Review: Ages of American Capitalism

Ages of American Capitalism: A History of the United States, Jonathan Levy. New York: Random House, (Forthcoming, April 20,) 2021.

Summary: An economic history of the United States, dividing the history into ages of commerce, capital, control, and chaos.

I received an early e-galley of this book and by the time I worked through this massive tome, I thought it would be in print. Perhaps because of publishing delays, it won’t be out until April 20 of next year. If you want to read a history of the United States from an economic perspective, pre-order this book now.

Jonathan Levy covers the period from 1660 up until the present. He divides this history up into four ages. If you cannot remember all the economic developments, charts, booms and recessions, you need to remember just four words: commerce, capital, control, chaos.

The Age of Commerce spans the period of 1660 to 1860. The focus of this period, from the early colonies to the election of Lincoln focuses on trade, often the surplus of household economies exchanged for other needed commodities. One particular feature of American commerce was the “portable capital” of slavery, creating booms of sugar, tobacco, and cotton. One of the critical questions of this period was whether Hamilton’s centralized banking-fueled economy or Jefferson’s agrarian Empire of Liberty would prevail. Northern and Southern versions of commerce, the beginnings of an industrial society in the northeast and old northwest, and the slave economy of the south, laid the groundwork for the divisions leading up to the Civil War.

The Age of Capital spans the period from 1860 to 1932. The Civil War spelled the end of slave capital and led to a new period of industrial capital, first in the explosive growth of railroads, and then the illiquid capital of industrial production. All of this was made possible by the use of fossil fuels. One of the most fascinating chapters in this section, that illustrates the fusion of all these factors, is that on “Fordism.” The age was marked by cycles of boom and bust. A return to the gold standard in the 1920’s resulted first in a great boom, and then the greatest bust, the beginning of the Great Depression.

The inauguration of Franklin D. Roosevelt also opened The Age of Control. Levy delimits this as the years of 1932 until 1980, ending with the economic shocks of the late 1970’s. Levy uses the language of “control” because that was the focus of Roosevelt’s New Deal policies. The critical thing was to deploy capital, employing breadwinners through infrastructure development programs, and providing income security through Social Security. Ultimately the war economy ended the depression as government funds were invested in war production. This was followed by the consumerism of the 1950’s, a fascinating chapter on the development of the post-war economy into which I was born. That began to unravel in the late 1960’s and early 1970’s, particularly as OPEC controlled the price of oil at high levels, triggering the painful combination of high inflation and high unemployment we came to know as “stagflation.”

From 1980 to the present is Jonathan Levy’s The Age of Chaos. Things started with the “Volcker Shock,” a policy of high interest rates to bring down inflation (we bought our first house with the help of a determined realtor in this crazy period). Many of the promises of Reagan never materialized but the value of the dollar soared. Income growth shifted from labor to owners of property, whether real estate or stocks, an economy built less on production than speculation and an increasing disparity between laborers and those in the service economy, and investors. Home ownership was encouraged, with the granting of increasingly risky mortgages, bundled into investment instruments guaranteed by the big investment houses. In 2008 it all came crashing down, only to be put back together in the Obama administration with assets continuing to grow in value until the pandemic.

We are left wondering what will come next. While assets seem to grow, many see little growth in income. We face what may be an existential necessity to transition from the fossil-fueled economy. Levy believes we are at a place of reckoning. Will we keep repeating history, especially the recent history of Chaos? He proposes that this history is important to know as we determine our economic course in the future. I also think it critical in making sense of our past and how we’ve gotten to this place. Understanding the role of economics in historical events like the tensions leading to the civil war raises a question about the contemporary fault lines in our society. How do we make sense of our urban, suburban, and rural economies? Is this at all connected to our islands of blue in seas of red in so many parts of the country? I’m not persuaded that economics are the only factor but I also wonder if we cannot understand our history and contemporary social fabric without it. I’ve not seen anyone do quite what this book does, and the author has a good case for the importance of what he has done.

________________________________

Disclosure of Material Connection: I received a complimentary review copy of this book from the publisher via Netgalley. The opinions I have expressed are my own.

Review: Just Capitalism

just-capitalism

Just Capitalism Brent Waters. Louisville: Westminster John Knox Press, 2016.

Summary: A theological defense of capitalism and particularly economic globalization as the best means, through exchange, of providing an preferential option for the poor and promoting human flourishing, albeit shaped by different goals for exchange, and the promotion of human community.

