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The Development of America

Many people today believe that America is a model for economic success.  But how exactly did America achieve its economic success, and it is a pattern that can, or should, be followed by currently developing nations?  Today America consists of roughly 4% of the worlds population and is in possession of 70% of the world's wealth.  This of course means that the remaining 96% of the world shares the remaining 30% of the wealth.  It's easy to see then why so many countries are in poverty, but why can't they just develop their economies like America has?  To answer this you have to know how America has developed its own economy.

The American economy is founded on genocide, slavery, opium and tobacco, war, imperialism, and of course, good 'ole hard work.

 

The entire history of the Americas, and the development of American civilization, is rooted in economic conquest and the drive for wealth and personal gain.

 

The voyage of discovery that was undertaken by Christopher Columbus took place for economic reasons.  Columbus himself was a businessman that was attempting to find a shorter way to the Orient in order to develop more profitable trade routs.

 

Upon arrival in the Bahamas in 1492, and the subsequent voyage through the Caribbean, the economic nature of the discovery voyage soon took shape.  From the very outset the people of the Bahamas and Caribbean were exploited by the Europeans.  This exploitation and theft is what fueled the European economy of the 1500 to the 1700s, and provided a base of wealth that has had an impact that last through to today.

 

Over a million Bahamians and Caribbeans died as they were forced into slavery to mine gold and gems for the Spanish during the early days of discovery.   The wealth that was stolen from these people is still present in Spain today.  The treasures taken from these people through the use of slavery now lines the pockets and architecture of churches, private estates, and government offices.  The entire native population of the Bahamas and Caribbean was pushed to extinction in less then 100 years; this was total genocide.

 

The rush for wealth came quick after the discovery of the “New World”.  All the major powers of Europe engaged in imperialism and conquest of the Americas, and the primary motivating factor behind this was economics.  Private individuals, churches, and governments (who, at the time, were tied to churches) raced to the Americas in pursuit of wealth.

 

This is the stage upon which the founding of the United States of America was set.

 

The United Stated of America was founded on slavery and genocide. This isn't an insignificant side note, this is the central issue to the founding and development of America and the American economic system. Slavery was necessary in order to get the colonies, and later the country's, economy going at the level it did, and it was necessary for the Revolution as well as a major cause of the Revolution.

 

Another major cause of the Revolution was American debt to British merchants by tobacco farmers.  Tobacco was a critical crop for America, it was the country’s largest cash crop, and slavery was an integral part of tobacco farming.  The single largest source of revenue for the colonies prior to the revolution was the sale of tobacco.  King James disliked tobacco smoking, considering an unhealthy and filthy habit, and sought to discourage it by heavily taxing the product. In fact the role of tobacco was so great in the early American economy that many historians agree that tobacco was a major contributor to the American Revolution, both as a source of money to fund the war, and as a source of contention which lead up to the conflict.  At the time of the Revolution the war was actually known as “The Tobacco War”.  The American Revolutionary War started in what was known at the time as “The Tobacco Coast”.

 

From the time of the first landings in the New World there was conflict between the native people of the land and the white Europeans.  There are cases of peaceful interactions between the natives and Europeans, but those are the exception, not the rule, and in many cases the helpful assistance that was provided by the native people to the Europeans was later repaid with treachery and slaughter as conflicts of interests arose between the groups.  Though disease did play a role in the death of many native populations, a large number of the deaths of native people was caused directly by conflict and the deliberate killing of native peoples by the settlers.  In fact some cases of disease among the native people were intentionally inflicted upon them as colonists intentionally gave disease infected materials, such as clothing and blankets to native peoples, which caused massive, and intentional, devastation of native populations. Even in cases where the spread of disease was not intentional, it was welcomed by many of the settlers as it made their conquest of resources easier, as John Winthrop, the governor of the Massachusetts Bay Colony, wrote “for the natives, they are near all dead of the smallpox, so as the Lord hath cleared our title to what we possess."


