In one respect at least the economic hothouse succeeded all too well. It laid the foundation not only for the domination of American life by business but also for the rise of a culture with an amazing, irresistible tendency to transform every single aspect of American life first into a business and then into a larger business. No institution, activity, or value has escaped this relentless organizing into some form of commerce. Some of the most obvious examples include the arts, politics, religion, education, sports, sex, media, entertainment, the family, childhood, and, of course, history. Commercialization rolled like a tsunami into every corner of American life, propelled largely by the continued pressure exerted by the forces discussed earlier: organization, technological innovation, advertising, and the relentless energy of entrepreneurs. The scale and scope of enterprises grow ever larger and now embrace the globe as easily as once they did regional markets.

In the economy produced by the economic hothouse, it was only natural for companies to seek new markets in every corner of the world. As the competitive arena expanded from national to global realms, firms found themselves dealing on a level that transcended their old loyalties and identities. The rise of multinational corporations signaled the emergence of a new economic order grounded in markets that defied older strictures and limitations.

Anyone who doubts the importance of business history should keep in mind this salient fact: It concerns not merely the history of business in the United States but even more the process by which business came to dominate every aspect of American life. Business is not simply an important element of American life; like it or not, it has become the dominant force in American culture. Try to think of a single human activity that has not been organized into a business of some kind, and in most cases a very large business.

This book is not a comprehensive history of American business. It is rather an interpretation of the most seminal period of that history and seeks to explain how business came to occupy the center stage of American life. The story begins with the most revolutionary process that the world has experienced. Industrialization remains the great divide in human history, separating past from present cultures, transforming values as well as life styles, leaving a monumental imprint on the environment, and setting in motion forces that drove its impact inexorably onward. It transcended ideologies, defied political strictures, ignored moral dictums, overturned social orders, and unraveled the fabric of tradition.

Behind the advances discussed earlier lay the most fundamental revolution of all: the creation and spread of new sources of power. The power revolution laid the foundation for the new technologies that transformed transportation, communication, and production. It hastened the settling of the continent, multiplied the productivity of a people short on labor, and became the indispensable engine driving material progress. Between 1870 and 1920 American consumption of energy increased about 440 percent, and its sources changed dramatically. In 1870 wood accounted for about 73 percent of all energy used, with coal supplying nearly all the remainder. By 1920 wood provided less than 8 percent of energy used, coal soared to 73 percent, oil contributed 12 percent, and natural gas chipped in 4 percent. By the 1880s a growing proportion of energy went into producing a new source of power that became the most vital technology of the twentieth century: electricity.

How successful was the economic hothouse? a few figures can at least suggest what it did for productivity. During the 1870s American gross national product, measured in 1958 dollars, averaged about $23 billion a year. That figure reached $52.7 billion in 1890, $76.7 billion in 1900, and $125.6 billion in 1914. In per capita terms the amount jumped from $531 in the 1870s to $1,267 in 1914. Between 1839 and 1899 total commodity output rose at a rate of 50 percent every decade. The population also soared but only at about half this rate; as a result, the output per capita in 1899 increased by 250 percent of that of half a century earlier. Nonfarm output per man-hour rose 28 percent during the 1890s despite the depression and jumped another 49 percent by 1919. The number of business concerns went from 427,000 in 1870 to nearly 1.2 million in 1900 and more than 1.8 million in 1920.

Disposable income increased for workers at all levels, driven by earnings that rose while prices fell. Disposable personal income, which averaged $14.1 billion around the turn of the century, reached $33.3 billion by the eve of World War I and soared to $71.5 billion by 1920, thanks in part to wartime inflation.

The american economic hothouse began life with more soil than anyone had ever imagined. Since ancient times land has served as the major source of wealth and productivity. Not by accident did ruling classes everywhere consist of those who owned or controlled the land. From the very beginning the promise of American life, the appeal it held out to newcomers, revolved around land – boundless acres of a commodity so unavailable in their native countries. The lure of land for settlers involved not only sustenance but independence, the prospect of enhanced dignity and self-worth, and the hope of passing a material legacy onto one's children. For the vast majority of Americans in the preindustrial era, farming was both their livelihood and their way of life, whether on a small New England plot wrested from the rocky soil, a sprawling southern plantation, or a prairie spread where the sky seemed never to end.

Land helped shape the American character in many ways. It encouraged attitudes of independence, self-reliance, and individualism that many observers found typical of Americans. It promoted an almost mystical faith in the promise of the future as well as a realm in which a person could escape from his past.

Tensions had long existed between rural and urban America. The nation had been overwhelmingly rural for most of its existence, but as industrialization shifted the demographic balance toward urban areas, society grew more fragmented. As new technologies quickened the pace of change in American life, the gap between urban and rural folk widened into a chasm. Change came slowest to rural and small-town America, what historian Robert Wiebe aptly called “island communities” dominated by local elites, where people clung to familiar customs and life went on much as before with occasional but growing intrusions from the storm of change engulfing the distant cities. From this ever widening clash of values arose the cultural wars that exploded after 1880.

Urban America emerged as the heart of a powerful new ethos that defined progress in material terms. The corporations made their headquarters there and new technologies first flourished there. Cities were home to the big department stores, an incredible array of shops and goods, amusements of every kind from the opera to the dance hall, a smorgasbord of restaurants offering cuisines of all kinds, an endless parade of fads and fashions, trappings of wealth beyond the wildest imaginations of rural folk, hordes of carriages filling the streets, and crowds of people scurrying along sidewalks.

For the vast majority of american businesses, organization posed no problem at all. Small businesses have always been the staple of the American economy. Like the skyline of a great city, they are overshadowed by the towering skyscrapers of big firms, but they more than make up in number what they lack in size. The vast majority of American businesses have always been small operations run by one or two individuals or a family. These individuals became the folk heroes of American economic life, the seekers after that most cherished goal of being one's own boss. In preindustrial America they dominated virtually every sector of economic activity, whether they be farmer, merchant, fisherman, innkeeper, or artisan. Predictably, many small enterprises had short life spans, perishing from poor management, bad luck, hard times, or the mortality of owners. A select few firms survived through more than one generation or succeeded so well that they became large companies.

The coming of industrialization drastically revamped the role of small business in American life. It enabled companies to produce a greater volume of goods at a lower cost per unit. As large firms applied these economies of scale, they pushed smaller competitors out of the industry and made it all but impossible for smaller rivals to enter.

The metaphor of the economic hothouse is misleading in at least one important respect. The image suggests a tidy, neatly ordered landscape when in fact the opposite proved to be the case. Rapid growth turned both the business world and society itself into tangled jungles. Bitter competition helped weed out the business environment and organize it around the triumphant giant enterprises that came to dominate it. Their power and focus contrasted sharply with the sprawling, unruly social institutions surrounding them. Gradually their influence and power compelled the rest of society to follow their example. In this way the organizational revolution did more than reshape the structure of American business. By influencing nearly every aspect of national life, it created the corporate society as well. As the organizational revolution spread beyond the economy to the social system, it transformed a society of individuals into one of organizations.