Review of Jeffrey Broxmeyer's Electoral Capitalism: The Party System in New York’s Gilded Age
Reviewed by Atiba Pertilla
The 2020 presidential campaign is coming to a close with controversies swirling over the alleged and established entanglement of the two main candidates, Joe Biden and Donald Trump, in a variety of schemes to use their political position to benefit themselves or their families. On the one hand, newspaper investigations have questioned the seemliness of Donald Trump and his family profiting from the expenditure of taxpayer funds at their portfolio of resorts, the use of campaign money to buy their memoirs and book their facilities, and the conflicts of interest raised by a president appointing regulators to oversee global financial institutions which have lent hundreds of millions of dollars against his assets. On the other hand, Republican operatives have accused Joe Biden’s son of trading on his family name to launch and sustain his investment banking career, and attempted to show the Democratic candidate benefited directly from his son’s connections and steered foreign policy to suit them.
Electoral Capitalism: The Party System in New York’s Gilded Age
By Jeffrey Broxmeyer
University of Pennsylvania Press, 2020
240 pages
At the heart of these concerns lies a conviction that profiting from political connections is a primary driver of Americans’ loss of faith in their elected representatives. Electoral Capitalism, a new book by Jeffrey Broxmeyer, focuses on public graft and political machines in Gilded Age New York and is a timely look at how earlier voters faced similar questions. Broxmeyer, an assistant professor of political science at the University of Toledo, takes a fresh approach by placing “officeholding capitalists” at the center of his analysis and examining what their role tells us about mass-suffrage parties and the prelude to Progressive-era reform. While the book would be profitably read alongside Sven Beckert’s The Monied Metropolis as an alternative take on the machinations of New York’s self-satisfied upper class, or slotted between David Scobey’s Empire City and David Hammack’s Power and Society as books attentive to the interplay between political coalitions and urban development, it should also be appealing to anyone seeking perspective on how individual operators sustain political parties and build beneficial relationships.
The bipartisan pursuit of “electoral capitalism,” Broxmeyer argues, was a “pathological” pattern inextricable from the maintenance of a political system which facilitated the growth of extreme wealth and mass poverty as rapid industrialization reshaped the United States as a whole and New York City in particular. He urges readers to move away from “corruption” as an unhelpful term of ethical judgment rather than analysis, and to grapple instead with how both Democrats and Republicans participated in the “commodification” of politics and built a culture of incentives to use political office for personal gain. As such, he suggests, examining the factors that sustained electoral capitalism can shed considerable light on the present era of yawning income inequality and billion-dollar political campaigns.
The language of “capitalism” and entrepreneurship is not a simple allusion to politicians’ pursuit of wealth; Broxmeyer shows officeholders acted much like contemporaneous businessmen, seeking “predictable returns” (i.e., winning elections), to squeeze out competition (quash intraparty rivals), and to develop as many lucrative “product” lines as possible (whether salaries, gifts, or investments). Adapting the managerial techniques of nascent corporate bureaucracies, “the imperative to coordinate... drove organizational innovations” within the parties, such as garnishing the salaries of government employees who owed their jobs to the “spoils” system to fund their patrons’ political machines. Control of burgeoning bureaucracies and coordination between multiple entities were important skills for politicians and businessmen alike. For businessmen themselves, “party connections... were [a] competitive market advantage.” Some, like banker Levi Morton, eventually moved directly into political office. For electoral capitalists, politics and markets were not separate spheres but rather intertwined: “moneymaking was at the forefront of officeholders’ priorities.”
Electoral Capitalism covers a lot of ground but moves briskly. In the first two chapters, Broxmeyer examines how partisan divisions within the economic elite shaped how electoral capitalism yielded profits. For Democrats, local real estate developers were an important constituency to assist with friendly ordinances and public infrastructure projects but also to work with as business partners and draw on for campaign funds. Chapter one examines the 1870 collapse of Tammany leaders’ effort to direct public deposits to a chain of “pet banks” they controlled and use the proceeds to finance both political operations and insider deals. Republicans, by contrast, were more closely tied to financial institutions and large-scale corporations. Chapter two examines the entanglement of Republican politicians with businesses that thrived on relationships with the state, such as the US Express freight company, controlled by Senator Thomas Platt, which owed much of its business to guaranteed federal contracts. In some cases, the connections were so seamless that politicians served as each other’s investment advisors while relying on financiers for inside knowledge on potential profit opportunities.
Broxmeyer’s account of Levi Morton’s investment bank, Morton, Bliss, & Co., is particularly fascinating. Thanks to maneuvering by Congressional allies, the firm received federal deposits to pay salaries overseas and other commissions. In turn it leveraged the liquidity these agreements provided to win additional government business, such as taking the lead in marketing US bonds abroad. Morton’s position rested on accommodating influential Republicans in a variety of ways; unusually for an investment bank, it more or less functioned as a private lender for well-connected politicians, even advancing two months’ rent to the daughter of former House Speaker James Blaine while she was staying in France. Morton’s correspondence indicates that in return for such services he was able to dictate the placement of party operatives to the Grant and Garfield administrations much like politicians with formal positions did.
