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Capitalism in America: An Economic History of the United States
Shortlisted for the FT & McKinsey Business Book of the Year 2018
Where does prosperity come from, and how does it spread through a society? What role does innovation play in creating prosperity and why do some eras see the fruits of innovation spread more democratically, and others, including our own, find the opposite?
In Capitalism in America, Alan Greenspan, legendary Chair of the Federal Reserve, distils a lifetime of grappling with these questions into a profound assessment of the decisive drivers of the US economy over the course of its history. In partnership with Economist journalist and historian Adrian Wooldridge, he unfolds a tale of vast landscapes, titanic figures and triumphant breakthroughs as well as terrible moral failings. Every crucial American economic debate is here - from the role of slavery in the antebellum Southern economy to America's violent swings in its openness to global trade.
At heart, the authors argue, America's genius has been its enthusiasm for the effects of creative destruction, the ceaseless churn of the old giving way to the new. Although messy and painful, it has lifted the overwhelming majority of Americans to standards of living unimaginable even a few generations past. At a time when productivity has again stalled, stirring populist furies, and the continuing of American pre-eminence seems uncertain, Capitalism in America explains why America has worked so successfully in the past and been such a gigantic engine of economic growth.
Where does prosperity come from, and how does it spread through a society? What role does innovation play in creating prosperity and why do some eras see the fruits of innovation spread more democratically, and others, including our own, find the opposite?
In Capitalism in America, Alan Greenspan, legendary Chair of the Federal Reserve, distils a lifetime of grappling with these questions into a profound assessment of the decisive drivers of the US economy over the course of its history. In partnership with Economist journalist and historian Adrian Wooldridge, he unfolds a tale of vast landscapes, titanic figures and triumphant breakthroughs as well as terrible moral failings. Every crucial American economic debate is here - from the role of slavery in the antebellum Southern economy to America's violent swings in its openness to global trade.
At heart, the authors argue, America's genius has been its enthusiasm for the effects of creative destruction, the ceaseless churn of the old giving way to the new. Although messy and painful, it has lifted the overwhelming majority of Americans to standards of living unimaginable even a few generations past. At a time when productivity has again stalled, stirring populist furies, and the continuing of American pre-eminence seems uncertain, Capitalism in America explains why America has worked so successfully in the past and been such a gigantic engine of economic growth.
496 pages, Kindle Edition
First published October 16, 2018
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About the author
Alan Greenspan
59 books184 followersAlan Greenspan is an American economist who served as the 13th chairman of the Federal Reserve from 1987 to 2006. He worked as a private adviser and provided consulting for firms through his company, Greenspan Associates LLC.
First nominated to the Federal Reserve by President Ronald Reagan in August 1987, he was reappointed at successive four-year intervals until retiring on January 31, 2006, after the second-longest tenure in the position, behind only William McChesney Martin. President George W. Bush appointed Ben S. Bernanke as his successor. Greenspan came to the Federal Reserve Board from a consulting career. Although he was subdued in his public appearances, favorable media coverage raised his profile to a point that several observers likened him to a "rock star". Democratic leaders of Congress criticized him for politicizing his office because of his support for Social Security privatization and tax cuts.
Many have argued that the "easy-money" policies of the Fed during Greenspan's tenure, including the practice known as the "Greenspan put", were a leading cause of the dot-com bubble and subprime mortgage crisis (the latter occurring within a year of his leaving the Fed), which, said The Wall Street Journal, "tarnished his reputation". Yale economist Robert J. Shiller argues that "once stocks fell, real estate became the primary outlet for the speculative frenzy that the stock market had unleashed". Greenspan argues that the housing bubble was not a result of low-interest short-term rates but rather a worldwide phenomenon caused by the progressive decline in long-term interest rates – a direct consequence of the relationship between high savings rates in the developing world and its inverse in the developed world.
First nominated to the Federal Reserve by President Ronald Reagan in August 1987, he was reappointed at successive four-year intervals until retiring on January 31, 2006, after the second-longest tenure in the position, behind only William McChesney Martin. President George W. Bush appointed Ben S. Bernanke as his successor. Greenspan came to the Federal Reserve Board from a consulting career. Although he was subdued in his public appearances, favorable media coverage raised his profile to a point that several observers likened him to a "rock star". Democratic leaders of Congress criticized him for politicizing his office because of his support for Social Security privatization and tax cuts.
Many have argued that the "easy-money" policies of the Fed during Greenspan's tenure, including the practice known as the "Greenspan put", were a leading cause of the dot-com bubble and subprime mortgage crisis (the latter occurring within a year of his leaving the Fed), which, said The Wall Street Journal, "tarnished his reputation". Yale economist Robert J. Shiller argues that "once stocks fell, real estate became the primary outlet for the speculative frenzy that the stock market had unleashed". Greenspan argues that the housing bubble was not a result of low-interest short-term rates but rather a worldwide phenomenon caused by the progressive decline in long-term interest rates – a direct consequence of the relationship between high savings rates in the developing world and its inverse in the developed world.
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September 12, 2021
This one is hard to review. It has its good points and is entertaining in spots. It is also too basic and clearly intended for a general reading audience. It is well written and draws on the best of current historical scholarship. The book also has a clear perspective, which is a mixed blessing.
This is a one volume history of American capitalism that stretches temporally from colonial times to the beginning year of the Trump administration. The lead author is a former head of the Federal Reserve and a legendary guru/oracle of finance during the 1990s and early 2000s. He is not free from concerns that he may have contributed to some of the events in the book through his policies. His coauthor is a well known and very skilled business writer for the Economist magazine. I suspect that this book is seen as a potential text for some introductory classes as various secondary and post-secondary levels, as well as perhaps in some online MOOC courses. On this account, the book is effective and if there had to be one text with this set of coverage parameters, one could choose worse ones than this. Readers can follow up this book with others and make their own judgments regarding gaps and balance.
As a basic book, Greenspan’s perspective about a grand history of American capitalism, with a focus on entrepreneurship and “creative destruction”, is valuable. It is really important for a book to have a strong story so that readers see how the range of events that go into such a history fit together (at least more or less). The book views the history of American capitalism as the progressive triumph of entrepreneurship that has led to American prosperity and which has brought benefits to the masses that were hardly dreamed of at the time of the revolution. This occurs through processes of innovation and “creative destruction” that lead old ways of doing things to the dustbin of history while ushering in new and more productive approaches. Good bye buggies, horses, and buggy whips; hello automobiles!
... but ...
The problem with grand historical narratives, especially of economic activity, is that they are inherently oversimplified and at their worst simplistic. Yes yes the country has prospered but what about those pesky costs, social and economic, that arose from creative destruction and were imposed upon others who did not make life choices that were blessed by the economic gods and perhaps did not see the history as a beneficial one, especially for them. Indians? Women? Slaves? Freed slaves? Chinese laborers? Don’t trouble me with details, after all, one needs to break some eggs to get ... This does not even begin to cover the costs of workers and families dislocated by economic changes with reduced possibilities for second chances. At a more metaphysical level, how does one begin to think about the roads not taken? Ok, so the US went for mass production and consumerism - was the alternative to that really Stalinist repression or third world poverty? The simulation fallacy looms large here and we will never know what might have happened.
A broad history almost has to adopt a position that, of course there were the disadvantaged and dislocated, and that slavery and continental expansion were hard on indigenous people, but it all turned out for the better, didn’t it? Up to a point, I understand this, but seriously? It is really not OK as a method to average out the costs of massive social change across the various parties. Personal utilities are not standardized or interchangeable. Do were really want to dismiss the subjugation of millions of slaves, along with the traumas placed on freed slaves and their dependents by Jim Crow? That is a bit hard to fit into the story without wincing. Once you get going on this, it should be possible to rationalize anything in the name of progress - anything.
