Nicholas Lemann’s The Promised Land: The Great Black Migration and How it Changed America (Knopf, 1991), was a remarkable success. The effect on the South in the 1930s of the mechanization of cotton picking and the phasing out of the share-cropping system was made vivid, thanks to James Agee, Walker Evans, and Richard Wright.

Incredibly, Lehmann’s was only the second book to appear in all the years since about the journey of nearly a million African-American men, woman and children from the Mississippi Delta to the South Side of Chicago in the years after World War II. The Warmth of Other Suns: The Epic Story of America’s Great Migration, by Isabel Wilkerson, added to the story in 2010.  (There were even more white sharecroppers, but their diaspora was more diffuse.) Lemann constructed a three-way triangle with which to tell his story: Clarksdale, Miss.; Lawndale, Chicago; and Washington, D.C.  He found flesh-and-blood characters to populate his story.  And he turned it into a parable of race relations in America since the 1960s.

Before Lemann’s book, what college sophomores interested in race relations knew about the background to race relations was likely Harlem, the Brotherhood of Sleeping Car Porters, and, maybe, the first volume of Taylor Branch’s biography of Martin Luther King Jr.,  and Common Ground: A Turbulent Decade in the Lives of Three American Families, by J. Anthony Lukas (Knopf, 1985). Afterward, Marquette Park, the Robert Taylor Homes, the Blackstone Rangers, and the Moynihan Report became part of the vernacular.  I re-read most of The Promised Land last week. It is a journalistic masterpiece.

Success propelled Lehmann into the stratosphere, in which he wrote two more books: The Big Test: The Secret History of the American Meritocracy (Farrar Straus, 1999), about changing college admission policies over seven decades; and Redemption: The Last Battle of the Civil War (Farrar Straus, 2006), about the mostly successful repression of newly emancipated slaves during the Reconstruction Era. He had moved from The Atlantic to The New Yorker in 1999, and served two five-year terms as dean of the Columbia Graduate School of Journalism, retiring in 2013

So it is not surprising that, in retirement, Lemann should seek to tell the story of another great migration, this one a journey in time rather than a geographical trek.  He describes Transaction Man: The Rise of the Deal and the Decline of the American Dream (Farrar Straus, 2019) as “the history of our move from an institution–oriented to a transaction-oriented society.” His narrative begins, he writes,

[W]ith Americans of the early twentieth century confronting the powerful new realty of concentrated economic power and debating how to constrain it.  This was an intense, all-consuming, highly consequential battle, fought not just here but worldwide.  Out of these intense dissatisfactions and disagreements and conflicts, the institution-based order, with a much bigger national government and the corporation at its anchors, emerged. Then another set of dissatisfactions and disagreements, this one directed against governments and corporations, produced another set of big changes, which in turn,, created the new transactions-based order.  And today, a third vision of society based on Internet-enabled networks – which might restore some of what the age of transactions destroyed –is emerging.

In other words, it is a zig-zag story.  And as such, Transaction Man makes consistently interesting reading.  Lemann is an awfully polished writer after all these years. But the book is not as successful on its own terms as The Promised Land.

The familiar techniques are here. The locations:  Chicago Lawn, a formerly thriving industrial neighborhood on Chicago’s South Side, steadily being hollowed out, by white, then black flight to the suburbs, and by the deindustrialization of the Midwest; the offices of Morgan Stanley, a Wall Street fixture, until the company moved its headquarters to midtown Manhattan, in 1973; and, more or less tacked on to complete the triptych structure, Silicon Valley.

There are fully drawn personalities, too, to represent each era.

There is Adolf Berle, 1895-1971, whose name is mostly forgotten now. As author, with Gardner Means, of The Modern Corporation and Private Property, in 1931, a thinker who for a time outranked Peter Drucker, John Kenneth Galbraith, James Burnham, Karl Polanyi, and Alfred Chandler s as a prophet of corporate hegemony.  Berle took one side of an argument with family friend Louis Brandeis — regulate corporate planning and control of markets as opposed to break ’em up – an argument that Brandeis eventually won. An early member of President Franklin Roosevelt’s “Brains Trust,” Berle was eventually fobbed off as wartime ambassador to Cuba, where he oversaw the formation of the rate-setting International Air Transit Authority.

