The Chris Voss Show - The Chris Voss Show Podcast – Inside Money: Brown Brothers Harriman and the American Way of Power by Zachary Karabell

Episode Date: June 25, 2021

Inside Money: Brown Brothers Harriman and the American Way of Power by Zachary Karabell A sweeping history of the legendary private investment firm Brown Brothers Harriman, exploring its central role in the story of American wealth and its rise to global power Conspiracy theories have always swirled around Brown Brothers Harriman, and not without reason. Throughout the nineteenth century, when America was convulsed by a devastating financial panic essentially every twenty years, Brown Brothers quietly went from strength to strength, propping up the U.S. financial system at crucial moments and catalyzing successive booms, from the cotton trade and the steamship to the railroad, while largely managing to avoid the unwelcome attention that plagued some of its competitors. By the turn of the twentieth century, Brown Brothers was unquestionably at the heart of what was meant by an American Establishment. As America's reach extended beyond its shores, Brown Brothers worked hand in glove with the State Department, notably in Nicaragua in the early twentieth century, where the firm essentially took over the country's economy. To the Brown family, the virtue of their dealings was a given; their form of muscular Protestantism, forged on the playing fields of Groton and Yale, was the acme of civilization, and it was their duty to import that civilization to the world. When, during the Great Depression, Brown Brothers ensured their strength by merging with Averell Harriman's investment bank to form Brown Brothers Harriman, the die was cast for the role the firm would play on the global stage during World War II and thereafter, as its partners served at the highest levels of government to shape the international system that defines the world to this day. In Inside Money, acclaimed historian, commentator, and former financial executive Zachary Karabell offers the first full and frank look inside this institution against the backdrop of American history. Blessed with complete access to the company's archives, as well as a thrilling understanding of the larger forces at play, Karabell has created an X-ray of American power--financial, political, cultural--as it has evolved from the early 1800s to the present. Today, unlike many of its competitors, Brown Brothers Harriman remains a private partnership and a beacon of sustainable capitalism, having forgone the heady speculative upsides of the past thirty years but also having avoided any role in the devastating downsides. The firm is no longer in the command capsule of the American economy, but, arguably, that is to its credit. If its partners cleaved to any one adage over the generations, it is that a relentless pursuit of more can destroy more than it creates.

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His name is Zachary Carabelle. He has got his newest book that just came out May 18th, 2021, And so we're going to get a chance to speak with him here today. His name is Zachary Carabelle. He has got his newest book that just came out May 18th, 2021, Inside Money, Brown Brothers Harriman and the American Way of Power. And he is an author and columnist. He's the founder of the Progress Network at New America and the president of River Twice Research and River Twice Capital. Previously, he was the head of global strategies at EnvestNet, a publicly traded financial services firm. Prior to that, he was president of Fred Alger and Company. In addition, he ran the River Twice

Fund from 2011 to 2013, an alternative fund that focused on sustainability. Educated at Columbia, Oxford, and Harvard, where he received his PhD, he's written widely on history, economics, and international relations. Welcome to the show, Zachary. How are you? Thank you, Chris Voss. I'm pretty good. Awesome, Voss. It's wonderful to have you. So give us your plugs. Tell us where people can find out more about you in the book. There's a website, www.zacharycarabelle.com, which took me a considerable amount of time to come up with that URL. So I hope people will remember it. Or at Zachary Carabelle Twitter, also another extraordinarily difficult naming exercise. Had to hire a whole branding company for that and identification the book inside money can be found on amazon and apple and audible at barnes and noble and of course we all like to say at your

local independent bookstore which i actually do think is important to support or you can do bookshop.org which will buy it from some independent bookstore somewhere. So them's my plugs. There you go. Wherever fine books are sold. Wherever fine books are sold, as they say. As they say. So what motivates you on to write this book, Zachary?