More generally, a book like this must of necessity be an amalgamation of numerous subsections, each of which has its own body of scholarship behind it. For US economic history, there have been huge advances in research on virtually every topic included in this volume. To the authors’ credit, they cite the right researchers and appear to have done their homework. I know where to turn for more detail. The trouble of course is that for any of these topics, the implication of the research is far from clear, even for experts. For a new reader to this area, I have to think that follow-up reading will almost invariably lead to the conclusion that the history is far more complicated and hard to clearly interpret than is made the case in this volume. There is always nuance and it is not always clear how hard the authors are pushing their particular perspectives as opposed to broader levels of consensus. Particularly egregious was the critical analysis of the New Deal and the mini-recession of 1937, as well as the concluding analysis of the current causes of reduced US economic dynamism. Virtually all along the way, the perspectives of the authors are quite clear.
This is OK - so I do not agree with the “march of entrepreneurship and creative destruction” story in its full range and detail. There are other stories to tell as well and the effort to present a grand narrative is problematic. But if it gets more people to read and think about these topics and perhaps even read in more detail and take issue with the authors, then that for me is a good result.
I did not get much new material out of the book, but I was able to stick with it and did not give it up.
It was OK and worth the effort.
This is a one volume history of American capitalism that stretches temporally from colonial times to the beginning year of the Trump administration. The lead author is a former head of the Federal Reserve and a legendary guru/oracle of finance during the 1990s and early 2000s. He is not free from concerns that he may have contributed to some of the events in the book through his policies. His coauthor is a well known and very skilled business writer for the Economist magazine. I suspect that this book is seen as a potential text for some introductory classes as various secondary and post-secondary levels, as well as perhaps in some online MOOC courses. On this account, the book is effective and if there had to be one text with this set of coverage parameters, one could choose worse ones than this. Readers can follow up this book with others and make their own judgments regarding gaps and balance.
As a basic book, Greenspan’s perspective about a grand history of American capitalism, with a focus on entrepreneurship and “creative destruction”, is valuable. It is really important for a book to have a strong story so that readers see how the range of events that go into such a history fit together (at least more or less). The book views the history of American capitalism as the progressive triumph of entrepreneurship that has led to American prosperity and which has brought benefits to the masses that were hardly dreamed of at the time of the revolution. This occurs through processes of innovation and “creative destruction” that lead old ways of doing things to the dustbin of history while ushering in new and more productive approaches. Good bye buggies, horses, and buggy whips; hello automobiles!
... but ...
The problem with grand historical narratives, especially of economic activity, is that they are inherently oversimplified and at their worst simplistic. Yes yes the country has prospered but what about those pesky costs, social and economic, that arose from creative destruction and were imposed upon others who did not make life choices that were blessed by the economic gods and perhaps did not see the history as a beneficial one, especially for them. Indians? Women? Slaves? Freed slaves? Chinese laborers? Don’t trouble me with details, after all, one needs to break some eggs to get ... This does not even begin to cover the costs of workers and families dislocated by economic changes with reduced possibilities for second chances. At a more metaphysical level, how does one begin to think about the roads not taken? Ok, so the US went for mass production and consumerism - was the alternative to that really Stalinist repression or third world poverty? The simulation fallacy looms large here and we will never know what might have happened.
A broad history almost has to adopt a position that, of course there were the disadvantaged and dislocated, and that slavery and continental expansion were hard on indigenous people, but it all turned out for the better, didn’t it? Up to a point, I understand this, but seriously? It is really not OK as a method to average out the costs of massive social change across the various parties. Personal utilities are not standardized or interchangeable. Do were really want to dismiss the subjugation of millions of slaves, along with the traumas placed on freed slaves and their dependents by Jim Crow? That is a bit hard to fit into the story without wincing. Once you get going on this, it should be possible to rationalize anything in the name of progress - anything.
More generally, a book like this must of necessity be an amalgamation of numerous subsections, each of which has its own body of scholarship behind it. For US economic history, there have been huge advances in research on virtually every topic included in this volume. To the authors’ credit, they cite the right researchers and appear to have done their homework. I know where to turn for more detail. The trouble of course is that for any of these topics, the implication of the research is far from clear, even for experts. For a new reader to this area, I have to think that follow-up reading will almost invariably lead to the conclusion that the history is far more complicated and hard to clearly interpret than is made the case in this volume. There is always nuance and it is not always clear how hard the authors are pushing their particular perspectives as opposed to broader levels of consensus. Particularly egregious was the critical analysis of the New Deal and the mini-recession of 1937, as well as the concluding analysis of the current causes of reduced US economic dynamism. Virtually all along the way, the perspectives of the authors are quite clear.
This is OK - so I do not agree with the “march of entrepreneurship and creative destruction” story in its full range and detail. There are other stories to tell as well and the effort to present a grand narrative is problematic. But if it gets more people to read and think about these topics and perhaps even read in more detail and take issue with the authors, then that for me is a good result.
I did not get much new material out of the book, but I was able to stick with it and did not give it up.
It was OK and worth the effort.
April 9, 2019
I grabbed this book on an impulse at the library. It was surprisingly entertaining and informative. Written by the former Chairman of the Federal Reserve Bank, it had the potential to be a dense boring work of economic minutiae. However, it is written in a very readable and enjoyable prose. For the most part, the economic concepts described in the book are presented such that an average reader can understand what is being discussed.
The title of the book is apropos. Whereas most history books are concerned with political history, this book is concerned with the economic history of the United States. It covers such topics as: the economic development of the early colonies; the economic effects of westward expansion; the development of transportation (particularly canals,railroads, roads, cars, trucks and railroads); the rise of titans like Carnegie, Morgan, Rockefeller, Stanford, Vanderbilt; the rise of conglomerates; the Depression; the effects of WWI and WWII and the Civil War; the effect of government; the effect of slavery; the effect of immigration; stagflation; Reaganomics; Dot Com bubble; the Great Recession and the recovery; and, globalization.
In recent years, Greenspan had as much of an affect on American economics as any single person in recent years, so he writes from a position of exceptional authority. Ever since the Great Bust of 2007, I have been very interested in in the functioning of the U.S. economy, and this book is one of the best and most informative I have found.
If you want to understand where the U.S. has been economically and where it may be headed, this book is a must.
The title of the book is apropos. Whereas most history books are concerned with political history, this book is concerned with the economic history of the United States. It covers such topics as: the economic development of the early colonies; the economic effects of westward expansion; the development of transportation (particularly canals,railroads, roads, cars, trucks and railroads); the rise of titans like Carnegie, Morgan, Rockefeller, Stanford, Vanderbilt; the rise of conglomerates; the Depression; the effects of WWI and WWII and the Civil War; the effect of government; the effect of slavery; the effect of immigration; stagflation; Reaganomics; Dot Com bubble; the Great Recession and the recovery; and, globalization.
In recent years, Greenspan had as much of an affect on American economics as any single person in recent years, so he writes from a position of exceptional authority. Ever since the Great Bust of 2007, I have been very interested in in the functioning of the U.S. economy, and this book is one of the best and most informative I have found.
If you want to understand where the U.S. has been economically and where it may be headed, this book is a must.
January 20, 2019
This book, written by one of the supposedly most brilliant chairs of the Federal Reserve in our history, is a major disappointment. It essentially is a paean to unfettered capitalism and almost entirely ignores its fundamental and often devastating flaws.
It either ignores or whitewashes the most serious problems of our age that capitalists have caused or been major contributors to: worsening climate change, severe environmental degradation, growing income inequality, the urgent need to reform the financial system, the capitalist oligarchy that controls both political parties, the crushing national debt, the death of organized labor and protections for the working class, and many more.
