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Bringing The “Ring” Back In: The Politics Of Booty Capitalism

Published online by Cambridge University Press:  06 February 2020

Jeffrey D. Broxmeyer
Jeffrey D. Broxmeyer*
Affiliation:
University of Toledo
*
*Corresponding author. E-mail: jeffrey.broxmeyer@utoledo.edu
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Abstract

One striking parallel between the Gilded Age and today is the return of the “ring” as a volatile form of governance. Rings are small bands of entrepreneurs who, through capture of key political institutions, exploit the coalition-building imperatives of party politics to rapidly accumulate large personal fortunes. The vernacular hails from the 1860s and 1870s, when the Tweed Ring, Gold Ring, Whiskey Ring, and Bank Ring, among others, scandalized the public with smash and grab practices. In the Trump era, Paul Manafort's career and the president's family business share many similarities to these classic episodes, both in the contested origin of private wealth and the circulation of profits throughout the political system. Rings thus have a tendency to recur in American political development. When electoral politics becomes financialized, speculators may seize opportunities to extract a hefty surplus from the public domain. In premodern contexts, Max Weber called this plundering phenomenon “booty capitalism.” The variant specific to American electoral institutions highlights a periodic conflict in democratic capitalism that arises over the legitimacy of political wealth accumulation.

Type
Special Issue: A Second Gilded Age?
Information
The Journal of the Gilded Age and Progressive Era , Volume 19 , Issue 2 , April 2020 , pp. 235 - 245
Copyright
Copyright © Society for Historians of the Gilded Age and Progressive Era 2020

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References

Notes

1 The Trump Organization initially projected that it would lose $1.2 million during the first four months of 2017. Instead, it turned a $2 million profit. Jonathan O'Connell, “Trump D.C. Hotel Turns $2 Million Profit in Four Months,” The Washington Post, Aug. 10, 2017. Donald Trump's official financial disclosures reported $17 million in income from his D.C. hotel in 2017 and $40 million in 2018. “Donald J. Trump, Executive Branch Personnel Public Financial Disclosure Reports,” June 14, 2017, 21; and May 15, 2018, 20, U.S. Office of Government Ethics, available via Center for Responsive Politics, Trump Administration Financial Disclosures, www.opensecrets.org/trump/financial-disclosures (accessed Dec. 31, 2019).

2 Andy Sullivan, Emily Stephenson, and Steve Holland, “Trump Says He Won't Divest From His Business While President,” Reuters, Jan. 11, 2017; “Remarks of Walter M. Shaub, Jr., Director, U.S. Office of Government Ethics, as prepared for delivery at 4:00 p.m. on January 11, 2017, at the Brookings Institution,” available online at www.brookings.edu/events/white-house-ethics-experts-repond-to-donald-trumps-announcement (accessed Dec. 31, 2019). One nonpartisan watchdog group found over 500 conflicts of interest in the first year of the presidency alone. See Citizens for Responsibility and Ethics in Washington (CREW), “Profiting from the Presidency: A Year's Worth of President Trump's Conflicts of Interest,” Jan. 19, 2017, www.citizensforethics.org/profitingfromthepresidency (accessed Dec. 31, 2019).

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5 Taken from an editorial denouncing the Tweed Ring fortunes. New York Times, “Minor Topics,” Nov. 25, 1871, 4.

6 The phrase “bring the ‘ring’ back in” is adapted from the title of the political science classic Bringing The State Back In. Peter B. Evans, Dietrich Rueschemeyer, and Theda Skocpol ed., Bringing The State Back In (New York: Cambridge University Press, 1985).

7 The first court case over the Tweed Ring went to trial in 1871. The last case related to it was a libel suit only dismissed in 1898.

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9 I make this analytic distinction as corollary to the contention that “only in the nineteenth century did … societies with markets become market societies.” Michael Zakim and Gary J. Kornblith ed., Capitalism Takes Command: The Social Transformation of Nineteenth-Century America (Chicago: University of Chicago, 2012), 4.

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15 Aldrich, John, Why Parties? A Second Look (Chicago: University of Chicago Press, 2011)CrossRefGoogle Scholar. A prime example is the Canal Ring, a loose association of bipartisan state legislators who inflated no-bid contracts to service and maintain New York's state-owned system of canals. Archdeacon, Thomas, “The Erie Canal Ring, Samuel J. Tilden, and the Democratic Party,” New York History 55 (Oct. 1978): 408–29Google Scholar.

