The British philosopher John Gray has been on the Left, and he has been on the Right. More recently, he has settled into the role of a brilliant, provocative, and contrarian curmudgeon, known for an aphoristic style rare in a discipline where opacity is often confused with erudition.
Read MoreArthur Koestler’s “Darkness at Noon” was one of the most influential novels of the 20th century, and the 20th century would have been a better century had it been more influential still. Yet until now, the book could only be read at one remove, in editions based on a hasty English translation of a German text presumed lost in the confusion of wartime.
Read MoreIn an age when cultural appropriation is “problematic,” the EU is a repeat offender. Not content with stealing a continent’s name and rewriting its history, the engineers of “ever closer union” have spent years squeezing centuries of art into a “European” (as they abuse that term) straitjacket, a maneuver anticipated by General de Gaulle during a press conference over half a century ago. Dante, Goethe, and Chateaubriand, he agreed, “belonged to Europe” insofar as they were Italian, German, and French. But they would not have done much for Europe had they lacked a nationality and written in some sort of “harmonized Esperanto or” — and here de Gaulle reinforced mockery with erudition — “Volapük.”
Read MoreHeidi Tworek’s shrewd, erudite and timely News from Germany is a work of historical analysis that can also be read as a corrective to the dangerous hysteria over the information games—fake news and all the rest—currently being played over the internet. The tale she tells is, in no small part, an account of how a nation that understood more clearly than most how the dissemination of news could be used as a device to project power beyond its borders tried to break its rivals’ (accidental) dominance in this area. For more than half a century, this was, argues Tworek, an assistant professor of history at the University of British Columbia, an obsession for “an astonishing array of German politicians, industrialists, military leaders and journalists”.
Read MoreBritain’s “public,” which is to say private, schools have been around since at least the 14th century. The controversy over their place in the country’s life sometimes seems to have been raging for almost as long, although it really only took off a couple hundred years ago, the day before yesterday in a land of ancient grievances.
“Gilded Youth,” James Brooke-Smith ’s addition to the sizeable canon of unflattering accounts of these curious establishments, has plenty of room for familiar complaints: bullying, sadism, sexual abuse, emotional repression, entrenching “the privilege of the wealthy few,” and so on. But even those exhausted with this well-worn topic may be intrigued by Mr. Brooke-Smith’s examination of the surprisingly complex history of public school dissent—there were some inmates who struck back against what they saw as asylums.
Read MoreThere’s a passage in Cold Calls (2005), the final volume in Christopher Logue’s magnificent and, fittingly, never-completed “account” of the Iliad, in which the British poet describes Ajax and Nestor calling on Achilles:
They find him, with guitar,
Singing of Gilgamesh.
Read More
Archangel, Russia, August 1996 © Andrew Stuttaford
The key message underlying Keir Giles’s trenchant, persuasive and alarming Moscow Rules is that the idea of Russia as a part of the European family is an illusion. In fewer than 200 pages he pulls that notion to pieces and then suggests what the West’s policy towards Moscow should look like if it is to be guided by reality rather than hopes or a pretty dream.
Giles, a senior consulting fellow at Chatham House, explains how Westerners are misled by geography (a portion of Russia is, after all, in Europe), language (Russians may use the same political terminology as their counterparts in the West, but they tend to mean very different things by it), and even appearance: “[T]he majority of [Russians] are outwardly indistinguishable from white members of the Euro-Atlantic community.” The misunderstanding may be deepened by, as Giles notes, the high visibility of a “Westernised” intelligentsia, whose views are not representative of the country as a whole. And there’s something else that I’d add to the pile of deceptive resemblances: The civilisations of both Russia and the West owe much to Christianity. Even the Soviet rejection of religion (based, in no small part, on the writings of a German, which is to say, a Western, philosopher) can be reread as another of the millenarian explosions that have long scarred European history. The distance between Anabaptist Münster and revolutionary Petrograd is not so very far.