He conveniently forgets the awful history of how capitalists have fought tooth and nail--with bribery, outsized political influence, monopolies and oligarchies, conspiracies, and yes, violence--to defeat, delay, and castrate every significant reform that has benefitted the middle and working classes since the 19th century. Today, very quietly and with total bipartisan support--the one thing Democrats and Republicans agree on are taking the maximum amount of campaign contributions from whoever will give it to them--Congress has stripped the Dodd-Frank Act of many of its protections. The current administration has neutralized the Consumer Protection Bureau and done much more to weaken protections for the environment and the very people--the disaffected millions of "deplorables"--who voted for Trump in 2016.
Greenspan gives capitalism far too much credit for reforms that either state and local government carried out, especially the major improvements in public health, such as public water and sewer systems, or it was forced to adopt by progressive administrations. It is little more than a long excuse and deliberate cover-up for the serious flaws in the capitalist system that Greenspan himself caused that led to the 2008 Great Recession and its long-term aftermath.
To make clear, I am NOT a marxist or socialist. In fact, I am a Edmund Burke conservative. I believe that capitalism is the best economic system available to have prosperous mass societies, BUT corporations must be managed based on the spiritual--and smart business--concept of STEWARDSHIP! They cannot be solely motivated by the highest profit at the lowest cost or the quarterly earnings report that drives their stock price AND multi-million-dollar executive bonuses. For example, it is obscene for one man to have "earned" an income in 2018 of almost $1 billion! They must be stewards--of their employees, the environment, their stockholders and creditors, their customers, their suppliers, everyone and everything they touch. Greenspan ignores virtually the deep responsibility capitalists have to everyone.
This book is a travesty. Enough said.
It either ignores or whitewashes the most serious problems of our age that capitalists have caused or been major contributors to: worsening climate change, severe environmental degradation, growing income inequality, the urgent need to reform the financial system, the capitalist oligarchy that controls both political parties, the crushing national debt, the death of organized labor and protections for the working class, and many more.
He conveniently forgets the awful history of how capitalists have fought tooth and nail--with bribery, outsized political influence, monopolies and oligarchies, conspiracies, and yes, violence--to defeat, delay, and castrate every significant reform that has benefitted the middle and working classes since the 19th century. Today, very quietly and with total bipartisan support--the one thing Democrats and Republicans agree on are taking the maximum amount of campaign contributions from whoever will give it to them--Congress has stripped the Dodd-Frank Act of many of its protections. The current administration has neutralized the Consumer Protection Bureau and done much more to weaken protections for the environment and the very people--the disaffected millions of "deplorables"--who voted for Trump in 2016.
Greenspan gives capitalism far too much credit for reforms that either state and local government carried out, especially the major improvements in public health, such as public water and sewer systems, or it was forced to adopt by progressive administrations. It is little more than a long excuse and deliberate cover-up for the serious flaws in the capitalist system that Greenspan himself caused that led to the 2008 Great Recession and its long-term aftermath.
To make clear, I am NOT a marxist or socialist. In fact, I am a Edmund Burke conservative. I believe that capitalism is the best economic system available to have prosperous mass societies, BUT corporations must be managed based on the spiritual--and smart business--concept of STEWARDSHIP! They cannot be solely motivated by the highest profit at the lowest cost or the quarterly earnings report that drives their stock price AND multi-million-dollar executive bonuses. For example, it is obscene for one man to have "earned" an income in 2018 of almost $1 billion! They must be stewards--of their employees, the environment, their stockholders and creditors, their customers, their suppliers, everyone and everything they touch. Greenspan ignores virtually the deep responsibility capitalists have to everyone.
This book is a travesty. Enough said.
August 19, 2024
Capitalism in America uses history to frame Alan Greenspan's traditional conservative ideology and his prescription for the future maintenance of the macroeconomy. With this book as evidence, I submit that his old-school brand of conservatism--while more palatable than the mindless populism currently in vogue--relies upon several convenient omissions from the economic history of the United States, as well as a quintessentially aristocratic perspective on labor. For that reason, I am deeply skeptical of his conclusions.
One thing Greenspan shares with Trump's populist movement is his belief that things used to be better. Not in terms of living standards--Greenspan goes on for several pages about the hardships of colonial life--but in terms of economic structure. The book begins with his commemoration of the 18th century Americans who, in the face of great adversity, managed to build a better society than Britain's.
He expounds upon the great resources and open space the pioneering men of the age used to create this economy, using hard work and ingenuity within a system free of regulation. He commends the founding fathers for banning internal tariffs and extending property rights to ideas via a system of copywriting. He fails to mention that the 'free land' and resources were stolen from the people who already lived there. He fails to mention that women could not own property until the mid-1800s. In later chapters, he discusses slavery and calls it barbaric, but does not backtrack tarnish the rosy picture he painted of America in its infancy. In other words, his vision of early America focuses on the economic advancement of white men, and blurs out everything else.
I think this is the narrative many conservatives share of the early days of the United States. It is a myth of merit-based achievement, and the myth persists after the Civil War with the rise of oil, steel, and railroad tycoons. I should stop to say that Rockefeller, Carnegie, and J.P. Morgan deserve credit for their work just as Eli Whitney deserves credit for his cotton gin, because I don't claim that these titans of industry had nothing unique about them. They were brilliant workaholics who pushed society into the 20th century. But Greenspan waves his hands at liberal accusations of inequality and mistreatment of the common laborer, saying "these businesspeople where neither 'robbers' nor 'barons'[...]These men got rich by rolling up their sleeves and seizing their chances." He discusses the pollution, overcrowding, and poverty of industrial American cities, but never suggests that his great capitalists had anything to do with it, or could have done anything to improve matters.
I interpreted Greenspan's history prior to 1930--about half the book--as a merely backdrop for his philosophy of political economy. I first saw glimmers of this philosophy emerge in his chapter on the great depression. In this chapter, he makes two things clear: government spending is bad for the long term health of an economy, and labor unions will slow economic growth. He rails against Roosevelt's New Deal and takes repeated shots at the union agreements that were signed in this era ("The Treaty of Detroit was eating away at the foundations of American affluence.") I found myself groaning at his apparent disregard for living wages and other benefits. In any case, he finds a way to apply these two components of his philosophy to each decade until the present throughout the rest of the book.
I thoroughly disliked the extent of Greenspan's bias in this book. He uses Enron as an example of prosperous American enterprise that went under at the turn of the millennium, conveniently omitting anything about their rampant accounting and energy fraud. He laments the overreach of government regulation, citing a child's lemonade stand that got shut down in Maryland a few years ago. In fact the incident in question apparently involved "kids hawking bottled beverages under a 10-foot by 10-foot tent near a nationally televised sports event", an operation mostly orchestrated by the parents. This is an intellectually dishonest misconstrual of the facts. I am confident dozens of other examples exist in the book that I did not catch.
For this reason, I'm skeptical of the conclusions Greenspan makes about regulation, government spending, and organized labor. Specifically, although I think we can tidy up regulation, I think it plays a crucial role in fostering a functional (if not safe) society. I agree that we could streamline social security, but I think medicaid should be expanded--in fact, I believe in single payer healthcare. I firmly disagree with his misgivings on labor. I think laborers should be more organized. Executive pay needs to be cut and distributed to the work force. Greenspan would have a heart attack!
Now comes the HOWEVER:
I found some value in reading this book. I agree, to some extent, in his thesis that creative destruction drives progress. I even agree that the current economic environment disincentivizes such creative destruction--with start-ups generally selling themselves to big quasi monopolies rather than defeating inefficient, ageing competitors; with complex regulations impeding entry to new business. Furthermore, I walked away with two new ideas:
(1) perhaps social security should be need-based and not age-based. I'm not sure Greenspan explicitly suggested this idea in the book, although he certainly proposed pushing the age to receive federal retirement benefits to 67 or even 70 years of age. If you have $2 million+ in your retirement fund, should you really be getting a check from the government every month, at the expense of the health of the economy?
