Levy on Risk and Capitalism

I enjoyed Jonathan Levy's Freaks of Fortune--profited from it, too, I think--although I would have a tough time saying just what the book is about.  No matter: I think the author, if pressed, might have to admit the same,.  The subtitle is "The Emerging World of Capitalism and Risk in America,"  What we have here half a dozen loosely connected accounts of people who cope with various kinds of dislocations in the economy of 19th Century America.  I suppose you could say that "risk," broadly defined figures in all of them, although in some the relevance is more attenuated than others.  In any event a hasty reader might infer that Levy thinks risk is peculiar capitalism. If that were a fair characterization then I think you'd have to say that he is forgetting disease, drought, famine,natural disaster and all the other visitations that have afflicted humankind throughout its history.  But I don't suppose he is saying that.  I suppose he is saying (although, strictly speaking, he does not say) that there are certain risks that are are peculiar to capitalist (market?) societies, and that demand responses beyond the ken of mere hunter-gatherers.  He doesn't specify in detail but he does use the phrase "self-ownership" by my count eleven times  to describe the creature newly obliged to lfunction in the new human bazaar.  In context  the phrase appears to come freighted with a kind of horrified fascination and I think I sense (though again, he does not spell out) a nostalgia for some kind of communal past.  He's entitled to that,  of course,but it might have helped if he had been more specific.

Surely the best of these loosely-related stories is his account of the "fraternal societies" that arose in the late 19th Century, to mix ritual,social companionship and benefit payment schemes for members.  You can't spend a lifetime reading commercial law cases without stumbling onto these fraternal societies and I thought I knew a bit about them but I seem to have had it backwards. I had assumed they were precursors of organized market insurance, but apparently they come later: they arise, rather, as a a foil to (and a criticism of) the (as we might say) morals of the marketplace.  The linchpin is that if a member (say) dies, then the society may pay a death benefit; but the money comes from an assessment levied only after the triggering event.  Translated, these societies have--and want--nothing to do with actuarial tables, experience rating, investment reserves and all the other accouterments of a conventional insurance: we are not like them.  It's  interesting also to read his account of the fraternal societies as they try to feel their way through the changing institutional structure of a changing age.  At one point we have Samuel Gompers, new leader of the new American Federation of Labor arguing that "an ideal labor union was really a 'life and health assurance company,' with a 'strike benefit added.'"  Oddly, having done so well with the fraternal societies as foils to "insurance," he says little except in passing about the rise of insurance more generally.

I also profited from his discussion of the post-civil war settlement and the question of how to reconfigure the newly freed black labor force. We talk of "40 acres and a mule" as an idea that went nowhere; but  Levy is able to show that there were some limited experiments with giving blacks access to land for farming,   Some of the support for the idea came from northern abolitionists and here is where it gets really interesting. Levy's point here is that the abolitionists--often enough rooted in the textile economy of New England--hoped to see the blacks through their energy back into cotton, as cheap supply for the northern mills.  But no: the newly empowered blacks seemed to show an unsettling tendency to subsistence farming, as if the idea of putting their own food on the family table was more attractive to them then the idea of getting into production for market (Levy touches virtually not at all on the economics of the choice--whether subsistence farming was a viable alternative, whether production for market realistic promise of a better  life).

Levy also offers an interesting sketch of another little-known institution: a "Freedman's Bank," created in the aftermath of the war to accept and invest the savings of the newly liberated former slaves.  The bank seems to have received an impressive lot of deposits although Levy doesn't linger long on trying to figure out just how the ex-slaves could have acquired--and held onto--so much money.  In a cruel followup, the bank collapsed and the money mostly disappeared, whether the result of fraud, mismanagement, or the general maelstrom surrounding the Panic of 1873,  It's a sad story but a sad part of it is that a lot of white depositors met the same fate when their banks too got swept into the undertow.  I suppose you might say that here we have one of those "risks" that only capitalism can offer.   Perhaps so, but here would have been an excellent point to meditate on just which risks are (or are not) artifacts of a market economy.