So I once wrote a book about how money made America over the past 200 plus years. And I've studied American history. I've written a bunch of books about it. I've taught, I've had this sort of dual career as an academic and then inadvertent, but multi-decade career in finance and financial firms. So I thought about how could I bring those two things together, like my own personal peanut butter cup. And I then came on the idea of using this firm, which admittedly, many people have not heard of. I'd heard of them insofar as there was a triad of Brown Brothers Harriman partners in the middle of the 20th century, who became extremely central to the creation of the kind of global economic and international order that dominates

today, and one of whom was Prescott Bush, who was the senator from Connecticut from 1952 to 1960. But more important for our present time was the progenitor and the patriarch of the Bush family, the father of George H.W. Bush and the grandfather of George W. Bush. And his family fortune comes out of being a partner of Brown Brothers Harriman, but also a man named Averill Harriman, who is one of the architects of the American century, and also Robert Lov out, they are the longest lived private bank still in existence in the United States. And that in and of itself is not the reason to write a book. Living long is interesting, but not book worthy. But they are really present at every important, dramatic, critical juncture of how money makes America, how money builds the railroads and the transatlantic steam world and finances trade and finances the slave system and finances American extension of power into Central America and Latin America,

and then how the people who made the money of the 19th century make the world of the 20th. And then it leads into more of a meditation on what that capitalism was, warts and all, and what our capitalism is today and what it could be going forward. It's pretty interesting. I wasn't aware, I hadn't heard of these guys either. And I'm no Wall Street dude. I've done investing in Wall Street and stuff, but I never heard of them before.

And I was surprised to see that they were one of the oldest banks. By far. The other ones that survived, most of them would come from the 1870s and 1880s and Brown Brothers is the dawn of the oldest bank by far yeah the other ones that survived most of them would come from the 1870s and 1880s and brown brothers is the dawn of the 19th century and these kids like the pre goldman sachs where they're involved with the government they're they're the globalism is starting to really rise up and they're involved in fingers and pies everywhere and stuff tell us a

little bit about that yeah so obviously i i wrote the, so I admittedly have a self-interest in magnifying their role in American history. And I suppose one of the pushbacks could be the authors always do this, right? There's always that book where it's some sort of basic topic that you may or may not have heard of. And the subtitle is the secret recipe that made the world or the magical ingredient that changed humanity forever. But in the case of Brown Brothers, they really are an unheralded and have flown beneath the radar. And largely it's because they inculcate a culture from the time of the founder that they want to be beneath the radar, which is also one of the reasons why in the 60s and 70s, when, you know, Americans during the Vietnam War start reacting against the establishment, the WASP, the white male elites of whom Brown Brothers are the card carrying members.

Lots of people go to Yale, they go to Groton, they're in Skull and Bones. And because they're quietly behind the scenes, they're perceived as then pulling the levers in some sort of cabal-like way. But the reality is they don't want to be the story. They've never wanted to be the story they've never wanted to be the story when the current partners of brown brothers and and the irony being not only are they still in existence but they have 5 000 employees they make about 2 billion dollars in revenue a year they have about a 500 million dollars in profit this is hardly a a small bank on the corner but even today people sometimes go really are they they still around and no they're

not the size of goldman and these other places but that's not exactly small potatoes but they don't want to be the story they've never wanted to be the story they every day they wake up and their name's not in the news is a good day and i had to assure them when i wrote the book that this was not going to be a hit job nor was it going to be a love letter oh wow so you didn't need i didn't need their cooperation by the way all their archives are no longer in the firm. So it didn't matter whether I was writing a hit job or a love letter from the perspective of there was no veto power on the part of the firm over me writing the book. Interesting.

So how does this firm get started? What is the origins of this firm? It's like most American stories. It starts with an immigrant. And in this case, it starts with an Irish linen merchant, Northern Ireland, in the Belfast region, who is Protestant, and is fleeing the troubles of Ireland after a bout of, in the 1790s, both Protestant and Catholics came together to try to reject English rule. And then when that failed, start fighting with each other. And Alexander Brown was his name, had no interest in these sectarian conflicts. He wanted to be a merchant and was. And he moves to Baltimore in 1800 because a cousin

of his had moved to Baltimore and then begins to set up a family merchant empire. So like all things American, it begins with an immigrant and it begins with a middle-class immigrant trying to make his way and trying to establish something for his family. And he has four sons and each of the sons are dispatched to different cities, as had been the case with the Rothschilds and the Fugers. Merchant empires tended to be family collectives because when you have people thousands of miles apart, one of the only ways you have any trust that if you send a shipment to another place that you'll get paid or when you send payment to another place, you'll get your goods is the bonds of family trust. So that wasn't particularly unusual.