The belief, against a great deal of evidence (a good selection of it neatly sketched out in this book), in the essential similarities between Russia and the West is helped, as Giles points out, from the way that “Western minds, especially liberal educated ones, rebel against national stereotypes. The taint of orientalism causes them to reject explanations for personal or national behaviours that are based on psychological constructs or worldviews that are specific to a given people or culture. The notion that a nation will behave in a given way because that is how it has always done is a hard sell in academic circles.”
But “the taint of orientalism” is not the only reason for Western reluctance to accept Russia for what it is. Elsewhere, Giles refers to the manner in which the West “and, in particular, Western Europe, [has] moved on to a postnationalist view of international relations”. That’s true enough, but the blandness of the wording (“moved on”) understates the extent to which this shift is based on a quasi-religious faith in “progress”, rather than any understanding of human nature or, beyond a cosy corner of Europe, how much of the world actually still works.
Russia’s perception of itself is, Giles maintains, “far from unique — plenty of nations have convinced themselves of their special destiny and birthright of leadership”. But, even if the West has now adopted a different interpretation of what that means, Russia has not (and, nor, I suspect, has, China, say, or India). Russia’s claim to great power status may be considerably less convincing than it was in Soviet or imperial times, but the West still needs to deal with its consequences, which can be summarised as a demand for “respect”. In this context that is a more loaded term, as Giles warns, than the English word implies. It conveys a sense that Russia should be feared too. Russia wants to be deferred to both globally (Barack Obama’s jibe that it was a “regional power” stung) and also with regard to its supposed right to control a sphere of influence in its neighbourhood.
And the way that Russia sees itself cannot, Giles argues, be wished away, or blamed on propaganda or, for that matter, on Vladimir Putin. Putin is “enacting, rather than inventing” long-term ambitions which resonate with “ordinary” Russians in a way that should not be underestimated (Giles is clearly not optimistic that Putin’s departure would mean a change for the better). “What has changed” and “dramatically” so is Russia’s “capability to achieve these ambitions”.
That’s not a comforting thought, given Russia’s resentment over the humiliations of the 1990s, its zero sum approach to international relations (something also well covered in this book), and, if necessary, its willingness to resort to violence. The best response, Giles asserts, is to accept that there are profound differences between Russia and the West that cannot be “reset” away, and then find a method to manage them. This will have to include defining “the boundaries of acceptable behaviour” and then policing them, a task that will require the West both to stick more closely together and to increase spending on the various varieties of hard power required to back up its stance.
With President Trump still prone to thinking aloud about Nato and too many European nations still unprepared to take their own defence seriously, that may be a tall order. Under the circumstances, sending a few copies of this book to Berlin and Washington DC would be a good plan.
Monument to the Conquerors of Space, Moscow, March 1993 © Andrew Stuttaford
If nothing else, the Bolshevik Revolution was seen as an absolute break with the past. That is how it was planned, how it was hymned (“We’ll burn up Raphael for our Tomorrow’s sake,” wrote Vladimir Kirillov; he was shot twenty years later), and how many of its opponents understood it. With the exception of those realists who regarded it as a reversion to barbarism, Red October was perceived as something essentially modern, or, even, to some, as rather more than modern, a pathway, to borrow a pre-revolutionary phrase from Trotsky, towards a “radiant future.”
The imagining of that radiant future owed more to ancient fantasies than a Lenin or Trotsky would ever admit, even probably to themselves. But burrow through their verbiage, eliminate the preoccupations of time and place—czars and capital and imperialism— and it becomes obvious that the Bolsheviks, or at least their truest believers, were merely the latest generation of millennialist fanatics to bother our planet, even if they wanted to build rather more of Heaven here on earth (or “earths”—I’ll get to that) than their predecessors. “We are kindling a new eternity,” declaimed the poet Vladimir Mayakovsky shortly after the revolution—and a decade or so before his suicide.
