Government and the American Economy is a collection of essays dedicated to Robert Higgs. The list of contributors includes several mainstays of the economic history profession, each of whom reviews a key aspect of the interaction between government and American economic development. This is not a collection of original research papers, but rather a series of review essays written primarily for an audience of nonspecialists. There are some tables and graphs, including some reference tables at the end of the book, but the text is not technical and goes light on the econometrics. The authors narrate the history in plain English, often embedding in endnotes more specific references to the original scholarship that underpins their discussion.

The book has many virtues. First, its chapters ably cover a tremendous amount of ground. One could craft an undergraduate survey course around the text—American economic history as viewed through a government policy lens. Second, the authors are fully cognizant of recent additions to the economic history literature, and so the discussions are up-to-date. Indeed, each author is typically a leading expert on the topic he discusses. Finally, although all the essays pay tribute to Higgs's work, the contributors are mature scholars with their own well-defined views of how government has influenced economic change and vice versa. Thus, the essays do not merely echo Higgs's views, though they often build on Higgs's insights, such as the idea that crises lead to a “ratchet effect” on government spending and economic intrusions. Taken together, the volume is an excellent tribute to Higgs and his positive influence on the authors' professional development.

Readers of this Journal might be disappointed that the book emphasizes accessibility and breadth over originality and depth. The same scholars could have written a much more specialized book, one that would have been more useful for professional scholars. For example, one could imagine the same topics addressed in the style of “handbook” chapters (that is, like the popular economics reference books published by North Holland). The handbooks assess the professional literature explicitly, pointing out where our knowledge is firm, where it is more shaky, what the central methodological and data problems are, and where new research could be profitably directed. Alternatively, one could imagine a book far less ambitious in scope, but considerably more ambitious in generating new knowledge, in which case the chapters would read more like journal articles. Ultimately, however, the book fulfills its chosen objectives quite well. It delivers a broad introduction to the many ways government has shaped the American economy, and in describing how government has responded to economic and political crises, it identifies the ramifications of now distant events.

Although the timeframes overlap to a great extent, the chapters are arranged in a roughly chronological fashion. After an overview by Price Fishback (chapter 1), the essays address government in the colonial era (by Stanley Engerman, chapter 2) and the formulation of the United States under the Constitution (by Robert McGuire, chapter 3). Gary Libecap recounts the history of federal land policy (chapter 4), pointing out where and why it worked reasonably well and where and why it did not. Richard Sylla describes the federalist financial revolution and subsequent changes in government's interaction with financial institutions (chapter 5). John Wallis highlights historical changes in the economic activities and policy leadership of state and federal governments (chapter 6). Jeffrey Rogers Hummel argues that the Civil War was “America's real turning point” in terms of government power (chapter 7, p. 219). Robert Margo recounts the role of government in enforcing and later undermining racially discriminatory practices and institutions (chapter 8). The rise of regulation during the Gilded Age is explained by Mark Guglielmo and Werner Troesken (chapter 9). Fishback highlights how interest group politics drove a wide array of policy changes during the Progressive Era, including the forerunners of the modern social insurance system (chapter 10). Sumner La Croix undertakes the near impossible task of summarizing trends and events related to population growth, educational investment, and post–World War II labor market regulations (chapter 11). In chapter 12, Libecap chronicles the transition from patronage to civil service in federal government employment and the implications for how the federal bureaucracy works. Fishback surveys the New Deal response to the Great Depression and its institutional legacies in chapter 13. Higgs discusses the broad and long-lasting influence of World War I and II in chapter 14. Randal Rucker and E. C. Pasour review the evolution of federal farm policies, ranging from research support to price support and elaborate compensatory schemes (chapter 15). In chapter 16, Lee Alston and Joseph Ferrie describe the role of the South in forestalling and then decisively shaping the welfare state.

Finally, in chapter 17, Fishback ruminates on the nature and expense of government-provided “security” (broadly defined) in the postwar period: the welfare state, the military industrial complex, regulation of many flavors, and unbridled fiscal expansion. I would offer two qualifications to the chapter's claim that security has been bought at the expense of “individual freedoms” since World War II. First, African Americans have far more “individual freedoms” now than they did in the early twentieth century, and the growth of the federal government (in terms of both power and spending) played a key role in effecting that change. Second, one can tenably define “individual freedoms” in a way that links the reduction of poverty, perhaps through government expenditure, with the expansion of individual freedom (see, for example, Amartya Sen, Development as Freedom, New York: Knopf, 2000).

This is a lengthy and multifaceted book, and in the space of this review I cannot discuss the essays individually. However, I would like to highlight the chapter written by Higgs himself—the chapter on the world wars. It is an especially engaging account of the interaction of crises, policy experiments, and the emergence of long-lived ideas about the economic role government can and should play in America. Whether or not one agrees with all of Higgs's interpretations and judgments, one will be convinced that economists and economic historians must seriously study the social imprint of wartime experiences to understand the subsequent economic and political direction of the United States.