But the firm, the culture that Alexander inculcates and teaches his sons, that they then teach their sons, who then teach their sons. And admittedly, it's all sons, it's all men, and it's all white. That's just the reality of this particular firm. And the extraordinary thing is that culture, rather than getting dissipated and diluted the way it does for Goldman or Lehman or these other firms, all of whom go public and become these mega companies in the 70s, 80s, and 90s, Brown Brothers never goes that route, which is one of the reasons why no one writes about it, because it never became too big to fail. So are they a public company now, or are they still privately held? They are still a private partnership.

And a lot of the point of the book ultimately is that private partnerships create structural constraints on the amount of money you can risk. And their culture was really a culture that respected the power of money, not just to create and enrich people, but also the power to disrupt and destroy. Because if you lived in the 19th century in the United States, every 20 years, metronomically, there's a massive crisis that we call panics in 1819, in 1837, in 1857, in 1873, in 1893, in 190707. And then of course in 1929. And each of those follow a kind of speculative, heady, oh my God, we're going to make a lot of money. And then everything crashes and people lose everything and firms go to business. And the Browns kind of watch this

generation by generation, decade by decade. And we're like, look, money can create and make you rich. Sure. But if you get too far ahead of your skis, it can also destroy and disrupt. And so how do you find that kind of noble mean between creation and destruction? And because they're a partnership, it's always their money. So you can't bet other people's money. You're wagering your own.

You can get other people to join you. And I think that creates a very different culture of capitalism than all these partnerships were. Goldman was a partnership. Lehman was a partnership. J partnerships were. Goldman was a partnership. Lehman was a partnership. J.P. Morgan was a partnership. But the Brown Brothers was not just a partnership. It was a partnership with a culture of really respecting the risks that come with money and being really mindful of them in a way that I think sounds almost alien to the financial world today, where the gains are the focus and the risks are an

afterthought. And part of the reason for that, I'll wrap up my moment right now with this, is that we live in a world today where gains are still privatized, but risks go to someone else. If you run one of these firms today, you could make $10 million, but you're almost certainly not going to personally lose $10 million. And so the risk reward benefit is, hey, I can go for the moon here and if I fail and maybe I have egg on my face and maybe I lose my job, but I don't lose my home. But the public and the shareholders could lose a lot. If you're a partnership, every big deal is a big deal. And it changes, I think, the calculus of risk. And Brown Brothers has never lost sight of that, unlike almost every other firm.

So that's interesting. We had somebody on recently, if I recall rightly. There was a video I was watching. They were talking about how one of the problems that lead to these huge crises is, in fact, I think it was a gentleman who was in the Carter Reagan administration on recently, and he did the book 200 failures or something like that of economic failures. And he talked about how one of the problems with the big failures of the dot-com booms and then the mortgage crisis was that a lot of the firms, they knew that the government would bail them out. The

government would come in and give them money. But in the meantime, all the homeowners took the hit in the mortgage crisis. And what he claimed it did was it encouraged people to take more risks and be more stupid at the Wall Street level because they knew that the government would bail them out and they'd end up fine. And it's usually, like you say, the shareholders that take the beating. So it's interesting in that perspective. Yeah. And look, things have changed in the way we understand capitalism, the way we understand finance capitalism. And I think there was a model that Brown Brothers Harriman both creates and replicates over time that, again, did not preclude them from being central players in the cotton trade i am not in any way saying oh you know what a magical firm if only everyone could be that i

am saying that there was a culture that was inculcated over generations that one respected risk because structurally they bore risk two understood the immense power of money the same way like nuclear physicists in the 30s understood that if you unlock the power of the atom, you could light a city or you could destroy a city. But that power goes in either direction. And it's really up to human beings and culture to create guardrails. And sometimes you have to guard, in order to guard against the destructive power, you have to limit the upside. And Brown Brothers understood that about money and still understands that about money. It doesn't mean they weren't individually greedy. It doesn't mean they weren't exclusive. It doesn't mean they weren't at times complicit

