Tuesday, March 22, 2016

The Anglo-American Merger of Elites

The mutual problem faced by the elites on both sides of the ocean---namely how to tame democracy, and harness it for the good purpose within a modern industrial society, forced the British and American cohorts towards a close cooperation by the end of the century.

British financial interests in America had regrown quickly following the revolution, but the pivotal year was around 1850, owing to developments in industrial technology, as well as the influence of certain individuals, most particularly Junius Morgan, founder of J.S.Morgan & Co., who spearheaded the great flood of London capital into American markets following the laying of the first translatlantic telegraph cable in 1858.

As they did in the home isles, British debt instruments financed a huge explosion in the most important technology of the era---railroads. The American states individually went into a frenzy of government-backed railroad building, greatly in competition with each other until two regional railroad blocs were formed, one of the northern states and one of the southern states. The rapidity by which this situation exploded into open warfare is indicative of the magnitude of the importance of the railroad as a technology.

It is not surprising that the House of Morgan eventually (by the 1890s) became known as much for its ownership and control of the American railroads as it did for its (London-backed) domination of the American financial markets.

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