- Every Man a Speculator: A History of Wall Street in American Life by Steven Fraser (HarperCollins, 752 pages, $29.95)
Are so many Americans now invested in the market that a majority favors replacing social insurance with private accounts? Or are Americans' egalitarianism, their mistrust of ï¬nancial wheeler-dealers, and their fears of economic volatility still potent enough that Social Security can be saved after all?
Before answering those questions one way or another, the reader would do well to consult the collected works of Steven Fraser, who over the past couple of decades has emerged as a leading historian of American capitalism and the attempts to reform it. In 1990, Fraser co-edited The Rise and Fall of the New Deal Order, an examination of the changes in the political economy that paved the way for the Reagan era. In the 1990s, he authored Labor Will Rule, a biography of Sidney Hillman, the clothing-workers-union president, one of the founders of the Congress of Industrial Organizations, and Franklin Delano Roosevelt intimate. The Hillman biography is really a groundbreaking study of the roots of the Keynesian liberalism at the core of the New Deal. As Fraser tells the tale, Hillman was at the center of a group of unionists, economists, and, most critically, mass-market businessmen such as Edward Filene, who all sought to break the stranglehold that Wall Street and heavy industry -- steel, rail, chemicals -- held over American capital. Together, they created the mass consumptionist legislation -- legalizing unions, establishing Social Security and the minimum wage -- that we've come to think of as the essence of the New Deal.
Fraser took 688 pages to deal with labor; now, at close to the same length, it's capital's turn. Every Man a Speculator is, as Fraser acknowledges, an unusual history; its subject, he writes, is "the Wall Streets of the American mind." The book is an account of the role that ï¬nance has played in America's business, politics, culture, religion, imagination, fantasies, and phobias. It is not, therefore, simply a history of Wall Street, though some of it reads like a Matthew Josephson account of such robber barons as Jay Gould and Jim Fisk, and other parts like C. Wright Mills on such power elitists as John McCloy and Henry Stimson. Fraser looks at the image of Wall Street in the works of the Adamses, Herman Melville, Mark Twain, Theodore Dreiser, F. Scott Fitzgerald, John Dos Passos, Frank Capra, Tom Wolfe, Oliver Stone, and numerous, more obscure novelists, playwrights, and ï¬lmmakers. He looks at the populist pushback against the Street that shaped the politics of the late-19th and early-20th centuries (here, he's Alfred Kazin; there, he's Michael Kazin). He recounts the populistic comedy routines of Will Rogers and Eddie Cantor. His scholarship, over a vast range of disparate materials, is dazzling. Running through the work, for instance, is a discussion of board games, from antebellum America through contemporary video pinball -- some of the games illustrating the moral pitfalls of the speculator's life, more showcasing the visceral thrill of making a killing.
As a near-encyclopedia of American economic, social, and political history, Every Man a Speculator is a treasure trove of information. As a panorama without a protagonist or clear narrative line, though, it can in spots seem arbitrary in its focus and repetitive in its emphasis. Until it reaches the late-19th century, the book has an almost episodic quality. Then it tautens perceptibly as J.P. Morgan strides onto the scene. As American capitalism grows more organized, so does Fraser's history.
Every Man a Speculator is too sprawling to have a thesis, but it does have a number of themes. One is that even though ï¬nance may today dominate the economy (e.g., the Clinton boom) and the polity (e.g., our trade policy and the threat of privatized Social Security), it hasn't always. In crucial periods of our history, other forms of capitalism that paid more attention to workers, consumers, and the government than to short-term share value did a better job of creating widely shared prosperity than our current "shareholder über alles" model.
The biggest eclipse of ï¬nance as a power in American economic life came during the height of the New Deal order -- the years of the post–World War II economic miracle, when America became the ï¬rst nation in human history that was home to a middle-class majority. At a time when prosperity did not trickle but gushed down -- the rate of home ownership increased from 40 percent in 1939 to 66 percent in 1955, and median household income rose from $19,500 in 1947 to $26,800 in 1959 -- the role of ï¬nance had never been more negligible. Between 1950 and 1973, nonï¬nancial corporations funded 93 percent of their capital expenditures out of internal resources. American capitalism during the boom years didn't depend on Wall Street and wasn't subject to the tyranny of shareholder value that has since depressed wages and eliminated beneï¬ts and job security. Nor did talent flock to Wall Street during these years. In 1928, 17 percent of Harvard Business School grads went there; in 1941, just 1.3 percent did. As late as 1976, just 10 percent of the grads headed for Wall Street, but a decade later, that ï¬gure had tripled. Ironically, during the height of the New Deal order (which is to say, during the Cold War) it was Wall Street -- McCloy, Robert Lovett, Dean Acheson, James Forrestal, and the like -- that ran the world. But it did so within the framework of the economy that FDR had built.
Previously, Fraser documents, when ï¬nance had run the American economy as it saw ï¬t, it fostered a level of class conflict that the New Deal order subsequently suppressed. Every Man a Speculator contains a nuanced appreciation of populism in American life: It was, Fraser argues, a politics that looked "backward and forward at the same time. [Programmatically] it anticipated the modern regulatory state way in advance of the urban upper-middle classes … . [Culturally, however,] the glare of Wall Street lit up an antique nightscape in the Populist imagination. It was populated by the oversexed and the emasculated, by urban tricksters and sybarites, by moral prostitutes, alien conspirators and apocalyptic demons."
In a sense, Fraser provides an answer to Tom Frank's mighty question, what's the matter with Kansas? The cultural half of populism always raged at a cosmopolitan elite from the moral low ground of provincial bias and, occasionally, bigotry. Where, Fraser wonders, has populism gone? Despite the ï¬nancialization of American capital, despite the rise of such latter-day Jay Goulds as Michael Milken and Kenneth Lay, the populist rage at Wall Street -- a constant, if often minority, tendency from 1790 through 1940 -- has not returned. Why, Fraser asks, is Eliot Spitzer the only elected ofï¬cial really pursuing the neoswindlers of the new economy? The gutting of American industry and unions that has proceeded apace over the past quarter-century has "eviscerated the main social foundation of resistance to Wall Street's political hegemony," he notes.
That's a big part of the story, but not all of it. The same kind of invective that Kansas showered on Wall Street in the 1870s and 1890s and 1910s and 1930s is with us, in only somewhat less florid fashion, today. But now, it is directed at the liberal media, the government, Hollywood -- at the liberal establishment that the right has successfully demonized -- even as it has depicted the champions of the new, break-the-social-contract capitalism of Milken and hundreds of more garden-variety ceos as the heroes of a new, if not empirically demonstrable, age of American prosperity.
And yet while America's mistrust of its ï¬nancial operators may be largely dormant, Wall Street fears it can be roused. The ï¬rms that would beneï¬t to the tune of billions by selling private retirement accounts have concluded that anything they could say on behalf of privatization would likely boomerang with the public. Once upon a time, Fraser recounts, angry mobs actually chased Jay Gould and Jim Fisk through the streets of New York when the tycoons' efforts to corner the gold market ended in a ï¬nancial panic. Before the New Deal, mobs were a regular feature of American capitalism. If the New Deal is to be swept away, even Kansas might recover its economic populist impulses.
Harold Meyerson is editor-at-large of The American Prospect.
