Freaks of Fortune: The Emerging World of Capitalism and Risk in America

Abstract

Jonathan Levy's Freaks of Fortune is a compelling new narrative of the rise of American capitalism that reflects the financial turn in this burgeoning subfield. This is a history of capitalism as we have come to know it in recent decades: an economic system shaken by chronic volatility and governed by financial institutions, in which social struggle centers on how to manage the violent vicissitudes of fortune from which the author takes his title. Levy reveals that this crisis-prone “economic chance-world” is neither so new nor so natural as it might appear (p. 6). His capacious study focuses on a series of nineteenth-century financial panics and on the creation of financial commodities designed both to capitalize on and to contain speculative instability. The keynote of capitalist development, in Levy's recounting, is the commodification of risk. Financial corporations came to trade on the “radical uncertainty” borne by individuals and households and on the bubbles and busts that rocked market society (p. 14). In 1800 the only Americans who treated risk as a commodity were maritime merchants buying and selling insurance on the goods they traded across the Atlantic. But as industrial workers and family farmers relied increasingly on market exchange, they too came to see themselves as proprietors of their future prospects of success and failure. For many Americans, assuming the risks and rewards of a turbulent market came to embody self-ownership, according to Levy, even as they were compelled to turn to financial intermediaries who specialized in securing such bets.