banks and trying to repeal an existing bank’s charter, while in Massachusetts lawmakers sought to housetrain corporations by tinkering with the details and complexities of corporate charter language.31 These histories of politics and political economy look to the founding generation for the answers they formulated to questions concerning how interests were to be managed in the young republic, poring over warning signs our forebears missed in this “lost moment” when history could have unfolded in a different way.
But this is precisely why context is key.
Early American lawmakers considering petitions for legal privileges needed to look no further than the 1773 Tea Act for an example of how a corporation’s shareholders could sway parliamentarians’ votes, distorting an empire’s political economy and propelling its colonies into open rebellion. The East India Company, however, was a unique institution without a North American equivalent.32
By contrast, American historians writing in the twentieth and twenty-first centuries approach this subject with their own particular constellation of references. Whenever most people are asked what the word corporation means to them—whether they are detached scholars and journalists, interested policy makers and politicos, or students considering the question for the first time—they conjure answers that reference the signposts of our era. They do not think of the British East India Company or its favored position in the eighteenth-century tea market but settle their brains on the twenty-first-century companies they interact with on a regular basis. To live in the United States today is to live in a nation where well-organized private interests dominate the defense, health-care, banking and finance, and media and publishing industries, as well as science, all manner of transportation, and much of the everyday commerce of nearly 300 million citizens.
Despite the sticky web of complication woven by this system as it was practiced, the vocabulary we use in our present political discourse continues to insist that somewhere, deep under layers of institutions, money, motives, and grey shades of legality, an identifiable line once existed that demarcated the boundary between What Is Public and What Is Private.33
This assumption lies at the heart of decades of state legislative and congressional lawmaking and United States Supreme Court litigation aiming to limit the influence of corporations and wealthy individuals on elections and policy making. But even after drawing and redrawing limitations on who can participate in a campaign, when and how much they can contribute, and in what places and spaces candidates and lawmakers can solicit support, little seems to have been redeemed. Despite the creation of a Federal Election Commission (FEC) in 1974; the Court’s 1976 decision in Buckley v. Valeo; the adoption of the Bipartisan Campaign Reform Act (McCain-Feingold) in 2002; internal efforts by congressional ethics committees; audits by the executive branch; state governments’ oversight and policing of agencies, officials, and legislators; and citizens’ activities in monitoring disclosure reports, filing Freedom of Information Act (FOIA) requests, and signing Public Interest Research Group (PIRG) petitions, the applied political economy of the United States remains inherently muddled.
The federal regime’s regulatory apparatus often appears to be deliberately designed to be captured by the industries being monitored.34 Many sectors of the U.S. economy are dominated by just a handful of corporations, often operating as duopolies or monopolies. And although these firms are said to be part of the free and private marketplace, their positions are protected and their power is undeniably felt throughout the public sector. In the formal exercise of policy making, rule-making, lawmaking, and the crafting and enforcement of administrative regulations, and in the informal but highly lucrative economy of influence sustained by lobbying, deal-making, political fundraising, and seasonal electioneering, any lines that might separate public and private spheres and markets in our era seem blurred beyond recognition. The most fundamental, basic tasks of the modern American state—“to insure domestic Tranquility, provide for the common defense, promote the general Welfare”—are today executed within the mixed economy of socialized risks, private rewards, public funds, public oversight, and private profit.
Judges, policy makers, and even government activists do not seem able to carve out distinct public and private spheres in thinking about how America’s political economy should work, largely because reforms fail to take full notice of how that political economy works in practice.
What if there was no lost moment? What if, instead of swinging into action as an afterthought to restrain a politics driven by ideology (or honor or culture) in the early republic—think of James Madison’s Federalist No. 51—material interests were instead at the very heart of post-Revolutionary and post-Constitutional Convention politics, used to both excite and temper competing imperatives? If true, we could then view the “emergence” of corporations and economic institutions as a continuation of past practices adjusted to fit new political arrangements.35
Much rhetoric of the American Revolution redefined civic space by drawing boundaries around influence and power. Pamphleteers, Continental congressmen, and minutemen all evinced hostility to accumulations of wealth, concentrations of political authority in a single individual or among a court of collaborators, and the conflation of personal wealth with a right-to-rule that was common in pre-Revolutionary times. The idea that a man’s political power emanated from his person, was legitimated by his property, and automatically elevated him to a stature sufficient to merit an office might not have been explicitly annihilated by the Revolution, but it was certainly disrupted by challenges to authority, aristocracy, and deference. Although wealth itself was not abolished, it was nevertheless divested of any implied grant of authority. Inheritances and marriages were no longer investiture ceremonies. The Revolution formally decoupled fitness for office from accidents of birth, marriage, and fortune once the legitimate source of government authority was relocated from the King, his ministers, and his imperial dependents to the sovereign people and their duly elected deputies in legislatures, councils, and congresses.
Yet this legacy was fundamentally jeopardized by the building of an institutional matrix of state-chartered enterprises responsible for igniting both financial and transportation “revolutions” in this era. To fund and run these corporations, monopolies, and other projects, lawmakers politically empowered a particular class of individuals: people with capital. Political entrepreneurs were people without boundaries, not at all self-conscious or deeply conflicted about using political leverage to gain economic advantages and deploying capital to win political disputes. They embodied in their person powers that were, in theory, reserved only for public bodies and to be dispensed only by popular consent in the new democratic republic. This form of authority nevertheless radiated throughout the institutions of New York’s economic life.36 Participating in the marketplace as a corporate director or shareholder; as a licensee of a state monopoly or partner in a state-sanctioned venture; as a holder and defender of a federal patent; as a bank depositor or borrower; as a bond holder in federal, state, or corporate securities; or even as a single signer among hundreds on a petition on behalf of a canal, railroad, or other project sent to the state capital were all avenues to participate in the state’s political and civic life, demolishing any pretense of there being boundaries between the two.37
Ordinarily we think of this process as one of exploitation or regulatory capture that occurs when private firms gain sway over their public regulators. But what we learn in Building the Empire State is that no such coup d’état happened; it was never necessary. American capitalism instead grew out of collaborations between political and economic interests—a dynamic in which business strategies and institutions were shaped by political strategies and institutions, and vice versa.38 In the case of Robert Livingston, self-interested and civic motives could be harmonious; he had no qualms about positioning himself and his investments for a favorable outcome if his larger civic plans became a reality or in gaining personal political power by circumventing the electoral process to become the principal of a commercially and financially influential extra-legislative institution. For him, no meaningful distinction existed between public authority and private capital. Politics existed, in part, to ensure that
