Q&A with Stefan Link and Noam Maggor on their article, “The United States as a Developing Nation: Revisiting the Peculiarities of American History,” which was recently published in Past & Present.
Stefan is an Associate Professor of History at Dartmouth College and author of Forging Global Fordism: Nazi Germany, Soviet Russia, and the Contest over the Industrial Order (Princeton UP), which explores how the 20th-century automobile industry took shape as activist states confronted America, competed over industrial development, and clashed over the terms of globalization. It also talks about the ideological origins of mass production in Midwestern Populism, the Soviet context of Gramsci’s Prison Notebooks, and the proto-developmental state in Nazi Germany.
Noam is a Senior Lecturer in American History at Queen Mary University of London and author of Brahmin Capitalism: Frontiers of Wealth and Populism in America’s First Gilded Age (Harvard UP), which is a finance-driven and urban-centered account of the transformation of American capitalism at the end of the nineteenth century. His new project interrogates the integration of what became the American West into the economic orbit of the United States. With renewed attention to the core concerns of political economy, it aims to position the Western US comparatively alongside other global peripheries – in Russia, Egypt, India, and Latin America – that were aggressively pulled in this period into the world economy.
Johnny Fulfer: Could you explain what your article is about?
Noam Maggor and Stefan Link: The article is a ‘Viewpoints’ piece that is part literature review, part historiographical critique, and part articulation of a research agenda, informed by our own independent book projects. It asks a simple question: why is it that economic development has been an urgent question for historians (and social scientists) of virtually all regions around the world but rarely in research about the United States? Why is it that despite the widespread rejection of American exceptionalism, scholars of various stripes still regard American industrialization as an almost inevitable process rather than as a historical problem to be interrogated and explained? We try to open up some of the insularity of American historiography and explore the US from a global-comparative perspective, with Latin America as a comparative case. From this vantage point, it is clear that there is nothing straightforward about a rapidly expanding exporter of agricultural goods, like the US in the nineteenth century, becoming a huge manufacturing economy. And yet, this trajectory itself has not really been framed as a historical puzzle.
There is of course a great deal of excellent scholarship about the growth of the American economy, and, especially recently, emphasis on the robust “infrastructural” power of the US state (for example, Bill Novak, Gary Gerstle, Richard John, Nicolas Barreyre, Ariel Ron, Gautham Rao, Monica Prasad, Mark Wilson, and others). We call for this conversation to take an extra bold step and cohere around the concept of an American “developmental state” that not only provided the legal and political foundation for markets but more proactively shaped market activity. We argue that only an American developmental state, analogous but of course not identical to more familiar cases of developmental states in the twentieth century (South Korea, Taiwan, China, etc.), could have facilitated a complicated, broad, and deep-seated shift from the export of primary commodities to domestic industry. We turn to the American West to offer a rough sketch of what such a state looked like and how it pushed back against economic specialization on extraction to nurture diverse manufacturing.
JF: What are some of the most important books and articles that shaped your thinking about the history of US economic development?
NM & SL: The starting point for the early conversations that led to this article was The Visible Hand by Alfred Chandler. We both thought of it as a deeply ideological artefact of the Cold War Era and yet marveled at its amazing resilience. We could not help noticing that the book’s underlying apolitical economism continued to pervade later accounts, including ones that ostensibly challenged it.
More broadly, we both came out of the history of capitalism project at Harvard, led by Sven Beckert and Christine Desan. We perhaps interpreted the goals of this project differently than how it has come to be understood (especially among economic historians for whom the ‘new’ history of capitalism – NHC – is often synonymous with a particular argument about American slavery). Our own agenda has always been to politicize economic and business history by putting political conflict over market institutions at the center of the analysis and even the engine of historical change. We see this, on one hand, as an extension of the goals of social and labor history, since this is where we began intellectually. But we also view this as a in part a critique of the reluctance of this older scholarship to engage more broadly with political economy and rethink meta narratives handed down in one way or another from modernization theory. It is in large measure scholars who themselves came out of social history such as Elizabeth Blackmar, Nelson Lichtenstein, Leon Fink (and younger historians like Jeffrey Sklansky, Lawrence Glickman, Scott Nelson, Elizabeth Shermer, and Amy Offner), who provided the inspiration for this move. As Nelson Lichtenstein once memorably explained to us, in connection with his work on Walmart and globalization: “we used to think the history of capital was simple and overdetermined, and the history of labor was contingent and in need of close, contextual study.” We were encouraged not to make the same assumption.