Read the words that follow Trotsky’s reference to “a radiant future” and the breadth of his vision is impossible to miss: “Man, strong and beautiful, will become master of the drifting stream of his history and will direct it towards the boundless horizons of beauty, joy and happiness.” Trotsky returned to this mirage just over twenty years later in some passages in Literature and Revolution (1924). The communist Heaven on earth was to be Promethean, with man moving “rivers and mountains.” Man himself would be its greatest project. “The most complicated methods of artificial selection and psychophysical training” would be used to “create a higher social biologic type, or, if you please, a superman.”
Trotsky clearly anticipated that his superman would be able to live a (very) long time, but he doesn’t seem to have expected him to be immortal. Compared with what the Russian philosopher Nikolai Fedorov (1829–1903) had in mind, Trotsky’s was a narrow, crabbed, shirker’s Prometheanism. Fedorov dreamed bigger dreams. He insisted that humanity’s (compulsory) “common task” should be not the postponement of death but its defeat, a demanding enough objective even without Fedorov’s typically maximalist twist. Immortality was not enough. All the dead must also be brought back to life. In a rare nod to practicality, Fedorov admitted that completing the common task would take a very long while. In the meantime, however, it would provide mankind with a great unifying purpose (under the direction, conveniently, of a Russian autocrat). It would also push our species into space, as we searched for the particles necessary to restore long-perished ancestors, many of whom would have to be re-engineered (in ways infinitely more extensive than anything envisaged by Trotsky) so that they could survive on some distant planet: all those Lazaruses, you see, would be too numerous for earth (by this time transformed into a spaceship, “a great electric boat”) to host.
An eccentric’s eccentric (slept on a trunk, vegetarian, librarian, odd views about sex, mistaken for a beggar in the street, impressed Tolstoy), Fedorov wrote reams and attracted a few devotees but published very little during his lifetime. Nevertheless, he became known as the father of “cosmism,” an ill-defined mishmash of beliefs, convictions, and delusions, not all of which he would have shared. Cosmism, or ideas that could be squeezed into that obligingly elastic pigeonhole, drew growing attention before the revolution, and considerably more in the decade of utopian hysteria that followed it, including, in every probability, from Trotsky. In his introduction to Russian Cosmism, a collection of writings by some of the better-known (in Russia at least; over here, well . . . ) cosmists published last year, the New York University professor Boris Groys observes how many cosmists took Trotsky’s side during his duel with Stalin.
Stalin, who had his own more downbeat take on the future, did not approve of cosmism and would not have been convinced by post-revolutionary efforts to strip it of its mystical baggage. He thought even less of those who sympathized with Trotsky. Under the circumstances, it is unsurprising that a number of cosmists were forced into the queue for resurrection earlier than they might have hoped. Others served long terms in the Gulag. But some “scientific cosmists” (cosmism is a tree with many branches), valuable to the regime in other respects, were tolerated so long as they kept their esoteric philosophizing mainly to themselves. Konstantin Tsiolkovsky (1857–1935) may have been inspired by Fedorov’s visions of space travel, but he was also the father of Russian rocketry, and, despite official unease over some of his views, was supported by the Soviet state.
Other cosmists’ encounters with science were less successful. Alexander Bogdanov (1873–1928), an early associate of Lenin and a revolutionary, doctor, science-fiction writer, and much more besides, recommended blood transfusions from the young to the old as a way of reversing aging. As the appearance of a “blood boy” in an episode of the television show Silicon Valley suggests, this theory is going through a revival, but it killed Bogdanov. He died after an exchange of blood with a student who had been written off by her doctors owing to malaria and tuberculosis. She, amazingly, recovered.
