Review: Ages of American Capitalism

/ Eric Primm

One of my idiosyncracies is that I’m interested in reading about everything. I love learning about history, and I love learning about economics. For a while, I considered going back to school to get a Ph.D. in either or both subjects. (In addition to the literature, French, and philosophy Ph.D.’s that I’d like.) But life moved on, and I didn’t make the career switch. Still history and economic books have a particular ability to lure me into waters that are over my head. I have Piketty’s Capital sitting on my shelf, started, set aside, restarted, re-set aside. The reason that I love these books is because I’m looking for how the world got to the point it’s at. For example, how did conservatives come to worship at the altar of capitalism? I believe that the study of history can tell us a lot about today. If you agree, then let me recommend Jonathan Levy’s Ages of American Capitalism. This book covers the economic history of the U.S. from the colonial era right up to the Great Recession of 2008. This book challenged my previous studies while remaining accessible to be read for fun. Levy’s balanced analysis looks at how capitalism evolved with the changing American times.

Disclaimer: The publisher provided an eARC of this book in exchange for a fair and honest review. All opinions are mine and mine alone.

© Primmlife.com 2021

TL;DR

Ages of American Capitalism takes readers on a tour of U.S. economic history. From the colonial period to Reconstruction to World War II to the stagflation of the 70s, Jonathan Levy analyzes all of these eras through the lens of a changing capitalism. Highly recommended to history and economics buffs.

Review: Ages of American Capitalism by Jonathan Levy
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From the Publisher

A leading economic historian traces the evolution of American capitalism from the colonial era to the present—and argues that we’ve reached a turning point that will define the era ahead.

“The best one-volume history of American capitalism . . . It is impossible to understand the United States without understanding its economic history. This book, from one of the nation’s foremost historians of capitalism, brings that important and endlessly fascinating story to life.”—Sven Beckert, author of Empire of Cotton

Today, in the midst of a new economic crisis and severe political discord, the nature of capitalism in United States is at a crossroads. Since the market crash and Great Recession of 2008, historian Jonathan Levy has been teaching a course to help his students understand everything that had happened to reach that disaster and the current state of the economy, but in doing so he discovered something more fundamental about American history. Now, in an ambitious single-volume history of the United States, he reveals how, from the beginning of U.S. history to the present, capitalism in America has evolved through four distinct ages and how the country’s economic evolution is inseparable from the nature of American life itself.

The Age of Commerce spans the colonial era through the outbreak of the Civil War, a period of history in which economic growth and output largely depended on enslaved labor and was limited by what could be drawn from the land and where it could be traded. The Age of Capital traces the impact of the first major leap in economic development following the Civil War: the industrial revolution, when capitalists set capital down in factories to produce commercial goods, fueled by labor moving into cities. But investments in the new industrial economy led to great volatility, most dramatically with the onset of the Great Depression in 1929. The Depression immediately sparked the Age of Control, when the government took on a more active role in the economy, first trying to jump-start it and then funding military production during World War II. Skepticism of government intervention in the Cold War combined with recession and stagflation in the 1970s led to a crisis of industrial capitalism and the withdrawal of political will for regulation. In the Age of Chaos that followed, the combination of deregulation and the growth of the finance industry created a booming economy for some but also striking inequalities and a lack of oversight that led directly to the crash of 2008.

In Ages of American Capitalism, Jonathan Levy proves that, contrary to political dogma, capitalism in the United States has never been just one thing. Instead, it has morphed throughout the country’s history—and it’s likely changing again right now.

A leading economic historian traces the evolution of American capitalism from the colonial era to the present—and argues that we’ve reached a turning point that will define the era ahead.

“The best one-volume history of American capitalism . . . It is impossible to understand the United States without understanding its economic history. This book, from one of the nation’s foremost historians of capitalism, brings that important and endlessly fascinating story to life.”—Sven Beckert, author of Empire of Cotton

Today, in the midst of a new economic crisis and severe political discord, the nature of capitalism in United States is at a crossroads. Since the market crash and Great Recession of 2008, historian Jonathan Levy has been teaching a course to help his students understand everything that had happened to reach that disaster and the current state of the economy, but in doing so he discovered something more fundamental about American history. Now, in an ambitious single-volume history of the United States, he reveals how, from the beginning of U.S. history to the present, capitalism in America has evolved through four distinct ages and how the country’s economic evolution is inseparable from the nature of American life itself.

The Age of Commerce spans the colonial era through the outbreak of the Civil War, a period of history in which economic growth and output largely depended on enslaved labor and was limited by what could be drawn from the land and where it could be traded. The Age of Capital traces the impact of the first major leap in economic development following the Civil War: the industrial revolution, when capitalists set capital down in factories to produce commercial goods, fueled by labor moving into cities. But investments in the new industrial economy led to great volatility, most dramatically with the onset of the Great Depression in 1929. The Depression immediately sparked the Age of Control, when the government took on a more active role in the economy, first trying to jump-start it and then funding military production during World War II. Skepticism of government intervention in the Cold War combined with recession and stagflation in the 1970s led to a crisis of industrial capitalism and the withdrawal of political will for regulation. In the Age of Chaos that followed, the combination of deregulation and the growth of the finance industry created a booming economy for some but also striking inequalities and a lack of oversight that led directly to the crash of 2008.

In Ages of American Capitalism, Jonathan Levy proves that, contrary to political dogma, capitalism in the United States has never been just one thing. Instead, it has morphed throughout the country’s history—and it’s likely changing again right now.

