The financial crisis that began in 2008 has made Americans keenly aware of the enormous impact Wall Street has on the economic well-being of the nation and its citizenry. How did financial markets and institutions-commonly perceived as marginal and elitist at the beginning of the twentieth century-come to be seen as the bedrock of American capitalism? How did stock investment-once considered disreputable and dangerous-first become a mass practice?
Julia Ott tells the story of how, between the rise of giant industrial corporations and the Crash of 1929, the federal government, corporations, and financial institutions campaigned to universalize investment, with the goal of providing individual investors with a stake in the economy and the nation. As these distributors of stocks and bonds established a broad, national market for financial securities, they debated the distribution of economic power, the proper role of government, and the meaning of citizenship under modern capitalism.
By 1929, the incidence of stock ownership had risen to engulf one quarter of American households in the looming financial disaster. Accordingly, the federal government assumed responsibility for protecting citizen-investors by regulating the financial securities markets. By recovering the forgotten history of this initial phase of mass investment and the issues surrounding it, Ott enriches and enlightens contemporary debates over economic reform.
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About the Author
Julia C. Ott is Assistant Professor of History at The New School for Social Research.
Table of Contents
Introduction: The Quest for an Investors' Democracy 1
1 The Problem with Financial Securities 9
2 The "Free and Open Market" Responds 36
3 "Be a Stockholder in Victory!" 55
4 Mobilizing the Financial Nation 75
5 The Postwar Struggle for the Financial Nation 101
6 Swords into Shares 129
7 The Corporate Quest for Shareholder Democracy 150
8 Finance Joins in the Quest for Shareholder Democracy 168
9 "The People's Market" 191
Epilogue: The Enduring Quest 214
What People are Saying About This
An excellent and pathbreaking analysis of the struggle to find in "shareholder democracy" a remedy for the inequality and social and political discontent that has troubled American society since the industrial revolution began.
Steve Fraser, author of Every Man a Speculator
Julia Ott has written an important book for our times, after a financial crisis has us wondering if our financial markets, in their current form, really promote individual wellbeing as they should. We have to learn from the past, and invent a new and better capitalism for the future.
Robert Shiller, author of Irrational Exuberance
A brilliant examination of the origins of our investors' democracy. Ott reveals how participation in financial markets became the embodiment of citizenship. Beautifully written and rigorously researched, she makes clear that our contemporary entanglement with finance is nothing new.
Stephen Mihm, author of A Nation of Counterfeiters
In the 21st century the savings of Americans are highly dependent on returns from stock- market investments that are buffeted by speculation and subject to manipulation by insiders. In this timely and outstanding book, Ott documents how Americans were initially lured into this dependence and provides key insights for understanding why.
William Lazonick, author of Sustainable Prosperity in the New Economy?
Ott's stunning book provides much needed history to a modern America that takes mutual funds, 401ks, and stock options for granted. With imaginative research, sophisticated analysis, and engaging writing, Ott astutely reveals the benefits and costs of becoming a nation of stockholders.
Lizabeth Cohen, author of A Consumers' Republic