Interest in cosmism within Russia began to pick up again in the waning days of the Soviet Union and has gathered speed since. Anton Vaino, Vladimir Putin’s chief of staff since 2016, no less, has claimed to be the co-inventor of a “Nooscope,” a device designed as a technocratic tool to study humanity’s collective consciousness. This is a questionable proposition at many levels, but it was undoubtedly inspired by the thinking of Vladimir Vernadsky (1863–1945), some sort of cosmist, but a good enough geologist to be awarded a Stalin Prize rather than a stint in the Gulag—or worse. Cosmism’s comeback in post-Soviet Russia is part of a much broader effort to reconnect with an intellectual heritage wrecked by the long communist ascendancy. It has also helped that Fedorov’s preference for autocracy and his belief in a uniquely Russian form of manifest destiny fits into attempts to cobble together an ideological structure for a Putin regime that no longer finds Western liberalism compatible with its ambitions.
Cosmism is a slippery, protean concept. Anyone hoping that Professor Groys’s book will offer anything approaching a precise definition of what cosmism was (and is) will inevitably be disappointed. To be sure, Groys’s introduction does include some useful clues, notably the contrast between the cosmists’ view that science could fulfill the millennialist hopes of the past and the Futurist conviction that the new technologies of the twentieth century represented a chance to start again from scratch. Groys also spells out how Fedorov’s ideas were (at least notionally) rooted in materialism: to Fedorov, the soul had no existence separate from the body, let alone any prospect of outlasting it. But because, as Groys summarizes it, everything was “material, physical, everything [was] technically manipulable,” a properly organized society—a requirement that aligned some initially unsympathetic cosmists with Soviet statism and, in some cases, totalitarianism—should, in the end, be able to bring back the dead. Indeed, it had a moral obligation to do so. Why should admission to Utopia be confined to the (currently) living?
Yes, this was nuts, but it was a nuttiness not so far removed from what some in the Bolshevik hierarchy were saying (Trotsky was not alone), and it was embraced with enthusiasm by zanier elements on the revolutionary fringe. The Biocosmists-Immortalists called for “immortality, resurrection, rejuvenation . . . and the freedom to move in cosmic space.” They were “daring,” one prominent Biocosmist conceded, but “optimists, not madmen.”
After his introduction, Groys throws the reader in at the deep end, leaving him to work his own way through a well-chosen selection of writings (many only recently republished in Russian, and never translated before into English) that are both of scholarly interest and an intriguing glimpse into a certain state of mind. They can be heavy going—“Here I present only sixteen theorems of life”—but are not without their highlights, among them weather control, intra-atomic energy, a worldwide labor army, homes in the ether, the colonization of space, a spot of eugenics, “happy atoms,” and a mad sci-fi story from Bogdanov: “Margarita Anche, a blossoming woman of seven hundred and fifty . . . ” But any newbies relying solely on Groys’s introduction for their understanding of cosmism will be left somewhat bewildered. This book is better read alongside works such as George M. Young’s The Russian Cosmists (2012) and The Occult in Russian and Soviet Culture (1997), edited by Fordham University’s Bernice Glatzer Rosenthal. The title of the latter is yet another much-needed reminder that Soviet history is not always what we have been led to believe.
With “Bankers and Bolsheviks: International Finance and the Russian Revolution,” Hassan Malik has written a fascinating study of an overlooked topic—but not a book for emerging markets investors who like to sleep soundly at night. Mr. Malik chronicles the involvement of foreign capital in Russia before and up to the October Revolution. It ends expensively. Shortly after taking power in 1917, the Bolsheviks repudiated Russia’s debts. Adjusted for inflation, this remains the biggest sovereign default in history, made costlier by its completeness. No debts or obligations were “restructured”: With token exceptions, the money was gone for good.
Mr. Malik’s meticulous, forensic account reveals why late Romanov Russia—for a few years the world’s largest oil producer—had been so successful in attracting funding from abroad. Mr. Malik, an investment strategist and financial historian, is more skeptical than many about the contribution made by Sergei Witte, who was Russian finance minister between 1892 and 1903 (before rising higher still). But the surge in Russia’s economic development during those years is beyond dispute. Net national product grew at an estimated compound annual rate of nearly 5%, “very high” for the time, according to Mr. Malik. Other numbers tell a similar tale.
