George Washington: America’s First Entrepreneur by [email protected]
George Washington as First Entrepreneur
George Washington was the first U.S. president, a celebrated military general and also a keen businessman and entrepreneur. But his business smarts have essentially been forgotten by historians and the public, even though Washington’s face can be seen plastered across the U.S. currency.
A new book called First Entrepreneur: How George Washington Built His – and the Nation’s – Prosperity is based upon reams of historic, unpublished documents showing the extent of his entrepreneurial focus. The book shines a light on Washington’s business-minded accomplishments, which helped set up the nation for future success.
Author Edward Lengel, a professor at the University of Virginia, discussed his book and revealed little known details about this crucial founding father on the [email protected] show on Wharton Business Radio on SiriusXM channel 111. (Listen to the podcast at the top of this page.)
An edited transcript of the conversation follows.
[email protected]: Before interviewing an author, I love to read the inside jacket of his book for a great nugget of insight. You’ve got a good one in your book, which says, “The United States was conceived in business, founded on business, and operated as a business.” A lot of people forget about this. When we talk about the United States, we talk about freedom and many other topics. We don’t think much about business.
Edward Lengel: Yes. It was unusual for me, too. I had also been accustomed to looking at George Washington from a different perspective. But when I began to look at him as an entrepreneur and as a businessman, I saw, first of all, that he thought of himself as an entrepreneur and businessman. Secondly, he identified the country’s interests with his own.
When he became both a general commanding the armies and President of the United States, he naturally thought of the country as a business. When he became President, he said, “Building the national prosperity is my first and my only aim.” Business was central to his approach.
[email protected]: You are the director for The Papers of George Washington, which is a massive project begun in the 1960s to analyze and annotate all of Washington’s letters, writing and documents. So you are very familiar with Washington. When did you begin thinking about Washington in a business sense?
“He naturally thought of the country as a business.”
Lengel: It began only a few years ago when my organization decided to look at Washington’s financial and business papers, which had never been published. There’s a huge collection of account books, ledgers and financial documentation. We decided to interpret them and publish them. This opened a whole new window into his life. These are not just records or dreary accounts. They actually document the lifeblood of his family, his estate and the country. It shows how much time and effort he spent on this and how important it was to him.
I think his business aptitude came from his mother, who has a bad reputation for being a grouchy woman. But she inculcated in him principles of thrift, diligence and hard work. She taught him the very basic principle that industry and morality go together. She taught him that the moral man is industrious and vice versa. She taught him that building your own prosperity is, in and of itself, an ethical thing to do.
[email protected]: How did George Washington take that philosophy, expand it beyond the family realm and apply it to a new country? How did he use that philosophy to build up the United States?
Lengel: It was a challenge, especially when he first became President, because there was a lot of political division, uncertainty and fear. He took an optimistic view of his tasks: leading the nation, trying to build up the nation’s credit, establishing a stable currency, building national infrastructure and keeping the peace. He especially focused on the currency and wiping out international debt. This was a huge challenge, especially the debt. Fortunately, he had Alexander Hamilton to work with him.
[email protected]: How much debt are we talking about?
Lengel: I think the equivalent today would approach trillions of dollars. It was a crushing debt owed to France and the Netherlands after several years of war. Six years into his presidency, he had wiped out the national debt to France.
[email protected]: How did he do that?
Lengel: He worked with Hamilton to deliver a revolving system of debt repayments to gradually pay it off through careful taxation, currency management and by establishing a national bank. Instead of wiping out the economy to pay off the whole debt all at once, he was able to manage it over a series of years, which built up the nation’s credit.
[email protected]: Hamilton is credited with a lot of the early success of the U.S. economy, but the two men are closely associated with one another.
Lengel: Yes. Hamilton certainly developed many of the concepts for implementing economic policy, but George Washington set the goals and strategy. Hamilton worked with him to carry it out. There were times when Washington was ready to strike down Hamilton’s ideas. He was within moments of vetoing the national bank that Hamilton established. But they worked as a team.
[email protected]: The country could have turned out very differently were it not for this business focus.
Lengel: Yes. The country could have staggered into ruin or stagnation, or it could have broken apart, both politically and physically. There was a lot of regional difference. It was an important part of Washington’s national policy, tied with his economic policy, to bind the different parts of the nation together through commerce. I really can’t overstate how important commerce was to him, both domestic and international.
[email protected]: Trade is massively important for a new country that is trying to build itself up.
Lengel: Yes. Washington saw commerce as something that naturally contributed to peace and unity.
He coined a phrase, “communities of interest,” during the Revolutionary War, and he used it over and over again. The idea was that if people trade with each other – including Native Americans, Northerners, Southerners and foreigners – they will inevitably begin to see common and shared interests. They will work together and be more peaceful as a result.
[email protected]: But there had to be a level of trust with George Washington. You had to take a person at his word and face value.
Lengel: Yes. His conduct during the war and at the end of the war showed that he was a trustworthy person. Anybody else in that position may not have been able to generate the same level of trust.
[email protected]: It’s interesting how Washington’s prosperity is tied to the country’s prosperity.
Lengel: Before the war he saw how the British mercantilist, colonial system held him down and forced his fellow Americans to stay down. Ultimately, he absolutely hated debt. Debt made him anxious and worried. But the British colonial system forced the American people into debt. He saw that if he wanted to get out of debt and build his own prosperity, the nation would need to rid itself of the colonial system.
[email protected]: George Washington didn’t have a great formal education, but I get the sense from your book that this was actually a positive for him.
“Washington saw commerce as something that naturally