When Wall Street Met Main Street

The Quest for an Investors' Democracy

ISBN 9780674417021

Publication date: 09/01/2014

The financial crisis that began in 2008 has made Americans keenly aware of the enormous impact Wall Street has on the economic well-being of the nation and its citizenry. How did financial markets and institutions-commonly perceived as marginal and elitist at the beginning of the twentieth century-come to be seen as the bedrock of American capitalism? How did stock investment-once considered disreputable and dangerous-first become a mass practice?

Julia Ott tells the story of how, between the rise of giant industrial corporations and the Crash of 1929, the federal government, corporations, and financial institutions campaigned to universalize investment, with the goal of providing individual investors with a stake in the economy and the nation. As these distributors of stocks and bonds established a broad, national market for financial securities, they debated the distribution of economic power, the proper role of government, and the meaning of citizenship under modern capitalism.

By 1929, the incidence of stock ownership had risen to engulf one quarter of American households in the looming financial disaster. Accordingly, the federal government assumed responsibility for protecting citizen-investors by regulating the financial securities markets. By recovering the forgotten history of this initial phase of mass investment and the issues surrounding it, Ott enriches and enlightens contemporary debates over economic reform.

Praise

Ott’s account is superb, full of subtle insights and surprising interactions between state actors in desperate need of finance, financiers in desperate need of political legitimacy, and a wide range of private citizens and civil society actors—women’s groups, even labor unions—caught in between.

—Jonathan Levy, Public Culture
Julia Ott has written an informative and insightful study of a surprisingly neglected topic… This brief account cannot do justice to the rich texture of Ott’s argument, which contains a wealth of detail, impressive depth of research, and cogent analysis… Ott has done anyone interested in the history of finance a great service.

—Maury Klein, Business History Review
This is a sterling piece of scholarship.

—Jim Cullen, History News Network
Ott’s stunning book provides much needed history to a modern America that takes mutual funds, 401ks, and stock options for granted. With imaginative research, sophisticated analysis, and engaging writing, Ott astutely reveals the benefits and costs of becoming a nation of stockholders.

—Lizabeth Cohen, author of A Consumers’ Republic
An excellent and pathbreaking analysis of the struggle to find in ‘shareholder democracy’ a remedy for the inequality and social and political discontent that has troubled American society since the industrial revolution began.

—Steve Fraser, author of Every Man a Speculator
In the twenty-first century the savings of Americans are highly dependent on returns from stock market investments that are buffeted by speculation and subject to manipulation by insiders. In this timely and outstanding book, Ott documents how Americans were initially lured into this dependence and provides key insights for understanding why.

—William Lazonick, author of Sustainable Prosperity in the New Economy?
A brilliant examination of the origins of our investors’ democracy. Ott reveals how participation in financial markets became the embodiment of citizenship. Beautifully written and rigorously researched, she makes clear that our contemporary entanglement with finance is nothing new.

—Stephen Mihm, author of A Nation of Counterfeiters
Julia Ott has written an important book for our times, after a financial crisis has us wondering if our financial markets, in their current form, really promote individual well-being as they should. We have to learn from the past, and invent a new and better capitalism for the future.

—Robert Shiller, author of Irrational Exuberance