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23 During the Civil War, Congress placed a tax on distilled liquor as part of its wartime program to raise revenue. The tax began at 20 cents per gallon on July 21, 1862, and peaked at $2 in 1865. By the time the Whiskey Ring formed, the tax had been lowered to 70 cents per gallon. Wood, Barry Robert, The St. Louis Whiskey Ring: Corruption and Reform In The Gilded Age (Carbondale, IL: Southern Illinois University, 1973), 1Google Scholar; Bensel, Richard, Yankee Leviathan: The Origins of Central State Authority in America, 1859–1877 (New York: Cambridge University Press, 1990)Google Scholar.

24 Wood, The St. Louis Whiskey Ring, 17.

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26 Gould and Fisk's maneuver exploited the hard currency's speculative potential while the country was temporarily off the gold standard. Barreyre, Nicolas, Gold and Freedom: The Political Economy of Reconstruction, trans. Goldhammer, Arthur (Charlottesville: University of Virginia Press, 2015), 47–53Google Scholar.

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28 The parallels with other rings are too obvious to miss. Jay Gould diluted Erie Railroad stock to finance his “lock up” and Gold Ring—he had a veritable press printing stock certificates in the basement of his offices. The Tweed Ring swelled voter rolls with “naturalization mills” in 1868 to elect the Tammany-backed candidate for governor, John Hoffman.

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30 William Ralston likely committed suicide as a result of bankruptcy. On Ralston's gambit to create an alternative silver market, through lobbying and bribery, by demonetizing silver in the “Crime of ’73,” see Samuel DeCanio, “Populism, Paranoia, and the Politics of Free Silver,” Studies in American Political Development 25 (Apr. 2011): 1–26.

31 Benjamin Page, Larry Bartels, and Jason Seawright, “Democracy and the Policy Preferences of Wealthy Americans,” Perspectives on Politics 11 (Mar. 2013): 51–73. The explosive growth of money in politics is driven by the FIRE sector. Lee Drutman, “On FIRE: How the Finance, Insurance, Real Estate Sector Drove the Growth of the Political 1 Percent of the 1 Percent,” Sunlight Foundation, Jan. 26, 2012, https://bit.ly/2LpqGWA (accessed Dec. 31, 2019). Congressional offices are three to four times more responsive to donors. Kalla, Joshua L. and Broockman, David E., “Campaign Contributions Facilitate Access to Congressional Officials: A Randomized Experiment,” American Journal of Political Science 60 (July 2016): 545–58CrossRefGoogle Scholar.

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39 For concrete examples, see Eric Umansky and Andrea Bernstein, “Donald Trump Jr. Pushed ‘Blatantly Illegal’ Project in India, Former Official Says—‘Trump, Inc.’ Podcast,” ProPublica, Mar. 21, 2018; CREW, “CREW Gets Trump Family Business Secret Service Spending Documents,” July 18, 2018, https://bit.ly/2uKLu4D (accessed June 14, 2019).

40 “Review of GSA's Revised Plan for the Federal Bureau of Investigation Headquarters Consolidation Project,” Office of the Inspector General, U.S. General Services Administration, Aug. 27, 2018, 7–8, https://bit.ly/2wBnkuu (accessed Dec. 31, 2019).

41 CREW filed a complaint with the Department of Justice and the Office of Government Ethics alleging Ross's violation of the STOCK Act and securities law. CREW, “CREW Requests Investigation into Wilbur Ross,” June 22, 2018, www.citizensforethics.org/legal-filing/crew-requests-investigation-into-wilbur-boss-for-potential-stock-act-violation/ (accessed Dec. 31, 2019).

42 Manafort's various firms managed campaigns for everyone from Senator Jesse Helms to Senator Arlen Specter; they managed the entire top-tier field of 1988 presidential candidates and organized the inaugural activities of President George H. W. Bush. Manafort's last business partner, Rick Davis, ran John McCain's presidential races in 2000 and 2008. See Franklin Foer, “Paul Manafort, American Hustler,” The Atlantic, Mar. 2018.

43 United States of America v. Paul J. Manafort, Jr., and Richard W. Gates III, 1:18 Cr. 83, Eastern District of Virginia, Alexandria Division, Feb. 2018, www.justice.gov/file/1038391/download, (accessed Dec. 31, 2019).

