Hostname: page-component-586b7cd67f-2brh9 Total loading time: 0 Render date: 2024-11-25T19:02:32.081Z Has data issue: false hasContentIssue false
  • English
  • Français

The Domestic Political Origins of Global Financial Standards: The Agrarian Roots of American Securities Regulations

Published online by Cambridge University Press:  20 January 2017

Richard Carney
Richard Carney*
Affiliation:
Australian National University
Get access Rights & Permissions [Opens in a new window]

Abstract

America's securities markets constitute a central distinguishing feature of its brand of capitalism. What are their political origins? In contrast to arguments which point to business owners as determining the institutional foundations of America's political economy, this paper argues that farmers played a leading role. Indeed, the rules and regulations governing U.S. securities markets were created in opposition to the wishes of business owners, and without farmers' political influence, the U.S. may have developed a financial system similar to that found in continental Europe. Moreover, to the extent that U.S. securities regulations serve as a template for international financial standards, the paper shows that the humble American farmer inadvertently contributed to the financialization of the modern global economy.

Keywords

corporate financecorporate governancecorporate ownershipsecurities and exchange commissionfarmersNew Dealfinancial regulationsinternational standards
Type
Research Article
Information
Business and Politics , Volume 13 , Issue 3: Special Issue: The Domestic Foundations of IPE: The U.S. Case in Current and Historical Perspective , October 2011 , pp. 1 - 39
Copyright
Copyright © V.K. Aggarwal 2011 and published under exclusive license to Cambridge University Press 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Aldrich, Winthrop W. 1933. Suggestions for Improving the Banking System. New York: Chase National Bank.Google Scholar
American Political Leaders, 1789-1994. 1994. Washington, DC: CQ Press.Google Scholar
Aoki, Masahiko and Patrick, Hugh. 1994. The Japanese Main Bank System: an introductory overview. Oxford: Clarendon Press.Google Scholar
Becht, Marco and DeLong, Bradford J. 2005. “Why Has There Been So Little Block Holding in America?” In Morck, Randall K. ed., A History of Corporate Governance Around the World: Family Business Groups to Professional Managers. Chicago: Chicago University Press.Google Scholar
Bellush, Bernard. 1955. Franklin D. Roosevelt as Governor of New York. New York: Columbia University Press.Google Scholar
Bensel, Richard. 1984. Sectionalism and American Political Development, 1880-1980. Madison, WI: University of Wisconsin Press.Google Scholar
Bensel, Richard. 1990. Yankee Leviathan: the origins of central state authority in America, 1859 – 1877. New York, NY: Cambridge University Press.Google Scholar
Bensel, Richard. 2000. The Political Economy of American Industrialization, 1877-1900. New York: Cambridge University Press.Google Scholar
Benston, G.J. 1990. The Separation of Commercial and Investment Banking: The Glass-Steagall Act Revisited and Reconsidered. Norwell: Kluwer Academic.Google Scholar
Blakey, Roy G. and Blakey, Gladys C. 1935. “The Revenue Act of 1935.” The American Economic Review 25 (4): 673–90.Google Scholar
Brandeis, Louis. 1914. Other People's Money and How Bankers Use It. New York: Jacket Library.Google Scholar
Buck, Solon. 1963. The Granger Movement; a study of agricultural organization and its political, economic, and social manifestations, 1870-1880. Lincoln, Nebraska: University of Nebraska Press.Google Scholar
Buchanan, Norman “The Origins and Development of the Public Utility Holding Company.” Journal of Political Economy 44 (1): 31–53.Google Scholar
Burk, James. 1985. “The Origins of Federal Securities Regulation: A Case Study in the Social Control of Finance.” Social Forces 63 (4): 1010–29.Google Scholar
