Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
of Uncertainty
of Countervailing
Power
of Controversy
Crash, 1929
Affluent Society
Liberal
Hour
Economic Development
The Scotch
The New
Industrial State
The Triumph
Indian Painting {with Mohindcr Singh Randhawa)
Ambassador s Journal
Economics, Pt'ace and Laughter
A C-hina
Passage
Money: Whence
It
Came, Where
It
Went
The Age
John Kenneth
of Uncertainty
Galbraith
Houghton
Boston
Mifflin
Company
1977
No
part of this
any form by any means, electronic or mechanical, including photocopying and recording, or by any information storage or retrieval system, without permission in writing from the publisher.
Library of Congress Cataloging in PubUcation Data
Galbraith,
The age
in 1977.
of uncertainty.
Based on a
BBC
Includes index.
1.
I.
Economics
Title.
History.
2.
Economic
history.
76-26965
10
987654321
of Uncertainty
7
of Classical Capitalism
11
of
High Capitalism
77
43
Marx
109
5.
6. 7. 8. 9.
133
Fall of
Money
227 257
161
197
280 303
324
343
345
List of Illustrations
349
Index
355
of Uncertainty
in 1973, as
ni}'
mind,
to
received a
call
BBC
call
in
London.
at
He w anted
know
if I
v\'ouId
do a
tele\'ision series
The
came
me. Harvard
tell
is
professors are required by a custom thai must reach back to the Pilgrims to
how deeply
most
they are in love with their teaching. Even those whose boredom
The
perpetration
had been finding increasingh' difficult. Once or tw ice I had caught myself looking at the ranks of eager young faces with mild revulsion. A terrible thing. I was thinking of retiring. Why not do so and tr> the \ ast, impersonal
audience of television? There was,
hear the sets clicking
,
had been
told,
What if a man dozed, a couple left? It had been a hard da\ love had its claims, and anyhow I wouldn't know After less than decent hesitation, I accepted. I sat down with the men Adrian Malone, Dick Gilling, Mick Jackson, David Kennard who w ere, for the next three years,
off.
.
to
be
my
We
sounded well:
"The Age of Lfncertainty for the series. It thought; and it suggested the basic theme: we
"
certainties in
economic thought
in
with the great uncertaint\ with w hich problems are faced in our time. In the
and the
meant
complexity of the
As our
far
theme emerged.
It
for
The
are those by which people and governments are guided. Thus thc\ help to
shape history
itself.
What men
pou er
dangers of the state has a bearing on the laws they enact or do not enact
on
or entrust to
market
fall
First,
the
men and
World.
the ideas,
Adam
in Britain, Ireland
and the
history.
New
First, the
This would be the division within the early programs as in the early chapters
oi this
hook. But
it
would
also
be the sequence
from
in
certain time
stitutions.
we would
last of
shift
men
is
to
The
deal
mean
is
that
he
it is
only
who
here to
stay. Ideas
institutions
and
this
book, were
An
to
enterprise for television such as this lends itself to an obvious and easy
specialization.
The substance would be mine; the presentation would belong m> colleagues of the BBC. Had this division been pressed, the results would
was only
m\
And
in
doing
so,
my thinking,
added greatly
turn,
to my information. The benefits carry over into this book. In was generally less important, I suggested subjects and locations for pictures and occasionally how something might be given visual meaning. My association with the BBC did not end with producers and directors. The British Broadcasting Corporation, as everyone must know, is a very great organization. In the world of responsible television there are the BBC and some others. Its genius lies in the quality of the people it attracts and also in the feeling of everyone the talented cameramen, sound men, lighting men,
though
it
production assistants,
stall
persons
re-
who
encounters
realizes,
is
writing. The discipline of time is relentless. An hour on Karl Marx may seem to some viewers very long; in relation to his long, intense, varied and prodigiously active life it is onh a minute. The problem is not simplification; one can state a central point briefly and with accuracy and clarity, and one must expect to be held to accoimt if he does not. The discipline of time manifests
itself in
to
be intensely personal;
to say
about
Adam
Smith, Ricardo,
Maynard Keynes
telex ision
his selection
is
reasonably
those who,
all
available diplomacy
and
tact to
is
is
thing that
is
accurate to knowledge.
carried by the pictures, part b\
the words.
No one
\\
will publish
A motion picture or
It
must
also
be
an
written in the knowledge that the viewer has only one chance. Perhaps for
programs such as
in contrast,
this
there should, on
s
difficult points,
be provision
eye
for
discretion.
But there
isn't.
The w riter
his
of a book,
to tra\el
will,
on occasion, allow
be covered. These were the basic material from w liich the television scripts were developed. From the original essays, amended by the scripts, I then wrote
the book.
the television programs. Happily one does not ha\'c to limit a chapter to
p*
can be read
an hour
not
what
yet.
to illus-
emerged from m\
But
I
BBC
witli
an enhanced respect
is
do not
obsolete or obsolescent.
1.
Classical
Capitahsm
On one
Keynes
observed that
l:)oth
when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences,
are usually the slaves of
in 1935.
Thinking then of the oratory of Adolf Hitler, Joseph Goebbels and Julius
was at the time in full tide, and of Alfred Rosenberg and Houston Stewart Chamberlain from whose writings they drev\' their racial doctrines, he added: "Madmen in authority, who hear voices in the air, are distilling their frcnz> from some academic scribbler of a few years back."Streicher which
Then came
his affirmation;
is
vastly
modern
in
con-
sequence. Presumably
This
is
know by what we
are governed.
so
his point.
For
in
economic
affairs
interest.
They are
of
severe. In
is
dail\- political
discussion
indi\idual
lelt, lil)eral
or of socialism.
the
same
action on
or on
all
who
ment
or inflation in
isn't
much
differto
liberals or social
democrats
will
be forced
The
Also
we had
best not close our eyes too completely to the idea of vested
to protect
is
interest.
tendenc\
to
see as
may be
They are
also
11
of Classical Capitalism
interpret
of
time, as did the economic institutions that they seek to explain. But there
is
generally agreed point at which one can begin. In the last half
life in
Britain,
and
in lesser
measure
elsewhere
in
also in
bv a succession of mechanical inventions. These were the steam engine and a series of remarkable innovations in textile manufacturing; the flying shuttle (which came early) was followed by the spinning jenny, water frame, spinning
(as
it
by the rich, an indispensable utilit\ for the poor. The hand-spinning and weaving of cloth were infinitely tedious, costly processes; the purchase ot a coat bv an average citizen was an action comparable in modern times to the purchase of an automobile or even a house. The new machines took the manufacture of cloth out of the household and into the mills and
made
an item
oi
mass consumption.
With the textile revolution went a more general instinct h)r technical change and a vast confidence and pride in its results. It was something like the great burst of confidence in technology and its wonders that followed World War II. With the Industrial Revolution went yet another in economic thought. an These ideas had a sense of the world to come but they were also deeply influenced by the world that liad always been. That important point was overwhelmingly the world of agriculture. Nor could it have been otherwise. LIntil then economic life, a tiny minority of the privileged apart, had
food, meant supplying one's self and one's family with only three things clothing and shelter. And all of these came from the land. Food, of course, did. So did skins, wool and vegetable fibers. And houses, such as they were, came
forest,
quarry or brick
kiln. Until
and
in
many
tural economics.
The Landscape
Economists have recurrently tried to depict the economic system for the layman as a machine. Raw materials arc fed into it; the workers turn it; the
capitalist
owns
it;
its
a better
was overwhelmingly rural. The workers w ere mostly employed in agriculture. Income and power, two things that ha\ e usualK gone together, were indicated by the size and magnificence ol the dwellings in which people lived; those of the farm laborers were many and mean. The
Industrial Revolution,
it
12
The Founder
The house
of the landlord
was the
It's
worth having
in
power but
Neither the power of the state nor that of the landowners was plenary. In England by the time of the Industrial Revolution, by the workings of law and custom, tenant farmers and even farm workers had acquired certain minimal
defenses against the power of their landlords. There were rules governing
compensation and expulsion that had to be respected. And at Runnymede in 1215, a great convocation had combined an historic commitment to human liberty with an even more immediate concern for the rights properly
their
appurtenant to real estate. In consequence, the position of the large landowners had been substantially protected against the incursions of the King.
who worked were far less well protected from their landlords; both landless and landed were far more vulnerable to the ever more insistent claims of the King. So it was in most of the rest of Europe, and increasingly it was so as one moved east and to Asia. In India in the distant domain of the Moghuls to whose
England, however, was an advanced case. In France the peasants
the land
gorgeous courts
in
more
way
all
land was
considered to be
owned
in
the
manner
Moghul
himself.
The Founder
It
would be
reckless,
maybe
in these
days even a
All races
with the exception of the Irish who doubtless can protest their devotion to higher arts.'' But in relation to population no one can question the eminence of
the Scotch, as properly they
may be called. (Only in the last century did whisky name.) The only truly distinguished competition is
first
The
greatest of
economist,
Adam
Smith. Econ-
omists do not have a great reputation for agreeing with one another
but on
it is
is
wide agreement.
If
town of Kirkcaldy on the north side of the Firth of Forth in 1723. The father of the man whose name would ever after be linked with freedom of trade was a customs official.
born, or
baptized, in the small port
He was
anyhow
13
The Founder
The Founder
is remembered vvarniK hut a trifle erraticalh in his native town. In went for se\eral golden da\ s to Scotland to help celebrate the 250th anniversary of Smith's birth. It was June; \\ lien it docs not rain, there is no countryside in all the world more tranquil and lovely than that around Edinburgh and across the Firth of Forth. But in the last century Kirkcaldy became
Smith
I
1973,
the linoleum capital of the world; the industry has since declined but enough
air was better in Smith's As visitors, we were housed on the golf courses of St. Andrews some twenty miles awa\ One da\ I rode to the celebrations with a Kirkcakh cab
.
and James Callaghan, pre\iousl\ Chancellor of the Exchequer, as of this writing Prime Minister, and a friend. "I expect," Jim said to our dri\ er as we were on our wa> "that you're prett>' proud hereabouts of being from the same town as Adam Smith? You know a good deal about him, I suppose?"
driver
,
Part\
alw ays
heard.
His impressions of
Oxford were adverse; he later held that the Oxford public professors, as those
with a salary were called, did no work. They got their pa\ an\ wa\ so wh\
should the> bother.
Men
do
professors
were a metaphor of
his
economic system.
their best
when
and the penalties of sloth. It was equally important that people be free to seek the work or conduct the business that would reward their efforts. What so served the individual, got him the most, then best served
diligence or intelligence
the societ\'
b\'
getting
it
the most.
to Scotland to lecture his long friendship
on English literature at
Hume.
first
of logic,
number of remember
when
taught there
before World
dull
War II. Professors who were lazy or incompetent or merelv and w ho w ere being deserted in clro\ es by their students attributed their small classes to the importance of their subject and the attendant rigor of
their instruction.
They argued,
made
put,
it
Though
their
argument w
as plausib]\
seemed
to
me
who
b\ the
American
colonies, a
,
w hich he
Benjamin
15
of Classical Capitalism
Quakers
in
all
negro slaves,
1763, self-interest
offered a post as
us that their number cannot be very great. In overcame high principle and captured Smith. He was tutor to the young Duke of Buccleuch a family which was
may satisfy
then (as
border.
still)
The
the end. Smith resigned his professorship and took his young charge off to the
Continent on the Grand Tom-. In the manner of young aristocrats the young
man
evidently survived this education without any historic effect. For Smith
it
on the border between France and Switzerland. The archaeological ruins that
once housed the financial enterprises of Mr. Bernard Cornfeld are only a few
hundred yards away. The border location was chosen in both cases for the same reason the need for international movement in advance of hostile authority. The occupant of the chateau was Fran(^ois-Marie Arouet, called
Voltaire.
One
visit
language. Smith was having a wretched time with his French. Voltaire spoke
excellent English. Voltaire always regarded
of political liberty
England as an island quite literally and freedom of thought, and he had lived there for more
in
which stands on a
small, tree-covered
hill
as appropriate to a
man
of the
Age
of Reason
perhaps,
It's
in this respect,
;
that
it is
the house of a
Voltaire
was a man
man
of affluence.
a munificent dwelling.
is
one that
to
Where
things are
display subtlety of mind. For both Smith and Voltaire reason required that one
and comprehensively on all the relevant and available information. Thus one made decisions. By this standard Adam Smith was also supremely a man of reason. He had a simply unlimited appetite for information. He gathered it, digested it and allow ed it to guide his thoughts. These led him into new paths, made him a pioneer.
instead one brought the
to
mind
bear
fully
France was
for
1765, he .saw, as
one
still
16
Man of Reason
who seem
appropriately nervous.
of Classical Capitalism
4
hiiiiKired
soil.
men
in
wlio work
it
and
tlic
OnI\
France
is tlic
villages,
major topic of interest and concern and also of scholarly dispute. At the time of
agricultural faith of
France was
at
its
peak.
It
was
in
known
the
gift of
ield a surplus
manufacture yielded no such gain. They were necessary but they were
The
its
"produit net"
sustained
all
other
was tlie basic industry, the only basic industry. There is proof here of Keynes's assertion that no economic idea is ever truly dead. For a time in my youth I served as research director for the American Farm Bureau Federation, the I)ig, conservative tarm organization, farmproducers. Agricultiu-c
hum
lobb\
in
its
power. Each
wealth
is
the soiuce of
all
halls.
not yet
tlie
When
i:)oliticians
campaign
still
h)r the
message
ot physiocrac\ ma\'
is
be heard. '"Yours,
feeds
my
friends,
is
the basic
the
man who
them
all."
Smith met the Physiocrats at Paris and Versailles. The one who impressed him most and the most original of mind w as Francois Quesnay, the physician, no less, to Louis XV. Quesnay was the friend of Madame de Pompadour, and
she was his patron at the court.
Like UKJst people without adequate occupation, the denizens ot Versailles
were alwa\s open to ingenious no\elt\ The French countryside was later glorified by Marie Antoinette's model \illage, Le Hameau, which can still be seen. The French rural econom\ was celebrated with similar ingenuit\ by Quesnay's famous Tableau Economiqiic. The Tableau was an effort to show in quantitative terms the relationships of the principal parts of the economic to show how much product farmers, landlords, merchants received system from each other and how much income they passed back to each other in
.
return.
to
be taken more
to
Marie Antoinette's
Adam
do
with the rejection. His authoril\ was great, and he thought economic scholarship
if
modern econ-
no particular
use.
18
is
cr"'
'-^c^^V'-
-i
-i
........
*^
iJEJ^tf^S-'^iS^
,-2:
Classical Capitalism
But
in
The
table
(really
and buys
to cal-
an idea
in distant
Dr. Quesnay.
Another of tlie Physiocrats visited by Smith was Anne Robert Jacques Turgot. With liis colleagues Tiugot believed that public expenditure and therewith the burden of taxation on enterprise or, as the Physiocrats saw it, on agriculture should be kept to a minimum. This should be done by and the "produit net"
power and function of the state. became Comptroller-General of France, and his task w as to curb the extravagance of the French court and thus to reduce the burden on
limiting the
In 1774, Turgot
He
failed.
risk their
no doubt a reason.
seem
God-given
top
right.
to injustice
a trivial thing
compared with
tJie
was
in the
Ancien Regime.
When
relorm irom
became
impossible, revolution
The Wealth
of Nations
Long before Turgot was dismissed. Smith had taken the lessons of his travel back to Scotland. He was at work on his great book, and his friends had come to wonder if he would ever finish it. It was thought that he might be one of that great company of scholars, famous in the better universities to this day, which makes work on a forthcoming book (and conversation on its rigor and high
.scholarK merit) a substitute for ever publishing
it.
was innm-diate. and the first printing of An Iiuiuinj into llie Nature and Causes oj the Wealth of Nations sold out in six montlis, a fact which would be more interesting it we knew the size of tiie printing. Distributed through, and sometimes all but lost in, the vast array of information which the book contained was the great thought that may well have originated with observing the Oxford professors.
Eventually, in 1776,
lie
did publisli
it;
the acclaim
The wealth of a nation results from the diligent pursuit by each of its citizens ot his own interests when he reaps the resulting reward or suiters any resulting penalties. In serving his own interests, the individual serves the
22
is
guided to do so as though b\ an
visible, inept
and predacious
hand These too are ideas that have li\ed in oratory. Let businessmen meet now anywhere in the nonsocialist world, and the praise of self-interest
usually modified to enlightened self-interest
also resounds.
self-interest, the
wealth
ot
a nation
was
also
enhanced by the
division of labor.
efficiency of specialization
To
this
were from
and some
productive powers of labour, and the greater part of the skill, dexterity, and judgment with which it is anywhere directed, or applied, seem to have been
the effects of the division of labour."
^
Here
pins
is
how Smith
in his
he must have encountered the manufacture of and obser\'ed the process with his usual care:
One man draws out the wire, another straights it, a third cuts it, a fourth points it, a fifth grinds it make the head requires two or three distinct operations; to
put
it
on,
is
is
another;
it is
even a trade by
itselt to
put
them
into the
paper
^
.
.
Ten men
One man
in
doing
all
the operations
ma>be twenty.
centur\ of
It is still
with
its
attendant increase
labor producti\it\
was
Henry Ford.
The
this
whatever
pins or
From
came
Smith's case against tariffs and other restraints on trade and for the
and international,
in
the exchange of
goods, the
Freedom
of trade, in
its
in the
became not
From
result.
came
the most
fa\
orable social
23
25
Classical Capitalism
The
the interventionist, was the state mercantihst government which imposed tariffs, granted monopohes, burdened with taxes and, above all, sought to improve what, left to itself, was
ancient
enemy
of these freedoms
best.
all
who
cite
Smith
in
modern times imagine. Businessmen were a major menace to their own freedom; their invariant instinct was to impose restraints upon themselves, and from this came another of Adam Smith's very trenchant observations: "People of the same trade seldom meet together, even for merriment and
diversion, but the conversation ends in a conspiracy against the public, or in
some contrivance
to raise prices."'
is
also uncelebrated in
modern
will
come
to
many
as a shock:
he was deeply
opposed
to joint-stock
companies,
".
.
.
now
called corporations.
Of
the stock-
happens not
but receive
among them,
them."'"
make
.
to
And
of directors he added:
of
other people's
it
money than
of their own,
it
cannot well be
man, they
are apt to consider attention to small matters as not for their master's honour, and \er> easily
give themselves a dispensation from having
prevail,
it.
more
or less, in the
.
. .
management
of
compan\
Without an
exclusive privilege
[joint-stock
'
it.
visit
by
Adam
Commerce, the National Association of Manufactiuers, the first merged meeting of the two or a gathering of the Confederation ol British Industries. He would be astonished
forthcoming meeting of the United States
of
to
Chamber
proclaiming their economic virtue in his name. They, in their turn, would be
appalled
exist.
when he
of
all
prophets
The Clearances
Adam
Smith died
ot
in
made
lie
Commissioner
(Xistoms
which
was
26
The Clearances
Mile in Edinbi.ir<j;h. His house is nearby. A few scholars come to visit hut not many. Economists are generally negligent ot their heroes. David Hume has a far grander monument a mile or two away, side by side with one of Abraham
Lincoln which commemorates soldiers of Scottish origin
slavery in the Civil War.
who
fought against
By the time Smith died, the changes of which he was the prophet were becoming visible in England and Scotland. And in both the countryside and in the towns. The Industrial Re\'olution was not a sudden, \'iolent thing but it was
the kind of re\olution >ou could actualK see.
People everywhere were being drawn from the country \illages to the
towns and
demand
for the
The most
zontally
expanse of
makes up an appreciable part of the whole land area of Scotland. In summer it is green, lonesome and loveh', with the muted lighting of the far north. I was reminded, visiting there in the summer of 1975, of a comment of the late Richard Grossman: "No American realU' understands how much \acant space there is in Britain." At the beginning of the last century around t\\ o thirds of tliis particular space was owned by the Countess of Sutherland and her husband, the Marquis of Stafford. Between 1811 and 1820, by common estimate they cleared some 15,000 Highlanders from their estates to make room for sheep. The Naver is a narrow black stream that runs north through the county for some thirty or forty miles to come out near Pentland Firth, some fifty miles west of Scapa Flow Its thin and meager valley was then densely populated. Almost all the people were
and
verticalh'
it
.
dispossessed.
assumed the definitive aspects of a final solution. In March the tenants had been given two months' notice to get out. But they were still around, tor they had no place else to go. So the agents of the laird moved in with fire and dogs. They were especially careful to burn the roof timbers of the houses, for that meant,
At Strathnaver
(as
elsewhere) in
May
was later held, were burned without taking the precaution of evacuating the more aged and enfeebled inhabitants. The sheep that took the place of the people returned far more revenue to the landlords b\ a further estimate about three times as much. They had another ad\antage to the laird. The Che\'iots moving over the hills were
return.
A few
houses,
it
It
could
have been
so.
27
Sutherland.
"No American really understands how much vacant space there The Clearances helped create this void.
is
in Britain."
Clearances
brilliantly illustrated a
problem
It is
in
economic
development that
usable land
that development
so many people, so
result,
possible to have
little
is
impossible.
given the
number of people, is still bad. There is an equilibrium of poverty. So it is in much of India and in Bangladesh, Indonesia and other densely populated countries. No more land can be had. The Highland technique for reducing the population is no longer recommended. Birth control lends itself well to speeches but only slowly, when at all, to results. This is a problem to which
I
will return.
were
where,
in
did not take easily to the rhythm of the machine. Their stronger instinct
to migrate,
was
most often
to
in fact, as in
name, the
new
Scotland.
Women
it
and children
pliable industrial
material, though
New Lanark, a half hour or so south and east of Glasgow in a deep valley by
the Clyde
falls
New Lanark, is associated in many people's minds, perhaps a bit vaguely, with
enlightened humanitarian experiment.
tories for the workers, erect
and
stern,
The
Bank of Scotland. Dale's compassionate thought was to go to the orphanages of Glasgow and Edinburgh to rescue the miserable youngsters and give them both schooling and useful work. The cities, more than incidentally, would be relieved of the cost of their keep. New Lanark became the largest cotton mill in Scotland.
whose
face in recent years has graced the notes of the
David Dale.
\
FIVE
POUNDS
"Mji:'
of Classical Capitalism
of
all
What was
of the
the town
now
a population of eighty.
of the highest moral tone.