in really problematic systems. So I'm not saying, hey, let's all go back. Going back is not tenable. It's not possible, and it's not desirable. But teasing out some of the lessons, and the other one, which I alluded to before we get into, the reason why that triad of partners at the middle of the 20th century had such a profound effect on shaping the global system during World War II and after World War II is because they believed that the public good was an obligation for those who have made immense private gain. That you can't thrive individually

unless the public thrives. And that was true from the firm, even in the 1820s. Brown Brothers and Alexander and his sons in Baltimore in 1828 spearhead the building of the first railroad in the United States, the B& the bno railroad the baltimore and ohio the monopoly square railroad first time anyone had built a metal car pulled by a steam

engine not by horses it was the moon shot of its day and they undertake this because alexander is worried that baltimore is going to fall behind new york and philadelphia economically which it was and it did and that the only way to maybe save New York and Philadelphia economically, which it was and it did. And that the only way to maybe save it, the Hail Mary, was if you build this railroad across the Appalachians into the Ohio River Valley. And they do build the railroad and they make no money on it. It's a public works undertaken by private enterprise because the government in those years wasn't going to pay for it. The state of Maryland paid a little bit in Baltimore. But they do it as a public works because they believe that unless their community, in this case Baltimore, thrived, it was going to limit how much they could thrive. So this kind of mesh of self-interest and self-serving, selfish and selfless, but that the public good has to be attended to. And that's also not a familiar mantra in our world today for elites.

Yeah. Yeah. That was a Thomas Fartarian to the book, 200 years of American financial panics. And I referenced earlier, do we have a problem in this country of unfettered capitalism? And are these folks on the better end of uh capitalism and do we have a problem like that or i think we do but i think what's fascinating about the fetters is that they were

self-imposed they were not imposed upon them and that raises a very interesting question of like how far can regulation take you unless your actual culture takes you there as well. So regulation can clearly stop people from doing certain things. It's not clear that regulation can get people to do certain things. You could tax people. You could say you can't do those deals. But could you create a culture of public service

or an awareness that my private gain and our public good are linked? Could regulation and laws do that? I'm much more skeptical of that. I'm not, this is, I'm not going to get into a debate about regulation. My point is it's the culture that inculcates that value system that leads to the Fed or the, it leads to a more balanced form of capitalism. And look, I'm also clear in the book that Brown brothers was like 200 years of of male ramrod rectitude right these guys were straight as an arrow they were not the gordon gecko or the wolf of wall street

leonardo dicaprio which in a weird way as much as we we demonize as being the epitome of a kind of greed that destroys we also somewhat lionize and celebrate it you watch these movies about these guys and you're like oh they're shitty they're also cool and we don't celebrate the small c conservative and i'm not saying in the book that that everything should be that right i've said a bunch of times but brown brother sireman would never have underwritten elon. And you want somebody to, whether you love him or hate him, the point is you want somebody to fund really speculative dreams and moonshots. But you don't want everyone at the center of a volatile system trying to be that, trying to fund that, trying to make a hundred X. And the problem now is the balance of our system is completely skewed toward the, let's take the risk and be speculative. And the problem now is the balance of our system is completely skewed

toward the, let's take the risk and be speculative. And sometimes that works very well. But as we know from multiple times over the past 20 years, sometimes it fails and we all pay the price colossally. Yeah, we all do. It's crazy, man. So you tell the story of this, were they, I believe they would have been in place before the federal reserve was created. Were they basically like an early federal Reserve to the U.S. government? Yeah, I mean, they and J.P. Morgan, what you had is a kind of, and I read about this in the book, one of the great moments, important moments in American 19th century history is this war over the chartering of the Second Bank of the United States, which was like a early precursor progenitor

to the Federal Reserve, although it didn't have the same kind of power. And Andrew Jackson comes into office representing the heartland of the time, the Mississippi Valley, the Ohio River Valley, and was an early populist. And they hated the Bank of the United States because they thought it was coastal elites lining their pockets with the hard-earned labor of these yeoman frontier people carving out a new nation. But the irony is, and part of what I write about a book, in order to carve out that new nation, you needed all these local regional banks that were called wildcat banks, which is print money was abandoned. And yeah, it made it easy to get money if you wanted a loan and you wanted a mortgage. But also meant those banks had a real tendency to run out

