Why Is America So Rich?

The United States is the world’s most prosperous
economy. It’s been that way for so long — over a
hundred years — that we take it for granted. But how did it happen? There are many answers, of course. One is that the United States values the free
market over government control of the economy. But here’s a point that is seldom made:
It didn’t begin that way. Before the country placed its trust in the
free market, it trusted the government to make important business decisions. Or to put it another way, only after the government
failed repeatedly to promote economic growth and only after private enterprise succeeded
where the government failed, did the United States start to develop a world beating economy. Let’s look at three telling examples:
In 1808 John Jacob Astor formed the American Fur Company and marketed American furs around
the world. Europeans adored beaver hats for their peerless
warmth and durability. Astor gave them what they wanted. Instead of leaving the fur business to capable
entrepreneurs like Astor, the government decided it wanted to be in on the action. So, it subsidized its own fur company run
by a self-promoting government official named Thomas McKenney. McKenney should have won the competition. After all, he had the federal government backing
him. But while Astor employed hundreds of people
and still made a tidy profit, McKenney’s company lost money every year. Finally, Congress in 1822, came to its senses
and ended the subsidies for McKenney and his associates. A similar situation developed in the 1840’s
around the telegraph. The telegraph was the first step toward the
instant communication we have today. Invented by Samuel Morse, the telegraph transmitted
sound – as dots and dashes representing letters of the alphabet. Morse, more of an idealist than businessman,
agreed to let the government own and operate the telegraph “in the national interest.” But the government steadily lost money each
month it operated the telegraph. During 1845, expenditures for the telegraph
exceeded revenue by six-to-one and sometimes by ten-to-one. Seeing no value in the invention, Congress
turned the money-loser over to private enterprise. In the hands of entrepreneurs, the business
took off. Telegraph promoters showed the press how it
could instantly report stories occurring hundreds of miles away. Bankers, stock brokers and insurance companies
saw how they could instantly monitor investments near and far. As the quality of service improved, telegraph
lines were strung across the country – from 40 miles of wire in 1846 to 23,000 miles in
1852. By the 1860s, the U.S. had a transcontinental
telegraph wire. And by the end of that decade entrepreneurs
had strung a telegraph cable across the Atlantic Ocean. Why didn’t the US government profitably
use what Morse had invented? Part of the answer is that the incentives
for bureaucrats differ sharply from those of entrepreneurs. When government operated the telegraph, Washington
bureaucrats received no profits from the messages they sent, and the cash they lost was the
taxpayers’, not their own. So government officials had no incentive to
improve service, to find new customers, or to expand to more cities. But entrepreneurs like Ezra Cornell, the founder
of Western Union, did. Cheaper, better service meant more customers
and more profits. Just fifteen years after Congress privatized
the telegraph, both the costs of construction and the rates for service linking the major
cities were as little as one-tenth of the original rates established by Washington. In the steamship business, we see the story
repeated yet again. During the 1840s, regular steamship travel
began between New York and England. The government placed its bets on ship owner
Edward Collins, a man more skilled at political lobbying than at business. While Congress funded Collins, Cornelius Vanderbilt
started his own steamship company. Vanderbilt cut the costs of travel, filled
his ships with eager passengers, and built a fabulously successful business, soon leaving
Collins in his wake. Collins failed because he didn’t feel a
need to improve, or even provide safe and regular service (for example, two of his four
ships sank, killing hundreds of passengers). If he lost money, there was always another
politician to appeal to. Vanderbilt, in contrast, had to serve his
customers or he would have lost his company. You’d think we would have learned our lesson
by now: economic prosperity comes from free enterprise, not from government subsidies. But it’s a lesson we have to learn every generation. I’m Burton Folsom, Professor of History
at Hillsdale College, for Prager University.

100 comments on “Why Is America So Rich?”

  1. Guy Mailhot says:

    Hatred of Capitalism (economy control by Private Company) is a religion, not something Logic. prove it to stupid leftist and he will always find a reason, a scape goat, for is repeated failure.

  2. Misterworldwide says:

    America is not rich haha

  3. HunterKiller says:

    Because they robbed some money from russia

  4. Kevin Urbieta says:

    Were Only Rich Because We took Mexico's Land, Money, and Every Thing, So YA

  5. Tofeeq Majeed says:

    Now it is the other way around now the business men own the government..

