Book review of Ages of American Capitalism: A History of the United States by Jonathan Levy

The Civil War not only expanded the scope of the federal government, but, as Levy emphasizes, it also demonstrated the ability to generate exponential growth by borrowing and spending, literally creating money out of thin air, in the case of private finance, or by printing it, in the case of government. Suddenly, Levy writes, “capital” changed everything and touched every life, creating a self-reinforcing cycle of increased investment. Thanks to mechanization, farm productivity nearly tripled over the next 20 years, to the point that five acres of wheat grown in Kansas could be produced and shipped to London at a lower cost than producing one acre in Devonshire, England. The bounty not only increased the incomes of American farmers, it also lowered agricultural prices worldwide, forcing millions of European farmers to emigrate to the United States, where they provided cheap labor for an industrial boom that began with intermediate goods like iron and steel but soon gave way to affordable, mass-produced consumer goods for a growing middle class.

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