The Next 100 Years

t h e f i r s t c yc l e : f ro m f o u n d e r s to p i o n e e r s
America was founded in 1776, with the Declaration of Independence. From 
that moment on, it had a national identity, a national army, and a national 
congress. The founders consisted primarily of a single ethnic group— 
Englishmen with a smattering of Scots. These prosperous men saw them­
selves as the guardians of the new governing regime, different in character 
from the unlanded and unmonied masses—and certainly from African slaves. 
But they couldn’t build the country by themselves. Pioneers were needed 
to move the country outward and settle the land west of the Alleghenies. 
These pioneers were men completely unlike Jefferson or Washington. Typi­
cally they were poor, uneducated immigrants, mostly Scots- Irish, who were 
searching for small parcels of land to clear and farm. They were men like 
Daniel Boone. 
By the 1820s, a political battle was raging between these two groups, as 
the ideals of the founders collided with the interests of the settlers. The so­
cial tension turned into economic crisis and culminated in the election of 
the champion of the new generation, Andrew Jackson, in 1828. This fol­
lowed the failed presidency of John Quincy Adams, the last of the founding 
generation. 

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a m e r i c a n p o w e r a n d t h e c r i s i s o f 2 0 3 0
s e co n d c yc l e : f ro m p i o n e e r s
to s m a l l - tow n a m e r i c a
Under Jackson, the most dynamic class in America was that of the pioneer-
farmers who settled the center of the continent. The old founding class 
didn’t vanish, but the balance of political power shifted from them to the 
poorer (but much more numerous) settlers heading west. Jackson’s prede­
cessors had favored a stable currency to protect investors. Jackson champi­
oned cheap money to protect debtors, the people who voted for him. Where 
Washington, the gentleman farmer, soldier, and statesman, was the em­
blematic hero of the first cycle, Abraham Lincoln, born in a log cabin in 
Kentucky, was the emblematic hero of the second. 
By the end of this cycle, after the Civil War, the West was no longer 
characterized by the hardscrabble subsistence farming of first- generation pi­
oneers. By 1876, farmers not only owned their land but also were making 
money at farming. The landscape changed as well, homesteads giving rise to 
small towns that had developed to serve the increasingly prosperous farm­
ers. Small- town banks took the farmers’ deposits and invested the money on 
Wall Street, which in turn invested the money in railroads and industry. 
But there was a problem. The cheap-money policies that had been fol­
lowed for fifty years might have helped the pioneers, but those same policies 
were hurting their children, who had turned the farms of the West into 
businesses. By the 1870s the crisis of cheap money had become unbearable. 
Low interest rates were making it impossible to invest the profits from the 
farms—and especially from the businesses that were serving the farmers. 
A strong, stable currency was essential if America was to grow. In 1876, 
Rutherford B. Hayes was elected president after the failed presidency of 
Ulysses S. Grant. Hayes—or more precisely his secretary of the treasury, 
John Sherman—championed money backed by gold, which limited infla­
tion, raised interest rates, and made investment more attractive. Poorer 
farmers were hurt, but wealthier farmers and ranchers and their small- town 
bankers were helped. This financial policy fueled the rapid industrialization 
of the United States. For fifty years it drove the American economy in an ex­
traordinary expansion, until it choked on its own success, just as in the two 
earlier cycles. 

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