Published in 2004, An Empire of Wealth by John Steele Gordon explores the economic history of the United States from Henry Hudson sailing the Half Moon up the Hudson
River in 1609 to the terrorist attacks of September 11th,
2001. Mr. Gordon’s premise is to show
that America
was formed primarily out of a profit-seeking motive and became the first nation
to achieve superpower status via economic pathways as opposed to military aggression.
An Empire of Wealth
provides a fascinating record of our nation’s multitudinous speculative booms
and busts, technological revolutions, Wall Street shenanigans, corporate
espionage, persistent legislative ineptitude, experiments with having and not
having a central bank, our rocky history with the gold standard, Yankee
Ingenuity, fluctuations between massive budget surpluses to deficits, and
countless other stories of industrial heroism and nefarious greed. Empire does an excellent job of
covering America’s
epic development as an economic superpower.
While Empire is not a “how
to” book for a trader, it provides incredible insight into the history and
character of the American economy; the playing field on which we all competing. More importantly, Empire thoroughly explores
the development of the great entity of Wall Street. To know one’s history is to better understand
one’s future.
For example, Empire shows
that in the 1640’s, during the formative years of Nieuw Amsterdam (now Manhattan), over 18 languages
were spoken, the seal consisted a beaver (the main commodity being traded)
surrounded by wampum (Indian currency), and it took the settlers 17 years to
erect the first church. An international
collection of people focused first on trade and second on all other
pursuits. It appears not much has
changed in Manhattan
since its original founding.
Mr. Gordon walks the reader
through countless booms and busts, and in by doing so, he shows us how
repetitive the American economic cycle is.
We currently are all trying to trade through “unprecedented times,” but
after reading Empire, one realizes our current environment is nothing
new. With this understanding of history,
a trader can achieve some level of serenity and be able to better predict where
we are going.
Empire provides a solid
compilation of the causes and effects of the Great Depression. To drive home the point that “everything old
is new again,” let two lesser known facts from the 1930’s be brought to
light. First, in the fall of 1932 the
yield on Treasury Bills went negative.
Secondly, in 1938, Richard Whitney and Company, led by the former
President of the New York Stock Exchange, was discovered to be engaging in a
massive embezzlement scheme to defraud all of its investors. 6,000 people gathered to watch Mr. Madoff
Whitney be led away in handcuffs and sent to Sing Sing. Sound familiar?
Read An Empire of Wealth. It humbles the reader by showing that we are
all just one of the hundreds of millions of people who have participated in the
American economy while instilling a terrific sense of pride that we have the
opportunity to compete in the most dynamic and colorful economic story the
world has ever seen.