of money. When people got scared, right? They were called panics because people freaked out. They ran to the bank. There was a run on the bank. And if you didn't run to the bank quickly enough, the bank ran out of money. And when the bank was out of money, it was out of money. There was no Federal Deposit Insurance Corporation. There was no backstop. So you had a lot of private banks like Brown Brothers, like J.P. Morgan, like Morgan Stanley later on in the 19th century that were like their own money centers that provided liquidity to the system when needed. And Brown Brothers in particular actually provided these letters of credit that made all transatlantic trade possible. Their letters of credit were the primary means for everybody doing trade in the 19th century. There were some other companies as well.

Unheralded stuff, but without it, you don't have the trading system. So it was all private before the Federal Reserve. That's crazy, man. That's crazy. So what are some other stories that stick out in the book that you can tease out to readers that are going to be salacious for them to check out? One is in 1912, the US government sends a contingent of Marines led by one of the great unsung characters of American 20th century history, a Marine general named Smedley Butler. You can't make that name up, right? If you put that in a screenplay or movie, somebody would go, really? Sounds like something from Blazing Saddles. You'd think. But no, he was a tough, interesting Marine who carried out a lot of American foreign policy in Central America as the United States begins to flex its imperial muscles regionally in the Caribbean, first a lot of turmoil in Nicaragua, and there was some legitimate fear that those debts and American economic interests in the country would be jeopardized, and maybe even some American citizens in Managua.

And working with the State Department, Brown Brothers manages to convince the government that some troops should be dispatched to maintain order in this bubbling civil war. And Smedley Butler lands with a contingent of Marines. And that begins what is a multi-year and ultimately multi-decade on again, off again occupation of Nicaragua until Anastasio Somoza comes into power. And then his son who remained in power

until the Sandinistas take over in the 1980s or until the Sandinista civil war in the 1980s. And Brown Brothers essentially is the conduit for the beginning of a certain type of american imperialism in central america along with some other firms in this period of dollar diplomacy such that the nation magazine which ironically enough brown brothers helps found and fund in 1865 calls nicaragua the republic of brown brothers and here once again they're one of the ways in which American power begins to extend itself out into the world. And then, as I said before,

you have this triad of partners who, you know, between them, along with a small group of other people, all of whom went to Yale or related schools, all went to the same kind of boarding schools like Groton and St. George's and lawrenceville and had a similar world view of those with great power bear great responsibility i continue to joke this is the spider-man view of history right and but they believed it they were inculcated in it and they believed it and they acted upon it and they create the united nations and the world trade organization which was then called gat and the bre Trade Organization, which was then called GATT, and the Bretton Woods system, which establishes the dollar as the global currency, which it remains today, and the Pentagon and the National Security Council and a lot of the Cold War. These guys were the drivers of this system.

That's what's really interesting about your book and the story is these guys really helped build everything that we utilize today and the systems that we have yeah they are the unsung is probably not the right word they're like the hidden architects and hidden to me is not conspiratorial the belief is always that because these secret societies that you did your handshake and you got in the room and then you took off your coat grabbed a scotch and a cigar and talked about how we're going to rule the world um everything up to how are we going to rule the world was true right they were a closed-knit elite that if you weren't either born into it or somehow married into it or educated into it you weren't going to be in it and it united railroad fortunes e.h harriman was

one of the great railroad barons and helped create the Union Pacific and was also the object of Teddy Roosevelt's one huge act of trust busting when he breaks up the Northern Securities Trust, which is this railroad combine to basically control the preponderance of all rail lines in the United States. That's where the Harriman fortune comes from. These were interlinked, and that's where the Bush family comes in. And it's been a source, especially in the 20th century, of kind of, aha, these are the guys behind the scenes pulling the levers in the shadows. In the shadows. We do the same thing in my Illuminati meetings. Yeah, Tuesday every day at Starbucks. And we miss you.

