The American Business History was greatly influenced by the forms of governments that the United States of America has had through times. The Constitution of 1789 was composed three branches: Legislature, Executive, and Judiciary. These three branches tailored the manner by which the Federal form of government was run in that era. By the Federal government, the coin money/currency was issued, bankruptcy laws were established, the national postal system was fabricated, patents and copyrights were issued, uniform weights and measures were instituted, the tax system was created, and the interstate and international trades were regulated.
The political framework of the Federal government gave birth to a common market. It fastened a distinctive dynamic form of government business relations. The post-colonial era was born in 1750. It prompted an imperial political economy which resulted to international rivalry which was evidenced by the European land claim, non-native settlement on the lands of America, and the dominant (free and forced) immigrant groups in colonial Britsh America. The revolution created political conservatism resulting to political unrest and hostility towards merchants.
Trade patterns were reshaped in such a way that inter-regional trade grew and paved a way for foreign trade. New patterns of investment were fashioned via the flood of government securities, foreign borrowing, and beginnings of institutionalized banking. The merchant community was revitalized fostering new methods of cooperation through the collective action by capitalists through the formation of corporations. When the Articles of Confederation was ratified in 1781, the government had no power to levy taxes and no power to regulate commerce which was not healthy for the American economy. The Federal government became weak.
The States nevertheless became strong. Because of this, the Confederation was removed and the American government formulated the Constitution of 1789. The Constitution of 1789 allowed the American government the power to tax, regulate international trade (tariffs), and regulate interstate trade. It crafted a war of political independence which in turn resulted to economic independence within framework for a national economy for America in 1812. The war among nations effected trade embargoes: all foreign trade were prohibited in 1807 and by 1809, trade was prohibited with Britain and France.
This nonetheless resulted to more protection for the domestic manufacturers. Local businesses responded positively. Cotton plantations and export trade flourished in the South. In the North, the merchants responded positively by specializing in finance and investing in manufacturing. In 1815, regional divergence increased, institutional banking grew, and domestic manufacturing in middle/northern states was also nurtured. The Federal government was thus strengthened while the states were weakened but remained strong. By economic independence, Capitalism earned significance whereby analytical tools were used in business colonies.
Three types of capitalism were identified: Merchant Capitalism, Industrial Capitalism, and Financial Capitalism. These three forms of capitalism was rooted by the colonial capitalism under the colonial form of government that America had during that time. The economic independence fostered the local merchants/capitalists’ business acumen with the use of analytical tools. The analytical tools aided the American businessman in properly identifying the scale of investment, strategies for business growth, and appropriate business structure. The colonial business was characterized as small scale in several ways.
Geographically, place of business was distant. Scale of investment was relatively small. Pace of business was slow and social relations was personal. The Strategies of growth was expansion (doing on a larger scale) and specialization (in function, products, or geographic area). The Structure of business was defined as Ownership Structure and Managerial Structure. The ownership structure was further identified as Proprietorship, Partnership, and Corporation. The colonial money and credit gave birth to the use of the commodity money, specie, Spanish milled Dollar, Bills of Exchange, and Paper Currency.
The revolution created political conservatism resulting to political unrest and hostility towards merchants. Trade patterns were reshaped in such a way that inter-regional trade grew and paved a way for foreign trade. New patterns of investment were fashioned via the flood of government securities, foreign borrowing, and beginnings of institutionalized banking. The merchant community was revitalized fostering new methods of cooperation through the collective action by capitalists through the formation of corporations. The colonial government and the revolution both produced what American business is in today’s times.
The United States of America is widely known today as a Capitalist country. Much of what is known for what multiplies its wealth was brought about by how Capitalism was run over the centuries. The members of the American government, which continues to shape the business environment, has always been united in the formulation of effective measures to strengthen its businesses by pumping enough financial resources into the financial system. Even with the recent recession, the Americans plowed more and more capital in order to recoup from its setbacks. To date, the positive effects could be clearly seen due to the rebound of financial markets.