The Anti-Fragile US Economy prior to WW2
When the US was founded, our per capita income was less than Europe. It was less than China’s.
By 1800, we had passed them all and never looked back. Even the great economic Depression we suffered didn’t slow us down much.
However, this income wasn’t just about financial wealth. Financial wealth comes and goes.
Instead it was based on economic progress. The kind of improvement that actually makes life better for everyone.
- We built and drove more cars,
- electrified more homes, and
- added phones to more homes than the rest of the world combined.
The punch line is that we did this all by the 1920s.
But the laughs don’t end there.
We did it without debt. Nearly half of US households at the time owned their own homes without mortgages!
We also did this with a minimalist financial system and an inept government bureaucracy the size of a postage stamp.
So why is this so funny?
It’s exactly the opposite of what we believe today. For example:
We believe that debt and finance markets are the source of economic progress (as in: we celebrate financial manipulators as “entrepreneurs”).
We believe that government oversight and regulation improve how our economy operates (as in: why don’t the guys in DC pass more laws?).
Of course, these new beliefs don’t appear to be working.
We’re stagnant. The Federal Reserve has been stimulating the economy for seven years and we still can’t grow.
Incomes are going down. Wealth is stratifying (fewer economic decision makers = bad decision making).
In short, we’re doing badly because we’ve become fragile.
It’s time to fix that. We can recreate the anti-fragile economy that served us so well for centuries.
All it takes is a willingness to use the technology available to us in new ways.