Forging American Capitalism

After over a month of faffing around, Prospect has finally published my review of the late Thomas McCraw's The Founders and Finance (Harvard UP, 2012). It's here. Sadly, their editor hacked it up some. So here's what I actually wrote.

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In the winter of 1781, the army of revolutionary America was near breaking-point: ill-equipped and under-nourished to the point of mutiny, encamped in snow-bound New Jersey. George Washington wrote, ‘it would be well for the troops, if like chameleons, they could live upon air.’ Then in May that year, Congress appointed Robert Morris to take charge of the financing and supply of the war. This was a desperate measure: they gave Morris wide-ranging powers over army employment and supply contracts. What was his plan? A radical austerity package. Morris would ‘reduce the expenditures as nearly as possible to what in reason and justice they ought to be,’ and thereby restore public credit.

This is not a story that Thomas McCraw tells in The Founders and Finance. Fortunately for the rebels, Washington persuaded Morris to hold off on his austerity plans and fund just one more campaign – to besiege the British in South Carolina. By the end of the year, Cornwallis surrendered at Yorktown and the war was effectively won. The part we learn in this book is how Morris ‘almost miraculously procured the necessary funds,’ even contributing his own money. After all, he might have said to the near-starving men as they marched southward through Pennsylvania, we’re all in this together.

Although Morris gets a potted biography in chapter six, he isn’t one of the major protagonists of The Founders and Finance. He died in disgrace after bankrupting himself on land speculation and serving a term in debtors’ jail. Instead, McCraw’s account is built around very conventional biographies of two much more acceptable heroes. This is a book in a long, grand, and profitable tradition – admiring portraits of the so-called founding fathers, the elite white men who signed the Declaration of Independence, wrote the Constitution, and served in the first governments of the United States.

David McCullough’s Pullitzer-winning John Adams, with its attendant HBO series, is the most successful recent example of this genre, and can be credited with reinvigorating it for the twenty-first century. Since then, one prominent trend has been to pick out ‘lost’ or ‘forgotten’ examples, like Aaron Burr, the dissolute Vice-President accused of treason by Thomas Jefferson, or Noah Webster, the ill-tempered dictionary compiler. These figures may stretch the definition of ‘founder,’ but the purpose of these books isn’t to question the category so much as to fill it fit to bursting.

Thomas McCraw, the Harvard business historian whose earlier books were paeans to twentieth-century liberal capitalism, has picked two pretty sure-fire winners in his own foray to the founding era. These are the Treasury Secretaries whose statues now grace the Treasury building in Washington D.C.: Alexander Hamilton and Albert Gallatin. As the title neatly encapsulates, The Founders and Finance is a high-concept marriage of two presently-powerful themes. It promises to offer a little of McCraw’s moderate perspective to the Tea Party set who love their founders, but also to bring some wisdom from down the ages for those reeling in the current crisis.

As if being money-men wasn’t alluring enough, McCraw also ruminates on his heroes’ status as immigrants in America. Hamilton was born on the Caribbean island of St Croix, part of the Danish empire; Gallatin in Geneva; Morris in Liverpool. Is there a significance here worth noting? McCraw toys with the notion that these men are something like ‘money doctors’ or the IMF, experts who bring dispassionate, surgical knowledge to needy economies. Yet ‘at bottom’ the comparison fails, he tells us. What really matters here is simply the exotic, cosmopolitan patina that immigrant status confers.

Like Joseph Schumpeter, the subject of an earlier McCraw biography who surfaces several times here too, Hamilton and Gallatin are supposed to embody the creativity, freedom, and brilliance that both drive McCraw’s idea of capitalism and thrive under it. This is a book about ‘financial wizardry,’ in which the pyrotechnics of individual heroism divert attention from the structural underpinnings of finance, politics, and society. What McCraw has set out to do here is rebuild the screen that separates us from the messy back-stage glimpsed in the financial crisis, to renormalize finance and politics and close down moves for radical reform.

