History
When first watching Dr. Folsom’s speech, I was immediately struck by how much the entrepreneurship we see today is based on what happened hundreds of years ago. Not only do we learn about entrepreneurship, but we get a bit of a history lesson as well. This class as a whole has shown me the influence that both history and entrepreneurship on a global scale affect what I’m seeing here in America today.
Steam Ships
He begins by saying how much of an advantage England had over the United States, in terms of entrepreneurship because we had to export so much from them. We also wanted more people to come over to the United States to help us. We were behind, and we needed government assistance. However, this all seemed to come to a head with the steamship. It allowed people to travel across the Atlantic in two weeks, vs the two month long trip that people were used to. Now this allowed migration to increase exponentially, as traveling for two weeks is much easier than traveling for two months. Now, Americans wanted to subsidize this industry in order to compete with them, so we didn’t have to have as great of a dependency that we had previously had. Once we caught up, free enterprise was able to take over and give us a more equal chance at the market.
Something that truly shocked me was the belief that America had about minimizing debt. That is definitely not something that is seen today so the fact that we were only ten million in debt, and we had someone asking for a couple million dollars is just insane to me. It was critical that we allowed this though, as it helped us emerge as an entrepreneurial country, although maybe not in the way one may imagine. A person once told me, “You have to put yourself in positions of success in order to succeed,” and that’s what Collins thought he was doing here.
While Vanderbilt ended up having some trouble, he was able to make it across the Atlantic in an impressive eleven days. He did have to make some adjustments, as the amount of coal and other fossil fuels used was excessive, as it was a lot to cross the ocean in such a short amount of time. However, he was able to make adjustments and found more ways to make a profit. He started charging less but allowing more people on, he found out that people would pay for food, he cut costs of insurance etc. Vanderbilt was able to make a profit with zero subsidy, a very impressive feat.
Collins was able to compete, coming out as more of a luxury service. He charged more but only took on less people and tried to go at greater speeds. However, in 1854 he made a very fatal mistake and hit an iceberg, killing over four hundred people.
In a way, I found this story pretty inspiring. Here were two people, Collins, who had more than enough funding and congress on his side, and on the other hand we had Vanderbilt, someone with zero subsidy who was able to make both a name and a profit for himself. Vanderbilt had the heart and try of a true entrepreneur and it goes to show that, even though it may be helpful, that having money doesn’t always lead to a successful business as a lot more goes into it than that.
Vanderbilt went on to become the weathiest man in America. After suceeding in steamships, he started in the railroad business as well and found great success there.
Railroads
Now, after hearing the story of steamships, I thought that this would’ve been considered a great learning curve in our history so I was shocked to hear Dr. Folsom say that we didn’t really learn from this. Congress continued to give out large loans and put us further into debt with the railroad industry, just a mere two years after the whole fiasco with Collins. We ended up spending sixty-million dollars on this railroad, and you couldn’t even fully make it across. Well, this was the case until a man, with an entrepreneurial heart that was unsubsidized decided to go back and study the route that Lewis and Clark took going west. He made a railroad going through the flat passage based off their travels, and that unsubsidized railroad became the most successful one that was built. It was the only one in the late 1800’s that didn’t go broke. He had no federal subsidies at all. However, this time congress did learn. Congress decided to stop given out subsidies and rely on the entrepreneurs instead. This was the trick, as then the oil industry took off with an entrepreneur at the heart of it. No subsidies needed.