  6. Rohan G. Nair says:

    Wrong map of India!

  7. idris bevan says:

    Why is America so rich?
    is billions of dollars in debt

  8. Sachin Nale says:

    Due to petro dollar. Simple. Print as much u want other had to buy.

  9. Let'sBreakItDown says:

    Now do health care! Oh wait…

  10. Ggerに says:

    Australia and Luxembourg are laughing

  11. Carlos Andujar says:

    China aint got the balls to make us pay the debt tho.😂😂😂😂 U.S to intimidating to the world no country dares to challenge the U.S.

  12. Philip Jones says:

    Why is America so rich? Republican Ideas (Free Enterprise). How could we loose our wealth? Democrat/socialist ideas (green new deal).

  13. James Mac777 says:

    Jesus Christ made America great, all others take it away.

  14. Patrick Smith says:


  15. luc bergeron says:

    Ya being bailed out by goverment when you fail lol

  16. Chun-Yang Chao says:

    Yeah, but imagine 1928 and 2008, your freemarket almost nuked everyone.

  17. Cheyenne Alvis says:

    because when we hear the word Tent Cities or Homeless veterans or pilots using food stamps or many people living pay check to paycheck we go USA!! USA!! and drown those liberal faggets out.

  18. paul sturgess sturg gaming says:

    America is a poor country like my country Canada America owes trillions and trillions of dollars

  19. sharl ezel says:

    Bec they stole a lot of gold bullions?

  20. Milan Lama says:

    Do you have any idea how much debt the US have?
    Change the topic of the video,please

  21. Howdy! says:

    Petrodollar scam helped alot

  22. Daniel Delport says:

    Wierd fact John Jacob Astor and Cornelius Vanderbilt died on the Titanic
    point captalism made the rich but also cost them their lives
    But in my opinion capitalism stil won because ships like thaus from Cunard who had the propper supply of life boats became more waelthy because White Star Line was to bad from the begining
    Sorry English is not my first Langauge

  23. Youssef Berbiche says:

    Free add for liberalism . Niceu .

  24. Tom de Whalley says:

    Screw America man 😂

  25. Trey Woods says:

    So why do taxpayers currently subsidize corporations and industries today like the fossil fuels industry? Why do we bailout businesses that fail from their incompetence like the banks and auto industry? Why do we subsidized corporate agriculture? I agree. All of that should stop since the business entrepreneurs are supposed to be savvy and know more than government and politicians.

  26. Patrick Arroyo says:

    then why are we still leading with the biggest debt?

  27. John Davison Rockefeller SR. says:

    America debt is nothing because every day america make 56bilion dolar

  28. Brandon Valentin says:

    Maybe they should have a historian on boards and committees that make gov’t decisions

  29. Stavros Stavropoulos says:

    By killing and stealing from the others

  30. Nemanja ĆIrić says:

    Is anyone believe this crappy prpaganda payed by billionaires who dont want workers to dare for bigger wages and European working condition

  31. Americans Eagle says:

    These are the 10 best countries in the world
    Published Tue, Jan 23 2018 2:55 PM ESTUpdated Fri, Jan 26 2018 2:31 AM EST
    Zameena Mejia

    Zurich, SwitzerlandCarl Larson | Getty Images
    For the second consecutive year, Switzerland is the world’s best country, according to the U.S. News & World Report.

    In order to help people understand how nations are perceived on a global scale, over 21,000 respondents were asked to evaluate 80 countries by ranking them according to 65 attributes. Among those were economic influence, power, citizenship and quality of life, which collectively helped determine each country’s success as a modern nation.

    The rankings are part of an analysis project called the 2018 Best Countries Report, conducted now for three years by the Wharton School of the University of Pennsylvania and global consumer insights firm Y&R’s BAV Group.

    “The Best Countries report speaks to the effect a nation’s brand can have on its economic prosperity and perceived standing in the world,” Wharton professor of marketing David Reibstein said in a statement.

    Y&R Global CEO David Sable added that nations need to think carefully about their brand appeal and show off qualities like innovation and compassion in order to set themselves apart.

