opens with claim that all American capitalism stems from the project of empire. specifically a seventeenth-century British empire crafted by “imperial statesmen, pious Christians, aristocratic lords, and gentlemen capitalists.” Levy writes: “English colonizers, with their prayer books, farm animals, and sea-worn nerves, brought the habit of capitalist commerce to North America in the seventeenth century.” for readers interested in Alexander Hamilton and/or the musical, chapter three situates Hamilton’s financial system in this narrative. chapter five reminds me of Levy’s first book, Freaks of Fortune: The Emerging World of Capitalism and Risk in America, which offers a history of the idea of risk, because Ages of American Capitalism’s chapter five, “Confidence Men” reintroduces a human element to high political-economic theory by unpacking the “moral sense” that men like Henry David Thoreau and P. T. Barnum sought within American capitalism. this 945-page monster traces capitalism in the United States, capitalism’s relationships with policy and morality, and how all of the above stems from an imperial drive

Ages of American Capitalism by Jonathan Levy is a thorough historical analysis of capitalism in the Americas. I was most struck by one of Levy's central theses around capitalism's predilection toward hoarding resources and capital and how this is often in direct conflict with the presupposed virtue of capitalism, mainly its efficiency. I would recommend that readers take this one slowly -- it's very academic in structure and can be hard to follow for readers who don't have a background in history or economics. The book is at its strongest when contextualized in each of its four subsections as one can easily get lost without a central thesis tying his or her thoughts together. Ultimately, I would recommend this book to readers who are interested in an in depth analysis of American capitalism but has a strong foundation in the subject area.

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

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.

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.

Ages of American Capitalism is a fascinating read about how American capitalism came to be. With lots of books out there that I would lump into the category of books about economics, I would categorize this as the history of economics, something that I don't see a lot of. I found the book to be informative, almost exhaustively so, but I also could see the approach the author took to make it readable by those who don't have a background in economics. I wouldn't necessarily pick this up as a primer--it's 1000 pages long and does use a quite a bit of jargon--but I would recommend this to anyone who has a basic understand of how our economic system works with curiosity for how it came to be.

No, I will not use this book in my classes or recommend it to students. It is just too dense and difficult for that. That is not to say it is a bad book. It packs an impressive amount of information and detail into its narrative. Clearly Levy has immense knowledge to share across a wide spectrum of areas. It is just too much for the average reader (I am pretty well educated and consider myself reasonably intelligent, but struggled to keep up with him and probably failed to do so multiple times while reading this book). It certainly gave me a lot to think about and provided some new perspectives.

I must admit, however, that while I have always subscribed to the theory that economics is a major factor driving our history, I do not believe it is the only factor and thus feel that Levy has over-stated (if not over-simplified) his case at times in this book.

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.

Writing an economic history of the United States is no small task. Many economists know too little history, and many historians know too little economics. As a result, economic histories often lapse into failure. Ages of American Capitalism: A History of the United States, by historian Jonathan Levy, falls into neither category. But I consider the book a colossal failure. I use colossal deliberately—coming in at around 900 pages including notes, it is not light reading.

Levy creates an interesting periodization of American economic history—The Age of Commerce (1660-1860), The Age of Capital (1860-1932), The Age of Control (1932-1980), and The Age of Chaos (1980-)—that fits rather well, although it is difficult to see “The Age of Chaos” referring to a period with capstones of the Ronald Reagan and Donald Trump presidencies and not cringe at the presentist political overtones.

Being a historian, Levy is no slave to modern economists’ focus on, as he explains it, “mathematical rigor that, precisely due to this virtue, does not make much room for other accounts of economic life—including historical accounts.” I could not agree more. Levy’s book covers topics in capitalism broadly, such as changing understandings of commerce, its societal impact, and ethics, and literary depictions of commercial society, with some eclectic vignettes examining figures such as P.T. Barnum. Levy is perceptive, and mostly does well inserting himself in the shoes of people in the story to understand and reasonably represent their position. But the book is often too eclectic in its look at American economic history to offer convincing theses, notwithstanding its length. Given Levy’s eclecticism, this review will be equally eclectic.

Without wading too deeply into what “capitalism” really means, the American economic system can be called capitalism, he says, because of “the centrality of capital to this form of economic life,” which is a reasonable first approximation.

Levy has three theses undergirding his work. According to Levy’s first thesis, it is important to understand that capital is not “a physical factor of production,” but a “process through which a legal asset is invested with pecuniary value” given “its capacity to yield a future pecuniary profit.” I won’t quibble with his definitions of capital and capitalism too much, as I have ammunition to spend elsewhere, but it generally fits the colloquial understanding of capital and capitalism, even if Levy too lightly discards the importance of understanding capital as a physical factor of production. Additionally, defining capital as a legal asset, and one that is invested with pecuniary value, is useful, as it distinguishes from, say, the Soviet economy, where capital is owned by the State, and where there is no capacity to yield a future pecuniary profit due to State ownership. And the focus on investment in a capitalist economy, along with the significance of money, credit, and finance, and so on, is sensible.

Levy also describes “pecuniary investment” as the first mover in capitalism; “[o]nly then may it become an instrument of production.” Even if true, we are never told: so what? But Levy seems to have forgotten his Crusoe economics. Capital goods can be created without pecuniary investment—indeed, even without money or trade, for capital goods can be something as simple as a fishing rod or a net that are not consumed themselves but are a means to increase production of goods that will be consumed, such as fish. But Levy’s definitions have assumed this away. It is both appropriate and necessary to recognize that “money, credit, and finance” have been “critical cogs in a capitalist economy,” without being part of the definition of capital or capitalism. Likewise, “expectations” need not be part of the definition of capital. Capital can be defined as a physical thing, while still having pecuniary value due to the expected yield. Capitalism need not be all these things for capitalism to encompass them all.

