America Before Capitalism: Historical Perspective

America Beyond Capitalism(Image: Democracy Collaborative)This is the twenty-second installment of an exclusive Truthout series from political economist and author Gar Alperovitz. We are publishing weekly installments of the new edition of America Beyond Capitalism, a visionary book first published in 2005 whose time has come. Donate to Truthout and receive a free copy.

At the time of the declaration of Independence, the United States comprised a modest line of settlements along a thin shelf of land bordering the Atlantic Ocean, plus a smattering of inland farms and small community groupings. The first census in 1790 registered a total population of less than 4 million. Only five cities numbered more than ten thousand; the two largest, New York and Philadelphia, fewer than fifty thousand.

The majority of Americans earned their living in agriculture; technologically, the horse and iron plow were standard. Commerce was mainly restricted to traders and small manufacturers. Neither men without significant property, nor women, nor slaves could vote. For them – a large majority of the population – there was no democracy. Government constituted a tiny percentage of the small postcolonial economy; federal spending had reached only a little over $7.5 million by 1795.

By the year 2000 dramatic shifts in geographic scale and population had transformed the postcolonial settlements into a continental nation of over 280 million – more than seventy times the population at the time of the Declaration. Nearly 65 percent of Americans now lived in metropolitan areas of more than a million; with over a third (35 percent) living in areas of more than 2.5 million.

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Revolutionary changes had relegated the once dominant independent farmer and individual entrepreneur to the secondary margins of economic life. The large for-profit limited liability corporation had been elevated to a central role in ongoing American life, radically different from anything ever envisioned by classical free-market theory (the most important text of which, by Adam Smith, had just begun to circulate shortly after the Revolution).

Transformative changes in technology had taken the nation from the horse and buggy to the steam locomotive to the automobile and on to manned flight and the jet airplane – to say nothing of penicillin, antibiotics, and DNA, on the one hand, and the development of computers and the Internet, on the other. The average person could now earn approximately seventeen times what his or her counterpart in the late eighteenth century could with roughly the same expenditure of time and energy.

Evolutionary changes in public institutional structure had transformed government from a tiny force to almost 40 percent of direct activity in the modern economy – plus a vast array of regulations, loans, loan guarantees, tax provisions and related incentives, and other indirect activities. At the same time, extraordinary changes in culture forced the elimination of slavery and much (though hardly all) racial discrimination – and ended many (though hardly all) obstacles to women’s equal participation in virtually every institution of modern society.

It would be surprising if the coming era did not experience large-order transformative shifts at least as great as these. Indeed, given that technological change is now extraordinarily rapid (there are more scientists alive today than in all of previous human history) – and given that the constitutional structure of the nation was scripted in the time of the horse and the plow – it would be even more surprising if far greater changes than had ever previously occurred were not to dominate the coming stages of American development.