Navigating Failure: Bankruptcy And Commercial Society In Antebellum America

The "self-made" man is a familiar figure in nineteenth-century American history. But the relentless expansion of market relations that facilitated such stories of commercial success also ensured that individual bankruptcy would become a prominent feature in the nation's economic landscape. In this ambitious foray into the shifting character of American capitalism, Edward Balleisen explores the economic roots and social meanings of bankruptcy, assessing the impact of widespread insolvency on the evolution of American law, business culture, and commercial society.

Balleisen makes innovative use of the rich and previously overlooked court records generated by the 1841 Federal Bankruptcy Act, building his arguments on the commercial biographies of hundreds of failed business owners. He crafts a nuanced account of how responses to bankruptcy shaped two opposing elements of capitalist society in mid-nineteenth-century America--an entrepreneurial ethos grounded in risk taking and the ceaseless search for new markets, new products, and new ways of organizing economic activity, and an urban, middle-class sensibility increasingly averse to the dangers associated with independent proprietorship and increasingly predicated on salaried, white-collar employment.

Reviews:

Early in 2001, two big economics stories crossed paths and received vastly different coverage. The meltdown of the "dot-coms" dominated the front pages. Meanwhile, congressional passage of a new bankruptcy law that threatened to establish more favorable terms for creditors passed mostly under the radar screen. Edward Balleisen's engaging social and economic history of bankruptcy in the mid-19th century United States anticipates today's trends, both noisy and quiet. It is a lively yet thorough chronicle of the kinds of booms and busts to which capitalism is prone. When a New Yorker of 1837 ruefully remarks that fortunes "have melted away like the snows before an April sun," it is easy to believe that his cruelest month is ours as well. One of the book's many virtues lies in reminding readers that lesser-known stories-such as the passage of bankruptcy laws-may have a bigger long-term impact than panics and crashes themselves. Liberal bankruptcy laws have been and remain important for many economic and cultural reasons. Some of the characters in this book-and they are truly characters, a tribute to Balleisen's skills as a writer-yield to disappointment and become the security-seeking cadres of corporate capitalism. Others take the "double or nothing" pledge and become even more reckless entrepreneurs. This is historical writing at its best: by opening a window on crucial but little-known episodes in the nation's past, it lets through rays of insight that illuminate the present.