Brown Brothers Harriman: The Shadowy Investment Bank That Built America’s Financial System

09/02/21 • 37 min

Conspiracy theories have always swirled around Brown Brothers Harriman, the oldest and one of the largest private investment banks in the United States, and not without reason. As America of the 1800s was convulsed by devastating financial panics every twenty years, the Brown Brothers Harriman quietly went from strength to strength, propping up the US financial system at crucial moments while avoiding the unwelcome attention that plagued many of its competitors. Throughout the nineteenth century, the partners helped to create paper money as the primary medium of American capitalism; underwrote the first major railroad; and almost unilaterally created the first foreign exchange system. More troublingly, there were a central player in the cotton trade and, by association, the system of slave labor that prevailed in the South until the Civil War.
Today’s guest, Zachary Karabell, author of INSIDE MONEY: Brown Brothers Harriman and the American Way of Power is here to discuss this complex marriage of money and power in America. But it’s what came after, in the 20th century, that truly catapulted the firm's influence and offers insight about their legacy and lessons for the future.
In this episode we discuss:
Brown Brothers Harriman’s essential and largely unknown role in shaping American history
How Brown Brothers Harriman helped create an axis of political and economic power, educated at elite schools, now known as “the Establishment”
How a balanced sense of self-interest and collective good helped Brown Brothers Harriman avoid the fate of “too big to fail” firms in the twenty-first century
The idea of “enough” wealth or “enough” success – has it become alien in today’s economy? Was it always this way?
What lessons can be learned from those who stewarded the expansion of America’s infrastructure in the early days of our democracy as we embark on rebuilding our infrastructure today?

See omnystudio.com/listener for privacy information.

See omnystudio.com/listener for privacy information.

Previous Episode

Drunk: How We Singed, Danced, and Stumbled Our Ways to Civilization

Humans love to drink. We have a glass or two when bonding with friends, celebrating special occasions, releasing some stress at happy hour, and definitely when coping with a once-in-a-lifetime pandemic. But when you consider the consequences—hangovers, addiction, physical injury, and more—shouldn't evolution have taught us to avoid it?
And yet, our taste for alcohol has survived almost as long as humans have been around. So why do humans love to get intoxicated?
Today’s guest, Edward Slingerland (author of the book Drunk: How We Sipped, Danced, and Stumbled Our Way to Civilization) shows us why our fondness for intoxication has survived so long, how our favorite vice influenced the growth of civilizations, and why society as we know it couldn’t have emerged without alcohol.
We discuss anecdotes and research, including:
•Archeological evidence suggests that the desire for alcohol—not food—was the key driver of the agricultural revolution, and therefore civilization
• When humans were forced to abstain or drink in isolation during Prohibition, new patent applications decreased by 15%, then quickly rebounded as speakeasies and other creative ways of social drinking emerged
•George Washington insisted that alcohol was essential for military morale and urged Congress to establish public distilleries to keep the US Army stocked with booze
•Folk beliefs about drinking and bonding are bolstered by laboratory experiments suggesting that alcohol enhances group identity, interpersonal liking, and self-disclosure.
•Being a little drunk makes you a worse liar, but it also makes you a better lie detector.

See omnystudio.com/listener for privacy information.

Next Episode

Columbus of the Pacific: The Forgotten Portuguese Sailor Who Opened Up Earth’s Largest Ocean in 1564

Lope Martín was a little-known 16th century Afro-Portugese pilot known as the "Columbus of the Pacific"--who against all odds finished the final great voyage of the Age of Discovery. He raced ahead of Portugal’s top navigators in the notoriously challenging journey from the New World to Asia and back, only to be sentenced to hanging upon his return, while a white Augustine monk achieved all the glory.
It began with a secret mission, no expenses spared. Spain, plotting to break Portugal’s monopoly trade with Asia, set sail from a hidden Mexican port to cross the Pacific—and then, critically, to attempt the never before-accomplished return: the vuelta. Four ships set out, each carrying a dream team of navigators. The smallest ship, guided by Lope, a mulatto who had risen through the ranks to become one of the most qualified pilots of the era, soon pulled far ahead and became mysteriously lost from the fleet.
It was the beginning of a voyage of epic scope, featuring mutiny, murderous encounters, astonishing physical hardships—and at last a triumphant return. But the pilot of the fleet’s flagship, an Augustine friar, later caught up with Martín to achieve the vuelta as well. It was he who now basked in glory, while Lope Martín was secretly sentenced to be hanged by the Spanish crown as repayment for his services.
To look at this forgotten story is Andres Resendez, author of the new book Conquering the Pacific: An Unknown Mariner and the Final Great Voyage of the Age of Discovery

See omnystudio.com/listener for privacy information.