It is not uncommon in theological discussions of capitalism to be intensely critical of capitalist economics as exploitative of the poor, the environment, and perpetuating and intensifying economic inequities in the world. Brent Waters has witnessed this trend, and without denying excesses, mounts a defense of capitalism theologically as promoting economic exchanges that foster economic growth for the poor, and thus their flourishing as human beings. Far from considering globalization a negative force, he defends it. In his Preface, he writes:

“Why I am defending globalization, then, is based primarily on two arguments. First, the world is part of God’s good creation and as such is the source of abundant material goods that may be enjoyed by humans as God’s creatures. These goods, however, are not at hand but are latent and must be developed. Humans must develop the potential not only to meet their most basic needs and wants but also to more fully enjoy and share the goods of creation as part of their calling to exercise God’s mandate of limited dominion and stewardship. At present, global marketbased exchange offers the best means for both developing and distributing these material goods.

“Second, at present, globalization offers the most realistic and promising way of exercising a preferential option for the poor. The liberalization of trade and capital investment over the past two decades has helped lift around a billion people out of dire poverty and has created a fledgling global middle class. With increased globalization these trends cannot only be sustained but also enlarged and strengthened. In short, the best way to help the poor, to love them, in part, as neighbors, is to enable them to participate more fully in new and expanding global markets.”

This quote is a précis of the argument the author makes in the first half of the book for exchange being foundational to economic growth and human flourishing, and that the creative destruction and market state conditions fostered by globalization actually serve to advance overall economic growth, and indeed provide ways for the Holy Spirit to work in the world in new ways as new economic relationships are established.

The second half of the book addresses some of the critiques of capitalism. For one thing, exchange alone cannot make us happy, but is crucial at some level to provide the conditions wherein humans can consider the sources of happiness. Human exchange best occurs not in depersonalized, detached situations but in exchange that recognizes our relatedness as human beings. This influences the role we give to political orders within the fabric of civil society. Most significantly, the political order should provide and protect the freedoms of exchange, expression, and conscience fundamental to our human dignity.

There was much here that I could affirm. I think for example of the ways that relief efforts often undermine local economies when purchasing services from local concerns could strengthen the economy in many instances. Exchange, not just redistribution of resources fosters development. So many aid programs have been depersonalizing and ignored the fundamental importance of productive work as an expression of human dignity and as a means of obtaining a living.

There were two areas where I found myself taking issue with the author. One was in the final chapter on stewardship, where he makes a case for putting environmental concerns in abeyance so that economic development can continue to occur among the developing nations. I question the bifurcation of economic and environmental concerns, particularly because the changes already occurring most dramatically affect the poorest peoples of the world disproportionately. Here, I would commend Pope Francis’s Laudato Si because it unites under an ethic of care, our concern for both the poor and the creation, rather than choosing one or the other. It is significant that Waters, in making his case downplays the evidence of climate change and plays up the threat of economic reverses with efforts to address climate change.

What troubles me is why these two must be set at odds with each other. Waters may have a point in not burdening the poorest countries with addressing climate change. But I would have liked to see him further pursue the responsibility of wealthy countries to use their greater affluence to shift to cleaner forms of energy and more efficient patterns of consumption. This could foster “greener technologies” by bearing the upfront costs so that all humanity may eventually utilize these more cheaply. This would seem to be the kind of koinonia that he advocates on a global scale.

I also saw little here of a discussion of capital accumulation that Thomas Piketty argues in Capital has increased the wealth and poverty disparities in the world. This disparity results from accumulation of wealth not from exchange of goods and services but non-labor income sources like stocks, bonds, real estate, and the like. Beyond acknowledging the importance of capital investment, he does not discuss the problem of disparities threatening the development of a middle class which he contends to be important.

Still, I value the contribution Waters makes to the discussion of a theology of economics. Many discussions I see either simply commend an “opting out” of creating local economies while the world goes its merry way, or schemes that argue for aid and redistribution in ways that undercut healthy mechanisms of exchange. Also, his argument for globalization as providing a preferential option for the poor challenges the protectionist tendencies of the affluent countries, whose “poor” are better off than much of the world. Free trade rather than aid may be a better option, despite the displacements it may cause for some, painful as these are.

I hope Waters will continue to work on this theology of economics. His dissent from the prevailing consensus is important and needs to be developed more than this moderate length work permits.

______________________________

Disclosure of Material Connection: I received this book free from the publisher via Netgalley. I was not required to write a positive review. The opinions I have expressed are my own.