A comprehensive and illuminating account of the history of credit in America, The Economy of Promises: Trust, Power & Credit in America (Princeton UP, 2022) by Northwestern University Professor Bruce Carruthers is a far-reaching study of credit in nineteenth- and twentieth-century America. Synthesizing and surveying economic and social history, Bruce Carruthers examines how issues of trust stitched together the modern U.S. economy. In the case of credit, that trust involves a commitment by debtors to repay money they have borrowed from lenders. Each promise poses a fundamental question: why does the lender trust the borrower? The book tracks the dramatic shift from personal qualitative judgments to the impersonal quantitative measurements of credit scores and ratings, which make lending and economic activity on a much greater scale possible. It discusses how lending is shaped by the shadow of failure, and the possibility that borrowers will break their promises and fail to repay their debts. It reveals how credit markets have been shaped by public policy, regulatory changes, and various political factors. Bringing to life the complicated and abstract terrain of human interaction we call the economy, The Economy of Promises is an important study of the tangle of indebtedness that, for better or worse, shapes and defines American lives.

Daniel Peris is Senior Vice President at Federated Hermes in Pittsburgh. He can be reached at [email protected] or via Twitter @HistoryInvestor. His History and Investing blog and Keep Calm & Carry On Investing podcast are here.

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