When the activities of entrepreneurs and their firms were inextricable from their political connections, Broxmeyer argues, they essentially constituted the party themselves. Moreover, the commitment of both parties to upholding business interests, even if they emphasized different economic sectors, could also create bipartisan alliances for personal benefit. For example, Broxmeyer traces how James Lenox, founder of the Lenox Library (one of the predecessors of the New York Public Library), obtained its state charter. Not only did he sell off part of his family’s estate to “Boss” William M. Tweed and “Tammany Republican” Thomas Murphy to secure their cooperation in steering the bill through the state legislature; Lenox then invested the library’s endowment in New York municipal bonds, committing it to financing the city’s public works.
The third chapter turns to an examination of “partisan poor relief” — namely the use of public jobs as a form of social welfare. The dislocations created by the industrial economy produced demands at unprecedented scale which both Democrats and Republicans were forced to assuage to compete for votes. While Tammany Hall may have been more notorious for hiring “paint eaters” and “placemen” to fill municipal jobs, Broxmeyer focuses on the blizzard of requests that descended on James B. Butler, a minor Republican functionary who served as the chief of appointments at the US Treasury Department and thus the contact point for those seeking federal jobs in New York. Applicants traded on contemporary ideas of manly responsibility, disability, and dependency to define themselves as deserving recipients of “social protection” in the form of public jobs, but they also committed to furthering party interests whether by canvassing friends to vote for the right candidates, regularly passing on a share of their salary, or both. Seen in this light, the “internal party market” for public jobs was an efficient way for politicians to respond to economic tumult while benefiting those who promised to be activist ideological allies.
In the fourth and final chapter, Broxmeyer turns to grassroots and elite reformers’ attacks on electoral capitalism. Grassroots reformers like Henry George and his allies were caught on the horns of a dilemma. Distrustful of both Democrats and Republicans, they sought to expand the role of the state in ensuring fairer conditions for industrial labor and the distribution of wealth, yet were anxious to tear down or avoid bureaucracies to ensure they were not captured by the entities they were meant to regulate. In a context where many voters looked to public jobs as a form of welfare, grassroots reformers’ producerist critique of the public sector made it difficult for them to build power among voting blocs. Meanwhile, elite critics’ focus on civil service reform and other measures to stamp out the distribution of jobs to political allies were rooted more in a distaste for a large government sector than in a dislike of partisanship. While they sought “fewer street sweepers and lowly clerks,” many fought ardently to win themselves appointments to public commissions and executive agencies — often proudly renouncing the salaries they received — in order to shape and shrink the public sector to their liking.
Broxmeyer suggests these differences in class standing, and the grounds on which each group critiqued electoral capitalism, have had an underacknowledged influence on the subsequent study of American parties. The “voluminous” pamphlets and “self-conscious histories” written by “elite reformers,” he argues, were absorbed by the nascent social scientists who were their peers and were busy formulating theories of party politics. The framing of patronage as a moral question rather than a facet of class sublimation produced models that attributed agency to politicians who supposedly pandered to the poor with no-show jobs and public works projects. This viewpoint also castigated voters for being complicit in their own fleecing, rather than seeing bipartisan support for the use of government jobs as a form of public welfare. The critique of this “proto-Keynesianism” has cast a shadow over the use of “expansionary spending” and “active labor market policies” by both New York City’s government and the federal government ever since.
In the Gilded Age, Broxmeyer notes, “party leaders’ power and wealth, frankly, were mysterious to contemporaries.” Modern-day standards of financial disclosure are meant to overcome the “mystery” — though their effectiveness in the face of resistance, such as Donald Trump’s unrelenting attempts to preserve his tax records from public scrutiny, is an open question. On the other hand, what are voters to make of how Michael Bloomberg’s lavish charitable spending during his mayoral career, which might be called “electoral philanthropy,” helped enhance his power? The modern-day celebrity status of the operatives who have guided these campaigns and others mirrors the practices Broxmeyer has uncovered for the 19th century. His analysis indicates the “revolving door” between government service and campaign management needs just as much analysis as the one between the government and lobbying has received.
The idea that politicians should not profit directly from their positions seems firmly established, as indicated recently by the bouncing from power of HHS secretary Tom Price, EPA administrator Scott Pruitt, and Interior secretary Ryan Zinke, all in the wake of reports of taxpayer spending on their sumptuous travel and office perks. The Supreme Court, on the other hand, has narrowed the construction of public corruption to cover only “official acts.” Meanwhile, the practice of former presidents, Cabinet officials, and campaign operatives raking in large sums from book sales and speeches suggests that the “commodification” of politics has been transformed into the commoditization of politicians themselves, paradoxically making their conduct more opaque. Broxmeyer’s findings suggest that when political action is “hidden from plain sight,” it is all too likely that the present-day variations on electoral capitalism are doing as much to shunt “the windfalls of democratic capitalism” as their nineteenth-century prototype.
Atiba Pertilla is a Contributing Editor for Gotham and a Research Fellow and Digital Editor at the German Historical Institute.