Public authorities are agencies created by governments to engage directly in the economy for public purposes. They differ from standard agencies in that they operate outside the administrative framework of democratically accountable government. Since they generate their own operating income by charging users for goods and services and borrow for capital expenses based on projections of future revenues, they can avoid the input from voters and the regulations that control public agencies funded by tax revenues. Institutions built on the public authority model exist at all levels of government and in every state. A few of these enterprises, such as the Tennessee Valley Authority and the Port Authority of New York and New Jersey, are well known. Thousands more toil in relative obscurity, operating toll roads and bridges, airports, transit systems, cargo ports, entertainment venues, sewer and water systems, and even parking garages. Despite their ubiquity, these agencies are not well understood. Many release little information about their internal operations. It is not even possible to say conclusively how many exist, since experts disagree about how to define them, and states do not systematically track them. One thing we do know about public authorities is that, over the course of the 20th century, these institutions have become a major component of American governance. Immediately following the Second World War, they played a minor role in public finance. But by the early 21st century, borrowing by authorities constituted well over half of all public borrowing at the sub-federal level. This change means that increasingly the leaders of these entities, rather than elected officials, make key decisions about where and how to build public infrastructure and steer economic development in the United States
Foreign economic policy involves the mediation and management of economic flows across borders. Over two and a half centuries, the context for U.S. foreign economic policy has transformed. Once a fledgling republic on the periphery of the world economy, the United States has become the world’s largest economy, the arbiter of international economic order, and a predominant influence on the global economy. Throughout this transformation, the making of foreign economic policy has entailed delicate tradeoffs between diverse interests—political and material, foreign and domestic, sectional and sectoral, and so on. Ideas and beliefs have also shaped U.S. foreign economic policy—from Enlightenment-era convictions about the pacifying effects of international commerce to late 20th-century convictions about the efficacy of free markets.
Pedro A. Regalado
Entrepreneurship has been a basic element of Latinx life in the United States since long before the nation’s founding, varying in scale and cutting across race, class, and gender to different degrees. Indigenous forms of commerce pre-dated Spanish contact in the Americas and continued thereafter. Beginning in the 16th century, the raising, trading, and production of cattle and cattle-related products became foundational to Spanish, Mexican, and later American Southwest society and culture. By the 19th century, Latinxs in US metropolitan areas began to establish enterprises in the form of storefronts, warehouses, factories, as well as smaller ventures including peddling. At times, they succeeded previous ethnic owners; in other moments, they established new businesses that shaped everyday life and politics of their respective communities. Whatever the scale of their ventures, Latinx business owners continued to capitalize on the migration of Latinx people to the United States from Latin America and the Caribbean during the 20th century. These entrepreneurs entered business for different reasons, often responding to restricted or constrained labor options, though many sought the flexibility that entrepreneurship offered. Despite an increasing association between Latinx people and entrepreneurship, profits from Latinx ventures produced uneven results during the second half of the 20th century. For some, finance and business ownership has generated immense wealth and political influence. For others at the margins of society, it has remained a tool for achieving sustenance amid the variability of a racially stratified labor market. No monolithic account can wholly capture the vastness and complexity of Latinx economic activity. Latinx business and entrepreneurship remains a vital piece of the place-making and politics of the US Latinx population. This article provides an overview of major trends and pivotal moments in its rich history.
