Close this search box.

Critical Limits of the “New” History of Capitalism

A Review of Jonathan Levy's Ages of American Capitalism

July 20, 2021

Ages of American Capitalism: A History of the United States
by Jonathan Levy
Random House

Coming in at well over 700 pages, Jonathan Levy’s new book, Ages of American Capitalism, sets the bar for a relatively comprehensive single volume interpretation of the history of US capitalism. Bringing together insights from the post-Great Recession explosion of writings on the history of American capitalism, often called the “new history of capitalism,” it has the potential to be a defining statement of this intellectual turn.

In the Introduction he states that what has been missing in discussions regarding the new history of capitalism is a proper engagement with economics. To compensate, Levy’s overall goal is twofold: to present a full picture of the history of US capitalism that goes against the tendency in the academic field of economics (which often translates to the political arena) that focuses on mathematics and models rather than politics and social life, but also to push historians of capitalism to deal more thoroughly with the history of investment, finance, and production. The author claims the goal of his book is to, “set the historical record straight,” as to the history of American capitalism, from its early days, through the Great Recession.

The book is organized around three central premises. First, “rather than a physical factor of production, a thing, capital is a process. Specifically, capital is the process through which a legal asset is invested with pecuniary value, in light of its capacity to yield a future pecuniary profit.” In other words, in some ways reflecting Marx’s idea of capital as a process that flows, changes forms, rather than a thing (although it is not clear how much of Levy’s definition here is taken from Marx), capital can take many forms (industry, finance, etc.) and is based on a certain asset being ascribed quantitative value.

Secondly, he says, “capital is defined by the quest for a future pecuniary profit,” yet it is not the endless search for profit alone that constitutes capitalism. Rather, “the profit motive of capitalists has never been enough to drive economic history, not even the history of capitalism.” In other words, human motivation, even in capitalist society, is much greater than the profit motive alone. Slave owners were interested in profits, but also a particular lifestyle based on racial domination. Industrialists have been motivated by profit, but also a desire to create. And so on.

Third, “the history of capitalism is a never-ending conflict between the short-term propensity to hoard and the long-term ability and inducement to invest.” For Levy, this is a key feature explaining the history of capitalism. The “first move,” as he puts it, in a capitalist society, is investment. And this move provides the lens he finds most useful to make sense of capitalism’s history: not, say, the relations of production or class struggle, but the inducement to invest, and the history of the way that investors may either hoard or spend, and the assets in which they decide to invest.

Eras of American Capitalism

The rest of the book draws from these themes to analyze what the author periodizes as four eras of American capitalism. First is the Age of Commerce, approximately 1660-1860. As the British Empire expanded to New England and Virginia, creating a colonial empire based on removing indigenous peoples and importing African slaves to exploit, this era is characterized by what the author discusses as “Smithian growth.” The main factor of American capitalism in this age, primarily, was exchange, expanding the size of the market, creating a “Smithian commercial multiplier.”

The next period, the Age of Capital (1860-1932), was the era of American industrialization, resulting, eventually, in Fordism, along with a variety of revolts against rising American capitalism, from the development of workers’ movements and strikes to agrarian populism. Here, the “industrial investment multiplier” was key, as capital increasingly invested in industry and productivity rose. Third came the Age of Control (1932-1980). Rising out of the New Deal, powered by the economic stimulus of World War Two, coupled with the rise of the US as global hegemon, this era was built around the “Keynesian fiscal multiplier” in which the state would play a key role encouraging macroeconomic growth.

Lastly, there is the Age of Chaos (1980-today). Here, he argues, the key difference with earlier eras was a shift in what he calls, “capitalism’s core dynamic: the logic of investment, as it works through production, exchange and consumption.” In this era, capital increasingly sought out profit through asset appreciation and short-term liquidity, as opposed to, for instance, the earlier industrial era in which much capital was tied up in fixed investments. In other words, the tendency has been for investors to prefer putting their capital into liquid forms such as financial derivatives rather than, say, big investments in plants and labor. And, with globalization, international production chains, and just-in-time production, industry itself has taken more flexible forms.