That Russia turned to foreign bond markets during a wave of financial globalization was not “particularly remarkable,” the author notes. That it would become “the largest net international borrower in the world” was, he believes, a different matter. Given the pace of Russian growth, however, and bankers’ perennially Pavlovian response to the whiff of profit, I am not so sure.
There was also the perception at the time that, for all its faults, Russia was “a responsible member of the European family of civilized nations.” As such, the czar’s government was rewarded with more trust than it probably deserved. In 1906 Russia secured a massive loan despite troubling finances, an economic slowdown, a shaky currency, recent military defeat by the Japanese, and something close to outright revolution. More foreign money followed, drawn in by a return to growth. Nevertheless, Mr. Malik argues that late imperial Russia was more fragile than understood then (and now). Debt was piling up and the political system was unstable. It took a huge build-up in defense spending—the silver lining of a cloud about to burst—to revive an economy that was again faltering.
If the attitude of foreign financiers toward Russia up to 1914 can be defended, their behavior afterward is rather harder to explain. By early 1917 Russia was losing World War I, its finances were crumbling, the economy was buckling and the political climate was deteriorating. Despite this, Mr. Malik notes, “the risk premiums on Russian debt relative to Western benchmarks approached multiyear lows.” Wartime politics played their part, and so did moral hazard, thanks to Russian government guarantees (and vague support from its allies). The liberal revolution that overthrew the czar in early 1917 was broadly welcomed as another step in a transformation in which, as Mr. Malik observes, international financiers considered they had long been participating. Maintaining or increasing their presence in a newly liberal Russia would be a “logical continuation” of that role, so that’s what they did.
What ensued, unfortunately, was not the next stage in a benign evolutionary process, but an abrupt break with the past. Foreign investors anticipated radical change, maintains Mr. Malik, but not the direction it took. This was a mistake more forgivable than he implies: There was nothing inevitable about the Bolshevik triumph that fall. The author is right to highlight the probability that, even if the liberals had held on to power, “a fairly significant default” was on the cards. But a default by a liberal regime would have borne no comparison to the Bolshevik default.
Even had the Bolsheviks been able to honor the debt, they would not have done so. This was a matter of principle (why, asked Lenin, repay lenders who financed “the Cossack whip and sword”?) as well as strategy. Debt repudiation was a weapon in the class war, intended to dismantle the economic strength of the bourgeoisie at home and to foment trouble abroad—specifically in France, where investment in Russian securities had spread a long way down the social scale.
Mr. Malik records the insouciance or even optimism of foreign financiers in the face of late 1917’s political turmoil. This may have peaked with “in hindsight . . . one of the most bizarre business decisions in American banking history”—no mean feat: The forerunner of Citibank opened its Moscow branch “nearly three weeks after the Bolshevik takeover.” This was an extreme example of the consequences of some financiers’ misreading of Lenin’s new order, a phenomenon Mr. Malik handles well. Precedent (Russia had never defaulted) suggested the new regime would see reason, as did a conventional understanding of morality and self-interest. Yet bankers and Bolsheviks defined reason, morality and self-interest in very different ways. Lenin’s oddball sect wanted to remake Russia (and the world). If that meant cutting itself off from international capital, too bad.
Mr. Malik criticizes foreign investors for not grasping “the political dimension” of financial support for the czar’s sometimes savagely repressive rule. But their unpopularity with the opposition was somewhat ironic: It overlooked the way in which “apolitical” foreign financing contributed to a modernization that, however unintentionally, subverted the ancien régime. And investors may have paid too much attention to politics later on. One element in the seemingly complacent reaction of international financiers to the February Revolution was a desire to help the liberal reformers. This may have been too much of a gamble but, given what was to come, it was worth taking. Russia’s tragedy was not that it ran out of money, but that it ran out of time.
