Ideas in Development

A number of years ago, a contentious, brilliant philosopher, political theorist and ex-Marxist wrote down the following rules for democratic discourse:

Economists often claim that they are the only genuine social scientists. Not everybody buys this line.

Instead, skeptics argue that the economics that dominates the teaching of undergraduates and graduate students is only a single school of economic thought – generally, described as mainstream economics or neo-classical.

This appears to be the virtual consensus among those practitioners of the “dismal science,” if one turns to the advice of three fairly recent books on the subject:  William Baumol, Alan Blinder and Edward Wolfe’s Downsizing in America: Reality, Causes and Consequences (2003); Pierre Cahuc and Andre Zylberberg’s The Natural Survival of Work: Job Creation and Job Destruction in a Growing Economy (2006); and Clair Brown, John Haltiwanger and Julia Lane’s Economic Turbulence: Is a Volatile Economy Good for America? (2006). We should note that some of these authors could be regarded as liberals (for instance, Blinder and Wolfe).  I am making this point so that the reader will not assume that these books are all written by conservatives and libertarians.

Blessed Among Nations: How the World Made America is a fun, fascinating read. The author, Eric Rauchway, knows how to assemble his evidence and how to tell a story. The book is an examination of an earlier period of globalization. The country was in a unique position, from the Civil War to World War I. During this period, it was the place to invest and a massive amount of foreign capital flowed into the U.S., as its population soared and the Western frontier was developed.

The U.S. federal government was rather weak and there was little regulation of commerce, few protections for the working man or women, intense and violent conflict between labor and management, and constant additions of immigrants to the workforce, who were subjected to cruel exploitation and terrible working conditions.