By so periodizing the history of American capitalism, Levy highlights the complex ways that capital has shifted forms throughout American history and also brings out the role of the state in this history. Each of Levy’s periods have been determined not by economic forces alone, but by powers including government policy and law and the collective psychology of investment. As well, he brings out certain gendered and racialized aspects of this history, from the centrality of the breadwinner-housewife relationship in US history to racial slavery and beyond. Most significantly, he demonstrates the importance of finance and monetary policy to the history of US capitalism.

While the book serves as a useful overview of the history of the US economy, and the strengths of the text lie in detailed discussions of the history of financial crises, shifts in capital’s investment patterns, and the way the government has historically reshaped itself in shaping capital, there are also a variety of limits and shortcomings to Levy’s account.


Misunderstanding Marx

Some of these may be the result of a problematic engagement with Marx. In a subsection titled “Marx’s Theory of Industrial Capital,” he summarizes parts of Marx’s ideas presented in Capital Volume 1, telling us, “Capital is rich with various arguments, but the core of Marx’s economic argument was very simple.” He then presents a problematic interpretation of Marx whose work is, perhaps, not so simple.

While these may seem like technical quibbles, the implications of failing to understand Marx’s work—and, for that matter, understand critical and Marxist approaches to history that draw from Marx’s insights—have larger implications for interpreting the history of capitalism.

Levy tells us, for instance, “under capitalism, Marx argued, one single commodity, ‘labor power,’ was the source of all economic value—including surplus value.” But Marx does not argue all economic value comes from labor power, exactly. He is well aware that means of production, like machines, tools, and factories, transfer value to products. He also argues that land and fictitious and speculative capital can claim shares of overall value in the economy. Labor power is, for Marx, of course, the source of surplus value. But that doesn’t mean all prices or “economic values” generally speaking are simply the result of labor power. The high prices of diamonds and gold, for instance, are determined by forces besides labor power in itself.

The author then repeats an old, discredited perspective (often called Marx’s immiseration thesis) which states that, “assuming a competitive labor market, capitalists paid labor only the cost of its reproduction, or workers’ minimum subsistence needs.” This is a very typical liberal and conservative misinterpretation, which misses the fact that Marx viewed people’s “needs” as, in many regards, historically changing and contingent. It also overlooks the extent he viewed wage rates and work hours as determined by class struggle and workers’ organizing against capital.

A bit later he also tells us that, in contrast to Adam Smith, “the dynamics of Marx’s economic system were of time alone.” This is also a strange claim, especially given Marx was highly concerned with space. From his discussion in the Communist Manifesto of the way capital is a globalizing force, to his discussions of the “annihilation of space by time” in the Grundrisse, to the chapters about colonization in Capital itself, Marx does not privilege time over space, but focused on the interactions between the two: from the tendency of capitalists to speed up production to squeeze more value out of workers and battles over the working day to colonialism and globalization.

After this, Levy claims that, while there were exceptions in his writing, such as The Eighteenth Brumaire, the Marx of Capital was a “philosophical determinist.” Unfortunately, he never tells us what he means by this (or, for that matter, provides citations or evidence for this).

Another major problem arises when he then says, “by contrast, capital’s contingent dynamics—the repeating credit cycle, the eventful histories of money, liquidity, speculation, panic, and hoarding—were not a subject of Capital, although Marx treated them, at times insignificantly, at times not, in writings posthumously published.” Here, we see that the author acknowledges the existence of Marx’s writings on money, finance, etc. yet doesn’t feel a need to significantly engage with them. This is odd, given that Capital Volume One, as Marx was explicit about, presents a picture of the capitalist mode of production at a specific level of abstraction dealing with production, while volumes 2 and 3 address issues of circulation and the system on a large scale: including hundreds of pages in Volume 3 on money, credit, and finance.

While these may seem like technical quibbles, the implications of failing to understand Marx’s work—and, for that matter, understand critical and Marxist approaches to history that draw from Marx’s insights—have larger implications for interpreting the history of capitalism. This comes out in his emphasis on capitalism as an investment driven system and his definitional statement, “capitalism is an economy—an instrumental means of producing things for consumption—geared toward the achievement of capital’s end, which is pecuniary gain.” This perspective, in many regards, raises a chicken-or-the-egg problem which the author’s framework is unable to solve. To put it simply: if capitalism is an investment driven system, what created this? How was a form of society, or mode of production, built in which an investment driven system was made possible? Where did the profit driven capitalist class come from?

