PDF Summary:George Washington Dealmaker-In-Chief, by Cyrus A. Ansary

George Washington's vision for a thriving American economy extended far beyond military victories and nation-building. In George Washington Dealmaker-In-Chief, Cyrus A. Ansary explores Washington's unique perspective, shaped by his experiences in colonial business dealings, land ownership, and entrepreneurship.

The book details how Washington aimed to replace Britain's oppressive mercantile system with free-market principles. It examines his efforts to establish stable financial institutions, an independent judicial system, and legal safeguards to attract investment and foster innovation, laying the foundation for America's future economic prosperity.

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Context

• The British mercantilist system restricted American trade by mandating that colonies trade primarily with Britain, limiting their ability to engage freely with other nations and stifling economic growth.
• To bypass British restrictions, colonists often resorted to smuggling, which highlighted their desire for freer trade and economic independence.
• The ability to control and utilize vast natural resources and land within the country was a significant factor in economic expansion post-independence.
• Washington's vision and policies laid the groundwork for future American economic leaders and thinkers, influencing the country's trajectory towards becoming a major economic power.

Fiscal Struggles of Continental Congress Highlight Need for Strong National Government

Despite achieving independence, the country's first years under the Continental Congress were marked by economic hardship and fiscal instability. Ansary points out how Congress, without the ability to tax, struggled to finance the war, relying heavily on printing money, loans, and requisitioning supplies. This led to runaway inflation, depreciated currency, and ultimately to default on debts, jeopardizing the government's credibility and eroding the public's confidence. It was through this turbulent period that the necessity for a more robust national government with the power to regulate commerce, establish a national currency, and ensure fiscal stability became evident. These struggles were front and center in Washington's mind as he took on the Presidency.

Context

• This 1786-1787 uprising by farmers in Massachusetts highlighted the weaknesses of the Confederation government in dealing with economic distress and maintaining order.
• The reliance on printing money without backing led to the devaluation of the Continental currency, causing economic instability and loss of public trust.
• Without the power to tax, Congress requested supplies and funds from the individual states. Compliance was inconsistent, as states prioritized their own needs and interests.
• The inability to pay back loans and debts, both foreign and domestic, damaged the young nation's creditworthiness, making it difficult to secure future loans.
• Many soldiers were paid with devalued currency or not at all, leading to unrest and mutinies, highlighting the government's inability to meet its obligations.
• Each state had its own trade policies and currencies, creating economic disunity and complicating interstate commerce, which further weakened the national economy.
• A weak central government struggled to negotiate effectively with foreign powers, affecting treaties and trade agreements, which a more robust government could improve.
• Observations of other countries with strong central governments, such as Britain, demonstrated the benefits of having a unified approach to economic policy and currency management.
• Washington prioritized establishing public credit and managing national debt, learning from the Continental Congress's inability to maintain financial credibility.

Devising and Implementing a Plan to Promote Entrepreneurship

Ansary outlines how President Washington, drawing on his years of experience in business and his observations of the colonial economy, developed his innovative economic model, characterized by a strong public credit, a central bank, a robust judiciary, and, most importantly, free market principles. He argues that Washington's initiative was a game-changer, reshaping American society and establishing the foundation of a vibrant entrepreneurial economy.

Washington's Plan: Transitioning From a Colonial Economy to Free-Market Principles

Ansary stresses that Washington's view of America's economy was radically different from the British model he had experienced as a colonist. He aimed to replace the top-down, centrally controlled system imposed by the British with one that prioritized individual initiative and free markets. This meant removing bureaucratic barriers, fostering competition, encouraging business formation, protecting private ownership rights, and establishing a consistent national monetary system. In essence, his goal was to develop an environment where individuals, not governments, would drive economic growth. This revolutionary shift contrasted sharply with the prevailing European mindset that equated state authority with prosperity.