Each
orphans was
it
However,
was
in
what
is
now commended
work
ethic
had
to
No one should be too shocked. By the standards of the time New Lanark was
a place of compassion and culture,
the case after 1799,
if
not exactly of
rest.
when
Owen,
Owen
was a philosopher, Utopian socialist, religious skeptic and spiritualist. Reformers now came from all over Europe to visit New Lanark, to see for themselves this proof that industry could have a humane face. Under Owen, the Institution for the Eormalion of Character was built. It offered lectures for
adults, singing
very young. Public houses were closed and alcohol banned. In time, the work
day
and a half hours, and children under twelve were never employed. It's an indication of how things were elsewhere that this was considered lenient. Because of his compassion Owen was always in trouble with his partners. They would have much preferred a tough, downfor the children
was reduced
to ten
to-earth
ol
the
little
bastards.
New
Lanark didn't
Owen. So
there was a
sequel; this
of the
was New Wabash. Here Owen sought to make a completely fresh beginning; the new communit\ would ha\ e no accjuisitive genesis, no continuing capitalist taint. Its principle would be not Smith's self-interest but the far greater ideal of
service to others.
Idealists did
come
lo
New Harmony,
more than
more or less exclusively, to argmnent. While the discussions continued, so it was said, the pigs inxaded the gardens. Harmony being lost. New Harmon\ failed. Free enterprise, the pursuit of self-interest, was thus sa\ed in Indiana. It is my imhappy obser\ation that idealists, including liberal reformers in our
own
that e\ery-
row over
first
over who,
if
anxone,
is
to
be
in cliarge.
30
Building character at
The
of Classical Capitalism
Ricardo and Malthus If New Harmony was not in accordance with Smith's instruction, Britain was. A few months after Smith's death his position as a prophet was officially proclaimed. In a budget speech Pitt said of him that his "extensive knowledge
of detail
will,
'
None
had such a courageous endorsement. Adam Smith offered more than counsel on public affairs. He offered what a view of how the economic would today be called an economic model
since in the nonsocialist world has
in
The
cost of production of
an item,
was the
cost of
it.
Here were the germs of two ideas which were to grow and shape men's thought and which still do. One was the labor theory of value. The other was that mankind would tend always to fall victim to its own fecundity the
Adam
taken up Ricardo
in
is
of founding father of
economics; with him the great ethnic rivals of the Scotch arrive. Ricardo was
Jewish.
He was
a stockbroker, a
member
of Parliament, a
man
of superb
Malthus, for
much
of his
life,
taught at Haileybury
the
staff college, as
we
would now call it, of the East India Company. In the last century the East India Company was the source of income for Britain's greatest economists besides Malthus, James Mill and liis prodigious and luminous son, John Stuart Mill. None of them, it is interesting to note, was ever on the subcontinent, and this was not thought to be a handicap. James Mill produced a highly regarded history of the British in India. It included a devastating critique of the Hindu epics, which he deeply disliked, which he could not read in the original and which had not then been translated into English. The Mills, needless to say, were Scotch. From Malthus came the Principle of Population. This held that, given "the passion between the sexes" (a most damaging thing that he sometimes thought might be subject to "moral restraint" and against which he suggested ministers might warn at marriage), population would always increase in geometric ratio 2, 4, 8, 16 and so on. Meanwhile, at best, the food supply would
2, 3, 4, 5.
From
this
came
the inevitable
absence of moral
restraint, population
would be subject
^^^
war
or
Adam
and the
division of labor,
had a
tlie
optimist.
in
became Ricardo's workers. Among the work on the one hand and for the food would be reduced to bare subsistence. It was man's
population
for
thought
this
was a major
his majestic
qualification.
necessary for
life,
would receive the minimum This was iron law of wages. It led, among never more. the
It
other things, to the conclusion that not onh' was compassion wasted on the
working
run. But
in the short
down. And any effort by government or trade unions to raise wages and rescue people from poverty would similarly be in conflict witli economic law, be similarly frustrated b\ the resulting increase in numbers. Different products of farms or factories required different amounts of
Ricardo's minimally nourished labor.
lished the relative value of things
The amount
to labor.
Voiced
form
was
still
strongly rural.
By the
was
thrust of change.
However,
rents. In
in Ricardo's s\
stem
tlic
main
figure
still
the landlord.
The same
up
tliat
effect of shoving
consequence, the more numerous the people, the richer were the
landlords.
They
it;
And
done about
some
was receding
Smith that
it
in
It
was
Adam
ment would
But
would
limit
economic freedom
35
and thus make everything worse. David his own Hghts, a cruel man. In a naturally cruel world he merely urged against contending in a futile way with the inevitable and
self-interest
He
There was a difference of opinion of much future importance between the two friends over what would happen to the handsome revenue accruing to the landlords. Ricardo held that it would either be spent or it would be saved and
used for investment in land improvement, building, industrial development,
in
which case
it
would
also
be spent.
He accepted a proposition made earlier by French interpreter of Adam Smith. Say's Law
only in a different way, so there could
held that production always provided the income to buy whatever was pro-
On
this point
falter
and
power
Keynes was later to say, captured Britain as the Holy Inquisition captured Spain. For the next hundred years, until the decade of the Great Depression,
Say and Ricardo ruled supreme.
purchasing power did not
crackpots. Then, with John
Men who
know their economics; in fact, they were considered Maynard Keynes, Malthus's idea of a shortage of purchasing power became accepted doctrine. The most urgent task of government now was to compensate for the shortage, to offset the oversaving.
Economics
is
One measure of an idea, though economists have not always thought well of it,
is
whether
its
it
rest
of
do not exaggerate
was
more than a substitute for the American colonies. Production and trade, now far less hampered than those of other countries, expanded wonderfully. These
brought to the British nation
all
Adam
In the wars with Napoleon, Pitt used this wealth as a highly compassionate
substitute for British
manpower.
had an abundance
also
of men. Britain supplied the subsidies that supported and encouraged their
valor. After Waterloo, trade
36
affirmed.
As prosperity expanded in these years, wages fell, as the Ricardian system had promised. Economists in that age were men of much prestige and \\ ith reason. more perhaps than now Their ideas, especially those of Malthus and Ricardo, had another test
half of the last century. That was in Ireland, in those years fulK kingdom but still John Bull's other island. The Irish test too, in its o\\ n way, was a triumphant validation. No one could doubt the tendency of the Irish population; it was increasing geometrically. Within a mere sixty years, from 1780 to 1840, it first doubled and then \ery nearly doubled again. By 1840, there were 8 million on the
during the
first
a part of the
whole
island,
compared with
4.6 million
now.
suppK had
so
also increased.
There
But
food
had been a green revolution based on the rapid expansion of the production of
the potato. Nothing,
when
yields
well.
this
supply
much more
nearh' arithmetic.
or more often
much more congenial and frequently As the Irish population expanded, so did the competition for land and so did the return that was extracted by the absentee landlords. Grain \\ as grown to pay the rent; potatoes were grown to feed the people. Even when people starved, the grain was sold and the rent was paid. Starvation might conceivably be survived. Eviction for nonpayment of the rent meant there would be nothing to live on forever. The Malthusian climax is no gradual thing. As experience in India and Bangladesh in recent times has shown, it comes suddenly when something goes wrong in those countries, the rains. In Ireland in 1845-1847, Phytophthora infestans, nurtured by the warm, moist Irish climate, first damaged
absent in England which was socially
it.
Much
much
is
always attributed
drought or
floods.
Much more
Ireland should have been attributed to the losing race in earlier years of
food suppK' with population and the losing contest of tenant workers with
landlords.
Not only were the circumstances as Ricardo and .Malthus foretold; the
response of Westminster to the Irish disaster was as Ricardo would have
recommended. As now would be said, it was from the book. The Corn Laws were repealed to allow the free import of grain. Though excellent in principle, this did not help those without money to buy grain, a category that included
the entire starving population.
Indian corn
in
was imported
down
prices.
lor the
Low
prices
37
of Classical Capitalism
were also not helpful to people who had no money at all. In 1845, a program of public works was inaugurated. This was in conflict with the principle that the poor should never be helped, and in the following year, when it was greatly needed, it was abandoned. There was, it was said, no way of distinguishing between those who wanted a job in consequence of the crop failure and those who, as always in Ireland at the time, needed a job as a normal thing. The custodian of the Ricardian tablets was Charles Edward Trevelyan, assistant secretary, meaning at the time permanent head, of the Treasury. Trade, he advised, would be "paralyzed" if the government, by giving away
food, interfered with the legitimate profit of private enterprise. His Chancellor,
when
the hunger
was severe
would be made
much
liberty as possible."
On few
matters in
life is
and what happens to people when it is put into practice. We've seen this often enough in our own time. In a Washington office during the Vietnam war it was a protective
statement of a policy by a well-spoken
in a quiet office
man
reaction. In Asia
it
tliat
could not
even be seen.
Trevelyan's principles were enunciated in the old Treasury offices in Whitehall.
in Ireland
In the
manner
of
men
in cjuiet offices
classical
1846, he wrote that the problem of Ireland "being altogether beyond the powers of men, the cure has been applied by the direct stroke of an all-wise Providence in a manner as unexpected and as unthought of as it is likely to be
effectual."'-'
Tlicrc
action,
if
is
is
for the
consequences of principled
ruthless
hand had become the hand of God the hand of a rather couldn't have had much liking for the Irish.
God who
The Escape
There was an escape hatch from the Great Hunger, the same one as Irom the Highland Clearances: tiiat was the emigrant ship to America. It wasn't an
escape from death; that too was a passenger on the ships.
forty miles
Isle,
If
you go
thirty or
down
the Saint
Lawrence
Ri\ er
to
Grosse
and
decaying buildings.
Department of Agriculture. In the famine years it was where the typhus-ridden ships from Ireland were required to stop to
38
One escape from Mai thus and the famine. This is the fever St. Lawrence where 5294 died. Cholera Bay is nearby.
hospital
on Grosse
Isle in the
of Classical Capitalism
tall
shaft
died after they arrived on the island. Nor was typhus the only hazard; the
inlet
and interesting mostly for its name. It is called Cholera Bay. But there was a brighter side. Perhaps in the New World the ultimate principles articulated by Adam Smith and David Ricardo were still valid. But their setting was very different. So, accordingly, was the result.
free. This
being
so,
it
no monopoly income on the landlord. No one could much squeeze a tenant or a farm worker if, the next day, he could thumb his nose gracefulK' at his landlord or employer and leave to take up a farm of his own. In America population might multiply as Malthus said, and it did. But the need for workers increased
even more. So pay did not get worse,
it
got better.
meant they could not rebuild. In the were hacking farms from the forests. New World a few months later they Trees were now the enemy. In America the settlers regularly sought the high land where the tree grow th was the least dense. Only later did they move down to tackle tlie licavier forests on the richer valley floor. Ricardo had seen
told to go. This
the pressure of population forcing settlement onto ever poorer land. Henr\-
saw this new sequence and had the temerity to challenge the master. With increasing population and the general progress of the arts, ever better land was brought into use. He had seen it with his own
of the next generation,
eyes.
He
in a
On
food
And
Irish construction
crews, perhaps the best celebrated of the refugees from the Great Hunger,
railroads
tliat
woidd make
tlie
this
And
a century.
STuith,
in the
New
World. They
were not. Smith especially, left l)ehind. Self-interest and freedom of enterprise were a secular faith in the Old World. In the New World they emerged as religion. Fifty years after the Great Hunger tliis faith had filled a w hole continent. In 1893, the children of those who had experienced the hunger and a lew who remembered it gathered in Chicago for the great fair a festixal of celebration. Of the pessimism inherent in the ideas of Ricardo and Malthus il would liave been hard to find nuicli trace. But of tlie \irtue of the ideas of free enterprise thai w roLight this miracle there was also not much doubt.
40
In the
New World economics was revised by trees. Ricardo held that cultivation spread out from New World it often began with the worst on the best land more trees had
of Classical Capitalism
Smith Now
In the present century the world of
Adam
Smith has
Some
olutionary onslaught of
in the state the best
Marx and
the
suggested from
suflFered
heavy blows.
the rev-
attack by those
who
see
for
hope
and compensating
by circumstances
also
the force that Keynes did not Smith's world. So We've seen that the corporation was deeply inimical was the union something that Smith mentions mostly as he muses
stress.
how much more wicked combinations of workingmen are deemed to be as compared with those of merchants. War and the modern armed and
over
technologically competitive
state
for
The
another change
of Ricardo
one that
it
is
improvement
in
be permanent; compassion
it is
Adam
Smith
would have been much troubled. For his genius was less in his ideas than in his method. As we've seen, as a man of reason he informed himself as to circumstances and formed his ideas accordingly. The need to adjust to new circumstances and new information would neither have surprised nor troubled him. He would never have expected his ideas to apply in circumstances for w hich thev were not intended.
42
2.
The ideas of nineteenth-century capitalism did not encourage the notion oi an egahtarian commonwealth. The landlords got rich; those who toiled on the land got poor, remained poor. And in time it became evident that the industrial capitalists could get rich
Andrew
brought him $25 million. That was before inflation and before the income
man, had accumulated approximately $900 million, his net worth that year.' His friend and adviser, Frederick T. Gates, warned him of the terrible danger he faced:
1913, John D. Rockefeller, a self-made
Your fortune
grows!
If
is
By
up
like
it
faster than
it
you do
will
son's sons
seem
still
to
be largely
assets.
men employed
in
and
thought.
Many were so sustained, and nothing better expressed the hope than
left
it,
on her headstone:
Don't mourn for me, friends, don't
weep
for
me
never.
to
do nothing forever
and
ever.
The
rich,
by contrast,
I
set
more
There
a
can be no doubt,
to take
also
sound
There
is
AccordingK
if
now.
In this chapter
would
in
the last
century and the ideas by which these were sanctified. By what moral code did
43
of
High Capitahsm
How
did
it
and use
of wealth?
By what
men defend
their affluence?
Remembering
we may be
of the Affluent
it
the rich are the most noticed and the least studied. So
was, and
The
had their adherents. And the way of life of the poor was also studied. How were they housed? What did they eat? What were their amusements? With a
how
The
rich,
they were a proper subject of novels but not of social investigation. Poverty
was something
vears ago a
man
or
woman
East
London
to find out
to
how many people slept in a room. No butler would an investigator who was looking into sleeping habits in
strong and even dominant current of social thought in the last centur\' set
the rich apart and held that they were, indeed, a superior caste.
Of these ideas
little
lot,
One
study by a
stroll
museum
of natural history.
The higher
and
made
it
strongest, best
adapted
to their
And
this
same
rich.
same capacity
explained the
to the
pri\ ilcged
The
life
and
to
It is
we owe
it,
the phrase,
the fittest."
but
ol
of economic
44
and
. .
social life.
He was,
however,
explicit in his
debt to Darwin:
to the
human race
.
all
is
."there
an average advance under the pressure, since "only those who do advance under it eventually
. . .
survive"; and
prolific writer,
gloomy. His numerous books were influential in England but in the United
were very
little less
this
haps better.
These ideas couldn't, in fact, have been more wonderful. Never before in any country had so many been so rich or enjoyed their wealth so much. And in consequence of Spencer no one needed to feel the slightest guilt over this good fortune. It was the inevitable result of natural strength, inherent capacity to adapt. The rich man was the innocent beneficiary of his own superiority. To the enjoyment of wealth was added the almost equal enjoyment which came with the knowledge that one had it because one was better. The ideas also protected wealth. No one, and especially no government, could touch it or the methods by which it was acquired or was being enlarged. To do so would interfere with the desperately essential process by which the race was being improved. It might seem a problem for the rich that so many were so poor. This could trouble the conscience at least of the unduly sensitive. But Herbert Spencer took care of this embarrassment as well. To help the poor, either by private or public aid, also interfered disastrously with the improvement of the race. Here
again one should
Partly by
to the
let
up
to them.
It is
impossible in any
its
suspend
this discipline
by stepping
in
consequences,
wise.''
wholesome weeding-out
was permissible. While
for
it
was
to infringe
on
who
was bad for those who received help, it those who gave. Thus it was justified, at least for
45
of
High Capitalism
those
who were
it
own ennoblement
at the
expense of
the race.
Spencer,
will
stern, as well as
was
"^'ale
professor of
The most distinguished of these, was William Graham Sumner. Sumner independent and rugged mind and perhaps the most
in
on economic matters
It
was Sumner's great task to join the ideas of Herbert half of the last century. Spencer to those of Adam Smith and Da\ id Ricardo. Sumner was an ardent Social Darw inist; he was fully as devoted as Spencer to improving the race. But he also saw in this process a more immediate amelioration tliat might help even the poor, might save them from being weeded out. For the struggle for survival was the whip on the back ot the poor. It made them work hard against all their natural inclination. It was Adam
Smith's self-interest in the peculiarly compelling form by which the poor could
to the rich
to
work
in the common interest. From the combined efforts of poor and rich came production and wealth, and these, in turn, allowed more people than otherwise to survive. Sumner too should be heard in his own words. Here is
It is
because
tlie\
caltli
to
them
aggregates under
hands
Thc>
iiiav iairK
lor certain
wages and
It
to Yale
was a sad da\' for the man of means when he could no longer send and know that he would be so instructed.
his
son
The Coming
As Jesus came eventually
America. The reception
in
to
came
e\'entuall\ to
was broadb the same. B\ the time ol and his journey in 1882, Spencer was no longer young he was sixt>'-two not in the best of lieallh. He was also averse to reporters and the press. His American tour, nonetheless, was the trimuph that any observer would have expected. Everywhere he was greeted with reverence b\ men who saw in their own selection for affluence the strongest of proof that the race was being improxed. Spencer was not, himself, wIioIIn reassured. It was an era ot exuberant pride in the American achievement. He was exposed to a bit too
the two cases
much
In
of
it.
Once
Darw
inian
had lagged, was still in a slightK primitive stage. terms, Americans were still, maybe, with the higher primates.
46
am simply carrying out the views of Mi. Darwin in their apphcations to the human race."
of
High Capitahsm
last
supper
the great
its
final
celebration at
fame
as the watering
life, politics
New
York
rich.
Leaders
in business,
academic
and
on the Social Darwinists and their time, has written of the evening with much
joy.
in his
chilling thought.
rallied,
audience
and
so strenuous
were the
One
if
War would not have occurred. Henry Ward Beecher, the most famous of American divines and a man who, despite some aberrant tendencies that I will mention in a moment, considered his own salvation secure, said he looked forward to renewing his acquaintance with Spencer "beyond the grave."
Spencer's Social Statics had been better read in the South, the Civil
No one
at this
to
how
gap. In those years John D. Rockefeller had himself formulated the doctrine
Sunday school class in an exceptionally engaging way: "The American Beauty rose," he had explained to the young, "can be produced in the splendor and fragrance which bring cheer to its beholder only by sacrificing the early buds which grow up aroimd it."'' The same sacrifices occurred in business and
for a
is
not an evil
tendency
of God. "
^
in business. It
is
The question,
Ill,
of course,
was whether
this
same
God would
later of
John D.,
id.
Jr.,
or yet
John D.
Surely, on the
more than
would
legatees and justify a confiscatory inheritance tax that would save their efforts
for society.
nasty problem.
relics
No one
past.
pureK
oi
the
is
They
restrain the
hand
when he
will
damage
Or maybe
12,
Rockefeller
of compassion:
One
ol llic pidhlciiis
this coiiiilrs
tliis.
is llial
uc lune
some
tliis
Judro-C christian
lioiitay;c
iil
wantiny; to
iielp those in
need.
And
iien
added
to
proniisi'
more
tlian tlie\
ean dehxei.**
48
How the Fit Were Selected We turn now to how the rich
and nothing
so far in
American
estate
or
Canadian
could
railroad.
was
who
looted
all
get
many people so suddenly as the The contractors who built it, those whose real who owned it, those who shipped by it and those rich, some of them in a week. The only people
who were spared the burdens of wealth were and ran the trains. Railroading in the last century was not a highly paid occupation, and it was also very dangerous. The casualty rates of those who ran the trains the incidence of mutilation and death approached that of a first-class war. who laid
the
rails
The
great
this
construction
and operation;
The
were by
may
one
arts. At issue was the Erie Railroad, running from the New Jersey side of the Hudson River to Buffalo, in those days a deplorable and often
of these
two basic
who
controlled the
New
York
Central on the east margin of the river, wanted to ow n the Eric to ensure his
monopoly of service to Buffalo and potentially to Chicago. \ anderbilt s commitment was to robbing the public. The enduring contribution of his family to
spoken literature was the expression, "The public be damned.
"
One
of his opponents
was Jim
Fisk,
who died
of gunshot
wounds
in
1872 at
the rather early age of thirty-eight, and to the general regret of the better class
of Americans
who wished it had been earlier. Allied with him were Daniel Drew and Jay Gould, two other experienced larcenists, although Drew was by now a little past his best. Their commitment was to robbing the stockholders.
individual
was in control of a railroad, there was a myriad ot devices by which its cash and other assets could be siphoned ofi into his ow n pocket. Jay Gould was the acknowledged master of these techniques. Fisk, though not as highK qualified on detail, was far more colorful in the practice of
fraud.
Once an
The
came
in 1867
itself.
49
cast.
Jim
Fisk.
Boss Tweed.
buy a contioUing
in
and with it he could hope to But Drew and Fisk liad an even greater
this,
advantage. They were in control of the railroad; and they had a printing press
the basement of the building that housed the railroad offices. In con-
h...
*.,
JU/-
.;
B'" P '"">
....
jr.i^
The shares.
sequence, the\ could print n.ore stock than Vanderbilt could ever hope
to
buy
in
to
to
keep themselves
it
was
said at
New
York State
Supreme
jiuist,
money could
w liat w as called
Erie
Gang
.
and threatened them with jail. The\ responded b\ picking up the books oi the railroad, not forgetting its cash, and fleeing across the river to Jersey Git\ Jim Fisk, a sensitive man, also took his mistress, a less than \ irginal u oman named
Josie Mansfield.
that Vanderbilt's
to
men might
try to
was recruited from the railway yards, a flag was hung out and the new headcjuarters in Taylor's Hotel was named Fort Taylor. The Erie war, as by now it w as being called, w as full on. From Fort Taylor, Gould. Drew and Fisk counterattacked. In a breathtaking move they bouglit the New York State Legislature or enough of it to
51
The shooting of Jim Fisk. He combined love with the love of money, and for love he
died
. .
And is
buried here.
legal.
away from
Vanderbilt.
named a
locomotive for him. And, a more important accjuisition, they bought William
Tammany
Hall,
now retreated.