In the 1760's slavery began to lose favor among the British. In addition, one of the demands made on the colonists was to treat the natives more favorably and not to move farther west into "Indian" and French territory. By the 1770's it was becoming clear to the wealthy slave owning colonists that the system of slavery was in jeopardy from the British who they knew were moving towards making the slave trade illegal.  In 1772 a significant ruling was passed in Britain that ended slavery in Britain and made expropriation of salves from Britain illegal.  This ruling, among other correspondences, let the American colonists know that slavery was on its way to being made illegal in the colonies. 

Virtually all of the founding fathers owned slaves, and some, like Franklin, were actually slave traders. The argument that you can't judge the founding fathers views of slavery due to the times is ridiculous. Many colonists opposed slavery, and the Bahamas actually formed a democratic government prior to the US and they stated that slavery was to be illegal on moral grounds. They were later taken back over by the British, but it shows that many people opposed slavery, during the 1600s, and 1700s.

Only about 1/3 of the colonists supported the revolution. This group was made up disproportionately of wealthy land owning slave owners.

The American Revolution was economically based in the protection of slavery and wealth.  The Stamp Act of 1765 was enacted to pay for British troops that were stationed in the colonies, primarily on the western boarders to protect against Indian and French invasions.  This act though primarily taxed the wealthy of the eastern coast, who felt it unfair that they should pay for the protection of the western frontiersmen.

The Revolutionaries were fighting against authority in order to preserve their way of life, which was dependant on slavery and opposed to taxation.  Unlike many revolutions of significance in the world such as the later French and Russian revolutions, this was a revolution of the wealthy against foreign authority, whereas the others were revolutions of the poor against domestic abuse of the wealthy ruling classes.

The Declaration of Independence was written as a way to gain international support, mainly from France, for the Revolution.   This was done because revolutions are not looked kindly upon by any government because they are seen as undermining all authority.  In order to get support from the French the founders drafted the Declaration of Independence, which includes a list of grievances against Britain that explained why they were revolting against British rule.  However, this list of grievances has never been fully justified.  The Declaration of Independence was also adopted by the wealthy New Englanders to gain support from the average colonists to join in support of the revolution. 

 

A larger number of foreign troops and naval vessels participated in the American Revolutionary War then did American colonists, also known as Continental Soldiers.  Many of the most important battles of the Revolutionary War were fought primarily by the French.  At the same time that the American Revolutionary War was being fought the British and the French were fighting each other in places all around the world.  North America was not the only arena of conflict for these two powers; they were both engaged in war on a global level, as were the many other powers of Europe.  All of this war was based in imperialistic economic conquest as the western powers were engaged in the general exploitation of all the people’s of the world in order to increase the wealth of their “mother countries”.

 

At the time of the signing of the Declaration of Independence slavery was present in all 13 colonies.  Based on the drafting of the Constitution of the United States only about 20% of the adult population was able to vote.  This 20% was comprised of the wealthiest segment of society.  The Constitution was drafted in such a way that all slave owners had the right to vote and slavery was guaranteed by the Constitution.

 

Slavery played a vital role in the early American economy, and in the lives of affluent Americans.  A statesman from South Carolina noted prior to the Constitutional Convention: “Negroes were our wealth, our only natural resource.”

 

In addition one of the first economic goals defined by the nation was to become independent of all other nations for military and essential supplies.  This was seen as a challenge at the time because American was largely a nation of farmers.  The founders recognized though that economic security required national self-sufficiency.  At the same time, the Federalists, who were the ones developing the economic policy of the United States, primarily treasurer Alexander Hamilton, developed a number of economic incentives for wealthy industrialists and merchants.  These incentives angered many citizens, especially farmers.

 

By the conclusion of the Revolutionary War in 1783, the Federalist Party had taken control of the nation’s political landscape.  The Federalists Party was the party of the wealthy mercantile class, and included George Washington, John Adams, and Alexander Hamilton, among many other prominent and influential American figures.  The Federalist Party opposed democracy and held the view that the common people were not capable of self-government.  The Federalists passed the Alien and Sedition Acts, as well as the Naturalization Act, all designed to oppose the growing Democratic-Republican Party, lead by Thomas Jefferson, which was in support of the French Revolution and the ideals set forth by the French Revolution concerning full democracy and popular self-rule.  The Federalists sought to maintain a strong control of the economic means of the United States.  The rise of the Federalist Party was seen by many people of the United States as an abandonment of the values for which they had fought during the Revolution and resulted in a political backlash by the majority against the powerful, but minority, Federalist Party.

