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Handbook of the History of Money and Currency

Editor(s):Battilossi, Stefano
Cassis, Youssef
Yago, Kazuhiko
Reviewer(s):Connors, Duncan

Published by EH.Net (July 2022).

Stefano Battilossi, Youssef Cassis, and Kazuhiko Yago, eds. Handbook of the History of Money and Currency. Singapore: Springer, 2020. xv + 1,109 pp. $799.99 (cloth), ISBN 978-9811305955.

Reviewed for EH.Net by Duncan Connors, DBA Programme, Otago Business School, University of Otago.


When teaching the history of economic thought, I often ask this question in the first lecture: ‘What is money?’ Invariably the answer is a simplistic, thought-terminating cliché, ‘It’s a means of exchange, of course!’ and the students smile with an all-knowing expression. Needless to state, I do not play nice and during the following hour demonstrate that money, and by association finance and economics, is far more complex, diverse, and multifaceted than an average 18-year-old can possibly comprehend. Such is the condition of modern secondary education; many undergraduates (even postgraduates) lack an appreciation of the history and evolution of finance as an activity. There is, however, an antidote in the form of the Handbook of the History of Money and Currency, a collection of the latest work in the field that has an introductory research role as well as a pedagogical one.

The Handbook can be commended for the high level of synthesis between the many components. Indeed, when forming an academic ‘supergroup,’ the goal has to be more akin to the impeccable harmonies of Crosby, Stills, Nash & Young (CSNY) and not so much the extended solos of Emerson, Lake & Palmer (ELP), whose members travelled to concerts in separate limos and played very long individual solos because, frankly, they did not enjoy one another’s company. This can be seen in many academic collections, which sometimes strike a discordant note as chapters follow their own paths at times divergent from the overall aim of the text. The fascinating synergies found within the Handbook, however, can be witnessed from the very first section on the origins of money, where Michael Hudson, Colin P. Elliot, and Bill Maurer complement one another’s work on the early origins of money, a trend that continues throughout the text, helped in no small part by Stefan Battilossi and Kazuhiko Yago’s comprehensive introduction that by outlines the complementary aspects of each contribution to the Handbook, hence the text is more CSNY than ELP. This approach allows the student or academic using this book as an introduction to monetary history not only to appreciate the chronological evolution of money but also the economic, or perhaps philosophic aspects of the subject.

An example of this comes from choosing to open the text with Michael Hudson’s chapter on the origins of money that started with a joyous debunking of the ‘myth of barter’ (something which again every 18-year-old economics and finance student should be made aware of) that proceeded to demonstrate that debt likely existed before money by using a thought experiment akin to those employed by the late (and much missed) David Graeber at the London School of Economics: how can barter work if grain has not been harvested or livestock cannot travel in 30-degree heat during a Levantine mid-summer? The pragmatic and practical answer is that it cannot and therefore the first lesson about the nature of money itself has been imparted. This is important from both a pedagogical and research perspective as student and academic alike still cling to the notions of barter being utilised by early humans that were put forth by Aristotle and Adam Smith, despite the lack of evidence for such a view. This is a good way to start the text as it outlines the motivation of those trying to create stable and purposeful money over many millennia: to produce an item recognised for its value and remains so over time.

However, as W. Stanley Jevons and Carl Menger pointed out, value is subjective and can be based as much on utility as status, and this fluidity is discussed throughout the text, not just in the final sections dedicated to exchange rates, attempts at integration, central banking, monetary banking and aggregate price shocks (this final section appeared incongruous on first reading but in actualité acts as a fascinating segue into the current ‘crypto’ age) but throughout the text. One notable example of this can be found within the sections dedicated to the development of money in Asia, notably because until relatively recently developments in Asia were barely touched upon by western focused historians of financial and monetary history. Yohei Kakinuma’s chapter on the monetary system in ancient China is a particularly fascinating and welcome addition to the literature. The chapter covers early paper money, the ‘rise and fall’ hypothesis, and the complementary yet completely different currencies – silk, gold, and coin, the use of which depended on circumstances, status and geography. It is reasonable to argue that our understanding of monetary systems is constrained within a western theoretical bias and, consequently, just as recent research has challenged notions of barter used in early societies, the study of ancient Chinese currencies and other monetary developments over many millennia could add to our understanding of the evolution of early money.

This chapter leads onto work by Niv Horesh and Hisashi Takagi on the later period of monetary consolidation within China and Japan that led to currencies, once both nations had opened to trade with the western powers, based upon the Mexican (formerly Spanish) Silver Dollar. Indeed, on this point it could also be argued that the post-Enlightenment era of burgeoning trade and empire led to increased effort to standardise a common metric for currencies, what in geographic or navigational terms would be referred to as a datum: a base mark or reference point from which all measurements are taken. That the Silver Dollar in the late 18th century was a truly international currency and the basis of the US Dollar as well as the Chinese Yuan and Japanese yen (Indeed it was the basis for currencies across Asia) suggests a desire, at both government and commercial levels, for a monetary consistency that transcends time and borders, an important feature of a pre-telegraph and radio era global economy where transactions were drawn out along temporal and geographic lines. These trends are discussed in detail within the sections on exchange rate regimes and monetary integration, with notably fascinating chapters by Peter Kugler and Tobias Straumann on the Bretton Woods system, Catherine Schenk on the Sterling Area, and Anders Ögren on currency unions. The latter chapter is worthy of note for its analytical use of Robert Mundell’s ‘Optimal Currency Area’ to draw historical lessons from the Latin Monetary Union (LMU) of 1865 and the Scandinavian Currency Union (SCU) of 1873 that could be applied to the European Monetary Union and the euro. It should be noted, however, that despite the LMU starting out as a bimetallist system which included silver and gold (until 1878 after Cardinal Giacomo Antonelli, treasurer of the Papal States decided to debase its silver coinage to increase the supply of gold) that ultimately both unions were a response to a burgeoning gold standard in global trade in the mid to late 1800s. This could have been discussed in more detail and linked into the chapter on the Gold Standard by Lawrence H. Officer.

The final section of the text, on aggregate price shocks, was very welcome and, with Richard C. K. Burdekin’s contribution on deflation, very timely. However, monetary history can be described as a series of epochs between repeated crisis and this section could have been more extensive, including work on collapse of Bretton Woods, hyperinflation in Latin America and the post-Soviet sphere or even the global financial crisis that invariably follow the declaration of war (Richard Roberts, the pre-eminent history on the financial crisis of 1914 is sadly no longer with us and I was left wondering what contribution he might have made to this section). Indeed, discussion of such events could have segued well into some of the economic theories and models that were absent in this text. This is a very important point (particularly as we re-enter an age of inflation after COVID-19 and the events in the Ukraine) as reiteration of the circular nature of financial and monetary history could have been more informative to academic and students alike, particularly additional contributions on aggregate price shocks and rapid changes in the value of money over very short time frames.

This book is a welcome addition to the field. The juxtaposition of synthesis with new and orginal thought on the subject is welcome as many similar texts in related disciplines have in the past have been victims either of groupthink or provided a series of fractious contributions that are hard for the reader to reconcile. The editors of the Handbook of the History of Money and Currency, Stefano Battilossi, Youssef Cassis, and Kazuhiko Yago, have created an exceptional resource for both the research community, particularly doctoral students in the field or those working in related disciplines, as well as for those of us who teach the history of economic thought and the development of finance. If there is one criticism which could be levelled at the text, it is that the discussion of economic theories related to the evolution and perceptions of money were touched upon only fleetingly and a wider acknowledgement of meso-level social trends would have been equally welcome. Nevertheless, this is an important and substantial contribution and is a recommended read for all those working within the field of monetary history.


Duncan Connors is Senior Lecturer at the DBA Programme at Otago Business School, University of Otago. His publications include A History of Money, Fourth Edition, with Glyn Davies (University of Wales Press, 2016) and “The Atomic Business: Structures and Strategies,” with Maria del Mar Rubio-Varas and Joseba De la Torre (Business History, 2020).

Copyright (c) 2022 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator ( Published by EH.Net (July 2022). All EH.Net reviews are archived at

Subject(s):Financial Markets, Financial Institutions, and Monetary History
Macroeconomics and Fluctuations
Geographic Area(s):General, International, or Comparative
Time Period(s):General or Comparative

Disasters and History: The Vulnerability and Resilience of Past Societies

Author(s):van Bavel, Bas
Curtis, Daniel R.
Dijkman, Jessica
Hannaford, Matthew
de Keyzer, Maika
van Onacker, Eline
Soens, Tim
Reviewer(s):Noy, Ilan

Published by EH.Net (July 2022).

Bas van Bavel, Daniel R. Curtis, Jessica Dijkman, Matthew Hannaford, Maïka de Keyzer, Eline van Onacker, and Tim Soens. Disasters and History: The Vulnerability and Resilience of Past Societies. Cambridge: Cambridge University Press, 2020. x + 231 pp. $29.99 (paperback), ISBN 978-1108477178.

Reviewed for EH.Net by Ilan Noy, Victoria University of Wellington, New Zealand.


History’s path is strewn with disasters, and at least this reader did not require any convincing that the history of disasters and disasters’ impact on history are both worthy topics of a book-length investigation. Van Bavel, Curtis, Dijkman, Hannaford, de Keyzer, van Onacker, and Soens collaborated in writing a book that aims to provide a comprehensive description of the insights learnt from investigating the global history of disasters. And, indeed, the book delivers on this promise, and provides the interested reader with many nuggets of insights and ideas to ponder. The authors, a group of mostly historians and sociologists from the Low Countries, cover a long time span (from the Pre-Christian Mediterranean Basin to the West Africa Ebola epidemic of 2014), a varied geographic terrain, and several types of mostly sudden-onset disasters. They further elucidate on how historical developments are both catalysts for disasters, shape their impacts and their immediate aftermath, and are also affected by disasters in the long term, throughout a sometimes decades-long recovery process.

