Today, we have a guest post from Richard John, Professor of History at Columbia University and co-editor with Kim Phillips-Fein of Capital Gains: Business and Politics in Twentieth-Century America, which explores the influence of business on American politics in the twentieth century. Complementing Phillips-Fein's earlier post for us examining what historical precedent might tell us about the business community's relationship with the Trump administration, John looks back at the different ways that historians have understood and argued about the political role of the business community, highlighting Capital Gains' important contributions to these ongoing and evolving debates.
Writing in 2014, historian Beth Bailey put it well: Political economy is back. A “major historiographical transition” for historians of the United States was underway that was rapidly bringing to a close the long dominance of social and cultural history. In their place were a raft of exciting new studies of politics, political economy, public and private institutions, and transnational networks. Much of the work in this vein has flown under the banner of the history of capitalism. This work, in turn, has reshaped our understanding of nineteenth-century institutions such as the slave plantation and the futures market.
For historians of the twentieth century, banking and finance have received the lion’s share of attention. Other topics beckon. The recent publication of Capital Gains, a collection of twelve original essays that I coedited with Kim-Phillips Fein, expands this new approach to the American past to the relationship between business elites, politics, and the state.
It has long been assumed that the relationship between business and politics in the twentieth-century was adversarial. The United States has for over a century boasted a raft of antimonopoly laws to limit corporate power. For many historians, including Alfred D. Chandler, Jr. and Thomas K. McCraw, these laws shaped a political economy in which business elites were more-or-less constantly on the defensive. Recent scholarship by social and cultural historians has reinforced this conclusion by emphasizing the hostility of influential economic actors to the expansion of the state that took place during the New Deal.
The essays in our collection challenge both these assumptions. Business elites, it turns out, have proved far more adept than historians have often assumed at using the levers of power to create and sustain pro-business governmental institutions. We don’t often think of powerful economic actors as building social movements to reshape the political-economic rules of the game. This is a mistake. Business-led collective action has been at least as influential as the labor movement in shaping the world in which we live. Bernie Sanders and Donald Trump know this: only historians, it seems, remain in the dark. (Consider, for example, the paucity of job listings in economic history.)
Two examples from our collection help make my point. The U. S. Chamber of Commerce in the 1910s worked closely with the Department of Commerce to insure that trade-association-backed inter-firm information-sharing projects would not run afoul of the courts. In so doing, it took a page out of the playbook of the small-business-friendly “people’s lawyer,” Louis Brandeis. The Department of Commerce, in turn, contacted hundreds of trade groups to build support for the Chamber of Commerce. Neither wanted to return to free market competition as the Supreme Court had defined it before it handed down its famous “rule of reason” standard for competition policy in 1911. On the contrary, business and government each favored the expansion of federal-government administrative agencies as an alternative to judge-made law.
The National Association of Manufacturers, similarly, embraced in the 1960s the then-fashionable liberal ideal of “corporate social responsibility,” much to the consternation of its own ideologically driven back benchers. Liberalism was in the ascendancy, and, like any well run voluntary association, its leadership was mindful of the priorities of its due-paying associates, who, among other things, looked to the organization to help comply with federal anti-discrimination legislation.
Examples such as these, and the essays in Capital Gains include many more, underscore the enduring vitality of two genres of historical writing that the current generation of historians neglects at its peril: namely, progressivism and corporate liberalism.
Progressive historiography is often associated with the Manichean people-versus-the-interests dualism that supposedly informed Charles Beard’s landmark Economic Interpretation of the Constitution (1913). While not entirely inaccurate, this characterization is too narrow. In particular, it underplays the progressive historians’ critical realism—a mindset they shared with Chandler and McCraw—as well as their technological enthusiasm. Beard’s 1927 presidential address for the American Political Science Association was, in many ways, a more revealing statement of progressive historiography than anything he wrote in Economic Interpretation. Progressives mobilized the state to foster social change. In so doing, or so our contributors contend, they followed the lead of the business elites they are mistakenly assumed to have reviled.
Corporate liberalism is another older historiographical tradition that our contributors have revived. The phrase itself was coined in the 1960s by the late Martin Sklar, a historian whose landmark contributions to our understanding of the U. S. political economy is only just now gaining the recognition that it deserves. Corporate liberalism for Sklar was both an ideology and a tool for understanding how the political economy worked. Corporate liberals subordinated the state to the society (pace Woodrow Wilson and not Theodore Roosevelt) while embracing a mix of public policies that legitimated the high-tech, capital-intensive managerial corporation. Its ascendancy was in no sense a conspiracy, as cynics sometimes contend. Rather, it was a testament to the strength of a liberal consensus in the 1950s and 1960s so powerful that, as Jennifer Delton demonstrates in her brilliantly revisionist essay in Capital Gains on the National Associations of Manufacturers (NAM), it forced the organization to abandon its longstanding hostility to federal regulatory legislation. “That the NAM was forced to adjust,” Delton contended, spoke volumes about the U. S. political economy during the postwar boom.
To contend with Chandler and McCraw that U. S. government-business relations in the twentieth century was adversarial is misleading. Sometimes it was; often, it was not. But the trend was clear: Capital gained over time—as our title proclaims. Whether this trend will persist is anyone’s guess. The surprise victory of real-estate mogul Donald Trump in the 2016 presidential election suggests that it might. Business elites in the twentieth century have often complained that they lacked access to the levers of power. These protests often lacked merit. Today they seem almost delusional. To understand why, historians will find much to ponder in Capital Gains.