 

Early American policy was heavily influenced by economic considerations, in fact business was the most important consideration in developing the laws of the nation.  One of the chief factors influenced by the mercantile considerations of the framers was that of immigration.  Immigration was seen as very important to encourage because the wealthy industrial cities of the north were in need of workers and the immigration of Americans west was seen as a constant drain on the human resources of the region.  Large scale immigration was seen as a means to combat the constant population drain to the west and south.  Low taxes, “a perfect equality of religious privileges”, and the promise of land grants were seen as ways to encourage people to “flock from Europe to the United States to pursue their own trades or professions, if they were once made sensible of the advantages they would enjoy, and were inspired with an assurance of encouragement and employment , will, with difficulty, be induced to transplant themselves, with a view to becoming Cultivators of Land.”  The industrial cities of the north, such as New York were made the main destination ports of immigrants in order to ensure that large numbers of workers would make first landfall in America in the industrialized region hungry for low wage workers.

 

Despite the collapse of the Federalist Party as a public entity in the early 1800s, the influence of the party was felt in America for many years to come, and the principles and ideologies of the party formed the basis of powerful and influential, wealthy, elite groups that have had a major impact on American policy all throughout American history, through to today. 


The expansion of the United States took place in a variety of ways.  Conflict with, and genocide of, native peoples was a part of virtually all expansion.  Land speculators had a strong influence on the expansion of territory and ratification of new states.  Land speculators were typically wealthy Americans who would buy land in U.S. territories, or sometimes outside of US territories.  They would then lobby for those territories to become states, and upon ratification of statehood the value of land always increased tremendously, which the speculators then sold for huge profits.  It was common for one piece of land to be sold to many different people, but the sellers quickly skipped out and left the people to resolve the problems on their own.  There were also many cases of land being sold that was never owned by the seller, typically this was Indian land, and once the white settlers settled on the land the U.S. government typically supported the right of the settlers to keep the land, even though it was not a legal purchase and violated treaties.  The Indians were typically either killed in conflict, or moved into smaller reservations.

 

At the same time, many of the industrialists of the New England states often opposed the expansion westward and the ratification of new states because they felt that the addition of new territory to the United States would mean that more people would move west out of the New England area, which would increase labor prices, and compromise their business interests.  They sought to constrain American expansion in order to concentrate the population in the New England area. The decision by Thomas Jefferson, an opponent of the Federalist Party, to make the Louisiana Purchase was widely criticized by many wealthy Americans, but was hailed by those looking for new territory to expand into.

 

The driving factors behind progress and national growth, even at this point, was money.

 

The drug trade was also an important part of early American economic development.  Many of America’s most wealthy men in the 19th century, such as John Jacob Astor, were opium traders.  The money that they gained through the opium and fur trade with China was then used in real estate and railroad development.  In addition foreign investment from Wu Ping-Chien, the opium drug lord of China and the richest man in the world at the time, contributed greatly to the westward development of railroads and shipping businesses to further trade with America.  The Bayer Drug Company made its initial fortune off the sales of heroin in the 1800s.


All the major players and shapers of American culture and policy, even at this early stage, were businessmen.  These businessmen heavily influenced politics, law, military actions, and the direction of American culture.  However, four fifths of the American population was farmers, and tobacco was one of the most important American crops.

 

Even though business was an important factor in American life, banking had still not been established to any great degree in America.  This was partially due to anti-Semitism, and the view that banking was profession of the Jews and it was partially due to general distrust of government controlled currency, and also largely influenced by the fact that many Americans were people who were fleeing from Europe due to debt problems and the association with banks and debtors prisons in Europe.  Because of this foreign currency was often used in the states from prior to the revolution up through the 1850s.  In addition to foreign currency, typically Spanish bartering was also used with tobacco being a common currency.  Many wealthy American businessmen held foreign bank accounts during this time.  American banks did form often but they quickly failed because there was no federal control over the printing of money so in the attempt to raise money banks would print so much as to cause inflation and make the money worthless.