New York City, March 1989 © Andrew Stuttaford
With 29-year-old “democratic socialist” and imminent congresswoman Alexandria Ocasio-Cortez widely seen as the harbinger of a future that, with luck, I may be too aged to see through to Caracas, Capitalism in America may come to be regarded as an obituary as much as a history. Not that its two authors, Adrian Wooldridge, political editor of The Economist — a magazine now closer to Davos liberalism than to the classical kind — and Alan Greenspan, who needs no introduction, would see it that way. Capitalism in America is a celebration — some of it should be read to music, Sousa, say, when the narrative reaches the Gilded Age — of the economic system that took the U.S. to the top of the world and could, maintain Greenspan and Wooldridge, still keep it there. They may warn of “America’s fading dynamism,” but they conclude that the country “is trapped in an iron cage of its own making,” to which it “has all the keys that it needs.” The question is whether it has the “political will” to use them. Indeed.
Messrs. Wooldridge and Greenspan possess a sharp understanding of the political foundations of American growth — as they must. There were, after all, other large countries blessed with rich resources and abundant land, and, as the 19th century drew on, the ability to exploit them. Argentina’s great liberal president, Domingo Sarmiento (1811–88), dreamt of emulating the developing colossus to the north. By the 1890s, Argentina was among the wealthiest places on earth (on one measure, briefly the richest), and European immigrants were pouring in. And yet the U.S. now stands where it now does, and Argentina is, well, Argentina.
“Anyone who regards economic history,” caution Greenspan and Wooldridge, “as history with the politics left out is reading the wrong book.” America’s economics would have been impossible without its politics, and the latter were, the authors emphasize, profoundly shaped by the happy timing of the country’s founding, born in the age of enlightenment. Although they do not explicitly say so, the variant of the Enlightenment that weighed most on the Founding Fathers, for ancestral as well as intellectual reasons, was British, the fruit of an incremental process dating back to (at least) 1688, rather than its more radical French alternative. Moreover, it was buttressed by having inherited what Greenspan and Wooldridge refer to as “many of Britain’s best traditions,” from the common law to a certain respect for individual rights. In that sense, “the American Revolution was only a half revolution.” The nascent republic was marked by a suspicion of both monarchical rule and unrestrained popular government. Commerce was able to slip through the gaps, helped by, as the authors explain, the insights of Adam Smith, the prohibition of internal trade barriers, and — a critical incentive for the enterprising — the strong defense of property (including intellectual-property) rights enshrined in the new Constitution.
This settlement was made easier to sustain by the United States’ birth in “an age of growth — an age when the essential economic problem was to promote the forces of change rather than to divvy up a fixed set of resources,” a summary that is on the crude side — fighting over the proceeds of growth can be ugly enough — but works well enough for a country that, more than anywhere else at that epoch, was a land of opportunity.
And what allowed America’s inventors, innovators, and entrepreneurs to make so much of this opportunity was the extent to which creative destruction (to Greenspan and Wooldridge, “the ‘perennial gale’ that uproots businesses — and lives — but that, in the process, creates a more productive economy”) was allowed free rein. In this heroic retelling — Howard Zinn, avert your eyes — of America’s expansion (the Gilded Age is rechristened “the Age of Giants”), creative destruction — the hammer in the invisible hand — is the mightiest hero of all, “the principal driving force of economic progress.” The government’s job, the authors note approvingly (did I mention that Alan Greenspan was a part of Ayn Rand’s circle?), was to protect property rights and the sanctity of contracts and then, rather than “tame” creative destruction, enable it and get out of the way. Less was more: “The old nations creep on at a snail’s pace,” wrote Andrew Carnegie. “The Republic thunders past with the rush of an express.”