(2) I'm now less convinced that Roosevelt's New Deal was the economic boone I previously believed it to be. In fact, between 1931 and 1937, unemployment increased from ~16% to ~17%. Gross National Product and private investment did not return to pre-crisis levels until the advent of World War II. Without a counterfactual, we can't know the true value of Roosevelt's policies. But my beliefs on the matter may be shifting now.
As annoying as I found much of this book, I can't walk away from something that both kept me interested and introduced me to new ideas without giving it at least three stars.
One thing Greenspan shares with Trump's populist movement is his belief that things used to be better. Not in terms of living standards--Greenspan goes on for several pages about the hardships of colonial life--but in terms of economic structure. The book begins with his commemoration of the 18th century Americans who, in the face of great adversity, managed to build a better society than Britain's.
"From 1600-1766 the colonies enjoyed the world's fastest growth rate, growing more than twice as fast as the mother country. And by the time they were ready for divorce, Americans were the world's richest people, with an average output her head of $4.71 a day measured in 2017 dollars. Americans were two to three inches taller than Europeans. They were also more fertile [...] by 1800 the new country had dozens of universities, at a time when England only had two."
He expounds upon the great resources and open space the pioneering men of the age used to create this economy, using hard work and ingenuity within a system free of regulation. He commends the founding fathers for banning internal tariffs and extending property rights to ideas via a system of copywriting. He fails to mention that the 'free land' and resources were stolen from the people who already lived there. He fails to mention that women could not own property until the mid-1800s. In later chapters, he discusses slavery and calls it barbaric, but does not backtrack tarnish the rosy picture he painted of America in its infancy. In other words, his vision of early America focuses on the economic advancement of white men, and blurs out everything else.
I think this is the narrative many conservatives share of the early days of the United States. It is a myth of merit-based achievement, and the myth persists after the Civil War with the rise of oil, steel, and railroad tycoons. I should stop to say that Rockefeller, Carnegie, and J.P. Morgan deserve credit for their work just as Eli Whitney deserves credit for his cotton gin, because I don't claim that these titans of industry had nothing unique about them. They were brilliant workaholics who pushed society into the 20th century. But Greenspan waves his hands at liberal accusations of inequality and mistreatment of the common laborer, saying "these businesspeople where neither 'robbers' nor 'barons'[...]These men got rich by rolling up their sleeves and seizing their chances." He discusses the pollution, overcrowding, and poverty of industrial American cities, but never suggests that his great capitalists had anything to do with it, or could have done anything to improve matters.
I interpreted Greenspan's history prior to 1930--about half the book--as a merely backdrop for his philosophy of political economy. I first saw glimmers of this philosophy emerge in his chapter on the great depression. In this chapter, he makes two things clear: government spending is bad for the long term health of an economy, and labor unions will slow economic growth. He rails against Roosevelt's New Deal and takes repeated shots at the union agreements that were signed in this era ("The Treaty of Detroit was eating away at the foundations of American affluence.") I found myself groaning at his apparent disregard for living wages and other benefits. In any case, he finds a way to apply these two components of his philosophy to each decade until the present throughout the rest of the book.
I thoroughly disliked the extent of Greenspan's bias in this book. He uses Enron as an example of prosperous American enterprise that went under at the turn of the millennium, conveniently omitting anything about their rampant accounting and energy fraud. He laments the overreach of government regulation, citing a child's lemonade stand that got shut down in Maryland a few years ago. In fact the incident in question apparently involved "kids hawking bottled beverages under a 10-foot by 10-foot tent near a nationally televised sports event", an operation mostly orchestrated by the parents. This is an intellectually dishonest misconstrual of the facts. I am confident dozens of other examples exist in the book that I did not catch.
For this reason, I'm skeptical of the conclusions Greenspan makes about regulation, government spending, and organized labor. Specifically, although I think we can tidy up regulation, I think it plays a crucial role in fostering a functional (if not safe) society. I agree that we could streamline social security, but I think medicaid should be expanded--in fact, I believe in single payer healthcare. I firmly disagree with his misgivings on labor. I think laborers should be more organized. Executive pay needs to be cut and distributed to the work force. Greenspan would have a heart attack!
Now comes the HOWEVER:
I found some value in reading this book. I agree, to some extent, in his thesis that creative destruction drives progress. I even agree that the current economic environment disincentivizes such creative destruction--with start-ups generally selling themselves to big quasi monopolies rather than defeating inefficient, ageing competitors; with complex regulations impeding entry to new business. Furthermore, I walked away with two new ideas:
(1) perhaps social security should be need-based and not age-based. I'm not sure Greenspan explicitly suggested this idea in the book, although he certainly proposed pushing the age to receive federal retirement benefits to 67 or even 70 years of age. If you have $2 million+ in your retirement fund, should you really be getting a check from the government every month, at the expense of the health of the economy?
(2) I'm now less convinced that Roosevelt's New Deal was the economic boone I previously believed it to be. In fact, between 1931 and 1937, unemployment increased from ~16% to ~17%. Gross National Product and private investment did not return to pre-crisis levels until the advent of World War II. Without a counterfactual, we can't know the true value of Roosevelt's policies. But my beliefs on the matter may be shifting now.
As annoying as I found much of this book, I can't walk away from something that both kept me interested and introduced me to new ideas without giving it at least three stars.
December 30, 2022
I was pleasantly surprised how readable and interesting this book turned out to be. If you're thinking about reading it --spoiler alert: the authors present capitalism and America in a favorable light -- your best approach would be to download the free Kindle sample, which contains the entire Introduction, which is very nicely done. If you like that, your library probably has a copy.
A few tidbits from my notes:
An ugly truth from the postwar South: the planters still needed labor. A good source: rented convicts from Southern prisons. Death rates: 11 to 16% per year (1887). A planter remarked, "one dies, you get another."
Frederick Terman of Stanford has "as good a claim as anybody" to be the father of Silicon Valley. He built Stanford's engineering department into a world-class institution, built the Stanford Industrial Park -- and loaned his students Hewlett and Packard $538 from his own pocket in 1939, so they could start their business in Packard's garage. I'd never heard of him. https://en.wikipedia.org/wiki/Frederi...
How not to do taxation: in 1976, Astrid Lindgren, the Swedish author of the "Pippi Longstocking" books, received a tax bill for 102% of her income. In 1991, Swedish spending and taxation hit the wall, and they drastically reformed entitlements and their tax structure. We could, too -- if the political will could be found.
I could go on, but I'll close with a strong recommendation: if the subject interests you, give the book a try. It's a good one. 4+ stars.
A few tidbits from my notes:
An ugly truth from the postwar South: the planters still needed labor. A good source: rented convicts from Southern prisons. Death rates: 11 to 16% per year (1887). A planter remarked, "one dies, you get another."
Frederick Terman of Stanford has "as good a claim as anybody" to be the father of Silicon Valley. He built Stanford's engineering department into a world-class institution, built the Stanford Industrial Park -- and loaned his students Hewlett and Packard $538 from his own pocket in 1939, so they could start their business in Packard's garage. I'd never heard of him. https://en.wikipedia.org/wiki/Frederi...
How not to do taxation: in 1976, Astrid Lindgren, the Swedish author of the "Pippi Longstocking" books, received a tax bill for 102% of her income. In 1991, Swedish spending and taxation hit the wall, and they drastically reformed entitlements and their tax structure. We could, too -- if the political will could be found.
I could go on, but I'll close with a strong recommendation: if the subject interests you, give the book a try. It's a good one. 4+ stars.
June 15, 2020
Excellent book about different stages of capitalism in America.
