The relentless revolution: a history of capitalism (29 page)

The market’s opportunities came in new guises to new participants. The digest of patents put out by the first patent commissioner reveals the full sweep of commercial imagination. Because America’s patent law was cheap and easy to acquire, ordinary people took advantage of its protection. As rural towns got connected to the national market through a system of roads, canals, and railroads, patent applications dramatically increased. Scores of ordinary Americans patented devices in metallurgy, chemical processes, hydraulic implements, machine tools, and household conveniences. Others only dreamed of inventions, like the pamphleteer who conjured up for his readers two-hundred-foot-high sails stretched across the length of a mile to capture and convert wind into power equal to two hundred thousand men!
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After 1834 the U.S. Patent Office scrutinized applications for novelty and usefulness. While this move diminished the number of patents granted, it also proved a boon to unknown and underfunded inventors whose success in getting a patent acted as a vote of confidence in the invention.
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Every idea that found material expression in a novel artifact proved just how wrong were the old-timers who invoked the past to predict that the world already had too many clocks, steam engines, stoves—you name it. Novelty, usually experienced as a break with the expectation of how things ought to be, became the most constant feature in the lives of Americans. After so many centuries of resistance to change, new products in the nineteenth century sometimes caught on just because of their novelty.

Freed from British restrictions, American merchants sent ships up the California coast, across the Pacific, and into the Indian Ocean. Elias Hasket Derby, America’s first millionaire, made his money opening up markets in Russia and the Orient. Americans boat designers and shippers had the pleasure of beating out the English with clippers built along the New England coast. New York’s Black Ball Line dominated the passenger and mail routes of the North Atlantic. Pushing the rivalry a bit further, American merchants began sending their clippers to China to deliver tea to the London market, prompting a great China race.

Alexis de Tocqueville, author of
Democracy in America
, saw enough of the economy to predict its upward trajectory. “Independence,” he wrote, “gave a new and powerful surge to their maritime genius…. Today it is Americans themselves who carry home nine-tenths of the products of Europe. It is again Americans who bring three-quarters of the exports of the New World to consumers in Europe.” Having noted that, he went on to explain how Americans could beat out Europe in shipping costs: “It’s not because their ships were cheaper which they weren’t. The wages of seamen were even higher,” he stressed, going on to say, “[O]ne would seek in vain the causes of this superiority in material advantages; it is due to purely intellectual and moral qualities.”

The European navigator ventures on the seas only with prudence; he departs only when the weather invites him to; if an unforeseen accident comes upon him, he enters into port at night, he furls a part of his sails, and when he sees the ocean whiten at the approach of land, he slows his course and examines the sun. The American neglects these precautions and braves these dangers. He departs while the tempest still roars at night as in the day he opens all his sails to the wind; while on the go, he repairs his ship, worn down by the storm, and when he finally approaches the end of his course, he continues to fly towards the shore as if he already perceived the port. The American is often shipwrecked, but there is no navigator who crosses the seas as rapidly as he does. Doing the same things as another in less time, he can do them at less expense.
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The profits from grain and cotton crops spread rapidly through the states, filling thousands of pockets with just enough money to finance new ventures whether it was moving to a good teaching post, starting a store, working up an invention, buying supplies for a frontier stake, venturing a cargo to the West Indies, buying a slave, or making a strike for one’s own freedom from enslavement. From an accountant’s point of view, young Americans were poor, reckless, and debt-prone; but a risk-taking genie had been let out of the bottle of parental constraint, and not all the prudence of the ages could stuff it back in. The democratic practices that rapidly, if unexpectedly, followed the establishment of the American Republic redounded to the benefit of young people. With the British gone and the colonial upper class deprived of its hold on political power, ordinary people could choose their own life goals and usually pursued them in the economy that Jefferson and his successors chose to leave unregulated.

Still, the United States, like most of Germany, was economically primitive by any modern standard. Until the end of the 1820s only those living on the nation’s rivers could be sure of long-distance transportation and then only in one direction. Roads did not go very far inland and were impassable in rainy months. Most people lived in very simple houses, often of their own construction. Enslaved families crowded into barracks-like cabins. Olive Cleaveland Clarke, who grew up in western Massachusetts, remembered being seventeen before she saw her first carpets. She had to visit Northampton to make an acquaintance with a piano.
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Musical instruments were scarce. Chester Harding, who later made a career of portrait painting, had never seen a picture of any sort until he was twenty-five. The Netherlands in the seventeenth century could boast of two million works of art.

Life expectancy was not high in the nineteenth century, age forty-five for those white women and men who successfully made it to age twenty. For African Americans, the picture was much bleaker, life expectancy dropping as low as thirty-five. White women in 1800 bore an average of seven children; enslaved women, nine, each delivery posing a threat to the mother’s health.
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Such high fertility made for a youthful nation, with 58 percent of America’s population under twenty in 1820, compared with 44 percent in 1899 and 27 percent today.
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Wages, good by European standards, were far from bounteous when the cost of living is factored in. Food, clothing, and shelter took 80 percent or more of a worker’s wages for the typical sixty-hour workweek.
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In Europe food alone could eat up 60 percent to 80 percent of a family’s weekly budget, depending upon the harvest. But people take their bearings from what has gone before them, not from future, unimaginable standards of living. And what Americans in the first half of the nineteenth century experienced was the steady improvement of their material environment: acres brought under the plow, steam engines applied in ingenious ways, rivers and streams dammed and sluiced to power mills, with miles of canals and roads cut through the wilderness.