In this process, The Founders and Finance turns on an appeal to moderation. Yes, McCraw tells us, Hamilton and Gallatin were opponents. In the habitual symbology of the American founding, Hamilton stands for a strong central government and the manipulation of national debt as a policy tool; Gallatin, by contrast, stands for laissez faire and deficit reduction. William Hogeland, whose new book Founding Finance (Texas University Press, October 2012) will be a helpful corrective to this one, has recently exposed  the ways both left and right make use of this crude dichotomy. But for McCraw, it was the ‘fusion’ of the two that ‘came to constitute the basic capitalist framework’ of America. He frames contemporary capitalism as a middle course between two extremes, and thus of course, the only reasonable option.

Behind all this wizardry there is a real framework to American capitalism, which does not appear in this book but is worth more historical attention. When The Founders and Finance discusses how ‘the development of the American West’ was the centrepiece of Gallatin’s economic strategy, it pays scant notice to the violent removal of Native Americans. This ‘genocide’ is named as such, but literally in a footnote to ‘the American Dream.’ Meanwhile the regressive taxation on which Hamilton built his financial system, which lined the pockets of public investors with the scant surpluses of rural farmers, is also passed over. McCraw instead presents the Whiskey Rebellion, a major insurrection resisting these taxes, as a political battle between his two heroes. His is a history as if only the policy elite existed.

Of course, that policy elite is made up of the men who drew up the institutions of federal government in the United States. In that respect, their influence can’t be denied: they really were founding fathers. But just what they founded is something of a different story. Far from the champions of democracy and equality that we sometimes imagine bestriding the American Revolution, men like James Madison and George Washington, as well as Hamilton and Gallatin, were instrumental in entrenching American capitalism. The constitution they wrote didn’t guarantee voting rights for citizens, but it did guarantee that democratic legislatures wouldn’t break contracts with investors, or print money to inflate away public debt.

The two primary conceits of The Founders and Finance – immigrants’ role and the ‘long-term merging’ of Hamilton and Gallatin’s policies – are both harnessed to McCraw’s defence of the ideological and economic status quo. By telling the life-stories of these two men as if they were the story of finance in early America, McCraw imagines a world where individuals hold the reins of the economy, determining the future wellbeing of millions through the genius of their ideas. By telling these stories as heroic tales of trial and sacrifice, conflict dissolving into consensus, he informs us that our involvement is unnecessary and unwarranted. The founding father industry consistently warns that politics is best left to demigods. McCraw adds finance as well. We should sit back and let the magicians work.

Taking Gender Seriously in Teaching

I've just finished giving my first lecture and seminar as an Associate Lecturer in Colonial American History at Oxford Brookes. So that's one occasion for writing this post. My plan is to come back to this blog, and use it to discuss issues arising from teaching the course, as well as from organising a conference in April 2013. Oxford's IT department are running a programme of social media engagement this term, too - so, it seems a good time.

I've also just read the SOAS Gender Report (PDF), which presents a very straightforward set of concerns and recommendations about the place of gender in teaching. The report is addressed to SOAS Politics and Development departments, but it absolutely concerns teachers in all human disciplines in all universities. Since I want to use this space to reflect on how to teach better (as well as how to run better conferences), this is a good place to start.

What Berry & Roelofs' report basically highlights is the disconnection between academics' own theoretical commitment (on the whole) to gender analysis as at least an important part of any human discipline, and the content of our actual teaching and reading lists. Part of the problem might be that designing teaching is hard and time-consuming. But it might actually be less boring if we thought more about how to integrate our own intellectual goals, interests, and ideas. If we conduct teaching and research in different paradigms, we're kind of letting down one possible justification for research universities as valuable public institutions.

Here's my course module as it stands: there is one main textbook, written by a man; there are nine lectures and none of them are on gender; all primary source reading I had planned is written by men. All of those elements essentially carry over from the original design of the course (which I'm filling in to teach for this semester). But that's not really an excuse. I should do better.

As I mentioned, I've just given the first lecture and seminar - I read the report after I'd finished. One thing made me less disappointed in myself. We took some excerpts from Frederick Jackson Turner's classic essay "The Significance of the Frontier in American History" as the seminar text, and discussion went well, and in both back-to-back classes we spent time discussing the nature of "individualism" and its relationship with patriarchy.