Peace, of a
sort,
move the headquarters of the Erie back to New York and into the opera house, where he combined railroading with grand opera. His prospects seemed exceptional until he was shot by Edward Stokes. Stokes was a rival of Fisk for the love of Josie Mansfield, although, poor girl, it seems that she was more than willing to be nice to both. Fisk's body was brought back to Brattleboro, Vermont, whence he had launched his career, and the whole town turned out to give him a dead hero's welcome. He was buried there; four grieving maidens in stone still guard the burial plot. One of them seems to be pouring
coins on his grave.
was
at
its
one night
was discovered, a little after the fact, to have lost four passenger cars on a They had gone over a small precipice, and there was a painful fire when they landed. Coaches were of wood and heated by big potbellied coal stoves. Both the coaches and the passengers were a bad fire risk. A year or so later an
named James Griffin pulled his freight westbound passenger express go by. He dozed off, dreamed that the express had passed, then pulled out on the track and met the passenger train head-on. There was fire again; the casualties were again
engineer (engine driver to Englishmen)
train into a siding to let the
heavy.
As an even more normal occurrence, Erie freight cars jumped the tracks or
didn't
move because
was
there
was no serviceable locomotive to pull them. Since the management was the rape of the stockholders,
continuing and articulate complaint from
this
there
cjuarter.
ot these things,
were English, and none got a dividend. All men who worked on the road often went unpaid, gave Drew, Gould and Fisk a bad name. As noted, they are still
of the stockholders
Many
their
in later times,
In contrast, the
their
mind, and their families achieved high distinction. This was true of Vanderbilt.
was equally so in other fieldsof endeavor of Rockefeller, Carnegie, Morgan, Guggenheim, Mellon, all of whom made their money by producing cheap,
It
suppres.sing competition
and
became names
The
point
53
The Natural
Selection
o! the Rockefellers
John D. Rockefeller (left) held that men, like the American Beauty rose, were
improved only by
ruthless sacrifice
"a
/W
John
k
D., Jr.
David.
Nelson.
is
a nasty permanently the public predation the mulcting of the people large though
capitalists
left
other
mouth. Public
at
criticized at the
Even within
their lifetimes
many
of
its
The involvement
God
in the last
century re-
and that
But
in
is
why He made
so
in
many
of
the last
century and
some
extent,
is still.
was inevitable; it reflected the immutable working-out of economic law. And, as we've just seen, there was the further thought that, by natural selection, the poor were being weeded out. Given enough time, the undeserving poor, as George Bernard Shaw's
well, the Ricardian thought that poverty
doctrine
was
socially tranquilizing
it
posed an alarming problem for the devout. The doctrine derived from Darwin,
and
a
for all
communicants of decently
literal
mind
it
involved a
in
six
flat
denial of
scriptural truth.
descent from
days because
derived were
in drastic conflict
with
As
John T. Scopes in Tennessee for that Darwin's doctrines had truth would pit
sensitive
in one of the great judicial was the nerve that mention of
showed how
if
evolution touched.
Still,
the stakes
were high;
Christian faith, the rich layman could indeed relax. Not surprisingK the effort
was made,
at the
Plymouth Church
is
in Brooklyn.
The church
it
still
stands across
now an
was becoming one of the richest parishes in the whole country, and Henry Ward Beecher, the man, no less, who had made the appointment to meet Herbert Spencer in heaven, was the pastor. The rich, the ambitious and the mereh industrious were flocking to hear him in unbelievable numbers; Henry Adams guessed that no one had preached so influentialK to so man\ since Saint Paul. In IS66, Beecher wrote Spencer that "the peculiar condition of American society has made your
borhood. Then,
in
55
Thorstein Veblen
ritings tar
more
fruitful
in
no
man
to resist a quickening.
Theologv, like the animal kingdom, was evolutionar> Such change did not contradict the Holy Writ. Religion was enduring. Its truths did not change.
.
Darwin and Spencer belonged to theology; the Bible was religion. So there was no conflict between natural selection and the Holy Scripture. I do not understand this distinction, and it is fairly certain that neither Beecher nor liis congregation did either. But it sounded exceptionally good. Beecher had other good news for his affluent flock. God particularly loved sinners, for He greatly enjoyed redeeming them. So, by implication, one could go out of an occasional evening and sin. The ensuing repentance and redemption would then do wonders
for
ceeded to follow
tative
his
own
life and later one of the most authoriwar, has show n how faithful he Vietnam the Vietnam and reporters on
was
in this regard.
some of them
at least
by
taking
them
to bed.
thought that even though Beecher was being redeemed, her case was not so clear. So she confessed not to God as intended but to her husband, and he sued Beecher. The jury disagreed on Beecher's guilt. No one who has since looked
at the
Earlier on,
told
tliat
they
There must
l)e
man> and
am
one, w ho
would
There
is
\\
hich the
ricli
justified
themselves
way in which they spent their monev. It's a field of study that I haxe always much enjo\'ed. But it would be quite wrong to imagine that this amusement is pureh the product of hindsight the perspective that time allows. By far the most amused and
the last century.
The same
is
true of the
in their
greatest days
temporarv observer.
ostentation. This
He wrote of them at was Thorstein Veblen. Veblen was the hero of my teachers at the University of California in the thirties. I was introduced to his books simultaneously with Alfred Marshall's Principles, the bible of economic
the very peak of
their
orthodox)
this.
in
and the
still
first
decades of
delight.
57
The Veblen legend is of a poor farm boy, the son of Norwegian immigrants. He was driven through hfe by a gnawing sense of envy, a burning sense of
injustice.
is
interesting:
injustice
it might be more accurate the other way around.) Veblen's Norwegian compatriots were many, frugal, worthy and poor. A few in this new land were profligate, idle and rich. This contrast Veblen could not forgive or accept. Thus his merciless books and tongue. Thorstein Veblen was, indeed, the son of a poor Norwegian immigrant. When he was born in Wisconsin in 1857, life was still a struggle. But by the time he went oif to college, his father, Thomas Anderson Veblen, was in possession of 290 acres of land in southern Minnesota as rich as any outdoors. Not a hundred working farmers in all of Norway were as affluent. The family was educated at nearby Carleton College, and they paid their own way.
always burns;
went on
still
to
paying
all
way. At Yale he
men, William Craham Sumner. Spencer and Sumner would not be wrong in a world populated by Veblen's parents. Their Hfe was hard but they were fit, and they survived handsomely, happily and honestly.
encountered and made a major impression on, of
Thorstein Veblen wrote not out of envy but out of a sense of ignored
superiority fortified by contempt.
He
called the
WASP
establishment, as being
much
intelligence, culture or
depended,
at best,
trifle
insecure, they
were vulner-
The
rich
Why should they have so much? What virtue justifies their higher income and
station? This attack the rich can always stand.
affirms their superiority.
It
this
far
more
refined;
it
was
most somber and careful science. All primitive tribes had their festivals, rituals and orgies, some of them exceptionally depraved. Likewise the rich. Their
social
observances and
rituals
might be different
in
And
for
every
mannerism
or
enjoyment of the
rich,
The Vanderbilts bound up their women in were purely objects of enjoyment and display. The Papuan chief carved up the faces or breasts of his wives to the same end. The rich gathered for elegant dinners and entertainments. The counterpart ritual
58
of
High Capitahsm
of the aboriginal
emploNed
it
otherwise than
and
it
therefore has
utility as
an evidence
But
is
also
weapon and
it
meets a
felt
who
is
gifted with
even a
life.
American
ot tliem
They
occasions of public
consequences
in private.
above scale
convenient members of
the faculty but rareh believe the\- should have to earn their pay. Howe\'er, in
some justification for their pervasive unease and selfwhose folk tendencies Veblen also examined, believed that the country should have centers of higher learning. It was onlv decent. Their offspring needed gloss. Also doctors and lawyers were
the last century they had
pity.
The
successful btisinessmen,
essential.
But
tJiey
inimical to property
affirmed the conservative truths, treated wealth and enterprise with respect.
as an ideal
man
All
for
some other
to see
institution.
During
his
he moved from
New
School in
New York.
were glad
him
go;
it is
of
all
that he
was
there.
His moves were facilitated, on occasion, by the fact that, though far from
beautiful,
women. He considered
it
a prob-
was giving
to middle-class morality,
he asked
man could do when the\- just moxe in w itii you. There is a when imder consideration for a professorship at Harxard, he was warned by President Abbott Lawrence Lowell, who brought up the subject with embarrassment, for his was a world without sex or other sin, that some of
resignedh w hat a
legend that,
It
was an
if
appointed, to
behave. Veblen replied courteously that there was no need to worr\-, he had
I once investigated this story, and it seems, unfortunately, be w holly untrue. Veblen, lonesome and sad at the end, died in 1929.
to
Conspicuous Consumption
first and greatest book. The 'rhconj of the Leisure Cla.s.s, was published just before the turn of the century. With Henry George's Progress
Veblen's
60
and Poverty, the great case for the single tax on land, it is one of the two American works of social comment from the last century which are still read and studied. It contains the germ of Veblen's basic economic idea, which was de\cloped further in his later The Theory of Business Enterprise. This beidentified a conflict in economic life between industry and business tween those whose talent lay in the production of goods and those whose concern was not with making things but \\ itii making money. The moneymakers, by restricting production to enhance profits, sabotaged (Veblen's word) the capacity- of the producers to produce. It was an idea that won enthusiastic converts in the nineteen-thirties among a militant band of dis-
what they called Technocracy. Veblen's distinction between makers and moneymakers has not survived. in his His enduring achievement was not in economics but in sociology Theory behavior of the rich. The examination of the social aforementioned of
ciples
committed
to
is
the carefully
Two
end Conspicuous
is
in the
to
work, where nothing else so preoccupies the body and the mind. The rich
man
might work himself. But he gained much distinction from the conspicuous
idleness of his
women. Conspicuous Consumption was consumption designed exclusively to impress with the cost that was involved. Taste did not enter. Never after the publication of The Theory of the Leisure Class could a rich man spend with ostentation, abandon and enjo\ ment w ithout someone rising
to ridicule
it
as Conspicuous
Consumption.
How real was the culture of conspicuous wealth that X'eblen described? Anyone who has doubts can go and see for himself. The place is Newport, Rhode Island. Most Americans have never seen these vast houses, do not know what they are missing. I've lived nearly all of my life a couple of hours' drive away and would be with the majorit\ except for an accident of public hfe. In 1961, Prime Minister Nehru vi.sitcd the Ihiited States and met President Kennedy in Newport. They passed along the waterfront in the presidential yacht, the Honey Fitz, to view the mansions. "I brought you this way,
Mr. Prime Minister," the President
said,
"so that
ou can see
61
'
oJ
High Capitahsm
When tlie Newport houses were mans worth was, indeed, measured
built
of
the century, a
in simple,
dream
of disputing
the rich man's claim to pre-eminence, Hollywood had not been heard
television personalities
it
was
to distinguish
of, and were not even a gleam. But, as Veblen held, wealth, if a man, had to l^e known. He couldn't walk around bills
brandishing thousand-dollar
although
some
tried.
was to proclaim the worth ot the inmates. The greatest of the houses was The Breakers, and it brings us back to the name that rectus in an> discussion of the manners and morals of the rich. Commodore Vanderliilt was not only a creative and sanguinar\- entrepreneur who robbed the public with candor. He also headed a famih that was notably conspicuous in its consumption. The Breakers cost the Vanderbilts, by one very early estimate, $.3 million. The Commodore also adopted what became Vanderbilt University in Nashville, Tennessee. That, by comparison, cost him
procreation. Their purpose
establishments.
fitting to a
A large army of serxants was required to run these They u ere trained in the disciplined obedience and obeisance
It is
a serious grievance
unformed
'
may be
plowing or sheepherding.
in a privileged elite. It
was
what brought this way of life to an end. It may be and general rule that no one spends his life affirming the superiority of other people if he has any alternative. So, at the earliest moment
more than
incidentally,
laid
down
as a broad
the>
w ere loved
until
ne.xt
w hile
first
the dis-
class.
The Ceremonials
Houses were not
barian tribes and
I)\
themselves
customs of barsimilar,
tiie
contemporary
tribal chief
"
which he saw as
Veblen
evidence
Personal rituals and manners were also important; both chief and tycoon
62
Home and home away from home The Breakers $3,000,000 to begin.
:
The Casino
at
Monte
Carlo. "If a
man dropped ten thousand or fifty thousand, he showed the man who could lose such sums."
full
canvas.
^^iJ^:\!^
Publicity
in
needed to be "connoisseurs in creditable viands of xarious degrees of merit, manly beverages and trinkets, in seemly apparel and architecture, in weapons, games, dances, and the narcotics."'- Veblen concluded also that "drunkenness and other patJiological consequences of the free use of stimuwere valuable
indications of "the superior status of those
lants"
who
'^
are able
to afford the
are
among some peoples freely recognized as manly The ceremonies at which \\ ealth was displaxed
ball"'"*
"costly entertainments
in the
and
competitors to his feasts, orgies or other entertainments. These were the very
his
own
standing depended. His guests were thus the unwitting instruments of his
effort to establish his superiority
ball or potlatch,
when
his guests
had a
their
own
back.
certain of attendance,
it
To be
an element of
soon after
One example,
Fish.
She staged
a major party not ostensibly for her neighbors but for their dogs. Not without
difficulty,
while exploring the anthropology of Newport, my colleagues of the BBC recreated this entertainment. No one watching the event could have any
that, as
doubt
festivals
in
form, not at
Island.
all
in kind,
from those
Borneo or
Publicity
in a suitably
was
in
This occupation
much enjoyed by
the affluent.
rare.
We speak wonderlate
it's
The
Mr. Howard
Hughes
built
of not being seen. Half of the pleasure in the dogs" dinner just
in thinking
mentioned was
it.
how amazed
The
society
mention
will
arouse
in
who are mentioned, the envy it is hoped that such those who are ignored.
to the
Jr.,
enjoyment of
to
all,
who owned the New York Herald. William Randolph Hearst is usually thought
be the founder of the .\merican
it
\ello\\
Samuel
Eliot
Morison held,
was Bennetts
father.
The purpose
of a newspaper, he had
65
Jr.
The purpose
The Riviera
proclaimed,
is
-^
'
had plent\
for
it
ot
room
columns
"We
support no party,
"
liis
father
had
dull,
also proclaimed, "... care nothing for an\ election or an\ can-
down
to a Constable." '*
being
to find
Newport was
his base.
The Riviera
in
was an inconvenient
and even perxersc feature of the class structure. Wealth a man could get. But wealth was greatly improved by being old, and this age was not so easily
acquired. In their earliest manifestation the Vanderbilts, Astors, Whitneys,
not to mention the Rockefellers and Fords,
\\
ere
all
\\
ere so
first
become
exceptionalh' well-aged,
last
is
inferior to
landed or
century a
titled
Englishman of modest
ecjual of
means, even an impecunious and venereal Polish count, was often the
Among Americans,
were much
better. Their
further
is
its
income
with two
liver,
and expensive, varied and reliably mone\ the poor man's instinct is for a good meal, a bender or an imaginatively obliging woman. So it must be for all. These were not, in fact, negligible pleasures for the rich in the last century. The Victorians were prodigious eaters and devout, two-handed drinkers, and man\ went off each Near to a continental spa most often Carlsbad
in food, alcohol
some
extra
sets of clothing,
wear o\ er and another to \\ ear home pounds. Nothing was so discussed as the state of one's
one
set to
for the large-scale consimiption of alcohol.
Sex
may
limits to the
similar, although
amount of food and drink that can be more variable, limits to the time that
in bed. And w ith the passage of time, the consequences and drinking vast bulk, chronic dnmkenness, a grossly debased appearance ceased to be admired and became subject to rebuke.
67
of
High Capitahsm
wealth, eventualK'
therapy.
became a mass recreation and even a branch of physical The sensuous enjoyments of the rich ceased to be a source of
in
admiration and distinction, and they ceased to be the exclusive pleasure of the
rich.
The
climate and
"where
of the
women." But
Bennett,
Ferrat.
its
much
greater advantage
was
in the
way
it
soKed
all
And
they could always use. So inevitable was this bargain that the\ were negotiated by the scores,
social
rank appeared
and brokers
to
make
the deals.
in
would
payments balance then been calculated. B\' 1909, by one estimate, 500 American heiresses had been exported for the improvement of the famlK name, along with $220 million.
'
''
The greatest,
houses; the
w ere
was
Marlborough,
is
an
initial
Duke of Marlborough should marr\ (^onsuelo \ anpayment of $2,500,000. More was later in\esled in
repairing Blenheim, which was run down, and in a great new l^ondon house.
all, the Marlborough connection cost around $10 million. The results, however, were excellent. The robber-baron connotation was almost com-
In
and
even, ex paste,
all
in
68
Marlborough.
Castellane
of
High Capitahsm
was accomplished. Onh about marry Anna, daughter of Jay Gould, to the Count
much
less
that of Lord Winston Churchill was the son of a somewhat similar union Randolph Churchill with the American, Jennie Jerome. This, however, seems
to
factor.
Gambling
The
Riviera's other service to the rich
its
came from
for
the casino at
Monte
Carlo.
incomparable efficiency
shown, the
rich
The
and
also
sociology of gambling
to
is little
some do. was very important. Men and women of the highest fashion those whose judgments determined, above all, an individual's social rank and repute assembled of a night at the Societe des Bains de Mer. Richly accoutered, they moved around the tables, through the adjacent salons. Never before or since v/as there such an audience for the man who wanted to prove that he had money to burn. If he was rich, he could not lose. If he dropped ten or fifty thousand, he showed to this audience that he was a man who could lose such sums. If he won, it did him no damage.
gamble
to lose
women gamble
money. In the
century
this
To
modicum
needed some entree to society and also, as a starter, a few friends. A yacht, before radio, meant isolation from the world and one's affairs. Also it had another drawback: it was only for the supremely rich. The
entertaining, one
great
J.
P.
Morgan
is
remembered
for
He
a proposition
if
And he
all
told
know
it.
he couldn't afford
>'ou
could
And
this
i
of the
Modern Rich
problem of finding distinction has greatly
What
of the
modern
in
rich? Tlic
changed. Nowhere
own
70
itself.
The modern
politician
now
man
of wealth as a
it
person of distinction.
No Washington
New
is
mere
Any
the
infinitely superior.
Such
is
by public
office that
sums
to
be ambassadors
artists
modern
man
of wealth
association with such people or try for achievement himself in these or related
fields.
Otherwise he
will
be almost
totally overlooked.
in practice in this regard. In
Boston and
New
then sought
or, in appli-
art,
philanthropy
makes them an
many women
of means, extrava-
gant attire
thought a useful
way
New
confer
some
essential for
anyone of the
slightest ambition. In
damage has been done by rich New Yorkers, many of them lawyers, who have sought esteem through association with the field of foreign policy. Not unnaturally they have shown an unfortunate attachment to foreign leaders and potentates who share their o\\'n commitment to personal enrichment. However, the support of liberal politicians and radical causes of
recent decades no slight
an adequately innocuous
In Texas,
sort
is
where wealth
possessions
by the assessed value of the house, the acreage of the ranch, the
which these possessions are displayed and admired.
folk habits that the world's
is
size, speed and furnishings of the airplane and the visible cost of the grooming and caparisoning of the horses and women. Much store is set by barbecues and
similar fiestas at
logical
It is
the
consequence of these
for costly
consumer
artifacts
in Dallas.
ill
change.
71
'
^i.>
>'
wi.'
4 ^
S
^
1
COMPUTOR.
by
digirol
o burton.
cose
Consumption can
still
be conspicuous
in Texas.
and bond. Operores on o quorrz crystol. ond occurote to within 60 seconds o yeor. 550 00(3 60). Fronn
Precious Jewelry
pockoge sporrs sryle wire wheel covers, ond corpeting of mouton 'hroughour The Codilloc Miroge shown is ovoiloble only rhrough Neimon-Morcus Allow eight weeks for delivery 17A 24.500(X). For furrher informorion. coll AC 214/741-6911. ext 1225.
mm
of
High Capitahsm
A narrow and largely imaginary line divides what is admired as elegance from
what
is
condemned
as ostentatious display
conspicuous consumption.
Such change has alrea^iy overtaken Southern California, suburban Los Angeles in particular, where Moorish revival houses, swimming pools, exquisitely clipped lawns and slightly eccentric automobiles were once a source
of major esteem but which, though
still
An
adequately publicized association with figures of substantial notoriety in telein the late sixties and early vision, motion pictures, politics or crime
were
especially valuable
now
essential.
Have
moneymakers improved?
to the
a quesno doubt;
fiestas just
everyone
will ask.
As
manners, there
is
mentioned would be thought very coarse. Even a modern oil man would shudder to hear a Vanderbilt tell the public to be damned. In our da\ the most
ruthless predator
miringly of his primary concern for serving the people of a free society.
He
obligatory.
No one
can chew
Thus have the manners of modern capitalism improved. As to the advance in morality as opposed to manners, one can be less sure. I.O.S., Vesco, Poulson, Sindona, Hoffman, C. Arnholt Smith and the Real
tobacco.
Estate
Fund
more
sophisticated in accelerating
the separation of widows, orphans and fools from their money, are not, most
will think, a
quantum
Gang bought
paid
for tliem. In the last century Pavel Ivanovich Chichikov traveled over Russia
Gogol's Dead
Souls.
landlords and
for
Los Angeles one Stanley Goldblum created souls that were equally ethereal, insured their lives and sold their policies (and the premiums these
theoretically
more substantial insurance companies at a handhe was greath- esteemed. The stock of Equit\ some profit. Funding Corporation boomed; men of repute joined its board. The moral improvement even on early Russian enterprise is not clear. My own thought is that if men are sufficiently concerned to acquire money,
would earn)
it
to
While
lasted,
Out
conscience
Mencken once
ma\ be looking"
74
most,
may be
of the
Modern Rich
law. But a largely stable minority will be impelled to step over the line into forthright rascality.
The
vary
much
as to form from
one period
is
to the next.
fiction to
The man who is admired for the almost always rediscovering some earlier form of
known, have
all
fraud.
The
all
been practiced.
not. But, equally,
The manners
of capitalism improve.
75
3.
Adam
Smith. David Ricardo and their lollowers affirmed as the natural order
in
an economic society
raw materials
the capital or
as well as land
factories,
machinery,
and Sumner gave this the highest social and moral sanction. Thorstein Veblen mused over and was amused hv the result. But even Veblen did not dissent. Though a merciless critic of the high capitalist order, Veblen was not a socialist or even a reformer.
of production. Spencer
means
e used the a
word massi\ e
to
we agree
Marx
work
Mohammed
rivals
single author.
number of professed and devoted followers recruited by a And the competition is not really very close. The ft)ll()wers of
Marx now far outnumber the sons of the Prophet. Marx lies in Highgate Cemetery in London where he was buried on March 17, 1883. As with Smith's grave it is a place of onK minor pilgrimage the pilgrims are mostly delegations from the Communist countries on official business in London. Until about twenty years ago Marx's grave was in an
Now
it
lies at
Herbert Spencer.
pleasure in the
It
would be hard
to tliink of
company
of each other.