Take, for instance, Levy’s analysis of the Age of Commerce. Through a limited engagement with the decades long debate over the rise of capitalism in the American north, the author is well-aware that many farmers practiced “safety first” or “composite” farming in which production to reproduce patriarchal family subsistence often was more important than production for the market. And he cites economic historian William Parker who argued the northern farmer was split between “peasant” and “gambler” desires. He imposes this on northern agrarian history without questioning if the northern patriarchal farm family can really be considered “peasants,” given there were no lords ruling over them as in feudal Europe.

In the closest he gets to discussing the transition to capitalism in the American North, he says, “there was no one-off transition to capitalism but a cascading series of ‘market revolutions,’ and counterrevolutions, specific to geographical place.” But, limited by a perspective in which investment comes before social development in the history of capitalism, and, for that matter, a limited framework for understanding transformations in modes of production, the author is never able to tell us how capitalism arose in the American North, or locate the uneven history of capitalist and non-capitalist (or less capitalist and more capitalist) relations of production, how these have intersected over time, and how capital came to dominate social relations. At risk of my overstating, it becomes a history of capital’s conquest over people without explaining how capitalism came to control and dominate social life.

With regard to southern slavery, the author does a good job of bringing together arguments within the “new” history of capitalism which show that plantation slavery was a form of capitalism. But as an analysis of the Southern social order as a whole, this account remains limited. He does note, at one point, “the plantation economy, for instance, failed to commercially integrate the large group of white, upcountry yeoman farm households, many of them subsistence oriented.” But otherwise, the account remains focused on the plantation capitalist “variety of capitalism.” Thus, by the time the author gets to the Civil War, he tells us it was in some regards rooted in two different (northern and southern) varieties of capitalism, but very contingent on the particular politics of the era. Yet he doesn’t raise the question which historians of the social history of capitalism have raised: to what extent, even in the 1860s, was the United States not completely a capitalist society?

Similar issues arise in his analysis of the Age of Chaos—a term which he prefers over the more commonly used “neoliberalism,” as he seems to find the concept of neoliberalism problematic. For the author, “what most distinguishes the Age of Chaos is a shift in what has always been capitalism’s core dynamic: the logic of investment, as it works through production, exchange, and consumption.”

In many ways this is not wrong. He’s right to see capital’s shift towards more liquid means: derivatives markets, for instance. And he also does a good job of showing how part of this included a conscious capitalist class attack on workers, as the American business class reconfigured itself. But this argument could have been taken further. For example, investment is not a force separated from human agency, but runs through it. Levy could have, for instance, engaged with arguments that emphasis on the restoration of capitalist class power in the 1970s and ’80s, in which, as a class practice, investment strategies were not simply the result of capital changing forms on its own terms, but capitalists changing investment strategies to strengthen their class position. There is a causal question here regarding social class and class position and power which it would be interesting to see the author engage with more.


Race and Gender in US Capitalism

In terms of race and gender, the author does substantially incorporate them into his history, albeit within limits. For one, it is striking that in his vast analysis he does not engage with the work of W.E.B. Du Bois, such as Black Reconstruction in America and more specifically, Du Bois’s argument that the “general strike of the slaves” played a key role in ending slavery. More broadly this is part of an issue of agency. While Levy does, for instance, discuss colonial wars between white settlers and indigenous peoples, resistance by the enslaved plays no significant role in his account. But, as an institution, slavery was shaped by both the enslaved and slavers. This is reflective of a broader theme in the book (with a few exceptions such as his discussions of the workers’ movements of the later 19th century and the populist movement) in which resistance to capital is often overlooked. For instance, while the author profiles a variety of famous capitalists, he doesn’t discuss the life and politics of Eugene Debs, giving us, at times, a one-sided account of American history focusing more on the top than the bottom. And when we get to the 21st century, Occupy Wall Street gets little more than a mention.