JF: What did the “global division of labor” look like in the years before the First World War?
NM & SL: We are indebted to the synthetic work of Kevin O’Rourke and Ronald Findlay (and of course a longer intellectual tradition associated with Wallerstein’s worlds-system theory) for our thinking about the late nineteenth century in terms of a global division of labor marked by specialization. This framework emphasizes an accelerating historical trend toward ever greater economic specialization and divergence between exporters of manufactured goods (‘core) and exporters of primary commodities (‘periphery’). We found it interesting how awkwardly the US fits into this divide since it was (and continued to be) a massive exporter of primary commodities – expanding territorially in leaps and bounds – even as it rapidly industrialized, becoming a net exporter of manufactured goods, and forged a dynamic financial sector. Whereas the literature on a country like Argentina has long been preoccupied with why territorial expansion and export-led prosperity in this period did not nurture a vibrant manufacturing sector, Americanists tend to assume the former necessarily lead to the latter. They rarely ask the inverse set of questions: why did the US not specialize like other frontier economies in this period? Why did it not develop the familiar symptoms of ‘Dutch Disease’? How did it diversify beyond commercial agriculture and mineral extraction? Economic historians such as Gavin Wright, Stanley Engerman, Kenneth Sokoloff, and Robert Allen, have contended with these questions in their own ways. We think historians have their own unique contribution to make in this area.
JF: By provincializing US development, you argue that the United States shouldn’t be viewed as the reference point/standard for economic development. What sort of problems are there with viewing the United States as the reference point for economic development?
NM & SL: Historians and social scientists that work on other regions in the world understand all too well the pitfalls of taking the US – or the West – as a benchmark for “success” and analyze other cases in terms of “pathologies” that contribute to “failed” or “incomplete” modernizations. It is generally well understood that this is a misguided exercise. What has not been reflected on as much is how to rethink the US in light of these types of insights. How do we think about the US as yet another historical case rather than a template for successful modernization as such? Historians of the US nowadays are of course not very sanguine about American history. US historiography has lost its former triumphalism and embraced a much more melancholy tone. Americanists are also much more aware of the sheer levels of violence, volatility, corruption, dysfunction, and environmental damage that pervaded the American past. Nevertheless, even harsh critics continue to think of the US, ever and always, as an incipient world hegemon, as if any other path is unfathomable. We think that provincializing the US must also include greater awareness of US power in the twentieth century to be historically specific and in need of explanation, not a transhistorical fact to be assumed. This might be easier to do these days as American dominance no longer seems to be the country’s perpetual heirloom.
The implications, by the way, extend beyond economic history itself. This perspective opens the possibility of grasping American history, including politics, society, and culture, as much more open-ended and malleable than conventionally understood. It massively loosens the familiar teleologies that usually frame this history. It allows us, for example, to revisit a long array of contentious political battles that preoccupied Americans in the nineteenth and early twentieth centuries – tariffs, taxation, corporate regulation and governance, central banking and monetary policy, competition and antimonopoly, and many others – as fully formative for the trajectory of the country, rather than as reformist or adaptive (a ‘response’ to market-driven economic change). It allows us to grasp social movements in this period, not as defeated alternatives or romantic crusaders, but as full participants in forging the industrial order. We can better appreciate that (as with other developing countries) the stakes were not limited to how resources would be distributed or even who would govern and how, but also what kind of political economy and society would ultimately be governed.
JF: Could you describe what you mean by the “post-Polanyian paradigm” and what differences and similarities, if any, it has with Northian institutionalism?