When I saw the author is Greenspan I've prepared myself to pages full of "quantitative easing" and "irrational exuberance" sentences. The book was very vivid and refreshing, excellent language and information, highly recommended.
When I saw the author is Greenspan I've prepared myself to pages full of "quantitative easing" and "irrational exuberance" sentences. The book was very vivid and refreshing, excellent language and information, highly recommended.
April 4, 2019
Capitalism in America : A history, by Alan Greenspan, is an interesting overview of the history of Capitalism in America, and more generally, an examination of economic trends in America from conception to modern times. Greenspan is the former chair of the Federal Reserve in the United States, and as chair, a rampant supporter of the high growth, lasseiz-faire capitalism that was common in the States in the 1980's and 1990's. The book has its particular biases, which I will talk about later.
The book generally examines US economic history for the past few centuries. From an Agrarian economy at its inception, to one that promoted chattel slavery, onto industrialization in the 19th century. In the 20th century, the US economy began to take the shape it has today, first a modernizing economy dominated by industries, but slowly evolved into the global power we see today, with control over global trade, finance, and with a very powerful domestic industry focused on services and consumerism. The book closely examines the "great men" who made this possible, your Ford's, Rockefeller's. etc. etc. Greenspan is very much enthused with these Capitalist giants, and although he does mention some of the negative externalizes they unleashed on the economy, he mostly focuses on the positive - no criticism necessarily. The development of modern management structures, production techniques, industrial organization and so forth mostly originated or were innovated in the United States. Greenspan is also positive on the development of middle management culture, and the promotion of shareholder value as a key pillar of the financial system of the US. Greenspan does examine modern issues, such as the growth of stagflation (inefficient labour - ie. powerful unions and workforces), and the bubbles of the 1990's and early 2000's, which was an era of growth focus over economic stability.
Greenspan's solutions to the 2008 recession are vague - not a bad thing necessarily. He seems to take a Chicago-school outlook, criticizing banks for their lack of reserves on their balance sheets. He does talk about the positive and negative aspects of creative destruction - how capitalism has historically disrupted previous generations in favour of new techniques, production, efficiencies and ideas. This is one of the key playoffs of the book - Greenspan admits that the negative aspects of creative destruction can be damaging, but ultimately concludes they are worth it, and those protesting against changes are like modern Luddites. Greenspan is a capitalist of the 1990's - big on finance, positive toward shareholder value, but thoughtful on slow, conservative reform of the economic system. The downsides of rampant capitalism are clear, but Greenspan looks at the positives throughout history, and ultimately concludes the cost benefit analysis is in favour.
AS my rating attests, this book is positive, but a mixed bag in my opinion. I certainly do not fully agree with his prognosis on Capitalism and Greenspan's fawning endorsement. Destroying people now to encourage creative destruction, which largely benefits the already wealthy, in order to reform the system in their favour, is not a positive thing, in my opinion. Wealth should be distributed more evenly across societies. The rabid and unfaltering adherence to pure individualism in society in modern times is wrong - communities must and should share resources, promote each others well-being, and ensure wealth, labour and leisure are efficiently divided among all individuals. Greenspan would not agree - some "great men" it seems, are more worthy of wealth than others - even if they trend toward megalomaniac behaviour. Greenspan is not populist, but thoroughly capitalist. Their is no room for a more democratic system that promotes the interests of consumers, workers and the poor. Instead, the market will efficiently allocate resources if the "G' in government remains small.
Whatever I think about these ideas, they are certainly ideas. If you are interested in Capitalism or economics at all, this is a good - if basic, overview of American Capitalism. It is certainly simple in some parts, and lacks greater detail on all sorts of interesting topics, but even so, is worthy of a read for the discourse and historical overview it offers. I would recommend this book to those looking for a more status quo analysis of Capitalism in the United States.
The book generally examines US economic history for the past few centuries. From an Agrarian economy at its inception, to one that promoted chattel slavery, onto industrialization in the 19th century. In the 20th century, the US economy began to take the shape it has today, first a modernizing economy dominated by industries, but slowly evolved into the global power we see today, with control over global trade, finance, and with a very powerful domestic industry focused on services and consumerism. The book closely examines the "great men" who made this possible, your Ford's, Rockefeller's. etc. etc. Greenspan is very much enthused with these Capitalist giants, and although he does mention some of the negative externalizes they unleashed on the economy, he mostly focuses on the positive - no criticism necessarily. The development of modern management structures, production techniques, industrial organization and so forth mostly originated or were innovated in the United States. Greenspan is also positive on the development of middle management culture, and the promotion of shareholder value as a key pillar of the financial system of the US. Greenspan does examine modern issues, such as the growth of stagflation (inefficient labour - ie. powerful unions and workforces), and the bubbles of the 1990's and early 2000's, which was an era of growth focus over economic stability.
Greenspan's solutions to the 2008 recession are vague - not a bad thing necessarily. He seems to take a Chicago-school outlook, criticizing banks for their lack of reserves on their balance sheets. He does talk about the positive and negative aspects of creative destruction - how capitalism has historically disrupted previous generations in favour of new techniques, production, efficiencies and ideas. This is one of the key playoffs of the book - Greenspan admits that the negative aspects of creative destruction can be damaging, but ultimately concludes they are worth it, and those protesting against changes are like modern Luddites. Greenspan is a capitalist of the 1990's - big on finance, positive toward shareholder value, but thoughtful on slow, conservative reform of the economic system. The downsides of rampant capitalism are clear, but Greenspan looks at the positives throughout history, and ultimately concludes the cost benefit analysis is in favour.
AS my rating attests, this book is positive, but a mixed bag in my opinion. I certainly do not fully agree with his prognosis on Capitalism and Greenspan's fawning endorsement. Destroying people now to encourage creative destruction, which largely benefits the already wealthy, in order to reform the system in their favour, is not a positive thing, in my opinion. Wealth should be distributed more evenly across societies. The rabid and unfaltering adherence to pure individualism in society in modern times is wrong - communities must and should share resources, promote each others well-being, and ensure wealth, labour and leisure are efficiently divided among all individuals. Greenspan would not agree - some "great men" it seems, are more worthy of wealth than others - even if they trend toward megalomaniac behaviour. Greenspan is not populist, but thoroughly capitalist. Their is no room for a more democratic system that promotes the interests of consumers, workers and the poor. Instead, the market will efficiently allocate resources if the "G' in government remains small.
Whatever I think about these ideas, they are certainly ideas. If you are interested in Capitalism or economics at all, this is a good - if basic, overview of American Capitalism. It is certainly simple in some parts, and lacks greater detail on all sorts of interesting topics, but even so, is worthy of a read for the discourse and historical overview it offers. I would recommend this book to those looking for a more status quo analysis of Capitalism in the United States.
May 3, 2020
A very useful economic history of the US.
There may be more detail here than many readers would care to plow through, but it moves along surprisingly quickly. The concluding chapter is excellent — serving as a summary, explaining the pros/cons/necessity of creative destruction, and laying out a prescription for renewing our economic dynamism (including a fascinating look at how we can learn from Sweden’s experience). The book is worth buying for the last chapter alone.
There may be more detail here than many readers would care to plow through, but it moves along surprisingly quickly. The concluding chapter is excellent — serving as a summary, explaining the pros/cons/necessity of creative destruction, and laying out a prescription for renewing our economic dynamism (including a fascinating look at how we can learn from Sweden’s experience). The book is worth buying for the last chapter alone.
January 12, 2021
To be very honest, didn't go through to the end.
The book is very single sided.
Don't be surprised if you see this in an average Republican's bookshelf!
It's more propaganda than history
The book is very single sided.
Don't be surprised if you see this in an average Republican's bookshelf!
