Review by New York Times Review
At age 92, Alan Greenspan remains a towering figure in American finance. He was the second-longest serving chairman of the Federal Reserve (after William McChesney Martin). Dubbed a "rock star" by The Economist, Greenspan achieved an unprecedented level of celebrity for a Fed chairman as stocks soared to record levels in the 1990s, and then notoriety, as his legacy was undermined by the Great Recession that began in 2008, less than two years after he left office. Greenspan was appointed by Ronald Reagan in 1987 and reappointed by three successive presidents from both parties. That a lifelong champion of free markets and an early acolyte of the objectivist author and philosopher Ayn Rand could so successfully straddle the political spectrum for so long is a testament to the bipartisan free-market ideology that followed the end of the Cold War. At the time it all seemed like the ultimate triumph of democratic capitalism. Now, 10 years after the collapse of Lehman Brothers provoked a global financial panic and led to what Greenspan refers to as "the great stagnation," the selfcongratulation seems to have been premature. Both parties have largely repudiated Greenspan's precepts, with Republicans lurching toward protectionism and a nativist hostility for globalization and Democrats lurching toward something he would surely find equally repugnant: income redistribution, ever-expanding government entitlements and identity politics. Less a conventional history than an extended polemic, "Capitalism in America: A History," by Greenspan and Adrian Wooldridge, a columnist and editor for The Economist, explores and ultimately celebrates the Austrian economist Joseph Schumpeter's concept of "creative destruction," which the authors describe as a "perennial gale" that "uproots businesses - and lives - but that, in the process, creates a more productive economy." While this approach risks oversimplifying centuries of American economic history, it provides a useful lens for analyzing America's current polarization and for understanding the centrifugal forces that have given rise to a President Trump, on the right, or a Bernie Sanders on the left. Other than a few paragraphs arguing the case that the Fed's easy money policy had little to no impact on the housing bubble that led to the Great Recession, "Capitalism in America" has almost nothing to say about Greenspan's own role in recent economic history, and he offers no defense of his tenure as Fed chairman. But that isn't his purpose here. "Capitalism in America" is Greenspan and Wooldridge's plea to re-embrace America's long-held capitalist traditions and entrepreneurial culture in order to rescue the country from its current "fading dynamism." While "Capitalism in America" begins with the colonial era, when Americans were already enjoying "the world's fastest growth rate," Greenspan and Wooldridge hit their narrative stride and ideological sweet spot when they reach the late-19thcentury "Age of Giants," a name they prefer to the prevailing "Robber Barons," who may have been rich but, as self-made men, were neither robbers nor hereditary barons. In the authors' approving view, men like the banker John Pierpont Morgan, the oil baron John D. Rockefeller and the steel magnate Andrew Carnegie, all born within a few years of one another in the 1830s, were "giants of energy and ambition" who "exercised more power than anybody other than kings or generals had exercised before." These men (and they were all men) are "heroes of creative destruction" because they "helped to produce a massive improvement in living standards for all." That they also produced social and economic upheaval for many is a small price to pay, the authors contend. The rise of their great corporations, not to mention the industries they helped build and finance, from railroads to autos to retail chains like Sears, Roebuck, displaced millions of workers and small-business owners who were rendered obsolete. Cyrus McCormack's threshing machine displaced a quarter of the world's agricultural workers. "People seldom achieve great things without being willing to ride roughshod over the opposition," the authors note. Not surprisingly, these "giants" attracted popular hostility and resentment - Teddy Roosevelt called them "malefactors of great wealth." Their success and attendant wealth unleashed a populist backlash. Williams Jennings Bryan campaigned against Wall Street and its "cross of gold." Congress passed the first antitrust laws. The first federal income tax paved the way to income redistribution. History's harsh judgment of the era (which culminated in the 1929 stock market crash and ensuing Great Depression) suggests why creative destruction has had trouble gaining much of a following. Like the Robber Barons, today's drivers of creative destruction, technology and internet entrepreneurs, "are seldom the easiest of heroes, nor the nicest," the authors note. "They will sacrifice anything, from their own peace of mind to the lives of those around them, to build a business empire and then protect that business empire from destruction." Such people are prone "to what the Norwegians call Stormannsgalskap, or the 'madness of great men.' " Tesla's Elon Musk, who merits several approving mentions, comes to mind. The disruptive forces they unleash generate "unease: the fiercer the gale the greater the unease." And not all destruction, it should be said, is creative. In a nod to the exotic derivatives and mortgage-backed securities that led to the Great Recession (and went largely undetected by Greenspan's Fed), Greenspan and Wooldridge acknowledge that "creative destruction can sometimes be all destruction and no creation." The popular reaction is typically a wellintentioned but misguided effort to preserve the status quo. "People link arms to protect threatened jobs and save dying industries. They denounce capitalists for their ruthless greed. The result is stagnation: In trying to tame the creative destruction, for example by preserving jobs or keeping factories open, they end up killing it," the authors contend. In their view, America today is already well along that path to stagnation. "Capitalism in America" barely mentions Trump beyond condemning his "dangerous" trade policies and warning about the fiscal recklessness of his tax cuts. But the entire book is an indictment of Trump's stands on immigration and protectionism and his attempts to resurrect fading mining and industrial concerns - attempts that, as "Capitalism in America" shows repeatedly, are almost surely doomed. At the same time, Greenspan's admiration for the rugged individualists who populate the novels of Ayn Rand (who merits a nod in this history) and the frontier spirit that animated America's early development shows no sign of weakening as Greenspan has aged. He and Wooldridge lament that Americans are "losing the rugged pioneering spirit" that once defined them and mock the "trigger warnings" and "safe spaces" that now obsess academia. The authors quote Winston Churchill: "We have not journeyed across the centuries, across the oceans, across the mountains, across the prairies, because we are made of sugar candy." But now, they conclude, "sugar candy people are everywhere." Their prescription for American renewal - reining in entitlements, instituting fiscal responsibility and limited government, deregulating, focusing on education and opportunity, and above all fostering a fierceness in the face of creative destruction - was Republican orthodoxy not so long ago. Before the Great Recession it was embraced by most Democrats as well, and more recently by President Bill Clinton, the recipient of glowing praise in these pages. No longer. "Capitalism in America," in both its interpretation of economic history and its recipe for revival, is likely to offend the dominant Trump wing of the Republican Party and the resurgent left among Democrats. It's not clear who, if anyone, will pick up the Greenspan torch. America is now "trapped in an iron cage of its own making," the authors contend. But "we have shown that America has all the keys that it needs to open the cage. The great question is whether it has the political will to turn them." Uprooting lives, but creating a more productive economy. james B. stewart writes Common Sense, a weekly business column, for The Times and is the author of nine books, including "Den of Thieves" and "DisneyWar."
