George Washington Was a Brilliant Entrepreneur

Tuesday, 22 Feb 2011 09:53 AM

By John Berlau

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February is an important month in the history of American commerce. In this month is the birthday of one of the country's earliest business innovators and large-scale entrepreneurs.

During a time period of America's existence as an English colony, this businessman's enterprise processed 1.5 million fish per year sent throughout the 13 American colonies and the British West Indies. During the last years of his life, this mogul built one of the largest whiskey distilleries in the new nation.

Don't think you've heard of this entrepreneur?

He served as a representative in colonial Virginia's House of Burgesses and as a Virginia delegate to the pre-Revolutionary War Continental Congress. Then being chosen to lead the Continental Army during the Revolutionary War and leading the American nation to a hard-fought victory for independence. And then, a few years after that, becoming the new nation's first president.

That’s right — George Washington.

Now, some pioneering scholars are documenting little known aspects of Washington's life. His pursuits can be said to be just as creative as those of Franklin and Jefferson, but in a different way. Washington's creativity of the type one associates with modern entrepreneurs such as Bill Gates and even Donald Trump.

Whereas Franklin built gadgets at his homestead, and Jefferson built fancy buildings, the notable things Washington built were a series of interconnected businesses.

In the 2006 biography “The Unexpected George Washington,” historian Harlow Giles Unger calls Washington "one of America's leading entrepreneurs" and chronicles Washington's transformation of Mount Vernon from a sleepy tobacco farm into a type of industrial village.

Some of his enterprises are now on display at the Mount Vernon Estate and Gardens historical site in Alexandria, Va., available for visitors to see as celebrate the national holiday of Washington's birthday, celebrated on a Monday. Washington's real birthday is the 22nd, which this year happens to fall this Tuesday, just one day after the official holiday. (And the federal holiday, by the way, is still officially Washington's birthday, not President's Day. Although many celebrate the birth of Abraham Lincoln in February, and some states have their own legal holidays for him, Congress never formally merged Washington's day with Lincoln's birthday nor gave Lincoln his own official holiday.)

The Donald W. Reynolds Museum and Education Center, opened on the grounds of Mount Vernon in 2006, has a display of the Mount Vernon fishery and other facets of his career as a "visionary entrepreneur." And Washington's gristmill and whiskey distillery were themselves recently reopened — the latter thanks to a generous grant from the Distilled Spirits Council of the United States — for attendees to get a first-hand look at some of Washington's interconnected ventures.

In this challenging time for free enterprise, Washington's business, as well as his political, biography can be seen as emblematic of the American dream. Washington's background wasn't exactly poor, but it was not as rich as many of his contemporaries among the Founders. His father died when he was 11, and, among the youngest of many brothers, he didn't inherit much, and the family lacked money to give him a formal education.

Washington's first step to becoming an entrepreneur was to abandon the most common cash crop of his native Virginia. That would be the now-dreaded tobacco. But it was not for health reasons that Washington stopped planting it. It was because of taxes and duties that reduced his profits and the fact that the tobacco crop was hurting Mount Vernon's soil.

As described in a paper by Mount Vernon director of restoration Dennis J. Pogue, "By 1766 the disappointingly low prices that he was receiving in return for his tobacco harvest convinced Washington that he would be better off devoting the labor of his workers to producing other commodities that had a more dependable payoff."

Washington grew hundreds of crops, many of which were imported from Europe. (And yes, he did grow hemp, but not very much and not for very long.) But for his main cash crop, he chose wheat.

He became a manufacturer of two products that contained his crop: flour and distilled whiskey.

Washington also "farmed" the banks of the Potomac for shad, herring, and other fish. His fishery consisted of rowboats and large nets, and in a six-week fishing season each spring, Washington's men netted about 1.5 million fish, according to the Reynolds Museum at Mount Vernon. And the inedible portions of the fish were used as fertilizer for crops such as wheat

But it is the distillery may offer the most fascinating example of Washington's entrepreneurial prowess. After retiring from the presidency and returning to Mount Vernon, Washington built a distillery in 1797. The whiskey was made largely from crops grown at Mount Vernon. As one Virginia magazine describes it, "rye, malted barley and corn were mixed with boiling water to make a mash in 120 gallon barrels."

This process is now re-enacted at Mount Vernon at the distillery that was reopened in 2007, thanks to the grant from the Distilled Spirits Council of the United States. A few times a year, Washington's whiskey — using one of the old recipes — is even sold to Mount Vernon visitors.

Washington's lifelong entrepreneurship sheds new light on his fight for liberty, and his motivation to develop a constitutional structure in which all were free to develop their many talents.

Like that of other Founding Fathers, Washington's career was stained by the evils of slavery, and this extended to his business enterprises, most of which made use of the labor of the slaves at Mount Vernon. But his correspondence shows that Washington realized this contradiction more than most of the Founding Fathers, and he worked tirelessly the last few years of his life to free all of his slaves upon his and Martha's death and also make provisions for their education and for the support of the former slave children and elderly.

So this month, if you can't make it to the celebrations at Mount Vernon, you just may want to toast George Washington — the politician and entrepreneur — with a plate of herring washed down with a glass of whiskey.

John Berlau is director of the Center for Investors and Entrepreneurs at the Competitive Enterprise Institute. He blogs at OpenMarket.org. E-mail him at jberlau@cei.org

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