Technology in Germany and the United States

The United States and Germany borrowed the technology in the basic industries of textile making and locomotive design from Great Britain. Using British designs as launching pads for innumerable modifications and ancillary inventions, both countries proved adept at perfecting the inventions that they acquired from Great Britain, as well as from Belgium and France. John Jervis’s work on the railroad is exemplary of the process. Britain’s locomotives didn’t do well on sharp curves, so Jervis reconfigured them in a kind of inventive dialogue with his British mentors. By 1836 American manufacturers had stopped importing locomotives from Great Britain because they had domestic ones to buy. Similarly iron production got under way in the United States in the 1830s with blast furnaces that had to be redesigned from British models in order to make use of Pennsylvania’s abundant anthracite coal. In the 1840s Americans got 80 percent of their pig iron from Great Britain; by 1856 domestic production had overtaken iron imports.
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Germany’s abundance of coal, iron, and accessible capital translated quickly into railroad mileage. By mid-century the number of operating railroad miles had become a good indicator of economic development. Britain had close to ten thousand miles laid; Germany came next in Europe with 58 percent of that total; France with 29 percent, Austria-Hungary with 19 percent, and Italy and Russia with less than 1 percent.
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The United States already had almost nine thousand miles, a figure that was to treble in the next ten years. Originally, the most efficient American lines were those private companies built because politicians guided publicly financed railroads to their home districts, however remote.
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Unlike European countries, the United States had hundreds of miles of sparsely populated areas to cover in order to join the Pacific and Atlantic coasts. The American government became a major sponsor of railroad construction, providing incentives in land grants to railroad companies. Real estate speculations abounded as building the transcontinental railroad became awash in graft. Despite this, laying railroads became an important adjunct to nation building for both Germany and the United States.

By the last three decades of the nineteenth century the United States and Germany had nurtured the innovations that picked up the beat of economic development. Constant innovations didn’t come without cost, because every improved device rendered obsolete its predecessor. Prodded by the lure of stronger sales and higher profits, backers of incessant inventiveness hurt established industries and firms. The early-twentieth-century Austrian economist Joseph Schumpeter captured the essence of capitalism, with his “creative destruction” of the old by the new.
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Rarely has anyone so precisely hit the nail on the head, implying the consequences associated with both “creative” and “destruction.” Less catchy is the economists’ take on this, “early obsolescence,” a phrase meant to indicate that commercial objects don’t grow old; they just become obsolete when they are replaced by something better. Retrospectively we can see that innovation pushed the relentless revolution of capitalism, yet why or how one country or region grabbed the technological lead remains a bit obscure.

Telegraphy offers a fascinating example of the Ping-Pong game of adaptive inventions. In the closing years of the eighteenth century, two French brothers, Claude and Ignace Chappe, contrived to send signals that could be transformed into words through semaphore relaying stations placed ten to fifteen miles apart. In 1837 an English instrument maker, Charles Wheatstone, devised and patented an electric telegraphic system using five needles to point to letters of the alphabet. He conducted experiments in electricity, optics, and acoustics of sufficient excellence to earn him a professorship at King’s College, London, despite his lack of formal education. Wheatstone had been drawn to telegraphy through his efforts to measure the velocity of light. Two years earlier Samuel Morse, building on the work of another American, demonstrated that signals could be transmitted by wire, using electric impulses from a sending apparatus connected by an electric circuit to a receiver that operated an electrical magnet that produced marks on paper. From this, Morse composed his famous code of dots and dashes representing letters of the alphabet.

Although Morse quickly gave a public demonstration of his telegraphy, its transition from model to mechanism took another five years and a subvention from Congress. Morse’s telegraphy eventually became the one most widely used, but not before Germany’s Ernst Werner von Siemens, founder of the great electrical engineering corporation, developed a telegraphic system based on Wheatstone’s that Eastern European countries adopted. All these successes in telegraphy came amid dozens of failed efforts, sunk by the technical problems of transmitting messages through space.
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Contemporaries found something magical about transmitting messages in seconds. Soon telegraphy became an integral part of running a railroad. Its signals speedily shuttled information about arrivals, departures, and breakdowns across continents; its poles lined the roadbeds, vivid evidence that the space dividing people was collapsing.

Siemens came to telegraphy through his military post in the artillery workshops of Berlin. In Germany, he oversaw the laying of the first submarine lines and received credit for saving the town of Kiel from an advancing fleet when the Germans were fighting the Danes. In 1845 his patented machine delivered the message that the German Assembly had voted in favor of a German emperor. Morse’s first message was also political: The Whig Party had nominated Henry Clay for president. More famous was the biblical quotation that the young daughter of a friend had suggested for a message: “What Hath God Wrought!” Thirty-three years later, in 1877, God wrought something even more portentous, the telephone.

For both Germany and the United States, the railroad became the most effective nation builder and spur to economic growth. It also dramatized for all to see that speed modernized how people thought and behaved, effectively dividing premodern and modern epochs in human history. Train stations created new public spaces. They were frequently the largest buildings in towns; in cities architects designed them to be temples to progress. German conservatives bemoaned the fact that riding on railroad would breach the walls separating social classes. And of course they did. Manufacturers dispersed throughout Germany became railroads’ first beneficiaries and their most powerful sponsors. They saw the enormous advantages in simultaneously reducing transportation costs and widening the market for their products. Laying track rapidly connected German manufacturers with the producers of food, timber, and iron ore. Germany’s unification in 1871 only intensified the synergy of political and economic development. With Germany’s incessant railroad building, its mileage surpassed first France, then Belgium and had drawn even with Great Britain by 1875.