ALAN GREENSPAN’S NEW BOOK A LOVE LET­TER TO CAP­I­TAL­ISM

The News & Observer (Sunday) - - Arts Living - BY PETER A. COCLANIS

It’s been a tough decade for Amer­i­can cap­i­tal­ism. First, the Great Re­ces­sion, fol­lowed by a slow, un­even re­cov­ery, which left be­hind mil­lions of peo­ple and en­tire re­gions. Such de­vel­op­ments led in turn to ris­ing pub­lic con­cern over in­equal­ity, which seemed to be in­creas­ing, and pro­duc­tiv­ity, the growth of which was de­creas­ing, spark­ing talk of “sec­u­lar stag­na­tion.”

Not sur­pris­ingly, all this gloom and doom brought both am­bi­tious politi­cians and de­sign­ing aca­demics out of the wood­work. Mem­bers of both groups saw po­lit­i­cal or ca­reeren­hanc­ing hay to be made by at­tack­ing the eco­nomic sys­tem from which they them­selves ben­e­fited and with which the U.S. is as­so­ci­ated more than any­place else: Cap­i­tal­ism. Voilà — the rise to promi­nence of pols such as Bernie San­ders and Alexan­dria Oca­sio-Cortez, the resur­gence of the Demo­cratic So­cial­ists of Amer­ica, and the trendi­ness in academia of fields such as the “new his­tory of Amer­i­can cap­i­tal­ism,” the prac­ti­tion­ers of which are gen­er­ally apoplec­tic about the cap­i­tal­ist sys­tem, pred­i­cated, as it is, on free mar­kets, pri­vate prop­erty, and com­pe­ti­tion. In such a climate, is it any won­der that a highly pub­li­cized Gallup Poll taken last sum­mer found that Democrats viewed so­cial­ism more fa­vor­ably than cap­i­tal­ism?

To be sure, cap­i­tal­ism has its prob­lems, though far fewer than any other eco­nomic sys­tem that’s ever been on of­fer. Sup­port­ers of cap­i­tal­ism can take so­lace in the fact that some hope­ful signs have be­gun to ap­pear. In­deed, in a sce­nario con­sis­tent with New­ton —for ev­ery ac­tion there is an equal and op­po­site re­ac­tion, and all that — we are see­ing de­fend­ers of cap­i­tal­ism mo­bi­lize in re­sponse to the many as­saults this sys­tem has en­dured. The busi­ness press has been quite ac­tive in this re­gard, and, ear­lier in 2018, we saw the pub­li­ca­tion of bil­lion­aire busi­ness­man/ phi­lan­thropist Ken Lan­gone’s heart-felt mem­oir “I Love Cap­i­tal­ism!”

With Alan Greenspan and Adrian Wooldridge’s book, “Cap­i­tal­ism in Amer­ica: A His­tory,” we have a sys­tem­atic ri­poste to cap­i­tal­ism’s crit­ics.

This un­likely pair — Greenspan, the 92-year econ­o­mist who chaired the Fed­eral Re­serve Bank from 1987 un­til 2006, and Wooldridge, a 59-year old, Ox­ford-trained his­to­rian and long-time writer/ ed­i­tor for The Econ­o­mist — has risen ad­mirably to the task.

“Cap­i­tal­ism in Amer­ica” is a lively, of­ten bril­liant, and al­ways in­ter­est­ing sur­vey of Amer­ica’s eco­nomic his­tory from col­o­niza­tion to the present. The au­thors fo­cus on three linked “or­ga­niz­ing themes”: Pro­duc­tiv­ity, the con­cept of creative de­struc­tion, and pol­i­tics. As they see things: “Pro­duc­tiv­ity de­scribes so­ci­ety’s abil­ity to get more out­put from a given in­put. Creative de­struc­tion de­fines the process that drives pro­duc­tiv­ity growth. Pol­i­tics deals with the fall­out of creative de­struc­tion.”

In their view, the in­ter­ac­tion among th­ese themes has spurred creative de­struc­tion — think me­chan­i­cal reapers re­plac­ing hordes of har­vest la­bor­ers or ATMs re­plac­ing bank tell­ers — through most of our coun­try’s his­tory, lead­ing to ris­ing lev­els of eco­nomic ef­fi­ciency, cen­turies of growth, and un­par­al­leled wealth ac­cu­mu­la­tion.

Al­though we still have nu­mer­ous strengths, the au­thors be­lieve that the U.S. econ­omy is in­creas­ingly char­ac­ter­ized by “fad­ing dy­namism.” Why? They cite var­i­ous fac­tors: Prob­lems in our ed­u­ca­tional sys­tem, dis­ap­point­ing pro­duc­tiv­ity gains from IT, de­clin­ing mo­bil­ity, and ag­ing in­fra­struc­ture. Two other fac­tors, how­ever, trou­ble the au­thors most: The un­sus­tain­able growth of en­ti­tle­ments and our in­creas­ing un­will­ing­ness to ac­cept the costs of creative de­struc­tion. Both of th­ese fac­tors, alas, are ex­pres­sions of our deeply flawed po­lit­i­cal sys­tem.

Some will find Greenspan and Wooldridge’s book overly bullish on cap­i­tal­ism, and both in­com­plete and a bit self­serv­ing. There is, for ex­am­ple, rel­a­tively lit­tle dis­cus­sion of work­ers or of Greenspan’s role lead­ing up to the Great Re­ces­sion. But, on balance, this is a most wel­come ad­di­tion to the lit­er­a­ture on both cap­i­tal­ism as a sys­tem and the eco­nomic his­tory of the United States.

Peter A. Coclanis is Al­bert R. New­some Distin­guished Pro­fes­sor of His­tory and Di­rec­tor of the Global Re­search In­sti­tute at UNCChapel Hill.

J. SCOTT APPLEWHITE AP file photo

Pen­guin Press

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.