 

The War of 1812 developed as early American imperialist and commercial efforts came into conflict with British imperialism and Britain’s involvement in the European wars.  The issues at the heart of the War of 1812 were commerce, the desire of the War Eagles to expand American territory, and growing conflict between the Native Americans and the American settlers. 

 

Leading up to the War of 1812 the American economy was in a general depression because expansion had slowed and because of the Embargo Act which virtually forbade trade with foreign nations.  However, profiteering under the Embargo Act was very high as the merchants worked around the act and continued to trade at even higher profits. 

America sought to claim neutrality so that American merchants could sell supplies to both the French and the British, supplies including weapons and other military supplies that were in demand due to the Napoleonic wars in Europe. The heavy profiteering that the American merchants took place in during the Napoleonic Wars posed a threat to the British merchant marine empire as well endangered their ability to wage war against the French.

 

During the war of 1812 there was an effort to conquer all of Canada and annex it as American territory.

 

Heavy losses were sustained by Native Americans during the War of 1812, including the death of the Indian leader Tecumseh, which resulted in loss of land and rights by the Indians through the treaties that were signed at the end of the war.

 

War with various Native American groups continued through the early 1800s, especially along the western borders of the nation, which at that time was primarily in the region of Georgia, Tennessee, and Kentucky.

 

In the early 1830s the destruction of the Cherokee Nation took place because gold was found in western Georgia.  The destruction of the Cherokee Nation lead to the Trail of Tears, in which about 15,000-17,000 Cherokee were forcefully removed from their established territory in Georgia, territory that had been negotiated for and the U.S. had signed treaties honoring. The Cherokee were marched from Georgia to Oklahoma after the gold was discovered in Cherokee territory. Thousands died along the way. 

 

The Cherokee were trying to fit in with the American ways. They had developed a written language, the first Native North Americans to do so.  They had towns with roads and running water.  They wore clothes like white Americans.  They had schools and practiced cattle ranching, farming, and fur trading. They had an independent representational government that was modeled after the US government, which included 8 regions, like states, that had representatives.

 

The Cherokee Nation was not the only Indian society to suffer such action during this time. Between the 1830s and 1840s over twenty Native American societies were forcefully moved from the East Coast to the Ohio Valley, much of the area in present day Kansas.  Thousands died during the process, like the Cherokee, being marched thousands of miles on foot under the command of the US Army.  This was done because it was first thought that the plains of the Ohio Valley were poor for farming.  Once it was realized that these lands were in fact good for farming large numbers of white settlers came to the region and Kansas became a US territory, 1854. The Native populations were moved again and their territories were reduced, most of the Native societies were then moved south to Oklahoma, onto poorer land. 

 

In 1846 the Mexican American War started, contributed to by Manifest Destiny, the belief that America had the “God-Given” destiny to occupy all of North America.  The territory of California, Nevada, Arizona, New Mexico and Utah was taken from Mexico during this war.  Over 35,000 people were killed in the Mexican American war, mostly Mexicans.  The war was in many ways also a religious war between Protestants and Catholics, Mexico being Catholic and America the Protestants.  Many Irish American Catholics deserted the American forces due to abuse and joined the Catholic Mexican army.


During the era of rapid westward expansion most of the development was left up to the unscrupulous capitalist tycoons and exploiters.  Monopolies and corporate towns abounded. 


Bounties on buffalo and Native Americans were abundant.  Bounties were paid for buffalo so people would kill them all off to starve the Indians to death.  This was a part of the public and private war on the few remaining free natives in America.  The war on natives was engaged in by the federal government, local governments, and private corporations and citizens.

 

By the time of the Civil War thousands of the country’s wealthiest families were dependant on slavery one way or another. In the North their factories were dependant on cheap materials provided by the South, and in the South they were the plantation owners themselves.

 

During the Civil War the rich got richer and the poor got poorer.  The Civil War is known as a poor man’s war because it was possible to pay to avoid the draft, which virtually all wealthy men did.  Later men paid to have substitute soldiers fill their draft orders.

 

The industrial and shipping industries grew dramatically during the Civil War.  A small number of industrialists profited hugely during the Civil War.  The profitability of the military industry prompted new growth and after the war industrialists in the military and related industries sought out new markets for their businesses.  During the Civil War the United States Federal government became a major customer for military supplies and a strong relationship between northern military industrialists and the Federal government took root.