I first approvingly note that the authors managed to make the book “open access.” The book is available as a PDF file, for free, on the publisher’s website (Cambridge University Press). Given the primacy of disaster concerns in many places — including in very disadvantaged ones — it is important that this book be made available to anyone who might benefit from its insights. And, indeed, it does provide insights that can be beneficial to the puzzled policymaker who is tasked with reducing disaster risk, improving disaster risk management or the post-disaster emergency phase, or with designing policies for long-term community recovery.

The 1755 Lisbon earthquake-fire-tsunami disaster was perhaps the first modern disaster — one about which a lot of data were collected, and which was international in its scope. It is the prototypical event the authors aim to learn from and indeed describe. Many of the themes that constantly crop up – for example the role of inequality in shaping the impact, the immediate response, the longer-term recovery, and the potential for disasters to change governance and legal institutions – were all clearly present in the 1755 event. However, instead of vertiginously ranging across space and time and picking examples from these diverse places and time periods, the book could have benefitted from diving into a few example events and describing them more thoroughly. History, after all, is often hidden in the details.

As the authors note, “disasters can be understood and explained only by placing them in their social, economic, political, and cultural contexts.” This would be the conventional historical argument. At the same time, they also believe in the external validity of the lessons one can learn from past disasters to inform our behaviour before, during, and after the disasters that are destined to occur.  As an economist, I share this aspiration for external validity. Determined to learn global contemporary lessons from very specific circumstances, however, the authors sometimes stray too aggressively in that direction (for example, in their discussion about unequal mortality burdens and the deaths of clergy in a 1693 earthquake in Sicily which toppled many churches). But these are quibbles, and overall, the book manages to provide many insights, based on a lot of examples.

Many of the terms used by the authors — e.g., vulnerability, resilience, adaptation, mitigation, exposure, and even disaster — have multiple definitions, which often diverge across the various disciplines that study disasters. For example, economists (my tribe) and historians do not define resilience in the same way, and seismic engineers define this term differently from either. As such, I think it is incumbent on us to try and speak in the same language, rather than hoping others will grasp our own. The authors themselves seem to define some terms differently across chapters, and that may further confuse the reader.

Fortunately, the Intergovernmental Panel on Climate Change (IPCC) and the United Nations Office for Disaster Risk Reduction (UNDRR) have produced simple glossaries, defining many of these contentious terms. We ought to start using them. Economists frequently pay little attention to such heated terminological disagreements, and largely adopt the view that what looks like a duck, walks like a duck, and is understood by most people to be a duck, should be called a duck. It is perhaps regrettable that the authors are too polite and end up discussing these terminological disagreements at length. They thus miss several opportunities to move us away from rather pointless disagreements and toward a consensus shaped by the IPCC and UNDRR.

One other quibble is that most of the history they cover focuses on high-income countries and their travails (with a specific and understandable focus on the Low Countries). Disasters, however, are more consequential in other parts of the world, parts which are poorly served by limited historical scholarship and hence by the authors themselves. Clearly, we need to do better as the most difficult challenges for disaster risk management are in those parts of the world we know least about. The authors readily acknowledge this lacuna, but as happens only too frequently, they are unable or unwilling to fill in what is lacking.

What is mainly lacking for me, as an economist, is quantifications. The authors describe myriad ways in which disaster dynamics are shaped by culture, by institutions, by economic structures, and by other mechanisms, but they almost never try to describe the magnitude of these channels, or indeed determine which ones are more important. Even when discussing the main global database that measures disaster impacts (EMDAT — collected by a research centre at the University of Louvain), they inaccurately define the criteria it uses (p. 63) and do not mention the quantifications it contains.

Finally, the book was published in 2020, but it was written before a new coronavirus variant somehow escaped its zoonotic host and changed our thinking about the possible ways in which epidemics could evolve and affect us. Indeed, our assessments as to which countries are more resilient to this type of disaster shock proved completely off the mark; unexpectedly, countries like Vietnam or Taiwan (or my own country, New Zealand) proved to be much more successful in handling the pandemic than the United States, the United Kingdom, or indeed all the rest of Europe. Had we done more historical research, on the 1918 Influenza pandemic for example, would we have been able to predict that?

I do hope that the authors, having observed the last three years since they finished writing this book, are now hard at work on a sequel, one that tries to take all the insights learned from historical disasters, and especially from past epidemics, and consider them in reference to the very diverse local experiences that we have all observed and lived through since COVID-19 emerged.


Ilan Noy is the Chair in the Economics of Disasters and Climate Change, at Te Herenga Waka — Victoria University of Wellington. He is the founding Editor-in-Chief of Economics of Disasters and Climate Change and recently authored (with Tom Uher) “Four New Horsemen of an Apocalypse? Solar Flares, Super-volcanoes, Pandemics, and Artificial Intelligence” in that journal.

Copyright (c) 2022 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator ( Published by EH.Net (July 2022). All EH.Net reviews are archived at

Subject(s):Economywide Country Studies and Comparative History
Environment, Climate, and Disasters
Macroeconomics and Fluctuations
Geographic Area(s):General, International, or Comparative
Time Period(s):General or Comparative

21st Century Monetary Policy: The Federal Reserve from the Great Inflation to COVID-19

Author(s):Bernanke, Ben S.
Reviewer(s):Ebenstein, Lanny

Published by EH.Net (July 2022).

Ben S. Bernanke. 21st Century Monetary Policy: The Federal Reserve from the Great Inflation to COVID-19. New York: W. W. Norton & Company, 2022. xxvi + 480 pp. $35.00 (hardcover), ISBN 978-1324020462.

Reviewed for EH.Net by Lanny Ebenstein, Department of Economics, University of California, Santa Barbara.


Ben Bernanke’s 21st Century Monetary Policy is sure to become a classic work on the history of the Federal Reserve System in the postwar era to the COVID-19 recession. It will be required reading for all future students of and officials at the Fed. Bernanke’s perspective is shaped by two fundamental virtues: his academic work as a scholar of the Fed and of monetary policy and his practical work as a member of the Federal Reserve’s Board of Governors and, from 2006 to 2014, its Chair. Both virtues are displayed in this excellent book.

Bernanke’s description of Fed policymaking will be enlightening to most. There has not really been a work on the history of the Fed that has captured the public or academic minds since Milton Friedman and Anna Schwartz’s A Monetary History of the United States, 1867-1960 (1963). Friedman’s mantra, “Inflation is always and everywhere a monetary phenomenon,” became implanted in popular consciousness, and his monetary interpretation of the Great Depression–that the primary source of the depression was a monetary collapse initiated by the Federal Reserve System or which, in any event, the Fed could largely have forestalled–became the conventional scholarly wisdom.

On the basis of favorable comments Bernanke made at Friedman’s 90th birthday party in 2002–“I would like to say to Milton …: Regarding the Great Depression. You’re right, we [the Fed] did it. We’re very sorry. But thanks to you, we won’t do it again” (p. xvii)–it is sometimes mistakenly thought that Bernanke is basically a Friedmanite monetarist. As he makes clear in 21st Century Monetary Policy, however, Bernanke is fundamentally a Keynesian in analytic apparatus and perspective: “So-called Keynesian economics, in a modernized form, remains the central paradigm at the Fed and other central banks” (p. vii). Friedman’s mantra is replaced by Bernanke’s dictum: “Although growth in the money supply and inflation bear some relation in the long run, at least in certain circumstances, in the short run the connection can be unstable and difficult to predict” (p. 35). For Bernanke–as with his predecessors and successors at the Fed–monetary policy, except in unusual circumstances, is basically interest rate policy.

The early chapters of 21st Century Monetary Policy on the Fed from the 1960s through the 1990s have many nuggets of information and provide great insight into theoretical analysis at the Fed to this day. William McChesney Martin, Chair of the Federal Reserve from 1951 to 1970, famously said that the Fed’s job is to “take away the punch bowl just as the party gets going,” that is, to raise interest rates in order to stem inflation as economic growth increases. This is the policy to which Martin and his successors have largely adhered. Bernanke’s outlook is that inflation is usually conditioned by “changes in economywide demand for goods and services [emphasis in original]” and “shocks to supply rather than demand” (p. 12), with significant emphasis on “expectations”: “Debates about the determinants of inflation expectations and about how central banks can affect those expectations have been central to the analysis and practice of monetary policy since at least the 1960s, if not earlier” (p. 13). Friedman’s focus on money supply is hardly a factor in the analysis.

The Fed Chair to whom Bernanke gives the most praise is Paul Volcker, who served from 1979 to 1987. Bernanke credits Volcker for having the wisdom and tenacity to initiate and maintain the high interest rates between 1979 and 1982, which, in the form of the federal funds rate, reached 20 percent in 1980–the highest ever, before or since. As a result of Volcker’s “war on inflation” (p. 36), as Bernanke and others have called it, inflation “dropped from about 13 percent in 1979 and 1980 to about 4 percent in 1982 … Thus, in only a few years, the Fed largely reversed the increase in inflation built up over a decade and a half” (p. 36).

Bernanke’s appraisal of Alan Greenspan’s long span as Fed Chair from 1987 to 2006 is somewhat more, at least to this reviewer, mixed. Though he gives Greenspan high marks for managing the domestic and, to a significant extent, world economies for most of his tenure in office, it cannot be gainsaid that the roots of the Global Financial Crisis and Great Recession emerged during Greenspan’s chairmanship. Bernanke sagely observes: “The extended rise in the Fed’s [interest] policy rate likely contributed to the decline in housing prices that began in the summer of 2006” (p. 106).

