In This Review

Wealth and Democracy: A Political History of the American Rich

Wealth and Democracy: A Political History of the American Rich
By Kevin Phillips
432 pp, Broadway Books, 2002

In the early years of the United States, Thomas Jefferson fought bitterly with Alexander Hamilton over the structure of the U.S. financial system. Jefferson feared that without proper checks and balances, an aristocratic financial class would wield a disproportionate amount of influence in government and thus erode popular democracy. In this cogent and thought-provoking book, Phillips argues that Jefferson's fear has come true. By meticulously tracing the phases of wealth concentration and the politics of the affluent from John Jacob Astor to Bill Gates, he shows that the United States is in the grip of a plutocracy controlled by Wall Street and big business. For the past two centuries, the rich have profited at the expense of the lower and middle classes through dubious government practices such as bank bailouts and suspect tax and tariff policy. Phillips uses his deep understanding of American and international financial history to show how strongly politics is intertwined with the complex cycle of boom and bust. His analysis, however, glosses over one important era: the post-World War II economic resurgence of the American middle class. Nevertheless, Wealth and Democracy is one of the most definitive sources on the relationship between money and power in America.