The Elite That Built America

The techno-nationalist elite, Ivy League networks, upscaling Vegas and more in this week's digest

Today is your last day to take advantage of my 30-40% special discount offer on joining my Member program. If you don’t sign up today, it’s gone.

I’ve long said that the correct way to define “the Right” is by a commitment to Truth. Someone who embodies that is the great conservative intellectual Tanner Greer, whom I’ve referenced before. I believe he’d identify as a conservative, but if you read his work, a political agenda doesn’t obviously come through. Instead, you see someone who’s been reading and thinking deeply about American and its future, and wants to get to the heart of things.

Greer has a superb new essay in American Affairs that I cannot commend highly enough. It’s called “The Making of a Techno-Nationalist Elite.” Nominally a review of Palantir CEO Alex Karp’s book on a technological republic, Greer provides instead a historical overview of the original techno-nationalist elite who built modern America.

These elites are, of course, the WASPs that I’ve written about, though he uses the common term “Eastern Establishment.” His essay covers some of the same territory as WASP scholar E. Digby Baltzell, economic historian Alfred D. Chandler, Jr. and others. It’s long, but provides a history of America that will help you understand how we got to now - and the problems facing us if we want to get where we want to go Here are some excerpts:

The scene was prepared by the British, whose inventors harnessed steam power during the First Industrial Revolution of the late eighteenth and early nineteenth centuries. But the inventions that make modern life possible emerged between 1860 and 1930. These years saw the invention and diffusion of steam turbines, internal combustion engines, electric motors, alternators, transformers and rectifiers, incandescent light, electromagnetic waves, recorded sound, aluminum smelting, dephosphorized steel and steel alloys, reinforced concrete, nitroglycerin, synthesized ammonia, radio transmission, plastics, and gas turbines. The architecture of our industrial civilization was assembled within one lifespan.

Americans did this assembling. The science that underpinned these technologies was international, but these technologies were refined, commercialized, and scaled in the United States. The Second Industrial Revolution unfolded as American industrialists built the corporate and financial machinery needed for industrial-scale production. Out of this crucible came not only new machines but new forms of management, bureaucracy, and social organization that, over the course of a century, would be imitated, adapted, and imposed across nearly every society on Earth. The United States was the birthplace of the technological republic.

….

The goal of The Technological Republic is to inspire American technologists to become American techno-nationalists. Regrettably, Karp and Zamiska offer no roadmap for accomplishing this. The two men invoke the technologists of genera­tions past as archetypes the modern engineering elite might aspire to, but they do not investigate the religious, social, political, or economic milieu that created these technologists. This is unfortunate: Karp and Zamiska’s sermonizing is not sufficient to make patriots out of a generation of engineers who have never been trained to think of themselves as stewards of a state. Elevating Silicon Valley’s engineering elite into a governing class would require much more: institutions, alliances, and traditions that root the wealth and expertise of our technologists in service to the nation.

The United States has had such a class in the past. They were the architects of the Second Industrial Revolution: engineers, industrialists, and entrepreneurs who believed that a technological revolution was needed to propel America toward greatness. They were, in this sense, America’s first governing class of techno-nationalists. In the mid-twentieth century, Americans would label their descendants the “Eastern Establishment.” This class did not materialize out of thin air. Examining their origins, and the reasons for their seventy-year dominance of American business and government, provides a useful corrective to Karp and Zamiska’s fragmented thinking and hazy wishcasting.

The techno-nationalist sees technology and nationhood as two intertwined goods. As technology advances, so does national power. Only a powerful state can unite a populous nation around a common identity and protect it from both external enemies and centrifugal forces. Such a nation then functions as a vast open market that allows emerging industries to benefit fully from economies of scale. These industries create wealth; wealth invested expands industrial capacity; booming industrial development stimulates the invention and adoption of new technologies, beginning the cycle anew.

…

The Hamiltonian program for “one great American system” of growing integration, advancing industry, and rising power was not realized in Hamilton’s lifetime. While the U.S. Constitution laid the groundwork for a technological republic, it was not enough to bring one into being. What the new republic required was a national elite resolutely committed to their nation’s technological ascent. But it would take decades before a class with such techno-nationalist inclinations came to helm the American state and economy.

…

The wealthiest elite groups of the antebellum era thus resembled Karp’s picture of the contemporary tech elite: they were suspicious of executive power, distrustful of American nationalism, insulated from the American public, and focused their investments in whatever field promised the highest returns, regardless of the political consequences for doing so. Many were localists; some were Atlanticists. Almost none were nationalists. Their favored politicians, men like Franklin Pierce, William Marcy, Howell Cobb, and James Henry Hammond, dismantled America’s system of centralized finance, slashed its tariffs, vetoed internal improvements, shoved industrial policy down to the states, and maligned the rising class of industrialists.

America’s most powerful regional elites simply had no material stake in a technological republic, and they lacked the nation-spanning institutions or social networks needed to lead one. The handful of antebellum statesmen who, with Daniel Webster, urged Americans to become “one people, one in interest, one in character, and one in political feeling,” were rewarded with a lifetime of political disappointments. All of this would change with the Civil War.

