Wealth and Democracy: A Political History of the American Rich

CHAPTER ONE THE EIGHTEENTH AND NINETEENTH CENTURIES: FROM PRIVATEERSMEN TO ROBBER BARONS The people who own the country ought to govern it. --John Jay, first chief justice of the United States, 1787 Many of our rich men have not been content with equal protection and equal benefits, but have besought us to make them richer by act of Congress. --Andrew Jackson, veto of Second Bank charter extension, 1832 Corruption dominates the ballot-box, the Legislatures, the Congress and touches even the ermine of the bench. The fruits of the toil of millions are boldly stolen to build up colossal fortunes for a few, unprecedented in the history of mankind; and the possessors of these, in turn, despise the Republic and endanger liberty. --National platform of the Populist Party, 1892 The debate over the compatibility of wealth and democracy is as old as the republic. From the start, concern that the egalitarian-seeming United States of the late eighteenth and early nineteenth centuries might develop wealth concentrations to match Europe's was a worry for many but also the guarded hope of an important few. Alexander Hamilton, who favored both a financial class and an aristocracy, would have cherished the possibility of such an elite. John Adams, who thought aristocracies inevitable, would not have been surprised. Thomas Jefferson brooded that such a danger could flow all too easily from urban growth, finance, and commerce. Richard Price, the British reformer friendly to the American Revolution, warned the new nation against foreign banks and finance; and Alexis de Tocqueville, in 1837, hedged his praise for democracy in America with concern that the new industrial elite, "one of the harshest that ever existed," would bring about the "permanent inequality of conditions and aristocracy." By the beginning of the twenty-first century, when the first clocks along the international date line struck midnight, the United States had met, at least broadly, the hopes of Hamilton and the fears of Jefferson and de Tocqueville. The transformation was hardly linear, given the interruptions of the populist and progressive eras and the New Deal. By 2000, however, the United States was not only the world's wealthiest nation and leading economic power, but also the Western industrial nation with the greatest percentage of the world's rich and the greatest gap between rich and poor. To make this transformation from agrarian republic to financial aristocracy fully come alive--to fill in its enormous achievement, recurrent corruption, amazing technological innovation, and political pretense--the best course is to begin in the Massachusetts seaports of Adams and John Hancock, the Virginia plantations of Jefferson and George Washington, and the Manhattan financial district of Hamilton, taking nineteenth-century turnpikes and canals to the railroads, stock exchanges, Civil War battlefields, and William Jennings Bryan's angry farm belt and moving on to Hollywood, the World War II defense industries, and Silicon Valley, and always keeping an eye on two principal centers of influence, Washington and Wall Street. By the end of the period covered by this first chapter, from the 1770s to 1900, wealth had enjoyed a glorious century and a quarter. The largest fortune in the United States had grown from an ambiguous $1 million to somewhere in the $300 to $400 million range. Democracy, in her allegorical garb, was by then wandering around Washington more than a little woebegone, muttering about "the shame of the Senate," watching a U.S. Supreme Court unabashedly hold for railroads in fifteen of sixteen cases, condemning New York City tenements that matched the worst of East End London, and glooming about the lost world of Jefferson, Jackson, and Lincoln. The unusual political freedom in the U.S., to be sure, was part of what made wealth more openly controversial than iPhillips, Kevin is the author of 'Wealth and Democracy: A Political History of the American Rich' with ISBN 9780767905336 and ISBN 0767905334.