While praising America “as a huge positive” not only for itself, but for what it has given the wider world, the authors don’t gloss over the darker side of “numerous disgraces” that have marred its rise. Slavery was a system resting “on foundations of unfathomable cruelty” that brought riches to the South but condemned it to economic backwardness as well as moral squalor. They also acknowledge that the state played a more active role in America’s economic explosion than it might be polite to mention in Galt’s Gulch. Railways, in many respects the Internet of the era (though, in a testimony to a time of remarkable innovation, there’s also the telegraph to think of), benefited — as, subsequently, did the Internet itself — from Uncle Sam’s largesse. Vast land grants offered railway companies the chance to risk a fortune building rails “in the middle of nowhere” in the hope of making a fortune by turning a “piece of nowhere into a part of the global economy.”
The authors write snappily and memorably, but not at the expense of subtlety. Thomas Edison’s “greatest claim to fame is arguably not as an inventor but as a systematizer of invention.” He created the first industrial laboratory and staffed it with “German PhDs, skilled craftsmen, and ‘absolutely insane men,’” the last category a preview, perhaps, of the pizza-munching Asperger’s army taking a (silicon) valley to fresh peaks.
By outlining the backgrounds of these economic pioneers, an impressively recurrent tale of creativity, social mobility, and sometimes uncontainable energy (Isaac Singer, of sewing-machine fame, sowed very widely, fathering at least 24 children, and, at one point, ran three households simultaneously), Greenspan and Wooldridge highlight the extent to which the American story was one of individual achievement. Those individuals did, Mr. Obama, build this.
But as the country grew richer, its politics changed, reflecting the growing electoral clout of those at the rough end of creative destruction, mounting alarm at escalating oligarchic and corporate power and its abuse (Teddy Roosevelt’s “malefactors of great wealth”), and a broader shift in opinion away from laissez-faire. This transformation in sentiment was accelerated by the Depression and two world wars but was well under way from the beginning of the 20th century, not least due to the size, complexity, and problems — “pollution,” relate Greenspan and Wooldridge, “on a terrifying scale” — of a country growing at an astonishing rate, a new kind of society that, it seemed self-evident, required steering by more than an invisible hand. There was also an early flowering of what has become an endemic phenomenon: “By producing prosperity, capitalism creates its own gravediggers in the form of a comfortable class of intellectuals and politicians” able to use the negative side of creative destruction to sell their own agenda.
The final two-thirds of the book details the evolution of American capitalism since the assault on laissez-faire first gathered speed. Adaptive, protean, and endlessly inventive, capitalism has proved to be more resilient than its early-20th-century champions might have expected. Government activism may have ebbed and flowed (this is not, incidentally, a book for FDR fans), but even if the Constitution acted as a restraint on the state’s encroachments, it never returned to low tide. Nevertheless, America’s private sector remained remarkably productive, famously through the 1920s, but again in the long post-WWII boom. Revived by Ronald Reagan after the stagflation of the 1970s, it flourished during what Greenspan and Wooldridge dub “the age of optimism” until the arrival of lean years marked by the dotcom bust, the runaway spending of the George W. Bush years, and the financial crisis, a catastrophe about which these authors have disappointingly (considering the identity of one of them) little that is novel to say.
Looking, however, beyond the proximate causes of the Great Recession, the authors are right to see signs of a deeper malaise in the economy, a creeping sickness that shows up in many ways, including lower productivity, declining social mobility, and unhealthy concentration in many industries. They attribute much of this to a decline in American exceptionalism. Creative destruction’s wild ride is being replaced by excessive risk aversion and overregulation. And they fret about swelling entitlements, both for their ultimate unaffordability and for the way they encourage consumption over the saving that is essential to fund productivity growth.
In an attempt to bring back a little cheer as their book draws to a close, Greenspan and Wooldridge observe that “America leads in all the industries that are inventing the future,” including artificial intelligence and robotics. But that future comes with a catch that they may have missed. Neither those industries nor their immediate digital predecessors, prime examples of creative destruction, are replacing the jobs or the wage rates to which they are laying waste. That could well account for more of America’s malaise than Greenspan and Wooldridge would care to admit, and may — Donald Trump, Bernie Sanders, or even Ocasio-Cortez could all be straws in a very different gale — herald an era of destruction with nothing creative about it.