With respect to his own transformative chairmanship, Bernanke recounts the aggressive and unprecedented actions the Fed took to diminish the Global Financial Crisis and Great Recession. He persuasively argues these actions were necessary to prevent the meltdown of the American and world financial systems and thereby economies. About the only criticisms I would offer here of his presentation is that he does not adequately incorporate into his analysis the impact of nonfinancial factors, such as increasing energy prices and demographic changes, on economic activity, but this is perhaps not an entirely fair cavil to make against a work whose title states it concerns monetary policy.

21st Century Monetary Policy: The Federal Reserve from the Great Inflation to COVID-19 extends to 2021 and includes thinking on the future of Federal Reserve and its policy, but it is probably best to defer discussion of these subjects as a result of their proximity to the present. Bernanke believes that a historical approach is the best way to understand “how the Fed’s tools, strategies, and communication have evolved to where they are today” (p. xi). All interested in the history of the Federal Reserve, Federal Reserve policy, and the theory underlying Fed policy will want to read this book.


Lanny Ebenstein is a Lecturer in the Department of Economics at the University of California, Santa Barbara. He is the author of ten books and many articles on economic and political history, history of economic thought, and public policy.

Copyright (c) 2022 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator ( Published by EH.Net (July 2022). All EH.Net reviews are archived at

Subject(s):Economic Planning and Policy
Financial Markets, Financial Institutions, and Monetary History
Macroeconomics and Fluctuations
Geographic Area(s):North America
Time Period(s):20th Century: WWII and post-WWII
21st Century

How the World Became Rich: The Historical Origins of Economic Growth

Author(s):Koyama, Mark
Rubin, Jared
Reviewer(s):Mokyr, Joel

Published by EH.Net (July 2022).

Mark Koyama and Jared Rubin. How the World Became Rich: The Historical Origins of Economic Growth. Cambridge, UK: Polity Press. x + 259 pp. $24.95 (paperback), ISBN 978-1509540235.

Reviewed for EH.Net by Joel Mokyr, Departments of Economics and History, Northwestern University.


Full disclosure: this reviewer’s name appears on the back cover of this book having written an endorsement, known as a blurb. Given that in the 40 words of an endorsement one can say very little, this book merits a more detailed discussion.

Any scholar teaching economic history and wishing for an up-to-date survey of a large and important literature will find it useful to read this book to bone up on the recent research listed in the long and encompassing list of references. Furthermore, they should seriously consider having their students read it for their class. The book is a wide-ranging yet remarkably complete and accessible survey of the Great Enrichment, the emergence of modern and prosperous economies that provide us with a material standard of living that our ancestors could not have dreamed of. How and why modern economic growth occurred when and where it did, and how economists have tried to understand this phenomenon, is the theme of this book. It is written by two of the finest young senior scholars in our field, both with important contributions to the subject matter of this book.

Many of the issues this book raises are highly contentious in our profession, and for good reason: these are hard questions on which learned scholars can disagree and interpret the evidence in different ways. How much did institutions really matter? What was the role of culture in economic growth? Was geography destiny? What was the role of craft guilds in the economic development of early modern Europe? How to think about the role of imperialism and slavery in the Industrial Revolution and the subsequent growth of industrial powers? Were high wages good or bad for technological progress? Was war a positive factor in economic growth? Was the European Marriage Pattern a positive factor in the economic development of the Continent?

The ecumenical and balanced approach the authors take to these questions is much like the Rabbi in a famous Jewish story. According to the legend, a rabbi is holding court in front of a large audience of his pupils. A husband and wife appear before the rabbi, to discuss their troubled domestic life. First the husband gets to lay out his case, and he lists all the sins and vices of his wife. The Rabbi listens carefully and pronounces his verdict: the husband is in the right. Then his pupils appeal to him: you should hear the wife’s case as well. The Rabbi consents and listens to the woman lays out her powerful case against her lazy and violent husband. He then announces his second verdict: the wife is in the right. His best pupil protests: but Rabbi, how can they both be in the right? The Rabbi listens and pronounces: the pupil is right too.

Rubin and Koyama present balanced and fair surveys of made in the literature, but they are reluctant to take strong positions. Such an ecumenical approach sets them apart from Clark’s Farewell to Alms and McCloskey’s Bourgeois Dignity, where the authors take up similar issues but in a much stronger opinionated mode. That thoughtful and measured approach of the survey, its elegant and crystal-clear style, and the authors’ impressive knowledge of a large and complex literature make this book nothing short of ideal for teaching advanced courses on global economic history to economics students.

It is especially refreshing to see a book such as this that pays explicit attention to institutions and culture, two themes that until not so long ago were taboo in our field but now seem to play increasingly central roles. The book contains full chapters on each, and while the discussion is naturally far from exhaustive, the authors do an excellent job summarizing some of the best work in these areas. What remains, of course, unsolved is why different nations develop different institutions and how and why such institutions change over time and how exactly cultural beliefs help determine the institutions that society ends up with.

The one issue on which the book takes a relatively strong position is on the issue of European imperialism and the importance of slavery and the slave trade to the Industrial Revolution and the origins of Western technological leadership (chapter 6). In recent years the “new history of capitalism,” in its zeal to blame the West and Capitalism for all the ills of the world, has argued that the West grew rich largely at the expense of the Africans and Asians whom Europeans mercilessly enslaved, sold, and exploited. As more sophisticated and economically literate scholarship has shown, the famous thesis by Eric Williams and recent proponents (e.g., Berg and Hudson, 2021) that somehow the Industrial Revolution depended on European imperialism and the Atlantic slave trade cannot be seriously defended. While Atlantic ports have been shown to have been crucial for subsequent economic development (Acemoglu, Johnson and Robinson, 2005), the exact causal chains are still unclear, and Koyama and Rubin stress sensibly that without institutional support for technological progress, without a rule of law and constraints on the executive, and without a comparatively inclusive society, no amount of colonialism and oppression of non-Europeans would have triggered modern economic growth.

The insight that economists have brought to this literature is that economic growth is fundamentally a positive-sum game: on a global level, the economic success of the West did not — on average — impoverish the Rest. In the long haul it made the entire world much richer than before — just not quite as rich as Europe and its offshoots (with some major exceptions such as Japan and Singapore). The causality is more complex. Whatever it was that made Europe learn to control energy and materials as well as run their economic systems better, also allowed them to manipulate and exploit Asians and Africans. But if anything was causal here, it was not that Imperialism caused the Industrial Revolution but the reverse: as Daniel Headrick in his classic work on the topic (1981) showed decades ago, what made western Imperialism possible above all was better technology (see also Hoffman, 2015).

Moreover, it is striking how poorly the historical fit between Imperialism of any kind and economic growth really is. The Roman Empire was the mother of all predatory empires, yet it did not industrialize and experienced only limited technological change. Eighteenth century China and Russia both added enormous stretches of land to their realms, with no noticeable effects on economic growth. The British Industrial Revolution coincided with the loss of the North American thirteen colonies. While Britain was a successful commercial and maritime nation, the Smithian gains from trade with its Empire — as Deirdre McCloskey (2010) has persuasively argued — were by themselves never enough to trigger the Industrial Revolution, much less create the Great Enrichment. In per capita terms, one of the largest colonial empires was the Dutch one in the East Indies, yet it did not help the Dutch industrialize until late in the nineteenth century. Belgium initiated its lamentable adventure in the Congo only after it had industrialized. Perhaps most strikingly, the European imperial venture collapsed after World War II, yet those were exactly the years during which economic growth in Europe was most rapid — with the exception of Russia (which maintained its colonial empire until 1991). In short, Koyama and Rubin conclude that colonialism and the slave trade “played a large role in the making of modern world” (a suitably vague statement) but that evidence is “mixed” on whether it was responsible for the world becoming rich (a polite pronouncement of a Scottish verdict: not proven).

Where the book truly shines is pointing out why the Great Enrichment was relatively late in coming and why the pre-1750 world — with a few exceptions — remained poor. The authors admirably survey the consensus that has emerged on the subject. Three major factors held the economies back. First, as neo-Malthusians such as Galor and Clark have maintained, before 1750 population growth in many cases wiped out the fruits of productivity growth, such as they were. Second, predators of various kinds and extractive institutions (North-Wallis-Weingast’s “natural state”) not only pillaged and plundered the riches of the few places that had been economically successful, they extinguished incentives to invest and innovate. Finally, until institutions had been established to govern and control the accumulation and dissemination of useful knowledge, the opportunities for sustained technological progress remained too limited. As the authors point out in admirable detail, the Industrial Revolution meant that these three brakes on economic progress slowly dissolved to create the Great Enrichment, first in a few economies in the West, then in more and more places around the world.

At the end of the day, as the authors sum up in chapter 11, in 2022 “the world is rich.” Almost anywhere one lives in this world, material life is in all likelihood better that it was a century, let alone a millennium, ago. A rising tide lifted most ships on the planet, but rather unequally, and while global poverty and famine are a fraction of what they were in 1800, they are still with us — mostly because of incompetent or tyrannical governance. What is perhaps worth noting, however, is that while technology keeps advancing, with novel breakthroughs opening new horizons in material sciences, molecular genetics, energy physics, and much more, there seems to be little if any long-term progress in the institutions that underlay the economic miracles of the past two centuries. Not only do countries with weak institutions such as Russia seem to lack the capability to adopt more inclusive and open governance, but even in nations long committed to the Enlightenment visions of freedom, human rights, and democracy, the institutions that helped make us rich seem ever more fragile. The conflict between ever-more powerful technology and the brittle polities that deploy it may be the greatest challenge to our future.