Context

• These principles advocate for minimal government intervention in the economy, allowing supply and demand to dictate production and prices, fostering innovation and efficiency.
• A stable and uniform currency was necessary to facilitate trade and economic stability. Washington recognized that a national monetary system would help unify the economy, reduce transaction costs, and build trust in the financial system.
• This approach helped shape the American identity as a land of opportunity, where personal effort and entrepreneurship were valued and rewarded, contrasting with the class-based systems in Europe.
• European countries used their colonies primarily as sources of raw materials and markets for finished goods, reinforcing the idea that state control and exploitation of resources were key to economic success.

Establishing Institutions: Forming a Bank for the Nation and a Stable Currency for Commerce and Stability

Ansary details how Washington, aided by his Treasury Secretary Alexander Hamilton, took concrete steps to implement his vision. By pushing for the establishment of the national Bank of the United States—a national-level bank capable of financing the government, making loans, and providing a stable paper currency—he tackled the critical issues of credit scarcity and runaway inflation. Despite encountering widespread distrust of banks, a remnant of the failed Continental currency, and opposition from within his own administration, Washington successfully navigated the opposition, showcasing his ability to translate his financial aspirations into concrete actions. The bank became a cornerstone of the new nation's financial structure, providing the foundation for a sound fiscal system. His efforts also enabled the 1792 Coinage Act, which not only organized the U.S. Mint but also set the stage for a unified national coinage.

Context

• After the American Revolution, the United States faced significant economic challenges, including war debt and a lack of a unified financial system. The Articles of Confederation had left the federal government weak, with limited power to regulate commerce or manage finances effectively.
• As the first Secretary of the Treasury, Hamilton was a key architect of the bank, drawing inspiration from the Bank of England to create a similar institution that could stabilize the American economy.
• The opposition within Washington's administration was rooted in differing visions for the future of the United States. Jefferson and his supporters favored an agrarian-based economy and feared that a strong central bank would favor commercial and industrial interests over farmers.
• The bank acted as the federal government's fiscal agent, managing its revenues and expenditures. It also regulated the issuance of paper money by state banks, helping to control inflation and maintain economic stability.
• The Act introduced a decimal system for U.S. currency, which was innovative at the time, as most countries used non-decimal systems.

Judicial Reform: Ensuring Independent Federal Structure for Contracts, Property Rights, and Fairness

Ansary shows that judicial reform was another vital element in Washington's entrepreneurial blueprint. He argues that establishing a credible and unbiased national judicial system was essential for protecting property rights, enforcing contracts, and ensuring everyone receives justice equally. Recognizing that a corrupt, inefficient, or politically influenced court system would undermine entrepreneurship and deter investment, he diligently set about creating a truly independent judiciary. He personally selected highly qualified jurists based solely on merit, ensuring their integrity and dedication to upholding the Constitution, further emphasizing the Separation of Powers. He also defended the Court's right to act independently, refusing to pressure it into providing advisory opinions. This established a lasting model of judicial independence, safeguarding legal principles and creating a predictable and trustworthy legal environment for business to flourish.

Practical Tips

• Implement a 'veto power' in your group projects or collaborations, where each member can veto decisions that they believe are not in the group's best interest. This encourages thorough discussion and consideration of different perspectives, mirroring the separation of powers principle by preventing unilateral decision-making and promoting balanced outcomes.

Other Perspectives

• While judicial reform may have been important, it could be argued that other factors such as economic policies, infrastructure development, or military protection were equally or more vital to fostering entrepreneurship.
• Ensuring justice for all is a complex goal that extends beyond the judiciary; it requires comprehensive social policies and educational programs to address systemic inequalities.
• In some cases, entrepreneurs and investors might adapt to a corrupt or inefficient system and find ways to operate within it, potentially leading to a different kind of economic growth, albeit not the most desirable or sustainable.
• The effectiveness of Washington's efforts to establish judicial independence can be debated, as the judiciary has evolved over time and faced numerous challenges and criticisms regarding its independence and impartiality.
• Personal selection by one individual, even with the intent of merit-based appointments, can lead to a concentration of power and may not reflect a democratic or transparent selection process.
• The lifetime tenure of Supreme Court justices, intended to protect their independence, can also lead to a lack of accountability, which might be seen as a potential flaw in the structure of judicial independence.
• In some cases, advisory opinions could serve as a preventive measure against laws that might be unconstitutional, saving time and resources that would otherwise be spent on lengthy court battles.
• The establishment of a model does not guarantee that all individual judges or jurists will adhere to the principles of independence, as personal beliefs or external influences may still impact their decisions.
• Legal principles may be safeguarded in theory, but their application in practice can vary, leading to instances where they are not upheld.
• A predictable legal environment could also lead to complacency among businesses, which might not innovate or adapt as aggressively as they would in a more dynamic legal landscape.