Christy Ford Chapin
The history of US finance—spanning from the republic’s founding through the 2007–2008 financial crisis—exhibits two primary themes. The first theme is that Americans have frequently expressed suspicion of financiers and bankers. This abiding distrust has generated ferocious political debates through which voters either have opposed government policies that empower financial interests or have advocated proposals to steer financial institutions toward serving the public. A second, related theme that emerges from this history is that government policy—both state and federal—has shaped and reshaped financial markets. This feature follows the pattern of American capitalism, which rather than appearing as laissez-faire market competition, instead materializes as interactions between government and private enterprise structuring each economic sector in a distinctive manner. International comparison illustrates this premise. Because state and federal policies produced a highly splintered commercial banking sector that discouraged the development of large, consolidated banks, American big business has frequently had to rely on securities financing. This shareholder model creates a different corporate form than a commercial-bank model. In Germany, for example, large banks often provide firms with financing as well as business consulting and management strategy services. In this commercial-bank model, German business executives cede some autonomy to bankers but also have more ability to engage in long-term planning than do American executives who tend to cater to short-term stock market demands. Under the banner of the public–private financial system two subthemes appear: fragmented institutional arrangements and welfare programming. Because of government policy, the United States, compared to other western nations, has an unusually fragmented financial system. Adding to this complexity, some of these institutions can be either state or federally chartered; meanwhile, the commercial banking sector has traditionally hosted thousands of banks, ranging from urban, money-center institutions to small unit banks. Space constraints exclude examination of numerous additional organizations, such as venture capital firms, hedge funds, securities brokers, mutual funds, real estate investment trusts, and mortgage brokers. The US regulatory framework reflects this fragmentation, as a bevy of federal and state agencies supervise the financial sector. Since policymakers passed deregulatory measures during the 1980s and 1990s, the sector has moved toward consolidation and universal banking, which permits a large assortment of financial services to coexist under one institutional umbrella. Nevertheless, the US financial sector continues to be more fragmented than other industrialized countries. The public–private financial system has also delivered many government benefits, revealing that the American welfare state is perhaps more robust than scholars often claim. Welfare programming through financial policy tends be “hidden,” frequently because significant portions of benefits provision reside “off the books,” either as government-sponsored enterprises that are nominally private or as government guarantees in the place of direct spending. Yet these programs have heavily affected both their beneficiaries and the nation’s economy. The government, for example, has directed significant resources toward the construction and maintenance of a massive farm credit system. Moreover, policymakers established mortgage insurance and residential financing programs, creating an economy and consumer culture that revolve around home ownership. While both agricultural and mortgage programs have helped low-income beneficiaries, they have dispensed more aid to middle-class and corporate recipients. These programs, along with the institutional configuration of the banking and credit system, demonstrate just how important US financial policy has been to the nation’s unfolding history.
Benjamin C. Waterhouse
Political lobbying has always played a key role in American governance, but the concept of paid influence peddling has been marked by a persistent tension throughout the country’s history. On the one hand, lobbying represents a democratic process by which citizens maintain open access to government. On the other, the outsized clout of certain groups engenders corruption and perpetuates inequality. The practice of lobbying itself has reflected broader social, political, and economic changes, particularly in the scope of state power and the scale of business organization. During the Gilded Age, associational activity flourished and lobbying became increasingly the province of organized trade associations. By the early 20th century, a wide range at political reforms worked to counter the political influence of corporations. Even after the Great Depression and New Deal recast the administrative and regulatory role of the federal government, business associations remained the primary vehicle through which corporations and their designated lobbyists influenced government policy. By the 1970s, corporate lobbyists had become more effective and better organized, and trade associations spurred a broad-based political mobilization of business. Business lobbying expanded in the latter decades of the 20th century; while the number of companies with a lobbying presence leveled off in the 1980s and 1990s, the number of lobbyists per company increased steadily and corporate lobbyists grew increasingly professionalized. A series of high-profile political scandals involving lobbyists in 2005 and 2006 sparked another effort at regulation. Yet despite popular disapproval of lobbying and distaste for politicians, efforts to substantially curtail the activities of lobbyists and trade associations did not achieve significant success.
Sharon Ann Murphy
In creating a new nation, the United States also had to create a financial system from scratch. During the period from the Revolution to the Civil War, the country experimented with numerous options. Although the Constitution deliberately banned the issuance of paper money by either Congress or the states, states indirectly reclaimed this power by incorporating state-chartered banks with the ability to print banknotes. These provided Americans with a medium of exchange to facilitate trade and an expansionary money supply to meet the economic needs of a growing nation. The federal government likewise entered into the world of money and finance with the incorporation of the First and Second Banks of the United States. Not only did critics challenge the constitutionality of these banks, but contemporaries likewise debated whether any banking institutions promoted the economic welfare of the nation or if they instead introduced unnecessary instability into the economy. These debates became particularly heated during moments of crisis. Periods of war, including the Revolutionary War, the War of 1812, and the Civil War, highlighted the necessity of a robust financial system to support the military effort, while periods of economic panic such as the Panic of 1819, the Panics of 1837 and 1839, and the Panic of 1857 drew attention to the weaknesses inherent in this decentralized, largely unregulated system. Whereas Andrew Jackson succeeded in destroying the Second Bank of the United States during the Bank War, state-chartered commercial banks, savings banks, and investment banks still multiplied rapidly throughout the period. Numerous states introduced regulations intended to control the worst excesses of these banks, but the most comprehensive legislation occurred with the federal government’s Civil War-era Banking Acts, which created the first uniform currency for the nation.
