economy in practice: I ask how ideas and ideologies gave way to actions and policies, and I explore the political, economic, and legal consequences of chartering particular institutions and organizing the marketplace in certain ways. In this period, New York’s state government was busy opening avenues for profit and influence to its citizens, prompting them to organize and mobilize as economic interests in order to take advantage of these opportunities. By asserting authority in creating and regulating institutions that facilitated and intermediated private commercial transactions throughout the northeastern United States and toward the expanding westward frontier, New York’s political officials set the formal rules of the game and defined the informal norms of behavior in one of the nation’s busiest commercial centers and largest economies, demonstrating that “the state” was one of the primary agents of change in the early republic’s economy.18
But although early American states were important in this era, they were hardly omnipotent. Operating within a layered federal regime of divided and shared sovereignties; early state governments lacked the jurisdictional authority, fiscal imagination, and public consent to directly undertake comprehensive revenue-intensive programs of nation-building.19 To compensate, lawmakers tapped the rule-making powers that were implicit in American statehood and constitution-making in order to reward private coalitions’ capital-formation abilities with formal institutional structures and legal privileges. Legal tools that had been the legacy of British imperial rule—charters for business corporations and banks, and monopoly grants for technology and transportation, for example—were repurposed by American lawmakers to serve the republic’s domestic needs.20 By restructuring and selectively bestowing these useful instrumentalities on favored groups, New York State political leaders created an economy of political opportunity that linked private ambition to the public weal.
Flinging the doors of statehouse chambers open to petitioners eager to gain legal privileges and realize exclusive profits resurrected the familiar pre-Revolutionary practice of engaging private entities to finance, construct, and manage civic institutions and ostensibly public assets. The landscape of political opportunity in the early republic was dominated by an economy of influence in which financial capital readily purchased political and regulatory power; this incentivized coalition-building and rewarded legislative skill. It also empowered public officials to steer private capital toward building a financial and transportation infrastructure capable of encouraging further commercial ambition and hastening economic development. Government therefore got things done by deliberately bestowing public authority on individuals and institutions in order to tap private capital and channel selfinterest toward public goods and civic ends.21 As a consequence, legislators willingly—and in some cases inadvertently—sustained the influence of a cadre of unelected political actors whose stature flowed from their personal access to private capital: political entrepreneurs.22
Once they were organized into legally sanctioned and formalized partnerships and corporations, these out-of-doors unelected operatives and political entrepreneurs began curating their interests; they recruited supporters from the ranks of elected officials to deepen and widen their ties to voters. Though far from uniform or unanimous, support for politically oriented entrepreneurs among a growing interlocking directorate of citizen-shareholders and corporate directors frustrated the practical day-to-day efforts of constitution-writers and lawmakers to collar unelected individuals’ and associations’ capabilities to bend the vast power of the state’s rule-making regulatory apparatus in their favor. Successful political entrepreneurs actively interested people in their enterprises by building networks of credit that offered access to debt and capital, by transforming the transactional relationship between modest citizen-shareholder investors and high-born corporate officers into durable long-term political alliances, and by constructing a partisan infrastructure to bring institutional discipline to the state’s official sources of political authority. In the new nation’s political economy, therefore, the energies of government, subordinate political institutions, and political parties were all fueled in large measure by extra-legislative, out-of-doors mobilizations undertaken for economic and material reasons.23
For elected officials and appointees, catering to constituents’ material interests was no distraction; it was the daily grind of the business of governing. Perusing the journals of legislative houses and statute books makes clear that such work consumed a great deal of attention from New York’s political class in the early republic. Across a spectrum of letters of affection and agitation, it is clear that there was a consensus position shared among a broad swath of political entrepreneurs in the early republic—George and DeWitt Clinton, Robert R. Livingston, Robert Fulton, Aaron Burr, and Alexander Hamilton, accompanied by a large and wide cohort of less-studied figures—that a chief purpose of politics and government was to advance citizens’ material interests and promote a commercial agenda. Creating a dynamic marketplace required the interposition of state power, and in the view of this cohort, government was supposed to be actively aiding the ambitions of the ambitious; for them, the controversy most often concerned whose enterprising plans merited support.
Although it is not surprising that capital and corporations exercised political power in the early republic (as they still do) or that political actors responded to them (ditto), it was not a given that the institutional ecology of New York State would evolve to revolve around the community of political entrepreneurs at the center of these enterprises. These experiments in privilege and monopoly were tests of the public’s patience for private enterprises entrusted with exclusive rights to execute a public mission. And the political intensity of American corporations’ early origins—particularly banks and transportation enterprises—helps explain why contemporaries and historians alike frequently cast a skeptical eye toward their emergence in the early republic.
This story is, after all, a paradox: corporations morphed from being objects of suspicion and symbols of monarchy in the late eighteenth century to being the dominant tool for capital formation and business organization by the middle of the nineteenth century.24
From the seemingly anti-bank, anticorporate, and antimonopoly political-economy rhetoric of the 1780s, an interwoven set of incorporated banks emerged in the United States that financed a set of semi-exclusive transportation initiatives. It is easy to explain this development as an enlargement of privileges among an already privileged cadre of self-dealing political leaders who succumbed to corruption and materialist temptations. Certainly the metaphysical efforts of political-economy theorists to sort out distinctions between public and private spheres of action was undermined by the state’s adoption of corporations and monopoly grants to run mixed-economy enterprises.25 Most efforts to use politics to restrain the influence of capital in early America were struggles that seem destined to fail.
Yet the subtle, often unspoken assumption underlying many histories of the politics and political economy of the early republic is that angst concerning corporations and concentrations of capital was widespread across thirteen states’ legislatures and the public.26 Through the ideological prisms of republicanism and liberalism, our unfortunate present-day predicament can seem avoidable and even accidental.27 The shorthand narrative goes something like this: starting with the creation of incorporated banks after the Revolution, capital was unleashed with the emergence of rapacious railroads, a “Market Revolution,” and a more laissez-faire marketplace that came to be dominated by trusts and monopolies in the Gilded Age.28 Economic histories of the period often rely on the same narrative to reach a strikingly different conclusion: one celebrating laissez-faire as the demise of the anticapitalist radicalism of the American Revolution and the blossoming of a more nearly perfect and correct set of institutional arrangements between the public and private sectors.29
Historians have identified a spectrum of “good founders” who presciently recognized that corporations, monopolies, and other institutions for capital formation and the aggregation of influence had the potential to endanger the institutions of government and civil society; some believed they had no place in the nation’s political economy, while others thought they could be unleashed only after first being mastered.30 A cadre of state legislators
