• October 31, 2014

Mad Men in the He-Cession

Masculinity, macaroni, and mayhem in America's financial panics

Mad Men in the He-Cession 1

Times Wide World

An armory in New York City served as a shelter for homeless men in 1935.

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Times Wide World

An armory in New York City served as a shelter for homeless men in 1935.

Market analysts have discovered that there are a few growth industries during depressions: Macaroni and cheese is flying off the shelves, along with cheap gin, video games, running shoes, and handguns. It is a disturbing image—one imagines unemployed men with time on their hands playing Fallout 3 (shoot mutants in a postapocalyptic Washington) and Overlord II (control evil minions who burn houses and beat up peace-loving, dope-smoking elves) while eating mac and cheese. Are those same men lacing up their running shoes in preparation for Armageddon?

Pundits have come to label the current economic downturn a "he-cession." In the summer issue of Foreign Policy, Reihan Salam, a fellow at the New America Foundation, suggested that because men's traditional jobs (particularly in finance and construction) have declined faster than women's (particularly in health care and the service sector), we might see a rise in angry, unemployed men—a source of social instability in 1990s Russia and today's Middle East.

There have been a lot of economic downturns in American history. While economists in the Reagan years tended to highlight the slow, gentle increase in American GDP that seemed to feed economic growth from the American Revolution forward, heterodox economists have argued that the American economy has been riven with crises, shocks, and other bear-market calamities. Where orthodox economists have read back into history the "Great Moderation," heterodox economists have seen hysteria, chaos, and violence. Cultural historians, meanwhile, have noticed a lot of hysterical talk about manhood, violence, and chaos during the panics of 1785, 1819, 1837, 1857, 1873—the list goes on. So what do scholars have to tell us about the tribulations of previous American panics? Was manhood in peril then? Were unemployed men really dangerous?

The United States has been thick with bad debts since the beginning of the Republic. As Woody Holton showed in Unruly Americans and the Origins of the Constitution (Hill and Wang, 2007), revolutionary states often financed and fed their armies with IOU's that they did not or could not pay. The value of the IOU's and state currencies fell with Schwarzeneggerian speed as banks and other creditors refused to accept them. The states promised to pay eventually (this may be sounding familiar), but those who needed cash—soldiers and widows—could not wait. Speculators bought up their IOU's at pennies on the dollar. (Speculation could be equal opportunity, as far as gender was concerned; Abigail Adams proved a fairly adroit speculator in New England paper.) Though some people fared well in the postrevolutionary crisis, tempers flared. Responding to public pressure, states passed "stay laws" to prevent creditors from seizing land. Other states guaranteed that valueless state money would be payable for all debts. That angered a young Thomas Jefferson, who sold his father-in-law's land on the installment plan. Virginia law forced him to take useless state currency for it.

As Holton demonstrated, the crisis between the end of hostilities in the Revolution and the adoption of the Constitution was dangerous: lots of boys and lots of guns. In the so-called Newburgh Conspiracy, recently unemployed officers who had served under George Washington threatened a coup if they were not paid for their services; Congress, fearing anarchy, demanded $2-million from the states. When the Commonwealth of Massachusetts responded by taxing whiskey, hard-up farmers in the middle and Western part of the state rose up in Shays' Rebellion. Ordinary Americans were not yahoos who demanded inflationary currency to avoid paying off their debts; they wanted to ease the pain of all the new taxes, taxes that were going to pay off speculators like Abigail Adams. Backers of the Constitution tended to favor bondholders and feared state rebellions; they sought to prevent episodes of runaway inflation. Those mixed motives pushed Americans toward a Constitution that removed monetary power from the states (no more state inflation) yet protected ordinary Americans from a government that might grow oppressive and punitive. The nation, it turns out, was conceived in a financial crisis. Mad men were not just in the background: The fear of violence by unemployed or economically insecure men shaped American economic policy; the Constitution became an instrument to protect creditors from future he-cessions of angry, numerous, and armed people concerned about their debts.