The Universal
The world
Man
Marx
as a revolutionar\
,
celebrates Karl
and
for a centin\
most of
He was
late
many would
The
his
Marx was
and
all
prominent as
77
The Dissent
of Karl
Marx
write,
may
note
\\
ith suitable
meager time
in his life,
editor as
its
with the Herald another parent of the Herald Tribune, was, for generations,
the organ of the highest Republican establishment.
ment with Republicans. After the election in 1864, he joined in congratulating Lincoln warmly on the Republican victory and on the progress of the war; said, "felt instinctiveK' that the star"The working men of Europe," he
oi their class.
"-
Marx was
also an historian, a
man
for
this
sense of
economic thought
its
history; Marxists
make themit
selves
and
Finally,
Marx was
it
someone hadn't
stance.
lived,
No one
\\ ill
would have done his work. The innovatwas not the individual but the circumever suggest that the \\ orld would be tlie same had Marx
someone
else
not lived.
When Marx
is
Europe.
Many would
say that
it still
is.
The
valley
filled
with
towns out of the Brothers Grimm. Above are the vineyards. And beyond the
rim of the valley are gentK' rolling farmlands, nuich of which
the thin,
iiu'lTicient
is still
farmed
in
common
come from
the
From
Communist come to
of
drink the wine, i'he local tourist oHice reports that onl\ the most occasional
visitor asks
about Marx.
merchandise and the family name. The pleasant and spacious house
w hich
Marx was born still smxives. There was much in this small tow
estimated at from
as .'\ugusla
10, (MM) to
it
1.5, (MM)
it
ariousK
.
Once,
was called the Rome ol the North. The German tribes regularly erupted southward t)n the Latins, a habit the\ did not break until the middle ol the present century. Augusta Trevorum was the principal
Trexorum,
bastion against this aggression.
The
78
Birthplace in Trier Marx was born in this pleasant house on May 5, 1818. It's a place of minor pilgrimage from the Communist lands. Western tourists are rarely aware of its existence.
:
The Dissent
of
Karl Marx
Roman
Trier
relic in
what was
so.
northern Gaul.
is
it
to Prussian rule.
The change was a matter of prime importance for the family of Heinrich Marx. The Marx family was Jewish; numerous of Karl Marx's ancestors had been rabbis. The French had been comparatively liberal to the ancient Jewish
community
of the town. Prussia
was
not.
As an
officer of the
Marx could not be a Jew. So he and were baptized as Protestants. It was, most scholars now agree, a purely practical step, one that did not involve any rejection of the social and intellectual traditions of Jewish life. As to religion, by the time Karl Marx was born, it was no longer thought very important by his family. Their mood was
the leading lawyer of the town, Heinrich
later his family
Marx's enemies
in later times.
anti-
Semitism. This was a fine start for anyone with an instinct for rabble-rousing,
many
others
made
also
Jew
was very hard on Jews. This was partly a literary convention; the word century was used extensively as a synonym or metaphor for the avaricious businessman. But it takes effort not to read some racial animus into
writing
in the last
his writing.
Marx was
also
an
atheist. This
its
very seriously,
when
active practice
was an age when most people took religion was a badge of respectability. And
Marx was
One
It
of his most
famous phrases
and exploitation when they should rise up in angry A similar thought, we've seen, stirred the soul of the Reverend Henry
results. Religion
Ward
helped people
lot in this
to
suffer patiently and unprotestingly however meager that might be, and
their assigned
this
economic
world,
good about
Marx.
Karl
it.
It
proposition
is
phrased;
more acceptable
to the
Marx never
where
he obviously excelled. To be Jewish, open to the charge of anti-Semitism and openly hostile to Christianity as well as all other faiths, was to ensure
adequately against religious applause.
80
The Young Romantic Marx was a deeply romantic youth. He wrote poetry, much of it unreadable
or so his family thought
and
.
idealistic essays
and glowing
men
will [then]
still
in his
Baron Ludvvig
was an intellectual and a liberal, and he had taken a great liking to the young Marx. They walked together on the banks of the Moselle, and he introduced his young friend to romantic poetry and also to the notion that the ideal state would be socialist, not capitalist; be based on common property, not private property." This was heady conversation for a German aristocrat to be offering a young lad of the town. It is not suggested that Marx's socialism began with these talks but they do explain how it was possible for him, though not without social strain, to marry into this family. At seventeen, Marx was sent down the Rhine to Bonn to the University. This was then a small academy of a few hundred students, very aristocratic in tone. Marx was still a romantic; his interests now extended to include drinking and duelling. Even by the relaxed academic standards of the time, he was rather idle. His father complained both of his high living costs and his almost
complete failure
to
a change in universities.
was a move
life.
The romantic
an end; the years of Hegel began. Not only was Berlin a far more serious place than Bonn but Marx was now surrounded by the disciples of Georg Wilhelm Friedrich Hegel. These young men, the
years were
at
now
to
change how
all
men think. This was one of those moments. What is not so easy to describe is the change
Hegel
is
certainly
so.
by a story told
of the
me by Arthur
Home
It concerned a night in 1940 when, as a member Guard, he was deployed with a fellow professor, a distinguished
81
to
t\\
airstrip
near Oxford.
with a
rifle
of
ith
Toward dawn,
and
said, "I
lit
his pipe
do > on suppose those wretched fellows aren't coming? I did so want a shot at them. I've always detested Hegel." Marx's lifetime associate and alK was Friedrich Engels. The best short
summar\
of
to Ijotli of
them comes
first
Ironi liim:
"The
great
tlie
ot
show the organic character ol this process. An organic process of transformation and development would become tlie central feature of Marx's thought. The mo\ing force in this transformation would be the conflict between the social classes. This would keep societ\ in a
effort
was made
to
Once
it.
it
tlie
bourgeoisie
were
ot
gaining power, the bourgeoisie would nurture the de\ elopment of a classconscious proletariat from the exploited, propert\less and denationalized
move
The
bourgeois state,
structure.
would be
state
Hegelian law, the process should continue. Perhaps the workers' state, by the nature of its productive tasks, w ould be highU' organized. Inneaucratic, disciplined. It would need .scientists, other intellectuals. .\nd il would
By
would now have a large demand. These artists would then begin to assert themseKes. Their opposition to the bureaucracy would become acute. Thus the next conflict, one that is far from in\ isible in the countries of Eastern Europe and the Soviet Union. How ever, Marx did not allow Hegel to take him so far. Nor
nurture
artists, poets, novelists for
w hose work
modern Communist
society,
Hegel could
l)e
quite a
come
easily to
likely
The Dissent
of
Karl Marx
itself,
involved liim
in
emotional
crises,
weak-
ened his health and, it appears, brought him to the edge of a ph\ sical breakdown. For a time he left the city and went to the small village of Stralau outside Berlin to recover. Each day he walked several miles to attend his lectures
is
and wrote
singularly
in sinprise at
much
he would be
in
unwholesome living. Much of the world's work, it has been done by men who do not teel quite well. Marx is a case in point.
It is
tempting
view
it is
the
modern Berlin the draiuaticalK visible manifestation was Marx's great preoccupation. The place to Wall. On one side is West Berlin: this is the embattled outpost of
to see in
On
is
all
preciseh
this,
spoken of democracy, not capitalism, and few have conceded the ine\
of the transformation unless
it
itability
is
be out of weakness.
Still,
the contrast
accepted;
I've long believed, alas, that in highly organized industrial societies, capitalist or socialist,
is
to
convergence
that
if
steel or
made on
stamp
its
impriiit
on
tlie
is
societ\
whether
tliat
be Magnitogorsk or Gary,
to the
Indiana.
If so,
the Wall
not a place
ol historic
mass production
it
vast
and
will
become
hard, visiting
Berlin,
The preoccupation
witli the
]:)r()ducti\e
more, not
less, alike.
In 1841,
Marx
left Berlin.
transfonuation.
1
A new
iactor
would
also
now
litherlo the)
w ere relaxed
and voluntary. Henceforth, for years, they would be sudden and compelled. Germany, France and Belgium would all unite in the belief that Marx w as an
excellent resident lor
some other
country. For a
man pursued
is
b\ the police,
ol solact'
and
in
to
to
be righteous
connnitting
it.
Marx was
ha\e
this
Marx went
Trier,
it
to
is
was
redeemed irom
84
France
it
was
said that w
liat
wasn't prohibited
what wasn't permitted was Marx became a journalist. The paper was the brandnew Rlieinisclie Zeitiiiig; it was well-financed and by. of all people, the burgeoning industrialists and merchants of the Rhineland and the Ruhr. Marx was an immediate success: he was first a highl> \alucd correspondent and ver\ soon the editor. None of this v\as siuprising. He was intelligent, resourceful and extremeK diligent and in some wa\s a force for moderation. He also enforced high standards. Revolution was much discussed. The word "communism, though still indistinct as to meaning, was now coming into use. Marx said that numerous of the resulting contributions were:
v\as permitted. Prussia followed a sterner rule:
prohibited. In Cologne
"
in a
slo\cnK
stvle
and flavoured with some atheism and communism (which these gentlemen ha\e never
I
studied) ...
declared that
was
.*
Marx would
still
be a force
left
for editorial
good
in
today.
Under Marx's editorship the Rhcinische Zeituuggrew rapidly in circulation, and its influence extended to the other German states. It became also of
increasing interest to the censors
who review ed the proots each night before it adverseK to Marx on many things; the most
I
numerous matters
Marx, and
to
From
wood
most w ater.
,
it
w as a
free good.
increasing population and prosperit> the wood had and the collectors a nuisance. So the privilege was withdrawn; wood now became serious private propert\ The cases seeking to
Now, with
become
protect
\'aluable
it
Some
all
prosecutions were, it is said, forlheft of dead wood or what was so described. the keepers of forests would be The law was now^ to be \ et further tigiitened given summary power to assess damages for theft. In commenting on this power, Marx asked:
if
is
theft,
would not
person of
Through mv
do not
deprive another
this
propertv ?
Do
not thus
In these
same months
of 1842,
tlie
Marx
also
came
to the
support
oi
old
.Moselle \'alley.
85
The Dissent
of Karl
Marx
common market that had recently adopted. His solution was not radical more discussion their problems and he came with free of to this also rather
severely from competition under the ZoUverein, the
the
German
states
labored caution:
To
resolve the difficultv, the administration and the administered both need a third element,
is
which
political
without being
official
at the
same time
represents the citizen without being directly involved in private interests. This resolving
element, composed of a
political
mind and a
is
a free Press.'
Marx
Prussia
to divorce.
was Prussia: here was a man supporting wood collection and free and criticizing the Czar. A line had to be drawn. In March 1843, the Rheinische Zeitung was suppressed. Marx went to Paris. First, however, on June 19, he went to Kreuznach, a resort town some fifty miles from Trier. There, in a Protestant and ci\'il ceremony, he married Jenny \'on Westphalen.
discussion
It
woman
since
Mary
did
her future
keep clear of
politics.
new life. The streets of Paris were Many of the revolutionaries at this
in Paris
time were German, refugees from Prussian censorship and repression. Many,
of course,
were
socialists.
was
very great.
now
a small hotel-boardinghouse.
hallway tells of the most famous tenant, as does, most willingly, the proprietor.
Andre Gide lived in recent times at one end of the street. Stavros Niarchos now has an apartment just a few doors away. One imagines that the neighborhood has come up a bit since Marx's day. Once settled in Paris, Marx went ahead with his next journalistic enterprise, the editing of the Deutsch-Franzosi.sche Jahrbiicher, the German-French Yearbooks. This was really a magazine but by calling it a book, lie hoped to avoid censorship. The reference to France in the title was also a gesture. Though he was in Paris, Marx's thoughts were on Germany, and it was for Germany thai the Yearbooks were \\ritteii. Rue Vaneau was a convenient location for Marx's editorial activities, for his co-editor, Arnold Ruge, was a
near neighbor.
review
in
the very
it
first
issue of the
Yearbooks led
to
another collision u
ith
Friedrich Engels.
Birth of a Socialist
The emancipation
is
ot
Germany
is
is
The head
itself
of this emancipation
philosoph>
its
heart
ithout transcending
'"
the proletariat, the proletariat cannot transcend itself withont realizing philosophy.
But again the Pru.ssian police showed thcmselve.s to be very sensitive men.
This was dangerous
stuff.
The
first
now be no German
readers,
there never
were
obviously in trouble. Marx, by this time, was also quarreling with his fellow
German-French Yearbooks was the last. In the next weeks, however, something far more important happened. Friedrich Engels was passing through Paris; the two men had met briefly once before; now at the Cafe de la Regence, once frequented by Benjamin Franklin, Denis Diderot, Sainte-Beuve and Louis Napoleon, they met and talked,
editor,
Ruge. So the
first
to
would be Marx's editor, collaborator, admirer, friend and financial angel. His name would forever, and all but exclusively, appear in association with that of Marx. "Our complete agreement in all theoretical fields became obvious," he later wrote, "and our joint work dates from that time."" Engels always considered himself a junior partner, and so, without doubt, he was. But that does not lessen his role. Had he not been the junior partner, much for which his senior partner is known would not have been
done.
And
like
Marx, he was a
(it is
member
hard
of the
upper middle
did they
class. All of
to think of
come from
the masses.
textile
manufacturers
Ruhr and,
in
an
branch of
Marx
settled
down
life.
Numerous
of the ideas
which were to dominate his later years are thought to have taken form in this period. No one should imagine, although some do, that socialism began with
was under the most intense discussion. Saint-Simon and Charles Fourier had preceded Marx. So had Robert Owen whom we've already encountered. Louis Auguste Blanqui (who spent most of his life in prison), Louis Blanc. P. J. Proudhon, all Frenchmen, and the Germans, Ferdinand Lassalle and Ludwig Feuerbach, were contemporaries. All, and
Marx. By
this
time
it
especially the
The Dissent
of
Karl Marx
Marx, during these years, was not only gathering ideas but considering the
role of ideas themselves.
force in historical change. Marx, while not denying the importance of ideas,
The accepted
intellectual production
changes
its
character
in
is
changed. The ruling ideas of each age ha\e ever been the ideas of the ruling
I
this.
in particular,
tendency
to
be
economic
interest.
What
iet
whether
in
the institutions
that reflect the
Union,
rareK hostile to
although
many
succeed.
also, in
Taking form,
student of
\\
hicii
capitalism itself would be changed. Sir Eric Roll, a remarkably eclectic English
Marx
he
civil
servant, an ac-
who
member
summary
Bank
many
ence
It
.
motivating influ-
change:
in
had
.
be some contradiction
production
made
necessary by the
new powers
opposed
[From
this
comes the
''
inevitable antagonism
whose
The
to
its
consequences. As a
he was forming
his ideas
on communism and
beginning to identify himself with the ultimate vision of the classless society.
else,
his
he continued writing. His preoccupation was still with Gernew outlet was Vorwdrfs (Forward), the organ of the German
in Paris.
refugee community
still
said:
is all
Germans has
ol
the
more
classic in thai
il
is
incapable
tence
ot
the
elopmcnt
Germany
is
It is
a neccssarx disproportion.
onK
people
element of its
freedom
. '
90
One
>
earns for policemen w ho could be aroused toda\ b> such prose. But.
were aroused. The\' complained to the French; to act. They asked for a friendly,
French Minister of the Interior, was obliging in such matters and issued an order for Marx's expulsion. That was on January 25, 1845. On twenty-four hours' notice the Marx family there \\ as now a baby girl departed for Brussels. Vorudrts \\ as also closed down.
The
history of
all
is
Freeman and
slave,
patrician
and plebeian,
and
serf,
oppressed, stood in constant opposition to one another, carried on an uninterrupted, nowhidden, now- open
fight,
common
State
is
common affairs of
The
b\ the
immenscK
ci\'ili-
facilitated
sation.
The cheap prices of its commodities are the hea\ y artiller\ w ith w hich
.
.
batters
dow n
all
Chinese walls
It
enormous
cities,
during
rule of .scarce
and more
[InitialK
1
have
monarch)
The Communists
iew
their
ends
chains.
countries, unite!
'
91
The Dissent
of
Karl Marx
crescendo tones
still
moved
faith.
to
proclaim their
laiiifcsto
of
tljc
Comiminist ^artji.
is
hauHtiiig
Europe the
spectre of Commiinisin.
All tlio
spectre
Powers of old Europe liave ciitereil iulo a liuly alliance tu exorcise tli-s Pope and Czar, Mclteruicli and Gutzot, Frcuch Radicals and
in opposition that has not been decried as comby its opponents in power ? Where the Opposition that has not reproach of Communism, against the more back the branding hurled adviinced oppusition partie.^. as well as a.^ainst its re-actiouar y advci varies ? Two things result from this fact. I. Communism is already acknowledged by ail European Powers to be itself a Power. II. It 13 bi^^li time that Communists slvniid openly, in the face of the whole world, piblisU tlieir views, theii- aims, tiien- tendcuciea, am! ii;cet this nursery tale of the Spectre of Communism with a Manitesto of the p.irty
itself.
To
this end,
Comamuists
German,
followiiif,'
Italian,
of various nationalities have assembled in the manifesto, to be published Flemish and Danish lauguaiics.
I.
(a)
all
is
and
slave,
i'-
guild-
meanl the cl.iss of modern Capilali'^li, nwucfs of the By bourgeoiiic raeaus of social produchon and employers of wage-laiwiir By pixjIcUuat. the class of moJero wage l3hour';rs wlio. having no ine,i:i3 of production of their
own, arc reduced
lo bcllinR
[Ii;ir
{b) Tliat is, all urt:Uii liialuiy. In n'^j, the pre history uf society, the social organization existing previous to rc'cordr:il history, was all but unknowu Sincn then, llaxthnusen discovered common ov\ncrship of l.iiid in Russia. Maurc provcil it to be the so^iial foundation from which .ill Teutonic races started in history, and by and bye village communities were fouud to be, or to have been, the priniilive form of society everywhere from India to Ireland. The ioaet
political
effect
on
uncompromising, thrusting
including those
it
mood
tor
all politicians,
\\
whom
name
of
Marx
is
lio identifx
onl\ with
suits. In
Frenchmen
of the right or
left
decide to
tell
The prose
so
contrived
is,
The Manijesio
might suppose,
lor
its
not without
its
contradictions.
its
There
is
none, as some
his call
in
accomplishments,
extinction.
in
there any real conflict between his call for revine\ itable.
and
his
claim that
it is
One can
al\\a\s
tr\
to
advance the
between
his
92
Revolution
Of a Sort
by
all
his hope of rc\ ohition. 'Hie program in the Manifesto modern standards, mostly a collation of reformist measures. The
lor:
demands are
oi'
land.
Abolition of inheritance.
national
bank with
monopoK
of banking operations.
in industr>
cultivation
Better
soil
management.
Work by
all.
Free education.
Abolition of child labor.
'*
In
in
these things
been done. And these reforms have helped take the raw edge
overthrow of
which Marx called. In such fashion did Marx work against Marx. The internal revolution came in those countries Russia, China. Cuba where the reforms Marx urged were never known.
existing social conditions" for
Revolution
Of a Sort
come on
the lieels of the Manifesto. In the Italian states,
Austria,
revolution did
France,
fell,
Germany and
few weeks. This was in 1848, the year of re\olutions, a year that is still connected in the minds of many people with Marx and the Manifesto, neither of which, in fact, had an appreciable influence on events. When the revolution came, the words of the Manifesto were still all but unknown. It was, however, the first revolution that could be identified. Ii()we\ er indistinctly, with the aims and aspirations of the w orkers with the
some
to rise again in a
proletariat as a class. So
it
was watched
profound
closely
effect
by Marx, especially as
his
it
developed
in Paris. .'Vnd
it
Iiad a
on
of
revolution. For that reason the e\ ents in Paris require a closer look.
E\er\' great event has
its
geographical epicenter
RcN'olution
Halls in
around Carpenters' and Independence Philadelphia; that of the great French Revolution was the Place de la
city blocks
93
Berlin.
Vienna.
,iii
t>
I
,
.1
;
IT-
"i
'.'
"
::
i,|,
it.
,hiii '
'NsMMdinf
jj' , si.
" r
~ H
B, a.
i S S jM'f S /j|,-;
.Jl
Prague.
Revolution
Of a Sort
The
setting
had something
to
taste. In the years before 1848 in France there had been and much unemployment. Businessmen suffered as well as the workers. The crops had also been bad and bread prices very high. Then, in 1847, crops were very good and prices fell. So now the peasants took a beating. Almost everyone was being punished; the market, which is much loved by conservati\es, was playing a ver> revolutionary role.
were much
Marx's
a severe depression
was that private production of goods might not be the only possible form of economic organization. This was the
It
and others mentioned abo\e. In circulation, also, was the compelling notion that every man had the right to a job; the reference was to the right to work.
In the United States, the phrase, the right to work,
to unions, for
now
a job.
It is
of nostalgia,
liberal
state
e\
in
trade-union
Time changes
work was a
The
to
The
leadership w as mostly by
men u ho
ot re\()lution,
By most standards, the leaders were conscr\'ative. As the symbol the red flag w as rejected in faxor of the tricolor. The tricolor was thought less damaging to business confidence and tlie public credit. The revolt was quickK successful. The Tuileries Palace was occupied. Louis Philippe found it con\ enient to depart. The Luxemboiug Palace was brought into use as the seat of a commission to study means for rescuing the workers from their poverty. This device was not yet a transparent stall. The concern with the workers brought the focus on the Gardens. The
the police.
tlie first
congress of workers in
for segregating
in
was
also,
means
and
the
be
It
was another
95
The Dissent
of
Karl Marx
thing to question private property, be for workers' rights, higher pay, a twelvehoin- day.
let
it
not be irresponsible.
The word
comes
always
being threatened.
safer than they
we knew how
hard
it is
to
word less, and conservatives might fret less about the danger. They are far, far
know. Three conditions are absolutely
essential.
ers,
who also know that they have men are rare. Revolutions
main chance.
The leaders must have disciplined followers, people who will accept orders, carry them out without too much debate. This too is unlikely; revolutionaries
have a disconcerting tendency
defend their
to believe
is
own
all,
beliefs.
There
The
violence of revolutions
in
is
men
the
was
in
War
in 1917. So it was in the Chinese Revolution after World was not in 1848. In the Luxembourg Palace the leadership was weak and the talk was long. It was of government workshops in which men would produce cooperatively for the common good; it didn't matter much what or at what cost. Or it was of public works, a great underground canal across Paris, in which imagination took the place of engineering. Wages were, indeed, raised. But this and associated relief measures had the effect of raising taxes and giving the peasants the impression that they were paying for the revolution. Meanwhile no real thought was given to seizing the instruments of power guardsmen, police, soldiers. These are extremely important people in the moment of
II.