The conflict elevated two social groups that had hitherto played second fiddle on the American stage: the disparate Northern regional elites, newly united beneath the Republican banner, and the rising class of industrialists and their financiers. The first seized the commanding heights of the Union’s politics; the second built the commanding heights of its economy. War bound them together in a common techno-nationalist project. The personal ties, institutions, and ideology that saved the Union would continue long after the guns went silent at Appomattox.

…

The Republicans of the 36th Congress moved quickly to exploit the absence of Southern obstruction. They advanced a legislative program which has since been called “the blueprint for modern America.” The package included vast land grants to transcontinental railroads, high tariffs to stimulate domestic manufacturing, and a host of measures designed to spur national development. As the Civil War stretched on, demand for iron, rail lines, machine tools, telegraph wires, steam engines, and armaments surged. The combination of new protective tariffs and the threat of Confederate commerce raiding ensured that domestic producers met this demand. For enterprising industrialists, this was an extraordinary opportunity to amass wealth on a scale that antebellum America had never offered.

War also birthed a new kind of American financier. At the outset of hostilities, Washington lacked both the taxation machinery to fund its armies and the appetite to inflate away the nation’s currency. Instead, it turned to a rising class of bankers who marketed bonds in Philadelphia, Boston, and, above all, New York. These financiers, in turn, closely advised the federal government on how to design a national banking system capable of supplying the Union with a universal currency and a uniform system of credit. Young upstart J. P. Morgan began his ascent serving as one of these financial intermediaries. He was not alone in this. Out of the ten largest banks in New York City in 1870, five did not exist before the war.

…

The sheer volume of physical material that could now be produced, transported, and processed by these new technologies had no precedent in human history. Existing corporate forms could not manage the torrent. The railroads, which had to coordinate hundreds of trains moving across multiple states and time zones on a finite number of lines, were the first to confront the problem head-on. Their solution was to invent the modern corporation: vast, vertically integrated bureaucracies with multi-level, managerial hierarchies. These structures shifted deci­sion-making power away from the decentralized marketplace and into the hands of salaried technicians and middle managers, creating a template that would define American business—and American power—for the next century.

…

The politicians of the new establishment did their part to create a macroeconomic environment equally conducive to techno-nationalist development. Their chosen political vehicle was, naturally, the victorious party of Lincoln. The GOP regularly endorsed a Hamiltonian vision of America’s future. Because, as James Garfield put it, “the civil society of our country is honeycombed through with disintegrating forces,” the United States was in desperate need of a strong centripetal force, which is exactly how most Republicans saw industry. Benjamin Harrison articulated a common belief when he argued that the new industrial economy was “working mightily . . . to efface all lingering estrangements between our people.”

…

The Republican Party of this era was a political alliance between the Protestant clergy and the petit bourgeois of small-town New England and New York; the prosperous farmers of the Midwest, many of whom were Union veterans; and the new Eastern Establishment. The policy suite enacted by the GOP benefited each of these groups. Protective tariffs not only favored the large industrialists, but also smaller manufacturers across the North. Industries like wool were given special carve-outs in order to keep their producers in the Republican column. Tariff revenues, in turn, were used to fund generous pensions to Union veterans. These commitments often extended beyond government policy into acts of private patronage, such as when, during a federal budget shortfall, J. P. Morgan personally lent $2.5 million to the Army payroll to ensure that the payment of veteran pensions would continue, or when George Westinghouse underwrote the national gathering of five thousand chapter leaders of the Grand Army of the Republic in his hometown.

The magnates of the Gilded Age grasped a lesson their twenty-first-century successors have largely forgotten. Technological development is only possible when a governing coalition commits to it; potential coalition members must be courted and convinced.

The Eastern Establishment understood its project in generational terms. They knew that the integration of the American nation and the growth of American power would not be accomplished in their lifetime. They wanted their children to inherit their select position in American society—and to be worthy of that inheritance.

…

This historical review offers uncomfortable lessons for those who dream, as Alexander Karp and Nicholas Zamiska do, of a twenty-first century techno-nationalist elite. The Technological Republic’s call for a “union of the state and the software industry” is, at bottom, a call for a new governing class. Any governing class requires three things: a political coalition to which it owes allegiance and over which it exercises influence; an economic base that provides this class with wealth and unites its members around shared material interests; and finally, a set of institutions, rituals, and social customs that give this class a culture distinct from the country at large. Absent the first two, a leadership class lacks the power to lead; absent the latter two, it lacks the ability to act as a class. The Eastern Establishment’s seventy-year dominance rested on its possession of all three.

Click over to read the whole thing.

You can read own telling of part of this history in my American Affairs essay on rediscovering E. Digby Baltzell’s sociology of elites.

Greer was also a guest on my podcast earlier this year:

Why Elite Colleges Matter

There are people who like to claim that where you go to college doesn’t matter, or even pooh-pooh the idea of college at all. There’s research that people who attend non-elite colleges make as much money as those who go to elite ones, controlling for other factors.