Yeah, yeah. And then we do our star And we miss you. We put it in a different place. I appreciate that. Yeah, yeah. And then we do our star of, what was that Michael Douglas movie? Anyway. Oh, the Star Chamber one. We do. Yeah, we do our Star Chamber on Wednesdays at the same Starbucks. So, you know, we're in there.

My Illuminati chapter splits time with the Masons. Do they? Yeah, because it's tough in New York and prices are down. Now it's better with because prices are down yeah we probably can get our own space you have to fight with the masons over that sometimes the masons are a pain in my ass that's all i could say they think they control everything and little it's hard to argue with these guys you're like there you go so anything we've missed or we haven't talked about on the book that we should cover? I think that this, you know,

and I learned from writing the story of this about the ways in which capitalism is not a static system. And I do think in a world where we're debating the role of government and the role of private industry and the inequities and what should be the equities of a system, we're having this conversation during a week when there was these revelations about what the actual tax rate is of the 25 largest billionaires in the United States. And I think part of what that speaks to is that the very wealthy in our world today

in what is supposedly a more meritocratic open system, we don't accept the idea of an elite. We've rejected the idea of an elite. We've rejected the idea of an establishment. So we've created this kind of image of an open, inclusive capitalism, when in many ways, it's a shareholder capitalism where we talked about before, where risks go to other people, gains go to individuals or to individual entities. But the connection between that and public good is far more tenuous and that is a cultural change it's also a structural change and yes warren buffett and bill gates and a lot of these other

people talked about the the giving pledge where they would give away half of their net worth and and create these philanthropies that would then give it back but there's a big difference between private philanthropies and engaging in the public good. And I'm really struck by the absence of the tech elite and to some degree, the financial elite in having any role in shaping a public conversation, whether that's actually going into government or simply recognizing that they have to be at the table. I'm sure you've talked about those in your show with other people. One of the only things that Elizabeth Warren, Bernie Sanders, Tom Cotton, and Josh Hawley agree with is that tech companies are too big

and should be broken up and all these other things. And it's like tech executives seem absent from the conversation of, yeah, we recognize that we have assumed, particularly after the pandemic, an incredibly central role in everybody's lives. And what are our responsibilities there in terms of profit, wealth, privacy, access? And I think an earlier group of elite, whether they consciously knew it, they were all inculcated with this idea of this Latin motto that Groton had, to reign is to serve, that service follows power. And look,

when I talk about this i feel myself having a certain degree of wouldn't that be nice but it's not the wouldn't it be nice i want to go back to that world again i wouldn't have any seat at that table by upbringing but i do believe that you could reintroduce or introduce in a new way that value system into our both power elite culture today and just our general culture but i don't thrive unless you thrive the the ceo of goldman sachs started talking i think in the last year or two about realizing that if they don't shift themselves away from wall street profits and then you start caring about the american worker and maybe caring about other things he put that out there i think in a speech or once or twice.

Yeah, the head of BlackRock, a guy named Larry Fink, who's the head of the largest asset management company in the world, and the business roundtable. I do think you are having companies begin to shift their speaking toward this. I guess the term today is stakeholder capitalism, not just shareholder. You know, the workers matter, the public collective matters, not just your public or private gain. It's not that present in the tech world, either because tech companies think that they're in a utopian way, accelerating the evolution of humanity towards some sort of

better connected future that zoom is, is the answer to our isolation. So yeah, I do think there are some signs of that, as you point out, but that doesn't mean that it's really embedded yet in the way we literally do business. Yeah. For all I know, it's just poppycock chat. When I heard those words from Goldman Sachs CEO, I was like, they're starting to get worried about a French revolution, an ether-rich guillotine coming of age sometime soon. Yeah, and that's a healthy fear. That is a healthy fear. I don't ever want to be on the back, on whatever part of a guillotine there is. Or back. Don't be under it.