So
it
revolutionary truth.
This
the early
On June
assemble
Pantheon a few hundred yards away. From there they marched to the Place de la Bastille to enforce the much-discussed demands on the provisional government. The government was not without resources, and
had been viewing the workers with increasing alarm. The workers succeeded in getting to the Place de la Bastille and in building a formidable barricade. The first attack by the National Guard was repelled,
it
and some
thirty
guardsmen were
killed.
of revto
olutionaries
now
asserted themselves.
Two handsome
climbed
what Frenchman,
To London
fire
were stormed and the workers overcome. Prisoners were taken, and initialK' they were shot. Then, it is said, out of consideration for the neighbors who objected to the noise, tlicy were put to the
ba\ onet instead.
ful
to the
days
until the
becoming conscious of the environment. Marx was not greatly surprised by this outcome. The bourgeois leadership
of the revolution did not inspire his confidence.
And as
far as the
workers were
first,
in
Marx noted
had succeeded
matter of the
"The
tricolour republic
now
'^
Elsewhere
in
made
to the
capitalist class
were
in conflict.
until the
World War
I.
To London
The \ear 184S did bring great personal changes for Marx. The Belgians were more liberal than their neighbors but just as nervous; they decided that even they could not harbor so dangerous a man. By now Marx was at the head of the
police
lists,
a celebrated
name
moment the revolutionary mood had its eff^ect. On almost the day he Brussels, he was invited back to France. And he w as able to go from there to Cologne to revive the Rheinische Zeitung, now become the Neue Rheinische Zeitung. His first loyalty was still to the German workers.
For the
And
it
and
Once they saw the feebleness of the revolutionar\ threat, they mo\'ed in again. Marx was still, in some ways, a voice for moderation. He had warned
it.
strongly against reckless, adventurist action In the workers that could only
lead to disaster.
Onh two
countries
to
were
still
States.
going to the
97
The Dissent
of Karl Marx
it
is
inteiestinti to spfcnlatc
done
so.
But
lie dichi
w ent
to
London.
the ex-
last
move; he
lixed in
London
Marx crossed
Though
.
lie liad
perience ot several
only thirl\-one.
Before him lay three further tasks: the Hrst was to put
organization that would bring
in final
was to create the was to find the means 1)\ wliich he and his t;nnil\ could eal, be housed and survive. Each of these tasks interfered sadK with the others but. in the vnd, all were
that \vf)uld guide the masses to their saKation; the second
accomplished.
and from other Iriends. 4liere was an occasional inheritance windfall from Trier, and there was the Neir York Trihtiiw. (In 1S.57, when limes were lean, the 'rrihiinc fired all ol its loreign correspondents but two. Marx was one of the two w ho w ere kept.) But Nhirx
financial help
fjigels
\\
The
came Irom
as alw'a\
a terrible
hand w ith mone\'. Where before his mo\cments were at now ihey were at the behest ol landlords and
Irom rooms
Dean
in
Leicester Square to a
flat
oH
Street in Soho. to
number 2<S
in
further up
six in all,
the squalid,
crowded rooms
uncerlainlx
,
in
the sudden
it.
mo\es and the sc|ualor were Jenin .Marx one gathers, w ith inlinite good nature.
1(S52, a
mariiage
The
is
police spy
It
infiltiated
Marx menage.
forth
and holds
hope as
to
spile el
el
llie
liis
is tlie
iienllesl
and
mildest
one
ihe eheapesl.
llu'
(|liarti'rs ol
London.
is
o rooms,
I'lie
one
lookm'j, onl
is
on
llie
sireel
is
salon,
at the liaek.
\
In the
not
solid pK'ec' ol
I'A ei
thill',; is
t'\
hroken.
\\
tal tei'ed
and
torn,
ol
ilh a
li.ill
meh
is
disorder
er\
lieie. In
it
the imdille
lie
hn ne old-lashioned tahle
\\
ert'd
s
with
to\
s.
an
oilelotli. lai^s
and on
there
ihildriai
the
and
tatti'is ol his
hroken rims,
kni\t's. lorks.
\
in a
w old,
and
all
on the sanu'
talile. .\ st'ller ol
ashamed
awa\ sneh
reinarkahle colleetion
ol
lu'ii
room smokeaiid
nines
hut
that lor a
to the
to
he uropinu ahoiit
a eax
em,
'j,radiiall\
as
on urow aetaistomed
out certain ohjeets w hieli distiii'^nish tlu'inselx es irom Ihe snrronndin;4 ha/e.
,
\\ er\
tliin'4 IS dirt\
^
'
and
cm eri'd
sit
dow
hecomes
a lhor()U'j;hl\ daiiijorous
hnsiness.
98
Marx's house at 41 Maitland Park Road. They moved here from "the evil, {rightful rooms" in Soho which Jemiy Marx said "encompassed all our joy and all our pain." This neighborhood
The Dissent
of Karl
Marx
Marx wrote
all
of
them
to a friend,
all
moved with
suburban
villa in
Hampstead, a brand-new
years in
estate development.
over. Although the
was
myth
is
who do
expression.
not have one. This was nearly complete security in thought and The governments under which Marx had previously lived had the
why he
should be so favored.
life
On
notwithstanding,
He
disreputable characters gathered in his sc]ualid cjuarters to consider the strattactics of revolution. In
Ambassador made an
members ol the Communist League were engaging in all kinds of dangerous discussions, e\ en debating the wisdom or imvvisdom of regicide. The Ambassador recei\ ed a superbly insouciant repK "... imder oiu* laws, mere discussion of regicide, so long as it does not concern the Queen of England and so long as there is no
protest to the British government.
Marx and
his iellow
definite plan, does not constitute sufficient grounds for the arrest of the conspirators.
"'''
said that he
However, as a conciliatory gesture, the British Home Secretary was prepared to give the revolutionaries financial assistance for
Howand
when
a joint request
came from
.\ustria
Marx and his friends, it was rejected. London Marx had one other resource that has been more celebrated. That was the fibrary of the British Museum.
Prussia for the transportation of
In
Das Kapital
in the British
Museum Marx
all
He
wrote,
in particular, his
No
will
one, least ol
it,
can be satisfied w
ith a short
And no modern
Marxist
.satisfied even by a much lengthier eftorl. It has long I>een the acknowledged right of ever\ Marxist scholar to read into Marx the particular meaning that he himself prefers and to treat all others w ith indignation. This is
ever be
if
The decently
meaning.
subtle
mind
more
\alid, less
ulgar
Still,
100
The Reading
Room of the British Museum. Marx worked here, as later also did Lenin.
'
The Dissent
of
Karl Marx
David Ricaido.
for there
it
will
were precursors) the labor theory of value, the proposition that things exchange in accordance with the amount and quality of the labor
required in their manufacture.
And with
sustained
life
The
up.
price of the
food,
Ricardo
means
of sub-
in
the main
was bid
at,
Wages were
to,
bid down.
The
were kept
or returned
Where
left off,
Marx began.
It is
in
histor\ that
in
socialist thought.
to a
of production.
What workers
was surplus
Wages were
waiting and eager for jobs. Should that labor be brought into emplov ment and
rise, tliis
would reduce
profits, precipitate
an economic
crisis, later
would thereby be
the surplus
v
restored.
From
come
invest-
ment. This would grow more rapidlv than the surplus; thus capitalism would
suffer a declining rate ol profit. Finallv
.
come
the wherewithal by w hich the large capitalists would gobble up the small
would grow stronger but the sv stem as a w hole would be ever more attenuated, ever weaker. This w eakness, in combination vv ith the tailing rate of retmn and the increasingh severe crises, would make the
system progressively more vulnerable
the angrv proletariat
it
to its
own
destruction. Confronted by
of its exploitation, disci-
aware
plined by
its
work,
therc>
final
liic
monopolise
all
acKanlasjcs
ol
process of translormation,
mows
always increasins;
the process
ol
in
mechanism
letter
it,
(
ot
ol capil;dist
The monopoK
of capital
\\
hecomes
ith,
and under
and
\\
here the\ become incompatihle with their capitalist inteiinment. This inte<4ument
ol capitalist pri\
hmst
-
102
The International
ell
ha\ e been
phrases.
his great
events w
ith lireat
His capitalist was given the satisfaction of knowing that his end
came
not
ith a
The International
The
first
\
olunie ot Capital
in
the
German
original.
Das Kapital:
Kritik der
Buch
1:
"Der
Pro-
was
many
for
published
in 1867.
The second
t\\
o \olumes. w
ith
a claimed readership
the press from notes and manuscripts b\ the e\ er-faithful Engels and could not
else.
p<)\ ert\
One
until
and
struggle.
Another w as
of writing anything
he had read everything. Yet another was the endless swirl of discussion,
in
w hich Marx
instinct for
lived.
What he
and no
dail\
:
known London
By means of an
filth
artificialK
alories of
London spew
their ph\sieal
into the
Thames. By means of the systematic pushing of goose quills the world capital spews
into the great
out
master
in
a \irtuoso in perjur\
and treason,
a ci-altsnian in
all
the pt'tty
and base
perfidies of jxirliamentars
il
when
in
blood u hen
the helm
ol state.--'
in
these years
Marx was
laving the
The instrument
in
of revolution
jnu-poses
would be an
workers of
all
common
Marx
was born in London on September 28. 1864. at a some 2000 workers, trade unionists and intellectuals from all over Europe. A governing council was selected, ot which Marx. naturalK becairie secretary'. Its first task was to produce a statement of principles and purposes: this was done, and Marx was appalled b\ the verbositv. illiteracy and general crudity of the result. So. knowing the subject to be irresistible, he got the members discussing rules. He then attended to the
tneeting attended by
.
103
Membership card
-ff^
IIITEflN>^
^
WORKING MEMS ASSOCI*\*^^
jlfil [^^
i^^W *
/^SSOCIATIOM INTtRN'.'.tOUVBIERS\
^^-J^hi^a^^
IWTtHIIK'
ylWTERimARBEITEW ASSOCI'n*SSOCI'
DOPCaAl./
CARD.
-was
first
day ofJartiLa/yJSfJ,
muL /tauL
G.-^-^T-
<!!yc^^^-<ij?
._
Mmiorary Trea^novr.
^i<crcfitfy
<-''?/-yx
( 't>ri ''pai^^iiiu.
"^"'^
for JPrance.
Germcory.
itdfy.
CiATVO^iJ*^
SwOxerhouL
y^
si
^^MM.
>
Paris Again
principles.
The
result, his
Address
to the
Working
Classes,
is
another famous
document
. . .
in tlie history oi
Marxist thought:
no application
ot science to prociiiction,
ol
no iniproxcment
ol machiiiciy,
no contrivance
ol
all
do au ay
\\
ith
dutv
ol llu'
working
classes.'''
tlie call:
"Proletarians of
all
countries, unite."
aHiliated trade luiions
The
members and
it
and
the
grew
in
in
1867
Lausanne and
in
calling
tor limitations
be the
went
to
drama
showed them-
selves far from being denationalized; instead the\ rallied to the deiense, as
they saw
it,
Then, as
later,
wicked and
The
was outlawed by Bismarck and soon b\ the Third Republic. Its headquarters was moved to Philadelphia, not a place ol seething class consciousness; there, a few years later, it expired. In 1889, as a union of workingdisputes,
class political parties
it
rose again
the Second
Inter-
national. This
Marx
Paris
Again
the
But
if
nail in
it
alsogaxe .Marx a
moment
of hope. For
where revolution
effect.
It
concerned, \sar
in
dream of the
Marx (and
those to follow
hoped. But
tile
it
to the
now happened
and the
its
France.
On March
of
I,
The
ov
erthrow
Napoleon
III
was
affirmed,
legislators
acquiesced
in the
peace
terms.
The
Prussian
army made
triumphal march
down
the
Champs
105
Eh-sees- Outaige at
t/
:
'^^
rulers,
experience
hunger and
ng
:s Of
revTjlt. It
the
began on Montmartre when the were in the hands <rf the ^^ ttrusLTberewere echoes. ~. Toulouse and other cities.
Paris
Only
cftv.
in
May
-1
'
-r
Conunune rf 1S71.
f the
It lasted
and oo
Mav 2S.
.t
e revolt
^^ftenbIood\'.
When
was
.Ages, including, in
esceetunei>
ciruei. SiMrh oi
the ieadmg
-5
as
-.tr
.\ew Caledonia.
Thewc_tiie a^idit^"
__
._:.
r
---
r.e
with
wfai:.
ers are
events were foflowed ckeeK by Mars, and by ih>w such wias his fame that
dooaries.
i:trast
:
was
attributed to
-ear
whvhe
<-
Commune
w as
middle-class
WTjen
the r
ft
was all
over.
Marx
sent a h
itive
dying I
of
s
Thie Civil
ther
Worfana mem
of
Mar
IS
.114 class. Its
:
Pans, wttb
a new
society.
The
prayers of their
il not avail
to redeeto tfaenoi.^^
The Commune
.
-_
^..
.,:.
:..^:. ..^,
ctbove
some wishful
thinking.
first
re>olution that
was to use. seriously. howe\er inIt was the onlv one Marx was to see.
Marx
li\.
eri
He continued his
higf.
106
Pans
after tfae
Oe
modem standards.
Coninic
fr u:e
uommuiie-
The Dissent
of
Karl Marx
and \\ hat was error in socialist thought. One of tliese judgments brought the most enduring of his phrases. In the years following the FrancoPrussian War, the working class in Germany grew rapidly in political strength. Again the aftermath of war. Not one but two working-class parties emerged,
was
riglit
met at Gotha in central Germany to merge and agree on a common program. The result was extremely displeasing to Marx: the program offended deeply against Marxist principles, and once again reform replaced revolution. His Critique of the Gotha Pru{i,ramme held, with much else, that after the workers had taken power, the scar tissue remaining from capitalist habits and thought would have first to disappear. Onl\ then would come the great day when society would "inscribe on its banners: from each according
and
in 1(S75, they
to his abihty, to
each according
to his
needs!"-"
It is
the hundreds of
thousands
His
last
in
\ears were not a happ\' time for Marx. His health w as bad and not
I)\
improved
the abuse to
\\
and
alcohol.
trecjuent occasions he
was
he went
Carlsbad
in
is
now Czechoslovakia where the police watched over him along with his doctors and reported principally on the very satisfactory way that he kept to his
prescribed regimen. In ISSI his wife Jenny was found to ha\ e cancer and that
,
December she
Jenn>. the
lonely,
first
died.
Marx
little
On March
13,
1883, with
Engels
at his bedside,
been so
diminished by
108
4.
The
ideas ot w liich
we have been
of
in
the last
were important
for
Western
Europe and
They had
Middle East,
.\frica.
was without
capitalists,
much
a
much was
ol
feudal socict\
.\lar\ spoke.
which
of
Much
of this world was, directh or indirectly, a colonial deof the industrial countries.
real.
The independence
was under both the economic influence and (through the Monroe
the United States. In the rest of the poor lands
in\ itation to
independence was an
ci\ ilized
call
the
coimtries.
lia\
e expected the
at length,
of its
the sort.
Adam Smith w as interested in the subject as in e\ erything else, l^ut he w as mostK concerned to warn against eflorts 1)\ tlu' mother countrs to monopolize trade w ith its possessions. It should make no attempt to do this either for trade
in
as tobacco, molasses,
w hale
content to
condemn
Company and
in
all its
to
'
lie
had
"I nder the present system of management, therefore. Great Britain derives nothing but loss from the dominion which she assiuues
concluded
that;
()\
er her colonies.
In a
modern
that Mallhus.
who
of
the
would diaw.
on the
iuige,
109
poor and
erence
to
prolific
population
in his
ol
India.
Es.saij
There
is,
refol
Hindustan
great
on The Principle
ol
Most
tendenc\
observations
in
Adam
some
with
selfish ad\
its
antage
lor the
mother countr\
James Mill, like .Malthus, was supported b\ the East India and he de\ oted much of his lile to his great History of British India. Company, a book to \\ hich all historians ol economic thought ad\ ert and \\ hich lew ha\ e
colonies.
political
compan\ s tiading nionopoK otherwise his case and administratix e, not economic. He looked lor;
first
s\
stem
would admit."' John Stuait Mill, who, like supported b\ the compan\ did not get ai'ound
,
his lather
There he contented himself with mging goxernment-assisted emigration w here population was excessive and empty
last
pages of
his
Principles.
The
made
this inter\
ention
imnecessar\
in
the case
ol
of classical capitalism
took colonialism lor granted and concernt-d ihemseK es with the conditions lor
progress
as
it
in
The
colonial world
did
make
He
ol
for colonies as a
lor capitalist
production. Thus
postponed for a
little
and collapse
Marx
advanced
The
had no bourgeoisie, no
It
it
was
in
was capitalism
would
to
transform [iioduction
olutionary proletaiial. So
was something
be urged
a progressixo
force.
down
In
and
is
,\tarx.
so rexiled as
t'r\
an
in\ itation to
address the
the
nited Nations.
110
ol
was
of
developed doctrine. The ideas sioxerning colonialism were merged into the
experience
itself,
and they changed somew hat as the experience changed. To we must go not to llie books but to the practice and the
was explained and justified. what has just been said that this part of oiu' discussion, and accordingK this chapter, ha\ e some of tlie character of a digression. The\- take us out of the main cmrent of ideas and exents in the dexelopment of capitalism and socialism to look at a special phenomenon, one lliat was not satisfactoril\ integrated into the main course of economic histor\ But digression is also an unsatislactor\ word, for it suggests something less important. We must not
follows from
.
and extent
tlie
The
did.
its
There
is
On man\
matters
men
sense that
is
better
serxed by a myth.
And
to
first of all.
to [lersuade
one
s self.
cerned.
Men
must ha\ e a
fairly ele\
To
die to protect or
pri\ilege of
someone
stated,
else, the
most
common
The case
of colonialism
The
w ere the\
selfish or
where
of
it
settlement
of
unused lands
the
mcreK
always
secMi
them-
spiritual, political or
The
realit\
who have
wrong:
far
more
Colonial rule, the go\ ernment of one people by another and geographicalK
or ethnically distant power, has
later
it
alwa\s comes
to
an end.
bloocK
is
departure
diminishing
intei'i'st ol
those w ho lea\e.
empire's
Spanish,
l^ritish.
l-'rench,
.\merican, Portuguese,
if
Dutch and
Belgiari
the people
of
the
worthwhile
to
do
so.
111
willing to
to
it
had been
to
win
them. Also, an important point, the people of these coimtries were no longer
willing to
to their
purpose
in
myth
selves
and
their
money
to the colonies.
One
much
final
day
in
the United
that
onetime colonies of Britain, Latin America, Africa and Asia, happens and more that does not happen can be explained by the
colonial experience
by the way the land was held, the way the economy was
rule.
No
memory
But,
it
is so deep and enduring as that of colonial humiliation and injustice. must also be added, nothing serves so well as an alibi. In the newly independent countries the colonial experience remains the prime excuse whenever something goes wrong. In these countries much does go wrong. So,
in this
\\
Once
the
m>
th
as
made
Iio
colonized.
Now
b\ those
\\
ho
\\
ere colonized.
To the East
Mention colonialism, and the first image is of a great thrust westward by Europeans into the New World. In fact, the first great colonial enterprise of
Western Eiuopeans was to the eastern Mediterranean. It began nearh nine hundred years ago with the First Crusade; it continued lor an incredibly long
time.
Had
still
in
the year of
would
the
Pentagon,
would
still
be heard
that, in the
light at
more
would be
emerging doubl as
The
men
inlidel
and
to
Turks.
crusader
da\
is
man
\\
ho
is
politics no one is viewed with more imease than "a crusader l\pe. The less avowed motive ol the Crusades was the acquisition of land and other property. Preaching the First Crusade in Clermont in 1095, Pope Urban II was candid enough tosax that good real estate was available for the ('hrislian taking in the HoK Land. This was a deepK' insj^iiing thought to the younger and landless
sons
ol
HoK
ol
mind
to (ind
in
"a job
lor tin-
Asia than at
112
nn
.'.
roixxpi cxx
cc c)tiatraiuT; urn
flcT
ipiC
(incamonon
tc>i^'i
Hiuene'i:
]^'^
li
rmejnnocsmr.l
Mmpomgxxc cr>r wtc p'ifb U am% cc [i Qucne Ico'ebc Rme ct& c{W tnix cr cc fiux [cntxtc >te autn*. Or
farPifjqiic arqiiciie critowi c!Ci
fxnw fTcwc
|x)fc)itce'Sc
,
wx .iMX?.llc
'
fi
c|xtcnet
[ocx'snoiicir
cp
paepiue^.wVij.am.CiJVlu
tr
cjjmr hotioii
(c tic>-->c
,^ f\
'
crxxfxrvgmxxain
q crncuon leVxn
ffuncc
'fccn^ctcrrcSifautx-cpdrr.
'
"iCfcc&.i
.amtre^rmlcrcnr
crrrtrrc9.'mtiT6tcJTC0cntn.
.
I'.TixurrraC-RjnJxi^frare.
'OvTxxoTie>cmonfbtt-qucnaii?i
'^nioTmniil.a'u(rfx*granrl<xtr
';
nonxccpixrtcetrnxeqiuxnraru.
'
f\itrr(mxc
fcix ntif]fhTntr.
ct mtinSU
rtfpioS^c p ifpcn
icir
civil
'
rSlh-ot? T>ar f 1
ttr.cropf
lenuow im
m^^^lN^
flicn cKirSruif
mai
Cti
merest
b:'inxc.]c/i'n>i>clpcnml
>av pciTOn'ft
c-otx^ipce atJiflc-
' qxti
'
par uii
;c
pmJm ojfcvte
*
,
gIXOU^.<?auturT0^Jmomrliut;
Ctxtftiiiceetx
hi^
'T'ta oiici
'
^ilicxxre.
rutcirconfe-TCMoeqaTpai^nft
iffi gi-nm . fx fm cfmutxnr imB acucre^gTme.ctTniiC-fcn cm 'laxnrvo a ^ parSccrrp gxxin^.
Ri
el
oTpiaiSSrt
Tmce. Ciin?^TtioTitrTr'Vni-m
T.oxicc.
tcVKu
or_
At Constantinople, the motives were deeply mixed These were the eastern Christians saved. The looting was remembered forever.
:
to be
Crusade the
We
lootin'j; ot
Constantinople
in
men
oi
\\
as
make
The
First
its
most distant
goal.
