American History Revised (55 page)

Franklin’s calculations were correct: by 1851 America had a larger population than England did. But the implication that America would become poorer was wrong. Franklin predicted that America would not become poorer as it grew because productivity would keep ahead of population growth. He also predicted that Americans, as they became richer, would have fewer children, enabling them to become even richer.

Predicting the future is never a matter of plotting a straight line from the past, for the simple reason that the factors that made up the past are constantly changing and interacting. Malthus was wrong because he failed to look beneath Franklin’s numbers, and only took them literally. Historians, also, not knowing basic statistics, frequently oversimplify history. One historian, for example, stated, “In the two hundred years between 1800 and 2000, real per capita GDP in the U.S. increased thirtyfold, a remarkable accomplishment.”

Thirty times sounds big, but over two hundred years? A financial analyst would look at it more thoroughly. Divide 3,000 percent by 200 years and you get 15 percent per annum—i.e., 15 percent “simple” interest. But this is oversimplistic, because it assumes a static base, whereas in Year 2 the base is increasing to 1.15, then in Year 3 to 132.25 (1.15 × 1.15), then 152.09, etc.—i.e., compound interest. That is why, when investors look at a deal, they use a Hewlett-Packard 12C calculator to compute “internal rate of return” (IRR) reflecting the real annual rate of interest given the growing base each year. If 1 is the U.S. GDP in the year 1800 and 30 is the GDP in the year 2000, what is the U.S. IRR? The number 1 becomes a −1 (the “present value”), 30 is the “future value,” and 200 is the “number of years.” The interest, according to the HP calculator, is 1.72 percent!

Not very remarkable.

When you apply mathematics to history, be careful what numbers you use. Pay attention to “net” numbers as opposed to “gross” numbers, do not be misled by a large number taken out of context, and look at “the big picture.” As Sherlock Holmes would say, “Elementary, my dear Watson!”

Finally, just run the numbers. Big numbers—a billion here, a billion there—are meaningless. Break them down into simple
numbers, and history becomes much more meaningful. In World War II, for example, America spent $325 billion. This money enabled it to kill 500,000 enemy soldiers. Each enemy soldier killed, therefore, cost American taxpayers a whopping $650,000.

Pretty expensive war, wouldn’t you say? Such is the price of maintaining our freedom and democracy.

Consider the following numbers:

• More innocent Americans died at the hands of the Ku Klux Klan during Reconstruction than at the hands of Osama bin Laden.
  

• The number of Americans killed in the entire thirteen-year war in Vietnam is lower than the number of Americans killed each year by drunk drivers.
  

• The number of conventional bombs we dropped on Vietnam and Cambodia was equivalent in force to 641 Hiroshimas.
  

Historical dates by themselves rarely mean much, but subtracting later dates from earlier dates gives a number that tells a story. That Harvard was founded only twenty-nine years after the Pilgrims landed on Plymouth Rock says much about the Pilgrims: they didn’t just live off the land, they tried to build something. Numerous other colleges soon followed. How many second-generation societies in any civilization have done this?

For a sense of historical perspective, consider that Great Britain emerged in 1763 “from the Seven Years’ War as the most powerful empire the world has ever seen.” If 1763 marks the rise of the British Empire and the end of World War I marks its demise, then the British Empire had a lifespan of 155 years. The United States did not achieve this distinction until 1945 (and for several decades afterward, it was challenged and threatened every step of the way by the Soviet Union). For the United States to match the reign of Great Britain, it must remain predominant until the beginning of the next century (1945 + 155 = 2100). The British Empire, like most great empires, did not fall because of military defeat, it imploded through imperial overstretch. For the United States, already stretched to the limit with its global responsibilities and fiscal debt, a lot can happen between now and 2100.

1624
The Dutch bought Manhattan Island from the Indians for sixty guilders (twenty-four dollars). We all know that Manhattan eventually proved to be a bonanza, the most valuable urban real estate in the world. But what the history books don’t tell us is what happened to the actual twenty-four-dollar purchase. How did the Dutch make out on their investment?

They got clobbered. Manhattan Island was a lemon of an acquisition: by 1645 it had run up astronomical losses of 550,000 guilders (almost ten thousand times the
original investment); most financial advisors in Holland were urging that the settlement be closed down. At a special meeting on March 3, 1645, the Directors decided to stick with the venture and pump in more money. “Notwithstanding the discovery that their North American province had fallen into ruin and confusion, and that this same province had, in place of being a source of profit, actually cost over five hundred fifty thousand guilders above the returns—they evidently felt that it was not entirely beyond hope, and that they need not and ought not to abandon it.”

The Dutch poured in more money, but the venture eventually failed because of bad management. Unlike the English governors of New England and Virginia, who gave away thousands of small land grants to attract rapid immigration and settlement, the Dutch were interested in trading. In pursuit of short-term profits, the West India Company divvied up the land among a few wealthy Dutch landowners (patroons) and paid only subsistence wages on the company-owned farms. It was a shortsighted policy: only a few Dutch settlers immigrated to such a place; most settlers had to be recruited from other countries. Worker productivity and loyalty sank to an all-time low.

