Nicholas Lemann's "Transaction Man"

Nicholas Lemann's books include the prizewinning The Promised Land: The Great Black Migration and How It Changed America.

He applied the “Page 99 Test” to his latest book, Transaction Man: The Rise of the Deal and the Decline of the American Dream, and reported the following:

Page 99 of Transaction Man is actually about half a page: it's the end of a section of the book. Therefore it's meant to be something of a cliffhanger, a way of introducing a topic that I'll take up later, but not immediately. On page 99, it's the early 1970s, and the ultimate white-shoe Wall Street firm, Morgan Stanley, whose history I have been tracing from its founding in the mid-1930s, has just appointed a new, youngish president, a man named Bob Baldwin, who wants to shake things up--at Morgan Stanley and on Wall Street generally. What this will mean is a great explosion of trading, merging, acquiring, and growing by financial firms that traditionally just planned new stock and bond offerings for large industrial corporations. And, in turn, these changes helped blow up the post-World War II political economy, which was built around corporations that offered generous pay, job security, health care, and retirement pensions to those lucky enough to work for them. Just after page 99, the next section will profile an economist who was the intellectual godfather and head cheerleader for many of these changes, Michael Jensen. Then, in the following section, I pick up the thread of the Morgan Stanley story, which concludes with the firm's near-extinction in the 2008 financial crisis.

The book as a whole traces the organization of the American economy through three stages: institution-oriented, transaction-oriented, network-oriented. In each stage there is a profile of a leading thinker and doer, and in between I revisit a series of places to show what the transitions from stage to stage mean for them. In addition to Morgan Stanley, they are a blue-collar neighborhood on the South Side of Chicago, and the government agencies in Washington that regulate the economy. The net result is the kind of profoundly unequal and politically volatile society we have today.

Learn more about Transaction Man.

--Marshal Zeringue