I think Levy does less well on the travail of farmers on the frontier in the 1870s-90s.  Heaven knows there was plenty of risk out there: tornadoes, locusts, dust storms, drought, whatever.  Levy seems particularly disturbed that these folks seem to be producing "for market" as distinct from--well as distinct from what, exactly?  Did he hope to find subsistence farming on the 100th meridian?  Levy doesn't specify, and in general here I think his problem is that he doesn't offer much by way of context.  I'd like to know more about what he thinks of the pattern of rain drought that seems to have played so large a role in the development of the frontier; more about how he understands the role of deflation in the money economy.  And so forth.  It would be a far more complicated story but maybe that is the point; maybe this is is all too complicated to deal with adequately in a single chapter.  A chapter on the futures market in Chicago seems vulnerable to the same kind of complaint.  Levy makes it tolerably clear that he hasn't the least use for futures trading in any but perhaps the most limited way.   He might be right, but I think the whole issue needs a more imaginative understanding than he seems able to give it.

Levy's final chapter on "the trusts" is perhaps most disappointing.  He's talking about the great age of industrial consolidation beginning, perhaps, with the Corsair Compact on JP Morgan's yacht in 1885 and continuing, perhaps, to the death of Teddy Roosevelt in 1919.  It's a fascinating story and it presents issues that I don't think we  begin to understand even to this day.  But that's the problem: for good or ill it is a highly visible story and it has been combed over often. Levy would have to be prepared to bring something new to the table; else we might as well retreat to older and more polished (if still incomplete) accounts.  

[One index of Levy' shaky grasp of the issue is that he builds his story of "the trusts" around the now-forgotten George W. Perkins, a vice-president of New York Life who spent a few not-very-satisfactory years as a Morgan associate.  Levy refers to Perkins (if I read him right) as "running the House of Morgan" which certainly would have come as a surprise to the old man himself.  Perkins was, rather, a man of some achievement in the insurance business who nonetheless made a perfect fool of himself in the Hughes insurance inquiry of 1906.  Perkins' first love appears to have been politics or, more narrowly, putting himself into the public eye.  He's entirely too slender a reed to carry the burden that Levy imposes on him.]

So, an imperfect, but still a good book.  The stuff about the fraternal societies and black land ownership are worth the price of admission. Every other topic is sufficiently interesting and important to deserve a fuller,more measured treatment on its own.

Where the Livin' Was Easy

Two snippets and a bit of context.  One, Chez Buce indulged (if you call it that) the other night in the first part of Ken Burns' Dustbowl.  It's a good reminder, if any be needed, that people through most of history had to scrape every day just to stay alive.  And forget about the hockey stick: some of the stark stories are pretty close to home.  

Which presents the second snippet: Trente Glorieuses.  You've heard the phrase before?  It's new to me. It's French; means "the glorious thirty," as in 1945-75, yesrs of ease and abundance and who could have guessed that France, with its own bleak history and inglorious war would recover so fast and so well.

We had our own glorioius thirty, of course, or perhaps "glorious 26" if you count 1947-1973.  Ease and abundance again, in the narrow sense that if your worthless brother-in-law fetched up on your doorstep around, say, the San Fernando Valley, you could have found him a job.  And not only a job, but a pretty good job, building cars, or airplanes, or highways, or big dams or whatever.   And even your worthless  brother-in-law would have been able to maintain a nice house with a stay-at-home wife and some kids and a lawn.  The echo of Homer Simpson is not accidental.

Remarkable how we really didn't notice at the time.  Some of us remembered the War, I suppose, but that was special and far away.  Some, to be fair, were haunted by memories of the Great Depression (of 1929ff; acgtually, the second Great Depression, after 1873-93, but pretty much nobody remembered that).  It's a human failing, I suppose: it takes a rare and special knack to recognize when you are well off.  And granted, there was the shadow of the Cold War: a looming menace so pervasive that it gave us reason to forget how well off we really were.

We're past all that now, of course.  Well: we pretend it will come back, but in the black of night, we feel a little bit like that billboard in Kansas that used to say "Please, God, Give Me One More Oil Boom--I Promise not to Piss It Away This Time." 

And not just us: some of the time we talk about how, oh it's outsourcing, the Chinese, blah blah. But no.  It's everywhere.  Fact is, we are beginning to realize that there simply may not be enough work to do, worldwide, anywhere.  

This cannot be wholesome.  I suppose it is a truism that you cazn infer the structure of a society from its military needs.  You fight on horseback, you need swaggering young thrill-seekers with enough of the ready to fit themselves out in full kit.   You need skilled longbowmen, you cosset them and treat them as a privileged class (and try to keep  them out of harm's way).  Somebody invents gunpowder: everything changes.  Ammo is cheap, weapons aren't that costly, and you can teach almost anybody how to point and shoot.  And the fact that they aren't too clever, that they're good at taking orders, is not  bug, it's a design feature.  Next thing you know, you've got a mass society where everybody has cell phone.  Point and shoot indeed.