Securing America's Economic Future

This final section focuses on the remarkable challenges Washington faced in the last years of his time as President. Ansary describes how he, using diplomacy and restraint, successfully negotiated with Britain and Spain to remove obstacles to commerce and expansion, establishing the foundation for a thriving domestic market. Ansary also examines the cultural components of Washington's financial outlook, highlighting his tireless campaign against corruption, his ardent support of education, and his unrelenting championing of a strong national union.

Advancing Domestic Interests

This section unveils George Washington's view that for the newly established republic to prosper, Americans needed to feel good about being Americans. He believed that only a robust national identity and a vibrant domestic market free from burdensome interstate restrictions and conflicts could create a basis for economic success. Ansary also details two important economic initiatives by Washington—patent and copyright protection laws and the introduction of sensible land ownership practices—as crucial for stimulating innovation and fostering entrepreneurship.

Unity and Trade: Boosting National Identity, Removing Interstate Barriers, and Developing a Domestic Market for Economic Growth

Ansary highlights Washington's recognition that the strength of national unity was fundamental to America's economic future. The legacy of British colonialism, coupled with the jealousies and suspicion prevailing among the newly independent states, threatened to fracture the country, creating domestic obstacles to commerce and impeding economic growth. He understood that a fragmented nation couldn't compete effectively in the global market or attract foreign investment. Ansary explains how Washington used the symbolic power of the country's newly established capital city to unify the nation, and employed his immense influence to secure federal funding and oversee its development. He also promoted domestic commerce by encouraging trade between states, advocating for better infrastructure and communications, and striving to create a unified national market for U.S. industries.

Practical Tips

• Start a neighborhood book exchange with a twist by including a note inside each book about how the story relates to the theme of unity or community. This not only promotes literacy but also sparks conversations among neighbors about the importance of coming together for the common good. You might leave a book on a park bench with a note inside saying, "This story reminded me of how we're stronger together – what are your thoughts?"
• Create a personal blog or vlog series that documents your journey of learning about different regions' historical grievances and their economic consequences. Use this platform to share insights, interview experts, or discuss with followers how understanding these issues can lead to more informed decisions in your personal and professional life. This activity will encourage you to actively research and reflect on how historical contexts affect contemporary economic situations.
• Advocate for policies that promote national cohesion by writing to your representatives or supporting political candidates who prioritize national unity. A more unified nation can negotiate better trade deals, attract foreign investment, and compete more effectively on a global scale, and your advocacy can play a role in shaping these policies.
• Design a personal emblem that represents your values and heritage. Draw inspiration from your family history, personal achievements, and aspirations to create a symbol that you can use on personal stationery, social media profiles, or even custom merchandise. This acts as a personal unifier, reminding you of your roots and goals.
• Create a blog or social media page dedicated to a development issue in your city, aiming to raise awareness and gather community support. This can be a stepping stone to understanding public engagement and the power of collective voice in development matters. Share stories, updates, and progress about local development projects, and encourage followers to get involved by attending city meetings or writing to their representatives.
• Participate in or initiate a regional product exchange program where you and others can swap goods that are unique to your respective states. This can be a fun way to experience different regional specialties and promote economic interaction similar to interstate trade, all while building community connections.
• You can enhance your neighborhood's connectivity by starting a local initiative to map out areas with poor infrastructure and report them to the relevant authorities. Gather a group of neighbors to identify potholes, broken streetlights, or areas with poor cell reception. Use a simple spreadsheet to track these issues and present the data to your local government or community board to advocate for improvements.
• Start a blog or social media page that highlights and reviews products from domestic companies. This not only spreads awareness of national products but also encourages others to consider them as viable options. For instance, if you come across a locally manufactured kitchen appliance that you love, share your experience online to promote the brand and product.

