INSIDE MONEY

Historian Karabell examines the long history of a financial services firm that exercised outsize power in the political sphere.

Brown Brothers, a firm as old as the nation, merged in the Depression with a smaller firm headed by Prescott Bush, whose family and fortunes were intertwined with those of Averell Harriman, “the debonair yet tight-lipped eldest son of the pugnacious railroad baron E.H. Harriman.” Brown Brothers had avoided investing in railroads in generations past, which made the merger seem unlikely, and the two firms operated very differently, the one using private resources, the other borrowing widely. Still, Brown Brothers Harriman “became a pillar of what would soon be called the American Establishment.” In the next decade, the firm would also become an agent for the exportation of American capitalism as a means of containing Soviet ambitions. Karabell digs deep into the history of the intertwined firm, sometimes revealing uncomfortable truths, such as Brown Brothers’ deep involvement in the Southern cotton economy and thus implication in the institution of slavery. In the balance, however, the more important story is the wedding of American money to global power. In the postwar era, the U.S. became a creditor and not a debtor nation, and members of the firm took political positions in diplomacy and defense and helped administer foreign-aid efforts such as the Marshall Plan. “In a few short years,” Karabell writes, “they succeeded beyond all measure in erecting a system of laws and institutions and the primacy of the dollar that came to govern almost every country on the planet by the end of the twentieth century.” They also exhibited a form of financial conservatism that would soon give way to the wild, risky speculation of the 1970s and beyond, a conservatism that Karabell counsels would serve us well today.

A readable, unfailingly interesting study on the making of the American century.