The Cambridge Economic History of the United States. Vol. 2: The Long Nineteenth Century / The Cambridge Economic History of the United States. Vol. 3: The Twentieth Century

Abstract

Riviere reviews "The Cambridge Economic History of the United States. Vol. 2: The Long Nineteenth Century" and "The Cambridge Economic History of the United Sates. Vol. 3: The Twentieth Century" edited by Stanley L. Engerman and Robert E. Gallman.

The Cambridge Economic History of the United States. Vol. 2: The Long Nineteenth Century. Ed. by Stanley L. Engerman and Robert E. Gallman. (New York: Cambridge University Press, 2000. x, 1,021 pp. $99.95, ISBN 0-521-- 55307-5.)

The Cambridge Economic History of the United States. Vol. 3: The Twentieth Century. Ed. by Stanley L. Engerman and Robert E. Gallman. (New York: Cambridge University Press, 2000. x, 1,190 pp. $99.95, ISBN 0-521-55308-- 3.)

With two bulky volumes of over one thousand pages each, Stanley Engerman and the late Robert Gallman have put the finishing touch to an overall economic history of the United States that stands as the achievement of a generation of economists and economic historians. I shall try first to give some useful tips for a helpful handling of the subjects treated. Each book is divided into seventeen chapters. Twelve of them treat the same subject in each volume: Economic growth, Canada, inequality, population, labor force, agriculture (extended into two chapters in volume 2 but with only one in volume 3), technological change, business organization, business and government (two chapters in volume 3 and one in volume 2), banking and finance, foreign trade, and foreign and financial relations. Two chapters of volume 2 extend to the end of the twentieth century: business law and internal transportation. The last chapter, "The Social Implications of US Economic Development," stands as an apt conclusion to volume 2 and a transition to the next volume. The chapter on slavery is naturally the only chapter centered on the peculiar institution, but it also branches out into the aftermath of Reconstruction and the black exodus to the North. Four chapters are specific to volume 3: "Strucrural Changes: Regional and Urban," "The Great Depression," which is long on causes, upturns, and downturns and short on bibliography and consequences, "War and the Economy in the Twentieth Century," and "Labor Law." Documentation on each chapter is gathered either at the end of the volume in bibliographic essays (16 out of 17 in volume 2, 15 out of 17 in volume 3) or at the end of a chapter; those at the end of chapters are in alphabetical order and without comments, but they are supplemented by telling statistics and charts and abundant footnotes.

Throughout the long nineteenth century (1790-1914), the United States was transformed from an outlandish minor economic power with plenty of natural resources and a fast-growing population into a nation whose GNP (gross national product) was higher than the combined GNP of Britain, Germany, and France. Discarding the mainly regional approach of the first volume, which was devoted to the colonial period, the history of American Indians and the British West Indies till about 1850, the second volume is built on four cardinal chapters: "Economic Growth and Structural Change," "The Economy of Canada," "Inequality," and "The Social Implications of US Economic Development." In all four chapters but ever-present in all the others, four problems are constantly referred to: the migration of labor and capital, the North American frontier as a magnet and source of opportunities, the process of rapid industrialization, and the social consequences of economic growth together with the budding part played by government. Some conclusions stand out. Attractive opportunities went side by side with inequality, and vice versa. External and internal migration, urbanization, and an overall appreciation of real wages in all sectors led to an intergenerational improvement of social status, even though regional differences remained high. The farmer as a customer and a seller was rapidly linked to the domestic and foreign markets. The strength and longevity of big corporations allowed them to respond quickly to market signals. Interests of big business and consumers occasionally clashed, but the former kept the upper hand. The end of the period witnessed an objective alliance between big firms and the U.S. government through a neocolonial policy in Latin America and in the Far East and the advent of a state-regulated-- in central banking and transportation, for instance-but not state-directed corporate capitalism. Working hard in the present and expecting much in the future, the average American experienced the "larger scale of human life" (Walter Lippmann).

In volume 3, definite emphasis is put on two developments that have no clear precedent before: on the one hand, economic depressions, two major world wars, the Korean and Vietnam conflicts, and the Cold War; on the other, the gradually expanded part played by the federal government, both developments being obviously linked. Nonmarket forces constantly boosted the economy till the late 1980s through defense spending, welfare programs, highway construction, and homemortgage loan programs generating real estate speculation and a prosperous building industry. The 1944 Bretton Woods agreements, the predominance of Wall Street, and the prevalence of the dollar in foreign exchanges and in national financial reserves all over the world helped the U.S. system to work as a force pump till the late 1970s and as a suction pump over the last two decades.

The last four chapters on technological change, corporate strategy, government regulation, and the public sector make up a long conclusion to the three volumes. Technology aims to reduce costs and improve reliability and productivity through a close alliance with university and federal research. Business must be able to forecast and analyze cyclical changes and act accordingly through fast and efficient improvements in structures and strategies. Change having become a must in a global economy, no firm can survive by clinging to entrenched positions. After the long regulatory period of midcentury, government today is content with supervising competition and market forces. The final sentence of the book reminds us that an efficient economy relies on a balance "between efficiency and equity," thus giving a final touch of humanity to the "dismal science."

The reading of the volumes is of easy access to the layman as authors rarely resort to econometrics. Undergraduate and graduate students can find in them precise analyses and welcome syntheses. We can scrutinize the cogwheels of a huge machinery with all its intricacies, subtleties, niceties, and minutiae and not get lost in the process. We may regret the lack of some driving belts that would show the economy at work. Some sectors that make up the bulk of economic life today through the number of people employed or concerned or through the capital invested in them-tourism, retailing, catering, advertising, health, education-are not treated as such. We do not feel the pulse of the America of department stores, shopping malls, franchising, fast-food outlets, and air traffic hubs or the impact of such prominent figures as Alfred Sloan, the Watsons, Bill Gates, the Du Ponts, the Rockefellers, the robber barons, or the yuppies. But what I ask for falls more within the province of economic geography than within that of economic history. The whole work will remain as an impressive picture of a world of "visible hands"-managers, stockholders, government entities and agencies-and of a universe in which the process of "creative destruction" calls for a constant effort of countervailing readjustment.