Government and the American Economy: A New History

Government and the American Economy: A New History

Government and the American Economy: A New History

Government and the American Economy: A New History

Synopsis

The American economy has provided a level of well-being that has consistently ranked at or near the top of the international ladder. A key source of this success has been widespread participation in political and economic processes. In The Government and the American Economy, leading economic historians chronicle the significance of America's open-access society and the roles played by government in its unrivaled success story.

America's democratic experiment, the authors show, allowed individuals and interest groups to shape the structure and policies of government, which, in turn, have fostered economic success and innovation by emphasizing private property rights, the rule of law, and protections of individual freedom. In response to new demands for infrastructure, America's federal structure hastened development by promoting the primacy of states, cities, and national governments. More recently, the economic reach of American government expanded dramatically as the populace accepted stronger limits on its economic freedoms in exchange for the increased security provided by regulation, an expanded welfare state, and a stronger national defense.

Excerpt

Douglass C. North

This ambitious book aims for a thorough appraisal of the role of government in the history of the American economy. Although the inspiration was Robert Higgs's pioneering exploration of this subject, the present work provides both a longitudinal view of the topic and an in-depth exploration of the role of government in the many aspects of the economy during that development. the book has three underlying themes: (1) the success story of the creation and maintenance of an open-access society throughout American history; (2) the critical role of interest groups in shaping the specific features of the polity and the economy; and (3) the role of beliefs in shaping the overall process—those of the participants and those of the authors of this book.

From earliest colonial times the American economy has provided a level of well-being that has placed it at or near the top of the economic ladder. the source of this success has been widespread participation in the political and economic processes. Persistent efforts to limit access to these processes for almost four centuries have been stopped. This is no mean achievement. the maintenance of a democratic polity and a market economy for such a long period is the hallmark of this process. in contrast to Latin America, the thirteen American colonies from the beginning of settlement created an open-access process. How did it happen? and more important, why has it been perpetuated in the succeeding centuries? Despite all the problems along the way, including the treatment of the native population, slavery, the unequal status of women, and the disadvantaged status of various groups at times, it is still an unequaled success story. the persistence of this open-access society in the course of a development that has featured an increase in population to almost three hundred million, a transformation from a rural agricultural society to an urban manufacturing giant and then to a service economy (specializing in technological development), and a devastatingly destructive civil war (to mention only a few of the fundamental changes) suggest the depth of its roots. Telling this story is a critical task of this book.

But the story of government is the story of interest groups. It could not be otherwise, as James Madison made clear in his celebrated . . .

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