As we try to make sense of the momentous change taking place in America – where democratic institutions built over decades are being dismantled in the space of a few weeks – we were advised by a friend to read a book published in 2022 titled “Capitalism in America”. We are half way through the book but have figured that in the former Fed Chairman Alan Greenspan’s mental model whilst the heroes are the entrepreneur, the villains are politicians (who deliberately whip up public indignation against the injustices of the free market economy, hand out freebies and then impose regulations). Since all of this sounds very familiar to those of us toiling away in Mumbai’s financial services sweat shops, we are finding the book to be a very good use of our time. In the words of the NYT reviewer:
“…“Capitalism in America: A History,” by Greenspan and Adrian Wooldridge, a columnist and editor for The Economist, explores and ultimately celebrates the Austrian economist Joseph Schumpeter’s concept of “creative destruction,” which the authors describe as a “perennial gale” that “uproots businesses — and lives — but that, in the process, creates a more productive economy.” While this approach risks oversimplifying centuries of American economic history, it provides a useful lens for analyzing America’s current polarization and for understanding the centrifugal forces that have given rise to a President Trump…”
Greenspan & Wooldridge go on to explain that America’s dynamism is fading because the politicians have wrested control of the economy from the entrepreneurs: “In their view, America today is already well along that path to stagnation. “Capitalism in America” barely mentions Trump beyond condemning his “dangerous” trade policies and warning about the fiscal recklessness of his tax cuts. But the entire book is an indictment of Trump’s stands on immigration and protectionism and his attempts to resurrect fading mining and industrial concerns — attempts that, as “Capitalism in America” shows repeatedly, are almost surely doomed.
At the same time, Greenspan’s admiration for the rugged individualists who populate the novels of Ayn Rand…He and Wooldridge lament that Americans are “losing the rugged pioneering spirit” that once defined them and mock the “trigger warnings” and “safe spaces” that now obsess academia.
The authors quote Winston Churchill: “We have not journeyed across the centuries, across the oceans, across the mountains, across the prairies, because we are made of sugar candy.” But now, they conclude, “sugar candy people are everywhere.””
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