I really enjoyed "Empire of Wealth." It was an easy-to-read book. The little nuggets of information in it were fascinating. There is no doubting Gordon's central premise: the economy of the US, which is based in capitalism and the pursuit of wealth, has allowed the nation to become the most powerful in the world. At the same time, getting to that position of power caused a LOT of pain in many regular folks. Gordon appropriately points out slavery, but the pain has been constant. That is not to say it hasn't been worth it, but there is always another side to every story, and Gordon - as well as those who have made lots of money - focus more on the positiive side. The section on the 1980s offers me a little more of an ability to comment. In pointing out the magic of de-regulation and tax cuts under President Reagan, I am sure much capitalistic energy was released. At the same time, Gordon doesn't mention how Reagan increased taxes, Bush increased taxes, and Clinton increased taxes. Any or all of those moves should have reversed positive economic trends that Gordon celebrates. Of course, we know it didn't happen that way. Even after Republicans in the early 1990s cried that Clinton's tax increases would send the nation back into recession, those Republicans were wrong. And the Reagan-80s also left a lot of regular folks without any gains, if not losses. Those stories are no less important. There is far more to a successful nation than unbridled capitalism. But I don't doubt that a country is more likely to be successful with more capitalism rather than less. In fairness to Gordon, he does an excellent job in highlighting FDR's New Deal and how it helped bolster the US when the nation was in difficult times.


I highly recommend that after reading this fine book, everyone looks up Jeff Madrick's fantastic review essay from the New York Review of Books (V 52, # 4, 03/10/05). He makes some excellent points that need to be considered along with Gordon's book.

There are many theories as to why the United States rose to economic dominance in the world. To some, this result was inevitable, but that success was achieved in spite of some major setbacks. Gordon describes the history of the United States in economic terms, and from many of the events, we can see much about what has been done well and that which was done poorly. From these events, we can also find some guidance concerning how things should be done in the future.
There were three major economic crises in the first two hundred years. The first was the aftermath of the revolution for independence. Since most of the colonial trade was with England and many of the wealthy were opposed to freedom from England, there was a major economic downturn after the war ended. Many types of currency were in circulation and the new country was an economic basket case. Fortunately for the future of the country, there was a person who knew how to solve the problem and had the stature to carry it out. That man was Alexander Hamilton and his program of establishing and funding a national debt was a resounding success. In 1789 the United States government was financially insolvent, yet five years later it had the highest credit rating in Europe. Hamilton also established a central bank, which served as a financial anchor for the nation as long as it existed. Gordon gives Hamilton his due credit for this, noting some of the opposition by other founding fathers who couldn't fathom it and what it has meant for the country since then.
The second major crisis was much more long term, namely the abolition of the central bank by Andrew Jackson. His actions led to the deepest and lengthiest economic depression that the country has ever seen. The early years of the 1830's were a boom time, all government debt had been retired and there was a revenue surplus. His executive order in 1837 requiring land be paid for in gold and silver led to a banking collapse, interest rates skyrocketed and in less than a year, 90 percent of the nation's factories were closed. The bottom of this depression was not reached until six years after Jackson's order. As Gordon points out, the lack of a central bank was a problem that continued to fester until the Federal Reserve System was established in 1913. Even then it was not up to the task and it was the depression of the 1930's that led to the changes that molded it into the form we know today. It can be argued that the greatest single mistake ever made by an American president was Andrew Jackson's destruction of the central bank.
The third major crisis was the great depression of the 1930's. What made it so much more devastating than the depression of the 1830's were the different demographics of the country. In 1930, a much larger percentage of the people worked in factories and fewer could rely on subsistence agriculture to survive. It was also a time when there were political alternatives that seemed more effective. Fascism appeared to have solved many of the problems in Germany and Italy and the communist façade of success in the Soviet Union was attractive to many.
What makes this book outstanding is how Gordon treats problems such as these, in explaining the causes and why the solutions worked. It is easy to see many of the reasons why the United States has grown to economic dominance, such as an abundance of natural resources, very low military spending for most of time, the large influx of a labor force determined to succeed and a legal system that protected individual rights.
One other fundamental lesson that can be derived from the book is the value of targeted government spending and support for critical infrastructure. The Erie Canal and the transcontinental railroad were both incredible achievements that cost a great deal but returned enormous economic advantages. Fully one-third of the capital in New York was used to fund the Erie Canal, yet it took less than ten years for this debt to be paid off. Government support was critical in steering those projects to success, and we also have the modern example of the Internet.
To many, the rise of the economic power of the United States was inevitable. As Gordon points out, that is probably, but not necessarily the case. In any case, this is an epic history of the rise of American economic power.

This is review is EXTREMELY partial, as the third sentence of Gordon's AN EMPIRE OF WEALTH was so thoughtless, tasteless, and incorrect, that it took alot of patience for me to pick it back up and read it for a class assignmet. Had I not been required to write about this particular book, I would left it where I had flung it after reading Gordon's thougtless, tasteless, and incorrect statemant that Abraham Lincoln's reputed formula for gaining knowledge of a nation's character by learning of its land, laws, and people is made difficult by it utter lack of ancient history. I have never before seen such a bad foot put forward so quickly in the writing of an authour whom I usually find to be more tolerable.

I had higher hopes for this book. After seeing its excerpts quoted elsewhere on the 'Net I expected a richer, more insightful, overall of American economic history than was present in the book. I am willing to put the confusion down to my own incorrectly set level of expectations.

Overall, the book seems to rely on multiple anecdotes, some interesting and most less so, and mostly context-less numbers to make its point -- that United States developed quickly, powerfully, and is now the most powerful nation that ever was. Since I generally have trouble with blanket statements of the "richest ever", "most powerful ever", I was not too crazy when the author repeatedly threw these phrases out without ever qualifying them in some strict numerical sense. Moreover, there is precious little comparison in this book to see how American economic development was different from that of England, or Germany. The chapters I found most interesting was a brief overview of the issues surrounding the revocation of the charter of the Bank of the United States and some of the anecdotes centering on the trade in ice and market panics.

That said, the book is a quick and painless read. The writing is very straighforward and easily comprehended. I got the hardcover edition as a gift, and am glad I did not have to pay for it.

If you think economic history has to be dull, you will be surprised by An Empire of Wealth. In it, financial journalist John Steele Gordon (who writes for, among other things, American Heritage) provides a sweeping, popular history of the U.S. economy from colonial times to the present. Much of what he discusses is inherently exciting -- such as the story of how steam railroads were developed -- but even when the subject would strike most people as dry (banking, money supply, etc.) Gordon makes it come alive.

Many people seem to have a problem with this book because it is so celebratory of the USA's wealth. But Gordon here demonstrates an important point: everyone (rich and poor alike) has benefited from the ability of capitalists to increase the size of the pie. Poor Americans of today are much better off than they would be if, instead of encouraging growth, the country had focused its efforts on a totally fair distribution of its wealth as it existed in, say, 1900 or 1920 or 1950. If you disagree with that, or don't understand it, then it is all the more important that you read this book. Even if you don't come around to Gordon's way of thinking, you will at least acquire the beginnings of a solid factual basis for your counterarguments.

One more point: Since the book was written for the "average reader," it's unfortunate that the bibliography is simply an alphabetical list of works consulted. I wish Gordon had instead provided an annotated bibliography, organized by topic, with his suggestions of what books are most useful. (Lawrence Friedman's History of American Law (1986) does this well, for example.)