 

Prior to the Civil War the American economy was highly dependant on slavery.  Though the Civil War eliminated slavery in the United States virtually overnight, the economy did not immediately change.  The economy was still dependant on slavery, or at least large scale exploitation of workers.  This dependency would be satiated through foreign exploitation.


American international imperialism started in earnest in the 1890s for a variety of reasons, economic, political, and military. American foreign imperialism was influenced
by Alfred T. Mahan who wrote The Influence of Sea Power upon history, 1660-1783 which advocated the taking of the Caribbean Islands, Hawaii, and the Philippine Islands for bases to protect U.S. commerce, the building of a canal to enable fleet movement from ocean to ocean, and the building of the Great White fleet of steam-driven armor plated battleships.

 

During the 1890s America did acquire Hawaii, Puerto Rico, Guam, and the Philippines among its territories through the Spanish-American War of 1898. 

 

The reason given for the acquisition of Hawaii by the McKinley administration was that “we must have Hawaii to help us get our share of China.”

 

At the time of the outbreak of the Spanish-American War American businessmen owned over $50,000,000 worth of property in Cuba.  After the conclusion of the Spanish-American war American businessmen had gained control of Cuba, Puerto Rico, Guam, and the Philippines.  “Free-Trade” was opened up with these areas, which allowed them to easily be profitable areas of investment for American businessmen.  Cuba and Puerto-Rico were turned into massive American sugar plantations in which the citizens were downtrodden and exploited by wealthy American businessmen.

 

The Spanish-America was though was just the first step in American imperialism and interventionism.  America’s rise to a world power took place between 1890 and 1920 through the process of imperialism.  During this period American forces invaded and supported right-wing revolutions, and in some cases put dictators into power, in Nicaragua, Panama, Mexico, Haiti, the Dominican Republic, China, and more. 

 

Leaders that were put into power by, or with the assistance of, American forces were supported by American businessmen and were loyal primarily to American interests.  They took out loans with American banks to build infrastructure that was used by American companies to exploit the natural resources and people of the countries and to build factories and farms where substandard working conditions were, and still are, used to get cheap labor for American products.  When the local people tried to unionize or rebel military force was, and still is, used to keep the people in line.

 

During this entire time American anti-imperialists were a growing force, and demonstrations and rallies were often held.  It would not be until the 1930s though that the anti-imperialism movement would gain strong public support.

 

At the same time, in the early 1900s, American adopted the gold standard to back its currency.  At this same time large new gold mines opened up in Alaska, Africa, and Australia leading to a global economic boom by all nations who used gold backed currency.

America entered WWI because large debts were owed to American banks from England and France, which were threatened with being lost if the Germans won the war. For a while the US was selling weapons to both sides, but moved more towards England and France when the risk of loss of debts became too great.  In addition the US did not want to see Europe united because that would make Europe a more powerful economic and military force.  When the war in Europe first started many American businessmen were pleased because the French and British empires were the strongest competitors with American economic interests and this was seen as an opportunity to gain ground in international marketplace.

The Lusitania incident was used as an excuse to get into war at a time when the Wilson administration was already eager to get into the war. The Lusitania was registered as a ship of war with the British Navy, and the Germans warned against sailing in the area that they sank it in the first place saying that they would sink boats in that area, and it was carrying contraband, which made it a valid target, though not really for shoot on sight though. The sinking of the Lusitania was made cause to go to war, which Wilson did because he was pressured from American bankers.

 

Many industrialists became ultra wealthy from WWI and it proved to be a boon to the American economy in general, as well as created a strong interest in the industrialists as international weapons traders.  Price gouging on essential goods was rampant by American merchants selling goods to war beaten Europe.  Food and medical supplies were sold to France at astronomical prices that were impossible to pay.   Debt was used to buy the food and goods with no other choice other then to let millions of people die of starvation and lack of medical care.  While virtually all of Europe was adversely affected by the war the war created one of the greatest boosts to the American economy ever, resulting in the “Roaring 20’s”.

With the conclusion of World War One, then called the Great War, virtually all of Europe was in debt to America with Germany shouldering the vast majority of the entire burden.