Surely after the Constitution, things must have improved. But as Murray N. Rothbard's well-known The Panic of 1819: Reactions and Policies—reissued in 2007 by the Ludwig von Mises Institute—demonstrated, the first nationwide panic had lots of angry men. A different war—the War of 1812-14—proved an important cause of the panic. When British troops burned Washington, American banks suspended specie payments, or refused to pay silver or gold for their privately printed bank notes. That led states to go hog-wild, creating banks that never paid in gold. (For a bullionist like Rothbard, that was taboo.) An inflationary land-price spiral led to widespread land speculation using cheap credit and easy money. The panic was the necessary correction. "Western" (i.e. Ohio) land prices plunged, taking 30 years to recover. The response? Angry Southern and Western farmers joined the ranks of Andrew Jackson's Democratic Party, which rightly (in Rothbard's view) committed to hard money, free banking, and libertarian ideology. Andrew Jackson—the nation's consummate armed and angry man—was the movement's hero.

Rothbard, originally writing about that in his 1956 dissertation, would not have considered highlighting the gender story here, but there is one, according to Robert V. Remini's 1984 Andrew Jackson and the Course of American Democracy, 1833-1845 (Harper and Row). It turns out that Jackson had had a rocky time in the late 1790s, when he almost faced debtors' prison for accepting and passing on the notes of his friend, a bankrupt merchant. When a later merchant took negotiable instruments from Jackson and the bankrupt friend failed to pay, the merchant (under American and English commercial law) could pursue each of the traders who had previously endorsed the notes for payment. Jackson was in trouble. The negotiability of such notes made commercial credit easy to establish in the Anglo-American world, but as Rowena Olegario showed in A Culture of Credit: Embedding Trust and Transparency in American Business (Harvard University Press, 2006), it could deepen financial panics because many merchants could be dragged down by the default of a single one. A merchant with a bad note could serially sue every name on the back of it. The experience of facing debtors' prison clearly scarred Jackson. He came to despise paper money and paper credit. Bankers became his especial bête noire.

In Jackson's era, collective violence against the Republic seemed a thing of the past. Nothing as coherent as the Newburgh Conspiracy, Shays' Rebellion, or the Whiskey Rebellion seemed in the works. By the 1819 and 1837 panics, the nation's police powers seemed effective at preventing angry young men from lacing up their moccasins and threatening the nation's sovereignty. National violence was more often personal than collective. In an age of unlimited liability and debtors' prisons, a man's reputation could mean the difference between success and jail. For men whose reputation, credit, and gender were tightly bound together, individual violence became a socially acceptable method for coping with the economic tensions of the day. From the 1790s through the 1830s, one sees a tight connection between dueling and a rage at the banks: Aaron Burr versus Alexander Hamilton; the future senator Thomas Hart Benton versus the attorney Charles Lucas; the Kentucky Representative and bank attorney Henry Clay versus the antibank Virginia Representative John Randolph; the journalist James Watson Webb versus the editor William Leggett. Jackson represented tens of thousands of men who were inclined to solve conflicts with canes, horsewhips, and pistols. A fair portion were slaveholders, men who sought to keep their slaves frightened by cultivating an air of unpredictable rage.

Outside the bounds of the United States, collective violence was silently encouraged. Between 1791 and 1850, hundreds of unemployed men joined expeditions against nearby Spanish and French forts, independent Latin American countries, and Indian settlements. In the Old Southwest, states subsidized militias of angry young men who attacked the settlements of the Five Civilized Tribes. Andrew Jackson was their furious hero, famous not only for fighting the British but for sponsoring a violent, illegal expedition into North Florida. Jackson had triumphed over his failures of the 1790s.

