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Summary
Summary
An Amazon Best History Book of 2019
"A splendid and beautifully written illustration of the tremendous importance public policy has for the daily lives of ordinary people." --Ryan Cooper, Washington Monthly
Over the last generation, the United States has undergone seismic changes. Stable institutions have given way to frictionless transactions, which are celebrated no matter what collateral damage they generate. The concentration of great wealth has coincided with the fraying of social ties and the rise of inequality. How did all this come about?
In Transaction Man , Nicholas Lemann explains the United States'--and the world's--great transformation by examining three remarkable individuals who epitomized and helped create their eras. Adolf Berle, Franklin Delano Roosevelt's chief theorist of the economy, imagined a society dominated by large corporations, which a newly powerful federal government had forced to become benign and stable institutions, contributing to the public good by offering stable employment and generous pensions. By the 1970s, the corporations' large stockholders grew restive under this regime, and their chief theoretician, Harvard Business School's Michael Jensen, insisted that firms should maximize shareholder value, whatever the consequences. Today, Silicon Valley titans such as the LinkedIn cofounder and venture capitalist Reid Hoffman hope "networks" can reknit our social fabric.
Lemann interweaves these fresh and vivid profiles with a history of the Morgan Stanley investment bank from the 1930s through the financial crisis of 2008, while also tracking the rise and fall of a working-class Chicago neighborhood and the family-run car dealerships at its heart. Incisive and sweeping, Transaction Man is the definitive account of the reengineering of America and the enormous impact it has had on us all.
Author Notes
Nicholas Lemann, a native of New Orleans, developed an interest in journalism during his teenage years. This eagerness to write was coupled with a keen interest in United States history and literature. He pooled his curiosities, earning a degree in American literature and history from Harvard University in 1976.
Journalism became Lemann's main occupation, as he built his writing career through working for the Washington Monthly, Texas Monthly, and the Washington Post. In 1983, he joined the Atlantic Monthly staff. His love for American history peaked with the publication of his commentary on the African-American migration to Chicago in search of jobs and a better life.
Lemann's book, The Promised Land, captured the 1991 Los Angeles Times Book Prize in journalism. His articles span many interests, from book reviews and political topics to travel stories about the Catskill Mountains and other natural wonders. He contributes many articles, not only to the Atlantic Monthly but to several other magazines as well.
Nicholas Lemann, his wife Dominique Browning, and their two sons live in New York City.
(Bowker Author Biography)
Reviews (4)
Publisher's Weekly Review
New Yorker staff writer Lemann (The Promised Land) describes the evolution of American corporate culture in this excellent and unusually framed economic history. Lemann describes how the American worker once dedicated his or her life to a single company, receiving generous benefits, career-long job security, and a pension, whereas the transaction man labors at the mercy of corporate shareholders who may sell, break up, or merge a company to maximize share price. Lemann attributes this change to the work of economists Milton Friedman, who believed the sole function of corporations was to maximize profits for shareholders, and Michael Jensen, who justified rapacious junk bond trading, hostile takeovers, and debt-leveraged buyouts. Lemann also depicts this transformation of the American economy at the micro level through its effect on one neighborhood, Chicago Lawn, which saw the disastrous dissolution of its auto dealerships after General Motors' bankruptcy. He thoughtfully links income inequality to the transactional theories of the corporation and looks ahead to a possible future model for "pluralism," wherein political and economic power is diffuse and distributed, rather than held in "institutions, transactions, or networks." This concise and cogent history of the theories that have transformed the American economy makes a potentially dry subject fascinating. (Sept.)
Kirkus Review
A fresh account of the magnitude of inequality in America and how it came to be.New Yorker staff writer Lemann (Emeritus, Dean/Columbia Journalism School; Redemption: The Last Battle of the Civil War, 2006, etc.) turns to complex theory to explain why income inequality has deepened in conjunction with the fracturing of social bonds between and among the ultrawealthy, middle-class residents, and those struggling with poverty. The author posits that three phases, dating back about 100 years, explain much of the upheaval: the era of powerful institutions, including government, political parties, massive corporations, massive labor unions, and affinity groups based on ethnicity; the era of transactions that often bypassed those institutions, mostly through Silicon Valley and Wall Street; and now, the era of internet-enabled entities such as Google, Apple, and Facebook. Lemann chooses one individual to explicate each phase: New Deal economist Adolf Berle as "Institution Man," Harvard Business School professor Michael Jensen as "Transaction Man," and LinkedIn co-creator Reid Hoffman as "Network Man." Though the author's high-level theorizing is confusing at times, he wisely offers general readers a solid foundation by discussing the impact of each era on citizens in specific neighborhoods, especially a neighborhood on the South Side of Chicago called Chicago Lawn. In that setting, he provides sharp portraits of a white male automobile dealer, an African American woman who migrated from the Deep South to fend off virulent racism in the neighborhood, and other residents struggling to make sense of the increasing economic inequality plaguing much of the country. The desires of Berle, Jensen, and Hoffman to create an orderly, prosperous society allowed a small slice of the citizenry to thrive beyond their wildest dreams but left the vast majority to struggle consistently with poverty.Lemann relies on his well-developed skills as a longtime journalist to weave the specific and the abstract into a narrative that is intellectually challenging. Copyright Kirkus Reviews, used with permission.
Choice Review
Lemann (emer., Columbia Journalism School and a staff writer for The New Yorker) employs his skill as a writer (which includes amusing anecdotes) to excite the reader's interest in his well-grounded historical argument. He nostalgically reminisces about a social contract when corporations cared about their employees, customers, clients, and communities and offered lifetime employment, pensions, security, and healthcare. He might have put more emphasis on what stakeholders got in exchange, which was surrendering any input in policy and letting managers manage as they saw fit, ultimately to benefit the corporate elite. Lemann is correct in suggesting that rapprochement has collapsed, but missing is thorough exploration of the reasons, among them that US corporations were trying to reassert dominance they lost relative to international competitors. Lemann almost implies that neoliberalism or "transaction" values were created simply by changing fashions in economic theories. He is correct that a later generation of corporate raiders, coming more from finance than from industry, deliberately destroyed viable companies for immediate profit, with little concern for who might be hurt in the process, but many of these same corporations were founded by investment tycoons like Morgan and Rockefeller. As America declines, capitalists will strive to impose the costs on ordinary citizens, with government cooperation. Summing Up: Recommended. With reservations. Lower-division undergraduates through faculty; general readers. --Yale R. Magrass, University of Massachusetts Dartmouth
Library Journal Review
Journalist Lemann (The Promised Land) examines approximately two centuries of economic organization through the lenses of three vastly different theories that can be categorized by the terms institutions, transactions, and networks. The first theoretical framework is associated with American economist Adolf Berle, who believed that only large concentrated corporate institutions could lead to economic stability, contain the resources to innovate new technologies, and promote social good. The next framework is associated with American economist Michael Jensen, who put his faith in market structures as an organizational force. The final framework is associated with Reid Hoffman, a Silicon Valley billionaire and innovator who cofounded social media companies, such as LinkedIn. Hoffman asserts that new economies and opportunities are being forged through social networks. Lemann acknowledges that economics is complex by skillfully analyzing macro- and microeconomic interrelationships and examining each theory's strengths, weaknesses, and overall flaws. It becomes clearer how economics impacts different societal layers. Overall, no economic institution achieves the dream of universal equality, prosperity, and stability. VERDICT Through the stories of individuals, often from varied neighborhoods, businesses, and corporations, Lemann makes these experiences come alive. Readers can use this insightful business history to guide their forecasts.--Caroline Geck, Somerset, NJ