Granted I hadn't planned this. It's just so obviously present as a contradiction in Turner's text. He declares that the frontier generates individualism, and also that it promotes disaggregation into family units. The contradiction is ideological: in Turner's mind, the individual subject is the white male head-of-household. I'm so glad we discussed this, because it's so central to the American colonial and revolutionary story. But it does make me wonder all the more, if it's so central, why hadn't I planned to include it?

I think too often it's easy to consign all this stuff to the "too difficult to worry about" bin. We should make a decision not to do that, and take the SOAS report's recommendation to take gender seriously. Next week I'm teaching the French and Spanish in America; the following week, the colonisation of Virginia: the combined roles of gender (including masculinity) and race (including whiteness) in those stories are vital, and should have a prominent place in my lectures.

One other thing to add. I am concerned about a slightly different aspect of gender in teaching, which is how gender affects the learning environment. My class felt like it was mostly men. But when I read back over the register, the class is only about 60% male. How do I encourage girls to take a more active part in class discussion? How do I ameliorate the gender-related obstacles here (not least of which, I guess, is that I'm a man too)? Putting women on the reading list must be a start. I haven't finished thinking about it.

When is a conversation a failure?

A couple of weeks ago I was in Nottingham at a conference on “The History of Failure and the Failure of History”. I was shamefully late, so I didn’t hear all the papers, but one that struck me was by Anthony Barker of George Washington Law School. The main thrust of his argument wasn’t that surprising. The American Revolution and the settlement that followed failed to achieve the large goals it set for itself in terms of freedom and equality; and specifically, it failed to achieve much of anything for women.

Perhaps there can be no failure where the terms of success are unreasonable, or anachronistic. But that wasn’t the case in revolutionary America. There, a far more radical change had been realised intellectually, only to be smothered politically. If only John Adams had listened properly to his wife Abigail, when she issued her famous call to “Remember the Ladies”:

“I long to hear that you have declared an independancy—and by the way in the new Code of Laws which I suppose it will be necessary for you to make I desire you would Remember the Ladies, and be more generous and favourable to them than your ancestors. Do not put such unlimited power into the hands of the Husbands. Remember all Men would be tyrants if they could. If perticuliar care and attention is not paid to the Laidies we are determined to foment a Rebelion, and will not hold ourselves bound by any Laws in which we have no voice, or Representation.” (Abigail Adams to John Adams, 31 March 1776)

 More than the failure of the revolution as a whole, it was John Adams’ personal failure to comprehend this letter that was the crux of Baker’s talk. John had responded to his wife, of course. But he had treated the whole exchange as a joke: “I can not but laugh,” he wrote to her. As Woody Holton has written, “He viewed the whole exchange as a continuation of the banter that, from the early days of his and Abigail’s courtship...” (Abigail Adams, p. 103). For Baker, that was Adams’ failure. He’d missed the real importance of his wife’s words, which deeply challenged the political theory of the revolution.

My question is, what constitutes a failure in conversation? Or, what constitutes success? I wonder how John felt when he sealed and sent his reply. All we have is interpretation, and – for some historians – conviction.

“Abigail Adams herself, I am now convinced, would have been mortified to learn the meaning that has been read into some of her private – and not entirely serious – correspondence with her husband,” wrote Linda dePauw in 1978. Charles Akers in 1980 reckoned that “by treating her “Code of Laws” as a joke, [John] saved [Abigail] the embarrassment of seriously prosecuting a case against one of the least guilty of men.” By the standards of both these historians, then, the exchange was... successful?

Historians are conducting a peculiarly one-sided conversation of our own, with the past. Can that conversation fail? What kind of understanding needs to be built up? Biographers often tout their unique appreciation for their subjects. Edith Gelles claimed to capture “the Abigail who emerges from her own words”. That claim reminds me of Ranke’s, that history arises mystically from the archive, as if it involves the same kind of je ne sais quoi as a good conversation. But what does it mean to fail?

A Glorious Consummation

How much does the use of metaphor tell us about the psychological state of a writer? Metaphorical reasoning is very important to the way history (or any text) is constructed, and both hidden/dead and explicit metaphors need to be analysed as an integral part of the whole. But sometimes historians just seem to go a bit crazy.

