Last updated: February 26, 2019
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Philosophy of American Enterprise.

There have been many books which showed different aspects of the way how American philosophy of life has been developing and particularly the philosophy of American enterprise. The building blocks of American philosophy of life are reflected to the fullest in the philosophy of American enterprise. All the values which are common for every aspect of the life of Americans haven’t escaped the attention of American enterprise philosophy. Just like in any other country, there are peculiar features in the culture of the United States which are reflected in every aspect of its people’s lives and country’s policy. When analyzing the country’s enterprise philosophy, it is particularly important to provide a detailed analysis of the country’s foreign relations policy, social policy and other aspects of the country’s life which shape its enterprise philosophy. Therefore, the book “The Ideas That Conquered the world”, Peace, Democracy, and Free Markets in the Twenty-First Century by Michael Mandelbaum is very useful for the Philosophy of American Enterprise course. Many of the ideas expressed in the book have been already used by American entrepreneurs for many years when carrying out the policy of their companies. There is no way to understand the philosophy of enterprises without a deep knowledge of all the processes which have been going in the country during the last centuries and which have contributed to this philosophy very much.

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Mandelbaum’s book shows the main events which happened in the American history and history of the world through the prism of intelligent optimism. In his opinion, every event which has shaped the American economy had a positive affect on it in some way because lessons were learned even of unfortunate events. Mandelbaum was talking not only about the economic history of the United States though. He did his best to show it with the connection of all other economies which play an important role in the 20th century. According to the author, “the economic history of the twentieth century teaches the lesson that national economies thrive to the extent that they have access to a global market. The collapse of international markets in the Great Depression of the 1930s had catastrophic economic and ultimately political effects the world over. A comparable twenty-first century collapse would be equally devastating.” (Mandelbaum, p.7).

The major building blocks on which Mandelbaum’s book is based include peace, democracy and free markets. One can easily notice that the same building blocks are put into the American philosophy of enterprise. There is no way for the American economy to be built other than on the mentioned principles. According to the author, today’s world is “a world dominated by three major ideas: peace as the preferred basis for relations among countries; democracy as the optimal way to organize political life within them; and the free market as the indispensable vehicle for producing wealth. The world that peace, democracy and free markets conquered and dominate, the world of the twenty-first century – its origins, its principal features, and its future – is the subject of this book.” (Mandelbaum, p.4).

By his research, the author has put a goal of showing the events which were going on in the United States during the major three periods of time: before the events of September 11th, during the time of the catastrophe and during the years which followed it. Mandelbaum has named the book “The Ideas That Conquered the world”, Peace, Democracy, and Free Markets in the Twenty-First Century not by chance. In his opinion, the cultural traditions and values of Americans could be reflected the best through the research provided on the following categories. Peace, democracy, and free markets are the blocks on which American policy and economy is based. As Mandelbaum emphasizes, in his book “first comes the rise to a dominant position of markets and affiliated institutions and practices, then the dramatic changes in the role of war, and finally the reasons for and the implications of the supremacy of democracy and the free market. The themes appear in this sequence so as to tell the story of the world of the twenty-first century in chronological order.”

This triad of peace, democracy and free markets was not invented by Mandelbaum himself though. About ninety years ago, it was declared by Woodrow Wilson. He was the first one to have declared peace, democracy and free trade as the components of American society and those principles for which the whole global community had to struggle. Mandelbaum is the follower of Wilson, and his book develops the mentioned principles throughout its chapters. Mandelbaum shows all the major aspects of those components in his work. The doctrine of liberalism which was expressed by Wilson is supported by Mandelbaum in every sentence of his work. According to the author, “Eight decades later this set of ideas – peace, democracy, and free markets – had come to dominate international affairs, not in the sense that each was enthusiastically embraced and faithfully practiced everywhere but rather in the sense that they had no fully articulated and politically potent rivals. After Wilson first offered them to the world, victory in two subsequent conflicts was required for his “Wilsonian triad” to gain global ascendancy.” (Mandelbaum, p.24). In many ways, this doctrine can be witnessed in the American philosophy of enterprise. What do those categories mean in terms of American philosophy of enterprises? Why are they so important?

Peace is one of the major aspects on which enterprises are built. As Mandelbaum states, “the devaluation of war is as important a feature of the world of the twenty-first century as the rise of the market.” In previous years, many countries have been putting many financial resources into the arms race in order to increase their power. Instead of financing such important sectors of economy as production of goods for people and for industries, major resources were channeled into the complex which dealt with war preparations. Arm race was particularly important for the economy during the time of Cold War. For example, in the Soviet Union the majority of money spent by the government was directed into the war complex. Many people were poor at that time because instead of spending money on developing consumer industry, the government was trying to win the first place in the arm race.