44 Foer, “Paul Manafort, American Hustler.”

45 Special Counsel Robert S. Mueller III, Report on the Investigation into Russian Interference in the 2016 Presidential Election, vol. 1 (Mar. 2019), 131–2, 134–5, 139, 141, www.justice.gov/storage/report.pdf (accessed Dec. 31, 2019).

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48 Isaac Arnsdorf and Kenneth Vogel, “Trump Getting Crushed By Clinton Money Machine: The presumptive GOP nominee reported just $1.3 million in cash on hand, Politico, June 20, 2016.

49 The State of New York v. Donald Trump, Donald Trump Jr., Ivanka Trump, Eric F. Trump, and the Donald J. Trump Foundation, Supreme Court of the State of New York, index no. 451130/2018, June 13, 2018. For relevant documents from the New York Attorney General, see https://on.ny.gov/2JGcVag (accessed Dec. 31, 2019).

50 We know this from Michael Cohen's guilty plea. Robert Kuzami, United States Attorney, Southern District of New York, to Guy Petrillo, re: United States v. Michael Cohen, Aug. 21, 2018, https://bit.ly/2OT1utW (accessed Dec. 31, 2019).

51 Justin Elliot, “New Evidence Emerges of Possible Wrongdoing by Trump Inaugural Committee,” ProPublica, Feb. 8, 2019; Maggie Haberman and Kenneth P. Vogel, “Trump's Inaugural Committee Paid $26 Million to Firm of First Lady's Adviser,” New York Times, Feb. 15, 2018.

52 As of the Feb. 1, 2019 filing. Center for Responsive Politics, “All The President's Profiting,” Center for Responsive Politics, www.opensecrets.org/trump/trump-properties?cycle=All (accessed Dec. 31, 2019).

53 We do not know how much lobbyists have spent at Trump properties because disclosure is not required by law. CREW, “Profiting from the Presidency.”

54 Lorraine Woellert and Stephanie Murray, “Judge Lets Emoluments Lawsuit Against Trump Move Ahead,” Politico, July 25, 2018.

55 Karen Yourish and Troy Griggs, “Tracking The President's Visits To Trump Properties,” New York Times, June 10, 2019, updated Dec. 30, 2019; CREW, “Presidential Profiteering: Trump's Conflicts in Year Two,” www.citizensforethics.org/presidential-profiteering-trumps-conflicts-got-worse (accessed Dec. 31, 2019).

56 Mar-a-Lago, where confidants have the president's ear on policy, doubled fees for new members after the election. Isaac Arnsdorf, “The Shadow Rulers of the VA,” ProPublica, Aug. 7, 2018.

57 Tammany Hall was a political machine in New York City that became synonymous with Democratic Party regulars from the mid-nineteenth to the mid-twentieth centuries. On “Tweed's Courthouse,” see Callow, Alexander Jr., The Tweed Ring (Oxford University Press, 1966)Google Scholar; Broxmeyer, “Boss's Brains,” 390.

58 Scott, James C., Against the Grain: A Deep History of the Earliest States (New Haven: Yale University Press, 2017), 171–3Google Scholar.

59 Leaks from the Panama Papers allow a rare glimpse into the pervasive interconnection between authoritarianism and the global circuits of capital. “The Panama Papers: Exposing the Rogue Offshore Finance Industry,” International Consortium of Investigative Journalists, www.icij.org/investigations/panama-papers (accessed Dec. 31, 2019); Zucman, Gabriel, The Hidden Wealth of Nations: The Scourge of Tax Havens, trans. Fagan, Teresa Lavender (Chicago: University of Chicago Press, 2015)CrossRefGoogle Scholar; Harrington, Brooke, Capital Without Borders: Wealth Managers and the One Percent (Cambridge, MA: Harvard University Press, 2016)CrossRefGoogle Scholar.

60 For a historical example, see Broxmeyer, Jeffrey D., “Political Capitalism in the Gilded Age: The Tammany Bank Run of 1871,” Journal of the Gilded Age and Progressive Era 16 (Jan. 2017): 44–64CrossRefGoogle Scholar.

61 Darren Samuelsohn and Josh Gerstein, “Cranky Judge, Flawed Witness Threaten Mueller's Manafort Case,” Politico, Aug. 8, 2018.