American Twentieth-Century Exceptionalism: An Outtake from "Slouching Towards Utopia: An Economic History of the Long Twentieth Century 1870-2016"

Il Quarto Stato

Sources of American Exceptionalism

In 1870 the focus of economic growth crossed the Atlantic to America, where continent-wide scale, a flood of immigration, vast resources, and an open society that made inventors and entrepreneurs culture heroes welcomed economic growth. In the United States the Belle Époque, the Gilded Age, the period of the explosion of prosperity set in motion around 1870 lasted without interruption longer than elsewhere in the world. China collapsed into revolution in 1911. Europe descended into the hell of World War I in 1914. In America the period of progress and industrial development lasted longer—perhaps from when the guns fell silent at the end of America’s Civil War at Appomattox in 1865 until the start of the Great Depression in the summer of 1929.

The sources of America’s exceptional wealth were many. The scale of the country induced the rise of modern management and mass production: industries that could take advantage of the potential demand created in a continent-wide market. Some have stressed the crucial role played by natural resources in America’s industrial supremacy: in a world in which transport costs were still significant, a comparative advantage in natural resources became a comparative advantage in manufacturing. Others stress the links between a resource-rich economy and the “American system” of manufactures, relying on standardization, attempts to make interchangeable parts, heavy use of machinery—and wasteful use of natural resources like materials and energy. In the twentieth century this American system was to lead straight to the possibilities of mass production, not because of any far-sighted process of industrial development but through myopic choices that generate further technological externalities.

In America in 1913, even in rural America, children went to school. The years before World War I saw a large increase in education, as at least elementary school became the rule for children in leading-edge economies. And years of education grew as well.

In countries like the United States that made the creation of a literate, numerate citizenry a high priority—and that encouraged those with richer backgrounds, better preparations, and quicker or better trained minds to go on to higher education—industrialists and others soon found the higher quality of their workforce more than making up for the taxes to support mass secondary and higher education. The U.S.’s edge in education was a powerful factor in giving the U.S. an edge in productivity—and Germany’s edge in education was a powerful factor in giving Germany an edge in industrial competitiveness also. In the United States in 1910 some 355,000 were attending college, making up nearly five percent of their age cohort. In Germany in 1910 some 1,000,000 students were enrolled in post-elementary education. And the higher wages and salaries paid to trained engineers and craftsmen induced the boom in education.

And America turned a great many immigrants into Americans. And in so doing probably turned the years from 1940-2016 into an era of American predominance. 
Consider: In 1860 the United States had a full-citizen population—i.e., Caucasian English speakers whom the government regarded as worth educating—of 25 million, while Britain and its Dominions had a full-citizen population of 32 million. By 1940 things had changed: 117 million full-citizen Americans; 76 million full-citizens in Britain and the Dominions. But if we look at the pro-rata descendants of the full citizens of 1860, we see numbers of roughly 50 and 65 million, advantage Britain and the Dominions.

Up to 1924 New York welcomed all comers from Europe and the Middle East, while London and the Dominions were only welcoming to northern European Protestants. There is a counterfactual in which the British Empire of the late 1800s is more interested in turning Jews, Poles, Italians, Romanians, and even Turks into Britons or Australians or Canadians. That world would have been a much more London-centered world for much, much longer.

Now the British Empire did respond to the growing colossus across the ocean to the west. It drew the rising superpower closer to it by making all kinds of ties: economic, cultural, social, and familial. Consider another migrant: Jennie Jerome (1854-1921), daughter of New York financier Jennie Jerome, who made a reverse migration: from Brooklyn, New York, United States to Westminster, England to marry Lord Randolph Spencer-Churchill, becoming engaged in 1873 three days after their first meeting at a sailing regatta on the Isle of Wight. Their marriage was then delayed for seven months while her father Leonard the financier and speculator and his father, John Winston, the seventh Duke of Marlborough, argued over how much money she would bring to the marriage, and how it would be safeguarded. Randolph died after two decades. Thereafter Jennie was “much admired by the Prince of Wales”, as they put it in those days, and in 1900 married a younger man, George Cornwallis-West, who was a month older than Jennie and Randolph’s son Winston. She died at 67: a broken ankle became infected and then, in those pre-antibiotic days, gangrenous, and amputating her leg could not save her.