As the result, people were not able to satisfy the needs which they had while the country kept expanding its war complex in order to compete with the United States. Orientation on war was never a plus for economy. As Mandelbaum mentions, after the orientation of the country changed, it took it a very long while to go back to normal because most of the people engaged in the war complex afterwards lost their jobs. In the United States, the orientation on participation in the Cold War was not as emphasized in the county’s philosophy as much as in the Soviet Union, therefore its economic results were much greater in the future. It balanced the financing of different branches of economy. Besides, its policy was soon changed for the peace orientation because that attitude has a positive influence on the economy. According to Mandelbaum, “the United States possesses the world’s largest store of military and economic power and bears the heaviest responsibility for defending and sustaining the global institutions and practices that embody the Wilsonian triad. The fate of the global liberal order depends very substantially on the extent to which the United States is willing and able to fulfill these responsibilities” (Mandelbaum, p.21).

Even though Mandelbaum states that peace is particularly important in today’s global society, he argues for the support of war in Iraq. He does not share the point of view of some researchers that the war in Iraq has a negative influence on the economy of the country. According to Mandelbaum, it is particularly important for the United States to support the spread of democracy in different countries of the world. Iraq is one of the most difficult countries to be influenced by the United States but it is very important to make sure it employs all the principles of democracy which are common for the leading countries of the world nowadays. As Mandelbaum states, there is no way for Iraq to get democratic values without participation of the United States.

Here we come to the point of democracy which also plays a very important role in Mandelbaum’s work. Mandelbaum regards the world history as the liberal history and devotes many chapters to showing how the world history was shaped by the principles of democracy. “The understanding of the world of the twenty-first century that prevails in the core countries – the “liberal theory of history” – consists of two propositions. One is that democracies tend to conduct peaceful foreign policies. The other is that where free markets are established their working, over time, tends to promote democracy.

Mandelbaum spends a long time analyzing the principles of democracy which have shaped the modern world and comes to the conclusion that without democracy, no country’s economy can function properly. Democracy needs to be seen in all the aspects of the country’s life, particularly in its economy. As far as philosophy of American enterprise states, democracy is the basis for the development of enterprises. The way in which American companies function nowadays is very much influenced by democratic standards. The principle of democracy shapes the activity of companies in many ways. According to this principle, companies are able to identify the major directions of their activities and strategies but at the same time, they are put in borders of different government regulations so that they rights of other companies are not limited.

Democracy is also greatly connected with another building block which Mandelbaum discusses throughout his book- free trade. The author places this block in the third place after peace and democracy because free trade is based on the previous two. Both the principles of peace and democracy are used for free trade. According to Mandelbaum’s point of view, there should be put no restrictions on trade in the world because all kinds of restrictions limit the possibilities of entrepreneurs. Mandelbaum argued for the same principle as the one which is usually expressed in American enterprise studies. For the trade to develop at the highest level, it needs to be not restricted and function on the principle of market rules. A characteristic feature of Mandelbaum’s work is his support of market economy. He argued that the choice of the United States for market economy was very successful and economy could function normally only by following this principle. Free trade was one of the components of market economy of which Mandelbaum was talking.

According to the author, all the mentioned principles had to be applied together in order to achieve maximum results in the economy. In his work, he did not talk only about the United States because he was trying to regard the country through the prism of the events which were happening in the global community. For example, discussion of the destruction function of communism in Russia and China was mentioned by Mandelbaum in many chapters of the book. In his opinion, this policy was one of the major problems which were experienced by those countries, and it had a negative influence on other states of the world as well. Communism prohibited free trade and the ideals of democracy, therefore it created a danger for the peaceful and democratic development of the rest of the world. It also prohibited the adoption of defensive-oriented military strategy of the world. The development of this strategy was particularly vital because both China and Russia created a sufficient danger for the peaceful world by the ideals which they had. The weapons of mass destruction held by the countries had a very negative influence on the development of relations between world countries. As Mandelbaum states, “the commitment to common security at the outset of the new century was not uniform across Europe. It was shakiest in Russia. The threats include those considered in the preceding chapters – the national destinies of Russia, China and the United States, the spread and use of weapons of mass destruction, and global economic collapse.” (Mandelbaum, p.11).

There have been many issues raised about the countries which did not support the principles of democracy. They did not agree to employ the principles of Woodrow Wilson for many reasons. However, they were destined to fail. All the values and ideals which they expressed turned out wrong. Only the ideals on which American philosophy was built turned out correct. Even those countries which for some time opposed to the principles of democracy eventually had to go back to them: “Germany and Japan have particular importance within the core because their conversion to free markets, democracy, and peace in the second half of the twentieth century, after having waged war against them in its first half, had a decisive influence on modern history.” (Mandelbaum, p.14).

However, there were countries which spent much more time weighting the principles of democracy before adopting them in their regimes. Due to this delay, their economic growth was not as large as it could otherwise be. For example, Mandelbaum mentions that China and Russia “had been the bearers of a political creed different from, and opposed to, Woodrow Wilson’s liberal values and practices. Their illiberal ideology failed and Russia and China abandoned it. But in discarding orthodox Communism, neither fully embraced the Wilsonian triad. Each pursued a foreign policy that was not entirely peaceful, conducted its domestic politics in a way at best partly democratic, and operated an economic system that was only incompletely marketized.” (Mandelbaum, p.16).

