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The Political Distribution of Economic Privilege in Van Buren's New York

Published online by Cambridge University Press:  16 February 2021

Howard Bodenhorn Open the ORCID record for Howard Bodenhorn [Opens in a new window]
Howard Bodenhorn*
Affiliation:
John E. Walker Department of Economics, Clemson University; National Bureau of Economic Research (NBER)
*
E-mail: [email protected]
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Abstract

Historians have long recognized that one of the principal functions of early nineteenth-century American state governments was the distribution of economic privileges, including preferential grants of corporate privileges. North, Wallis, and Weingast label such regimes natural states and argue that government as privilege dispenser is a characteristic of most societies and, in some few instances, represents a transitional phase between traditional premodern societies and modern open-access democracies. This article documents the operation of the natural state in New York, focusing on how Martin Van Buren's Democratic coalition manipulated the distribution of bank and insurance company charters so as to advance the interests of their Democratic coalition. Consistent with the North, Wallis, and Weingast interpretation, the evidence shows that the transition to open access was neither smooth nor inevitable; Van Buren's Democratic coalition reversed the long-run trend toward greater access until they were unseated during the financial crisis years of the late 1830s.

Type
Research Article
Information
Studies in American Political Development , Volume 35 , Issue 1 , April 2021 , pp. 127 - 145
Copyright
Copyright © The Author(s), 2021. Published by Cambridge University Press

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64. The city and county histories are not a random sample. A city, county, or bank history is used if is available on Google Books. I started searching for director lists in larger, more populous counties and continued to search alphabetically by county thereafter until the sample included more than 2,500 person-bank observations.

65. Howard Bodenhorn, “Opening Access: Banks and Politics in New York from the Revolution to the Civil War” (National Bureau of Economic Research working paper no. 23560, June 2017).

66. Lu and Wallis, “Banks, Politics, and Political Parties.”

67. Hutchins, Civil List.

68. Excluding appointive positions from the political elite (for the purposes of this study) is unlikely to underestimate the connection between politics and corporate finance because most men ever appointed to a prominent political position served as an elected representative at some point in their careers.

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