Ages of American Capitalism: A History of the United States
by Jonathan Levy
Ages of American Capitalism is a fascinating and highly detailed book that expanded my understanding of both capital itself and the ways capitalism developed in the United States.
The first major takeaway for me, which I also mentioned in my review of The Rise and Fall of American Growth, concerns the colonial economy. Levy presents the colonial and early postcolonial United States as something close to the apotheosis of the organic economy: perhaps the greatest amount of wealth and prosperity that could be squeezed out of a world still dependent on land, agriculture, animals, wind, water, and human labor rather than industrial energy.
The first British Empire, before Britain industrialized and consolidated its control over India, relied heavily on the Atlantic trading system connecting Britain, West African slave-trading posts, the Caribbean, Europe, and the American colonies. This system was horrific in its foundations, but it was also economically productive. It created a relatively prosperous Atlantic world in which the American colonists were deeply embedded.
The colonists really did see themselves as English people living on the other side of the ocean. More importantly, this economic relationship persisted even after independence. Americans may have achieved political freedom, but they did not immediately become economically independent. The United States continued to depend heavily on British trade, British finance, and British capital. As the dominant global power, Britain retained enormous financial influence over the American economy, and much of early American monetary and fiscal policy developed in response to British institutions and practices.
The second major takeaway is Levy’s explanation of capital itself. Capital is not merely money, land, factories, or shares of stock purchased through Robinhood. It is value made durable, transferable, and capable of generating more value. It can move between places and be converted from one form into another.
In the antebellum South, enslaved people therefore functioned not only as laborers but also as an especially powerful form of capital. Human labor had been transformed into property that could be bought, sold, borrowed against, transported, and inherited. Enslaved people were horrifyingly “liquid” assets: unlike land or factories, they could even be forced to transport themselves from Virginia to Tennessee.
That made slavery an extraordinarily profitable and deeply entrenched institution for its owners. I do not remember Levy’s exact comparison, but the basic point was that owning an enslaved person represented something like owning a major household asset today, with substantial and relatively dependable capital returns. Thinking about how politically and economically difficult it would be to eliminate something as widespread as private car ownership helps illustrate why slavery could not simply be legislated out of existence and why ending it ultimately required a war.
The third major takeaway is what might be called the American con. At points, Levy shifts into something like an anthropological mode and asks what capitalism has done to the American psyche. He traces the rise of the con man and explores the connections among capitalism, confidence, credit, and deception.
Capitalism depends on confidence: confidence that an investment will pay off, that a borrower will repay a loan, that money will retain its value, and that another person is representing an opportunity honestly. The con man exploits that same confidence. In Levy’s telling, the confidence man is not merely an outsider preying upon capitalism. He is, in some sense, a recurring product of the system itself.
The book continues through the postwar era and covers the monetary, financial, and economic shocks of recent American history. Like The Rise and Fall of American Growth, however, it ends at a slightly awkward moment. Levy’s story concludes in the middle of the COVID era, around 2020 and 2021, without any particularly strong prediction of what would happen over the following five or six years.
That is interesting in itself. A historian can explain centuries of economic development and still be unable to see what is about to happen next. Levy could not have anticipated the arrival of generative AI, the persistence of American economic growth, the surprising compression of some measures of inequality during the pandemic, or Donald Trump’s return to the presidency. That is not necessarily a criticism. If anything, it demonstrates how much easier it is to construct a coherent story about capitalism in retrospect than it is to predict capitalism’s next stage.
Overall, this is a good book. It can occasionally be dry, but it compensates with fascinating historical details and conceptual insights that are difficult to find elsewhere.