Daniel Drew was a notorious speculator during Wall Street’s early years, around the time of the Civil War. He earned his notoriety through truly stunning feats of insider trading, book cooking, and a ruthless disregard for the public interest. Americans, who have just lived through the greatest series of Wall Street scandals since the crash of 1929, would find him a familiar figure. Drew, who came from humble beginnings, once reportedly said about his colorful career on the Street, “It seems like a dream to me.”
Every Man a Speculator is about dreams and about nightmares, too. It is not, however, so much about the reveries of people like Drew, those men (and they were almost exclusively men) who rose to fame and fortune or infamy and ruin by trafficking in the mysteries of the Street. There already exists a sizable library of books about them. We will now and again come face-to-face with these men and their fantasies. But Every Man a Speculator is rather mainly about the rest of us. It tries to tell the two-hundred-year-old story of how Wall Street has inspired dreams and nightmares deep inside American culture, leaving its imprint on the lives of ordinary as well as some extraordinary people. Those popular images and metaphors, those visions and anxieties and desires that have attached themselves to the Street, can reveal something fundamental about its history, about its place in the national saga. They can also tell us something not only about the mind of Wall Street, but, more intriguing and rare, something about the Wall Streets of the American mind.
Examining how Wall Street has entered into the lives of generations long passed and those alive today is both a probe into the American character and an inquiry into the way the character of America has changed. But this is tricky terrain. The notion of a singular American character, a profile that captures a set of universally applicable traits, mental states, and behaviors is an elusive and dubious one at best. So, too, is the idea that the nation in all its polymorphous diversity can none the less be assigned a distinctive and unitary character. The United States is emphatically a country whose profound heterogeneity has been in some sense its very reason for being. So there have always been multiple American “characters,” many Wall Streets of the mind. Still, all the satiric cartoons and magazine exposés, the occasional hit movies and Broadway plays, the highbrow novels along with the potboilers and the folk poetry, the political jeremiads and hellfire and brimstone sermons, all the Horatio Alger inspirational storybooks and hero-worshipping biographies, the memoirs of daring-do and irretrievable loss, the visions of imperial grandeur and masculine prowess, do make Wall Street a window into the souls of Americans. By traveling down those Wall Streets of the American mind, we encounter more than the Street itself. It becomes the terrain on which people have wrestled with ancestral attitudes and beliefs about work and play, about democracy and capitalism, about wealth, freedom and equality, about God and mammon, about heroes and villains, about luck and sexuality, about national purpose and economic well-being.
What is all the more astonishing is that we can learn about all this even though until very recently most people had no direct and active involvement in the daily life of the Street. Only during the last quarter century have we become a “shareholder nation,” where roughly half of all American families have some stake in the market. And even that exaggerates the degree of present-day real personal engagement. Nonetheless, even when no more than a minuscule proportion of the population actually invested anything in the stock market, Wall Street radiated an indubitable magnetism.
Wall Street’s presence was already felt at the nation’s founding. Veterans of the Revolution, vigilant guardians of its democratic achievements, worried about Wall Street as an incubator of counterrevolutionary conspiracies. Others, like Alexander Hamilton, already conceived of the Street as an engine of future national glory. The founding fathers fell out and became the bitterest of enemies trading some of the most vitriolic accusations in American political history over their polarized views about the virtues and dangers of speculation.
Then the country underwent a half century of extraordinary territorial expansion and an explosion of commercial agriculture, new settlements, and marvelous new means of transportation and communication. Jacksonian America was awash in dreams of boundless opportunity for Every Man. Some saw Wall Street as yet another arena in which those plebian fantasies might come true. Others grew anxious that the Street might take advantage of the youthful nation’s callow self-confidence, its benign cupidity, and become a breeding ground for confidence men. Still others remained convinced that Wall Street was what their revolutionary ancestors had warned about: a truly monstrous house of aristocrats whose inscrutable machinations would engorge the country’s great good fortune, making it, like the Old World, a place of presumptuous elites and a dispossessed people.