Burns, Helen M. 1974. The American Banking Community and New Deal Banking Reform. Westport, Conn.: Greenwood Press.Google Scholar
Calomiris, Charles. 2000. U.S. Bank Deregulation in Historical Perspective. New York, NY: Cambridge University Press.Google Scholar
Carosso, Vincent. 1970. Investment Banking in America, A History. Cambridge, Mass.: Harvard University Press.Google Scholar
Carpenter, Daniel P. 2001. The Forging of Bureaucratic Autonomy: reputations, networks, and policy innovation in executive agencies, 1862-1928. Princeton, NJ: Princeton University Press.Google Scholar
Chandler, A. D. 1977. The Visible Hand: The Managerial Revolution in American Business. Cambridge, Mass.: The Belknap Press of Harvard University Press.Google Scholar
Chatov, Robert. 1975. Corporate Financial Reporting: Public or Private Control? New York: Free Press.Google Scholar
Chicago Conference on Trusts. 1900. Chicago Conference on Trusts. Chicago: Civic Federation of Chicago.Google Scholar
Clemens, Eli. 1950. Economics and Public Utilities. New York: Appleton-Century-Crofts.Google Scholar
Coletta, Paolo Enrico. 1964-69. William Jennings Bryan, Volume 2. Lincoln, University of Nebraska Press.Google Scholar
Cowing, Cedric. 1965. Populists, Plungers, and Progressives: a social history of stock and commodity speculation, 1890-1936. Princeton, NJ: Princeton University Press.Google Scholar
Cox, Gary W. and McCubbins, Mathew. 1993. Legislative Leviathan: party government in the House. Berkeley: University of California Press.Google Scholar
Cusack, Thomas, Iversen, Torben and Soskice, David. 2007. “Economic Interests and the Origins of Electoral Systems.” American Political Science Review 101 (3): 373–91.Google Scholar
De Bedts, Ralph. 1964. The New Deal's SEC: the formative years. New York: Columbia University Press.Google Scholar
De Long, J. Bradford. 1991. “Did Morgan's Men Add Value?” In Temin, P., ed. Inside business enterprise: Historical perspectives on the use of information. Chicago: University of Chicago Press, 1991: 205–49.Google Scholar
Dore, Ronald. 2000. Stock Market Capitalism: Welfare Capitalism: Japan and Germany versus the Anglo-Saxons. New York: Oxford University Press.Google Scholar
Federal Trade Commission. 1935. Utility Corporations. Senate Doc. 92, 70th Cong., 1st Sess. Washington, D.C.: U.S. Government Printing Office.Google Scholar
Fite, Gilbert Courtland. 1948. “Peter Norbeck: Prairie Statesman.” The University of Missouri Studies 22 (2): 1–204.Google Scholar
Flynn, John T. 1934. “The Marines Land in Wall Street.” Harper's Magazine 169: 149–50.Google Scholar
Funigiello, Philip Joseph. 1968. “A political and legislative history of the Public Utility Holding Company Act of 1935.” Ph.D. diss., New York University.Google Scholar
Garraty, John A. and Carnes, Mark C. eds. 1999. American National Biography. New York: Oxford University Press.Google Scholar
Hall, Peter, and Soskice, David. eds. 2001. Varieties of Capitalism: the institutional foundations of comparative advantage. New York: Oxford University Press.Google Scholar
Hansen, John Mark. 1991. Gaining Access: Congress and the farm lobby, 1919-81. Chicago: University of Chicago Press.Google Scholar
Högfeldt, Peter. 2005. “The History and Politics of Corporate Ownership in Sweden.” In Morck, Randall. ed. A History of Corporate Governance around the World. Chicago: University of Chicago Press.Google Scholar
Höpner, Martin. 2007. “Corporate Governance Reform and the German Party Paradox.” Comparative Politics 39 (4): 401–20.Google Scholar
Horowitz, David. 1996. Beyond Left & Right: Insurgency and the Establishment Urbana, Illinois: Univeristy of Illinois Press.Google Scholar
Iversen, Torben and Soskice, David. 2009. “Distribution and Redistribution: The Shadow of the Nineteenth Century.” World Politics 61 (3): 438–86.CrossRefGoogle Scholar
James, Scott Curtis. 2000. Presidents, Parties, and the State: a party system perspective on Democratic regulatory choice, 1884-1936. New York: Cambridge University Press.Google Scholar