    “For the countries that rose to the top of this year’s rankings, it is once again clear that military vigor and economic power are no longer the key determinants to a country’s brand success,” Y&R Global CEO David Sable said in a statement.

    Here are the top 10 best countries as detailed in the 2018 U.S. News & World Report:

    10. Netherlands
    Also in the top 10 best countries for: most business-friendly, most modern, entrepreneurship, quality of life, best countries to headquarter a corporation, raising kids, travel alone, most transparent countries, green living, women.

    9. France
    Also in the top 10 best countries for: cultural influence, power, heritage & richest traditions, most influential, education, starting a career.

    8. United States
    Also in the top 10 best countries for: cultural influence, entrepreneurship, power, most forward-looking, most influential, education.

    7. Australia
    Also in the top 10 best countries for: cultural influence, most modern, quality of life, most-forward looking, best countries to headquarter a corporation, raising kids, traveling alone, green living, investing in, education, retiring comfortably, women.

    6. Sweden
    Also in the top 10 best countries for: most business-friendly, cultural influence, most modern, entrepreneurship, quality of life, best countries to headquarter a corporation, raising kids, transparency, green living, education, retiring comfortably, women.

    5. Japan
    Also in the top 10 best countries for: cultural influence, entrepreneurship, power, up & coming economies, most-forward looking, most influential, green living, education.

    4. United Kingdom
    Also in the top 10 best countries for: cultural influence, entrepreneurship, power, starting a business, most forward-looking, most influential, transparency, education, starting a career.

    3. Germany
    Also in the top 10 best countries for: most modern, entrepreneurship, quality of life, power, most forward-looking, headquartering a corporation, most influential, transparency, green living, education, women.

    2. Canada
    Also in the top 10 best countries for: most business-friendly, most modern, entrepreneurship, quality of life, starting a business, most forward-looking countries, headquartering a corporation, raising kids, transparency, green living, education, retiring comfortably, women.

    1. Switzerland
    Also in the top 10 best countries for: most business-friendly, cultural influence, most modern, entrepreneurship, quality of life, starting a business, most forward-looking countries, headquartering a corporation, raising kids, transparency, green living, education, retiring comfortably, women.

    Along with the country rankings, respondents were also asked to share their opinions of major world leaders for the first time in the survey’s three-year history. Although their opinions weren’t factored into the countries’ rankings, the results provided insight on their current issues.

    Alphabet executive chairman Eric Schmidt was the most respected business leader, according to the report.

    In terms of global leaders, nearly 60 percent of respondents disapproved of U.S. president Donald Trump. Second to Trump was Russian president Vladimir Putin, who had a 44 percent disapproval rate.

    Canada’s Prime Minister Justin Trudeau and Germany’s chancellor Angela Merkel were the most respected leaders.

  32. J J Hernandez says:

    Should we add Amtrak to this video?

  33. Keval Shah says:

    A simple doubt: Then why is China (we know who owns or indirectly controls most of the companies there) has grown at such high rates for multiple decades, with their companies now competing global majors?

  34. DUNE YXZ says:

    TRUMP 2020!

  35. Chris Kilmer says:

    Great history – brilliant.

  36. Matthew Blizzard says:


  37. Robert Walker says:

    This is rather misleading. The US is not the world's richest nation – it's the nation that – based on nominal gross domestic product, creates the most. Then again, it's also the 3rd most populated nation in the world. Kinda silly to compare it to a small country. But when it comes to median income, median net worth or real value of how rich its citizens are, no Americans aren't the richest. And that's separate from actual quality of living, like life expectancy, etc…

  38. Tara Bird says:

    And people want the government involved in their medical insurance????????? This is scary!!

  39. john reese says:

    they invaded a resource rich land, killed all the natives and exploited the resources

  40. Raniel Pangilinan says:

    Now I know Ferdinand Marcos was not a hero or a villian, but he's just a tiny little Hayley Williams-ish puppet of the USA.

  41. ibra him says:

    Because of the support of the Government of Israel, which kills innocent people every day in Palestine and killed thousands in Iraq, Afghanistan and Pakistan after they discovered that there are no weapons of mass destruction and participation in the destruction of Syria and all this in order to steal oil and now the voice of the American people to an unprecedented racist The presidency of any US state to be president and this racist is Trump…

  42. Just Dew It! says:

    Customer SERVice!! Wr need to serve as business owners.