Acemoglu, Daron, Simon Johnson, and James A. Robinson. 2005. “The Rise of Europe: Atlantic Trade, Institutional Change, and Economic Growth.” The American Economic Review 95 (2005), pp. 546-579.

Berg, Maxine, and Pat Hudson. 2021. “Slavery, Atlantic Trade and Skills: a Response to Mokyr’s ‘Holy Land of Industrialism’” Journal of the British Academy, Vol. 9, pp. 259–281.

Clark, Gregory. 2007. A Farewell to Alms. Princeton, NJ: Princeton University Press.

Galor, Oded. 2011. Unified Growth Theory. Princeton, NJ: Princeton University Press.

Headrick, Daniel R. 1981. The Tools of Empire. New York: Oxford University Press.

Hoffman, Philip T. 2015. Why Did Europe Conquer the World? Princeton, NJ: Princeton University Press.

McCloskey, Deirdre. 2010. Bourgeois Dignity: Why Economics Can’t Explain the Modern World. Chicago: University of Chicago Press.

North, Douglass C., John Joseph Wallis, and Barry Weingast. 2009. Violence and Social Orders. Cambridge: Cambridge University Press.


Joel Mokyr is the Robert H. Strotz Professor of Arts and Sciences and Professor of Economics and History at Northwestern University, and Sackler Professor, (by special appointment) at the Eitan Berglas School of Economics, Tel Aviv University. His most recent book is A Culture of Growth (Princeton University Press, 2017).

Copyright (c) 2022 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator ( Published by EH.Net (July 2022). All EH.Net reviews are archived at

Subject(s):Economic Development, Growth, and Aggregate Productivity
Economywide Country Studies and Comparative History
Servitude and Slavery
Living Standards, Anthropometric History, Economic Anthropology
Geographic Area(s):General, International, or Comparative
Time Period(s):General or Comparative

The Industrial Revolution: A Very Short Introduction

Author(s):Allen, Robert C.
Reviewer(s):Offer, Avner

Published by EH.Net (June 2022).

(Editor’s note: Because this review covers two books, Global Economic History and The Industrial Revolution, we have posted it twice, with one posting for each title, for the sake of easier searches.)


Robert C. Allen. Global Economic History: A Very Short Introduction. Oxford: Oxford University Press, 2011. xiv + 170pp. £8.99 (paperback), ISBN 978–0–19–959665–2.

Robert C. Allen. The Industrial Revolution: A Very Short Introduction. Oxford: Oxford University Press, 2017. xiv + 150pp. £8.99 (paperback), ISBN 978–0–19–870678–6.

Reviewed for EH.Net by Avner Offer, Professor Emeritus of Economic History, All Souls College, University of Oxford.


These two books are already classics. Robert Allen has spent decades investigating the cause of modern economic growth from early modern times to the 20th century. He developed a metric for economic welfare, the minimum household subsistence basket, which has been estimated globally over the whole period, and an analytical framework for understanding the drivers of economic growth. These two books distil his findings and opinions. The learning is worn lightly: the books are reliably expert but are also succinct and highly readable. For the subject they cover, there is nothing better.

The first title, on global economic growth, is breath-taking in its grasp. It describes and accounts for the process of economic growth over five centuries in Asia, Europe, and the Americas. For each historical period and for each region the argument, framed in terms of cause and effect, delves down to the detail of institutions, technology, and welfare, supported by illuminating graphs and tables, most of them from data assembled by Allen himself. The past is sometimes allowed to speak in its own voice. The story is driven by a deep curiosity about how things work, for the ways that people and firms conduct themselves, with a hands-on relish for the feel of physical machinery. All this makes for a compelling read, and the books are deservedly very popular. The second of them, on the British Industrial Revolution, has all the virtues of the first, and adds an excellent chapter on social and political impacts which affirms a pessimistic view of worker welfare in a period of soaring business wealth. This grand project has encountered some controversy. Although firm in his own views, Allen also gives a generous hearing to other interpretations and especially those that stress the role of culture, knowledge, science, and civil society. If there is any partiality at all, it is not ideological but methodological.

The core issue is defined by Allen as why modern economic growth, and why initially in Britain and Europe more generally. Up to the 18th century, China and India together dominated global manufacturing and had a large export trade with Europe, porcelain from China, fabrics from India. Why did manufacturing shift from the east to the west during the 19th century, and why did it shift back again by the end of the 20th century? Implicitly underlying the argument is a neoclassical (Cobb-Douglas, Solow) model in which growth arises from the combination of capital, labour, and technological innovation. The pace and direction of growth are determined by the relative costs of these factors. In 18th century Britain labour was already costly in consequence of pre-industrial progress on a broad front, while capital was relatively cheap as a result of trading profits and large landowner rents. Hence there was a strong incentive for labour-saving technological innovation at the outset of the Industrial Revolution, and for the ensuing mechanical and chemical breakthroughs which gave Britain its industrial leadership. Where hands were cheaper there was no incentive to replace them with costly machines. In a process of incremental innovation Britain’s mechanised industry became the lowest-cost producer and dominated industrial exports worldwide for several decades.

But that cannot be the whole story, as Allen recognizes. If it is only a matter of the relative prices of capital and labour, why could capital not move to Asia, employ Asian labour, and export to Britain at even cheaper prices? That is what happened in the 20th century, when Britain and the United States de-industrialised and saw their manufacturing move offshore within the space of a few short decades, stranding the abilities and skills of manufacturing workers at home.

To adequately tell the story of modern economic growth Allen needs to bolt on several extensions, which in the end make it a different model from the one that merely responds to relative prices. As he tells it, the initial triggers were actually two windfalls, firstly the maritime expeditions which opened up access to new commodities and created new markets and a great deal of wealth, part of it arising from the forcible enslavement of Africans.  Two centuries later this was followed by the serendipity of easily accessible coal in the United Kingdom. Both of these windfalls are taken to be necessary conditions for the growth that ensued. Countries less favourably positioned could eventually catch up and substitute for the missing factors and for the stimulus of high wages, by means of a standard ‘development package’ made up of removal of internal trade barriers, external tariffs, domestic transport development, an effective financial system, and mass education and literacy. First implemented in the United States in the early decades of the 19th century, these policies were advocated influentially by Friedrich List in Germany (1841). The package was implemented successfully in continental Europe, but with mixed results in Latin America a century later, due to the economies there not being large enough to deploy manufacturing at a large enough scale.

The standard package provides a hint as to why capital could not be successfully exported to India to mechanise it early in the 19th century. As Allen shows in the case of the British Industrial Revolution, what counted was not only the price of labour but also its quality. While Indian workers were illiterate, about half of British ones could already read and write at beginning of the 19th century. Technical innovation in Britain took place within a rich ecosystem of a mature, articulate, urbanised civil society, with enterprise, science, curiosity, debate, and an elaborate subdivision of labour. For countries too far behind to implement the ‘standard package’ there was also a ‘Big Push’ catch-up option. Development was anticipated by heavy investment applied top-down in strategic sectors in manufacturing, agriculture, and education. First down this route were the Japanese, followed by the Soviet Union, and then successfully in Korea, Taiwan, and mainland China.

Allen’s books are satisfying to read as an acute historical account of economic development globally, but their theoretical framework is somewhat ad hoc. By stopping mostly at the end of the 19th century they largely ignore intrinsic limitations of economic growth as an ultimate source of welfare. Applying another perspective can reveal a different weighting and significance for the crucial factors. One such perspective is the discipline of economics itself as it arose in the cauldron of the Industrial Revolution, namely the classical economics of Adam Smith, Malthus, Ricardo, Marx, and John Stuart Mill. Unlike the neoclassical economics which followed, the factors of production were initially labour, capital and land, the latter factor representing the benefits and costs of location and the bounty of natural resources. It has been argued that Nature was taken out of economics (or rather taken for granted entirely) from the 1870s onwards by neoclassical economists wary of Henry George’s proposals for concentrating taxation on land (Gaffney and Harrison, 1994).

Restoring land as a factor has several explanatory advantages. It embraces overseas discovery not as an inexplicable windfall but as an expansion of the Earth’s exploitable surface, and takes analytical account of the crucial role of distance in trade. It places a decisive emphasis on fossil fuel, not only as ‘cheap energy’ available in particular locations, but as a force multiplier which leveraged muscular effort by more than an order of magnitude. Arguably this was a sufficient condition for economic growth once the technical problems of extraction were solved by means of the Newcomen steam engine and its successors. From that point of view technological development was an extended effort to harness and deploy this force multiplier for human requirements, a process that was necessarily slow and uneven, yet eventually became the main driver of modern economic growth. Without the energy surge of coal, technical innovation in itself would have been of little or no avail.

One of Allen’s key concepts is the minimum subsistence basket, which forms the unit of account. It does not include rent as the cost of location, only a standard 5% addition for housing. One of the costs of urbanisation, however, is much higher location rents. When these are taken into account the terminal multipliers of living standards which he provides, especially in the West, are too high, and provide an overestimate of well-being which continues up to the present. In the big metropolitan cities today location rents can make up to a quarter of the cost of living, ignoring other costs of congestion like air pollution and travel time. In the Habakkuk thesis (mentioned by Allen) the high wages in North America are caused by the abundance of land and are otherwise inexplicable in his account of economic growth there: the land factor again.