Johnson, Simon, La Porta, Rafael, Lopez-de-Silanes, Florencio, and Shleifer, Andrei. 2000. “Tunneling,” American Economic Review 90 (2): 22–27.Google Scholar
Johnson, Donald Bruce and Porter, Kirk H. 1973. National Party Platforms, 1840-1972. Urbana: University of Illinois Press.Google Scholar
Krikun, David. 1971. “An Economic and Political History of the Public Utility Act of 1935.” Ph.D. diss., University of Wisconsin, Madison.Google Scholar
Kroszner, Randall and Rajan, Raghuram. 1994. “Is the Glass-Steagall Act Justified? A Study of the U.S. Experience with Universal Banking before 1933.” American Economic Review 84 (4): 810–32.Google Scholar
La Porta, R., Lopez-de-Silanes, F., and Shleifer, A. 1999. “Corporate Ownership Around the World,” Journal of Finance 54 (2): 471–517.Google Scholar
La Porta, Rafael, Lopez-de-Silanes, Florencio, Shleifer, Andrei, Vishny, Robert W. 1998. “Law and Finance.” Journal of Political Economy 106 (6): 1113–55.Google Scholar
Landis, James. 1959-60. “The Legislative History of the Securities Act of 1933.” George Washington Law Review 29: 29–49.Google Scholar
Loss, Louis. 1961. Securities Regulation. Boston: Little, Brown.Google Scholar
March, Charles H. 1933. “Uncle Same Safeguards the Investor.” The Magazine of Wall Street 22: 514–15.Google Scholar
Martin, Cathie Jo and Swank, Duane. 2008. “The Political Origins of Coordinated Capitalism: Business Organizations, Party Systems, and State Structure in the Age of Innocence.” American Political Science Review 102 (2): 181–98.Google Scholar
Mattli, Walter. 2003. “Public and Private Governance in Setting International Standards.” In Kahler, Miles and Lake, David A. eds. Governance in A Global Economy: Political Authority in Transition. Princeton, NJ: Princeton University Press: 197–229.Google Scholar
Mattli, Walter and Büthe, Tim. 2005. “Accountability in Accounting? The Politics of Private Rule-Making in the Public Interest.” Governance 18: 399–429.Google Scholar
McCraw, Thomas. 1984. Prophets of Regulation: Charles Francis Adams, Louis D. Brandeis, James M. Landis, Alfred E. Kahn. Cambridge, Mass.: Belknap Press of Harvard University Press.Google Scholar
McDonald, Forrest. 1962. Insull: The Rise and Fall of a Billionaire Utility Tycoon. Chicago: University of Chicago Press.Google Scholar
Miller, George H. 1971. Railroads and the Granger Laws. Madison, WI: University of Wisconsin Press.Google Scholar
Morck, Randall. 2009. “The Riddle of the Great Pyramids.” Working Paper 14858. Cambridge, Mass.: National Bureau of Economic Research.Google Scholar
Mosley, Layne and Singer, David A. 2009. “The Global Financial Crisis: Lessons and Opportunities for International Political Economy.” International Interactions 3 (4): 420–29.Google Scholar
Mowry, George E. 1958. The Era of Theodore Roosevelt. New York: Harper and Row.Google Scholar
The Nation. 1913. “Blue Sky Laws.” The Nation 96, April 3: 343–45.Google Scholar
Newsweek. 1934. “Stock Exchange: ‘Kill the Bill’ Becomes Rallying Cry,” III April 7, 29–30.Google Scholar
Nolke, Andreas. 2005. “Introduction to the Special Issue: The Globalization of Accounting Standards.” Business and Politics, 7 (3): 1–7.Google Scholar
North, Douglass C. and Weingast, Barry Y. 1989. “Constitutions and Commitment: The Evolution of Institutions Governing Public Choice in Seventeenth-Century England,” The Journal of Economic History 49 (4): 803–32.Google Scholar
Pagano, Marco and Volpin, Paolo F. 2005. “The Political Economy of Corporate Governance.” American Economic Review 95 (3): 1005–30.Google Scholar
Parker, Carl. 1911. “Government Regulation of the Exchanges.” Annals of the American Academy of Political and Social Sciences 38: 444–57.Google Scholar
Philips, Charles F. 1984. The Regulation of Public Utilities: Theory and Practice. Arlington, VA: Public Utilities Reports.Google Scholar
