Theory 2 Action Podcast
Theory 2 Action Podcast
LM#65--Lovers of Liberty series--Book 2
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America's economic power stands unrivaled in human history. With only 6% of the world's population and land area, the United States generates nearly 30% of global GDP – a concentration of productive capacity that even ancient Rome at its height couldn't match.
Unlike empires of conquest, America's global influence flows from something more profound: its wealth creation engine. John Steele Gordon's masterwork "Empire of Wealth" reveals how America's free-market principles, grounded in English traditions of liberty and property rights, unleashed unprecedented prosperity. The contrast with nations like Argentina – blessed with similar natural resources but hampered by different political traditions – demonstrates how crucial these foundational principles were to America's success.
The American character has always embodied what some have called "Yankee ingenuity" – a relentless drive to improve through innovation. This spirit transformed everything from farming tools to governance systems, culminating in technological revolutions that reshaped human civilization. The computer revolution stands as a perfect example, collapsing information costs just as steam engines once transformed physical energy, creating entirely new possibilities for human advancement.
America's economic success story isn't just fascinating history – it's the foundation of our national power and global influence. As we celebrate our country's birthday, we should recognize that our prosperity wasn't inevitable or accidental, but the direct result of liberty-centered principles established at our founding. If you're curious about how America became an economic superpower and why its model continues to inspire the world, this exploration of our economic heritage offers invaluable insights into what makes America truly exceptional.
Key Points from the Episode:
• The United States produces 30% of world GDP with just 6% of global population and land area
• Unlike past empires that conquered through military force, America's influence comes through economic success
• John Steele Gordon's book "Empire of Wealth" presents America's economic history from colonial days to modern times
• America's economic success stems from English traditions of liberty, property rights, and rule of law
• The computer revolution collapsed information costs similar to how steam engines transformed physical energy
• American economic principles have spread globally because people everywhere want similar prosperity
• Free market capitalism forms the foundation of America's military, cultural and technological power
Keep fighting the good fight.
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Those are the drums of liberty. The world, for the last two and a half centuries, have seen nothing like the American experiment. The sheer amount of wealth this nation has created and, furthermore, the amount of wealth this nation has helped the rest of the world create, is beyond comprehension. Let's talk about it on this Liberty Minute.
Speaker 2:Welcome to the Theory to Action podcast, where we examine the timeless treasures of wisdom from the great books in less time, to help you take action immediately and ultimately to create and lead a flourishing life. Now here's your host, David Kaiser.
Speaker 1:Hello, I am David and welcome back to another Liberty Minute. This is book two in our Lovers of Liberty series special series. Five books in five days to celebrate our national birthday coming up soon, tomorrow. In fact, if you haven't been listening, are you living under a rock? Just kidding, just kidding. But if you have not been listening, be sure to go back and check out the just released episodes. We have book five, book four and book three up there. We believe they are worth their weight in gold and certainly in nuggets of wisdom. So with that, I'm very excited to kick off book three. We have a longer episode, so we're going to get right at it and with that let's roll.
Speaker 1:Since the beginning of our country, the free market and an extreme desire, and I would even say quest, to improve Americans' lot in life was in the soul of its character. Americans, as we would slowly become to be called, we Americans, are always on the quest to improve things improve the farm tools we worked with daily in the beginning of our country, improving the system of government that we were living under, improving the civil society, whether it be by formal police officers helping keep the peace in our cities or by the local traveling judge, adjudicating local disputes. We Americans were born with a DNA or some might even call it the Yankee ingenuity to constantly improve our state of life. To constantly improve our state of life. We Americans, we're not going to settle for the current state of our lives. And all this brings us to our first pull quote and perhaps my favorite book of all five. But more on that to come later. Let's go to the book and get into it.
Speaker 1:At the dawn of the 21st century, the position of the United States in world affairs has no equivalent in history. Indeed, one has to look to the apogee of the Roman Empire, almost two millennia ago, to find even a remotely comparable situation. Rome conquered the known world by force of arms. Its power rose from its military machine epitomized by the legions, and every great power since has exercised formal political hegemony over alien peoples to advance its own interests, alien peoples to advance its own interest. A century ago, the British Empire covered a world of the globe's land area, while a third of the world's people were subjects of King Edward VII, but only a small minority of those people spoke English or regarded themselves as British, regarded themselves as British. The United States, however, has always been at most a reluctant imperialist. In the 20th century, it was the only great power that did not add to its sovereign territory as a result of war, although it was also the only one to emerge stronger than ever from each of that century's three great power conflicts.