Economic growth is currently on course to exhaust the resources required for human life by warming up the climate and running down water supplies and usable energy. We are running out of ‘land’ in its broad economic connotation. Growth threatens to undermine itself, and may well turn out to have been a reversible phase in human development. The untrammelled and destructive pursuit of gain is exacerbated by the meliorist bias of neoclassical growth theory. The current economic analysis of climate draws on the same optimistic Solow growth theory to dismiss the dire predictions of climate scientists, thus acting to slow down preventive action and making disaster more likely. In contrast, substituting usable energy for technological change in growth models provides a third driver for growth which is as measurable as labour and capital, which has a good long-run empirical fit (Hall and Klitgaard, 2010; Warr, et al., 2011). Technology, the imponderable factor in current growth theory, can also spring unwelcome surprises. General artificial intelligence, a prospective form of Schumpeterian creative destruction, threatens to make humanity itself redundant.

Allen knows about most of these complications, and this review is too short to do justice to the richness and subtlety of his account. These studies provide a landmark outline of global economic growth and the British Industrial Revolution in alignment with mainstream economic thinking today. After more than two centuries of reflection and writing, these admirable works also highlight how much still remains to be understood.


Gaffney, M., and F. Harrison. ‘Neo-classical Economics as a Stratagem against Henry George’. Pp. 29-122 of Corruption of Economics, ed. M. Gaffney. London: Shepheard-Walwyn (Publishers) in association with Centre for Incentive Taxation Ltd, 1994.

Hall, C. A. S., and K. A. Klitgaard. Energy and the Wealth of Nations: Understanding the Biophysical Economy. New York: Springer, 2012.

Warr, B., R. Ayres, et al. `Energy Use and Economic Development: A Comparative Analysis of Useful Work Supply in Austria, Japan, the United Kingdom and the US during 100 years of Economic Growth’. Ecological Economics 69: 1904-1917 (2010).


Avner Offer ( is Chichele Professor Emeritus of Economic History, All Souls College, University of Oxford. His most recent book is Understanding the Private-Public Divide: Markets, Governments, and Time Horizons (Cambridge University Press, 2022).

Copyright (c) 2022 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator ( Published by EH.Net (June 2022). All EH.Net reviews are archived at

Subject(s):Economic Development, Growth, and Aggregate Productivity
Economywide Country Studies and Comparative History
Geographic Area(s):General, International, or Comparative
Time Period(s):General or Comparative

The Mismeasure of Progress: Economic Growth and Its Critics

Author(s):Macekura, Stephen J.
Reviewer(s):Gallardo-Albarrán, Daniel

Published by EH.Net (June 2022).

Stephen J. Macekura. The Mismeasure of Progress: Economic Growth and Its Critics. Chicago: The University of Chicago Press, 2020. 320 pp. $27.50 (cloth), ISBN 978-0226736303.

Reviewed for EH.Net by Daniel Gallardo-Albarrán, Rural and Environmental History Group, Wageningen University.


One major line of inquiry in economic history concerns the measurement of economic development in the long run. Over the past two decades, the field has thrived by furthering our understanding on important questions on the timing of the ‘Great Divergence’ or the consequences of industrialization for living standards (among others). However, there are issues at the core of this research strand that are often swept aside or are insufficiently tackled, as a result of using price-adjusted Gross Domestic Product (GDP), wages and similar metrics capturing purchasing power or economic output. For instance, which changes in an economy should count as economic development? How are narratives of long-term living standards influenced by the assumptions underpinning our measurement frameworks? These questions are of paramount importance to anyone interested in measuring or understanding long-run development, and Macekura’s work provides useful insights into them.

The Mismeasure of Progress presents a sweeping history of dissent, conflict, and disagreement around the concept of Gross National Product (GNP) and the growth paradigm, i.e., the idea that societies should maximize national income. Macekura follows the professional and intellectual trajectory of a number of experts who were crucial in developing and measuring GNP and GDP and establishing the system of national accounts, along with major critics of this endeavor. The book ultimately shows that the story does not end well for those critics who aspired to fundamentally change how societies measure national income and its preeminence in academic and policy circles, since GDP prevailed after all. However, knowing how their ideas developed is important to put in historical perspective current arguments against GDP.

The book contains six chapters as well as an introductory and a concluding chapter. The former sets the stage and draws parallels between current and past growth measurement critics. The development of the main argumentation of the book begins in the first chapter, which deals with a critical question: how did policy circles and the academic community come to associate living standards with GNP so narrowly? Before Simon Kuznets submitted his report on national income to the American Senate in 1934, concerns about the condition of the working classes triggered initiatives to gather information on different (non-income) aspects of people’s lives. For instance, the International Labor Organization conducted cross-national social surveys to measure workers’ access to food and shelter, and national statistical offices amassed data on suicides, crime rates, etcetera. However, the Great Depression and the Second World War consolidated national income statistics as a priority for policy makers, who used them to manage tight budgets and to mobilize large amount of resources for the war economy.

The construction of national income statistics and their adoption for economic policy was far from a smooth process, as the second and third chapters show. Already in the 1930s and 1940s, experts identified limits of national income as meaningful metric of economic activity and thus were skeptical of its usefulness to understand the economy of countries in different stages of development. Macekura illustrates this by highlighting the work of Phyllis Deane, a British economist tasked with measuring the economic capacity of the colonies in the 1940s. Her work in Zambia led her to criticize the national accounts as a clear comparable framework of economic activity, since it did not take into account that unwaged female labor and self-subsistence output were an important part of Zambian household production. In addition, a number of critics argued that the pursuit of growth had negative side effects for the natural environment and society, including greater poverty and inequality. The influential report Limits to Growth published by MIT in 1972 argued that ecological constraints would lead to a decline in population and living standards. An overemphasis on maximizing GDP was therefore misleading since economic growth had environmental costs that were not properly accounted for. Similarly, others argued that the pursuit of rationality and efficiency resulted in a spiritually aimless society too focused on mass consumerism.

Chapters four and five describe the crisis suffered by the growth paradigm in the 1970s and the search for alternatives that followed. The dependency of industrialized countries on fossil fuels (e.g., coal, oil) and other minerals (e.g., copper, zinc, lead) became increasingly clear to experts and the general public, as energy consumption surged after 1950 and economies suffered from the energy crisis of the 1970s prices when oil prices skyrocketed. For many, capitalist growth would ultimately lead to social disruption and conflict, although not everyone agreed. Intellectuals in the Global South saw maximizing GDP as a way to achieve prosperity and therefore opposed a zero-growth policy agenda in developing countries, which some even considered a new form of imperialist oppression. These discussions provided fertile ground for the development of social indicators that could replace GDP. Two influential metrics in this respect, which did not succeed in the end, were the Physical Quality of Life Index by Morris David Morris and the Measure of Economic Welfare by William D. Nordhaus and James Tobin.

Chapter six closes the main argumentation of the book by covering the revival and later debate of the growth paradigm during the last decades of the 20th century. The reliance on market mechanisms to reactivate the stagnating economies of the 1970s gave further impetus to the idea that maximizing national income will lead to long-term economic and social stability. However, and unlike the predominance of the growth paradigm in the 1940s and 1950s, the arguments and initiatives of critics reached a much broader audience than before. One example is the well-known Human Development Index that was embraced by the United Nations to enrich public discussion about international development in 1990. Even though this and other measures quantifying the environment and female work did not end up replacing GDP, they have significantly broadened the ideas around what constitutes development and how to advance it.

My main quibble with The Mismeasure of Progress is that it remains mostly descriptive. It excels at presenting the origins of dissent around GDP and the growth paradigm, and how some concepts and metrics emerged, changed, and at last were discarded. However, it would have been useful and interesting if Macekura had explained in detail why such ideas were ultimately ignored. To be sure, some parts give hints at why that was the case, but I missed a chapter (or various sections) providing a systematic review of various explanations and how they compare against each other. In addition, although this is a minor criticism, there is some argument repetition in a few parts that could have been avoided by referring the reader to other chapters.

Overall, this is an interesting book that complements earlier work on the origins and evolution of GDP (by Diane Coyle) as well as more technical work on how GDP mismeasures important aspects of citizens’ lives (by Marc Fleurbaey and Didier Blanchet). I think the first three chapters are particularly valuable for teaching purposes to chart the complicated origins of national income and how economists, far from a homogeneous group interested in advancing a specific agenda, fought against some of the very things the international community value most these days, such as gender equality, sustainability, or inequality. And perhaps this is one of the key lessons to extract from it: there is a long tradition of experts arguing that growth is non-neutral and we can learn from their history to craft more compelling alternatives to measure living standards in both history and the present. Agreeing on a definition or metric of progress is elusive and maybe impossible, but having public discussions about the shortcomings of our measurement frameworks will bring us closer to something that resembles a consensus worth pursuing.


Daniel Gallardo Albarrán is assistant professor in Economic History at Wageningen University, where he researches the roots of global health inequality and their implications for global welfare disparities. He is currently conducting a project funded by the Dutch Research Council on the determinants of clean water and sanitation since 1850 from a global perspective, and he manages the research portal Long-Run Health Matters (

Copyright (c) 2022 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator ( Published by EH.Net (June 2022). All EH.Net reviews are archived at

Subject(s):History of Economic Thought; Methodology
Living Standards, Anthropometric History, Economic Anthropology
Geographic Area(s):General, International, or Comparative
Time Period(s):20th Century: Pre WWII
20th Century: WWII and post-WWII

Armies of Deliverance: A New History of the Civil War

Author(s):Varon, Elizabeth R.
Reviewer(s):Farrell, Daniel

Published by EH.Net (June 2022).

Elizabeth R. Varon. Armies of Deliverance: A New History of the Civil War (College Edition). Oxford: Oxford University Press, 2020. xxiii + 531 pp. $35 (paperback), ISBN: 978-0199335398.

Reviewed by Daniel Farrell, Department of History, University of Cincinnati.


