Summary of Capitalism in America

Alan Greenspan and Adrian Wooldridge

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Recommendation

Boom, bust, repeat. The history of the American economy is a rollercoaster of ups and downs, but the United States remains a great power because its expansionary periods have proven robust enough to overwhelm the regular – sometimes wrenching – downturns. In this trenchant overview of American capitalism, former Federal Reserve head Alan Greenspan and journalist Adrian Wooldridge lay out America’s evolution from fiscal backwater to economic titan. With sharp prose, they explain what has driven three centuries of (mostly) financial progress and offer a diagnosis on what’s keeping 21st-century growth muted. Readers of any political persuasion can agree on most of the facts served up in this study, but one of its most striking features is how little new ground it breaks. Even casual students of American economic history are familiar with the broad trends and the smaller details that the authors cite, and the arguments over the girth of government feel as old as the American economic miracle itself. But considering Greenspan’s purposefully obfuscatory speeches as Fed chair, this book’s crisp language and clear message is a welcome change.

About the Authors

Alan Greenspan was chair of the Federal Reserve from 1987 to 2006. Adrian Wooldridge, the Economist‘s political editor, writes the magazine’s Bagehot column.

Summary

The US Economy Remains the Envy of the World

With just 5% of the global population, America churns out one-quarter of the planet’s economic output. The United States enjoys high standards of living and, as home to such massive companies as Amazon, Apple and Google, it continues as a leader in innovation.

But in 2018, new business formations were at a 30-year low, and competition across more than 70% of the economy was declining. Productivity and economic growth are weak. Entitlement payouts are growing, as the baby boom generation retires. In short, the performance of the American economy is anemic. But that condition does not describe America’s past, and it does not need to augur its future.

The United States Grew Through the Power of Creative Destruction

America’s economic dominance is all the more impressive given its humble start in the 1700s as an agrarian society. At first, abundant natural resources, including gold, oil and arable land, drove American growth, but the United States was economically insignificant and geographically remote, a place with little...

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