Jerusalem
was won. So was the real estate that reinforced the commitment to the (hoss. Then there w ere reverses. In less than a centiuy both Jerusalem and the land were lost. There now came \ et later Crusades, and now also the reports that
with a
little
more
eftort, a
all
losses
continued, and,
I'
.
when another
forced back to a lew footholds along the Mediterranean shore. land was gone, the pride of the Westerners was important, as was later suggested
*
'
still
engaged.
It
in \
i!
also be
'
in
it
w hal
too
is
now noithern
Isiael,
as the
most imporin
tant.
}
On
Ma\'
IS.
1291,
came under
later.
assault.
the
ing defenders,
ith
'
not in doubt, .^nd to ha\ e planned the e\ acuation would ha\ e been to concede
deleat. So v\hen
hope w as gone, there w as the same anarchic rush to escape. was sold to the highest bidder; lorlunes changed hands diuing
Passage oul w as b\ ship, not helicopter.
The
Fiscal Aspect
.
The younger sons were not the only ones interested in propert\ The sword arm of the kings of Jerusalem, and oi the later Crusades, was the military ortlers, the armed monks. Of these there w ere three the Knights of the Order of the Hospital of St. John of Jerusalem, known as the Hospitallers, the Poor Knights ol Christ and the femple ol Solomon, known as the Templars, and the later Teutonic Knights. The militarx orders were especialK notable lor their combination ol motives. They w ere dexout, disciplined and exceed-
and increasingK
(
so with the
ol
'hrisl
ol
the Ordeis,
Their inteicsl
114
Acre today.
The
Hospitallers, a slightly
lo tlie 1 loK Land. Tlieir militar> ing a military force, rendered care to pilgrims w ondc-rs of the medie\ al architecture, which stands to this day, is one of the Syria has been called world. Krak des C;he\aliers on a mountain in western What I sau nearly perfect castle ever built. 1 visited it in 1955.
tlie
most
througli a
blmding rainstorm
escaped from Acre came- to Rhodes. The Palace of the once visited it and spent island. also one of the superbK graceful sights of the w ith. among part of a week recording a television di.scussion
(
the belter
in
end of the week that the sound apparatus had not Hospitallers were been recording.) For the next two and a half centuries the combining this function with the policemen Of the eastern Mediterranean, piracv Again the undisclosed to the Lord and occasional lapses into
success;
it
developed
at the
service
in
the service
of colonialism has
It
is
so long
remained in the memor\ but come from afar, with religious purpose and sanction, to occup\ Jerusalem other secular pursuits. The fear also to take up tlie land and engage in inex itable that am w ho persisted that one dav the> would come Ixick. It w as
as that of the Chiisades.
men had
so
it
il
the>
did not
much whether
The
is still
over Israel.
Had
Turks threatened
into Spain southern shore of the Mediterranean and then across the straits so did the Last, the in waned .spirit into Europe itself, rhen. as the crusading
power
It
of the
Moors
in
the West.
oi'
tc-lls
same \ear
masters, she launched that Spain freed herself from the Moors, her colonial Columbus the most spectacular of all colonial \entures herself. Christopher
was
in Seville that
year
1491 on a
had come
to
persuade
Queen
gt'l Iht attention until .she the building of Spanish did. he had finished with the Moors. InnnediateK that
116
Romans
oi
look
ilhin a \er\
tew \ears
the
in possession ot a
Spaniards thought of
almost as lhe\
Washington and
British
Columbia, only a
of the
Spanish orbit, remained anon\ mous, trackless wilderness for another three
Adam
explicit form. To rescue souls obserx Smith ed. " The pious purpose
and
the project.
"
Ikit
and the
The
effort
managed
its
b\ the state,
all
that
Adam
Empire. Land,
conflict
companion,
think of as two
of
the most
much
of his
life,
the result
have ever read. (Prescott was nearb blind lor of beiny hit in the e\e l)\ a bread crust thrown
He w as so
highk regarded
in
S|iain to
Boston for his perusal and use.) Prescott had respect tor the religious motive in Spanish colonialism. The Dominicans, he tells admiringb .'... devoted themselves to the
that they
in
the
New World
"
. .
showed
.\
Old
tint
exclude
in
useful
toil.
ithout compulsion,
and
means Christianilv
it
It
was
not an association,
luav be
added.
117
tliat
escaped
llie
Around
named Hatuey was taken into custody in Cuba resistance movement and was sentenced to be burned
the end, gain admission to heaven.
As a
in
He
inquired
it
white
men would
I I
already
On
will not
be
so
a Christian: for
to a place
where
must
find
men
The Bureaucracy
The
CJrusaders
were
sul)ject to
in
France,
was meant to be so. wisdom ol the state, is available to this day in Seville. I'ntil 1717, Seville was the headquarters for colonial administration. The colonial files survive there, row upon row, room
was a
closely administered enterprise or
this,
Wonderful prooi of
and of belief
in
the higher
in 159(S, this
\\
great square
ot
here businessmen
it
was
used, as
it still is,
to
was truK immense. By 1700, some tour hundred thousand regulations governing colonial affairs had been issued. An effort in KiSl to consolidate and codify these produced some ele\ en thousand laws. All these the colonial administrators were presumed to know and follow. The Spanish Empire may well have worked only because its regulations w ere so numerous that no one imagined they would be enforced. The pett\ anthe Stamp .\cts, lor noNances that caused the l-jiglish colonies to revolt example would never e\en hu\e been noticed among [hv Spanish regu-
The amount
of paper so produced
lations.
Some
financial
his
is
1
a delight.
1
There
is
a letter Irom
it
Columbus
describes
is
to his
and business
affairs.
to
Mexico
way
ol
He warns
1539 from
of
some very
New World.
letter in
is
Queen
oi
Sixain tells
her that he
sending some
emeralds.
that
He
II
Urban
of
from Eiuope
in
the
knew
mailer
a receipt
may
measure
118
in Seville.
became a flood.
S^y^ln, j-^n'
T^
.1
fcV
i^
yU^e
"5
i^
f
?,^
.,
,,^j.
.,(..v..C5A....
j^^_,.g,.
.n^,
-<r#.*-
j,*.Ai^'t*'-
J.m- Jr^
HUt.ir.,
F"'U
rtfuA.-
V^.^1
+.1
-p<i'"
Ji"'"
>fii4f
4m
m(*,.^
ftirr*"
.-><n
&^/vt-
,a"^ - >"
-^ f' F^
'"-f
,^^
/.;
/'
" **
-A.
colonialists
Letters
is
blunt:
"
'
He goes on
to his cruel t\
The docimients
Valladolid,
is
in the
.
o\\
n tale to
tell
colonial bureaucracv
In 1654,
one
file
sought.
The
w as
still
some
sixty
years on.
was real. Long after Spain had left, the goxernment of the erstwhile colonies was highK centralized. It was also casual and rejected the common reaction to what had gone before. British colonialism, in contrast, was informal, decentralized, relaxed, even careless. Until the last century, apart from an Indian otRce and briefl\ an American secretary ship. Britain did not have a go\ ernment department w ith
else, the
legacy of bureaucracy
encouraged Smithian
es,
ideas
in
not to their
government,
own
well-being.
Mexico
In the third
decade
of
came
to
ernments
to recruit
military force.
Men
Spain and
the property of other and richer people. Local military levies, on which there
was increasing dependence, were lo> al not to Spain but to the lands of their birth. The mass of bureaucratic instruction emanating from Spain was an annoyance even when ignored. The occupation of Spain by the Bonapartes was the coup de grace; it removed all claim by the Spanish Crown to the loyalty of the subjects be\ond the ocean sea. The task of the liberators Boli\ ar. San Martin was again the kicking in of the rotten door. It w as also something
less
than liberation.
the ties with Spain
When
came
had been
toil of Others
was not
affected.
the effort of Madrid to limit the power, restrict the privileges, control the graft
and regulate the predation of the local landow ners that encouraged them to think ot independence. Nothing was more central to the colonial experience
than the tendency for conscience to hv a far more troid^lesome thing
in
the
in
the exploi-
tation ol the natives. Tiie colonists lelt the\ spoke Irom experience, felt the\
knew
120
'their people,
"
how
\\
ere,
it
w as
\\ ith a firm hand. Also it \\ as the economic interest was directly inxoKed. After independence, power in Spanish America remained with land. There were now constitutions and legislatures but there w as less here than met the e\ e. It was acreage and not
tliat
The
result in
first.
a century
after the
The
first
was a
than
More being
the
first.
it
was
far bloodier
So
was
also in
ovv
Cuba. There
too.
w hen Spain
handful
who
power remained with the ownership was New York. It was not until Fidel Castro
left,
Cuba made
its final
is
much
still
and otherwise,
for injustice
more modern
The United
it
sometimes
it
blamed
to local talent.
There are rough empirical grounds for thinking the native despots more pow erful. The tw o countries closest to the United States, Cuba and Mexico, are the two that have had the trulv deep revolutions those that swept away
used
to tell
my many
Latin .\merican
students that the misfortune of the rest of Latin America was in being too
distant from the revolutionarv' tutelage of the United States. This
was not
believed.
also
and
less
enduring than
in
more
there
Mexico and Central and South .\mcrica. The much was that of the P^rench. although here
ot
I
was
precious metals
later tell,"
Law, of
whom
was
Thev were backed bv gold and sil\ er remained to be mined in the Mississippi \alley. This gold and silver has not yet been found but the prospect seemed better then. Maps were in
banknotes bv the bale
circulation in
France that show cd mines of unimagined wealth, all products of the imagination. The sav ing of souls was less important than in the Spanish
121
Empire, partly, no doubt, because the French were less devout and partly because there were fewer souls available in the area for saving. A further
problem arose from the very poor cjualitN' of the souls of tlie colonizers themselves. In 1718, a hundred miles up the N4ississippi, the first small not settlement was established. It was called New Orleans for the Regent
One
thinks of a city
named,
sa\
for Edv\
ard VIII
New Windsor.
Soon after
among
among the newK- arrixed Christians and concluded: "... not onK do debauchery, lack of faith and all other vices reign here, but the\ reign with
immeasurable abundance!"
'-
in the
extreme. Once
Frenchmen were not available to work them. The French did not forget that the colon\ was one of the pillars of Law's fraud. As an indication of how slight was the interest, the Louisiana colonv in 1762 was ceded to Sjiain. The colonists resisted the more s\stematic
became evident,
interest declined.
Irish
origin,
Alexander
was a man
of affabilit}'
He won
the hearts of the dissident, in\ ilcd their leaders to a reception and had
them executed.
In 1800, Louisiana
sold to
was taken back b\ Napoleon, and three years later it w as Thomas Jefferson. With Alaska, it was one of the few great colonial
b\'
forward
The 530
some water)
an acre.
was alienated in large tracts. There it was was the plantation. Since no workers came with the land and they were needed to plant and cut the cane, and plant, chop and pick the cotton, thev were brought from the older states of the American union or from Africa. The colonial idea took hold here as completeK as in Mexico. Onh the superficial forms were different. And, as in Mexico, it ordained a later revolt, one rejecting the power of the planters and affirming the rights of the people.
Now
This began
in
in 1861
War and
o\\
n time. As
.
re\'olt
As
in
Mexico,
was a
Here
too there
owners made much of their moral obligation to their slaves. They provided for their religioLis instruction and e\entual saKation, protected them in a harsh, cruel w orld for w hich, bc-ing, it w as held, happ\ feckless children, the> were
.
in
another w a\
men spoke
of
the sacredness of
122
in the
tor
making money.
Lahore
now the Pakistan Pinijab, was called the Queen Cil\ The legend ot Shalimar survives even now, as does the Garden. To be a Punjabi in the days of the Raj was to be thought adaptable, progressive, intelligent, martial and, by Indian standards, relatively prosperous.
In British times Lahore, in
.
what
is
This
is still
the case.
first
When
it
British rule
came
to
east,
was
like that of
came
to trade
mone\' was to be
made.
(Colonialism
came
late to the
and the territory annexed only in 1849. B\ then the Honourable Company was dying and British rule was accjuiring a diflterent faith. This involved an important rcxision of the colonial idea, one of much importance also for the French and Dutch in the nineteenth century. The higher purpose ot colonialism was no longer religion. The Church of England was for Englishmen; missionaries were tolerated but not much encouraged, and to man>' colonial administrators the\ were frankly a nuisance. The new faith was law. The
British
that.
w ere in India to trade and make money. There was nothing wrong with But the redeeming purpose u as to bring goxcrnment according to law It
.
was an idea
of genuine power.
Punjab as a
ci\il
He was
to the
deput)
to say judge and general Beames went on to serve in Bengal, Orissa (between Calcutta and Madras) and (Chitlagong in w hat is now Bangladesh. When, in the full course of time, he retired to Britain, he set down the story of his career.'-' EspecialK' as regards his earl\ life, Beames had
Here he was
man who
to total recall.
He was not himseli concerned in the slightest w ith making money; that would ha\ c been Luithinkable. That other Englishmen found India a profitable possession w as something he mereK took for granted. This had nothing to do
with him; those so concerned, the businessmen and planters, were a thor-
with the
124
is
all
occupations
though perhaps
^4
British recreation
The hunt
breakfast.
witli
liis
British colleagues
and superiors
in
the
government (of whom he was usualK critical), and with the tasks of government which he approached and ot which lie w rote w ith a craftsman's jiride. He coniessed his laith. "GoxxMiiing men," he wrote, ""is grand work, the noblest ol all
occupations
difficult.""'"'
its
This functional
ow n categoricalK
al in
Largely
iii
consecjuencc,
in
the hundred
was one ot the best-governed countries in the world. Persons sate. Thought and speech w ere more secure than in recent
eff"ecti\e
There was
action
to
arrest
munications.
The
ot the litigiouslv
so
man\ w ere
so poor,
u as
building
and
railroads,
down commimal
riots
it
was
far
more
etficient
corrupt, arbitrary
in later
were snobbish,
race-
was the case above all that proves the ultimate point: ol some jieople to rule other people at a distance
and the departure
will reflect the
that
it
will
wishes
ot rulers as
well as ruled.
The end in India came on .\ugust 15, 1947. The British, too, could have remained. The effort would hav e been cheaper and easier than defeating the Germans in w hich ihev had just l)een inv olvod. 15ut thev had ceased to believe
that the colonial
purpose
justified the
modest increase
in effort.
.\nd w hile
fiindus, Sikhs
agreed
in
w anting them
to the
The
not. In
testament
in
northern India the end of British rule brought w hat was, perhaps, the
the pent-up law lessness of a centurv w as suddenlv released. 'Hie rules gov erning colonialism
ment
wasnt
ietnam.
There were
also the
Gongo.
.\lgeria. .Angola.
127
128
terrible.
Viewed in the long reach of history, the experience cannot seem remarkable or the end surprising. Oddly enough, we had been warned by the most eloquent of all the voices on the colonial idea. He had warned not because he was against colonialism but because he had been a part of it. Not one American in a thousand, and even fewer Englishmen, know that Rudyard Kipling once lived (from 1892 to 1896) outside Brattleboro in southeastern Vermont. The house he built is still there, a rather grim Victorian affair; sensitive souls now think it a bit spooky. There is nothing
grim about the view;
it
New
is
Hampshire,
all
the
way
to
Moimt
Monadnock.
works.
In his study,
which
Having lived in America, Kipling felt obliged to give advice when, in 1898, with the Spanish-American War and the accjuisition of the Philippines, the
American
No one
tlien
blushed to speak
ot
white
men and
their responsibility.
to expect.
The savage wars of peace Fill full the mouth of Famine And hid the sickness cease;
Go make them with luir h\ mi; And mark them with your dead!
\
willi
The wars
surrection
of peace
one came
sixty
\\
had been
it
was to save tliem from ('ommimism. The British had goxfrned in Western India through the princes, in Malaya through the sultans, in Africa through the chiefs. It was called indirect rule. In Vietnam we go\crned or
130
Now
Requiem
tlu>\
wore not
a crusade,
called princes,
Communism w as
For others,
was
so called,
as saving Constantinople
infidel.
it
The second
danger
;
Communism succeeded
in
in
Vietnam, freedom
in
Thailand, Malaysia,
domino theor\ the economic moti\e lurked just behind. Better to fight tor treedom and free enterprise in \ ii'tnam than on the beaches of Oahu. Or after that ma\ be Malibu. The United States could ha\'e remained in Vietnam of that there is not
the slightest doubt. But, as w ith the Portuguese, the British, the French, the
Spaniards and
among the Crusading knights and kings, there came a decline in What had been a slow decline in other countries went
w ould no longer suspend
disbelief, accept
rapidK
in
the higher motives, ignore the lower economic ones. Again there
was the
space
in
mess> end.
.\s at
Acre, the\
s.
it
in Saigon.
Then, as noted,
could
it
was
for
the galle\
galleys,
Now was for space on the helicopters. These w ere taster than the
trip
and the
.-Mso
it
all
be w atched on
much
Requiem
Does the
badl\
colonial experience belong fore\er to histor\
fingers;
?
The
burned
dc\ clopment in distant lands will henceforth surely be \iewed with caution.
And
it is
not only the United States that has had this pain.
The
World War
II,
sought to extend
its
influence in Yugoslavia,
it
can hardly
was deposed in Algeria, a Russian newspaper correspondent said to me rather sadly, "They used our tanks. Well, at least they didn't use our advisers." The Chinese, in their turn, became the bitter enemies of the Russians. Once again "The Blame ot those ye better." One hopes that there is now a volume of Kipling in the Kremlin. But, though colonialism is dead, the scars remain. The old colonial powers are now the rich industrial lands. Their former colonies are the poor countries ot the world. Colonialism is blamed for this p()\ert\. As earlier noted, it
Bella, a Soviet acolyte,
When Ben
gets the
blame when
local failure
that ol
local
governments,
politicians,
131
The
to
would be a more salutary explanation. makes deeply sensitive the relationships berich lands
I
tween the
the
have an obligation
if
widely accepted.
one
money and
the assisting country remains remote, waits to be asked, does not interfere,
will
will
be badly used.
to urge
The
to
right.
Then you
I
risk
who is
To
can
testify as a
onetime ambassador
in India,
difficult case.
My
instinct
was
to get
Economic development
it.
is
a great
and fascinating
enterprise.
There
none
like
How
had no shortage of thoughts. Also the United States was supplying much food and much money. For their use I had in some degree to answer. The late Krishna Menon, in a memoir, concluded that it was my farhunger and deprivation?
new viceroy. By most others I was forgiven. But, numerous other Americans, it was my good fortune to have been warned. I had lived much of my life in southeastern Vermont and knew all
from-secret purpose to be the
unlike
about Kipling.
I
and experience
cussion
\\
to digress
hat
we
choose to
It is
now time
to return.
132
5.
II generation, m\ generation, u ill al\\a\s think of modern watershed ol change. Hitler was defeated, fascism destro\ed. For the great colonial empires just discussed, it was either the end or the beginning of the end. The nuclear age arrived. The two superpowers emerged. Soviet influence and power advanced into Eastern Europe, American into Western Europe. The Chinese Revolution came. What
People
c)t
the World
War
\'anity,
\\
ith history.
But
ith
we
World War
It
was then
building, came apart sometimes in a matter of weeks. And others were permanentK transformed. It was in World War I that the age-old certainties were lost. Ihitil then aristocrats and capitalists felt secure in their position, and even socialists felt certain in their faith. It was never to be so again. The Age of Uncertainty began. World War II continued, enlarged and affirmed this change. In social terms World War II was the last battle of World War I. What came unglucd in the First World War was a class structure and the
that political
and
in
the
who
tilled
it.
Their
eminence now depended partly still on land ow nership, partK on education and social position, partly on an accepted right to public and militar\ office, most of all, perhaps, on tradition. The other partner in the coalition was the increasingly influential businessmen w ho, e\ er since 1848, had been asserting
their claim both to social position
and public
influence.
The relati\ e strength of the partners varied. In Eastern Europe the principal power was still with the landed aristocracy the famih' elites, the officers and officials they spawned. The monarchies still ruled; capitalism and capitalists
,
were
as
et a
it
in
h()we\ er
But here
left
the
government
'\'ale
Princeton,
In
industrial
proletariat. In Britain,
and
parliaments by large
working-class parties.
coalition
The
it.
In the
United States, by
party at
now the greatest of the industrial powers, and not much in the way of trade unions.
all
In 1914, in
still
rivaled or exceeded in
number
trial
workers, were also the hard substance of military power. Especially in East-
who owned
war as they were dominated in peace by those prove the decisive class. It was not necessary
that they should cease to obey.
It
is
u as
It
here, not
Western Europe,
it
appeared.
was here
disorder, then in revolution. The Western coalition, were more powerful, was meant to be much more vulnerable to revolution. That was the lesson, at least, from an offliand reading of Marx. It showed itself, instead, to be far stronger.
that
dissolved,
first in
where the
capitalists
one had
to select a city
irom which
is
to
it
would be Cracow,
in
what
is
now
Poland. There
Cracow was
was selected
purpose by the
than any other, led and catalyzed the breakup of the old order
Ilyich Ulyanov,
in 1912.
Vladimir
to
known, except
He came
Cracow
Cracow because it was on the border between the t\\ o great empires of Eastern Europe. It was then part of the Austro-Hungarian Empire but the Russian Empire began onl\ a few miles away. The imperial and colonial idea discussed in the last chapter \\ as the rule b\
selected
He
hite
men
in Asia,
It is
what the
British
had
in
India, the
Americans
Mozamin
bique. There
was
Here Austrians ruled Bohemians, Slovaks, Ruthenians, Croats, Slovenes, Italians and, in a more tactful way, the Hungarians. Here likewise Russians
ruled Latvians, Lithuanians, Estonians, Finns.
Poles. Cracow was ruled from Vienna. (So, a couple of hundred miles w est, was the much larger city of Prague.) Warsaw, to the north, was ruled from St. Petersburg.
almost e\
And
in
Poland, specifically,
184
Lenin.
The
Poznan. north and west, the cradle of Pohsh civihzation, was ruled with
considerable difficulty from Berlin. There were examples of this kind of
imperialism
in
Western Europe
Germans
the
in
Alsace-Lorraine
in
for the
resentments
it produced the same resentments and cultivated same exquisite hatreds but on a much larger scale. The tensions were far greater than in the outlying empires of the Western
in this colonialism
Many
of the ruled
Some
re-
was almost always true of those who were governed the Russians. To be by one's inferiors or, more exactly,
is
those so regarded
an especialK
bitter thing.
II
as the time
when
It
came
to
an end. This
is
was
War
imperialism began.