Levy’s second thesis emphasizes the profit-motive as a defining feature of capitalism, but he notes that history is not solely explained by the profit motive. True indeed. It explains a great deal, but the quest for pecuniary profits is only one aspect of human self-interest, which far more central. Envy, the quest for power, and so on, cannot be reduced to the quest for pecuniary profit alone, but they can be reduced to individuals’ understandings of their self-interest.

Lastly, Levy argues “The history of capitalism is a never-ending conflict between the short-term propensity to hoard and the long-term ability and inducement to invest. This conflict holds the key to explaining many of the dynamics of capitalism over time, including its periods of long-term economic development and growth, and its repeating booms and busts.” This thesis is why the book fundamentally disappoints. There are many familiar canards repeated, including that World War II ended the Great Depression, and the raison d’etre of every major financial panic was an abundance of short-term liquid speculation.

There is discussion of the impact of mercantilism on the American colonies, but it comes out far more favorable than it should. Mercantilism only “worked” to the extent that the colonies could ignore the system of British trade restrictions or when Britain was inherently the preferred trading partner. But Levy discusses the evolution of mercantilism rather favorably in the shift from the early concern with stockpiling gold and maintaining a favorable balance of trade to focusing more on protectionism of domestic concerns and restricting trade to Britain alone. Undoubtedly, when empires and nations are involved trade is rarely “free,” and there may have been many worse arrangements than British mercantilism under the circumstances. But that hardly answers whether “in the absence of mercantilist restrictions, the American colonies would have fared even better,” a question Levy simply dismisses.

We are presented with the typical dichotomy between Jefferson and Hamilton, and Hamilton’s vision was clearly superior in Levy’s telling. Implicitly, Levy favors Hamilton because Jefferson envisioned westward expansion, which involved both the territorial expansion of slavery along with the dispossession of natives (a double whammy). Explicitly, Hamilton’s vision presaged the “modern” public and private mixed economy of governmental infrastructure spending, banks and paper money, tariffs, and public debt. Jefferson merely favored free trade, and what does that have to do with modern prosperity, pray tell? Overall, the narrative is designed to make it hard to like Jefferson, and hard to dislike Hamilton (other than that Hamilton distrusted democracy). Painting Hamilton as the anti-slavery founder and Jefferson as the slavery founder is particularly ironic today, given new evidence that Hamilton in fact bought and sold slaves. And for all Hamilton’s presaging the commercial future of the nation, Jefferson clearly foresaw the future of the nation under Hamiltonian policy: “a litany of British horrors” like “financial oligarchy, government patronage, parasitical bureaucracy, heavy taxation, a standing army and navy, [and] wars.”

On the Civil War, Levy discusses the significant disadvantages the South faced in areas like manpower, industrial production, and capital, and attributes the North’s success partly to its government-directed mobilization and monetary policy, including going off of gold. But if anything, given that the North was more restrained than the South in these respects, i.e. it intervened less, inflated less, etc., its success can hardly be attributed to his pet policies. He briefly discusses corruption pertaining to railroads and the Civil War—saying “[a] highly functional political economy of corruption helped win the win,” although we’re not told exactly how, or whether this is optimal—but Levy misses out “bigly,” to use Trump-speak, regarding how government incentives led to transcontinental railroad inefficiency, as well as how the private initiative of James J. Hill created a transcontinental railroad without handouts. Burton Folsom is essential reading as to both.

There is much more that could be discussed, but I will leave it there. Ultimately, Levy’s book always leaves a cloud hanging over American capitalism. You get the recurrent suspicion that the critics of capitalism are ultimately right, and that government must intertwine itself in the market, combining the public and the private spheres, to be directed by enlightened geniuses who can understand where the economy is or needs to be going, and direct it there. If you think enlightened geniuses are no more equipped to run an economy than was Stalin, this is probably not the book for you.

This is a book that is for a select audience. As a history teacher, I tend to read voraciously about America's past, and have always had my eyes out for an economic history that doesn't get boggled down in theory. I was hoping that Levy's book would be the one I was looking for but was mistaken.

His book is great if you are looking for a narrative history about markets and economic systems (beginning with mercantilism and the rise of capitalism after the European discovery of the western hemisphere). He does a fine job defining his subject and goes to great length to explain his rationale for writing it in the first few pages, but I quickly learned that it was not about how capitalism affected the lives of Americans, rather, the system itself is the main character of the story.

This is not to be taken as a negative review; I am just trying to be clear what this book is. Economic history is not my strong suit, and my weak background made some of what I was reading inaccessible. I think Levy's writing is well-constructed; he keeps complicated ideas in basic sentence structure, which provides a manageable means of digesting information.

If you are looking for a book that will trace how the fundamental workings of capitalism have changed throughout American history, you should start with this book.

Thank you to the publisher for the free digital galley of this book in exchange for feedback.

Unfortunately, I'm tapping out early. I don't have enough background knowledge about economics to understand this book. I had hoped to learn a little about economics by reading it, which is why I requested it, but I don't think I'm the target audience, and I am bouncing off of it pretty hard.