I wonder what was on David Hendrickson's mind when he was writing Peace Pact?

Because the confederation had not yet been made, July 4, 1776, may perhaps best be regarded not as their day of betrothal [between the American states] but as their night of passion, a glorious consummation to the warm embraces of the previous two years yet an act that fell well short of a regular marriage. [p.126] 

And he goes on!

The final line of the Declaration was a pledge that they would see each other throughg the making of the union and the winning of independence, but it was not yet an achievement of either. In a technical sense, therefore, they were living in sin. If the fond hope of British strategists was to catch these Americans in flagrante delicto - that is, without the union - American whigs were just as determined to proceed rapidly to the formalization of their vows. [p.126]

Then a hundred pages later:

The Constitution, as it emerged from the shuttered conclave at Philadelphia - was the offspring of a mating that occurred there with a group that may be thought of (without prejudice to the eighteenth century, or to the twenty-first) as the mothers of the new child. These ladies frowned upon the advances of the nationalists, believed their claims to be quite excessive if not outrageous, and were as determined as their prospective partners to exact terms that would accord with their dignity and status. The elaborate courtship went on a whole hot summer, its consummation in doubt until the very end. Not surprisingly, the offspring they produced resembled both father and mother but was very different from what either parent had anticipated or hoped for. [p.219]

So the question is - can a historian win the bad sex award?

Crisis, Transference, and Synecdoche

This is an outline of a paper I am planning to write, which grows out of the concluding section of a different paper I will present in Cambridge later this month. It will also a significant element of the argument in my DPhil thesis.

The American revolution and the circumstances of its aftermath represented a threat to the status and perhaps existence of American elites (whether tory or patriot). Most notable among these circumstances were the weakening of bonds of credit and the inflationary measures of democratic state governments. Democratic (or "populist") electoral choices also contributed. As I said, this represented a threat to elites. But not to the people themselves, or to their security and prosperity per se.

Yet elite leaders and publicists (such as the authors of the Federalist) were able to effect a strategy of transference. That is, they "convinced" the American people that they themselves were the ones under threat, in terms of their livelihoods, their independence, and their actual existence. The word "convinced" is used with a caveat here: it was not a logical argument but a psychological and rhetorical strategy. The post-revolutionary crisis, which was in reality a crisis of the patriarchal elite, thus became a "national" crisis.

This strategy of transference was also a strategy of synecdoche. It required that the elite come to metaphorically represent the people and nation, while also representing the state of the nation back to the people. Thus threat to the part became threat to the whole. The strategy also required the formation or entrenchment of a "national" subject: that is, the ordinary individual who is to be represented by the elite. To repurpose Crevecoeur, this is a new man: an American. Rhetorics of nationalism and national unity were thus integral to the Federalist programme, as method rather than motive.

By transferring the situation of crisis from themselves to the "nation", American elites created the conditions of stress necessary for the re-creation of institutions. Americans responded to the financial and existential threat by acquiescing to (even if they did not, as a majority, vote in favour of) the new constitution and the subsequent Federalist programme. In this way - through transference and synecdoche, the formation of a new American subject - the elite manufactured the necessary consent to restructure and maintain its hegemony.

Mr Jefferson, Mr Paine, and the Question of Generations

In September 1789 Thomas Jefferson wrote to James Madison from Paris that "the question Whether one generation of men has a right to bind another, seems never to have been started either on this or our side of the water." In making his own answer, Jefferson famously declared that "the earth belongs in usufruct to the living," that "by the law of nature, one generation is to another as one independant nation to another," and furthermore that "no society can make a perpetual constitution, or even a perpetual law... Every constitution then, and every law, naturally expires at the end of 19 years. If it be enforced longer, it is an act of force, and not of right."

Jefferson's concern was with the principle of popular and legislative sovereignty, for that principle seemed to potentially come down on both sides of the issue. If the people were sovereign they could make any laws and contract any debts they liked, without impediment, including those that had effect after the lifetimes of the lawmakers. If there was no sovereignty above the popular representatives, then there was nothing to restrict them. On the other hand, this freedom ought to apply just as well to future sets of representatives. Otherwise, as Jefferson said, the world "belongs to the dead, and not to the living."