In I9I4,
however, the hold on the subject peoples seemed secure. Indethreat: rulers worried mostly about rival rulers
It
who could
was
this
Out
of these fears
alliances. Austria
had turned
Germany
financial
and
in
Britain
saw
in
Russia a
manpower. Russia reached out to France for in building her railroads and industry. France vast reserve of armed manpower. This manpower,
War
I,
Russian steamroller.
it
was meant
The
(the
Territorial Imperative
to hislor\
No subject know n
more
interesting ([uestion
Rome how it lasted so long), has been so much of World War I. Perhaps great events can ha\'e simple
,
explanations; Llo\d George once suggested that the powers simpK stumbled
J.
P.
in fuller
many
still
see, tlu'
outcome of the
capitalist
and imperial
rivalry
between
Britain
France on the one hand and Germany on the other. German capitalism was
136
challenging that of Britain and France for the markets that were indispensable
for capitalist siir\ival.
has,
even
for
non-
ol iorthright truth.
the
live
war began in Eastern Europe, and also that, in these last thirty years, same capitalist coimtries have found it possible to shed their colonies and
with each other
in
remarkable harmony.
lies in
The
better explanation
dominantly rural
capitalist world.
societies.
dangerously belligerent
more
were
Marx
and men had been both wealth and military power: the two went together. The
historical experience, land
in proportion to the extent
and quality of
of the land
c{ualit\
were the number, and perhaps also the qualit\ ot the peasantry it supported and therew ith of the soldiers he could muster. Thus his militar\ pow er. Thus
the territorial imperative, the belief that nothing should stand in the
acquisition or defense of territory.
way
of
and men
this territorial
It
imperative
was part
between
was
a factor as
France and Germany. Had German\ won, something more of France w ould
to
the Balkans,
was
mortal.
It
was
his
neighbor w anted
was decisive
for
plans plans
this
uniform and
ol its
to the frontier.
Once started,
territory,
it
momentum
own; the
act of mobilization
signified
an intention to
fight.
beyond your frontiers. Mobilization in 1914 did not, as is sometimes suggested, make w ar inevitable. It did provoke the atmospiiere of fear and crisis in w liich
rational decision
was even
less probable.
it
is
always thought a
trifle
preall
generals in
II
inheritance
is its
absence
On
the contrarv
intelligence
is
a threat to those
137
who do not possess it, and tliere is a strong case, therefore, for exckiding those who do possess it. This was the tendency in 1914. In consequence, both the rulers and the generals in World War I were singularly brainless men. for None was capable of thought on what war would mean for his class
the social order that was so greatly in his favor. There had alwa\'s been wars
Rulers had been obliterated. Tlie ruling classes had always survived.
extent that there
To
the
social
consequences
ot
war,
tliis
was what
was believed.
the fears
it
tlicn
made
the conflict
A chain reaction is
known
result.
rogue reaction
foretell.
one
One needs
witli a
The Workers
Though the rulers had not given consideration to the social consequences of war and were largely incapable of doing so, tlie workers had given it great attention. Their leaders were much more capable of thought. Also there was
no doubt as
to
who
who
of
common
money
make
If
mobilization impossible.
weapon would be employed the general strike. awesome thing, the ultimate social weapon. All
and things would end, all production would stop, all would come to a halt. War would then l)e impossible. The warmakers would be defeated b\ the massed power of their own workers. No one tlierealter w ould doubt the power of the working class. It didn't happen. When the call to arms came in 1914, the German Social Democrats, the most numerous and best organized of the working-class parties, voted in the Reichstag under w hat, in the United States, is called the unit rule. The vote was for the war credits. Hugo Haase, their parliamentary leader, opposed the vote in the party caucus. But then, with an admirable
of people
movement
economic
life
lie
in
the
138
Lenin in Poland
we
our
own
Fatherland.
"'
The vote was symbolic and not financialK decisive, as some historians ha\ e supposed. The Imperial German go\ ernment would not have been stopped by the defeat ot an appropriations bill. By September nearly a third of the membership of the Social Democratic Party was in the army. It was the same in France. The Germans, as an\ good Frenchman could see, w ere coming across Belgium. So, La Patiic. Prior to 1914, the French government had prepared a comprehensi\ e plan to deal with working-class opposition in the e\
ent of war. This pro\ ided for the arrest of strike leaders, the
To
the
to
was no
the anxiet\ about their frontiers, although in the xears before 1914, with the
rise of
German
even celebrated
I \\
When
the
Germans landed.
were stranded.
and shame
ofF
Such were
my
surprise
my
game.^
British
offices,
political
ot
of socialists
and
most prominent
think that
it
cured
Social
Democrats
in
arrested
In Russia, unlike
Lenin in Poland
were watched w ith tlie most profound interest bv Lenin in Cracow. Following jail and a threc-vcar sentence in Siberia, he had been out of Russia (except for short periods during and after 1905) since the beginning Krupof the centurv But the Polish police were tolerant, even friendlv
All these events
.
139
The war aims were not disguised: It was for King and country, roughly speaking, the traditional ruUng class and the system.
TERMS OF SERVICE
"^CfCR
IHL
ruKnnoNai
J'rt
TO JOIN
And
access to Russia
was
\
easy. Revolutionaries
man\ coming
to
isit
Though
it
traffic.
Once one
cl.
VI ur-
member
of the
Duma, came
to visit Lenin.
He had
Nonethe-
When Lenin rebuked him for doing so, he had never occurred to him that one could
in Russia.
Lenin
and Cracow was an excellent place from w hich to smuggle cop\ to the paper. Lenin's articles had mostK to do w ith Russia but he reached out to the literacy rate among American Negroes which, he noted with much indignation, was twice as high as that among Russian peasants. Edward A. Filene, the Boston philanthropist and merchant ("I got it in Lilene's basement "), attracted his attention. Filene held that American employers were coming to understand their workers better and that the workers were coming to see the problems of their employers. Both would e\ entually realize that their interests were in common. "Most esteemed Mr. Filene!.
a regular contributor,
"
was
tlic
The
Cracow could
still
Jama
exists. It
center of political discussion, and, Poland being Poland, the discussion continues.
But
in
He had
capitalist rivalry
summer months
imminent. So,
in
like
He was
ski resort of Zakopane. The house w hich he was staying, a singularly beautiful and room\ structine w ith clean, amber log walls and gleaming wood floors, is now another minor place of
in
socialist pilgrimage.
o{
in
was a schoolteacher and school superintendent. the family: Lenin's older brother was hanged while a
an amateurish plot
to assassinate
\oung student
for participating in
St.
Alexander
141
were all in keeping. It may, Marx who has given us our mental image of how a revolutionary should look. Far more than Marx, Lenin was a re\'olutionary. Marx wrote;
Lenin
led.
He
who
moving
ver\'
his higii
dome
man
of far
more
satisfactory aspect.
Once
old
C]uite a
historian
isited Har\'ard.
He was an He had
of a
ith
amused pride
that Lenin
known case
Lenin spoke,
a man
we
much
He
replied:
"When
marched."
Marx but
vital.
matters he went
first
essential for
aim was
".
but unit\
This belief was further affirmed when the working-class and France voted for the war. They were large, lacking
purpose. Their action led also to a
insistent. Until
rev()luti()nar\
parties of Germany
in strong,
coherent
new
was
then a reference
to Social
to the
who were
And, though
in Russia,
w orking
class,
be
to wait forever.
Why
They were
infinitely
would more
14S
The Guns
of
numerous. Tlicn
\\
t^ic
and
often,
though
of
who
were, belie\ ed
tilled for
that, as a
matter
owned
the landlords.
They had
gi\en up their
title
Marx saw
practical
man\
of
a far
tliis
more
did.
comse
to
in their
he
Once
become conservative
redeem the land for the truK socialist society. That problem could be faced w hen the time came, as b\' Stalin it was. In the end, things went in accordance with Lenin's design. His slogan peace, bread and land appealed wonderfully to the peasants in the armies of the Czar. When the rexolution came, the) were not socialists but they were not hostile. The armies comprising them were not a threat, and soon man\ were no longer enrolled. The peasant soldiers were \-oting with their feet, against the war and for the land that, by then, was being taken from the
The Guns
All this
of
was
still
more
he
practical
problems
form of the
in
Now \
conceivably, he was a
came
to the
house
in
Poronin, and
notebooks containing
He
room was
his
jail,
Lenin and
at
home.
Officer Class
Meanwhile the great armies came together, fought, slaughtered each other and then settled into trenches, to come out at inter\ als to be mowed down
again.
was showing itself a force ot real power in human affairs. In we have seen, it was predictable among rulers and generals and was, in some degree, congenital. So it explained much that happened in World War I. Part of the explanation w as the result oi a military and technical accident.
The
stupidity
143
INCH,
MAXIM GUN
CrossheRd
E/evating gesr
Socket
Arm crosshead
Block,jSitiming with
Turnbler, e/efating
screi*'
t handle
asa"
Front legs
fiear leg
Shoes
Socket lugs jamming handle, /"ont leas St ud,jalnts,and Stud, pin and Jamming handle rear leg Chain, securing cleaning screm
Direction dial Ele^at/on dial (fitted over handtvheel elevating gear) JiT^J^k
in the
the product
was one
though with
Two
so equipped were the equal of a hundred, sometimes even a thousand, armed with rifles. At Hyde Park Corner in London there is a memorial to the British machine gunners of the First World War. It has a simple, terrible inscription: "Saul hath slain his thousands; and David his ten thousands." Supporting this unlimited capacity to kill was the limited capacity for thought. Adaptation ot tactics was far beyond the capacity of the contemporary military mind. The hereditary generals and their staffs could think of nothing better than to send increasing numbers of men, erect, under heavy burden, at a slow pace, in broad daylight, against the machine guns after increasingly heavy artillery bombardment. This bombardment the machine guns, enough of them, invariabK survived. It did, however, eliminate all element of surprise. So the men who were sent were mowed down, and the mowing, it must be stressed, is no figure of speech. The political leaders, for their part, could think of nothing better than to trust the generals. Thus the continuing, unimaginable slaughter. Those who went to fight in World War I could not expect to come back. If, as Churchill once said, the\' survived the first hurricane or the second, they would surely be swept away in the third or the
fourth.
men
144
Switzerland
Switzerland
w hich Lenin came was the revolutionary capital of the world. B\ modern standards it was an almost unbelievably tolerant communit\ Highly subversive citizens were in residence from ever\ part of the Continent. People whom their own governments wanted elsewhere had unlimited freedom for agitation, and the Russians were an exceptionally large and notoriously articulate band. Gene\a landladies had two rates: one for ordinary people who went to bed; another, and higher, rate for Russians who remained up all night arguing. In Switzerland Lenin liv ed first in Bern. With him were his wife and motherin-law. Money was scarce, though small sums came from Russia to help
Tlie Switzerland to
.
now hard
to believe possible in
work was the library, where his hours were as regular as tliose of the chartered accountant he resembled. However, he still found it possible to get away to the mountains, and he was greatly pleased to discover that the librarians would mail him the books he needed. Previously in London he had been astonished that the library at the British Museum was run for the public and that the
librarians actually regarded themselves as the servants of the readers. (Years
later,
according to legend,
it
attendants
librarian
Lenin as
if he remembered Lenin. He did, a most diligent little man. The wondered whatever had become of him.) Now the Swiss impressed favorabK Krupskaya later recalled that her husband was "lavish of
:
first
of the
weapons
of revolution this
;
was
left
When
Lenin
was
to involve
himself with
tlie
The Conferences
Conferences were a very serious business
for the revolutionaries.
Nothing
modern
sales
executive
more committed
to
to the
conference as a
and
Conferences need
reational.
or a foundation.
fiercely proclaimed. It
is
very
Of serious conferences, very few are to exchange intormation and fewer still are to reach decisions. Most are to proclaim shared purposes, to reveal to the
145
the revolutionaries were Trotsky At the wartime conference at Zimmerwald nature lovers and were amazed. bird watchers. The birds looked back at these
rumored
to be
and thus
is
to reinforce confidence.
Or they
tliat
something;
is
of the
\\
Zimmerw aid
in
now
fev\-
minutes out
in
Attending were the Left or militant Social Democrats; the avowed purpose, of
was
to settle
to
were
in
it
to
be be-
The birds looked back these nature lovers Lenin, Trotsky, Zinoviev, Radek and were amazed. Lenin's position was as before: workers of different coimtries were not
as ornithologists, bird watchers.
came
in
common
the Czar,
tliese
tlu'
He argued
but without success. OnU' a handlul supported him. National teeling was
strong even
among
As
some simple
isolated,
pacifism.
And,
to
be cautious. Ornithologists or
morale.
not, they
had
home
,
again.
in 1914,
marching almost
alone.
lihrars
The conference
by
his wife's
did
He
account
much
irritated.
He turned back to the first revolutionarv' weapon. If the conference had been a failure, the tract on which he now v\-orked was destined to be a thing ot power.
It
imperialism
Imperialism:
it
Capitalism.
an impressi\e dociunent,
asserti\e
though short,
it is
is it
original.
As Lenin
concedes,
it
ol English
and
social reformers.
filled
But Imperialism
policy.
an enormous gap
in
re\olutionar\
thought and
Marx had predicted the progressive From their desperation and the internal contradictions and consequent weakening of the system would come the overthrow of capitalism. This was not a remote contingenc> as Marx saw it. It was imminent. In the fifty \ears following, capitalism had grown stronger; workers, as Lenin was far too realistic to den\, were less rc\o-
More
his phrase.
147
lutionary than
fifty
now
for
were important not as markets, as investment and for the resulting development. This colonial investment and development had given European and American capitalism new strength, new staying power. It had also rewarded the workers in the capitalist countries and made it possible, in Lenin's words, for the capitalists "to bribe the labour leaders and the upper stratum of the labour aristocracy.""^ So bribed, workers were then no longer
on
to a
new
and Latin American comrades. However, it would not last. This investment had given capitalism only a brief parole. The world was running out of new colonial territory. The war now going on reflected the desperate need of each capitalist country tor more such land. Thus would Marx be redeemed. Meanwhile the wartime behavior was exopportunists Lenin called them of the working-class leaders
plained.
to industrialize
become
relevant.
was why,
for
in
Lenin, in contrast,
made
Africans and the other people of what is now the Third World as for Europeans and Americans. The i)lame for the poverty of the poor countries lay with the rich. Only by revolution could the poor countries get both the capitalists and the workers of the advanced countries off their backs. Lenin took the revolution to Russia. But he also sent
it
on
to
China.
now went
it
. . .
though
still
would be "impossible
had been
privates
in
were shot
in
month
sentiments
the trenches.
148
This
not
tlie
\\
w ar
in
the
West
\\
as
show ing
its
weakness
pow er to command the masses; it was show ing its almost incredible strength. It w as showing that it could command millions to their death w ith scarceK a murmur, more often than not with enthusiasm. On D-da\ in 1944. the great decisive day of that war in the West. 2491 American, British and Canadian soldiers were killed. On July 1. 191 fi. on the
first
Somme
but one
da\" in
one battle
in
19,240
British soldiers
all ol
w ere
killed or died ol
1944 cost
the .\llied armies around 40. ()()() dead. For a gain of under
in 1916, British
miles on the
'i"he
Somme
point.
Battle of the
Somme w as
a disputed
soldiers
recalls the
At \'erdun. w
killed.
ithin that
were
No
battlefield of
World War
unless
it
be
in Russia,
much
horrors of that war. There are dozens a few hours from Paris that o\ erw helm
War
I.
One
is
a threeIt is
est
rom .Vmiens.
It is
mo\ e across
it
as o\ cr an\ pastme.
called
Newfoundland
Park.
It
as the scene of
acts of
On
still
the
first
day
ot the
Somme. from trenches and o\ er shell holes that you Newfoundland Regiment attacked, against the German
and against barbed w ire that was largely intact. The Germans be\ond were admirabh sheltered in a deep natural ravine served b\ a railroad. The\- had been ampK warned b\' the preparations and the premature explosion of a large mine near their lines. (The\ promptK
machine guns and
artiller\
to
succeed
was not
no surprise but
this
Within
tort\
minutes. 658
were
The
survivors
were then
and attack
again.
The order was rescinded onlv w hen the higher command disco\ ered there were almost none. The signs on the battlefield sav "Newtoundland Lines," "German Lines." The result was much as though the Crown Colonv of New foundland had made war on the w hole German Empire. In such fashion w as the sv stem tested. Nor was there anv eflFort, initiallv at
least, to disguise
It
was
for
roughlv
stem.
were responding, in a perbad character and outrageous ambition ot the Kaiser. Not
149
The Kaiser.
Revolution
until the
(or finding
to
safe for
democracy.
Further to remind the
rulers or their offspring
men for w horn tiie\ were fiirhting, the traditional showed up in the trenches from time to time on a quiet
day. The>
casion,
on the German
be soiled
deatli
were always eleganth caparisoned and suitahK attended. On ocside, duckhoards w ere put down so that hoots would not blood. b\ old It was accepted that men would be led or sent to their
by
officers
The men accepted without seeming complaint the current concept of heroism. This was a matter not of courage but of rank. Tlie greatest heroes were Hindenburg, Haig, Foch, Petain and King Albert of the Belgians. The
ruling classes,
above a certain
strongest.
level,
\'ery safe.
awful
test
w here the
relati\el\
capi-
power was
The
British
The
well-
educated and
most w
illingly
accepted their
own
New Zealanders
had
an especially high reputation. But the soldiers of the older capitalist countries
also fought well.
The
industrial proletariat of
much
less
amenable. In 1917,
showed
ment.
It was touch and go for a time before the mutin\ was contained. The backward peasants of Austria-Hungary showed c\en less enthusiasm for being killed. As might be expected, the national minorities were also imen-
thusiastic,
later the
Czechs showed
their excellent
discipline
enem\
all
And
On Januar>
purpose.
22, 1917,
Lenin spoke
to a
ser\es
its
old
When
vi.sited
it
in
197.5, Italian
It
Connuunist
a rather
workers employed
in
seemed
subdued convocation. At
now
for
more than
a decade;
it
been
151
his
He concluded
his
nia\ not
li\'e
coming revolution."^
house that
sur-
what seemed rather important news. Special editions were on the streets; apparently there was some kind of re\olution in Russia. Lenin and Krupska\'a hurried out and down to the lake where the papers were posted on the wall and could be read free. It was true. The moment of all moments had come, and he was in Switzerland Switzerland of all places. And with him were his most reliable collaborators,
called in with
A comrade
gasse, a thoroughfare later more celebrated as the In the next days Lenin
Dadaism?
was desperate. How could he, and the\% get to Russia? An airplane? That was mentioned, though in those days only as an idle dream. Out through France? The French would not think Lenin a helpful influence in Petrograd. They would arrest him forthwith. He could not lead a re\'olution from a French jail. To go through Germany would be to risk the suspicion, when he arrived in Russia, that he was a German agent. Still, that w as the onl\ chance. The German \ iew of Lenin's contribution to the Russian war eflfort, which was surprisingly sophisticated, was the same as that of the French but it led to the opposite conclusion. How good to ha\e Lenin in
Russia.
With,
t)ne
initiative
and
skill,
a Swiss socialist,
Fritz Flatten,
non-German train. The concept ot an German railroads proved too difficult for the average later historian, and from this came the reference to a sealed train. And eventualK it canu' lo l)e imagined that the Germans had sealed Lenin up
would be on an
extraterritorial train passing over the
because they wanted protection from the Bolshevik infection. They weren't
that troubled.
It
to
minimize
his
exposure to the
Fhere was a
Germans.
Al)()ut
twenty
Lenin
fellow liolsheviks
were on the
train.
child or two,
and
also Inessa
Armand, a sharply
beautiful,
French-born rev-
and possibly
it
does not
festi\e
all,
exclusion, f^enin
Germany and
Russia were
in.
He
in
On
.\pril 3,
1917
152
Lenin,
Moscow, May 1919. Lenin's great achievement was not the Revolution but
resulting anarchy.
in
conquering the
in
Petrograd,
in
in
among
the
and
sailors,
together
v\'ith
There was much motion, much oratory but little bloodshed. Again revolution was tJie kicking in of a rotten door. The Czarist regime had been more incompetent than even the selection of
olutionaries, served
him
well.
talent
by
class
with
men who made Haig and Retain seem its own inadequacy. And so did the government, such it could be called, that succeeded it. One of the notable historians ot the period is Adam irlam, my Harvard friend and colleague. Soviet scholars concede the worth oi his work on Lenin, although communism is a faith the author does not much admire. Ulam holds that Lenin's achieveposition
and personal
taking.
\s early as
Jul\\
One worker
with a
gift for
it
is
said
"^
"Take power, you son of a bitch, when it's given to you. Lenin's great achievement was in keeping and in consolidating power, in proceeding trom anarch) and ci\'il war to unresisted authority in the next five
shouted
to a leader:
vears.
Lenin's failure was in not seeing how great would be the further task of
building a socialist econom\\
that
is
mainly w hat
is
needed
of
for the
communist society," he had written.' End capitalism and what remained would be a job for clerks. Among socialists to this day there remains the view that, after capitalism goes, faith will do all. The awakening is always unLenin
li\'ecl
pleasant.
to refk>ct
on
apparatus
is
prett\'
bad
the
first
He was
astonished
how bureaucratic socialist management cjuickly became. The problem "... absorbed more and more of his energ>' and filled him with increasing anguish. It continued to oppress him imtil his stroke in 1922 and his death a year later. Eventually, in induslr\ there would be no small success. The peasants, w horn Lenin had made pari of the rex'olution, were its greater nemesis. After 1929, as the script recjuired, farms w ere collectivized, pri\ ate
and depressed
at
" ' '
,
154
property
in
lialf
a century ago.
in
To have
more
to
the Soviet
administration.
It
was the
Khrushchev
his job. In
recent times the shortcomings of Soviet agriculture ha\c been one of the most
important factors
arrive, prices
It
When
by
go up and up.
encouraged
of their
toil,
by high prices
suffer the
men and women who are and dissuaded b> low prices, who reap the rewards penalties of their own sloth, \\ ho exploit themselves
is
tilled
well oni\
little
sleep.
Hungary
The other
socialist countries
Poland,
Where
agriculture (and
concerned, there
a perceptible convergence,
From
Turin, Italy,
home
than
under capitalism, requires large business enterprises, and these must have
intelligent, careful, disciplined
scientist,
once
said,
on a
visit to
"instinct" of the Russian people. However that may be, the Soviet authorities some years ago sought the assistance of Fiat in developing and improving their automobile industry. In consequence, broadly similar equipment and assembly lines are now used to make a similar car in Turin and Togliattigrad. The two plants are among the five largest in the world. The organization is
similar.
So are the
tests of
this
performance
profit
made.