Review: Ages of American Capitalism by Jonathan Levy

Ages of American Capitalism covers a lot of ground; Levy starts with colonial policies and ends with the Great Recession of 2008. In the afterword, he tells us a little of his thoughts on the nation of the 2020s. Starting in the Age of Commerce, Levy shows us how English polices shaped the colonies and their world. While he is objective, he doesn’t gloss over the horrors of that era. Levy discusses how colonials used John Locke’s philosophy as justification to steal land from natives. But the point of these early chapters is to show how capitalism emerged from British mercantilism in the U.S. Levy returns again and again to the work of Adam Smith to show “Smithian gains.” This age was brought to an end by the “political destruction of enslaved capital,” i.e. the end of the Civil War. This led to the Age of Capital, an emergence of industry. The government encouraged private industrial development, whether through railroad subsidies or protection tariffs. This age would be see a rise in productivity and a speculative boom-and-bust credit cycle. It also saw the rise of populism and nearly toppled the gold standard. Sadly, this age also saw the passing of the last significant third political party, the People’s Party. Detroit shows its glory days here as the book covers the rise of mass manufacturing. But this age ends with the Great Depression. Franklin Delano Roosevelt ushers in the Age of Control, where government comes to the rescue. The boom and bust cycle got stuck in a bust for longer than expected. Everyone, from investors to your uncle Bob, chose a perceived safety of possession as opposed to the long term benefits of investment. The New Deal sought to control the economy by reducing the volatility of capitalism and finding employment for men. But World War II came along to eliminate U.S. unemployment through massive government spending. Private contractors got rich off the government’s money then and still do, now. Consumerism roared through the country, achieving a golden age. But no golden age lasts. Profits dropped; wages stagnated; and Nixon took the nation off the gold standard right as OPEC initiated its embargo. The Age of Control ended in an inflationary crisis as capital morphed again. Finally, the Age of Chaos descends. Paul Volcker decides to raise interest rates, creating a shock that catapulted the Fed to the top of economic policy making. In the Age of Chaos, capital evolved into the short term asset appreciation focused thing we all know and love. Clinton’s New Economy leads to the Great Moderation which leads to the Great Recession. Tasked with fixing the great recession, the Obama administration returned capital to an economic continuity, except, as we now know, the return to a booming economy left many people out. This created a chaos that allowed a candidate like Trump to be elected, though he never delivered any help to those left out by Obama’s economy. Will Biden’s administration enact policies to end the Age of Chaos? Or are we stuck in a new cycle of small booms and mega-busts?

Jonathan Levy decided to portion his book into four different eras of U.S. economy while sticking to his central study on capital and capitalism. The Age of Commerce, the Age of Capital, the Age of Control, and the Age of Chaos are titles for a truly epic fantasy, and this economic history is truly epic. It weighs in at close to a 1,000 pages with notes. Frankly, Levy could have broken this up into four books titled to their corresponding age, but the overall thesis would have been lost, I think.

I think this is a very even handed yet detailed examination of the economic history of the U.S. I identified a number of things which I could debate with friends on either side of the political spectrum. Though I have no doubt that both sides of the political spectrum will claim this book leans to far in the other direction, I think it’s a fairly centrist book. Levy excels at letting the reader come to the same conclusions as him; he doesn’t beat us over the head with his opinion.

Huge Book

Ages of American Capitalism is a huge book, not just in terms of size but in terms of scope and in terms of ideas. Throughout the book, the reader is shown that capitalism has never been just one thing in the U.S. It has evolved and changed over time, responding to changes in society, politics, and the crisis of the day. Capitalism adapts as needed, but from this book, it seems as if each adaptation shortens the view of capitalism. I think. The reality is that I’ll need to read this book again to understand it better. Part of me wants to buy in paper form so that I can write marginalia to ensure Levy’s lessons stick in my head, but I prefer the electronic version for highlighting. There is so much to learn in this book that a single read through isn’t enough.

Prior to each section, Levy put a short introduction to the chapters that will cover the next age. These introductions are good summaries, and I recommend reading them before and after the section. Before will prepare you for what’s coming; after will help you remember what you read.

The Populists

Ever since reading Thomas Frank’s The People, No, I’ve been fascinated by the populist movement of the late 1800’s. Levy includes a chapter on them, and I loved it. Levy describes the lessons we should draw from this failed party. Though it didn’t gain the White House and inevitably collapsed, it affected the politics of the time in lasting ways. Leaving the gold standard, being anti-monopoly, being wary of corporate power, and favorable laws for incorporating trade unions are all legacies of the populist movement.

Levy does an excellent job analyzing the party with both the good and the bad of populism. It is anti-inequality yet is attractive to racists. The Populists were a varied group, and Levy captures the various dichotomies that populism entails.

Notes

One thing to note, Dr. Levy includes references to papers he’s written and published elsewhere. I didn’t check out those papers to see what other references are there. I think this matters if one were to use part of the book to debate. I like to base my arguments off more than one authority because otherwise I’m committing the appeal to authority error. Again, I don’t see anything wrong with this practice of citing your own work; I just didn’t read the papers to see how they influenced this book. If you did, please, let me know in the comments if reading the papers adds to this reading experience.

Conclusion

Jonathan Levy’s Ages of American Capitalism is a big book full of huge ideas written to be accessible to professionals and hobbyists like me. Levy succeeded in showing how capitalism changed and evolved as American society needed it to. Ages of American Capitalism connects the dots from the early days of U.S. colonies to the Great Recession of 2008 in elegant yet thoughtful ways.

Ages of American Capitalism by Jonathan Levy is available from Random House on April 20th, 2021.

© Primmlife.com 2021

8 out of 10!