The role of failure in Jackson's character would be a familiar story to Scott A. Sandage, whose book Born Losers: A History of Failure in America (Harvard University Press, 2005) helps us understand how successive panics in the 19th century forced Americans to puzzle over the relationship between progress and manhood. In the period of Jackson's disgrace, falling behind in one's debts might make one simultaneously "feminized and defiled," Sandage explained, for a man who could not honor his debts did not appear to be a man at all. Perhaps it is little wonder that after Jackson's humiliating experience of selling off his land to evade debtors' prison, he became more sensitive than most about his masculinity and his character, challenging anyone who doubted his honesty or tweaked his nose to a duel. Shooting (and sometimes killing) his Tennessee rivals might have been a peculiar route to the White House, but it may ironically prove the central theme in Sandage's book—that failure needed to be constantly analyzed and renegotiated in the 19th century as it became clearer that nearly anyone could become bankrupt, that manhood was defined by a violent defense of one's reputation, and that any sufficiently angry former bankrupt could succeed.

Sandage showed that in the years after Jackson, bankruptcy became less dangerous. After the 1837 panic, with the Bankruptcy Act of 1841, debtor's prison was on its way out. Merchants, now lacking the threat of prison to ensure debtors would pay, demanded more intelligence about whom to advance goods or cash to. So success or failure in America became that narrative written about a person and his debts: the credit report. Those "spy books," first compiled by wholesalers to keep track of defaulting country merchants, constantly sought to define success and failure. They were Sandage's most productive source. A good man was hard to define. Spies discovered that upright family men could be "bad eggs," and illiterate barroom brawlers might be as "good as wheat" or "A Number 1" (both rich and reliable). Sandage's use of credit-report narratives gives us the texture of everyday life in the periods of boom and bust. We discover that Texas was the preferred place for defaulters to run to, and that the abolitionist and former bankrupt Lewis Tappan created the modern credit report by centralizing records produced by bill collectors and spy bookers. He built the intelligence system for measuring risk that would presumably prevent bad debt. Or so he said. The panic of 1857 suggests otherwise. Still, eruptions of violence about debt appeared to be on the wane.

Something was changing. Sandage's work suggests that what the Constitution did for containing the violence and influence of collective angry men, the credit report did for restraining individual angry men. One's credit became intangible, external, and not directly under a man's own control. As reputation became more finely graded, the desire to defend spotless honor probably began to seem rather quaint. And finally, after the Bankruptcy Act of 1841, when failure no longer meant penury and prison, the stakes were not so high. Credit reports may have contained the damage that could be done by failed men.

Of course, the panic of 1857 can be said to have ushered in the American Civil War, a time of spectacular violence. As Sean Wilentz has suggested in The Rise of American Democracy: Jefferson to Lincoln (Norton, 2005), the reigning Democratic Party that had picked up energy in previous financial panics found itself split in two by the panic of 1857. Why? Cotton planters in the South proved unaffected by the panic. James Henry Hammond famously crowed that "Cotton Is King," a monarch peculiarly exempt from financial cycles.

We might suggest that there were two stimulus packages debated in 1858: one from the North and one from the South. The Northern and Midwestern workers who had been Democratic Party stalwarts found that Republicans had a recipe for ending the 1857 panic: Western railroads, free Western land, and agricultural colleges. South of the Mason-Dixon line, as William L. Barney argued in The Road to Secession: A New Perspective on the Old South (Praeger, 1972), the most violent secessionist fire-eaters were the underemployed sons of planters in the Deep South. Those young men waited for their fathers to turn over plantations and were angry about being denied land in the West. Their version of a stimulus package was to propose annexing Cuba, making it possible for Southerners to import more slaves into the cotton South! Here two sets of angry young men from two sections confronted each other in two different parties. Enough younger workers deserted the Democratic Party to allow Abraham Lincoln to win election. Once he was elected, the South violently seceded. Here two kinds of stimulus packages and two political parties created a violent conflict that nearly destroyed the nation.