After the Civil War, an industrial revolution remade the nation at unimaginable speed. In a generation, America became a place more recognizable today than it would have been to people who came of age when Lincoln did. Wall Street figured centrally in that great transformation. Its titanic financiers dominated the economic and political landscape, especially the railroads which were the cornerstone of the new economy and which depended on a supportive and pliant government for their creation. The men who choreographed their construction and lived lavishly off their proceeds were revered by some as master builders and Napoleonic conquerors. Writers marveled at their Darwinian ferocity. But they were reviled by others as robber barons and rogues and sinners against the moral order. For the first time the Street became a spectacle, an object of mass fascination. It seduced and repelled people, sometimes the same people, all at once.
Fortunes amassed by titans like Commodore Vanderbilt and Jay Gould were personal and dynastic. This was an age still marked by family capitalism. By the turn of the century, however, the modern, publicly traded corporation, more or less as we know it today, began to supplant the family firm. It was invented on Wall Street, and once again the Street revamped the economy. There were those who hailed the new order as a progressive step forward and credited its creators, men like J. P. Morgan, with saving the nation from an endless cycle of booms and busts, panics, depressions, and severe social upheaval. Even if they never came anywhere near the New York Stock Exchange, new legions of the urban middle class shared vicariously in the nation’s rise as a prominent player in international affairs, challenging Great Britain for preeminence; they thanked Wall Street’s growing financial throw-weight for that imperial ascension. Millions of others, however—prairie farmers, urban workers, middle-sized businessmen among them—bitterly denounced and waged a second civil war against the “money trust.” Populists excoriated Wall Street as a fiendish “devil fish” sucking away the lifeblood of the country’s agrarian heartland. Progressive reformers in the cities coined the phrase “other people’s money” to indict the country’s principal investment banks for monopolizing and misusing the national patrimony and degrading its democratic heritage. Patrician survivors of New England’s Brahmin and New York’s Knickerbocker elites issued Götter dämmerung judgments about how Morgan’s ascendancy signaled the fall of Western civilization. Working-class socialists welcomed the Street’s trustification of the economy, but only because they were sure it was but a transit point on the way to the collective ownership of the means of production by an emancipated proletariat.
During its first century, Wall Street had very slowly widened the orbit of popular participation in its moneymaking. Still, the fraction of those really involved remained tiny. That didn’t stop people from gazing at it from afar as a yellow brick road to instant wealth, admiring and envying those from modest backgrounds who’d ridden down the Street to fame and fortune. But it was only with the advent of the Jazz Age in the 1920s that the prospect of a democratized Wall Street seemed to leave the realm of pure make-believe. Real or not, the Street, along with the speakeasy and the Charleston, came to symbolize a landmark moment in American popular culture. For Wall Street, moreover, it was a moment of notable transgression. As the association with bootleg liquor, short skirts, and sexualized music suggests, the Street took on an erotic appeal. Actually, that had always been true in so far as what people did on Wall Street seemed to violate the ascetic canons of the work ethic. But in earlier times, official society severely censured Wall Street’s tendency to libidinal abandon. Others may have secretly enjoyed the way the Street seemed to thumb its nose at the strictures of Protestant morality, but they did so covertly, enjoying a sneaky thrill. In the 1920s, that underground Wall Street rose to the surface of a new American play culture, and for a moment at least shed the moral stigma that had shadowed it for generations. Only a surviving remnant of die-hard Populists and left-wing bohemian intellectuals still remembered the dark side.