Championing Innovation: Advocating Patent and Copyright Laws, Fostering Creativity, Driving Tech Advancement, Securing America's Economic Edge

Ansary showcases the fervent belief that innovation is a key engine for expanding the economy. Recognizing the pivotal role of intellectual property protection in fostering creativity and encouraging new ventures, he argued forcefully for creating a nationwide patent system. He personally emphasized the importance of protecting inventors in his inaugural State of the Union Address to Congress, leading to the swift enactment of the Patent Act of 1790. This provided inventors with crucial protection for their work, paving the way for an unparalleled surge of technological advancement in America. Subsequently, he championed copyright laws as well, protecting writers and ensuring that those willing to invest time and energy in developing new intellectual property had a secure legal structure that allowed them to profit from their efforts. This set the stage for America to become a global leader in innovation. This initiative, along with the President's work to promote manufacturing, made it possible for the United States to become the pre-eminent technological and industrial powerhouse of the world within a century.

Other Perspectives

• Innovation without consideration of environmental impact can lead to unsustainable economic practices that may harm long-term economic prospects.
• The existence of open-source and creative commons models shows that innovation and creativity can also be fostered through collaboration and sharing, rather than through exclusive rights.
• A one-size-fits-all patent system may not be suitable for all industries, as different sectors may have varying needs and innovation cycles that require more tailored approaches.
• The Patent Act of 1790 only granted patents for a maximum of 14 years, which may not have been sufficient time for inventors to fully capitalize on their inventions.
• While protecting inventors can incentivize innovation, it can also create monopolies or barriers to entry for other innovators, potentially stifling competition and slowing down technological progress.
• Copyright laws may disproportionately benefit large corporations and established authors, rather than small, independent creators.
• The focus on profit can lead to prioritizing commercial success over artistic or scientific merit, potentially skewing the direction of innovation towards marketability rather than societal benefit.
• The strength of America's innovation leadership has fluctuated over time and has faced challenges from other nations that have invested heavily in technology and education.
• The emphasis on manufacturing and technological advancement sometimes overshadowed the importance of service industries and the role they have played in the modernization and diversification of the U.S. economy.

Cultivating Culture: Advocating Education, Government Transparency, and Anti-Corruption to Promote Novelty and Trustworthiness

Ansary examines the subtle but critical cultural shift Washington sought to bring about in order to reshape the mindset of Americans from a colonial mindset to an entrepreneurial mindset. Having witnessed the detrimental effects of class-based inequity and corruption in British society, he understood that a truly successful economy needed a foundation of trust, transparency, and equal opportunity for all. In his presidential role, he consistently led by example, choosing appointees for their merit rather than connections, refusing to commercialize the office for personal gain, and stressing the importance of public accountability in all matters of government. By advocating for improved education and championing press liberty, he promoted transparency and an informed citizenry, crucial for holding the powerful accountable and fostering a culture that prized innovation and hard work over inherited privilege.

Other Perspectives

• Washington's efforts to promote an entrepreneurial mindset might have been constrained by the existing social and economic structures of the time, which were deeply rooted in colonial practices and attitudes.
• An overemphasis on transparency could potentially hinder government effectiveness by causing excessive bureaucracy or slowing decision-making processes due to the need for constant public scrutiny.
• The standards and expectations for what constitutes personal gain have evolved over time, and actions that were acceptable in Washington's era might be viewed differently under modern ethical standards.
• In some cases, the need for public accountability can conflict with the need for confidentiality in matters of national security or sensitive diplomatic negotiations.
• The powerful may have the resources to evade accountability through legal means, lobbying, or other forms of influence, despite the efforts of an informed citizenry.
• The emphasis on hard work and innovation could lead to a culture of overwork and burnout, potentially neglecting the importance of work-life balance and well-being.