But Jefferson was wrong to say that the question had "never... been started either on this or our side of the water." More than three years earlier, in 1786, Thomas Paine had addressed this very question in his pamphlet, Dissertations on Government, the Affairs of the Bank, and Paper-Money. The issue that raised the question for Paine was the middle one, the affair of the bank. the Pennsylvania legislature had repealed a charter it had granted to the Bank of North America. Did it have the power to do so? Paine argued that it did not.

"The election of new Assemblies folowing each other makes no difference in the nature of the thing. The State is still the same State. - The public is still the same body. These do not annually expire though the time of an Assembly does. These are not new-created every year, nor can they be displaced from their original standing; but are a perpetual permanent body, always in being and stil the same." Hence, contracts entered into by the state, i.e. by the public, could not be broken by later representatives. And the charter was not so much a law as a contract.

Paine prefigured Jefferson's entire train of thought, but from almost the opposite direction. He asked his readers to imagine how it would be "if we adopt the vague inconsistent idea that every new Assembly has a full and complete authority over every Act done by the State in a former Assembly... It will lead us," he wrote, "into a wilderness of endless confusion and unsurmountable difficulties... Every new election would be a new revolution, or it would suppose the public of the former year dead and a new public risen in its place."

Yet that last clause opens new space for Jefferson's attack. The Virginian's position really does rest on the former public being now dead - at least a majority of it - and a new one arisen in its place. In his pamphlet, Paine leaves the issue at this point, and moves on to a history of the bank charter itself. But a few pages later he picks up the thread:

"As we are not to live forever ourselves, and other generations are to follow us, we have neither the power nor the right to govern them, or to say how they shall govern themselves. It is the summit of human vanity, and shews a covetousness of power beyond the grave, to be dictating to the world to come." His prescription? That it "be made an article in the Constitution, that all laws and Acts should cease of themselves in thirty ears, and have no legal force beyond that time." So from the position of an anti-Jeffersonian defender of stability, Paine has become, in the space of five pages in his pamphlet, the precursor of one of Jefferson's most famous - and famously original - thoughts.

Natural law, popular sovereignty, and the power of consent: sequel to come.

Couple of Things

First of all if you don't already get Stephen Elliott's overly personal emails from the Daily Rumpus, go do that now. Today he wrote, "I get ideas and if I don't act fast they go away. My life is a race against my own enthusiasms." I had a couple of ideas that I'm not going to be able to do right now but maybe some time soon like the summer?

1.

I want to make a film (first of all, yeah, I just want to make a film) about architecture and time. For me it feels easy to think about a building, or especially about "architecture" as an art-form, as being timeless - I mean, it has a time, but that time is the moment (moment!) it was built, and it's like it is stuck in that time forever, as a sort of fossil, right? But that's not, of course, true, because buildings are always changing along with everything else around them. They really do exist in time. They get altered or extended or revamped, deliberately, or they get rained on and worn away, and covered in soot, or struck by lightning, or flooded. The trees in their gardens grow enormous and begin to undermine their foundations, as well as block out their light. Ivy and other climbing plants climb them. And so on. So, yeah, I want to make a short film about architecture (which is something I kind of love, but don't have any formal knowledge of at all). I think it could have great music.

2.

I also want (and this is, basically, a lot less realistic even than the film idea; I mean, this is something that I might do in, say, ten years time) to write a cultural history of email. Not the whole internet, although someone should definitely also do that, I'd read it. Just email, and its relation to other forms of communication, its birth and (perhaps?) decline, its variety, its power. A history of email would also, of course, be a history of the nineteen-nineties and the two-thousands, and it would be a history of business and networks, rhetoric and friendship, love and the evolution of grammar. Not to mention spelling and punctuation. The Wikipedia page for email doesn't list any books of this kind already out there. In ten years someone could get there first, I suppose. And if they do I'll read it. In a way I think the history of how we talk to each other is the history of everything. Well, maybe not. But it's something.