Throughout the decades, there has been no shortage of literature to explain the North’s commitment to fighting the Civil War. Elizabeth R. Varon enters this continuously growing field with a single-volume history, Armies of Deliverance, that promises fresh interpretations of the subject. Varon forcefully argues that Abraham Lincoln’s administration successfully built its prowar collation around the idea of deliverance. Within this worldview, Northerners (broadly constructed) argued that Southerners were loyalists at heart, tricked into rebellion, and suffered under an oppressive and tyrannical Confederate government. However, as Varon argues, different constituencies modified their rhetoric to satisfy diverse political needs. While moderate and Radical Republicans differed on the moral question of slavery, both increasingly stressed that emancipation would liberate white Southerners from the slaveholding oligarchy that plunged the nation into war. Conservative prowar Democrats, however, faced the unique problem of presenting a loyal opposition to Lincoln’s administration while simultaneously committing themselves to an uncompromised victory over the Confederacy. To navigate this problem, Democrats stressed that “the key to reunion was rekindling the allegiance of conservative white Southerners by disabusing them of the false notion that the Union was controlled by anti-slavery extremists” (9).

To be sure, Varon’s book wades into longstanding debates. Scholars such as James Oakes and Chandra Manning have emphasized emancipation and black liberation as the driving motivation for the North. Others such as Gary Gallagher and Ian Smith have emphasized saving the Union as the North’s primary goal. Varon finds this dichotomy unsatisfying, arguing it fails to explain how politically diverse Northerners found common ground while simultaneously remaining sharply divided over the war’s meaning. Thus, the politics of deliverance forges a unifying principle for understanding the war, particularly since, according to the author, it existed at the outset and grew in strength over time. Given the fraught nature of partisan politics, deliverance helped ease “tensions within the Union over war aims” (2), allowing the conflict to have a common interpretation to restore Southerners to the blessings and liberties of the United States. Throughout the book, Varon demonstrates the importance of deliverance rhetoric, documenting its continuous use throughout the war.

The book’s structure closely mirrors the Union’s war effort, meaning that Northern political, social, and military events drive the narrative. Such an approach lends itself well to developing the book’s central arguments. Thus, like most works of the Civil War, emancipation takes center stage and is the major turning point of the war. While historians may continue to debate whether the Emancipation Proclamation was strictly a military measure, a genuine reflection of Lincoln’s abolitionist leanings, or something in between, it is undeniable that emancipation fundamentally changed the political nature of the North’s war effort. Here Varon’s argument begins to fracture along partisan lines. Varon makes a convincing case that deliverance was important to Republican rhetoric, but it’s less clear how meaningful it was for the War Democrats. Rather than explaining how Democrats kept faith in the war, Varon instead brings a wealth of information demonstrating how the Peace (Copperhead) wing of the Democratic Party split the organization, especially over their two primary complaints: emancipation and the abuses of civil liberties (which were aimed exclusively against conservative Democrats). Varon’s emphasis on Copperheads raises the question of whether deliverance truly bridged the political divide. Alternative explanations include that War Democrats compromised their principles and acceded to Republican policy goals for the greater service of saving the nation rather than sustaining their confidence in the politics of deliverance. Similarly, Varon acknowledges that some Democrats, particularly soldiers, became disgusted by Copperheads, whom they viewed (aided by Republican propaganda) as essentially traitorous. For many Democrats and conservatives, voting for the Republican ticket was perhaps an act of patriotism rather than a genuine commitment to deliverance.

The book’s structure is less effective in demonstrating Varon’s sub-argument, contending that discourses over “deliverance” similarly provide “a new perspective on Confederate politics” (15). In essence, the Confederacy sought deliverance from abolitionist influences that planters and Southern intellectuals saw as destabilizing their social order. The Confederacy also attempted to “liberate” the Border South, contending that Southern loyalists chaffed under military despotism. Varon explores these themes sporadically, but her Northern emphasis greatly overshadows her contributions to Confederate historiography. Likewise, given that EH.Net caters to economic historians, readers may be curious to know how Varon’s book relates to economic history. While economic issues are mentioned occasionally throughout the text, Armies of Deliverance is not an economic history of the Civil War, nor does it claim to be one.

Regardless of criticism, Varon has successfully written an engaging and thought-provoking new history of the Civil War. Scholars seeking to challenge or expand our understanding of Northern war motivations will be required to engage with Varon’s deliverance argument, as she deftly demonstrates its importance to the rhetoric of unconditional unionism.  Similarly, it is worth noting that Armies of Deliverance doubles as a college textbook. Given its engaging narrative and easily digestible and well-supported central thesis, Armies of Deliverance is a worthy choice for an upper-level college course and one that this reviewer would seriously consider using himself. Varon’s work is an excellent addition to the literature and deserves a spot in anyone’s Civil War library.


Daniel Farrell is a Ph.D. candidate in history at the University of Cincinnati, where his research focuses on the culture of pro-war unionism and efforts to suppress anti-war dissent in the Civil War Era North. He is the author of “‘The Nation Cannot Now Be Entrusted to Hands Reeking with the Blood of Loyal Victims’: Prison Propaganda, Hard War, and the Politics of Criminalization,” published in Lorien Foote and Daniel Krebs, eds., Useful Captives: The Role of POWs in American Military Conflicts (University Press of Kansas, 2021).

Copyright (c) 2022 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator ( Published by EH.Net (June 2022). All EH.Net reviews are archived at


Subject(s):Government, Law and Regulation, Public Finance
Servitude and Slavery
Military and War
Geographic Area(s):North America
Time Period(s):19th Century

After Redlining: The Urban Reinvestment Movement in the Era of Financial Deregulation

Author(s):Marchiel, Rebecca K.
Reviewer(s):Storrs, Thomas

Published by EH.Net (June 2022).

Rebecca K. Marchiel. After Redlining: The Urban Reinvestment Movement in the Era of Financial Deregulation. Chicago: The University of Chicago Press, 2020. viii + 296 pp. $50 (cloth), ISBN 978-0226723648.

Reviewed for EH.Net by Thomas Storrs, Corcoran Department of History, University of Virginia.


The term “redlining” refers to a financial institution’s refusal to service an area with loans or insurance due to some combination of the race, ethnicity, and wealth of its residents. The term entered the lexicon around 1970. Rebecca Marchiel’s excellent and groundbreaking first book After Redlining: The Urban Reinvestment Movement in the Era of Financial Deregulation highlights reasons for its emergence and the activists who fought for its end. This fascinating volume will be of interest to historians of finance, cities, and social movements. In brief, most existing scholarship on racial discrimination in home mortgages in the twentieth century, beginning with Kenneth Jackson’s Crabgrass Frontier in 1985 and stretching across many academic disciplines today, focuses on denial of credit to Black communities before 1970, as contrasted with the suburban white communities that received federal mortgage insurance and guarantees in the middle third of the twentieth century. Marchiel, an Associate Professor of History at the University of Mississippi, flips this script by focusing on interracial urban communities “FHAed,” a term coined by local activists, and those activists’ evolution into a national campaign for redress.  The book provides essential background for scholars researching intraurban wealth inequality in the twentieth century United States and would be appropriate for an undergraduate course on the late twentieth century US history of social movements, financialization, or cities.

Activists uncovering and fighting redlining serve as Marchiel’s primary actors and narrators. Gale Cincotta, formerly a stay-at-home mother of six boys, and Shel Trapp, a professional organizer, founded National People’s Action (NPA). NPA learned and grew from their Chicago base to become a national movement that secured passage of both the Home Mortgage Disclosure Act (HMDA) of 1975, requiring financial institutions to disclose their home mortgage lending, and the Community Reinvestment Act (CRA) of 1977 that formed the centerpiece of efforts to funnel mortgage dollars to underserved communities. HMDA and CRA constituted the high-water mark of NPA’s legislative efforts. The group then turned to bank-based reinvestment in the late 1970s and early 1980s where financial institutions, among them commercial banks, savings and loans, and life insurance companies, agreed to lend specific sums in inner-city neighborhoods. Despite high hopes and heady headlines, Marchiel explains that this phase “did nothing to shrink the racial wealth gap, nor did it provide economic security for low-income people.” (15) These piecemeal efforts did serve the lenders’ interests by staving off additional legislation. The Clinton Administration revived the CRA as the toll for commercial bank consolidation in the 1990s. These two pieces of legislation, Marchiel argues, marked the end of New Deal Liberalism and the dawn of a neoliberal deregulation that snuffed out community-based lending.

But back to the beginning of the story. The Federal Housing Administration’s Section 235 program, part of the 1968 Housing and Urban Development Act, fully insured lenders against loss on loans to poor borrowers in inner-city neighborhoods. The program was a disaster for everyone involved except for the rapacious lenders who milked the program into disgrace by repeatedly lending money with little or no money down on shoddy homes that bribed FHA inspectors certified as sound. These inflated appraisals saddled borrowers with unaffordable debts while disequilibrating prices. The federal government and borrowers lost their shirts while conventional lenders refused to lend in areas eligible for FHA Section 235 loans, i.e., neighborhoods that had been “FHAed.” This practice, not the earlier efforts of the FHA since its inception in 1934 to augment affluent, white suburbia, marked the genesis of redlining activism.

For urban history historiography, this intervention, alongside Keeanga Yahmatta Taylor’s complementary 2019 book Race for Profit: How Banks and the Real Estate Industry Undermined Black Homeownership, shifts focus from earlier harms done by FHA exclusion to more recent harms done by FHA inclusion. Kenneth Jackson’s Crabgrass Frontier exemplifies the former and sought to explain 1970s urban disinvestment by reaching back to the 1930s Home Owners’ Loan Corporation maps rather than the more proximate, and plausible, explanation of Section 235’s driving conventional lenders out of low-income urban neighborhoods. After Redlining also provides a new chapter to Beryl Satter’s Family Properties: How the Struggle Over Race and Real Estate Transformed Chicago and Urban America (2010), which focuses on earlier private contract lending that deployed similar schemes to evaporate Black wealth. This book also contrasts with Amanda Seligman’s Block by Block: Neighborhoods and Public Policy on Chicago’s West Side (2005), which focuses on the antiblack reactions of white Chicagoans as compared to Marchiel’s highlighting of interracial activism.