His analysis of gender, meanwhile, focuses on the breadwinner-housewife relationship: from its early establishment to the decline of one income earning families. He does provide, scattered throughout, some analysis of what the decline of this model has meant for masculinity in the United States. But in focusing on the breadwinner-housewife relation, a broader analysis of gender, and specifically of populations who did not fit into this relation is not engaged in any detail. For instance, Black women domestic workers in the American North and related marginalized groups are given little to no space.

In terms of the role of empire and colonialism in American history, the author is right to note, especially in the first segments of the book, that the US was built as a colonial empire organized around white supremacy (although he does not provide much detail as to what white supremacy was/is and how it has changed over time). And by the time he gets to the Iraq War, he writes, “it was an imperial invasion privatization style.” He also, throughout, clarifies that the ups and downs of the American economy are highly integrated to the US’s incorporation into the world political economy. But these mentions get much less attention than, say, the working of American finance, which risks downplaying the centrality of imperialism as a continuous process throughout US history.

A few final notes: in addition to the problematic engagement with Marx, the author engages, at one point, briefly, with Antonio Gramsci’s thoughts on Fordism. He ends up saying that communism, fascism, and capitalism, “borrowed from one another, but would also war with one another in a global struggle to the death for what Gramsci called ‘hegemony.’” This is an odd claim—and, as with the section on Marx, the author does not give us specific citations so the reader can check on the accuracy of the interpretation. Gramsci’s idea of hegemony, famously, was not about a “struggle to the death” between competing social orders exactly but referred to the way that the bourgeoisie builds hegemonic consent for class rule, specifically within the Italian context, asking how the working class can organize leadership against this offensive.

Similar issues occur in the author’s repeated claims that some example or evidence is “best.” Throughout the text, especially regarding the movies and novels that Levy references as way of demonstrating the cultural influence of economic and political changes, he often says a particular example is the “best” one without comparing it with others. He does this in his discussion of the industrial revolution, too, where he says, “the best possible definition of industrial revolution in general is the process by which the pattern of investment definitely shifts into intermediate capital goods, breeding new economic habits.” Yet it is unclear why this is the “best” definition or how it might compete with other definitions. We just have to take the author’s word for it.

Lastly, his political solutions to issues in American capitalism appear spotty and unclear. In the afterward he says, “a democratic politics of capital is called for. In order to repair the broken link between capitalism and democracy, what politics must do is get out in front of capital at the beginning of the economic process, in order to reshape its end.” Here, one wonders why he does not consider the fact that democracy—depending on its type—may not be compatible with the existence of capital.

He then says, “ethically, capitalism’s dependence upon projections of the future is its greatest potential virtue, as it urges us to imagine the possibility of a future that is qualitatively different from and better than the past—that includes post-capitalist futures.” Thus, first, he suggests that we need a democratic politics of capital: a fairer and democratic version of capitalism. He then toys with the ideas that thinking about the history of capitalism might allow us to think about post-capitalist futures. After this, he says, “what would it mean for American economic life to break free from the patterns of the Age of Chaos, and to capitalize and chart a different and better economic future?” Here, by using the word “capitalize,” he seems again to be returning to a form of capitalism in which capital as a social process is not eliminated. Ultimately it is unclear what, exactly, the author is politically prescribing. This may, again, stem from a problematic engagement with Marx, and critical theories and historical interpretations of capitalism more broadly.

Ages of American Capitalism presents a useful overview of American economic history, from the rise of the multinational corporation to the details of monetary policy to 21st century financialization and the Great Recession. The sections on finance are particularly illuminating, as he convincingly shows the ways economic policies throughout history have been premised less on grand economic theories, and more upon policy makers continually reacting to changing economic circumstances and crises. But it also repeats a common issue with many works of the new history of capitalism: a failure to engage with historical materialism in an accurate way or to  explore in any depth the lessons Marx’s critique of political economy and historical methodology might teach us about both US and world history. Overall, the book might be read as a summary of the ends of where the “new history of capitalism” gets us: good descriptive history, well-grounded empirically, but needing further conceptual development, with problematic engagement with critical theories of capitalism, and politically stuck somewhere between social democracy and socialism without a clear politics.



While logged in, you may access all print issues.

If you’d like to log out, click here:


Support our Work

Gift Subscriptions, Renewals, and More