Point and shoot indeed.  What sort of a society will you have when you really don't need anybody except the ones who fight your wars,  and when they are all tucked away in front of a computer screen in an air conditioned bunker in Las Vegas.

[Late-night rant.  I'll feel better in the morning.  It's the Perrier talking.]

Schmatta: A Book that Needs to be Written

Ask my college friend David what his father did for a living and he would say "outsmarts the ILGWU."  I mor or less got it: papa was management, contending withgi the International Ladies' Garment Workers Union, which meant (I have long assumed) that he scratched and clawed his way up from an immigrant beginning--first as a tailor, perhaps, then behind a sewing machine, then off on his own--a factor?--and so forth.   I never did get the details and I haven't seen David for half a century.

But it prompts a still-unanswered question: is there a good history of the garment industry in New York City, with or without its larger context in textile more generally.  Odd if there is not because as many have observed, except perhaps for the  story of the rise of Harlem,there are few immigrant sagas more fully documented than the story of the East European Jews who fled the Tsar's pogroms in the 1890s and beyond.

And you can get parts of the story everywhere.  Maybe the story is well enough told in Irving Howe's great World of Our Fathers; I read it with great pleasure and profit may years ago although I can't find a copy in the Buce bibliotech just now.  You get a slice of the story in David Von Drehle's Triangle: The Fire that Changed America and its ilk but that is only part of  larger story.  Perhaps you get the flavor from IJ Singer's The Brothers Ashkenazi--perhaps the most gripping novel I read  in past 10 years, but it is about Poland, not Amricaa, and one gets the sense the structure of the story is different.  I see there is an HBO documentary called Schmatta which I think I'll have to take a look at, although it sounds a bit solemn and predictable in format.  You even get a whiff of it in Grant Gilmore's magnificent Security Interests in Personal Property, where he devotes a chapter to "The Factor's Lien," with a concise but elegant account of the patterns of schmatt finance (fn.: as Gilmore's work suggests, someone would write a pretty good history of the word "factor" and its more overbearing offspring, the "factory")--but I digress). 

The story that I'm describing is in large part a story of Jewish immigrant life but I don't quite want to see it that way.  For one thing, I think it could also be described as "Italian," at least in part.  For another, I'd really like something more abstract or technical--the structure of the industry, where the capital came from, indeed the larger question of how anybody could make a living an enterprise so free of product differentiation and the absence of monopoly rents.

I suppose the book I want to read would have to include the account of the collapse of New York textile in the Lindsay-Beame years, including, perhaps, the inglorious last chapter in which someone gave an old loft factory building to Yeshiva University which turned it into a (gasp) lasw school.

Anyone?  Anyone?  Meanwhile, I guess I'll have to settle for this:

Demand-led Employment Growth in the Mills

My friend Marie (name change) and I were chatting about our youth around (but not in) the millyards, textile and otherwise, of Manchester NH in the 40s or thereabouts.  Marie threw in one great story I had not heard before:

Why there were so many three decker homes on both sides of the [Merrimac] River, owned by Amoskeag Corporation?  These homes were purchased at a very reasonable price if   the owner met the agreement to bring down two  more families from Canada to work in the mills....

 Makes sense to me--demand-led employment growth in the textile industry.  I do remember that the mill population in our day was (or so I thought)_ heavily French Canadian: they used to say that the Friday night traffic on the road back towards Trois Riviers (Quebec) was so thick you could hardly move.  

I told Marie about my own grandmother who was left a widow with seven kids.  I never her knew her; she died the year I was born, perhaps of exhaustion. Of her seven children, the oldest three had to quit school and go to  work early.  Of the seven, all who survived through adulthood (two died early) went on to useful and productive lives.   "At least my children never worked in the mills" their mother is said to have said.  Not that mill work was beneath their dignity--just that it was grinding, implacable and unremunerative.  Marie, resisting the impulse to deliver a bitch slap, responds with a story about  Roland (name change), her husband of 50-plus years:

Roland worked in the mills right after high school in order to pay for his schooling, and help support his parents, as his mom had a brain tumor, and couldn't work at Leavitt's dept store, and had a little sister.  He'd go to school at NH School of Accounting located up over a fruit store on Hanover St. (eight in his graduating class)  owned my Mr & Mrs. Shapiro.     Well anyhow he'd attend class from 8  - 1 PM...then head to a beef company to work on their accounting books.  At 3 PM he'd leave for the dye mill  until 11PM..that job was easy, so he could study.  He just had to keep an eye on the pressure gauge or some machine.  Then at home of course  at 11 PM he had to call me right away every night--then fold laundry and off to bed.

