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Capital gains

When the corporation became king, American democracy was the loser, writes Jack Beatty

Pay line, c. 1908, Homestead Works, where Andrew Carnegie had enforced a 12-hour workday and a seven-day workweek. ("AGE OF BETRAYAL")

Age of Betrayal: The Triumph of Money in America, 1865-1900
By Jack Beatty
Knopf, 483 pp., illustrated, $30

Does American capitalism have a history? Ever since the end of the Cold War, capitalism has appeared both omnipotent and omnipresent. Its encirclement of the globe, its icons of consumer culture to be seen in Mumbai, Kabul, Tehran, Gaza, and Lagos as well as in Paris, London, and New York, and its many defeated opponents ranging from 17th-century peasants to 20th-century Communists would seem to suggest capitalism's almost transhistorical character. Many scholars believe that America effectively began as a capitalist society, and these days few of them even bother to study capitalism's development.

Jack Beatty's interesting and pointed new book offers a different assessment. Yes, he proclaims, American capitalism does have a history, and it is a history that has compromised, if not undermined, our democracy and set us on a course of social and political crisis. In "Age of Betrayal," he takes us to the decades when the course was set, when "our" nation was born, and tells what he describes as "the saddest story."

What makes his " the saddest story" is a great moment of promise betrayed. In the bloodbath of the Civil War, two measures -- the Emancipation Proclamation and the Homestead Act, which took effect on Jan. 1, 1863 -- offered a radical vision of freedom, citizenship, and economic independence by ending slavery and providing cheap land for settlers in the trans-Mississippi West. It was a vision that would give national footing to Lincoln's America and enable the United States to stand apart in the 19th-century Atlantic world. Unfortunately, the promise steadily gave way before the twin engines of racism and industrial capitalism, leaving a very different society by century's end.

"Engine" does indeed seem the proper metaphor. The central relationship of America's betrayal, in Beatty's view, was the alliance between government and business: an alliance that makes a mockery of the notion that the 19th century was an age of laissez-faire, and one that established the foundation of an emerging state capitalism. The central institutions were the courts, and especially the Supreme Court, which whittled away the promises of freedom, citizenship, and independence for ordinary Americans and instead handed them over to the corporations. And the central vehicle of this truly revolutionary transformation was the great engine itself, the railroad.

Although Beatty is a writer, editor, and news analyst rather than a professional historian, he is remarkably well versed in the scholarly literature on the period, and he frequently (perhaps a bit too frequently) invokes its leading authorities to support his arguments. Readers will immediately be impressed by the range of subject matter he can handle, from political, economic, and constitutional history to the history of labor, social movements, and time (he begins with the national regulation of the clock in the 1880s, made necessary by interstate railroads). But readers will also find a narrative that is absorbing in its detail and refreshingly uncompromising in its perspective.

The seeds of betrayal, according to Beatty, were to be found in the railroad's reconfiguration of the economic, political, and social landscapes of the United States. The railroad "annihilated space," reorganized finance (effectively inventing Wall Street), and forged a new relationship between industry and the state. The seeds were to be found, as well, in the protective tariff system (a product of the Civil War), which favored manufacturers and a small section of the working class at the expense of everyone else, and in the Homestead Act, which ended up favoring speculators and large-scale developers rather than yeoman settlers. Yet the betrayal was the work not of technologies or abstract forces but of members of a new elite who inverted the Constitution, corrupted the political process, and launched a "revolution from above."

Beatty devotes a great deal of attention to two of the betrayers: Supreme Court Justice Stephen J. Field, who played a leading role in the court's abandonment of African-Americans and its embrace of corporate interests; and Tom Scott, who took charge of the Pennsylvania Railroad, sponsored the early career of Andrew Carnegie, and operated as one of the preeminent "political capitalists" of the day. We get, therefore, a close-up of the inner makings -- intellectually and politically -- of this revolution.

But even more arresting is Beatty's account of the elite attack on democracy between the 1870s and the turn of the 20th century. Through the use of money, gerrymandering, disfranchisement measures, vote suppression, the admission of new, underpopulated states, and the employment of the US Army and National Guard to put down labor unrest, the elite set out to weaken democratic politics and strengthen oligarchic power.

"The United States in these years," Beatty writes, "took on the lineaments of a Latin American party-state, an oligarchy ratified in rigged elections, girded by bayonets, and given a genial historical gloss by its raffish casting."

Still, members of the new elite did not have an easy time of it. They met stiff resistance from farmers and industrial workers who fought to maintain their respectability, independence, and political rights, intensifying social conflicts in the process. No nation in the Atlantic world had as violent a labor history in the 19th century as did the United States. The bloody showdown occurred at Carnegie's steel plants in Homestead, Pa., in 1892. In the aftermath came a new era of industrial consolidation, overseas expansion, bureaucratization, and corporate-state cooperation.

Beatty is mindful of the resonances between past and present. Indeed, quoting the eminent British historian Geoffrey Barraclough, he calls "Age of Betrayal" "an essay in contemporary history," one that "begins when the problems which are actual in the world today first take visible shape." The lurking question in our post-Cold War world is whether we any longer have the political resources and imaginations to bring about a rebirth.

Steven Hahn teaches history at the University of Pennsylvania and is the author, most recently, of the Pulitzer Prize-winning "A Nation Under Our Feet: Black Political Struggles in the Rural South From Slavery to the Great Migration."