The peace of 1865 would last for eight years, when fresh mischief emerged with the panic of 1873, a long and violent depression. David O. Stowell's edited collection, The Great Strikes of 1877 (University of Illinois Press, 2008), explores the last and most violent upheaval that followed that six-year depression. The contributors show that the panic of 1873 pushed railroads on the edge of receivership into agreements to collectively reduce wages across all the major railroads. The announcement of those cuts in 1877 precipitated the Great Strike, the largest nationwide strike America has ever seen. Begun in railroad repair shops in Baltimore and Pittsburgh, it quickly spread through important junctions in Martinsburg, W.Va., and Nashville, Tenn. On the one hand, the coordination among striking engineers, brakemen, and firemen appeared to be the first stage of what labor officials would later call industrial unionism. On the other hand, anti-Chinese violence in California suggested that race-baiting was an important rallying point. And who was raising hell? Apparently mostly well-dressed gentlemen and riotous women destroyed railroad hubs all over the country. The diversity of the crowds proved interesting and sobering. In the longest term, the burning of Pittsburgh and the deaths of strikers and soldiers in the mayhem led many middle-class citizens to form citizens' councils and build armories in major cities. The Great Strike also helped justify the creation of a national guard for confronting the threat of armed insurrection in major cities. By 1877 a Constitution and credit reports were not enough to restrain violence, and so Congress called on a more permanent police force to protect itself from the angry unemployed, men and women.

What are the lessons from the panics, recessions, and downturns of the past two centuries, and their effect on gender and violence? Certainly the nation has had more than its share of armed mobs, though 1877 suggests that we should not expect them all to be men. New parties often used angry rhetoric to stir up the sufferers from previous calamities. They defined their opposition to the "corrupt bargains" and "inflationism" displayed in previous panics: For Jacksonians it was a monster bank in 1819; for the Whigs who opposed him, what they saw as his illegitimate "pet banks"; for Republicans, Democratic kowtowing to slaveholders in 1857. Even without party appeals, panics could lead men to find scapegoats: American Indians, slaves, or Chinese immigrants.

It is also worth remembering that American institutions have from the beginning been shaped around the threat of angry young men. When those men sought to scale back debts, the new Constitution prevented it while providing protections against the powers of a strong federal government. Over the 19th century, masculine anger could not be deployed against the state, but the state proved willing to use angry unemployed men against external threats, coyly disclaiming any stake in militia attacks on Indians, or invasions of California, Florida, Louisiana, Mexico, and Nicaragua. When projected outward, the anger of young men could prove downright rewarding in building a continental nation.

Men's failure during panics, once viewed as a moral failing or a loss of masculinity, became more routine as panics became more routine in America. Reforms like the Bankruptcy Act eased the sting of depression for angry young men and did appear to minimize violence. As bankruptcy became more familiar and less harrowing than a prison sentence, tempers over indebtedness appeared to cool.

Are unemployed American men as dangerous as their counterparts in Russia or Pakistan? Probably not. The American political system has been jiggered and rejiggered through two centuries of angry, impulsive, violent men. Sometimes political institutions have been calibrated to deploy that violence, sometimes to redirect it, sometimes to quash it.

We will almost certainly see improved intelligence networks among credit-rating agencies to identify bad risks, given that leg irons are out of fashion in dealing with debtors. We might also see surges in policing institutions to deal with panicked perceptions about unruly American men. (After a Constitution, a Secret Service, and state armories, what is next? Real-estate surveillance drones?)

As for a coming Armageddon, statistics on bullet sales and macaroni purchases may be overreactions. Analysts have also noted a rapid rise in condom sales. One explanation for that is a rise in leisure time. Another explanation might be a rise in family planning. Male rage may go hand in hand with reflections on men's irrational exuberance in the past, and frank concerns about the shape of the future.

Scott Reynolds Nelson is a professor of history at the College of William and Mary. Among his books are Steel Drivin' Man: John Henry, the Untold Story of an American Legend (Oxford University Press, 2006) and Crash: An Uncommon History of America's Financial Panics, forthcoming from Knopf in the spring of 2011.

Comments

1. devedjian - January 18, 2010 at 01:10 pm

Your or pundit Salam's premise of a current HE-cession is lame and misguided: during recessions and depressions, women get laid off or fired in statistically signficant larger proportions than do men--across the entire socio-economic spectrum. As the number of men and women in the work place now nears parity (52% to 48%), you need to factor in that women are losing more jobs in absolute terms nationwide Granted, the sexist finance and construction industries are so male dominated that more men are being laid off than women in these two areas, but you're missing the big picture: finance and construction constitute about 20% of US GDP. Duh. Do the math.