The Jazz Age lasted only a moment though. There have been two great traumas in the country’s history, ruptures in the fabric of national life so fundamental that nothing is the same afterward. The first was the Civil War. The second was the Great Depression. The crash of 1929 did more than end the national infatuation with the Street’s sexiness. It enduringly implicated Wall Street in a crisis so grave it wouldn’t recover its credibility for forty years. For a generation and more, since at least 1900, Wall Street had been a central gathering place for a genuine American ruling class. At least Wall Street’s inner circle came as close to constituting one as is ever likely in a society as fissiparous and liquefied as America’s (not counting the planter elite that ruled the slave South). That class possessed enormous economic power, of course, but also decisive political influence, great social cachet, and cultural authority. All of that was vaporized by the Depression. For the first time, the Street’s business was subjected to a real if flawed public supervision under the New Deal. Faith in the free market, the signature belief of the ancien régime, was at a steep discount. The whole tone of the country shifted register, muting the traditional incantations of self-interest in favor of social welfare. Wall Street’s most august figures were not merely exposed as cheaters or felons, but were widely ridiculed as incompetent.
Laughter is a punishing historical sentence. The public face of the Street, so conspicuous for so many years, subsided beneath its waves. By 1940, all those bright young graduates of the Ivy League who used to flock there were finding work elsewhere. For nearly a century, from the time of the Civil War through the Great Depression, Wall Street had been an essential element of the country’s cultural iconography, nearly as omnipresent as Uncle Sam or the Western cowboy. But for the next forty years, roughly from 1940 to 1980, it vanished from the front page and lived out its life in the business section of the daily newspaper. Yet there was something strikingly bizarre about this remarkable invisibility. After all, the postwar order that put the Western world back together again after the carnage—that cluster of institutions including the International Monetary Fund, the World Bank, the Marshall Plan, and NATO—was designed and presided over by Wall Street’s “wise men,” a group of self-effacing financier-statesmen who came to be known as “The Establishment,” proconsuls of the American Century.
These years of cultural silence and political preeminence were a strange interlude indeed. And they eventually set off even stranger reverberations. “The Establishment” ended up getting attacked not only from the Left, which one might expect, but from the Right as well. For as long as anyone could remember Wall Street had been associated with the forces of concentrated wealth and power. However, beginning with Ronald Reagan’s cheering news that it was “morning in America” once again, the Street reemerged as a site of revolutionary struggle; only this time it was Wall Street in the vanguard of the revolution, a revolution in part it directed against itself. Under the sign of freedom and the free market, Wall Street warriors promised to take on the ossified, strangulating bureaucracies of the government, the corporation, and Wall Street’s stodgy old guard. Emancipation Wall Street–style was in one sense a counterrevolution against the New Deal, against all its irritating interference and egalitarian sentimentality. America’s second gilded age during the 1980s vented those resentments, wore its new wealth and ostentatious self-indulgence like a badge of honor, and dismantled every piece of government regulatory apparatus it could lay its hands on. As compared to the first gilded age exactly a century earlier, there was much less opposition this time around; although there was some in mocking send-ups of these new “masters of the universe” and in memorable cinematic portraits of Wall Street sociopaths who preached the gospel that “greed is good.” By and large, however, resistance had weakened and lost its political sting. Apparently, the social and psychic revolution associated with Wall Street went deeper than the mere lionization of Michael Milken in his glory days. By the 1990s, if it wasn’t quite fair to describe America as a “shareholder nation,” it was nonetheless true that the aroma given off by the Street was no longer the infernal one so familiar from the days of Jefferson, Jackson, and Roosevelt. Every Man could feel at home there like never before.