Speaker 1:Today, the United States possesses only 6% of the world's land area and 6% of its people, virtually all of whom regard themselves as Americans and speak English, as Americans and speak English. And yet its influence in the world is far greater than Britain's was at the height of its relative power in the mid-19th century. The reason is the American economy, for while the United States has only 6% of the land and of the people, it's close to 30% of the world's gross domestic product, more than three times that of any other country. In virtually every field of economic endeavor, from mining to telecommunications, and by almost every measure from agricultural production per capita to the annual number of books published, to the number of Nobel Prizes won more than 42 of them the United States leads the world. Its economy, however, is not only the largest in the world, it is the most dynamic and innovative as well. Virtually every major development in technology in the 20th century, which was far and away the most important century in the history of technology, originated in the United States or was principally industrialized and turned into consumer products here. Its culture, therefore, from blue jeans to Hollywood movies, to Coca-Cola, to rock and roll, to SUVs, to computer chat rooms, pervades the rest of the planet. As the new technologies spread around the world, they inescapably brought with them American ways and an American perspective. And that, my friends, is from the opening chapter of one of the great books I have read in my lifetime Empire of Wealth by John Steele Gordon, an epic history of American economic power, and an epic history, it is so much of our US history.
Speaker 1:Textbooks and stories miss the glaringly obvious fact that our country began with the free market and it didn't want to regulate that same free market to death and fast forward two and a half centuries later, and frankly, the free market is coming to dominate the world, in fact. Let's go back to the book to hear all about that very fact. The ultimate power of the United States, then, lies not in its military potent as that military is, to be sure but in its wealth, the wide distribution of that wealth among its population, its capacity to create still more wealth and its seemingly bottomless imagination in developing new ways to use that wealth productively. If the world is becoming rapidly Americanized, as once it became Romanized, the reason lies not in our weapons but in the fact that others want what we have and are willing, often eager, to adopt our ways in order to have them too. Spread of democracy and capitalism in recent decades, to a large extent in the light of the American example, is a peaceful and largely welcomed conquest, at least by the people, if often not by the elites who have seen their own powers slipping away. It is a conquest more subtle, more positive, more pervasive and, in all likelihood, more permanent than any other known before.
Speaker 1:The United States' economic freedom is more contagious than anything ever seen in the history of mankind, than anything ever seen in the history of mankind, and John Steele Gordon documents it very, very well. This book takes you on a journey through America's economic history, from the colonial days to the modern tech boom. It ties in major events like the Industrial Revolution and the Great Depression to the bigger story of how the United States became an economic powerhouse. It essentially gives you the big picture, and Gordon has a great knack for storytelling. He mixes the economic insights with fascinating stories about inventors and entrepreneurs and policymakers. He makes complex topics like banking and trade easy to understand, even if you're not an economist.
Speaker 1:Now I will say the book doesn't sugarcoat things. It celebrates America's economic achievement but also dives into the challenges like inequality and monopolies. It's a thoughtful look, a sweeping look, though, at the good and the bad of free market capitalism. And also Gordon focuses on the key drivers of the growth, like technology and infrastructure Think railroads and canals and the financial systems, like the Federal Reserve, and why that is important. Yeah, I know, right now we have a terrible Fed chairman, jerome Powell, but not all Fed chairmen have been terrible or will be terrible in the future. Chairman have been terrible or will be terrible in the future. So many people knock the institution when it is really the leadership that is the problem.
Speaker 1:For anyone curious about how these elements shape the country and shape the world that we're in right now, this is the perfect book. World that we're in right now, this is the perfect book. In short, it's a fascinating and, dare I say, approachable book. It's well-rounded looks at how America built its economic might, and that sweeping narrative across two centuries is just right up my alley. I think most of you will absolutely love it. Plus, this book is very easy to crush on Audible. I did it in just under a week so, like I said, it's very approachable and easy to digest. Two more quotes I want to share to tie all of this together. Going back to the book, to tie all of this together. Going back to the book Thus, america's is an empire of wealth, an empire of economic success and of the ideas and practices that fostered that success.