For urban economists, sociologists, and geographers, the book suggests a similar reappraisal is in order. The long legacy of New Deal mortgage programs and the fruitful research on them might move on to these questions: What relative role did higher interest rates and the FHA Section 235 program play in conventional home mortgage lenders’ abandonment of transitional urban neighborhoods? Why was the FHA successful in insuring mortgages in white suburbs and subsequently unsuccessful in insuring mortgages in racially mixed urban areas? What was the political economy of lenders’ purportedly voluntary loan commitments in response to activists’ demands and were these efforts a success on either side?

Overall, After Redlining makes a significant contribution to urban history scholarship that will be useful across many fields. Marchiel’s use of NPA’s archives to cogently put together a history of activism alongside sophisticated yet intelligible financial history is remarkable and innovative. As it is de rigeur in book reviews to add a few criticisms, I will follow suit even though none of mine are major. First, the title After Redlining is slightly misleading in that the book in fact covers a major period of redlining spurred by Section 235. This can be chalked up as a reference to preexisting narratives but underplays the book’s contribution. Second, in my reading, the clear “bad guy” here is the FHA in that they caused the destruction of an, up to that point, viable home mortgage market in inner city neighborhoods via Section 235. I think it bears emphasis that there was a viable conventional mortgage market during the FHA’s prior period of neglecting these areas and that the FHA’s Section 235 program killed it with an assist from erratic and rising mortgage rates. The Censuses of Housing across this period agree that savings and loans lent throughout the early postwar period to Black borrowers. Marchiel presents all the dots for these two conclusions but does not quite connect them. Lastly, I do not see evidence of “a two-way relationship with thrifts that activists came to expect under the New Deal financial regime.” (83) Thrifts, namely savings and loans, lent in urban areas and/or to nonwhite borrowers because the FHA did not. They sought to maximize the risk-adjusted returns of their savers rather than practice New Deal mutuality. Concomitantly, they stopped making conventional loans for the same areas and borrowers because they deemed the profit not worth the risk.

These required and slight criticisms aside, After Redlining should be on your reading list. I enjoyed it. Marchiel’s arguments and evidence answered many questions I had while fostering new ones. The 1970s are a treacherous canyon for any historian to cross. This book bridges them elegantly and innovatively with fresh evidence and novel arguments.


Thomas Storrs is a PhD student in the Corcoran Department of History at the University of Virginia, where he studies urban and financial history. His article with Price Fishback, Jonathan Rose, and Kenneth Snowden, “New Evidence on Redlining by Federal Housing Programs in the 1930s,” is forthcoming in the Journal of Urban Economics.

Copyright (c) 2022 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator ( Published by EH.Net (June 2022). All EH.Net reviews are archived at


Subject(s):Economic Planning and Policy
Financial Markets, Financial Institutions, and Monetary History
Government, Law and Regulation, Public Finance
Social and Cultural History, including Race, Ethnicity and Gender
Urban and Regional History
Geographic Area(s):North America
Time Period(s):20th Century: WWII and post-WWII

The Marginal Revolutionaries: How Austrian Economists Fought the War of Ideas

Author(s):Wasserman, Janek
Reviewer(s):Goodman, Nathan P.

Published by EH.Net (May 2022).

Janek Wasserman. The Marginal Revolutionaries: How Austrian Economists Fought the War of Ideas. New Haven and London: Yale University Press, 2019. xii + 354 pp. $35 (hardcover), ISBN 978-0-300-22822-9.

Reviewed for EH.Net by Nathan P. Goodman, Department of Economics, New York University.


Economists are social scientists, but we’re also human beings. We have families and friends. We learn and work in professional networks. We strive to influence the world around us. Some work in the history of economic thought focuses on economic ideas alone, offering a narrowly doctrinal history of our discipline. In The Marginal Revolutionaries, Janek Wasserman discusses not merely the ideas of Austrian school economists, but also their lives and relationships. The result is a rich and engaging history of the Austrian school of economics.

Austrian economists made vital contributions to economic theory, especially in relation to marginalism, subjectivism, opportunity cost, entrepreneurship, and spontaneous order. This book offers a history of how they made these contributions. Wasserman deftly weaves together both history of economic thought and engaging description of the social, political, and cultural context. This is especially compelling during the earlier chapters, which discuss how Austrian economics developed in Vienna.

At its height, Vienna was an incredible center of intellectual activity. The Austrian economists were a very important part of this intellectual culture, but they also interacted with other intellectual circles in Vienna. These included the logical positivists, famed psychologists such Sigmund Freud, and influential Marxists and socialists including Rudolf Hilferding, Otto Bauer, and Nikolai Bukharin. On the one hand, these types of interactions illustrate just how intellectually vibrant Vienna was. They also illustrate the crucial role that contestation and debate played in the development of Austrian economics. Austrian economists did not merely argue among themselves, they argued with other intellectuals who passionately disagreed with them. These disagreements were especially sharp in their debates with Marxists on questions such as the transformation problem, exploitation, the feasibility of rational economic calculation under socialism, and the relationship between capitalism and imperialism. Given my interest in defense economics, I found the discussion of their debates over imperialism especially fascinating.

But social science does not merely depend on arguments. The efforts of intellectual entrepreneurs who start seminars, colloquia, academic journals, research centers, professional organizations, and learned societies are just as crucial. Carl Menger founded the Austrian school, but Wasserman argues that the school formed a cohesive identity largely due to intellectual entrepreneurship by two scholars that Menger inspired: Eugen von Böhm-Bawerk and Friedrich von Wieser. By creating a professional association, the Gesellschaft Österreichischer Volkswirthe (Society of Austrian Economists, GÖV), and a corresponding journal, Die Zeitschrift für Volkswirtschaft, Socialpolitik und Verwaltung, they established forums for discussion of Austrian ideas. Throughout this period, they forged a vibrant community of Austrian scholars, including some I had not previously been familiar with, such as Emil Sax.

Later generations of Austrian economists continued to act as intellectual entrepreneurs. Throughout their time in Austria, they continued to establish discussion groups as well as more formal research centers such as the Institute for Business Cycle Research. During World War II, most of the Austrian economists fled from the Nazis. This emigration created an additional need for intellectual entrepreneurship. To help their friends and colleagues find refuge and secure employment outside of Austria, members of the Austrian school forged new relationships and drew on existing relationships with academics and donors. Once they had successfully fled, they engaged in intellectual entrepreneurship to make space for their work. The institutions they relied on in Austria had been destroyed, and they needed to forge new paths.

This took a variety of forms. Some, such as Ludwig von Mises’s seminar in New York and Friedrich Hayek’s role in founding the Mont Pelerin Society, were stories I knew well. Others, such as Gottfried Haberler’s influence on trade policy or Oskar Morgenstern’s influence within the American military-industrial complex, were new to me. Some of these lesser known paths illustrate the nuances of Austrian influence on global politics. The influence of Mises, Hayek, and Murray Rothbard on libertarian and free market political movements is well known. But Austrian influence within more technocratic circles is less widely known, and this book helped me better understand the diverse ways that Austrian economists influenced policy, both in Vienna and after their emigration.

While Wasserman spends a lot of time discussing how Austrian economists influenced politics, he also avoids a common pitfall that can occur in such discussions. Too often, people insinuate that Austrian economics is solely an ideological or political project. Wasserman makes sure to discuss Austrians’ technical scientific and methodological contributions, which are the true core of Austrian economics. While he discusses political activism by Austrian school economists, he also discusses deliberate efforts by Austrian economists to maintain the ideal of wertfreiheit, or value freedom. While Austrian economists had political views, many of them were clear about the difference between their prescriptive beliefs and their social scientific descriptions of the world.

Wasserman is a great storyteller. The relationships among Austrian economists are front and center in his account of the Austrian school. This makes the book a fun and engaging read and helps us appreciate the social element of scientific inquiry. If you care about Austrian economics, history of economic thought more generally, the history of 20th century politics, or the sociology of scientific inquiry, then I think you’ll benefit from reading this book.


Nathan P. Goodman is a Postdoctoral Fellow in the Department of Economics at New York University, where he is affiliated with the Program on the Foundations of the Market Economy. His research focuses on political economy, public choice, defense and peace economics, border militarization, and Austrian economics.

Copyright (c) 2022 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator ( Published by EH.Net (May 2022). All EH.Net reviews are archived at

Subject(s):History of Economic Thought; Methodology
Geographic Area(s):General, International, or Comparative
North America
Time Period(s):19th Century
20th Century: Pre WWII
20th Century: WWII and post-WWII

Three Days at Camp David: How a Secret Meeting in 1971 Transformed the Global Economy

Author(s):Garten, Jeffrey E.
Reviewer(s):Santos, Joseph M.

Published by EH.Net (May 2022).

Jeffrey E. Garten. Three Days at Camp David: How a Secret Meeting in 1971 Transformed the Global Economy. New York: Harper, 2021. 435 pp. $29.99, ISBN 978-0-06-288767-2 (cloth).