An important point of view which Mandelbaum supported was connected with the role of international financial institutions in the world economy. Mandelbaum did not share the ideals of institutional theory and his work does not provide research which is common for institutionalists.  According to Mandelbaum, in relations with international organizations, there was no sense for poor countries to set any specific rules for obtaining financing. They needed to value the resources which they were getting in the first place. As the author stated, “the construction of a working market economy depends chiefly on the efforts of the individual societies and governments involved – but not exclusively on them. It also depends on the vitality of the international economic order, especially the rules and institutions for assuring the unimpeded circulation, across sovereign borders of goods and money.” (Mandelbaum, p.12).

Mandelbaum also neglected the issue of breaking through the poverty cycle in the modern world by the poorest countries. This question needed to be vital for his research because he set a goal of defining the major processes which the modern world witnessed but he did not devote enough attention to it. Besides, the book does not provide a sufficient research on the problems which countries of Africa and Southeast Asia face now regarding democracy. Those questions needed to be answered in order to provide a sufficient research. The development of democracy in low-developed countries was just touched upon by the author. However, a positive feature of the book is that the author has achieved a very important objective- he managed to show how the development of democracy was going on in the modern world and what obstacles countries had to face when struggling for it. Particular role in this process is devoted to the United States due to its influence on many countries of the world.

One of the major events in the modern history of the world which have been discussed by Mandelbaum in details is the catastrophe of September 11th. Even though from the first sight, this event had the influence on only the United States, this was a major event in the global history. As Mandelbaum mentions, “the events of September 11 qualify as the most spectacular, riveting, grim, costly and searing acts of terrorism in history. The shock of the attacks reverberated around the United States and throughout the world.” (Mandelbaum, p.7).

The challenge which the United States started facing after the terrorists destroyed the World Trade Center and killed many people became particularly important in a financial sense. The terrorists did not only aim to kill people. They were giving a peculiar message to the United States by their actions, and it was a message very much connected with the philosophy of American enterprise. As Mandelbaum states, “the institution that the World Trade Center symbolized, and to which it was dedicated, was the free market, the central activity of which is trade. The planet’s dominant method for organizing economic activity, the market, did in fact occupy an exalted place in American society.” (Mandelbaum, p.14). Therefore, the terrorists wanted to show to the United States that they wanted to ruin not only their democracy but also the basic principles of which their economy was built.

However, the aim of terrorists was not only the United States and American nation. They knew very well that there were people of other nations working in the World Trade Center. Besides, there were many customers from other countries coming to meetings at the companies established in the World Trade Center, so the terrorists were also planning to kill them in the catastrophe. Mandelbaum mentioned that “people from more than eighty different countries died in the fires and the collapse. Most of them, moreover, worked for firms concerned with one aspect or another of finance. Concentrated in lower Manhattan, the financial industry is the most cosmopolitan in the world because its product, money, is more portable and more widely utilized than any other. This product is the key to the international reach of markets: while purely local exchange can and does operate on the basis of barter, markets stretching beyond a particular time and place require money.” (Mandelbaum, p.12).

Therefore, the destruction of World Trade Center was in many ways connected with the desire of terrorists to put the whole world trade on the knees. As Mandelbaum stated in his work, free trade was one of the building blocks of the American economy and global economy in general. That is why the terrorists considered it very important to start ruining the power of the United States from free trade. World Trade Center symbolized democracy, the union of nations in the global economy and their growing cooperation. There was no wonder the terrorists considered it their major object of destruction. According to Mandelbaum, “the money on which international commerce and industry depends is collected in lower Manhattan and from there distributed to every continent. The World Trade Center was thus symbolic of the network of commercial and financial exchanges that by the year 2001 had spread all over the planet. In choosing it as their target the terrorists perversely dramatized the supremacy of the free market and of the political system intimately associated with it in the United States and elsewhere, democracy, as a defining feature of the world of the twenty-first century.” (Mandelbaum, p.13).

All of the ideas which were expressed by Michael Mandelbaum in his work “The Ideas That Conquered the world”, Peace, Democracy, and Free Markets in the Twenty-First Century correspond to the course of the American enterprise philosophy. All the major building blocks on which American economy was built include peace, democracy and free trade. We can make a conclusion that those principles are also similar to the principles on which free enterprise is built. There are many obstacles on the spread of democracy in the world and the United States is doing  a very good job on achieving it. After the terrorist attack depicted by Mandelbaum, the country mobilized all of its efforts and resources in order to give a response to the terrorists. As the author mentions, “the attacks on Washington and New York were acts of war, and the war they inaugurated, the American war against terrorism, became the first war of the new century. They recalled the surprise attack at Pearl Harbor sixty years earlier. Like that 1941 assault, the events of September 11 triggered a campaign against the attackers, with the American government mobilized for military action.” (Mandelbaum, p.7). This is also one of the principles of which American enterprises are built- striving for success and coping with difficulties whenever they occur.  The book corresponds with the philosophy of American enterprise course in many ideas. It can be very helpful for understanding the history of development of philosophy of American enterprise.