NM & SL: This question speaks precisely to the formative role of politics in shaping markets that we previously mentioned. In The Great Transformation, Polanyi argued that nineteenth-century markets (in particular, global markets) did not simply emerge spontaneously but were the result of purposive and often coercive political action. He also argued that reactions to market-making, actions he put under the rubric of “social protection” – a grab bag in which he included everything from tariffs to factory legislation to welfare provisions to capital controls – were “spontaneous”. He was, in effect, turning early neoliberals like Mises and Hayek on their heads (who often portrayed markets as spontaneous, and social protection as interventionist and political). Polemically, this move is still very effective, and Polanyi remains instructive in drawing our attention to the politics of market-making. But Polanyi also clearly overcompensated (and this is why we say “post-Polanyian”). Neoliberals, as Quinn Slobodian has shown, in fact understood that market-making required strong states (to clear the space for spontaneity, so to speak). And of course pushback against markets was/is also thoroughly political. We thus aim to remove any ambiguity on this issue and insist that there are in fact no dis-embedded markets. We foreground the inevitable political contestation over the precise contours and limits of markets, and over the design of economic institutions more generally. We situate ourselves within an emerging paradigm, associated with Christine Desan, Steven Vogel, Bill Janeway, Fred Block, and Mariana Mazzucato: one that moves beyond the binary of “intervention” and “markets” to the thick muddle in the middle, where in fact everything happens.
Where this view departs from Northian institutionalism is in its emphasis on historicity and on ongoing political contestation as inescapable in the formation of markets. The capstone of North’s paradigm (Acemoglu & Robinson can also be mentioned in this context) is identifying institutional constellations that spur economic growth. For scholars in this vein, these institutions have one thing in common: they restrain political ‘meddling’ (viewed as a source of distortion or even corruption) so as to provide for the kind of stability and protection of private economic actors without which markets allegedly cannot function. It is here that institutionalism betrays is pedigree, which we think comprises of four grandparents: from classical liberalism it got its bourgeois sensibility and embrace of negative liberty; from Max Weber and modernization theory it imbibed a concept of history as quasi-blind process of rationalization; in its universalist claims it carries on mid-twentieth century positivist social science. As we insinuate in the article, Northian institutionalism is sufficiently historical to trace how institutions emerge from political conflict. Such conflict has historically produced – as though by fortuitous accident – a set of benign (growth-generating) institutions, which then locks in developmental take-offs. To the institutionalist sensibility, politics beyond this point becomes a distraction – or worse. Marx poked fun at the penchant of classical political economists like Smith and Ricardo to naturalize their own (bourgeois) present as the historical expression of some transhistorical truth: in such accounts, “once there has been history, but now there is no more.” One might adapt this and say that in Northian institutionalism, once there has been politics, but now there is no more.
JF: What you mean by “developmental state” seems to be centered around the intersections between the state and the economy to show how economic development was and is always political. Your essay Americanizes the literature on East Asian “developmental states,” while also showing the parallels between this literature and the post-Polanyian paradigm. Could briefly explain the historiographical significance of reframing US economic development through the lens of a post-Polanyian developmental state and what you hope to see from future scholarship that follows this frame of US history?
NM & SL: Your characterization of the piece is right on the mark. And there is indeed an interesting convergence between post-Polanyian theoretical insights, which often rest on a critical reading of American and European institutions, and the literature on ‘developmental states’ in East Asia and elsewhere. This convergence in our own time is potentially very generative, maybe even transformative, for how we will think about political economy in the not so distant future. The idea of the US as a market society, and of American history as driven by private market forces, runs very deep, so the revisionist implications of these types of insights for American historiography are particularly profound. American history has often been framed around the rise and triumph of ‘the market’ – with some debate over what was the most pivotal inflection point in this process (the Market Revolution of the 1820s? The Gilded Age? The 1920s?). If we indeed move away from thinking about market-driven change as “the norm” and proactive government as an anomalous and occasional form of “intervention,” there is room for much more emphasis on political-economic regimes, each with its own institutional blend, driven by shifting political and ideological alignments. Thomas Piketty’s recent book, by the way, fruitfully moves in this direction. He discusses a sequence of what he calls “regimes of inequality,” each historically specific, without privileging one over others as some kind of baseline – but of course inequality is only one feature of each regime and his is only one way of periodizing this history. As mentioned, historians have been rediscovering the American state for quite some time. There is a lot to build on. Nevertheless, we really do hope to see state-driven and politically-embedded approaches to the American economy becoming much more central to how we conceive of this history.
JF: You write that Northian institutionalism theorizes “political contestation up to an inflection point that gives birth to the ‘highest’ form of institutions – ‘open access’ systems, and the state as parsimonious arbiter of functioning markets,” while the “developmental state” literature demonstrates that the political conflict that shapes and harnesses markets never actually ends (p. 31).