Speaker 1:Like many successes, that of the American economy is often seen in retrospect as inevitable, even foreordained. After all, the country has always had a vast and varied and fecund national territory, abundant natural resources and a large and well-educated population. But Argentina had all these assets as well and hasn't fought a protracted war since 1870. Yet it struggles just to maintain its status as a developed nation. Its GDP is less than a third that of the United States per capita. Much of the reason for the difference lies in politics, for the Argentine politics, inherited from Spain's control from the top imperial system, has all too often destroyed wealth or even more often, prevented rather than fostered its creation. But American politics had the good and, frankly, the great fortune to be grounded in English traditions, especially the idea that the law, not the state, is supreme. The uniquely English concept of liberty the idea that individuals have inherent rights, including property rights, that may not be arbitrarily abrogated, was also crucial. Did you catch that? The uniquely English concept of liberty was also critical? Liberty is the foundation of this series. It is the foundation stone in our form of government Now.
Speaker 1:This book was written in 2004, so Gordon misses the digital revolution that was just taking flight in 2004. But let's grab a quote about computers themselves, which are the predecessors to the digital revolution, because his insights here are fascinating. Going back to the book, the computer, like the steam engine, produced an economic revolution Precisely the same reason. It caused a collapse in the price of a fundamental energy. The computer brought down the price of storing, retrieving and manipulating information. Previously, only human beings could do this sort of work. Now machines could increasingly be employed to do it far faster, far more accurately and at a far, far lower cost. And just as the steam engine could bring to bear enormous energy on a single task, the computer can bring a seemingly infinite capacity to calculate and manipulate information. A computer model of the early universe, designed in the 1980s, was estimated to have required more calculations than had been performed by the entire human race prior to the year 1940.
Speaker 1:Computers began to invade everyday life with astonishing speed. It was more than 60 years between Watt's first rotary steam engine and the coining of the phrase industrial revolution, but it was clear that a computer revolution was underway less than a decade after the first microprocessor was produced. The first commercial products were handheld calculators that quickly sent the adding machine and the slide roll into oblivion. Word processors began to replace the typewriter in the mid-1970s and microprocessors, unseen and usually unnoted, began to be used in automobiles, kitchen appliances, television sets, wristwatches and hundreds of other everyday items. Many new products cordless phones, cell phones, dvds, cds, vcrs, digital cameras, pdas would not be possible without them. By the 1990s they were ubiquitous. The modern world would cease to function in seconds if microprocessors were all to fail.
Speaker 1:Oh, that is just fantastic analysis on computers and its comparison to the steam engine in the 19th century and especially microprocessors and what we know now as semiconductors. We know we are in the middle of a digital revolution right now which will transform and is transforming our world through another series of cross currents and ebbs and flows. In fact, I just ordered from a fast food restaurant the other day and, frankly, the AI order taker was more pleasant and more willing to get the order exactly correct and I found that, frankly, super useful and super effective. If you don't think the digital revolution is here, I would suggest one book we have covered here and in the Mojo Academy Chip War by Chris Miller. It's a fascinating look at the semiconductor industry and business and the world that we live in now, whether you like it or not.
Speaker 1:I'm sure there were folks that objected to the internal combustion engine being invented back in the day and then that engine being put into a car to make the automobile which largely replaced the horse and buggy era. But that is the nature of the free market In the market that, if you're living in the United States, god has richly blessed you and me beyond all human comprehension to place us here and now. You and I would do well to appreciate that fact, and perhaps this book will help you to appreciate it even more. It's an incredible sweep of our economic history and our economic power. Would we or could we be the military, the cultural or the technological superpower that we currently are without our economic foundation in the free market? Oh heavens, no. After reading this book, you will understand our economic engine, that of free market. Capitalism is the very foundation of our power, from the very beginnings. That free market has blessed us in so many ways. We would do well to know its history and to appreciate its power. This book starts that appreciation.
Speaker 1:So today's Liberty in the short term. We are just a day away from our national birthday, july 4th, our 249th birthday as a country. Let us point to the good works that tell the American story as a land of hope that we learned about several years ago ago, also as Americans, that conservatism that largely 60 to 70 to 80 percent of the American people follow in their DNA, that conservatism is the antidote to tyranny, precisely because its principles are the founding principles. Furthermore, our second founding is extremely important to understand how we make our country even more a more perfect union, as Abraham Lincoln admonished us. And finally, with today's wonderful sweep of our economic history that we are so richly blessed with and the power with which we possess, that is truly, truly humbling. Let us give thanks to Almighty God for such providential blessings and most especially, for our liberty. Now, join us tomorrow where we will reveal book one in our countdown to our national birthday and where we will celebrate our great country and the exceptional nature of our national character.
Speaker 2:Thank you for joining us. We hope you enjoyed this Theory to Action podcast. Be sure to check out our show page at teammojoacademycom, where we have everything we discussed in this podcast, as well as other great resources. Until next time, keep getting your mojo on.