"So he quickly learned," says Marie, "mill work wasn't for him"  Copy that, but it sounds to me like that Marie got a keeper.

For optional reading:  Marie recommends Hareven and Langenbach, Amoskeag: Life and Work in an American Factory-City.

There's a wonderful summary of the early history of labor in the mills, in Atack and Pasell, A New Economic View of American History (a favorite; why doesn't somebody do a new edition?)--at 175-190.  I just now notice that they include a reference (at 182) to my old college roommate. Robert B. Zevn--this guy.  Yo, Bob!

Lucca and the Swiss Bankers

Another post about bankers, this time the Swiss variety.  Years ago I heard that Swiss banking got its start when Protestant bankers, crosswise with the Counter-reformation, fled to Protestant Switzerland.  

This has always sounded plausible to me.  After all we know there was a lot of people-moving in those days and in particular, that French Hugenots took their Protestantism almost everywhere (and enriched virtually every society with which they came in contact).  

Yet oddly enough, this is one "fact" --perhaps the only one--that the intertubes appear unwilling to confirm.  Miscellaneous searches invoking "Lucca" together with (in some form or other) Swiss banking.

Can anyone help here?  Am I totally spinning threads out of my own gizzard?  Or is there some hitherto overlooked confirmation of this (alleged) phenomenon?

Oh, and while you are doing my research for me--I wouldn't mind laying my hands on  good history of the Antwerp diamond trade as well.

Il Faut Cultiver Notre Jardin Meditations Approaching the Birthday of a Great Nation

Kindleberger (citing Forelich and Oppenheimer) on the Dutch:

Holland was the leader among the seven provinces, however, and as in political science theories of leadership, had to pay for the privilege of leading and being repaid in prestige, by taking on a disproportionate share of the totality... During the Dutch golden age of the seventeenth century, the issue was not troublesome. It became salient in the decline ....

[P. 90] I suppose any number of people have made a similar observation about America's truculent insistence that it be allowed to maintain (=pay for) so much of the world's defense. And the more you think of it, the more tempting it is to generalize. I wonder if something in the same nature persists when the blue states so cheerfully (heh) sustain the burden of paying the dependency bills of the red states. Similarly I can hear the old fashioned paterfamilias husband proudly and loudly boasting that "my wife will never have to work!"

Further afield, I suppose the same analysis might help to clarify the willingness of the tiny Nordic countries to puch above their weight in peacekeeping and suchlike: grant them the worthy motive of generosity, still there is a payoff (and who can begrudge them?) in enhanced self-esteem.

And--though this really is a bit of a stretch--I wonder if it might help to explain the stubborn unwillingness of the Germans to pick up any more of the tab for the trouble in the south. After all the Germans have had their experience with hegemony, thankyouverymuch, and it's not a pretty thing to remember. As in: we Germans are happy to stay home and tend to our knitting--why don't you do the same? Not saying they are right in this, of course, just trying to clarify what is going on.  

As the great Franco-German once said, "Il faut cultiver notre jardin."

Acemoglu and Robinson on Failure

As they got ready to publish Why Nations Fail, I suspect that Daron Acemoglu and James A. Robinson saw themselves as shooting at the big targets: Jared Diamond, or maybe Francis Fukayama. On that standard, I'd say they have reason to be disappointed. I think they've put together an interesting book, readable, and plausible in its argument, though not by any means the game-changer they might have thought it to be. Yet perhaps surprisingly, in a certain way they may have ended up with a book that is better than what they expected or wanted. 

First things first: it's hard to come to terms with a book entitled Why Nations Fail when you can't pin down a precise definition of “nations” or “fail,” or in particular, “why.” Given its pretensions, we have here, then, a remarkably casual book. The authors say they offer large a “theory,” although they concede that their “theory” is no great shakes at prediction. In particular, while they obviously harbor strong views as to what counts as failure, illustrated with examples, they really don't offer any insight into the process that brings it about.  We might better characterize  it as a “description,” a sketch of things that they like and don't like in large social organizations. Judged by this standard, it's affable, even convincing except insofar as it sketches a picture that you've been convinced by already.

