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EH.NET BOOK REVIEW
Published by EH.NET (October 1997)
Gretchen Ritter, _Goldbugs and Greenbacks: The Antimonopoly Tradition
and the Politics of Finance in America, 1865-1896_. Cambridge:
Cambridge University Press, 1997. xii + 303 pp. $54.95 (cloth), ISBN:
0-521-56167-1.
Reviewed for EH.NET by Larry Schweikart, Department of History, University
of Dayton. <[log in to unmask]>.
Following in the footsteps of other professors of government who have
employed historical methodology to examine political questions, such as
Richard Bensel, Gretchen Ritter (University of Texas, Austin) examines
the "money question" in American politics from the perspective of
antimonopolists. In particular, she looks at farm and Populist movements,
finally narrowing down her examples to Illinois, North Carolina, and
Massachusetts.
She has done a creditable job with the historical sources, especially the
"classics," like Hicks and Hammond, although tending to omit some of the
fairly large and growing literature on market mechanisms as integrators of
markets, especially the work by Calomiris, Gorton, and a few others.
Ritter correctly observes that the debates over money and banking in late
nineteenth-century America involved far broader economic issues, although
she does not emphasize the conflict between contracts-based approaches and
those of the "antimonopolists," who supported contracts until they no
longer worked to their own advantage. The difficulties that "both liberal
and conservative scholars have in acknowledging the programmatic content"
(p. 33) of party politics really is a result of the deification of Andrew
Jackson as a free marketeer, both by "democrats" supportive of an activist
state and Libertarians who oppose such a government. On the contrary,
Jackson was a "big government" guy who opposed the BUS because it wasn't
HIS bank.
>From such a starting point, it is easy---but wrong---to conclude as Ritter
does that the "antimonopolist program was both coherent and potentially
plausible" (p. 61). Fortunately, Ritter does not completely fall into the
trap, noting that the "reasons for this failure [of the antimonopolist
vision] are complex," (ibid.) including historical timing, structural
constraints, and other factors. She therefore attempts to construct an
alternative to what happened, grounding it solidly in what did happen.
Ultimately, the parties embraced governmental reforms of money and banking
precisely because both parties had, to one degree or another, abandoned
better market reforms such as branch banking. (The discussions of
branching, particularly in the West and California, are some of the
weakest parts of Ritter's otherwise cogent analysis.)
Ritter also unfortunately subscribes to the oft-repeated allegation that
the national banking system created hardships on the South and West. But a
difference existed between an absence of money and a shortage of capital,
and some economic historians, including Charles Calomiris, contend that
the shortage of physical money did not equate with a shortage of working
capital. Indeed, Ritter somewhat ignores the fact that state banks, S&Ls
and B&Ls existed and provided a strong alternative to the national banking
system, or that the rise in demand deposits more than offset changes in
physical money. The concentration of assets that Ritter finds in the East
was not at all mirrored in the West, as Lynne Doti and I have shown in our
_Banking in the American West_ (1991). Indeed, if anything, competition
expanded in the West until the 1950s, even with branch banking. Ritter
digresses with a discussion of how things "might have worked" with a brief
look at Denmark---hardly a model of anything the much larger and more
diverse U.S. might have to address---and concludes by noting that under
different circumstances, the antimonopolists may have succeeded in
instituting their system.
She seems to miss the irony that so-called anti-monopolists favored
invoking a government monopoly more powerful than any corporation; and
ignores a growing body of research strongly critical of the entire
antitrust movement as unproductive and ineffective in yielding greater
competition. Likewise, by ignoring the competitive money theories proposed
by a substantial number of free-market writers (stemming from Hayek), she
misses the REAL alternative reform program, which would have been based on
Scotland, not Denmark. Finally, when employing counterfactuals, it is
worthwhile to keep in mind that the antimonopolists of the nineteenth
century had never really experienced the ravages of inflation (produced by
governments) that destroyed their wages. Thus, deflation consumed their
attention.
This is a provocative book, and a good contribution to the debate, but
hardly the last word. Historians, however, should be flattered by the
excellent approach and methodology.
Larry Schweikart
Department of History
University of Dayton
Larry Schweikart is author of _Banking in the American South from the Age
of Jackson to Reconstruction_ (1987) and (with Lynne Pierson Doti),
_Banking in the American West from the Gold Rush to Deregulation_ (1991).
Copyright (c) 1997 by EH.Net and H-Net, all rights reserved. This work
may be copied for non-profit educational use if proper credit is given to
the author and the list. For other permission, please contact
[log in to unmask] (Robert Whaples, Book Review Editor, EH.Net.
Telephone: 910-758-4916. Fax: 910-758-6028.)
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