Posner, Eliot. 2009. “Making Rules for Global Finance: Transatlantic Regulatory Cooperation at the Turn of the Millenium.” International Organization 63: 665–699.Google Scholar
Proctor, Samuel. “The National Farmers’ Alliance Convention of 1890 and Its ‘Ocala Demands,’” Florida Historical Quarterly 28 (3): 161–81.Google Scholar
Rajan, Raghuram and Zingales, Luigi. 2003. “The Great Reversals: The Politics of Financial Development in the Twentieth Century.” Journal of Financial Economics 69 (1): 5–50.Google Scholar
Ripley, William. 1926. “More Light – And Power Too.” Atlantic Monthly 138: 159–75.Google Scholar
Ripley, William. 1981. Railroads: finance and organization. New York: Arno Press.Google Scholar
Roe, Mark. 1994. Strong Managers, Weak Owners: The Political Roots of American Corporate Finance. Princeton, NJ: Princeton University Press.Google Scholar
Roe, Mark. 2003. Political Determinants of Corporate Governance. New York: Oxford University Press.Google Scholar
Roosevelt, Franklin D. 1942. “Message from the President of the United States Transmitting Recommendations Relative to the Strengthening of Antitrust Laws.” American Economic Review 32 (2): 119–28.Google Scholar
Rosenman, Samuel I. ed. 1969. The Public Papers and Addresses of Franklin D. Roosevelt. New York: Russell & Russell.Google Scholar
Sanders, M. Elizabeth. 1999. Roots of Reform: farmers, workers, and the American state, 1877-1917. Chicago: University of Chicago Press.Google Scholar
Schlesinger, Arthur M. 1958. Coming of the New Deal. Boston: Houghton Mifflin.Google Scholar
Securities and Exchange Commission. 1973. “Statement of Policy on the Establishment and Improvement of Accounting Principles and Standards.” Accounting Series Release 150 (20 December 1973).Google Scholar
Securities and Exchange Commission. 2003. Reaffirming the Status of the FASB as a Designated Private-Sector Standards Setter: Policy Statement/Exchange Act Release Nos. 33-38221; 34-47743; IC-26028; FR-70. Washington, DC: SEC.Google Scholar
Sheldon, Richard N. 1983. “The Pujo Committee 1912.” In Schlesinger, Arthur M. Jr. and Bruns, Roger. Eds. Congress Investigates: A Documentary History, 1792-1974, Volume 3. New York: Chelsea House: 287–350.Google Scholar
Simon, M. C. 1998. “The Rise and Fall of Bank Control in the United States: 1890-1939,” The American Economic Review 88 (5): 1077–93.Google Scholar
Singer, David Andrew. 2004. “Capital Rules: The Domestic Politics of International Regulatory Hamonization,” International Organization, 58 (37): 531–65.Google Scholar
Sklar, Martin J. 1988. The Corporate Reconstruction of American Capitalism, 1890-1916: the market, the law, and politics. New York: Cambridge University Press.Google Scholar
Sobel, Robert. 1965. The Big Board: a history of the New York stock market. New York: Free Press.Google Scholar
Thorelli, Hans Birger. 1955. The Federal Antitrust Policy: origination of an American tradition. Baltimore, MD: Johns Hopkins University Press.Google Scholar
United States, Bureau of Labor Statistics. 1976. Brief History of the American Labor Movement. Washington, DC: The Bureau.Google Scholar
Van Riper, Robert. 1994. Setting Standards for Financial Reporting: FASB and the Struggle for Control of a Critical Process. Westport, CT: Quorum Books.Google Scholar
Verdier, Daniel. 2003. Moving Money. New York: Cambridge University Press.Google Scholar
Walter, Andrew. 2008. Governing Finance: East Asia's adoption of international standards. Ithaca, NY: Cornell University Press.Google Scholar
Wasik, John F. 2006. The Mercant of Power: Sam Insull, Thomas Edison, and the Creation of the Modern Metropolis. New York: Palgrave Macmillan.Google Scholar
White, Eugene Nelson 1986. “Before the Glass-Steagall Act. An Analysis of the Investment Banking Activities of National Banks.” Explorations in Economic History 23 (1): 33–55.Google Scholar
Willis, Henry Parker. 1975. Federal Reserve System. New York: Arno Press.Google Scholar