They prefer, to be more precise, societies in which the worker is worthy of his hire; in which there are incentives for the production of new ideas; where there is flexibility and even fluidity as the polity responds to changing times—in short, to use their word, “inclusive.”  They're also hot for the old Schumpeterian show-stopper, "creative destruction"--my searcher says the phrase occurs 64 times--but again, it isn't really clear what they mean by it.  The people who "created" Venice, for example, weren't really "destroying" prior society; they were just a bunch of swamp rats who learned how to turn some coins through trade/piracy.  And the Europeans who introduced mass slavery in the New Wotrld may well have been "destroying" what went before but it would be odd to think of them as "creative.

On the negative side, A and R  don't like societies where elites entrench themselves and try to gobble up all the rewards, no matter who may have produced them, The catch-name here is “extractive.” You might think that “extractive"  had something to do with the pillaging of nonrenewable resources and in some cases here perhaps it does, although far more often it seems they are talking about the extraction of wealth from anyone else who might have a claim on it. Since “elites” in this context seems to mean “whoever wins the competition for the levers of power,” the proposition comes pretty close to definitional--an elite is by definition a person who excludes others from their just reward.   [As what is perhaps an aside: A and R never seem to make clear just why they are so down on the “extraction” of wealth from others—is is it because they are Kantians who want to treat people as ends, not means?  Or perhaps Utilitarians who believe that more entrepreneurship will get down if entrepreneurs enjoy a good payday? It is possible that A and R simply did not notice the distinction.]

Anyway, “inclusive” societies that institutionalize innovation and exterminate “extraction.” Against this “framework,” A and R discuss a great variety (40? 80?) of instances from the prehistoric Nafutians to the present-day (I hope not “posthistoric") Somalis. Some of these stories are familiar, some quite new (at least to me). It isn't always obvious why a particular story is in s particular chapter although if you go with the flow, this isn't a problem. At any rate,  the authors are at least insistent on what their theory is not: not merely geography and not just culture.  Hmph, maybe.  . It'll be a long time before you persuade me that the differences between Venice (say) and Chad have nothing to do with geography; nor that the differences between Muslims and Hindus in the Indian subcontinent have nothing to do with culture (nor, come to think of it, Persians and Arabs in the Middle Eastern heartland, nor Muslims and Europeans in the Mediterranean). But the difference may not be obvious to A and R either: they seem to abandon the not-stuff whenever convenient as, for example, when compare/contrasting the experience of Spaniards in South America with that of the English in the North.

At this point, one might be tempted to say that one has read a lot of this before—in, for example, the seminal work of Douglass North. The authors will have none of it. They salute North as a distinguished forebear but they say that what they have added is “politics.” But once again, we are up against a problem of definition. Having pored conscientiously over the entire text, I haven't the least idea what precisely they mean by “politics,” unless it be “leadership,” or perhaps “the accident of leadership,” or perhaps more generally “accident.”

From their endnotes, it is clear that A and R have absorbed and (mostly successfully) repackaged a formidable amount of material, yet the general theoretic anemia helps to remind the reader of what they  have left out.  Unless I missed it, there is no mention of Richard Pipes and his superb account of "patrimonial" social order in Russia; nor of Kenneth Pomerantz and his searching comparison of China and the West, nor Martin van Otswald and his work on the social order of the military in Modern Europe.  Perhaps most important, they seem not to have considered what I would count as the runaway best book on modern nationhood--Charles Tilly's Coercion, Capital and European States.  As authors who want to include "politics" in their account of nationhood, it is hard to think of a better place to begin.


With limitations like these, how can one still count the book a success.  I'd put it this way: we're dealing with authors who come from a milieu where theory dominates.  As political/social historians in the academy, they come from a world where theory dominates: if you don't have a theory you are a mere popularizer, doomed to spend your weekends on C-Span with the likes of Doris Kearns and  Goodwin and Douglas Brinkley.  No self-respecting Ivy League professor wants. Better to propound any theory than to suffer obloquy such as that.  So now you've got two choices: either postulate a theory that is too rigid and formal to capture experience; or settle for one that is too weak to offer any new insight at all.  Given the choices, I'd say they are much luckier to have fallen (intentionally or not) into the second error.  At least it leaves them open to telling a bunch of really good stories.


Footnote:  The authors now have a blog, in which they answer some criticisms and offer some extensions of remarks.  It bids fair to become more interesting than the book itself.

Barbara Clark Smith's America, and American Patriotic Religion

Barbara Clark Smith's The Freedom We Lost ranks one millionth (give or take) in the Amazon league tables which must be dispiriting. And a rotten shame because it is a book that deserves a lot more attention particularly in the fatiguing and seemingly unending debate over the "intent of the founders."  Smith's narrow point is in her title: she throws light on the way in which the revolution centralized power (and don't they all?)--leaving the locals more constrained in managing their own lives.   The Crown may have been autocratic but at least it was remote. The new Federal government had its own autocratic tendencies but was not nearly so remote.

