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Levy Jonathan . Freaks of Fortune: The Emerging World of Capitalism and Risk in America . Cambridge, MA : Harvard University Press , 2012. 432 pp. $24.95 (cloth), ISBN 978-0674047488 .
Ott Julia C. When Wall Street Met Main Street: The Quest for an Investor's Democracy . Cambridge, MA : Harvard University Press , 2011. 352 pp. $35.00 (cloth), ISBN 978-0-674-05065-5 .
Book Reviews
During the fall of 2008, as the economy crashed and the phrase "too-big-to fail" entered the national lexicon, it became clear how dependent the U.S. economy was upon nebulous financial instruments such as credit default swaps and collateralized debt obligations. The rise of the financial sector partly reflected systemic changes in the nation's economy. No longer acting primarily in support of industry and manufacturing, finance had become an end in itself. Dubious accounting practices, high amounts of leverage, and even greater amounts of risk brought billions of dollars to those who adroitly captured markets, secured cheap labor, and ruthlessly streamlined business operations. Concurrently, these same forces brought ruin to millions of others. It is now clear how a deregulated Wall Street, peddling worthless mortgage securities, inflated a housing bubble and, at least in part, caused the Great Recession. Meanwhile, historians have produced many effective studies on the decline of the nation's industrial base, as well as the impact of globalization. 1Whether it was the oil shocks, the abandonment of the gold standard, the ascent of global competition, or the economic malaise that defined the 1970s, U.S. industry has waned and finance has assumed greater significance.
While this oft-repeated narrative contains more than a morsel of accuracy, it fails to consider the role that finance has played in American life over a far longer duration. Julia Ott and Jonathan Levy offer a corrective as they present the many ways in which investment, stock ownership, and financial risk have shaped the U.S. economic system. Together, they contribute to a burgeoning historiography on the growth and development of American capitalism.
Ott's When Wall Street Met Main Street explores the rather unlikely transition from a "proprietary democracy" to an "investor's democracy" (12). Advocates of republicanism, Ott maintains, were long suspicious of wealth accumulated through means other than...