Jennie and Randolph’s son Winston Leonard Spencer Churchill (1874-1965) was born eight months after their marriage. He would be the enfant terrible of British politics when young, a disastrous British Chancellor the Exchequer—the equivalent of Finance Minister or Treasury Secretary—when middle-aged, and quite possibly a decisive factor in defeating the Nazis as British Prime Minister during World War II. And not least of Winston’s excellences as a wartime prime minister was that he was half American.


The Furnace Where the Future Is Being Forged

The end result of all these factors was a United States that had a remarkable degree of technological and industrial dominance over the rest of the world for much of the twentieth century.

Because it was in relative terms so prosperous, and because its gradient of technological advance in the pre-WWI period was so much faster than that of western Europe, it was the United States throughout the twentieth century was the country where people looked to see the shape of the future. It had always been such. Holland in the seventeenth and Britain in the nineteenth centuries had been the focuses of institutional and economic innovation and the balance wheels of world economics and politics. To observers from Europe and elsewhere to be a qualitatively different civilization: it lacked the burden of the past that constrained the politics and oppressed the peoples of the nations of Europe, and freed from the burden of the past it could look toward the future.

We can see some of the admiration and wonder that turn of the century America triggered by gazing at the early twentieth century United States through the eyes of a 1916 transitory immigrant named Lev who, later, recorded his experiences in his autobiography. Not only Lev but his father David (1847–1922) and mother Anna (1850-1910) had been migrants. David and Anna crossed the greatest river they had ever seen to move hundreds of miles out of the forest and into the grasslands—lands where the horse nomads had roamed within recent historical memory before their suppression by the army. The lands thus seized were among the richest agriculture soils in the world, and very thinly settled: it was fifteen miles from their farm in Yanovka to the nearest post office. So they sent their son Lev to school in the nearest port city, Odessa.

There Lev Davidovich Bronstein became a communist. And midway through his career he found himself feared by Czars and policemen, and hunted and exiled because he was feared. Unlike the bulk of the people who had left the Old World for the New and wound up in New York in the 1910a, he did not want to be there. But he and his family made the best of it. The Bronsteins: 
>rented an apartment in a workers’ district, and furnished it on the installment plan. That apartment, at eighteen dollars a month, was equipped with all sorts of conveniences that we Europeans were quite unused to: electric lights, gas cooking-range, bath, telephone, automatic service-elevator, and even a chute for the garbage.These things completely won the boys over to New York. For a time the telephone was their main interest; we had not had this mysterious instrument either in Vienna or Paris...
 They—particularly the children—were overwhelmed by the prosperity of the United States, and by the technological marvels that they saw in use everyday: 
>...the children had new friends. The closest was the chauffeur of Dr. M. The doctor’s wife took my wife and the boys out driving... the chauffeur was a magician, a titan, a superman! With a wave of his hand, he made the machine obey his slightest command. To sit beside him was the supreme delight... 
He stayed in the United States for less than a year. The Russian Revolution came, and he returned to the city of St. Petersburg (whose name was changed, first to Petrograd, then to Leningrad, and now back to St. Petersburg). 
He was never allowed back into the United States. He was, after all, a dangerous subversive, with a long-run plan that included the overthrow of the government of the United States by force and violence. Thus he had no time to more than “catch the general life-rhythm of the monster known as New York.” He took an alias from one of his former Czarist jailers in Odessa: Trotsky. He became Lenin's right-hand, the organizer of Bolshevik victory in the Civil War, the first of the losers to Stalin in the subsequent power struggle, and finally the victim of the Soviet secret police, assassinated with an ice-pick in his head outside Mexico City in 1940. 
But on his departure from New York Trotsky felt—or at least he later wrote in exile that he had felt—as if he was leaving the future for the past:

I was leaving for Europe, with the feeling of a man who has had only a peek into the furnace where the future is being forged...

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