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


On July 1, 1944, more than 700 delegates, including John Maynard Keynes (British delegation) and Harry Dexter White (U.S delegation), from 44 nations, arrived at the Mount Washington Hotel in Bretton Woods, New Hampshire, to redesign an international monetary system left grossly imbalanced by the ravages of the Second World War. The outcome of the conference and subsequent deliberations was a U.S.-led elaborate plan to reorder the values of foreign exchange and the patterns of international trade, into a new international financial order that would come to be known as the Bretton Woods System (Steil 2013). The system included the newly established International Monetary Fund (IMF) and fixed exchange-rate parities, adjustable with IMF authorization as structural current-account imbalances dictated. In principle, the system afforded foreign-exchange stability—prohibiting competitive, beggar-thy-neighbor devaluations—and independent national monetary policies—reducing the international transmission of business cycles.

Roughly a quarter-century later, on August 13, 1971, President Richard M. Nixon and 15 advisors, including Arthur F. Burns (Chair of the Federal Reserve), John B. Connally (Secretary of the U.S. Treasury), and Paul A. Volcker (Undersecretary of the U.S. Treasury for International Monetary Affairs) arrived at Camp David, the presidential retreat in Catoctin Mountain Park, Maryland, to craft in secret an economic policy to reverse a relatively high rate of inflation, a current-account deficit, a longstanding decline in the U.S. monetary gold stock, and a recent, sharp rise in external dollar liabilities held by central banks. At the meeting’s end, on August 15, 1971, in a televised, Sunday-evening address to the nation, President Nixon announced, as part of his New Economic Policy, “I have directed Secretary Connally to suspend temporarily the convertibility of the dollar into gold…” (Garten 2021, 231). Temporary proved permanent: by March 1973, the dollar-gold link was decoupled completely; the floating-exchange rate system we know today stood firmly in place, signaling the unambiguous end to the Bretton Woods System.

In Three Days at Camp David, Jeffrey E. Garten, dean emeritus of the Yale School of Management, takes readers inside the presidential retreat on that fateful weekend, when the principals and a handful of staff members crafted the New Economic Policy, a package of wage and price controls, a 10 percent tariff increase, a 10 percent investment tax credit (and spending cuts to render the credit revenue neutral), and, most notably, the closure of the gold window. To Garten, the events of that weekend and the New Economic Policy it shaped reflected a larger shift in the dollar’s role—and, correspondingly, the U.S.’s role—in the world economy. The U.S. would no longer assume and jockey for the mantle of global economic leadership as the nation had done since the Second World War, a course change driven as much by pragmatism as anything else: by the early 1970s, economic challenges at home left little policy space or political appetite to address fragilities inherent in the Bretton Woods System.

This is to say, the demise of Bretton Woods was, in fact, broadly anticipated. The IMF Articles of Agreement had established the fund within the Bretton Woods System to intermediate financial flows across the balances of payments of member nations. Through the IMF, a nation with a temporary current-account deficit could borrow from a nation with a temporary current-account surplus. In this way, a nation that maintained a deficit [surplus] was not required to balance its current account by contracting [expanding] domestic economic activity. Absent this IMF intermediation, at best a contraction in one nation would be met with a corresponding expansion in another; at worst, the nation that maintained a current-account surplus would choose not to expand (over concern for inflation, for example), leading to a contraction of global economic activity. Meanwhile, according to the Articles, a nation could potentially correct a structural, or permanent, current-account imbalance by devaluing or revaluing its exchange rate accordingly. In any case, the Articles did not practically distinguish between temporary and permanent imbalances; nor did they “make clear what should happen when the principal reserve currency country—the United States—ran persistent trade or current account deficits” (Meltzer 2003, 584). Ultimately, these ambiguities would prove too much for the system to bear. It lasted twenty-five years; though current-account convertibility prevailed for only nine years, from 1959-67, when each member nation freely bought or sold foreign exchange to maintain the nation’s exchange-rate parity to the U.S. dollar within one-percentage-point margins; and the U.S. Treasury freely bought or sold gold—through the so-called gold window—to maintain the value of the U.S. dollar at $35 per ounce.

During this convertibility phase, interrelated problems challenged the system: balance-of-payments adjustments relied, to some extent, on the discretionary macroeconomic policies of debtor and creditor nations; meanwhile, either the supply of monetary gold constrained systemwide liquidity or it was supplied by U.S. balance-of-payments deficits, which, if large enough, strained confidence in the system—and, specifically, the U.S.—to maintain convertibility (Bordo 1993, 49-74). The Triffin dilemma implied the “postwar monetary arrangement contained the seeds of its own demise” (Garten 2021, 7). In the latter half of the 1960s, the scarcity of monetary gold and global inflationary pressures spurred by U.S. expansionary monetary policies conspired to compromise the system, which had effectively defaulted to a dollar standard, though threats posed by nations intending to exchange dollar liabilities for U.S. monetary gold loomed. British and French plans to convert their dollars into gold spurred the weekend meeting at Camp David.

Though Garten provides readers a broad overview of the Bretton Woods System and walks them through the events leading to the weekend meeting and its aftermath, the meeting is his primary focus. In a series of chapters Garten groups under the heading, “The Cast,” the author offers insightful and colorful biographies of the major attendees: namely, Richard M. Nixon, John B. Connally, Paul A. Volcker, Arthur F. Burns, George P. Schultz (Director of the Office of Management and Budget), and Peter G. Peterson (Assistant to the President for International Economic Policy). He also briefly introduces “Other Players,” including Paul W. McCracken (Chairman of the Council of Economic Advisors) and, though absent from the weekend meeting, Henry A. Kissinger (National Security Advisor). Then, in a series of chapters Garten groups under the heading “The Weekend,” he artfully weaves these personalities, and the often-tense negotiations between them and the president, into the early sausage making of Nixon’s New Economic Policy. In doing so, Garten offers readers—including monetary economists who imagine themselves well versed in the demise of Bretton Woods—a unique perspective and insight on a pivotal decision in the history of this monetary order.

We learn that John Connally, a ruthless political pragmatist and nationalist whom Nixon respected, believed U.S. allies had long taken advantage of the nation. In his view, international arrangements—the Bretton Woods System or otherwise—constrained U.S. progress. Governed by the self-described preference, “I want to screw the foreigners before they screw us,” Connally was at best indifferent to preserving the Bretton Woods System; moreover, using tariffs to protect domestic production did not offend him (Garten 2021, 77). Paul Volcker was the model career civil servant, a deep-in-the-weeds policy wonk of impeccable integrity who wrote long, dense white papers. He reasoned that the best interests of the U.S. were served by a robust international financial system; and he once described devaluation of the dollar—and, thus, decoupling its value from gold—as “anathema to me,” in part because, in his view, the value of money and, reciprocally, price stability required the anchor that gold provided (Garten 2001, 83). Arthur Burns, an eminent academic economist who served the National Bureau of Economic Research as research director, president, and honorary chairman, mattered to Nixon, if only because dissension from the chair of the Federal Reserve would compromise the message the president sought to convey regarding his New Economic Policy. As Garten tells it, as a monetary policymaker, Burns was at best complicated. He tended to view inflation as a byproduct of imperfectly competitive labor markets; thus, wage and price controls, not monetary contractions, were, in his view, potential instruments of price stability. Moreover, he seemed to cave to Nixon, a president who famously remarked, “When we get through, this Fed won’t be independent if it’s the only thing I do” (Garten 2021, 107).

Meanwhile, George Schultz, who held a PhD in industrial economics from MIT and had served as dean of the University of Chicago Graduate School of Business, was a “fierce conservative partisan,” a monetarist with a deregulatory, free-market mindset (Garten 2021, 112). Schultz favored replacing Bretton Woods with freely floating exchange rates between fiat currencies. Not surprisingly, he vehemently opposed wage and price controls. Finally, Peter Peterson was a free trader who, upon witnessing the seemingly organized world market power Germany and Japan exercised at great cost to the U.S., came to favor U.S. industrial policies that could enhance U.S. productivity with targeted investments in technology, the sort of investments that tax credits might induce, for example.

These and other personalities in the rooms—and cabins—where it happened during those Three Days at Camp David forged, in part, President Nixon’s New Economic Policy of wage and price controls, tariffs, tax credits, and a new monetary order. No doubt, larger international macroeconomic imbalances were in place well before the meeting, a fact Garten rightly acknowledges. Nevertheless, Garten offers a novel and compelling lens through which to view an executive decision that unquestionably hastened the pace of dramatic change in the global international financial order. Additionally, he persuasively argues his larger point that U.S. international macroeconomic policy in the early 1970s reflected a broader, intentional move away from a position of global leadership that the U.S. presumed it had occupied since the Second World War, a move Garten says the U.S. finds itself scrutinizing once again.


Bordo, Michael D. (1993) “The Bretton Woods International Monetary System: A Historical Overview.” In A Retrospective on the Bretton Woods System: Lessons for International Monetary Reform, edited by Michael D. Bordo and Barry Eichengreen, 3-98. Chicago: University of Chicago Press.

Meltzer, Allan H.  (2003) A History of the Federal Reserve, Volume 1: 1913–1951 Chicago: University of Chicago Press.

Steil, Benn. (2013) The Battle of Bretton Woods: John Maynard Keynes, Harry Dexter White, and the Making of a New World Order. Princeton: Princeton University Press.


Joseph M. Santos is Professor of Economics in the Ness School of Management and Economics at South Dakota State University, where he teaches and writes on macroeconomics, banking, and financial markets, and where he directs the Dykhouse Program in Money, Banking, and Regulation.

Copyright (c) 2022 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator ( Published by EH.Net (May 2022). All EH.Net reviews are archived at


Subject(s):Economic Planning and Policy
Economywide Country Studies and Comparative History
Financial Markets, Financial Institutions, and Monetary History
International and Domestic Trade and Relations
Geographic Area(s):North America
Time Period(s):20th Century: WWII and post-WWII