The Triumph of Capitalism

Published by EH.NET (August 2008)

Robert A. Degen, The Triumph of Capitalism. New Brunswick, NJ: Transaction Publishers, 2008. xiii + 204 pp. $40 (cloth), ISBN: 978-1-4128-0689-3.

Reviewed for EH.NET by Joseph M. Santos, Department of Economics, South Dakota State University.

In The Triumph of Capitalism, Robert A. Degen (Professor of Economics, Emeritus at Sewanee, The University of the South) traces the origins and chronicles the development of the present-day Occidental mixed economy. The author begins with a brief history of economic thought and method ? he addresses (in a single chapter) the origins of money, early examples of specialization and trade, medieval commerce, scholasticism, mercantilism, Adam Smith, and the Industrial Revolution ? and devotes much of his attention to the confluence of twentieth-century economic, political, and social forces that wrought modern capitalism.

Most EH.NET subscribers will be familiar with the author?s conventional account of events: In essence, popular antipathy toward capitalism and a growing socialist ethos, spawned from labor movements in Europe and, to a lesser extent, the U.S., gained broad appeal between the First and Second World Wars, when severe economic contractions and concomitant political and social instabilities fomented widespread doubt in the viability of the free market. The ensuing persistent rise in government intervention, fueled in part by New Deal- and, later, Keynesian-inspired income-stabilization policies, gave way to ?economic cohabitation? of private and public sectors ? an economic system that relied inauspiciously (as the stagflation of the 1970s would reveal) on a structural relationship between policy-induced inflation and unemployment (p. 71). Ultimately, capitalism ? the modern mixed-economy variety ? triumphed over socialism in the sense that governments deemphasized planning and control, privatized and deregulated, reformed welfare, and largely unfettered international-capital flows. Nevertheless, an ?undertow of socialism? persists: average total government outlays ? federal, state, and local, including social security ? exceed 40% of GDP across OECD countries; and, as myriad financial and accounting crises of the last decade demonstrate, governments in ostensibly free-market economies intervene at their discretion often and with broad popular support (p. 101).

Degen writes for a general audience and, as such, offers readers an accessible first pass at the history of twentieth-century economic thought and organization. As this brief synopsis reveals, particularly to those who teach undergraduate courses in the history of economic thought or comparative economic systems, the scope and approach of The Triumph of Capitalism are quite reminiscent of Daniel Yergin and Joseph Stanislaw?s, Commanding Heights: The Battle for the World Economy (New York: Simon and Schuster, 1998) and its derivative PBS documentary series. Indeed, in light of this earlier and very popular contribution to this pedagogical genre, readers of The Triumph of Capitalism may wish that the author had traded breadth for depth and, hence, tied more thoroughly select contributions to economic thought with the appropriate pivotal twentieth-century events and policies; by doing so, readers would likely gain a more concrete ? and, hence, lasting ? appreciation for the context and substance of these contributions, as well as their significance to economic organization then and now. For instance, the author mentions Milton Friedman twice (in passing references to the Chicago School and Monetarism), but misses opportunities to discuss substantively his seminal contributions to economic thought and his influences on economic organization in the contexts of, say, monetary policy and the Great Depression or 1970s wage-price spirals and the demise of the putative Phillips Curve policy menu.

Nonetheless, The Triumph of Capitalism synthesizes an important history of economic organization in the twentieth century and, in doing so, rightly emphasizes throughout the public sector?s enduring share of the modern capitalist economy. As such, newcomers to this topic will appreciate what this book has to offer

Joseph M. Santos is Professor of Economics at South Dakota State University, where he teaches undergraduate and graduate courses in macro- and monetary economics. His current research examines early North American futures trading and the evolution of the Canadian Wheat Board.