  43. Kettly Charles says:


  44. Reginald Stewart says:

    Hey Prager unniversity keep speaking the truth about everything great job & good bless you 🇺🇸

  45. Common Sense says:

    Free slave labor was great kick start to help a bunch of ungrateful lying 🤥 sacs a shit
    Who got wealthy from the profits to enrich the nation of human trafficking and cotton, beans and etc…. Start with the real history not a cover-up

  46. 1wing1 says:

    thats why communism cant work, when all the money is in the common hands, theyll waste it because its not theirs. same with the european greens… they just want higher taxes and the government to somehow fix the nature, when new inventions and private business could do it better, given the right incentives.

  47. Yards Ofsnot says:

    Rich?? Really?? Where?? Try asking the 10 million street sleepers and the 50 million earning 5 bucks an hour making sure the Owner gets just slightly more than filthy Rich. Truth is the US owes shit loads more in debts than what their perceived wealth is. In under 10 years the US will default.

  48. yo haruhi says:

  49. patchyman says:

    Yeah, there is truth to this, but it is way to over simplistic. The American defence budget allows it to invest loads of money in R&D. It’s often hard to see the immediate commercial benefit of such research before it is commissioned. For this reason, this kind of investment would never be made by private business. The government then hands over such research to privet businesses that make large profit from it. It makes it look like the government loses loads of money, and it’s the private business that makes all the money. This could lead you to think it was a good idea to privatise everything, which isn’t necessarily the case when considering the economy as a whole. The gov’s investment in bell labs is a good example of this.

    Another example (there are a few) is the Brazilian steel sector. Steel industries are often subsidized by their national government, why? Because they give a great benefit to national defence and the wider economy. The costs are clear, the direct profit isn’t.

    He completely ignores, the debt America gave to loads of subsequently successful economies after world war 1 and 2. On that note, the policy of isolationism that America took up during a large part of ww2 levelled much of its economic competition.

    America is huge and has loads of natural resources. Its ability to unify its large territory was largely due to European decisions, wars and distractions. This also plays a large part in its success. It’s very hard to unify such large territories under one stronger gov.

    He also misses out the huge contribution American legal system plays in laying out the foundation of its economy. As well as other institutions, the fed, the department of infostructure etc.

    I actually agree with the point he is making; I share his political stance. But, when teaching the public about economics, he shouldn’t deliberately reduce the complexity of the subject because doing so would serve to buttress his argument in favour of his political ideology.

    I mean loads of people on the left are SO SO guilty of this. I don’t think we should stoop to their level. The arguments pro [most] privatisation, I believe, stand on their own merit, without deceptively and deliberately not telling the whole truth.

  50. Cary Clan says:

    The telegraph was built on government funding and of course the government doesn’t make a profit …. the government is not supposed to make a profit they are supposed to provide the infrastructure for business to make a profit and make people’s lives better. The initial investment on the railroad and the national highway system was also paid for by the government… for the good of the nation. Government funding helped advance computer circuits, cell phone technology, touch screens, and the internet…. all the parts of the cell phone. The government financed research that created the google search engine algorithm and helped Apple get off the ground with start up investment.
    It’s business and government working together that brings us the drugs we have AND makes this the wealthiest nation… not business alone.
    If it was business alone, when the banks created subprime mortgages and crashed the economy who bailed them out???
    PragerU is warping People’s minds to hate government, so average people will leave government to the wealthy people. Everyone needs to ignore this propaganda and realize that we are all the government… as in We the people. It’s the government that lays the foundation for businesses to be successful, just look at any nation that has no government and then appreciate what we have and demand more out of the people who are supposed to represent us.

  51. Paulo Souza Jr. says:

    These are not the unique causes USA is so rich.

  52. Patrick says:

    You think this country was built on policy?? LOL!!…More like Lies, Bullets, Guns, Chains and 400 years of free slave labor! Murder now wears a three (3) piece suit.

  53. Moises Medina says:

    Over populated to

  54. We-Are- Great says:

    What Propaganda is this . The only rich citizens in the USA are the Richest 10% who own 87% Of All The Wealth in the USA .

