United States of Debtors

 American history, current events  Comments Off on United States of Debtors
Jul 202011
I don’t know where exactly Americans get the idea that our country wasn’t built on credit.  I think people assume that debt is a relatively new concept or just operate on the assumption that our early days were ones of rugged self-sufficiency.  Perhaps since historians don’t put it in blunt terms, they just don’t think about it, but the truth is that debt is part of the American way.
During the revolution, our motley collection of colonies hardly had the financial means to fight a war against one of the greatest empires of the age.  If France and Spain had not subsidized, supplied, and even fought our war, we would never have tasted national independence.  We kicked in a little, to be sure, but the amount of money available then was so small that the states and the federal government relied heavily on loans to bear our share.  Therein, a pattern was set that would last almost uninterrupted until today.  The federal government was still paying off the war debt when Thomas Jefferson bought Louisiana and piled on more deficit.  Before that debt could be retired, the War of 1812 came along and brought with it even more obligations.  A continuation of wars — with the Spanish, Mexicans, and Indians — meant that military spending continued to grow.  Back then, the federal government relied on tariffs for income, and that limited what the national budget could cover.  The coming of the Civil War brought a whole new level of expenditures and debt — warranting the introduction of the income tax for the first time.  National projects — parks, canals, railroads, and the like — meant continued government spending into the 20th century.  The development of the regulatory state expanded the size of the government and, of course, required more financial support then.  Successive world wars and a cold one, combined with a space race, assured mushrooming costs at the federal level.  Throughout all of these periods, outlays exceeded income, and the result was never-ending national debt.  Only once in our 235 year history has the government not been in debt — including the days of “smaller government.”  It is unrealistic, then, to expect it to function otherwise now and unhistorical to think this has not always been the case.
As to the popular fiction that Americans themselves manage their financial affairs differently, the history doesn’t back that up either.  Sure, credit card and student loan debt are new, but U.S. citizens relied on credit heavily even before these sources were available.  As soon as Henry Ford, et al, introduced the automobile to the public, they learned that the only way to get volume sales was to offer buying on time.  Ford wanted consumers to pay first and drive later, but when he started losing business to those who would let people drive the car while they paid it off, he too changed his policy.  In short, the story of the 20th century was the expansion of consumer credit in order to spur an economy supported by buyers.  Without it, there simply was no market.  Even before that, though, Americans relied heavily on credit.  It wasn’t until 1920 that the majority of people in the U.S. lived in cities.  Before that, rural life was the norm and most worked on farms or ranches with their families.  Agriculture was the main industry, and most wealth was in the form of real estate (land or slaves usually).  The average farmer or even plantation owner didn’t have cash to buy seed, supplies, and whatnot every year.  So, banks and merchants provided tools and other necessities on credit to be paid off when the harvest came in.  Often, the money made from this essentially just wiped the slate clean (or established a line of credit to draw from).  People rarely got rich off of farming — even Thomas Jefferson constantly struggled with debt for his plantation.  Mechanization in the 19th century would ultimately lead to the development of agribusiness, but that generally also ushered in the demise of the family farm, which went hand in hand with urbanization and the development of consumer culture.
Often, in the 18th and 19th centuries (and even some into the 20th), people got by without having cash at hand.  They bartered and traded for goods and services and used store credit.  Actual money was scarce in the early days.  Under the British colonial system, gold and silver (what we call “specie”) was hoarded in the home country.  In America, paper money — which functioned as an IOU for specie printed by individual banks, states, and others — was often used in lieu of gold or silver coins.  Counterfeit bills were a significant problem then, but it still was a long time until the federal government took sole responsibility for printing and backing money (in the 1860’s).  Before that, since there were few coins and not a whole lot of valuable paper money around, again, people got by on credit, trading and bartering.  However, trading and bartering in a seasonal/agricultural economy often also really meant delayed payment until the harvest (i.e. credit).  This kind of debt was considered productive credit as opposed to the consumer kind of the 20th century, but it was a burden of obligations nonetheless.
So, the average American household and the government have a long history of reliance on credit.  Essentially, ours has always been a nation of debt, and it’s best not to delude ourselves about it.  How much debt and what kind is a choice for us to make, but going without would be, well, un-American.
 Posted by at 10:15 pm

But, It’s About the War…

 current events  Comments Off on But, It’s About the War…
Jul 062011
The problem with military history for me is that it’s military history.  The subject really isn’t that compelling to me — and to most other Americans either, for that matter.  Oh, sure, war re-enactors, retired military officers, armchair generals, and wannabes love to study that stuff and/or recreate scenes of battle — whether in real life or with little plastic soldiers in a tableau built to scale, but the rest of us aren’t that interested in the detailed maneuverings of Pickett’s Charge or the one up San Juan Hill either.  Here’s the proof of that:  When the History Channel first debuted, it was heavy on military history because older men — who are often veterans and tend to be more interested in the subject — were a reliable audience.  Over time, the network retooled much of it’s offerings in order to attract larger crowds.  The focus on military history just wasn’t delivering the numbers.  This isn’t to say that Americans aren’t interested in war.  It’s an obsession with us mostly.  But, what really captivates us is the outcomes or the consequences of war.  We don’t need the fighting details.
In all honesty, wars come and go and the minutiae of the battles hold little lasting value (unless you are a student of military tactics).  It’s the effects of wars and their impacts that matter.  Thus it is with the Civil War, which our ongoing celebration now marks.  My God, that war totally upset what our country was.  We no longer had slavery because of it.  It rewrote our understanding of the role of our federal government, and it ushered in a new age of technological and social development.  Nevermore would women follow their husbands to battlefields to cook, mend, and care for them.  The military developed new systems for filling those needs and those pre-modern practices faded.  Also, it marked the coming of the end of the militia system where men provided their own horses, guns, and supplies for fighting.  Again, the military would undertake responsibility for this in lieu of amateur efforts in the future — and technology made this a necessity in a time that saw the development of the automatic weapon and chemical warfare.  You just can’t expect the average farmer to report with his trusty Gatling gun pulled from the rack over the mantle.  Politically, the war divided regions of the country into party enclaves that would last for a hundred years and prompt a redefinition of citizenship (per the 14th Amendment) and the power of the federal government — which expanded dramatically after the war with the introduction of the Department of Justice, Secret Service, and other new agencies.  These are just a few examples of the profound changes brought by the War Between the Sates.  Undoubtedly, it was a monumental moment in our history and produced a profound shift in our development.
It is important and right that we honor the importance of this event and mark it’s lasting effect.  The problem is, though, that our memorials are necessarily organized around the war.  How can they not be?  It’s all about the war.  Yet, the value of studying it is not in the military history for most of us.  So, historians around the country — most of whom (like me) do not specialize in military history (nor are they interested in doing so) — participate in commemorative events and use them to try to cram social, political, racial, and other histories into war stories.  Those of us in the practice want to show you the impact of the war;  we want to educate people about its influence.  Only, we aren’t really practiced in military history — only maybe every 50 years or so when we do a crash course in it for just such occasions.  Expect that in 2061, the war will remain a vital point of divergence for our history and that we will be struggling once again with reconciling non-military history with a celebration of war.  This is yet another lasting effect of la guerre.
 Posted by at 9:20 pm