Evolving Economics: The Ebbs and Flows of American Capitalism and its History

Jonathan Levy, Freaks of Fortune: The Emerging World of Capitalism and Risk in America (Cambridge, Mass.: Harvard University Press, 2012).

Elizabeth Tandy Shermer lists Jonathan Levy’s Freaks of Fortune as a work of intellectual history contributing to the writing of capitalism’s history. As she aptly explains, the quantitative trend followed by historians of capitalism in recent years threatens to undermine more socio-cultural projects about capitalism’s development. Shermer makes these arguments in agreement with historian Louis Hyman, who argues that a heavy focus on finance in histories of capitalism underscores the larger questions historians should ask about everyday life and capitalism in the past. According to Shermer, “[h]istorians must begin reconciling the rich history done on risk, insurance, financial underwriting, and bailouts, for example, in the nineteenth century.”[1] Levy’s work is exactly the scholarship Shermer is pointing to.

Levy adds a well-researched and nuanced work to a growing amount of scholarship on insurance, finance, and risk in the history of capitalism. He extends the commodification of risk in capitalist, nineteenth-century America to the ideological underpinnings of American capitalism that we see at present, especially liberal individualism. Although the chapters of Freaks of Fortune are thematically organized appropriately, the anecdotal evidence used to frame them produces a sense of confusion as each new section begins. The chapters taken apart, however, are incredibly useful for examining how American thought evolved to understand and alleviate risk in the nineteenth century.

Levy discuses the financial tools used by Americans to manage risk as centrifugal to the concept of “double commodification.”[2] He understands this term as the way Americans came to understand commodities and the risk associated with them: there is value in both the commodity (or object being managed) and in the risk assigned to it. Both the owners of the object and the insurance firms assigned risks to commodities in a process of appraisal. This process, according to Levy, facilitated the acquisition of a sense of freedom. Ultimately, the freedom of the commodity owner, however, was merely perceived during the process of self-ownership. In actuality, the individual freedom of ownership simply transferred dependence to the financial system. Thus, the “freaks of fortune,” the ebbs and flows of the capitalist market, eventually controlled American life.

As Shermer argues, histories of capitalism rich with a socio-cultural perspective open up new questions in old subfields. Perhaps the most apparent subfield Levy’s work might spark inquisition in is the history of slavery. Historians who are considering the meaning of freedom in America during the nineteenth century could draw some conclusions, or at least direction, from Freaks of Fortune. One of the most salient anecdotes Levy provides is about the Creole uprising of 1841, when nineteen men overtook the crew of the ship carrying them as commodities to be traded in New Orleans. The incident, as Levy explains, made a case for legal dispute in the Louisiana courts about the connections between freedom, self-ownership, and risk.[3] Ultimately, Levy uses this case to argue that the attainment of freedom was also the acceptance of personal risk. Although this case is by far not the only interesting connection Levy provides between identity, commodification, and risk, it is one that I found particularly compelling. It is one example of how a history of capitalism might be useful to historians of another subfield. This case is an example of what Seth Rockman identifies as a trend in a “wave of new scholarship” on the history of capitalism: slavery is integral rather than oppositional to the capitalist system.[4] Both Rockman and Shermer contend that the history of capitalism, as shown in Levy’s work, “integrates a variety of subfields and methodologies [such as business, labor, economic, and political history] under one capacious heading.”[5]

Levy’s history of risk management in America extends into the progressive era, part of what Rockman calls “more specialized scholarship on U.S. Capitalism [that] rarely confines itself to the decades between the American Revolution and the Civil War.”[6] Rockman argues that what Levy is contributing to is a re-periodization of U.S. History. This is, according to Rockman, particularly challenging for scholars of the early republic who previously held most ground in the history of capitalism. Rockman’s analysis of the new history of capitalism, however, questions the sustainability of such a field, which may be faddish. This leaves us with a question about the nature of historical subfields and the future for historians like Levy: Can a subfield dependent on its usefulness to other subfields of history sustain itself?