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Mike Moschos's avatar

This is a well written essay, however its reference to America's past is in deep historical error. It refers to a “the Eastern Establishment” plus a handful of inventors and system-builders as if they were in control, or even dominant within, the USA's System between 1870 and 1930, when the basic architecture of the USA's Old Republic made that simply structurally impossible. In those decades you still have fiercely autonomous state and local governments, wildly different corporate and railroad codes, competing reserve-city banking pyramids, and mass-member party machines that run cities and states as their own civic-industrial projects. Capital markets are fragmented by design; New York is a central reserve node, but it is hemmed in by the Independent Treasury, unit-banking rules, blue-sky laws, state-level public utility commissions, municipal ownership of key infrastructure, and a constant drumbeat of agrarian, labor, and Midwestern insurgencies. If a single “techno-nationalist” stratum truly governed America, you would not see the constant rate wars, anti-trust prosecutions at state and even local levels, insurgent third parties, related regional banking events, state-driven experiments in regulation, etc., etc. that characterize this period; you would see something closer to a unified developmental state. You don’t because the system is built to keep any one financial-industrial cluster from fixing permanent roles for the rest of the continent.

What did exist was a somewhat powerful aspirant elite centered in Northeastern finance, law, and big industry, retrospectively labeled the Eastern Establishment. They did built a lot of corporate and financial plumbing, but they built it inside a pre-existing Jacksonian federal architecture that diffused power outward and downward, and they were constantly forced to bargain with state legislatures, local bond markets, party organizations, and hostile blocs in Congress; at their strongest points they were coordinators but not vertical coordinators but rather horizontal coordinators (which is still quite influential in the moment it occurs) but those moments were limited. The very story the essay is telling, contained repeated battles over tariffs, money, railroads, utilities, and later the Fed and New Deal, only makes sense if no coherent techno-nationalist governing class ever fully captured the system. Calling 1870–1930 “rule by a techno-nationalist elite” projects a later, post-WW2 transformation decades resulting technocratic managerial order backwards onto a polity that still ran as a lower case "d" democracy

Virginia Postrel's avatar

Thank you for this post. Arnold Kling sent me the link because he knew I would appreciate it. I read the book so we could discuss it on his podcast (here's the link for the curious: https://youtu.be/sc2lR_iFp5g?si=lKhK2QjEdA20aKWQ).

This book is a fraud. It is absolute junk. It is the sort of "book" you get from rich, powerful people surrounded by yes-men. It is an insult to the intelligence of its readers, although a disturbing number of them don't realize it. It is an insult to the intelligence of its authors, although at least one of them doesn't realize it. I am angry that I wasted time reading it. I am more angry that it has blurbs from people who should know better. I am angry that it exists.

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