Copyright (c) The New York Times Company [July 21, 2019]
Review by Publisher's Weekly Review
Former Federal Reserve chairman Greenspan and Economist political editor Wooldridge set out to recount how the United States rose to become "the mightiest economy the world has ever seen" and explain the puzzling economic slowdown that has reared its head in the past decade. Unlike its Old World rivals, they write, America didn't just grow rich; it churned out innovation, embracing the Schumpeterian process of "creative destruction" and allowing entrepreneurial individuals to fulfill their potential in a society where hard work was prized, newcomers encouraged, and property rights safeguarded. The authors provide a predictably triumphalist reading of the growth of American capitalism, with progressive reformers described as in thrall to the "cult of government" and late-19th-century steel barons lauded as serving the public good. In conclusion, they recommend two fixes for our current economic woes: entitlements reform and more prudent reserves ratios at big banks in order to prevent another financial collapse. Consistently engaging and packed with fun facts (an 1870s guide to barbed wire listed 749 varieties of the fencing that won the West), the book speeds along at high velocity, pausing only to extol the virtues of American democracy and capitalism-which, for the authors, are essentially the same thing. This book will hold no surprises for those familiar with Greenspan's career. (Oct.) © Copyright PWxyz, LLC. All rights reserved.
(c) Copyright PWxyz, LLC. All rights reserved
Review by Library Journal Review
Two experts on the American economy, Greenspan (former chair, Federal Reserve; The Map and the Territory: Risk, Human Nature, and the Future of Forecasting) and Wooldridge (The Great Disruption: How Business Is Coping with Turbulent Times) join forces to provide illumination on the state of capitalism in our country today and the forces that have shaped it since our nation's formation. The authors examine the current state of our capitalist system and extend the book with some insights into how the United States might revitalize its flagging dynamism. The book looks at the people who have shaped our economy as well, with a focus on how these players contributed to the driving force of creative destruction, which the authors argue is a key component of productivity growth and innovation. They also cover some of the transformative economic drivers such as slavery and global trade policies. Narrator Ray Porter's voice and style are well suited for a book that demands close attention throughout, with a well-considered pace and voicing that is pleasant and does not distract from the story. The excellent content and production values keep listeners engaged. Audiences would benefit from downloading and printing the bonus materials, as they assist with understanding some of the more complex narrative portions. VERDICT Highly recommended for all public libraries. ["Although this collaborative project is fairly lengthy, the engaging writing style will appeal to many readers, especially those with a desire to under-stand better past events as well as readers seeking knowledge about how economists develop forecasts": LJ 10/1/18 starred review of the Penguin hc.]-Gretchen Pruett, New Braunfels P.L., TX © Copyright 2019. Library Journals LLC, a wholly owned subsidiary of Media Source, Inc. No redistribution permitted.
(c) Copyright Library Journals LLC, a wholly owned subsidiary of Media Source, Inc. No redistribution permitted.
Review by Kirkus Book Review
Everyone's favorite Randian economist explains the rise of American economic supremacy and worries for its passing.Former Federal Reserve chair Greenspan (The Map and the Territory: Risk, Human Nature, and the Future of Forecasting, 2013, etc.) teams up with Economist political editor Wooldridge (co-author: The Fourth Revolution: The Global Race to Reinvent the State, 2014, etc.) to chronicle the emergence of the United States from economic backwater to powerhouse, with its 5 percent of the world's population accounting for 25 percent of its GDP. By the authors' account, this rise has several key components, including diversity, equal opportunity to enter a marketplace with few barriers to entry, and an openness to contribution from just about everyonethe farmer's son Henry Ford, for instance, who toured the great slaughterhouses of Chicago and marveled at the carcasses moving through the saws and trimmers: "It was during a visit to one of these abattoirs that Henry Ford got the idea of the mass assembly line." Though of a libertarian bent, Greenspan and Wooldridge seemingly approve of public goods in the form of education, which, among other things, has long allowed the U.S. to be a "talent magnet" for entrepreneurially minded immigrants; now, events inspire them to decry "the current rise of nativism and populism." Rather more predictably, the authors lament the rise of regulation. "In the 1930s," they write, "Americans turned to government to save them from the instability of the market. In the 1980s, they turned to entrepreneurs to save them from the suffocation of government." The current regulation-heavy environment, coupled with lack of innovation and misguided efforts to place barriers on free trade, may lead to the emergence of rivals better attuned to the global market. Meanwhile, the authors foresee the beginnings of stagflation and the eventual economic decline of the once peerless U.S. market.Not without biases, but a smart and engaging look at the workings of the economic machine under various regimes, isolationist and internationalist alike. Copyright Kirkus Reviews, used with permission.
Copyright (c) Kirkus Reviews, used with permission.