It's more propaganda than history
December 29, 2018
“Capitalism in America” is one of the most interesting books I’ve read in a long time. To be honest, when I picked it up from the library, I wasn’t sure that I was in the mood for a challenging read about the history of capitalism in America, especially right around the Christmas holidays. However, I was pleasantly surprised once I began to read it. It is very well written and very user friendly and I couldn't put it down. Greenspan focuses on three organizing themes: productivity, creative destruction and politics. Throughout our history, productivity (society’s ability to get more output from a given input) has continually increased. The process that drives productivity is creative destruction. We continually create new ways of doing things and making things which make our former ways of doing things obsolete. Politics is involved with respect to how we deal with the fallout of creative destruction as a society. Lost manufacturing jobs in the Rust Belt is a good example. From the beginning of our republic in 1776, through the Civil War, the age of railroads, WWI, the Great Depression, WWII, the economic and manufacturing boom after WWII, stagflation of the 1970s, the optimism of the Reagan years and the 1990s, and the Great Recession, Greenspan reveals the creative, economic, political and social forces at work which shaped our economy and our lives. The chapter on America’s fading dynamism is a cautionary tale for our future. This is an outstanding book.
December 12, 2025
A readable but very elementary glossing over the economic history of the US.
July 25, 2021
Vigorous Self-Congratulation
America has accepted that destruction is the price of creation.
What created American prosperity? Capitalism in America brings a business-centric answer to this question that fits in the no-mans land between history and thesis. As Jin Xu of Empire of Silver would put it, Greenspan has a simple answer to a complex question. America was built on private enterprise and creative destruction. Much of the book is a celebration of economic growth and all the benefits capitalism has brought such a nation of entrepreneurs. Yet the narrative downplays the darker side of American capitalism to an astonishing degree: slavery is described in a jarring economic justification: Slavery was in some ways a horrific response to a basic climactic fact: you could not get free labor to harvest intensive crops in the heat and humidity. The suffering of generations from the externalities of capitalism are merely puzzling facts to be pondered by lesser economists.
A combination of overcrowding and pollution helps to explain one of the most puzzling facts of the era: despite overall improvement of living standards, the average height of the native born american male declined by 2.5% from 1830 to 1890.
Perhaps without meaning to, Capitalism in America tells the story of a people and a country built on privilege. Even before independence, America was ahead in the race. Furthermore, since the country was new, the relative power of the business class was far in excess of the European societies which would-be Americans escaped.
From 1600 to 1776 the colonies enjoyed the worlds fastest growth rate, growing twice as fast as any other country. By the time they were ready for a divorce, Americans were the world’s richest people with an average output of $4.71 / day in 2017. Americans were 2-3 inches taller than Europeans.
Comparing American monetary policy to that of China seems to reveal that America had foibles, like almost any other country. Our first attempt at paper currency, like that of the Tang, ended poorly. The war devastated America’s fragile economy. The continental congress’s attempts to finance the war by firing up printing presses .... eventually led to hyperinflation ... After the war there was a 30% decline in American national income as reflected in international trade. Both countries even ended up with a silver standard, though for opposite reasons. In China, the role of business had too little influence in politics. In America, business had all-too much influence: The west silver barons hit on a brilliant idea for pushing the price back up: force the federal government to buy their product and use it as currency. ... Grover Cleveland halted a run on the treasury’s gold supplies, pressing congress to repeal the silver act in 1893.
America��s saving grace was simply that Hamilton imagined and was empowered to help create the policies of a country where commerce was a cornerstone of prosperity; the equivalent Chinese courts never had the opportunity to empower such a character.
Sidenote: Decline and Fall of American Growth
The book makes the case that schumpeterian creative destruction is the engine of American growth, and that the decrease in creative destruction has caused a concomitant decline in economic growth. This is because of America’s sugar-candy people, to addicted on entitlement programs to innovate. The authors bemoan that entitlements have monotonically grown (10% per year under republicans, 7% per year under democrats) becoming a drag on the economy and the reinvention that America excels at. Productivity growth rates over time:
1913 - 1950: 3.1% / year.
1950 - 1973: 3.0% / year
1793 - 1998: 1.7% / year
1998 - 2004 3.5% / year
2004 - 2016 1.3% / year
Worse, the odds of a 30 year old earning more than parents at the same age has declined from 86% 40 years ago to 51% today. This is less compelling than the technology-driven thesis in Rise and Fall of American Growth. Overall, that book, or even Capital in the 21st century serve as better introductions to economic history.
America has accepted that destruction is the price of creation.
What created American prosperity? Capitalism in America brings a business-centric answer to this question that fits in the no-mans land between history and thesis. As Jin Xu of Empire of Silver would put it, Greenspan has a simple answer to a complex question. America was built on private enterprise and creative destruction. Much of the book is a celebration of economic growth and all the benefits capitalism has brought such a nation of entrepreneurs. Yet the narrative downplays the darker side of American capitalism to an astonishing degree: slavery is described in a jarring economic justification: Slavery was in some ways a horrific response to a basic climactic fact: you could not get free labor to harvest intensive crops in the heat and humidity. The suffering of generations from the externalities of capitalism are merely puzzling facts to be pondered by lesser economists.
A combination of overcrowding and pollution helps to explain one of the most puzzling facts of the era: despite overall improvement of living standards, the average height of the native born american male declined by 2.5% from 1830 to 1890.
Perhaps without meaning to, Capitalism in America tells the story of a people and a country built on privilege. Even before independence, America was ahead in the race. Furthermore, since the country was new, the relative power of the business class was far in excess of the European societies which would-be Americans escaped.
From 1600 to 1776 the colonies enjoyed the worlds fastest growth rate, growing twice as fast as any other country. By the time they were ready for a divorce, Americans were the world’s richest people with an average output of $4.71 / day in 2017. Americans were 2-3 inches taller than Europeans.
Comparing American monetary policy to that of China seems to reveal that America had foibles, like almost any other country. Our first attempt at paper currency, like that of the Tang, ended poorly. The war devastated America’s fragile economy. The continental congress’s attempts to finance the war by firing up printing presses .... eventually led to hyperinflation ... After the war there was a 30% decline in American national income as reflected in international trade. Both countries even ended up with a silver standard, though for opposite reasons. In China, the role of business had too little influence in politics. In America, business had all-too much influence: The west silver barons hit on a brilliant idea for pushing the price back up: force the federal government to buy their product and use it as currency. ... Grover Cleveland halted a run on the treasury’s gold supplies, pressing congress to repeal the silver act in 1893.
America��s saving grace was simply that Hamilton imagined and was empowered to help create the policies of a country where commerce was a cornerstone of prosperity; the equivalent Chinese courts never had the opportunity to empower such a character.
Sidenote: Decline and Fall of American Growth
The book makes the case that schumpeterian creative destruction is the engine of American growth, and that the decrease in creative destruction has caused a concomitant decline in economic growth. This is because of America’s sugar-candy people, to addicted on entitlement programs to innovate. The authors bemoan that entitlements have monotonically grown (10% per year under republicans, 7% per year under democrats) becoming a drag on the economy and the reinvention that America excels at. Productivity growth rates over time:
1913 - 1950: 3.1% / year.
1950 - 1973: 3.0% / year
1793 - 1998: 1.7% / year
1998 - 2004 3.5% / year
2004 - 2016 1.3% / year
Worse, the odds of a 30 year old earning more than parents at the same age has declined from 86% 40 years ago to 51% today. This is less compelling than the technology-driven thesis in Rise and Fall of American Growth. Overall, that book, or even Capital in the 21st century serve as better introductions to economic history.
October 21, 2018
A compelling narrative which chronologically covers the economic history of the United States. The 19th and most of the 20th century are covered in detail with interesting insights but the last 25 years do not get the same attention. The last chapter proposes a policy response to America's fading economic dynamism which failed to entirely convince me. Nevertheless, well worth reading.
