William E. Rappard, The Secret of American Prosperity (1955)

William E. Rappard’s book is a deliberately narrow inquiry: not whether America is superior altogether, but why, in the mid-twentieth century, its economy so visibly outproduces Europe’s. Hazlitt’s foreword frames its argumentative point: a European economist credits American prosperity not chiefly to luck, resources, or wartime immunity, but to institutions, habits, productivity, and competition. Rappard begins by restricting the question to economics:

“The science of economics, as I conceive it, has only one immediate aim—to explain how, in different periods, in different countries, and under different systems, men produce and share out the goods destined to satisfy their needs.”

The central thesis is simple but carefully staged. America is richer because American labor, aided by organization, machines, science, incentives, and market discipline, produces far more per head. Natural wealth matters, but it is not the secret.

“The United States are today by far the richest nation in the world because they produce by far the most wealth.”

Part One establishes the fact of American superiority, though Rappard is notably cautious about synthetic statistics such as national income. After citing per-capita income comparisons, he refuses to rest his case on them alone:

“we cannot find in us the faith necessary to call ours such a proof.”

He therefore builds a cumulative proof from indirect signs: rapid population growth and immigration, immense output of coal, steel, oil, electricity, and manufactures, heavy consumption of energy, cars and telephones, large gold reserves, favorable credit conditions, and the balance of payments. The latter is especially important: America’s export surplus, creditor status, foreign investment, tourism, remittances, and postwar aid show not only wealth but the capacity to finance others. The “dollar shortage” becomes evidence of a structural imbalance between productive America and dependent Europe.

Part Two prevents an easy explanation: American superiority was not merely created by the world wars. Through Smith, Chevalier, Tocqueville, Mill, Walker, and Shadwell, Rappard shows that high wages, rapid growth, mobility, and business energy were observed from the beginning. Chevalier is the crucial witness, because he saw not an accidental treasure house but a society organized around work, movement, infrastructure, equality, and ambition. Rappard’s historical section condenses this into the enduring American trait:

“fever for productive work”

Part Three supplies the explanatory core. General conditions helped: selected immigrant energies, abundant land and resources, political security, constitutional stability, and freedom from much of Europe’s inherited hierarchy. But these are conditions, not the secret itself. The decisive fact is superior labor productivity, supported by Rostas’s and Dresch’s comparative data. Rappard then identifies four distinctive characteristics of the American economy:

“mass production, the very close association between scientific research and economic activity, the passion for productivity, and the spirit of competition.”

Mass production depends on both the geographical breadth and the “social depth” of the American market: a large, unified, relatively egalitarian population able to buy standardized goods in enormous quantities. Applied science matters because American industry joins laboratory and workshop more effectively than Europe does. The “passion for productivity” is cultural as well as technical; Rappard contrasts European suspicion of mechanization, unemployment, and overproduction with an American tendency to treat higher output as a shared good. Competition is the final and dominant cause. He notes oligopoly and concentration, but argues that American capitalism remains more dynamically competitive than Europe’s cartel habits. Prosperity is stimulated by

“the free and refreshing breath of competition”

The conclusion is deliberately ambivalent. Rappard insists that economic superiority is real but limited: it measures command over exchangeable goods, not moral, artistic, or spiritual rank.

“economic superiority and superiority, full stop”

America’s achievement deserves admiration for energy, cooperation, generosity, and practical genius; yet its impatience, standardization, speed, and subordination of contemplation to production trouble him. Europe should learn from American productivity, science, scale, and competition, but adapt these lessons through its own older culture. The “secret” is therefore not a single device but a civilization of productive energy—and the warning that prosperity may be bought at the cost of values no income statistic can measure.