Transaction Man: The Rise of the Deal and the Decline of the American Dream

Policy Punchline

Nicholas Lemann’s recent book, “Transaction Man,” is an account of the United States economy in the 20th and 21st century, how it has transformed over time, and the impacts of such transformation on all of us. Specifically, Prof. Lemann examines three remarkable economic and social thinkers who he calls, “Institution/Organization Man,” “Transaction Man,” and “Network Man,” who epitomized and helped create the three main eras of American economy. In this interview, Prof. Lemann explains these three eras in detail, why none of these models has successfully brought sustainable prosperity to the American people, and how his vision of pluralism might provide a synthesis and possible solutions to today’s urgent social problems. “Institution Man” = Adolf Berle, Franklin Delano Roosevelt’s chief theorist of the economy, who imagined a society dominated by large corporations, which a newly powerful federal government had forced to become benign and stable institutions, contributing to the public good by offering stable employment and generous pensions. “Transaction Man” = Michael Jenson. By the 1970s, the corporations’ large stockholders grew restive under this regime, and their chief theoretician, Harvard Business School’s Michael Jensen, insisted that firms should maximize shareholder value, whatever the consequences may be. This narrative took place very much under the backdrop of “financialization” and heavy deregulations starting in the 1970s, which allowed capital providers and fund managers to suddenly play the role of textbook capitalist. “Network Man” = Reid Hoffman. Today, Silicon Valley titans like LinkedIn co-founder and venture capitalist Reid Hoffman hope “networks” can reknit our social fabric and efficient startups like Uber and Airbnb can replace much of the existing infrastructure. Bio: Professor Nicholas Lemann is a veteran American journalist and author of six books, including his latest "Transaction Man: The Rise of the Deal and the Decline of the American Dream." He is the Joseph Pulitzer II and Edith Pulitzer Moore Professor of Journalism and Dean Emeritus at the Columbia Journalism School. Previously, he has worked at The Atlantic Monthly, The Washington Monthly, The Washington Post, and a variety of other newspaper and magazine companies, writing about politics, education, business, social policy, and other topics.