January 15, 2021
To an immigrant like me, Capitalism in America: A History largely narrates a success story. One of the authors, Alan Greenspan, is an American economist who served as the Chair of the Federal Reserve and was probably responsible for some financial decisions that shaped the US during his term. The book covers various financial trends in the US since her independence to the early years of Donald Trump’s presidency. The authors do an excellent job in keeping things easy to digest so that readers with not much economics background follow along.
The book begins when the US was an agrarian society and life was tough. In those times, even the US presidents had to travel for days using multiple modes of transport to reach the White House. Then comes the era of the American Civil War when the Northern US practiced free labor markets while the Southern US mostly exploited the slave economy. The book transitions into the time of Robber barons whose capitalistic business practices saw explosive growth of the American economy. Their business empires gave birth to monopolies and abusive labor practices gave rise to the labor unions. The unprecedented growth in the 19th and 20th centuries get a lot of attention in this book. The book explains how both World Wars turned out to be economically beneficial to the US and how the technological innovation made US the growth engine of the 20th century.
The central theme of the book is creative destruction in which groundbreaking ideas pave the way for new markets by destroying the old ways of the world. The book is also a story of ingenuity, business acumen and entrepreneurial spirit of the US. Economical policies go hand in hand with political ideologies and the book does a really good job by offering the connect between politics and economics. Despite having quite a successful run, the book warns about 21st century not being the American century because of the political policies holding back America into the cage of its own creation. It does an excellent analysis of how socialist policies spend excessively on entitlements and unnecessary regulations impede businesses from growing. At the end, it offers a perspective on how Swedish economy improved by massively reducing its government size and cutting down on entitlements. Despite China’s dominance of the 21st century so far, the book ends on a mildly positive note.
Given that Greenspan is a Republican and a staunch capitalist, don’t look for a fair assessment or a scathing criticism on capitalism. Do read this book because it is a thought provoking work supported by an impeccable research on the history of the economic system in America.
The book begins when the US was an agrarian society and life was tough. In those times, even the US presidents had to travel for days using multiple modes of transport to reach the White House. Then comes the era of the American Civil War when the Northern US practiced free labor markets while the Southern US mostly exploited the slave economy. The book transitions into the time of Robber barons whose capitalistic business practices saw explosive growth of the American economy. Their business empires gave birth to monopolies and abusive labor practices gave rise to the labor unions. The unprecedented growth in the 19th and 20th centuries get a lot of attention in this book. The book explains how both World Wars turned out to be economically beneficial to the US and how the technological innovation made US the growth engine of the 20th century.
The central theme of the book is creative destruction in which groundbreaking ideas pave the way for new markets by destroying the old ways of the world. The book is also a story of ingenuity, business acumen and entrepreneurial spirit of the US. Economical policies go hand in hand with political ideologies and the book does a really good job by offering the connect between politics and economics. Despite having quite a successful run, the book warns about 21st century not being the American century because of the political policies holding back America into the cage of its own creation. It does an excellent analysis of how socialist policies spend excessively on entitlements and unnecessary regulations impede businesses from growing. At the end, it offers a perspective on how Swedish economy improved by massively reducing its government size and cutting down on entitlements. Despite China’s dominance of the 21st century so far, the book ends on a mildly positive note.
Given that Greenspan is a Republican and a staunch capitalist, don’t look for a fair assessment or a scathing criticism on capitalism. Do read this book because it is a thought provoking work supported by an impeccable research on the history of the economic system in America.
March 3, 2022
The story of America like no other in academic story form. From our beginnings to now. Great for conservatives to progressives to see what the past held and now what America wrestles with. Entertaining and informative.
January 6, 2022
Smuk bog om USAs historie. Minder mig om, hvordan det føltes at leve i et land med økonomisk vækst. Hvor naboen drømmer om en bedre verden for sine børn. Jeg tvivler imidlertid på, at problemet bare er overregulering, bureaukratisering af finanssektoren og høje ydelser
October 15, 2019
Wow! A really well-balanced and informative overview of the historical economics of America. Definitely recommend it if this is a topic you’re interested in.
November 19, 2018
Only a very small number of people are going to like this book. Funny enough, there really aren't many surveys of American economic history written for laypeople, so comparisons aren't going to do much good. But the book is choppy, at times contradictory (praising intellectual property in the beginning as a cause for American economic strength, and then calling it a cause of American productivity decline in the current age - or of praising Japanese protectionism while almost everywhere else cursing it), and at least once wrong (about where HAL 9000's name came from).
The central thesis is that America became strong from a strong adherence to Schumpeter's idea of Creative Destruction: that by letting firms fail new, better firms grow. There is ample evidence for this, and the book does well enough when arguing along these lines, which it does with nuanxe until the recent era.
The wheels kind of fall apart at the end, when the author begins sounding like a very Old Man Yells At Cloud, when they start complaining about kids selling lemonade and bake sales, which feels very different than the cool, calculated style of the economic policy or, say, Andrew Jackson.
Greenspan has no answers, and one might be tempted to forget that he was at the helm until right before the Great Recession, so any forecasting he makes should be done with that in mind.
The central thesis is that America became strong from a strong adherence to Schumpeter's idea of Creative Destruction: that by letting firms fail new, better firms grow. There is ample evidence for this, and the book does well enough when arguing along these lines, which it does with nuanxe until the recent era.
The wheels kind of fall apart at the end, when the author begins sounding like a very Old Man Yells At Cloud, when they start complaining about kids selling lemonade and bake sales, which feels very different than the cool, calculated style of the economic policy or, say, Andrew Jackson.
Greenspan has no answers, and one might be tempted to forget that he was at the helm until right before the Great Recession, so any forecasting he makes should be done with that in mind.
January 10, 2019
Excellent book about the history of Capitalism in America. The title may lead you to believe that this will be a very dry read, and that perhaps you would need a degree in economics to understand what is being said. However, Greenspan does a very good job of presenting the material in a way that the layman can understand. It is basically a history of our country from the American Revolution to present day America, told from the perspective of capitalism. He focuses a great deal on the concept of creative destruction, whereby the creativity and ingenuity to create new and improved ideas and methods ultimately leads to the destruction of the old ways. Examples would be electric lighting replacing gas lamps, and the automobile replacing the horse and buggy. Greenspan also discusses the political fallout of these changes in society. Overall, a very interesting and thought provoking read.
January 17, 2023
The sections at the end about Silicon Valley were superb. It couldn't cover COVID of course because it was published before it, but the conclusion/some stuff toward the end highlighted some systemic weaknesses of the mature American economy that were exacerbated by COVID mitigation. Recommended to anyone who enjoys an audiobook reader that sounds like (but isn't) Tom Hanks and to anyone who enjoys history and economic analysis. The political nature of economic analysis wasn't overdone. This book is definitely a bit right of center, but it definitely qualifies as centrist.
August 1, 2019
I applaud the sentiment behind this book. The authors recognize that capitalism and free enterprise are becoming increasingly unpopular in the US--these days, neither major political party embraces the merits of economic dynamism and limited, smart government, and there is no major voice arguing against central planning. So it would be great if someone could push back on current trends. They do have some great lines: "America prospered in large part because it accepted that destruction is the price for creation" (390). That's true, and important!
However, I don't think this book will do the trick. It's interesting as an economic history--drawing mostly on existing work (What Hath God Wrought, The Republic for Which It Stands, Robert Gordon's book)--and in that respect it may be a useful one-volume story of the American economy. I enjoyed reading it. But the book is flawed in several ways.