  55. armagedon026 says:

    Free labor from slaves

  56. Gu Nesnaj says:

    The IMF and Fed debt scam

  57. HOTRODDER50 says:

    Eager passengers?!?!?!? Lol Those eager passengers were slaves! WOW smh

  58. Willie Thompson says:

    This is an interesting narrative. Untrue, but interesting.

  59. Blizzbee R. says:

    Is this another propaganda?

  60. ronald bowes says:

    If you plunder all other economies with hegemonic might and devalue all other currencies so that yours become the benchmark, what do you expect. We should all understand what money really is. MONEY CLEARLY IS NOT A MATTER OF SPENDING. Money in the hand of the haves is a tool of subjugation and control. Do as I say when I say.
    Let us be very basic in an analogy. Husband has a wife and four kids. He owns a bakery which he has used clandestine means to take away from his competitors. Yet he brings home ONLY ONE loaf of bread from that bakery for his wife and four kids. He has total control over how hungry they will be and how long.
    The husband will always be rich with bread, and the wife and kids will always be borrowing and obedient.
    Enough said.

  61. Qamar Iqbal says:

    Not to forget free markets/neoliberal policies caused Global financial crises…

  62. Lucas Irnaten says:

    It still rich but …..

  63. Baigandine L says:

    Hint — It's not black folks. Although obviously slavery helped the south.

  64. Frances Venezia says:

    I thought it was because Christians were fleeing religious persecution in England, and God blessed the pilgrims endeavors to found a nation built on Christian principles.

  65. Deena James says:

    No mention of slavery… are you stupid?
    The USA is rich because of slavery.

  66. Rabbit Skipper says:

    Cheap slave labor, installing puppet leadership in foreign countries and the military industrial complex. The fact that there's a claim we have a free market. Shows just how Prager's fanbase is uninformed on the subject.

  67. The Absolute Madman says:

    Watch one presidential debate and you will never trust a politician to run a business, certainly not one you work for.

  68. RAYMOND OYIEKO says:

    They invested in War and stealing other Countries resources. i.e Libya,Iraq, Blood,Gold …. diamond in Congo, all Africa,Use in exchange for Green Card for refugees

  69. john mcdonald says:

    Competition is one of the prime reasons a market economy works. As in nature, the more intelligent, the swifter , the stronger prosper and thrive. Those better able to adapt do well. A market economy does the same.

  70. Nalini Global says:

    Because their imperialist regime steals from countries around the world

  71. Ronald Teal says:

    Thank yo9u, Professor Burton Folsom and Praeger University. I would love to see this updated with more recent examples of government intervention, Ii.e., auto manufacturing, windmills and solar.

  72. Brian Smith says:

    So true! Gotta love PragerU.

  73. Samuel Tantala says:

    You should come to South Africa Professor and educate the clowns running this country on economic prosperity which comes from free enterprise as you rightly pointed out, than from government subsidies which they are constantly giving to loss-making State-owned enterprises.

  74. NB Jamie Maldon says:

    Kick the government out and the country becomes prosperous 😂😂

  75. Dennis Prager likes baby dick says:

    By stealing

  76. SeasideDetective2 says:

    The "free market" is so often spoken of as a hallowed American tradition that many Americans forget how new it is. For many decades after this country's winning of independence, protectionism was the rule rather than the exception. The distribution of wealth was extremely lopsided, with the rich receiving plenty of government perks on the one hand and many more Americans existing at near-subsistence level on the other. Politicians did not start to champion small businesses until the 1890s, and most tariffs were not done away with until the 1940s. Even after that, it was taken for granted that the government had an essential role to play in shaping the economy; in the early 1980s, Ronald Reagan's economic libertarianism was considered just as radical as neo-socialism is today. In short, today's "conservatives" are actually pretty left-wing compared to their 18th, 19th, and early 20th-century forebears.

  77. Orisol Huang says:

    Why? Because they are all birches!

  78. Sir Robin of Camelot says:

    OIL! 🇺🇸💰🛢

  79. DAME BEYE says:

    No they are not rich they’re stealing people’s money only America is one of the most poor land in the world history

  80. Mangas Boys says:

    If free market works, why the USA get get an economic crisis in 1929 and 2008? The free market isn't perfect but, at least, is better than the socialism policy. Governement just need to be here to make sure that everything is ok.