Navigating Geopolitical Challenges and Promoting Global Trade

Ansary explores Washington's masterful handling of foreign relations during his presidency, demonstrating how he protected America's national interests and secured a favorable international environment for economic growth. Recognizing that the country was vulnerable to powerful European adversaries, he employed diplomatic tactics and shrewd negotiating strategies to avert costly wars while promoting unrestricted commerce.

Remaining Impartial in European Conflicts: Securing U.S. Economic Stability and Development

Ansary argues that Washington's dedication to neutrality was essential for protecting the fledgling American economy from being dragged into costly and disruptive European wars. Faced with mounting pressure to honor old treaties and join with France in its conflict with Great Britain, Washington, in a bold and decisive move, declared the United States neutral. This decision, though, didn't entail isolation. On the contrary, his neutrality proclamation asserted that nations are entitled to free trade and peaceful commerce, setting a precedent that would endure for centuries. Ansary highlights how, despite facing intense opposition at home and abroad, Washington stood firm on his neutrality stance, enabling America to develop its economic strength without the upheavals of military conflict.

Context

• At the time, the U.S. had a relatively small and underdeveloped military, making it ill-prepared for large-scale conflicts, which further underscored the importance of avoiding war.
• The United States had a formal alliance with France, established during the American Revolutionary War. This treaty obligated the U.S. to support France in times of war, creating pressure to join the conflict against Britain.
• The decision to remain neutral was controversial domestically, as political factions in the U.S. were divided in their support for France or Britain. Washington's stance helped to prevent internal divisions from escalating into broader conflict.
• The Proclamation of Neutrality in 1793 established a legal framework for American neutrality, which was later reinforced by the Neutrality Act of 1794, making it illegal for American citizens to engage in military actions against countries at peace with the U.S.
• The emphasis on free trade and peaceful commerce contributed to the development of international norms regarding neutral rights, influencing global trade practices.

Economic Statecraft: Diplomacy With Britain and Spain to Secure Treaties Opening Markets, Protect Property, Ensure Mississippi River Access, Avert Wars

Ansary details the deft diplomatic maneuvers Washington employed to ensure America's economic interests in its dealings with the European powers. Recognizing the challenges posed by lingering tensions with Great Britain, unresolved issues stemming from the American Revolution, and Spain's ambitions in North America, Washington sent missions to both nations with the objective of securing favorable treaties. Despite facing skepticism and resistance from both London and Madrid, he, with the help of his skilled diplomats, Jay and Thomas Pinckney, managed to pull off a diplomatic coup. Both Jay's Treaty with the British and Pinckney's Treaty with Spain settled outstanding grievances, opened up trade opportunities, protected American property, and prevented potentially disastrous wars. Ultimately, Washington's skillful maneuvering ensured that the U.S. could utilize the Mississippi River, a critical waterway for Western commerce, while solidifying the United States' position as a rightful player on the international stage.

Context

• The U.S. economy was still heavily reliant on trade with Britain, making diplomatic relations crucial for economic stability and growth.
• Also known as the Treaty of San Lorenzo, Pinckney's Treaty was negotiated by Thomas Pinckney in 1795. It addressed disputes over the boundaries of Spanish Florida and granted the U.S. navigation rights on the Mississippi River.
• Diplomatic communications were slow and complex, often taking weeks or months to exchange messages, which could lead to misunderstandings and delays in negotiations.
• Successfully negotiating these treaties helped establish the U.S. as a respected and independent player in international diplomacy, setting a precedent for future foreign policy.
• Jay's Treaty allowed for limited American trade with British colonies in the Caribbean, which was significant for American merchants seeking new markets.
• The treaty facilitated American expansion westward by ensuring access to important trade routes and reducing the threat of Spanish interference, which was vital for settlers and economic growth.
• Access to the Mississippi River was crucial for the economic development of the western frontier. It enabled the efficient movement of agricultural products, such as cotton and tobacco, which were key exports for the young nation.
• By averting potential conflicts through diplomacy, Washington ensured that the young nation could focus on internal development rather than being drawn into costly wars.