Official Markets: Bureaucrats as Market Makers in the Twentieth Century

How do we identify the boundary separating states and markets? What happens when the lines differentiating the two shift, blur, or get redrawn? And who does the shifting? These questions lie at the heart of four papers investigating the power of government or quasi-public bureaucracies over markets. The rise of the administrative state is one of the defining features of twentieth century political history. Likewise, globalization and financialization are two marked features of twentieth century economic change. Our panel examines these phenomena by looking at bureaucrats as market actors and market makers, in addition to simply serving as arbiters of ground rules.
First, Jamieson Myles examines the way in which financial reformers sought to transform commercial credit practices in U.S. retail and distribution by replacing open account credits with negotiable instruments in the form of trade acceptances following the creation of the Federal Reserve System. Second, Mary Bridges considers the way in which the US Department of Commerce briefly entered the game of gathering and distributing foreign credit information—typically an activity in the domain of the private sector—in order to promote US busines overseas. Third, Ian Kumekawa considers related questions of trade promotion and commercial boosterism from the perspective of Britain: his presentation explores British efforts to expand industrial exports as a form of semi-public state growth. Finally, Sean Vanatta examines the way an alliance of lawyers and bankers quietly rewrote US state laws governing investments in trusts, thereby transforming American capital markets in the immediate aftermath of World War II. Myles, Bridges, and Kumekawa all focus on the dynamics of regulation and market making between the first and second world wars. Vanatta’s paper expands the chronology, which gives the panel an interesting take on disruption and the statecraft of market making in the postwar era.
Collectively, the papers take up unexpected relationships between government bureaucracies and the private sector, particularly in creating new markets and building connections between markets. They tackle questions about how administrators in the twentieth century understood their relationship to business and financial markets—as well as how that relationship shifted over time.
As governments around the world have taken up expanded responsibilities and shoulder greater expectations for rescuing markets since Covid-19, these questions have profound resonance. As business historians and as active members of our communities, we are rethinking the proper role of the state as an arbiter of market ground rules and, increasingly often, an active participant in different dynamics of global markets.