There is Michael C. Jensen, born in Minneapolis in 1939, who in 1962 entered the University of Chicago as a graduate student just as the university’s golden age in economics was beginning. Harry Markowitz had left, but Merton Miller had arrived at the Business School, and Roald Coase the law school, and Jensen shared offices with Eugene Fama and Myron Scholes. All but Jensen would be recognized with Nobel Prizes. Jensen went off to the University of Rochester, and   in 1976, with William Meckling, published “The Theory of the Firm: Managerial Behavior, Agency Costs, and Ownership Structure,” providing strong analytic bones to an argument that Milton Friedman had made in so many words half a dozen years before: the sole social responsibility of a business was to increase its profit.  Berle and Means had argued that the separation of corporate ownership and control was both welcome and all but inevitable. Johnson and Meckling argued that the situation could and should be reversed simply by changing the rules of the game, in the name of competition and lower prices. It was the Brandeis approach to bigness, but with a twist: Rely on financial markets instead of government to facilitate the breaking-up.

Jensen and Meckling’s analysis of what was soon called the market for corporate control provided a public philosophy for the wave of corporate restructuring that had already begun.  Instead of returning to Chicago, Jensen left Rochester for the Harvard Business School. Brash manners and high spirits had already cost him what might have been a Nobel medal of his own, but Jensen had enormous success in the classroom, until his daughter’s chance encounter with personal development guru Werner Erhard put him on a different path. Lemann labors valiantly to untangle the role that Chicago played in legitimizing the global market turn.  But in his zeal to tell the story of Jensen’s apostasy, he somehow loses the thread of what the man believed.

And there is Reid Hoffman, born in Palo Alto in 1967, a personage suggested by Lemann’s literary agent as a suitable representative of the new age.  Hoffman believes, above all else, in scale – that is, bigness that enables big firms to grow bigger.  A co-founder – along with Peter Thiel and Elon Musk – of the online payment system PayPal, Hoffman went on to found LinkedIn, the professional networking firm.  “Hoffman believed that people want to conduct different parts of their lives in different online communities,” Lemann writes. LinkedIn would became, Hoffman hoped, “the central place where three billion people in the world, including blue-collar workers and students, would MANAGE their careers.”

Microsoft bought LinkedIn in 2016 for $26.2 billion; Hoffman collected $2.5 billion of it. But aside from the fact that Microsoft, Amazon, Google and Facebook have found themselves in the cross-hairs of Sherman and Clayton antitrust statutes, thanks to their successful applications of the gospel of scale, there is little in Hoffman’s story to make you think that Silicon Valley has come up with a viable new way of organizing social governance.

Sandwiched in among these profiles, to provide color and connective tissue, are various victims and propagators of these historical forces: Nick and Amy D’Andrea, owners of a Buick dealership in Chicago Lawn that is eventually torn down to build a Wendy’s hamburger stand; Ann Collier, born in Jackson, Mississippi, who for thirty years has lived nearby; Robert Baldwin, the Morgan Stanley chief executive who in the 1970s put the firm on the course that has taken it to the present day; and Steven Rattner, a one-time Morgan Stanley executive who oversaw government restructuring of the auto industry after 2008.

Making an appearance in an afterword, as an alternative to existing visions, is one last profile, that of Arthur F. Bentley (1870-1957), an obscure Johns Hopkins University-trained political scientist-turned Chicago newspaper reporter.  In 1908 Bentley published The Process of Government: A Study of Social Pressures, attracting little attention. He suffered a breakdown and moved to rural Indiana to grow apples. There he corresponded with the likes of Albert Einstein, Thomas Mann, and, especially, Columbia University philosopher John Dewey. By the time Bentley died in 1957, Lemann writes, The Process of Government had been  discovered (presumably thanks to Dewey), and was “considered the most important study of politics and society ever produced by an American – required reading for anybody studying those fields seriously,” only to be lost again.

Today, Lemann reports, Bentley’s book is out of print, but its pluralist message, he says, is more relevant than ever. (It is freely available online.)  Never mind those “little platoons of society”  that Edmund Burke was on about; let government re-regulate industry, strengthen unions, foster a sense of institutional social responsibility, and otherwise bring about a return to the countervailing powers of the halcyon 1950s – when the wrong turn  of the zig-zag got underway.

I have to end here. I must catch a plane. To be continued, sometime in the next few weeks. Transaction Man is an interesting book and there is something more to say.

David Warsh, an economic historian and veteran columnist, is proprietor of economicprincipals.com, where this essay first ran.

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