NM & SL: Yes, precisely. This raises the crucial issue of state capacity to discipline markets that we think remains underexplored in the literature about the US. The prevailing view, even in corners of the literature that emphasize the infrastructural power of the American state, is that it was often – almost as a matter of course – instrumentalized by market actors or made to accommodate their imperatives. In this view, capitalist interests have always been all too happy to socialize the risks and costs of doing business and feed off of government subsidies, incentives, grants, etc. But what about the reverse? Have American state institutions ever successfully harnessed private interests for their own political goals? Were they in some cases able to (to paraphrase Mazzucato) privatize the costs and socialize the rewards? Given the developmental results, the “developmental state” literature, especially insights drawn from the work of Alice Amsden and Vivek Chibber, would insist that this must have been the case, at least to some extent. We know that American courts upheld state supremacy vis-à-vis corporations and that the notion of ‘laissez faire’ has been vastly exaggerated. Our own ongoing research has also revealed many instances of state discipline, mostly found in a broad array of policies, ranging from corporate regulation, antitrust, central banking, labor, and taxation. In all of these contexts, we think historians have not done a great job recognizing and appreciating the structural significance of substantial political pushback against the rights of investors in the American context. There is no question that the balance of power between investors and legislators was far less lopsided in American settings than they did in other analogous contexts. But this remains to be studied in greater detail, and with fewer preconceived notions about what the final outcome of those types of contests ‘must have been.’ We are moving more deeply into this with our own empirical work, and we of course hope to encourage more research into this particular issue in a variety of contexts across time.
JF: By reframing US political economy through the lens of the “developmental state,” you’re saying that this Northian point of inflection essentially doesn’t exist and that the United States is in a state of perpetual development. Because the language of development implies a sense of natural growth that will eventually reach a point of maturity, do you think your critique of this “point of inflection” creates questions about the limitations of “development” as a frame of analysis? Because development also implies assumptions of natural deterioration, do you think it would be interesting to conceptualize economic institutions through the lens of both growth and deterioration? Or, how can you show the fluidity of economic institutions, which gives it a more diverse range of movement—instead of just growth or forward movement?
NM & SL: These are interesting questions – and clearly development has different connotations in different disciplinary conversations. This makes it in some ways fraught as a framework. We have already received some pushback from scholars who confidently asserted that the US was never a developing nation, which from our perspective as historians seems a little strange. Was the US born great? Was greatness baked into this highly dynamic society from its earliest origins? But for the same reason, the concept of development might potentially be fruitful as a point of cross-disciplinary engagement. We received excellent comments on the piece from Brad Hansen, Michael Pettis, Naomi Lamoreaux, John Wallis, pseudoerasmus (of course), and others, who have helped us deepen our own thinking and clarify our research agenda. It has generally been very affirming to speak across various divides.
Overall, by linking up with the “developmental state” literature, we aim to divest the concept of development from its entanglements with modernization theory. And perhaps this is not entirely possible, given that the prevalent association (at least in the west) of development with Cold War modernization. But we would point out that development has a more variegated conceptual history; long before Truman articulated it in 1949, it had been used by state and political actors engaged in (or theorizing) economic catch-up efforts alongside various other terms (such as “restoration”, “revolution”, “(re)construction” etc). In this context, we could also point to a longstanding protectionist tradition, going back to Hamilton, Carey, List, Gerschenkron, and others.
In the piece, we understand development as purposive structural economic change that consequentially shifts the global division of labor. Its main marker is not undifferentiated “growth”, abstractly conceived, but qualitative transformation (see Ha-Joon Chang on this particular point). We would hope that the term thus leaves room for visions of the kinds of inclusive, equitable, and sustainable economic restructuring that animate twenty-first-century discussions. In this sense, development need not imply more per capita GDP but instead emphasizes fundamental remaking. Yet as historians we are also realists who acknowledge that development historically has been associated with contest and rivalry over resources and industrial and technological capacities, and that the strong competitive currents and formidable state apparatuses characterizing the international political economy are unlikely to just disappear. This is also why we do not conceive of development as finite or potentially reaching a point of saturation, but in fact ongoing.