Land of Promise: An Economic History of the United States Kindle Edition

I found "Land of Promise" very informative. For a book on economic history it was surprisingly accessible. Michael Lind believes that American leaders can be divided into two groups: small-government Jeffersonians and big government Hamiltonians. Lind explains why he believes that Hamiltonianism is superior to Jeffersonianism. The Jeffersonians today are represented by the Republican Party and they tend to dislike big government. However, modern Jeffersonians, like Reagan and George W. Bush, advocated spending cuts while on the campaign trail, but reversed themselves while in office. The Hamiltonians generally believe that the US needs large, powerful organizations. Both Roosevelts and Dwight Eisenhower supported this view.

Lind argues that the government often does a lot of good and has played an important role in financing innovation. For example, the US military built the internet. Lind blames deregulation and the banks for most of the current economic problems. Lind claims that: “What is good about the American economy is largely the result of the Hamiltonian developmental tradition, and what is bad about it is largely the result of the Jeffersonian producerist school.” Lind likes big corporations, arguing that for industries that require massive capital investment, big is better (e.g., telecommunications, energy, and aircraft). He argues that the "American middle class enjoyed its zenith under a system of highly regulated, partly cartelized capitalism, and suffered under the less regulated capitalism that preceded it and followed it."

Lind's main conclusion seems to be that the US has been on the wrong track since the Carter Administration. Nixon was the last of the New Deal presidents. Mr. Lind wants a return to the economic policies that were in place during the 30 years following World War II. First, Jimmy Carter and then Ronald Reagan moved toward a more laissez-faire economy. The decades since then have seen far slower income growth for most Americans than the previous century. In order to rebuild the country and its middle class he suggests that there needs to be a change of direction.

Lind wants more manufacturing and less short-term thinking on investment. He believes that Wall Street is too powerful and the finance sector has had too much influence on the government. He wants to protect the domestic market from foreign competition. He points out that before Lincoln the US favored free trade, but it couldn't compete with the British manufacturing industry. Lincoln introduced protectionism and this allowed US manufacturers to grow and within 30 years the US had overtaken Britain. Nixon ended protectionism in the 1970s and US manufacturing slowly started to disappear. Most Asian countries built their economies through protectionism, it was only when they became competitive that they changed their view on trade. Lind argues there is a conflict between the financial and manufacturing sectors in the US. He concludes that free trade has resulted in the outsourcing of jobs and this hasn't been good for the American middle class. He also favors a more isolationist foreign policy with the US spending less on defense.

Lind argues that Americans are a pragmatic people. Eventually, they will see the logic in investing in roads, bridges, and education. The economic need for change will eventually create the political will for it. Lind never quite explains how the US has ended up as the richest large country in the world, even though other countries have pursued more Hamiltonian policies than the United States, without quite the same success. If you believe in protectionism, big government, and more regulation you will probably enjoy this book.

Michael Lind elegantly traces the economic history of the United States from: first a republic that rejected feudalism in favor of yeoman farmers, to second a republic that rejected slavery and an agricultural based economy instead embracing an industrial economy of factory workers, to a third republic that ameliorated the exploitation of wage labor by encouraging universal secondary education, subsidized college, universal pensions, etc. Now the United States is transitioning to a fourth republic and the lessons of the past hold many lessons but no exact policy prescriptions.

There was material covered in this book that was new to me. I enjoyed the different angle from which they approached the history of this country. It definitely made for interesting reading with everything going on in this country right now. If you like history, you'll like this book.

The part I enjoyed most was the detailing of the real and significant elite economic disputes that led to the civil war. I found this more satisfying and compelling than the usual attribution of the rhetoric of abolitionism and states rights that is given as the primary cause of the war by many people. It just rang a lot more true.

I enjoyed reading this book a lot. Rather than add to the several and very detailed reviews that praise this work, I want to respond to a few claims that Lind makes about areas related to my expertise, and tends to unravel his credibility in other areas.

The early parts of the book, up until and through the New Deal, are excellent. As Lind moves into the post war period, I was continually bothered by the prospect that Lind was tired and getting cranky, as if he writing this in all of one go. Dismissing concerns about sprawl as the snobbish musings of the downwardly mobile children of urban elites (his language), Lind completely misunderstands one of the fundamentals of the American economy--it is not just the relationship between the state, the banks and commerce--the American economy is grounded in its economic geography as well--and suburbanization, and with it, sprawl, are major contributors--good and bad, to what has happened in this country.

In terms of the bad, sprawl greatly increases the cost of infrastructure provision. And here is another area that Lind demonstrates his ignorance--claiming that it is right that infrastructure should be debt financed (what else?), he dismisses the highway trust fund as being ineffective because it is just a tool for earmarking. It hasn't been that in way since SAFETEA-LU, nearly a decade ago, and the problem with the trust fund is that it is undercapitalized from revenue. There are other problems with the trust fund, but he is not up on the issues. A national infrastructure bank is the right solution for a different problem.

Together with the somewhat stream of consciousness sections on technology--("memex"--really?), I started to wonder what other things he got wrong, because he is just shooting from the hip. Did I waste my time reading this thing? I was left with the feeling that if he could get recent times so wrong, what can we say about the historical narratives earlier in the book?

Turgid, repetitive, excellent review of what was good vs typical handwringing not being post new deal.