The Founders Allowing the People to Create a Surplus of Funds
When creating the United States, the founders were very weary of men in power using their authority for selfish gains. Because of this, they made many laws to limit the government involvement with the public. With this, the founders additionally decided to limit the government's role in entrepreneurship. This essentially put the economical success of the United States in the hands of the people. To my surprise, this was the only time the United States was never in debt but actually with a surplus of funds. To my knowledge the United States is now in great debt. I used to think the U.S. started in debt and that is why the country is still in debt. How did this come to be if we once had a surplus? Dr. Folsom explained that with the extra funds, the government was looking for ways to spend it. Subsidies, government provided financial aid, was one of the ways the government began to spend its surplus of funds.
If The Government is Spending a Large Sum of Funds on Subsidies, It Must be Helping a lot... Right?
Dr. Folsom gave many examples of past events that showed companies granted subsidies falling short to competing companies without any form of government aid. Dr. Folsom's first example was Collin's attempt to integrate steam ships into weekly American use. Collin's asked the government for a large sum of money to help him create a business that he believed would only better the country. His idea was to make and run steam ships to and from England to support trade and travel. Another man, Vanderbilt, decided to do the same thing, but without government subsidies as a financial aid. This meant that Vanderbilt had to be more innovative and meticulous to save money while also gaining consumers. Collins attempted many goes to create a successful business that brought profit, but could not do so. Every failed attempt Collins had, he went back to Congress asking for more money. Vanderbilt on the other hand, did not have to go to the Congress for financial aid, but was still able to run a successful steam boat company that made profit and was preferred by most consumers. Similar to this situation was the Lang airplane. The congress gave Lang money to try to create air planes, as the other story goes, Lang, despite government subsidies, failed and other private owned business was successful in creating fully functional planes.
Conclusion
Dr. Folsom stated "free-market entrepreneurs are more successful than political entrepreneurs." By this he means, entrepreneurs operating in a market in while the government has little to no government involvement are more successful. Additionally, political entrepreneurs, those who are aided in some way by the government, most times do not create as successful businesses or products. His argument makes sense, a free-market allows for more competition which increases the incentive of entrepreneurs to meet the consumers' needs. Meeting the needs of consumers means creating better products and lowering prices. Starting off a business with less money or no subsidy initially sounds counter intuitive when there are subsidies available, but starting off financially lower means harder work- more careful and creative ideas when it comes to creating a successful business.
Is possible for the United States to become a completely free market again and have as large of a growth like the Gilded Age? That I do not know. With small knowledge on the current economical state of the United States and how to exactly get to a completely free market, I myself cannot say. However I do understand that it is going to come from a large step back from the government and a limitation on their involvement with entrepreneurs to get there. This would place the rise and fall of the economy in the hands of the people. While this does sound like a lot for individuals to take on, I think that it would only drive the country to success as the people would want to be successful for themselves which in turn would mean economic growth for the United States. Dr. Folsom's ideas are still very valid 11 years later and I think will continue to be relevant until there is a day in which the United States is a true free-market economy.
Works Cited
Folsom, Burt. Myth of Robber Barons. August, 2010. https://www.c-span.org/video/?294883-2/burt-folsom-myth-robber-barons