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Makers and Takers: The Rise of Finance and the Fall of American Business
By Rana Foroohar
Penguin Random House, 2015
400 pages, $30.00
Money Changes Everything: How Finance Made Civilization Possible
By William Goetzmann
Princeton University Press, 2016
600 pages, $35.95
The subtitles tell the rationale for this joint review. Makers and Takers and Money Changes Everything give only slight hints about their respective books' contents. But you know what to expect after noting that Rana Foroohar will be describing "The Rise of Finance and the Fall of American Business." And you know where William Goetzmann is coming from as he discusses "How Finance Made Civilization Possible."
Both journalist Foroohar and Professor Goetzmann have produced fact-laden volumes they had been researching for more than 20 years. But can either justify their provocative subtitle? Both volumes offer thoughtful and credible commentary about historic events. And as is often the case, it is quite possible to learn a lot from the authors' narratives without necessarily agreeing with any of their sometimes controversial conclusions.
The key passages of Makers and Takers consist of long-time financial journalist Foroohar's description of the tremendous growth this country's financial sector has experienced during the past few decades. It's hard to argue with the statistics she cites to quantify that growth. Indeed, many writers have noted the increasing importance of the financial industry as measured by its share of the GDP, the quantity of its assets or the size of its employment base.
But this version of that growth acknowledges only in passing how many separate businesses comprise the complex financial segment of the domestic economy. In their own comments on the financialization of America, a few academic authors have disentangled the growth that has occurred across the multiple subcomponents of...