what it would look like to have such industries without the involvement of the government. Furthermore, the US government built roads, constructed canals, and bridges, allowing the full realization of economic potentials. It goes without saying, even a capitalist system without government is bound to fail.
In all, as this book has shown, allowing individuals to have the freedom to explore ideas is fundamental to the growth and development of society. The economist Professor Thomas Sowell has written that the free market system works not necessarily because it is best but primarily because it allows people to choose what works. How profound. That is what made America great, the ability of its innovators, inventors, and citizens to choose what works. That is why America is still the number one choice for immigrants worldwide and that is why innovative ideas are more likely to shoot from American than anywhere else. It is simple “Talent is universal, but opportunity is not”. Of course, this book did not shy away from the dreadful effects of the capitalist system or its exploitative nature.
If you are interested in understanding American economic history, this is a good recommendation for you.
This is a mammoth book, over 600 pages. But good!