But elite colleges and institutions offer network building opportunities you can’t get anywhere else. The Financial Times had a brief profile of Army Secretary Dan Driscoll.

The article tells:

At 38, Driscoll became the youngest US army secretary ever. Born into a military family, he grew up in western North Carolina and retains a slight drawl. His father served in Vietnam and his grandfather was an army decoder during the second world war. Deployed to Iraq in 2009, he left the army as a first lieutenant. He then enrolled in Yale Law School, where he met Vance.

As Driscoll tells it, Vance, then the head of the Yale Veterans Association, took the small group out for pizza and told them that they would feel like they didn’t belong, but that they could push through and settle into life at the elite university. These days, the two “text each other routinely, just like two buddies would”, says the former defence official.

How did he get such a high position so young? He met JD Vance at Yale Law School.

Driscoll is surely very smart, talented, and ambitious. He could have probably done well anywhere. But opportunities to meet future Vice Presidents and people of that stature are just thicker on the ground at schools like Yale

Property Tax Followup

A young, Millennial religious conservative sent me an email in response to my NYT op-ed on why property tax abolition is a bad idea. He says:

Thank you for your piece on property taxes. I am in a similar boat to your reader from South Carolina. The anti-property tax movement may drive me permanently anti-Republican. It is especially salient for me here in Oklahoma, where three hard-right legislators have begun an initiative petition to abolish property taxes on homestead properties here. There is just a complete disconnect between civic responsibility and privileges like property ownership; between public goods and the taxes that fund them. Oklahoma already has low property taxes (roughly 1.15% of market value, capped by the Constitution) and strong safeguards against rising property values (no more than 3% of property value per year for homesteads). Further, property taxes are limited to only supporting county government entities, primarily schools and libraries. I am pulling my hair out.

If you missed my piece, click over to check it out (gift link).

The Middle Class Squeeze in Vegas

As you know, I’m no fan of gambling. But this piece on the funk in which Las Vegas finds itself is interesting. Apparently the Vegas casino industry is also trying to shed middle class customers in favor of the more affluent gambler. You won’t be surprised to hear that private equity is playing a role.

It might seem wise to make room for smaller bankrolls in the city—the soul of Las Vegas is contingent on budget travelers—but those appeals are invariably ignored. Like so many other pleasures of modern life, Las Vegas is increasingly becoming a city financed by private equity. Harrah’s Entertainment, the gambling company that owned the casino where I met the Mehaffeys, was sold to a pair of equity sponsors in 2008 for $27.8 billion. One of those firms was Apollo Global Management, a New York–based real-estate holdings group that in 2022 made a play for the iconic Venetian hotel. That pattern has continued across the Strip. Blackstone, the commercial real-estate giant, entered sale-leaseback agreements for the Bellagio in 2019 and picked up the MGM Grand and Mandalay Bay in the years afterward. Blackstone would later sell some of those investments to Vici Properties, a real-estate investment fund founded in 2017, which owns a total of 54 casinos. The mom-and-pops have been bought off, the copper wiring is stripped, and as so often is the case with Wall Street, that tends to be the plan all along.

“The casinos on the Strip are no longer being driven by personalities at leadership. They’re being driven by corporate politics. So they have a different attitude about how you treat your consumers,” said Andrew Woods, director of the Center for Business and Economic Research at the University of Nevada, Las Vegas. “Why wouldn’t the resort industry find a way to maximize shareholder value by nickel-and-diming their consumers? Especially when, until very recently, those consumers haven’t pushed back.”

Click over to read the whole thing.

Best of the Web

Scott Yenor: Porn Is Poisoning Our Culture

NYT: How Manosphere Star Andrew Tate, Accused of Rape and Trafficking, Was Freed (gift link)

John Burn-Murdoch/Financial Times: The housing crisis is pushing Gen Z into crypto and economic nihilism - Locked out of home ownership, young adults are turning to risky financial behaviour

NYT: The Conservative Overhaul of the University of Texas Is Underway (gift link) - The school has been brought to heel by conservative critics of higher education. It is part of a broader transformation at the state’s universities.

Stephen Eide: Bureaucratizing Faith - On the growth of the faith-based NGO complex

New Content and Media Mentions

I got a mention in the Politico playbook.

New this week:

• Scott Galloway Is the Safest Edgelord in America - The manosphere’s sharpest advice wrapped in center-left bubble wrap—and it’s making him richer than almost anyone else in the space.

Some readers tell me that Galloway does talk often about how he would never get into UCLA today. I’d be interested to know if he specifically talks about the discriminatory implications of DEI for men, and especially white men. That’s the real, politically incorrect issue. It’s become very difficult for white boys with exceptional records to get into the University of California, while other people who need remedial math are admitted to these prestigious campuses instead. I’m also told he has a more business oriented book called The Algebra of Wealth.

Galloway puts out so much content it’s impossible to keep up with, so I had to go from just what was in Notes on Being a Man.

I’ll wrap up with one last pitch for my Member program. If you get value out of my work, want to go deeper, and want to support it, this is the best way to do so. I need help from people like you to carry out this important mission in the public square. Today is your last day to join at a discounted rate.