Capitalizing on Change: A Social History of American Business (review)

Buder, professor emeritus of history at Baruch College and the graduate center of City University, has written a paean to U.S. values that push forward innovation. He emphasizes the "historic continuous dialectic between the bottom-line materialism of the capitalist system and the civic and ethical values of the United States, between the economic forces propelling change and the national vision of social justice and a good life" (2–3).

Buder's approach is chronological, from the seventeenth century to the present. The 169 years of the colonial era are traversed with sweeping generalizations. During these years, Buder sees "the American emerging … an individual less inclined to defer to superiors … in embryo a pragmatic modern man or woman striving to rationally pursue his or her self interest" (39). The revolution, the framing of the constitution, the John Marshall court are all portrayed as defining American institutions, which emerge in a way that favored economic growth and development. Business expansion, from 1790 to 1860, is traced in a manner familiar to most U.S. historians. Buder also covers colorfully the increase in millionaires—from fewer than 100 in 1860 to more than 4,000 in 1890. He retells the well-known stories of John D. Rockefeller, Andrew Carnegie, and J. P. Morgan, stressing their "individual creativity and strength of will" (148). Next, he turns to the advent of big business, the "national" ªrms with their new technologies and new marketing structures. "Shopping by brand was to be the quintessential modern experience" (161). Buder documents the extraordinary change in late nineteenth-century to early twentieth-century America, although he fails to recognize that most of the national enterprises rapidly became multinational and that U.S. big business was much involved in the global economy.

In the 1920s, "mass advertising created new wants … working to undermine traditional habits of thrift" (234). The result was a consumer culture that contrasted sharply with Benjamin Franklin's "humble homily: 'Waste not, want not'" (236). "The automobile showcased the new consumer society" (245). Then the stock market crash came, followed by the Great Depression, which "set in motion the interventionist economic and social policies that have ever since characterized the federal government" (272). Not until World War II with massive government spending did the economy recover.

After the war, "confounding the pessimists, the United States experienced a long and sustained period of economic growth" (297). The baby-boom generation provided a new market for U.S. business. The South and West flourished, filling defense contracts. Air conditioning transformed the South. Buder includes in this discussion the "Whiz Kids" at Ford in the 1950s, the age of the conglomerates in the 1960s, the growth of U.S. multinational enterprise in the 1950s and 1960s, and the new U.S. affluence. But the seeds of the economic reversals of the 1970s lay in the late 1960s.

The discouraging 1970s were soon replaced by the Reaganomics of the 1980s, with its market fervor, its mergers and acquisitions, the attention to Japanese business (accompanied by fears of U.S. decline), and, once again, a new American consumerism. The 1980s, 1990s, and early twenty-first century featured the AT&T breakup settlement in 1982, the ascent of Jack Welch at General Electric, the transformation of Citigroup into a financial supermarket, the internet boom, the growth and collapse (in 2001) of Enron, and the new (as of 2005) role of sovereign wealth funds. At the start of the twenty-first century, the "eight biggest high-technology companies" were all based in the United States (411)—so much for U.S. "decline." During the 1980s and 1990s, many companies cut back their workforce, creating new efficiencies. The 1990s also witnessed the emergence of the institutional investor.

In the penultimate chapter, "Thinking Small," which concerns the revived importance of small businesses in America in the 1990s, Buder expresses his wariness that competitive advantage lies with firms of reduced size, noting that...