The history of Wall Street in America is then a record of deep ambivalence and of cultural warfare. The ambivalence has left its mark all across the terrain of our common and private lives. Is speculation a species of gambling or parasitism or both, and so a sin against the work ethic and the whole Protestant moral order; or is it on the contrary at the very heart of the American entrepreneurial genius, that indigenous instinct to seek out the new, that native audaciousness always ready to cross frontiers, to place a bet on the future? Has Wall Street been vital to the nation’s economic efficiency, innovation, and growth, or on the contrary did it convert potential material wherewithal into waste while choking off opportunity for those outside its charmed circle? Has the hero worshipping of financiers degraded the manners and mores of our civilization; or on the contrary do these men deserve chief credit for the nation’s abundance at home and stature abroad? Has democracy suffered as power gravitated to domineering aggregations of concentrated wealth; or on the contrary is the damage to democracy made worse by attempts to rein in that impulse to accumulate, to fetter the urge for self-aggrandizement nurtured by the free market? Has Wall Street driven a knife into the heart of the national faith in a classless America, the land of equal opportunity for all; or on the contrary has it always opened itself up to the self-made man, a place where a person from nowhere could become a somebody from somewhere? Is the ferocity and steely determination exhibited by a titan of finance a worthy model of masculinity; or is it prologue to the “rip their eyes out” primitivism of Gordon Gekko? Is Wall Street a Babylon on the Hudson, reeking of desublimated sex, a land of anarchic luck and reckless play; or is it a commercial City on a Hill, a zone of prudential calculation, deferred gratification, and sober rationality; and if it’s both, which is to be preferred? Has Wall Street’s growing preeminence in the global economy added to the grandeur of the nation, or fed delusions of grandeur and an instinct for imperial bullying?
Ambivalences like these—and many more one might name—make the history of Wall Street in American life an enigma. Or it could be said that Wall Street’s enigma is a purely American one: that we are a deeply conservative country yet irresistibly drawn to change. The instinct to collectively resist the usurpations of presumptuous wealth run up against just as strong but solitary impulses to seize the main chance. Even those multitudes for whom market society has brought worrying insecurity and even grievous loss remain tempted by the dream. For all its hustle and bustle, its creedal faith in the next big thing, the nation’s center of cultural gravity hovers in place. Again and again the country has headed back to the future. At no time has that seemed truer than now.
For the moment at least, Wall Street has won the war for hearts and minds. What an extraordinary reversal of the balance of power. However much Americans have been divided or of two minds about what they thought of Wall Street, the verdict was usually a negative one. At least that was true through the first long century and a half, up to the end of World War II or thereabouts. If Wall Street was an arena of cultural warfare, it is fair to say that the angels of our better nature were for generations mobilized against the Street. Even as its power and cultural weight grew, those who applauded it and placed their own hopes and the hopes of the nation in its impressive if inscrutable undertakings found themselves on the defensive. Certainly this was true within the precincts of high culture: among novelists and playwrights, theologians and academics, jurists and highbrow magazine editors. Again and again the financial elite found itself indicted by the country’s intellectual establishment: from Edith Wharton’s first best-seller, The House of Mirth, to the patrician jeremiads of Henry Adams to the future Supreme Court Justice Louis Brandeis’s merciless dissection of the “money trust” in Other People’s Money. This was so in the realm of popular culture as well, where the grotesque caricatures of cartoonists like Thomas Nast, the villainous bankers targeted by so many silent-movie makers, and the sensationalist exposés of yellow journalists like Joseph Pulitzer and William Randolph Hearst returned to Wall Street again and again as a site of scandal and iniquity. It was even true in the political realm, notwithstanding the enormous influence over public policy wielded by the Street. No president until Calvin Coolidge found it strategically wise to lavish praise on the Street in public; no president after him did so until Ronald Reagan; no president since Reagan has failed to do so.
This striking trajectory of conventional political wisdom reflects something deeper down: the sentimental reeducation of the nation over these two hundred years. Back home in living rooms all across America, where culture wars ultimately get settled, the verdict about the Street has been revised. Even in the teeth of the most stunning Wall Street frauds since the crash of 1929, people remain enamored. The political fallout has been minimal. The well-springs of opposition seem to have dried up; not only or even most importantly in the political world, but more intimately in what people think about the relationship between God and mammon, for example, if they think about that at all; or in the way our literary and cinematic fictions or even our daily newspaper fare assume a stance of fateful inevitability about the reign of the free market both at home and abroad. Crony capitalism so blatant it might have made Daniel Drew blush hardly arouses comment, much less condemnation. Delusional or not, for the moment at least Wall Street’s promise of emancipation, of Every Man a Speculator, has taken hold. The old Wall Street is dead. Long live Wall Street!
How did this happen? At least some part of the answer may be found here.