In 1664, Charles II of England gave his brother, the Duke of York, a territorial grant stretching from Maine down to the Delaware River. Four English frigates sailed into New Amsterdam harbor and persuaded the unhappy Dutch and non-Dutch settlers to accept the patronage of the English. The English picked up Manhattan for nothing—then proceeded to lose it themselves in a hostile takeover in 1776.

History does not tell us what the Indians did with their twenty-four dollars, but at least they got twenty-four dollars and no headaches—plus they were New Jersey Indians, with no real claim on Manhattan anyway. If anything, they were looking for an “exit strategy”: the Manhattan trading market was undeveloped, the labor force was unskilled, and the capital requirements were enormous. By getting out of a bad situation and taking whatever they could get, the Indians made the right decision.

In a newspaper column written in 1999, the humor columnist Dave Barry wrote, “ … purchased from the Indians for $24, plus $167,000 a month in maintenance fees.” He got the idea right: the Dutch invested a lot of money—and lost it all. Pity they didn’t pay more attention to the name of the place they were buying. The Indian word “Manahactanienk,” translated into English, means “the island of general intoxication.”

1776–2008
The mathematician John Allen Paulos once figured out that
the odds of a fellow American passenger on a 747 plane knowing someone you know, out of a nation of nearly 300 million people, were one out of one hundred, but that the second-level odds of one of your friend’s acquaintances knowing one of your fellow passenger’s friend’s acquaintances were ninety-nine out of one hundred. It should come as no surprise, therefore, that many of our presidents were related. Mathematics, not aristocracy, is at work.

Especially when the American population was 10 million or 50 million.

John Tyler was the son of Thomas Jefferson’s college roommate. He had no presidential relatives at the time, but he did in 1945, when his great-great-great-nephew became president (Harry Truman). Zachary Taylor was not only James Madison’s cousin; he also was related to Thomas Jefferson and James Monroe, as well as to Chief Justice John Marshall and General Robert E. Lee. The second Adams president and the second Bush president were sons of a president; the second Harrison president was a grandson. First prize in the mathematical president “family,” however, would go to FDR: he was related to no fewer than eleven other presidents. On his father’s side he was related to John Adams, John Quincy Adams, Martin Van Buren, and Theodore Roosevelt. On his mother’s side he was related to George Washington, James Madison, William Henry Harrison, Zachary Taylor, Ulysses Grant, Benjamin Harrison, and William Howard Taft. Also, thanks to his mother, he was related to both Jefferson Davis and Robert E. Lee. Robert E. Lee was related to Thomas Jefferson, James Madison, James Monroe, Martin Van Buren, William Henry Harrison, James K. Polk, Zachary Taylor, Ulysses Grant, and then later on to Grover Cleveland, Benjamin Harrison, Theodore Roosevelt, and Franklin D. Roosevelt. He also was related to Patrick Henry, John Marshall, Jefferson Davis, and eventually to Queen Elizabeth II. Within the Confederate Army, Lee’s relatives were generals Stonewall Jackson, Albert Sidney Johnston, Joseph E. Johnston, and J. E. B. Stuart.

Every father, especially if he’s a very successful man, worries about his daughter when he gives her away at the wedding ceremony. Imagine how an ex-president of the United States must feel: How can the young man possibly equal him?

Yes, we actually had an ex-president who gave away the bride to a young man who eventually became president of the United States. Theodore Roosevelt gave away his late brother’s daughter, Eleanor, to Franklin D. Roosevelt. “It’s a good thing to keep the name in the family,” he quipped. (As for a nice house to live in, of course, he had no idea.)

One would be hard-pressed to describe the meeting of the three heads of state at Yalta in 1945 as a “family reunion,” but two of them were cousins, related to a famous American general in World War II who later ran twice for president. The
general was Douglas MacArthur, who ran for president in 1948 and 1952 (and got nowhere). He was a sixth cousin once-removed of Sir Winston Churchill and an eighth cousin of President Franklin Roosevelt. (Churchill and Roosevelt shared a great-great-great-great-grandfather.)

George W. Bush has the distinction of having presidential relatives on both sides of his family. His father, of course, was president; so, too, was his mother’s distant, long-ago cousin Franklin Pierce. As for Jeb Bush becoming president, the odds are one out of 150 million adults. But like your fellow airplane passenger knowing someone who knows someone you know, his odds are a lot better than yours or mine. From George Washington to the present, there have been seventy-eight presidential sons; two have become president, so with good odds like that (one out of forty), why not a third? Problem is, Jeb Bush also has a brother who became president. The odds of a president, Papa George, having
two
presidential sons is so remote it won’t happen. People fearful of a “dynasty” can sleep at night.

Statistics mavens may appreciate that the 2008 presidential election had its full share of presidential relatives: John McCain was a sixth cousin of First Lady Laura Bush, and Barack Obama was a ninth cousin once-removed to Vice President Dick Cheney—a most unlikely match. Obama also included as his presidential relatives the two George Bushes, Gerald Ford, Lyndon Johnson, Harry Truman, and James Madison. (Obviously, if he was related to Truman, he had to be related to Tyler, too.)

1776
When George Washington took over as commander-in-chief of the Continental Army, he had two choices of compensation: a monthly salary of five hundred dollars, or full reimbursement of all expenses at the end of the war.