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