So there you go. What do you hope readers come away with? What do you hope they learn? I hope that they learn a bit about, even more about the central role of money in America. And what I mean by that is in the 19th century, it was easier in the United States to get money and make money than anywhere in the world ever before. And liquid money, paper money, because most parts of the world until the 20th century, money was land, money was people, labor, money was gold, money was silver, money wasn't liquid. So

transferring hard assets into energy, into capital that could build a business or build a homestead or build a railroad or create an amazing company, that was just hard to do. It's hard to gather the resources to do that. And the United States has a uniquely fluid and chaotic and messy ability to create money. And at the center of it, you had some bankers like Brown Brothers who were far more state and conservative. And you want that. You want the calm at the center of that storm. Or I guess if you're going to be really crude about it, you want your dealers not to be junkies. and i think appreciating the role of money in making america and the way in which there's a particular global system that is a product of a formula that worked in the united states of how business is done do you talk in the book at all anything about cryptocurrency and its impact

on the future of yeah because the grandmothers in cryptocurrency would be like a teetotaler and a martini they're not they're not a good combo. Yeah. It's interesting how that can affect the value of the dollar in a central bank and how the dollar is used around the world and how China seems to have really supported cryptocurrency to try and take the American dollar off of the mainstream market. Because the dollar has been one of the underpinnings of American power and still is. It gives us immense latitude. And a dollar system was what these men created in the middle of the 20th century after World War II to replace the British pound with the U.S. dollar as the primary lubricant for global trade, which gives us a lot of latitude relative to South Africa or Egypt, meaning we can print money more easily. It's not easy to tell us not to. You can't cut the United States off. No matter how much China has

become a global economic power, it's not really that zero sum. The United States remains massively powerful. And that, again, was a world these men made. And it's a world we're still living in. I think people forget that for all the change, we still live in an economic system that begins largely in 1945 and whose institutions begin in 1945 and have not been replaced. Wow. That tells you where we're going in the future. It'll be, do we,

does China to really give rise, they're going to be a, a, just a powerhouse because they're buying power and being a market in and of themselves. Do they also have to overthrow the dollar being the number one currency traded thing to really become the controllers of this world? First off, it's a whole separate topic. It's unclear they have any interest in being controllers of the world. It's totally clear that they wish to be total controllers of their own fate and answerable to no one, especially to the United States. So the Chinese government's desire to be untouchable and uncoercable and invulnerable,

just like the United States wishes much the same thing. I think that's undeniable. But that doesn't require China to have global economic dominance. And the interesting thing is China has been able to keep its internal economy relatively dollar free, relatively, not totally by any means, because of what you just said, the size of its market, the robustness of just an internal economy of 1.4 billion people and a rising middle class so they need to create a world where the dollar where they are not dependent on the dollar which they are increasingly doing but i'm not clear that they need to create a world without the dollar that's interesting but there's lots of other parts of the world that want to be without the dollar because nobody wants to be told what to do fundamentally and our power over the dollar gives us power over what we want to do for politics or influence of what we want to do.

For sanctions. Our banking system, we can cut people off from the banking system. We can tell people whether you agree with our policies towards Iran or North Korea or even China sanctions. You have to do them or we'll cut you off from the dollar-denominated banking system, which is economic death for most countries. Yeah. I don't think most people realize how those are jointly tied together and everything else. Yeah. Powerful. So Zachary, it's been wonderful to have you spend time with us here today and educate us on your

book. Give us your plug so people can look you up on the interwebs. So my plug is good story, Father's Day. Everybody's got a father. Inside Money, Brown Brothers Harriman and the American Way of Power. And it really is about the American way of power. It is the story of this firm, but it is a story of how America rose to global power and where it leaves us now in our version of capitalism. And I ended up learning more writing this book than I thought I would. And I think it's a story that people can read. It's not just a series of talking points that you should listen to. I think this is really interesting. Just everything about how it built America.

And it's one of those unsung, untold stories. So I think it's great you covered this in your book. Thanks, Zachary, for coming by the show today and spending your time with us. Thank you for having me, Chris. There you guys go. Check out the book Inside Money. You're going to take a look at it. Brown Brothers Harriman and the American Way of Power.

Be sure to get it. May 18th, 2021 just came out. So you want to pick that baby up. Go to youtube.com, Fortune's Chris Voss. See the video versions of our interviews. You can go to goodreads.com, Fortune's Chris Voss to see everything we're reading and reviewing over there. Also go to all of our groups on Facebook, LinkedIn, Twitter, Instagram. There's a whole mess of stuff

you can take a look at. Thanks to my audience for tuning in and we'll see you guys next time.