But beyond the narrow point, Smith helps us to see how radically different the world-view of he founding generation was, particularly with reference to the role of "the market."  Recall that Adam Smith's Wealth of Nations is no older than the Declaration of Independence. These people had not the remotest notion what a "market economy" might look like--indeed the very idea of an "economy" (in the modern sense) was only just a-borning.  They believed in "controls."  They didn't like displays of great wealth.  They didn't mind busting down the door of the occasional warehouse to to thwart the merchant's attempt at gouging.

I suppose none of this is in any way new to students of the period.  But it is well expressed here, and one can't help but reflect on how poorly it fits with the prevailing patriotic religion, and the vision of the founders has having launched us on an unfettered market economy, and may the best hedge fund win.

Don't misunderstand, I'm a Smithian myself, yessir, mightyproudtosayit.  But I try not to drink too deep of the Kool-ade, and I certainly can imagine an economy (!) with a different vision.  But enough about the founders--tell me, what would Jesus think of credit default swaps?  

Michael Kazin Dreams of a Past that Never Happened

Reviewing Richard White's new book about the history of the railroads, Michael Kazin longs for an Edenic yesterday before Hayek and Schumpeter and the equivocal blessings of creative destruction:

At the end of his powerful book, ... White floats a counterfactual balloon: what if the steel lines that spanned the continent had been “built as demand required” instead of as part of a competitive dash that caused as much waste and hardship as progress? Slower, more rational development would have lessened the damage to the environment, given Native Americans a chance to adapt to conquest and perhaps saved thousands of lives. White advises, “We need to think about what did not happen in order to think historically.”

Such an alternative past would probably require a different country. The history of American capitalism is stuffed with tales of industries that overbuilt and overpromised and left bankruptcies and distressed ecosystems in their wake: gold and silver mining, oil drilling and nuclear power, to name a few. The railroad barons wielded more power than other businessmen in the Gilded Age.

Kazin longs for "lower, more rational development  ... instead of as part of a competitive dash that caused as much waste and hardship as progress."  He calls this vision "a counterfactual."  But in fact, we achieved just exactly the kind of rationalization that Kazin so admires from the greatest of all American central planners, J. P. Morgan, starting no later than July 20, 1885 (126 years ago Wednesday) when Morgan hauled the president of the New York Central and the vice-president of the Pennsylvania aboard his yacht and bullied them into an end to their competitive warfare. Ron Chernow explains:

The basic weakness  with America's railroad system was overbuilding, which forced the roads into endless rounds of rate cuts and wage cuts to service debt.  At the same time, the massive power of their largest consumers--notably Rockefeller in oil and Carnegie in steel--forced them to grant preferential rebates to big shippers, enraging small western farmers and businessmen and stimulating calls for government regulation. For Pierpont, the leading symbol of railway monopoly, pure competition was never an option.

So Chernow in The House of Morgan at 55-6.  The "Corsair Compact," as the papers called it, can be understood as the episode that made Morgan Morgan.  By the next decade,  he had become a substantive--"Morganization."  Chernow again:

Oppressed by debt and overbuilding, more than a third of the country's railway trackage fell into receivership, and English investors exhorted Pierpont to bring order to the industry.  Thwarted by gentleman's agreements, Pierpont now tried another approach to forming railway cartels: he could reorganize bankrupt roads and traansfer control to himself. Then he wouldn't be at the whim of government or feuding railway chiefs.  ... Virtually every bankrupt road east of the Mississippi eventually passed through such reorganization ... . Some thirty-three thousand miles of railroad-one-sixth of the country's trackage--was morganized.  The companies' combined revenues approached an amount equal to half the U.S. government's annual receipts.

So Chernow, 67. The railroad barons," then, may indeed have "wielded more power than other businessmen in the Gilded Age."  But not so much as the financier Morgan.  Kazin may--I suspect he does--have reservations about this concentration of power.  And there are empirical questions here that are not easily answered in the library.  Was "destructive competition" more damaging in the long run to a free economy than Morgan-style consolidation?  Possibly; without a reliable counter-example it is hard to know.  Meanwhile as Kazin quotes White, "we need to think about what did not happen."  And what did not happen was certainly not free competition.

America: the Footnote (Cool Charts)

Cool charts show how recently the United States was a footnote to world economic life (link).