A Rorschach Test
Whereas The Next Convergence peers 40 years into the future, Age of Greed looks back over 40 years of the American past. It is a page-turner that, through a series of profiles of financiers, politicians, economists, and central bankers, presents a powerful polemical history. And it’s all true, as far as it goes. In this, Age of Greed resembles a famous issue of Institutional Investor published in 1987 that contained capsule stories of 50 celebrated financial entrepreneurs. Yet Jeff Madrick, the book’s author, like the editors of the glossy money manager fan mag, keeps you on your toes, asking yourself what he’s leaving out. Like liquor and candy, strongly emotional presentations take you only so far, but that is no reason to eschew them altogether.
Madrick’s proposition is that an age of greed began in 1970, when various Roosevelt haters, John Birchers, devotees of Ayn Rand, and economic ideologues of the Mont Pelerin Society (chiefly Milton Friedman and Friedrich Hayek) began to gain influence. Their movement gathered force until, with the election of Ronald Reagan, the gates burst open and the barbarians flooded through to put the nation on “an unfortunate, tragic path from which it may not be possible to turn back.” Thus, the book is divided into two parts, “Revolution,” up to 1980, and “The New Guard,” about those who took over after the barriers had been battered down.
What makes the book so entertaining is that each life Madrick offers is highly interesting on its own. Who knew that Walter Wriston’s father had been president of Brown University, or recognized that the young banker had drawn a bead on the Glass-Steagall Act practically from the beginning of his career at First National City Bank, today’s Citi Group? (He was 28 when he began lending to Aristotle Onassis.) Who understood the utter centrality to the 1980s of lawyer Joe Flom, to whom Madrick assigns a riveting chapter? Or the common denominator — scale as strategy — that Ted Turner, Sam Walton, and Steve Ross employed to build their businesses? Tom Peters, Jack Welch, Michael Milken, Alan Greenspan, George Soros, John Meriwether, Sandy Weill, Ken Lay, Jack Grubman, Angelo Mozilo, Jimmy Cayne, and Richard Fuld — they’re all here. And to Madrick, they are all undeniably greedy, for something or other.
Yet, as readable as the book is, there is something unsatisfying about it. Madrick is, after all, a paleo-liberal. He edits Challenge magazine and writes regularly for the New York Review of Books. Perhaps that’s why you won’t find President Barack Obama’s famous acknowledgment of Reagan’s role as a transformational president anywhere in this book. And there’s no Cold War. Madrick notes that the American mistrust of major institutions — government, religious, business, and educational — accelerated during the Vietnam War, but says nothing about the rhetorical and ideological effects of the United States’ successful competition with the former Soviet Union. Nor does the rise of China figure in the story. There’s no Bill Gates, either — no sense of the pervasive technological change that has been the background to so much institutional and social turbulence. And several characters whose careers would have lent fiber to his account are missing: Bruce Henderson of the Boston Consulting Group, Ronald Coase of the University of Chicago, Michael Jensen of Harvard Business School, and, for that matter, former House Speaker Newt Gingrich.
It’s commonplace for political sentiment in the U.S. to swing back and forth between private involvements and public purposes, but Madrick doesn’t give much credence to that view. He thinks events covered in the book may be irreversible. But my hunch is that political change is already in the works and that Age of Greed could impart roughly the same kind of momentum to that change as Gustavus Myers’s History of the Great American Fortunes did in the muckraker movement a century ago. In any event, Madrick has created a wonderful economic Rorschach test.