My biggest complaint is simply that the book doesn't meet basic standards of academic writing. The authors make a lot of claims without supporting footnotes. They show a lot of figures without source notes. Frankly, that is unacceptable--not because I don't trust the authors, but because readers need to know where you're getting your data and facts. More broadly, the book reads like a very long op-ed. It's heavy on normative claims, often without a lot of accompanying argument.
My other complaint is about the authors' prescription for current American problems. In chapter 12, "America's fading dynamism," the authors recite the standard list (at least among economists) of current economic trends: declining rates of business entry (though this is more nuanced than the authors suggest), a declining pace of job and worker flows, an apparent decline in upward inter-generational upward mobility, weak public investment in infrastructure, increasing industry concentration, "deaths of despair", "stagnating" high school completion rates, increasing hostility toward immigrants including critical high-skill immigrants, and of course the productivity slowdown. These are all important issues on which researchers and (some) policymakers are intensely focused. They are complicated. These authors think they have the answer:
"So why is the country stagnating? The most important reason is the growth of productivity-suppressing entitlements" (404).
This is just absurd. The entitlement situation is a crisis to be sure. But to argue that it explains all of the many patterns listed above is just laughably dumb; and the authors provide no serious argument linking these issues. So while I am definitely here for the anti-old-age-entitlements screed that follows page 404--we *do* have a massive old-age entitlement problem--I think the authors are irresponsible to tell people they've found the simple solution to some really difficult questions. If we solve the entitlement problem, I don't expect the other problems to magically go away.
So the book left me pretty unsatisfied, even though I enjoyed going through it. It peddles easy solutions to big problems. And it has a tone and approach that is not going to persuade many people who aren't already persuaded of the merits of--yes I'll say it--neoliberalism. So it's a missed opportunity.
However, I don't think this book will do the trick. It's interesting as an economic history--drawing mostly on existing work (What Hath God Wrought, The Republic for Which It Stands, Robert Gordon's book)--and in that respect it may be a useful one-volume story of the American economy. I enjoyed reading it. But the book is flawed in several ways.
My biggest complaint is simply that the book doesn't meet basic standards of academic writing. The authors make a lot of claims without supporting footnotes. They show a lot of figures without source notes. Frankly, that is unacceptable--not because I don't trust the authors, but because readers need to know where you're getting your data and facts. More broadly, the book reads like a very long op-ed. It's heavy on normative claims, often without a lot of accompanying argument.
My other complaint is about the authors' prescription for current American problems. In chapter 12, "America's fading dynamism," the authors recite the standard list (at least among economists) of current economic trends: declining rates of business entry (though this is more nuanced than the authors suggest), a declining pace of job and worker flows, an apparent decline in upward inter-generational upward mobility, weak public investment in infrastructure, increasing industry concentration, "deaths of despair", "stagnating" high school completion rates, increasing hostility toward immigrants including critical high-skill immigrants, and of course the productivity slowdown. These are all important issues on which researchers and (some) policymakers are intensely focused. They are complicated. These authors think they have the answer:
"So why is the country stagnating? The most important reason is the growth of productivity-suppressing entitlements" (404).
This is just absurd. The entitlement situation is a crisis to be sure. But to argue that it explains all of the many patterns listed above is just laughably dumb; and the authors provide no serious argument linking these issues. So while I am definitely here for the anti-old-age-entitlements screed that follows page 404--we *do* have a massive old-age entitlement problem--I think the authors are irresponsible to tell people they've found the simple solution to some really difficult questions. If we solve the entitlement problem, I don't expect the other problems to magically go away.
So the book left me pretty unsatisfied, even though I enjoyed going through it. It peddles easy solutions to big problems. And it has a tone and approach that is not going to persuade many people who aren't already persuaded of the merits of--yes I'll say it--neoliberalism. So it's a missed opportunity.
April 23, 2025
This book took me > 4 months to read because I didn't know anything about any of this and so I kept going to Claude to ask it more questions about a certain chapter and then that would lead me down a rabbit hole to a part of American history or a financial concept I didn't know about, and on and on.
Since the authors compress *all* of American economic history into just 450 pages - a length that isn't short, per se, but for the topic it's covering it's pretty concise - they move pretty quickly, and so that added to me needing-to-ask-Claude-about-every-other-thing-ness. This made my experience a tad frustrating, unlike if I'd just read the book start to end without looking anything up, in which case I would've finished it in less than a month but would've also retained next to nothing. Now I at least know what "Keynesian" means.
But the book is very well written, it's not just a string of Wikipedia articles, the authors do have their own opinions on things but manage to state things pretty objectively. This was my first economics-related book I've ever read and so there were a lot of growing pains. The funniest part to me was that "Obama" was mentioned exactly once in the entire book. I want to re-read this in a few years when hopefully the facts within won't be as new, and then I'll feel much smarter.
Since the authors compress *all* of American economic history into just 450 pages - a length that isn't short, per se, but for the topic it's covering it's pretty concise - they move pretty quickly, and so that added to me needing-to-ask-Claude-about-every-other-thing-ness. This made my experience a tad frustrating, unlike if I'd just read the book start to end without looking anything up, in which case I would've finished it in less than a month but would've also retained next to nothing. Now I at least know what "Keynesian" means.
But the book is very well written, it's not just a string of Wikipedia articles, the authors do have their own opinions on things but manage to state things pretty objectively. This was my first economics-related book I've ever read and so there were a lot of growing pains. The funniest part to me was that "Obama" was mentioned exactly once in the entire book. I want to re-read this in a few years when hopefully the facts within won't be as new, and then I'll feel much smarter.
July 13, 2019
The book explains really well the factors needed for making capitalism a success. It is very readable with examples that everyone can understand. Never gets too technical. The first half of the book is pretty interesting in that it explains the policies that led to the rise of America as the superpower that we know. The second half which is the post war era is a tad too simplistic and misses some real issues and maybe an external(outside in) perspective. Having read 'A people's history of United States', I found this one lacking in a lot of social/economic issues that affect(ed) the rise/fall of capitalism.
March 31, 2020
A well described overview of the historical basis for our economic system in America. At points this reads more like a textbook, but occasionally yields succinct commentary on the implications of an era. My only criticism is Chairman Greenspan at times glosses over eras and doesn’t effectively communicate salient points. However, the limit of only 450 pages constrained him. I believe this serves as a fantastic primer for those who are interested in the broader history of Capitalism, and will inevitably result in more investigation of specific eras.
December 18, 2022
Alan Greenspan writes a neoliberal history of American capitalism. He hails creative destruction but comically his policy as Fed chairman to keep the Fed funds rate arbitrarily low did more than anything to keep zombie company’s afloat. Greenspan also takes no responsibility for creating the financial environment that lead to Great Financial Crisis.
June 24, 2019
Great history of creative destruction and the examples of titans in industry both successful and those failures. Good recap of the two proposed solutions (entitlement reform and banking changes) and the reasons for encouragement when looking at the work done in Sweden.
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October 11, 2020Fascinating historical review of the economic history of the US. The last sections on modern times seem less nuanced, especially given who the author is & their role and influence over the subject at hand.
October 16, 2020
I know it's in the title, but reading this kept making me mad that it was only isolated to the American experience when the real thing about capitalism is how global it is. Maybe I just wasn't the audience.
March 17, 2021
this is excellent. he traces the history of the rise of the american economy with interesting statistics all the way to 2018 with interesting insights into both historical events and, in the final chapter, issues that are very current.
September 25, 2019
Thorough treatment of the subject and it ends on a semi-hopeful note.
I would recommend this to anyone looking for a non-technical history of capitalism. The authors do a great job tying together the underlying principles that govern the threats to growth and prosperity that now exist in the US market and society in general.
I would recommend this to anyone looking for a non-technical history of capitalism. The authors do a great job tying together the underlying principles that govern the threats to growth and prosperity that now exist in the US market and society in general.
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