Christopher W. Calvo
The conspicuous timing of the publication of Adam Smith’s The Wealth of Nations and America’s Declaration of Independence, separated by only a few months in 1776, has attracted a great deal of historical attention. America’s revolution was in large part motivated by the desire to break free from British mercantilism and engage the principles, both material and ideological, found in Smith’s work. From 1776 to the present day, the preponderance of capitalism in American economic history and the influence of The Wealth of Nations in American intellectual culture have contributed to the conventional wisdom that America and Smith enjoy a special relationship. After all, no nation has consistently pursued the tenets of Smithian-inspired capitalism, mainly free and competitive markets, a commitment to private property, and the pursuit of self-interests and profits, more than the United States. The shadow of Smith’s The Wealth of Nations looms large over America. But a closer look at American economic thought and practice demonstrates that Smith’s authority was not as dominant as the popular history assumes. Although most Americans accepted Smith’s work as the foundational text in political economy and extracted from it the cardinal principles of intellectual capitalism, its core values were twisted, turned, and fused together in contorted, sometimes contradictory fashions. American economic thought also reflects the widespread belief that the nation would trace an exceptional course, distinct from the Old World, and therefore necessitating a political economy suited to American traditions and expectations. Hybrid capitalist ideologies, although rooted in Smithian-inspired liberalism, developed within a dynamic domestic discourse that embraced ideological diversity and competing paradigms, exactly the kind expected from a new nation trying to understand its economic past, establish its present, and project its future. Likewise, American policymakers crafted legislation that brought the national economy both closer to and further from the Smithian ideal. Hybrid intellectual capitalism—a compounded ideological approach that antebellum American economic thinkers deployed to help rationalize the nation’s economic development—imitated the nation’s emergent hybrid material capitalism. Labor, commodity, and capital markets assumed amalgamated forms, combining, for instance, slave and free labor, private and public enterprises, and open and protected markets. Americans constructed different types of capitalism, reflecting a preference for mixtures of practical thought and policy that rarely conformed to strict ideological models. Historians of American economic thought and practice study capitalism as an evolutionary, dynamic institution with manifestations in traditional, expected corners, but historians also find capitalism demonstrated in unorthodox ways and practiced in obscure corners of market society that blended capitalist with non-capitalist experiences. In the 21st century, the benefits of incorporating conventional economic analysis with political, social, and cultural narratives are widely recognized. This has helped broaden scholars’ understanding of what exactly constitutes capitalism. And in doing so, the malleability of American economic thought and practice is put on full display, improving scholars’ appreciation for what remains the most significant material development in world history.
B. Alex Beasley
American cities have been transnational in nature since the first urban spaces emerged during the colonial period. Yet the specific shape of the relationship between American cities and the rest of the world has changed dramatically in the intervening years. In the mid-20th century, the increasing integration of the global economy within the American economy began to reshape US cities. In the Northeast and Midwest, the once robust manufacturing centers and factories that had sustained their residents—and their tax bases—left, first for the South and West, and then for cities and towns outside the United States, as capital grew more mobile and businesses sought lower wages and tax incentives elsewhere. That same global capital, combined with federal subsidies, created boomtowns in the once-rural South and West. Nationwide, city boosters began to pursue alternatives to heavy industry, once understood to be the undisputed guarantor of a healthy urban economy. Increasingly, US cities organized themselves around the service economy, both in high-end, white-collar sectors like finance, consulting, and education, and in low-end pink-collar and no-collar sectors like food service, hospitality, and health care. A new legal infrastructure related to immigration made US cities more racially, ethnically, and linguistically diverse than ever before. At the same time, some US cities were agents of economic globalization themselves. Dubbed “global cities” by celebrants and critics of the new economy alike, these cities achieved power and prestige in the late 20th century not only because they had survived the ruptures of globalization but because they helped to determine its shape. By the end of the 20th century, cities that are not routinely listed among the “global city” elite jockeyed to claim “world-class” status, investing in high-end art, entertainment, technology, education, and health care amenities to attract and retain the high-income white-collar workers understood to be the last hope for cities hollowed out by deindustrialization and global competition. Today, the extreme differences between “global cities” and the rest of US cities, and the extreme socioeconomic stratification seen in cities of all stripes, is a key concern of urbanists.