A systematic and timely exploration of how corporate profits, personal fortunes and philanthropy have benefitted American society over the course of a century.
As Americans debate income disparity and federal policies aimed at ending the recession, debut author Dunn revisits history to unearth relevant data from public policy spanning the first decade of the 20th century to the present. His quest: to find out where the profits go and who benefits from them. At the outset, Dunn invokes the Watergate-era phrase “follow the money.” He begins with how customer choices control the fate of business, then compares widely varying corporate performance across major industries and assesses the impact of government policies on investors. He also examines philanthropy across decades, tracking charitable giving by the foundations and descendants of the five wealthiest men in 1905. His finding: “Philanthropy returns corporate profits and personal wealth to society over time, often at a value that greatly exceeds their original worth ... often addressing causes that voters neglect with a passion and practicality that government agencies do not possess.” Dunn asks how society can fuel economic growth to replenish philanthropic coffers, concluding: “We promote innovation by letting more of the profit from business activity stay with the investors who risk capital. We suppress it by taking more of the profits in taxes.” Criticizing Keynesian economics or asserting that Roosevelt’s policies prolonged the Great Depression isn’t new, but Dunn’s coinage of “The Dark Age of American Innovation” should attract attention. A compelling graph shows how U.S. patent applications did not recover to 1929 levels until after President Kennedy’s tax cuts and then surged following Reagan’s cuts. Dunn deftly explains balance sheets, income statements, price-earnings ratios and return on equity. More notable is the author’s graceful narrative style, which never bogs down despite the book’s complicated subject matter. In economics there are always opposing viewpoints; whether or not readers share the author’s conclusions, they will find his approach well-reasoned, his presentation crisp and the historical details engaging.
This cogent, well-constructed apologia of American capitalism deserves wide readership.