  81. errol kong says:

    Because dem rob most of the rest of the world period

  82. Christobanistan says:

    Such a simplistic take. How about these (just to name a few)?
    1) A strong respect for personal property rights in the law, excellent support for contracts, and a fantastic, well developed credit system and a complex financial sector;
    2) vast natural resources that private companies were ALLOWED to exploit using the tools in item #1;
    3) a fascination for basic science that was powerfully supported by large government grants (not anymore since 1992 or so when we started to abandon and demonize public funding);
    4) an open, decentralized political and economic system that (at least until 1980 or so), used government power to crush monopolies and break them apart. We've totally lost that and it's destroying our economy.
    5) our anti-union ways have given our companies the ability to compete internationally;
    6) just a ton of other things strongly linked to our democratic, market-centric system.

  83. Dubai Trans says:

    America is not rich it’s the poorest country in my opinion. 99%of wealth in the hands of the rich and the entire population live on the 1% I should have thought twice before taking the plane to here and leave Dubai. I must be crazy

  84. Bel Diman says:

    The short answer is: genuine MERITOCRACY. The government does not, in general, employ the best people to perform the job while private companies , again not all the time but in general, hire the best people they can find to do the job. Having said that privatization of infrastructure and other public services is usually not beneficial to the wide public as often the quality of services is diminished and prices increased after a private company takes over.

  85. Squirrel says:

    This is bullsit. FeEx does really well!

  86. DingDongChingChong says:

    This video did not explain how the government lost money and private enterprises gained money. Very poor video explanation. Come on PragerU, what happened to your videos? They used to portray much more better explanations. Disliked.

  87. Chris Ashton says:

    Is the free market in US healthcare proud of overcharging, over prescribing and creating the opioid crisis that kills so many of its citizens……….or is it just an unfortunate corollary that ensures that Drs, Dentists and Pharma execs can afford to buy personal aircraft?

  88. JarheadPlaying says:

    They have been robbing other nations overseas and sold weapons around the globe. And there are jews…

  89. 한연화 says:

    america is fake.

  90. Simon Jones says:

    Well they stole a native American country then stole they're gold they're oil , also stole gold from Nazi Germany

  91. David Mecatron says:

    Oh No ! Bernie Sander followers are gonna cry now that they know the truth

  92. Quicklightning says:

    I just want to see some YouTuber in America but I live I london

  93. kal bharov says:

    Two things right to recall and jury system.
    That why America is great once they gone America will be corrupt country.
    How it will happen by changing people opinion but more importantly to destroy gun rights in America.
    India also have free market but don't have right to recall and jury system hence it is very corrupt.
    Also American elite control Indian government specially after fall of soviets by exploiting corrupt judges and IAS officer.
    And by using media houses in India.
    It will be poor country will artificial prosperity and religious violence.

  94. Mario V says:

    They are rich because they steal other countries resources.

  95. Tall Paul says:

    The biggest drain on the economy is the unaccountable government bureaucracy. Redistributing other people’s hard earned money to feed power hungry bureaucrats. ✌🏼🇺🇸

  96. Константин Георгиев says:

    Because after ww2 literally all of the developed world except the US was brought to rubble.

    Now stop glorifying the free market and letting poor people suffer and small businesses die just because you've done it before and it used to work. Right now we Europeans are doing the exact opposite of what you are doing and undoubtedly we live much better than you, so maybe you should reconsider your strategy for success.

    And before you've asked, no, I'm not Russian and I do not want all Americans killed and I certainly do not glorify Putin.

  97. Nonso Okonkwo says:

    Free trade for Citizens and normal business, Socialism for Large Corporations

  98. David Kelly says:

    America is rich because it's people are poor. PERIOD.

  99. syncmaster913b says:

    America is not so rich. If we consider GDP per capita, SEVEN countries are doing better than USA, with Luxemburg's GDP per capita being ALMOST DOUBLE compared to USA.

  100. Adam Armstrong says:

    Governments can’t run business because of beurocracy and corruption which are one in the same

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