Adopting an analytical-explanatory methodology and a critical historiographical approach, this study examines the transition of power in early American cinema (1908–1927) as the outcome of a contest between two conflicting discourses in political economy and culture. Research data were gathered through an examination of the legal records of the Motion Picture Patents Company (the Edison Trust) and a qualitative content analysis of representative films from the three principal cinematic currents. The film industry during this era was a contested terrain among three distinct configurations: the Edison Trust’s monopolistic model rooted in the conservative worldview of traditional WASP elites; the elitist model of the Triangle Film Corporation; and the commercial-hegemonic studio model established by Hollywood’s immigrant moguls. The theoretical framework synthesizes Joseph Schumpeter’s theory of creative destruction with the cultural theories of Neal Gabler and Patricia Erens. The findings reveal that the triumph of the Hollywood studio system was the result of combining economic creative destruction—achieved through vertical integration and the star system—with a hegemonic project aimed at redefining national identity. By foregrounding aspirational narratives and individualism, Hollywood redefined the myth of the American Dream, thereby transforming cinema from an industrial entertainment novelty into the twentieth century’s primary institution for meaning-making and cultural discursive production. This process not only challenged the hegemony of established elites but also redefined American national identity within a modern visual regime.