This book's analysis of current events and its ramificaitons are exactly why the US economy and the US education system are in such unconscionably abysmal states. No one bothers with critical thinking. Serves us all right!

2. barnesms - January 18, 2010 at 01:41 pm

Unfortunately, it is when social perspective or beliefs turn into "critical thinking" that conclusions are made without any investigation. Worse, this mindset becomes denial of facts. I am not agreeing with or denying the premise of this book, but I reject wholly any resistence to look at the numbers. In this current economic situation, males have suffered far more than females. There is no commentary, beliefs, or perspectives; that is just a fact.

Please don't try to do the math, but just look at the bloody numbers.

3. 11211250 - January 18, 2010 at 01:48 pm

A representative of the Tea Party concluded his time on an NPR talk show remarking on how US citizens have always had three boxes to correct political matters: The Ballot Box; The Jury Box; and The Box of Ammunition. Up to this time the man had followed the Tea Party talking points, but with this last remark the stunned NPR host could only ask him if he were suggesting that armed revolt was coming from the Tea Party. The Wisconsiner replied - "Who do you think is buying all that ammunition?" It is not the lack of critical thinking on the part of pundits and scholars that is of concern - it is that of the Teabaggers we should worry most about.

4. larryc - January 18, 2010 at 02:36 pm

What a superb piece!

And I don't think that the unemployed men playing Fallout 3 and Overlord II are the ones to worry about--it is those with a love of guns and teabags!

5. madamesmartypants - January 18, 2010 at 05:24 pm

barnesms, what evidence are you using? I'd be interested in seeing those numbers. Interesting piece, but I, like devedjian, am dubious of a "he-cession."

6. nglock - January 18, 2010 at 09:54 pm

Where do all the angry young men go?

"After a Constitution, a Secret Service, and state armories, what is next? Real-estate surveillance drones?"

How about "they've gone to the US prisons, every one". Certainly, a fair number seem to have landed there, in our country with one of the highest per capita prison populations in the world!

7. phxacademics - January 19, 2010 at 11:47 am

Hold on a moment. Let's not jump to our own conclusions too quickly. Here is a except from an AP story today:

NEW YORK - Historically, marriage was the surest route to financial security for women. Nowadays, it's men who are increasingly getting the bigger economic boost from tying the knot, according to a new analysis of census data.

The changes, summarized in a Pew Research Center report being released today, reflect the proliferation of working wives over the past 40 years, a period in which American women outpaced men in both education and earnings growth.

Maybe this does indeed bear closer examination.

8. gabrielinaz - January 19, 2010 at 12:00 pm

For those who doubt that the recession has hit male workers hardest:

http://www.boston.com/business/articles/2008/12/05/losing_jobs_in_unequal_numbers/

http://www.nytimes.com/2009/02/06/business/06women.html?_r=1

Granted, the numbers are mostly based on Dept of Labor unemployment reports which could win the Pulitzer Prize for Governmental Fiction but it's fairly clear that a disproportionate amount of men have lost their jobs.

9. darkroomjames - January 19, 2010 at 10:08 pm

darkroomjames

"In God We Trust/In Gold We Trust/In Credit Ratings We Trust" as we wend a serpentine path towards new theories of credit, trust, redefining the good man, the good woman, the good businessperson, and what constitutes a heart of gold versus a valued, trusted employee. We can have all the intelligence reports in the world, but the art of interpreting the skills and value of people in the field and in the office puts intelligence interpreters into new and more challenging roles that require a greater sophistication to judge impact and consequences, if not CYA smokescreens and outdating favorite prejudices. When Michael Jackson became personally worth billions, the WASP business mold was shattered. What was Jackson's credibility secret? Or that of the Beatles? Both were targeted by the FBI, and hated by conservatives.

10. zacry - January 20, 2010 at 08:29 pm

Where do all the angry young men go? ...
How about "they've gone to the US prisons, every one".

The prison system is growing by leaps and bounds, but they could never hold all the angry people (Even if they freed all the non-violent drug offenders and broken/debilitated shells).

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