Book review: Capitalism in America – A History by Alan Greenspan and Adrian Wooldridge

It would be difficult to find two more distinguished economic commentators than Alan Greenspan – former Chairman of the Federal Reserve, and Adrian Wooldridge – Oxford DPhil, Fellow of All Souls and Political Editor of the Economist. Between them they have accumulated a vast amount of experience of economics, it’s a history and its impact. In choosing to focus on the United States they have chosen, of course, to focus on the country that is perceived to have the most vigorous and the most red-blooded form of capitalism. Capitalism, as it were, unleashed is the focus here and this succinct and well-written volume revels in its ups and downs.

The authors are not keen on politics or politicians, who they consider are at their best when they interfere least. Like most business orientated people there is a general theme of politicians need to keep out of the way and do as little damage as possible to the business of business. There is also great admiration shown for the process of creative destruction – the perpetual renewal through innovation and invention, leading to ever increasing advancement, improvement and progress. As a volume of history, this is a very good read. As a demonstration of the tin ear of the economist to the feelings and responses of real people living in the real world, which then leads to real political consequences, this book is a good example of what is increasingly a spectacular phenonomen.

As a group of people, few can equal economists for leaden-footed interventions in public debate. The very phrase creative destruction is one designed to bring fear and worry to the millions who are affected. General demonstrations of how much richer and healthier the world is becoming is of little concern to those that suffer poverty, poor medical treatment, or who are the low paid workers making economic progress a reality. In a United States riven by an opioid epidemic, gun killings, and where the provision of basic health care is still something that serious politicians can argue against. This is to say nothing of the fact that the United States was built on the systematic extermination of the indigenous population and the exploitation of its vast natural resources, which is a significant contributor to the catastrophic impact of climate change. Politics and economics are inextricably linked and how capitalism and the free market operates and impacts is the great issue of our time. This is why this book is both timely and important.

Our oceans are choked with new plastic, which has passed through the animal food chain and is now entering the human food chain, produced more cheaply than it costs to recycle because of the newly cheap shale produced oil in the US. How can capitalism be developed to address this? How can the market be used to save the rainforest, encourage the reduction of CO2 emissions fast enough for us to be able to save the planet we inhabit. The history of capitalism in America is a history of the easy bit of making money – take a new land and exploit its natural resources, the human energy that comes when there are no social safety nets, and in a young country where government is weak and the rules are few it is not so hard to let rip. The world is different now, it is being killed in part by the results of the capitalism that has made America strong and powerful, which the United Kingdom and the European powers achieved before the US existed, and which China, India and many other countries are now trying to emulate. With finite resources and a fragile natural infrastructure capitalism and the market are facing their most difficult challenges, and this is going to require more, not less political intervention. That requires our politicians to be more economically literate and this book is a good place for them to start.