We see from
is
case
how
universal
the
modern business
for large-scale
firm. If in
agriculture there
production
cor-
modern
There
part. In
capitalism and
poration.
is
Soviet counterit
must be
Italian
Com-
the
powt-r
in
It
has a pen-
umbra
it
ing serv ices, and that sell, and sometimes repair, its products. It is regulated and assisted by a huge state bureaucracy. Its talent is provided by a big educational establishment. Not only arc the people so required numerous,
155
Fiat in Turin.
Its
counterpart in Togliattigrad.
now submerged
first
in this
pow er to the proletariat. And the prohuge army of technical, administrative, whiterealitx
.
collar personnelfact,
acknowledges the
so.
The
Italian
Communists w
if
ere. in
the
to
do
first
Itah
another cop
politician, as
reaction,
he came now
in 1914.
to
out. as b\ the
German w orkers
But
w hen
we have
seen.
how power,
its
impossibilit} of
would
had surrendered
like so
much
stance.
157
H-
^"."i
Karl Liebknecht.
A Recollection
\\
!:>>
S()\ iet
Inion
to
do
so.
unylued.
A Recollection
The
ehaniie brouglil h\
in
World War
u ent
w
ar,
in'j;.
w as a \ oungster
politics.
southwestern Ontario.
to the
My father
although
as aeti\ ely
concerned
in
his opposition b\
niodern
He was the dominant influence on would now^ be called. The board then granted exemptions on the basis of one grave necessity or another to nearK all u ho did not \\ ish to die. The Scotch w ho made up the hum connnunil\ ol the area \\ ere not strongly so inclined. My father's position and action w ere open to some patriotic rebuke. But after 191S. his position ciuickly became the approxed
standards took a distinctK' non\ iolcnt form.
the local draft board, as
one.
Decades
later, in
the earl\
sixties,
foimd m\self
conflict
in opposition to the
Vietnam
w
ise
u hen the
and
essential.
1
lia\
cized positions.
from foreign
polic\ discussion
I
w as then
in
because
comforted
much, b\
u hich the
I
reaction to
]
m\
had changed. changed because even in rural Ontario the re\olution had echoes. Canada
|
too, in a primiti\e
class. It
was
conser\'ati\e,
and influence that came from its Englishness, its with the King, Empire and the Church of England, and its feeling
er
that
it
n.
position so enjoyed.
It
had
also invested
its
w ar.
reflected on
w hat
i^rice,
the
W
in
C'urrie,
had returned
defend
home
to great acclaim.
Soon he was
in a
courtroom
a libel case to
among the troops he led. He w as held to ha\ e kept them ad\ ancing w hen it was known the war was o\er. Canadian farmers now asserted their political
power. So. though
less \isibly, did
its
made
it
clear that
pow er.
159
Its
character derived
that
ulti-
new
now
effect
notable case was money. In the years before 1914, that had been one of the
life. It
it
same
again.
It is
worth a special
160
6.
Money is a singular thing." It ranks with love as man's greatest source of joy. And it ranks \\ ith death as his greatest source of anxiety. Over all history it has
oppressed nearly
all
people
in
it
reliable
for
and very scarce. However, for many there has them money has been both unreliable and scarce.
full
is,
range of
human
emotion,
tlic
couch
could be
why
the
modern
this anxiety. In
times of
their
money
will continue, if
they will have any to spend the next time they push a cart. In times of
boom
and
themselves
if
afford.
It is
of work are over, whose income for the rest of life is given and will never, by any magic, increase. What if that money ceases to bu\ enough to sustain life or, what may be equally important, to maintain accustomed respectability? But there is equally the anxiety of the person who does not know whether next week's purchases will be supported by a job. Is a layoff in prospect? How long will the unemployment last? How will I, or we, get by? The anxiety in the supermarket has its focus on money. It is one of the great uncertainties of life. It has been so for a long time. More than most things, an urtderstanding of money requires an appreciation of its history. What was if once simple has become complex. But if we see how money has evolved we take the comple.xities one by one as they were added by its history an
whose days
when the BBC series on The Age of Uncertainty was being planned, I prepared a memorandum on the subject of money for the guidance of my colleagues in the enterprise. In the process of amplification and revision it became a rather lengthy book and was published as such in 197.5. {Money: Whence It Came. Where It Went. Boston: Houghton Mifflin, and London Andre Deutsch. There are echoes of the book in the pages following. An> one who has
In 197:3,
:
read
next.
it
can, with the very best conscience, omit this chapter and, though less conscientiously, the
161
my money last?"
come
to exploit or reassure.
The Origins
understanding of the
uncertainties of
\\
final result
it is
is
not so
difficult.
W'c sec w
ith fair
case the
hich
the focus.
or less as an afterthought
All of the
prostitute
themseK
es.
i)\
\\
portion
Greece, except
the young
first
people on record
who
seems certain that there were much earlier experiences w ith coinage Indus \'alley and China ot which Herodotus \\ as unaw are.
For the next
coined
in
the
many
money
The
coin might
I)e
of
its
It
might be
less. It
such coin as
mone\ and the promises then became mone\ Abuse of these in\ entions more profitable tlian mistreating coins. The measure of the abuse w as the gra\ e uncertainty on the part of the recipient as to \\ hat he was getting and the counterpart imcertaint\ as to \\ hat that money w ould bu\
a substitute for
Then,
mismanagement seemed
tunity for earning
money became reliable. The major problems of its solved. What now became uncertain w as the oppor,
it; jobs, farm prices, the earnings of the small businessman u ere an\thing but secure. It w as World War I that show ed that the new reliability of mone\ w as an illusion. Along witli tlie old political systems monetar\ stability also came unglued. There would be greater uncertaint\' than ever about getting mone\
And
it \\
ould
\
bii\
or not,
li\
itlT
a linear
iew of history.
We
The
money
The Function
Though one begins the
quality
histor\ of
money with
tlie
weight and
tobacco ha\e also been used. The\ periorm the essential timction
monex
163
its
own
is to avoid tlic awkwardness of barter the natural difficulty of finding someone who wishes to trade cattle or whiskey directly for a house. What serves as money need only be durable, reasonably uniform and evident as to quality. It can then be held lor a time and will be generally acceptable to
which
buyers and
sellers.
Given these
qualities,
almost anything
will serve as
an
if it
intermediate stage
in transactions. In
nonpastoral societies
it is
also helpful
can be carried or kept around the house. Coins came into use because they
improved on chunks or sacks of gold and silver by being in predetermined amounts, and could be carried in a purse. Scales for weighing
wcrt" durable,
the metal were no longer needed, at least in the comparati\el\' rare instances
many have
noticed
it,
are
now
obsolescent.
They no
They
ot
w hat w as once
money.
came
banks.
They
flourished in
Roman
164
of
Money
gi\
en
money.
It
may be w hy
full
l:)ankers
are so
solemn.
certain responsibilit\
is
is
inxolved. For a
It is
money
Amsterdam.
money
\\
as, as
money
goes,
abundant
in
Amsterdam. Mostly it was silver, an important point. Through most of history not gold, was the primar\ metal for coinage. That Judas got siKer for Jesus does not mean there was anything derogatory about tlie pa\ment. only
silver,
that
it
dis-
in the
New
World, principally
money: the more abundant the money, everijtJung else As silver became abundant, prices are belie\'ed to have risen almost everywhere in Europe. A good man\ people u ho hadn't heard about the discovery of America sav\' its effects in the price of whatever trifle the\ had to buy. Though siKer and silver coins were abundant, anotlier firm proposition concerning money was also demonstrated in these years. However much the\ha\'e, people feel they can do with more of it. So e\ er> w here in Europe men w ere taking the coins and sweating and clipiiing them, thereby getting metal
ositions regarding
it
will buy.
make more of them. In 1606, the Dutcli Parliament had issued a manual for money changers. It listed 846 silver and gold coins, many of them appallingly
to
deficient in weight
and
purity.
he sold goods
for
w as
to this
problem of quality that the merchants of Amsterdam now addressed themselves. They created a bank owned b\ the city: the bank solved the problem of
the cjuality of the coins by going back to the system that antedated the
invention of coinage. That was weighing.
In this action the tow n fathers pioneered the idea of public regulation of the
good and w retched coins to the bank, the l)ank weighed them, and the weight of the pure metal was then ciediled to his account. This deposit was a liighK reliable iorm of
b\ a public I)ank.
.\
money suppK
merchant brought
his
A merchant could transfer it to the accoimt of another merchant. The recipient knew that he was getting honest weight, nothing funn\ Payments through the bank commanded a premium. Then came the second Amsterdam disco\er\ although the principle was
mone\'.
.
know n elsewhere. The deposits so created did not need to be left idh in the bank. They could be lent. The bank then got interest. The borrower then had a
deposit that he could sp(^nd. But the original deposit
still
of
spendable money,
166
nil) his or
her e\
being done
e\ er\
The
creation
ol
nione\
1)\
bank
is
mind
is
slightK repelled.
.
The important
The\ must
creation of
is
same time
their
isn't
doing what
mone\
bank alu a\
rests.
hundred years
dam grew
The arts
\\
was
in that
year that
Rembrandt mo\ed there from Le>clen. The Merchant Cit\', as we shall later was a place of great good taste. Amsterdam, the most eminent merchant city of its age, is xery good e\'idcnce for the case. Many houses
see,
Irom
this
still
in
One. that of the merchant Jan Six, is as lovely as an> in Europe. Among the torty-odd paintings by Dutch masters still in the possession of the famih are no
lewer than three by Rembrandt. Rembrandt was a friend, and
his
name
is
prominent
It is
in
tempting
Amsterdam and
the consecjuent
its
flowering of
institutions
financial
and particularK
to the
Bank
of
Amsterdam was admirabK' situated on what, with some canal-digging, became one of the outlets of the Rhine. It was. like all successful merchant cities, a tolerant place; men who wanted to make monex could do business here regardless of race, creed or national origin. .Much of Amsterdam's prosperity was the achic\cment of its large settlement of Huguenots and Portuguese and Spanish Jews. The cit\ liad a reputation lor doing business with anyone who wished to do business, including, on occasion, those who miglit be fighting the Dutch. But. unquestionabK the Bank helped. I should complete its stor\'. As will now be evident, every monetar\ innoxation or reform carries the seeds of some new abuse. So it was here. One oi the important borrowers from the Bank was the Dutch East India C^ompan\ The members of the Compan\ were often the same men who ran the Bank. With the passage of time, lending and borrow ing became incestuous, e\en narcissistic. Nothing is new; the failure of the Eranklin National Bank in New
,
167
Amsterdam.
art.
169
of
Money
York
ill
in the
same years
in
England, was partly the result of bankers lending to business firms which they
greatly admired
own.
In the eighteenth
on hard times; there was war with was slow pay at first, and then its loans went into default. The making of loans and the creation ot mone\ b>' a bank, to repeat, is only possible if depositors do not come all at once for their money. If they suspect that they can't get their money, they will sureK come. Suspected
fell
Company
It
\\
The
depositors started coming, and they couldn't be paid. In 1819, after two
tlie Bank of Amsterdam was wound up. B> then, howhad been a far more spectacular demonstration of how a bank can create money and how this ability can be abused.
centuries of service,
ever, there
Paris,
1719
in
varied,
and
One was
result
was
intellectualK
Due d'Orleans, who was was the seemingly hopeless someone \\ ho promises by magic
for a solution
The Due
The
to this
available rascal
we have
already encountered.
rascal.
He was
who got carried away by his own achievements. He had a backgroimd in financial matters. His
Edinburgh goldsmith,
in that
was
had
b)
a well-to-do
to
have good
this service
and coins
and
had become bankers. On the Continent Law w as engaged in sellinij; an idea tor a new kind of bank, the deposits ot which w ould be secured by land rather than by silver or gold. He was also avoiding English justice; he had been imduly
successful in a duel.
In Paris in 1716,
to establisii a
bank,
the
off
tlu'
with notes
holders
in
of the ])ank, promises by the bank to pay off the face \alue to
silver or gold. It
is
Then
in 1717,
Law organized
how the Regent was persuaded. the Company of the West, later the Company
as the Mississippi
Company. There
170
d' Arkansas.
of
Money
was no doubt
Mexico
that his
to
as to
its
held absolute
title
endowment served Law's purposes in two ways. The notes bank was issuing were backed, as noted, by gold and silver. The needs of the Regent being large, so was the issue of notes. By no stretch of the imagination was there enough gold and silver in France to redeem the notes,
so
tlie
There,
was
said, gold
and
silver
were
in
maps of the period showed the mines, although no one has seen them since. The nonexistent metal in the imaginary mines was the
earlier chapter,
in
buy the
stock ot the
Company
of the West.
The
stock
boomed.
Law
up
prices
In 1719,
John
in all
France.
He was ennobled
as the
Due d'Arkansas, a
Mills.
man Wilbur
On
January
1720, he
of France, the
supreme arbiter of all French finances. There was no way to go but down, and presentK this became exident. Doubts began to develop about llu' notes. So people started bringing ihem to
172
The
collapse of
Law Dragoons
:
'fr/;.i>/\
/// ,
f/i>//
v//a// ('/'//
////.i//f/>/'/ f'(>///t'rf// //
1/
y//i I.a^^'
\.:vxs.t'< <{////>
/// r//r
//<'/}/(/;<//<'/'// ^'^^
,/i'irrt(/r'//f////.fAi
//t>/// .'^( ////.'.
.-
/"
J^niuc'iit.'Hioiix^ w
/('////(/' '}(// /v/.-i ////// //^Y>ii//\ i//>rf/ //i/l' .'jn.' C>r<:7 ///>?/
./.'%. V,-n
"//,/r.ffrut-
were wagons
still
in Louisiana,
and
also
to carry
which
Iiis
notes entitled him. Paying off the notes in gold and silver was
in
suspended:
were
now
got
worthless.
Law
Parisians
recommended
vagabonds and
had been sent out to round up sundry who were not sufficientK aware of their
\\ i\'cs
\
and a special
effort to
\'outh,
ot
mcdiimi
irtue. Paris, in
my
was considered a place of imaginative wickedness, a reputation long ago lost to Amsterdam, Copenhagen and Times Square. But there are still links \\ ith the past. The Rue Quincampoi.x is today a minor resort oi women of medium
virtue.
was unhappy, something was accomplished. Like the Amsterdam, Law's notes were money created by a bank. This money got the Regent out of a tight spot, encoin^aged colonization and made France prosperous, at least for a while. Law a somewhat neglected point had directed a substantial amount into canal building and other useful pidilic works. Issued in excess, the notes clearK w ere a disaster. Used in moderation, might the\ not do good? Tliat, now, the liritish were to prove.
the end
deposits in
Though
The Bank
Some
of
England
of the
Law we owe
and
s
to the
Due de
dinnng
for
at Versailles
in Paris
XIV and
after.
He
thought
said,
Law
lacked restraint.
There
is
much
to his case.
is sold esscntialh' the same Banque Royale to William of Orange. William too needed money; his debts came not from succeeding Louis but from fighting him. In 1694, the Bank of England was formed: its founders subscribed the nione\ the King needed. In retiun, thev were given the right to make loans to others with
Twenty years
man
of
economy, the
earl\
newly issued notes backed by the King's promise to pay. Paterson soon left, most likely, it now seems, over a conflict of interest. He was promoting a rival
174
pjFpfJip^i^^^
ii
ii!?
'i
Bank of England
of
Money
bank.
A few
years later Scotchmen were seized with the notion that vast
fortunes could be
made by founding
It
is
now
the
Isthmus of Panama.
was thought,
be a strategic location.
Few
survived the climate and the fever. Paterson was the leading promoter
of the Darien adventure.
He
lost his
escaped with
his
own
life.
To be a member of its Court of Directors wisdom and ominous economic power. The power
can be questioned. Outside directors are not told of important decisions until
after they are taken. This ensures against conflict of interest, a matter on
is still
vigilant. It
down through
for
the generations.
regular]\'
Board has
in office,
not
be trusted
to
balance their
own
checkbooks. Once
they are
financial prospect,
Bubble because the South Sea Company outbid was thought far too generous in its loans to Pitt tor the wars against Napoleon. David Ricardo held this view, although neither Ricardo nor his fellow critics offered any better ideas about where to raise the money. But. in time, the Bank became an accomplished instrument for reguprincipal role in the South Sea
in recklessness.
it
Later
it
money by
lesser
banks
in placing limits
on lending
and consecjuent deposit expansion and note issue. In doing so, it pro\'ided the restraint that, in its absence, had brought misfortune in Amsterdam, disaster
in Paris.
As the creation of money by banks is a simple deposits and bank notes thing, so is the mechanism for its control. In London in the eighteenth century
the goldsmitlis,
now become
them
tlie
banks,
made
The Bank
of England,
when
it
received these
'
banks
to
maintain reasonable reserves of cash against their note issues. They could not
be reckless
lor itself
It
had
itself.
176
fhidbkic.
^_
Napoleon.
of
Money
still
money
for those
who borrowed.
to excess. The Bank of England method for preventing this. When the ordinary or commercial banks seemed too generous with their loans, the Bank allowed some ot its own loans to run out or it sold some of the securities it held. In repaying these loans or paying for their securities, customers of the commercial lianks would transfer gold and silver from the vaults of the ordinary banks to the Bank of England. The reserves in gold and silver of the commercial banks, their protection in case depositors came for their money, would thus be depleted. Their lending and associated deposit- and money-creation would then have to be curtailed. This is the procedure now celebrated as open market operations. Another simple thing. The clearing banks, as the commercial banks are
this
And
de\ eloped a
called in Britain, could replace their depleted reserves by borrow ing from the
Bank
century a
is
came to be called the Bank Rate, in the last mysterious and wonderful thing. In the United States the Bank Rate
It
found
for itself
of fear
.
banks
for their
mone\ for the cash that b\ the nature of banking was not sufficiently there, Bank of England would then come to the rescue and lend to the clearing banks, though at a rather stifl rate. The central bank, as banks for othc-r bankers came to be called, served these other banks as the lender of last
'i'hc
resort.
It
rise
Bank of England. Pessimism had men at the Bank. But it was e\ en harder for them to fall below euphoria when, as recurrently happened, that swept the City and England. In 1720, there was a \ast outbreak of company promotions with much speculation in their shares. Trade w ith Spanish America was the focus of excitement but there w as also a notable company "for carrying on an undertaking of great advantage, but nobody to know w hat "it is. All these promotions were the South Sea Bubble, and, as noted, the Bank of England narrow K escaped inx'olvement. A centur\ later, in 1<S24, there was another wave of speculative enthusiasm, again o\er inxestment prospects in South America. Again, there was di\ersification. Englishmen could invest in a company "to drain the Red Sea with a view to rect)\ ering the .Again treasure abandoned by the Egyptians after the crossing of the Jews. the Bank was captured by the spirit of the times and did not curb the more
banks
a
way
'-'
178
In banking, confidence proceeds from an assured manner and good tailoring. The Court of Directors of the Bank of England in 1903 (top, elegant) and 1974 (bottom, prosaic).
of
Money
who
Who
is
when
there
even a one-
recur.
in the last
for
economic innovation.
modern
its
central
bank were
identified
Bank Rate had been raised. They did not know what knew that it was an act of extreme wisdom.
Paper Money
Coinage was the invention of the Greeks. The
English, including always the Scotch,
Italians,
banking.
We come now to paper money. This, in singular measure, was the gift
The American colonies, all know, were greatly opposed to taxation without representation. They were also, a less celebrated quality, equally opposed to taxation with representation. It was out of this opposition to taxation that government paper money was born. The birlliplace was Massachusetts; the year was 1690. Massachusetts soldiers had just returned from an unsuccessful expedition against Quebec. The loot from the fortress was to have been their pay but there was a miscalculation; Quebec did not fall. Angry soldiers can be a source of unease. So, in the absence of real money gold or silver they were given promises of such money instead. These promissorv notes then
to
hand
as
money.
to
seemed
a most [painless
way
pay
bills.
huge volume.
Any thought of eventual redemption was a mirage. But the restraint that the Due de Saint-Simon thought lacking in the French was not entireK' absent in
America. In the Middle Colonies
in
the century before the Revolution, paper moncv' was issued and used with good
was kept reasonably scarce, its redemption in gold or sil\ er conlimied plausible and thus it was kept acceptable. In the view of modern historians, it w as not onK' convenient lor trade but sa\ ed these colonists from
sense.
to
It
seem
eifect
on business.
money
in
these years
was Benjamin
Franklin.
He
thought
it
a good
and
useful thing,
and
his
practical touch.
He
printed
mone>
goxermnents on
his
own
a
printing press.
In
London
this colonial
invention o( paper
monev seemed,
in contrast,
most
180
it
in
London
to
much resentment in the colonics, almost as much as the ta.xes. This grie\ ance has ne\er had much standing in American histor\ The sound men of the
.
was absoluteK
dream of such
same.
It
Commimist,
capitalist
and those
\\
hich only
is
now the
of ink
s\\ iris
cornucopia of \ cgetables or an
heroic monument. This is partK an accident. In the development of paper money, governments followed the dull puritanical model of Massachusetts,
and sparkling example of New France. The Quebec model v\ as the pla\ ing card. The French, as all know w ere casual about their North American colonics. Ships and money often failed to arrive. When this happened and in rougliK the same \car as the Massachusetts attack, the intendants at Quebec also paid the garrison and for their supplies with promises. The most readiK a\ailable and durable paper stock was pla\ ing cards. These became the promises b\ \'irtue of having the official government signature attached. Then when the ships came in, the cards were redeemed in gold or silver. The innovation shocked Versailles but, eventually, there being no better alternati\e, it was accepted. In a 1711 issue, spades and clubs were the currency of highest denomination; hearts and diamonds had
not the irreverent
,
man\ cards were dealt, inflation resulted. In the last days of New France this happened. The pressure of need was great, the means for redemption small. .\t the end, the purchasing power of the cards
As with
all
currencies,
if
too
must weep
that, after
sin\i\al
and informed
At Las \'egas
.
and with the same currenc\ Anyone making a killing on the stock market would be rewarded in clubs and spades. A reference to gambling in Wall
would not be a metaphor. The innocent, looking at the money they would get, would be duly warned. Had the pla\ ing cards survived, the balance sheet of the Chase Manhattan Bank would set out assets and liabilities in
Street
hearts
and diamonds
as
ell
as clubs
into the
for the
and spades. The bank's recent \enture would ha\e been recognized immediateK
gamble
really was.
181
of
Money
one
is
first,
the
revolt
is
taxes.
Their credit
is
not likely to
Likewise
the famous were issued against the security of the church land and that of the And paper money, the invention of the colonies, paid for the Ameri-
can Revolution.
Some was
The
rest,
The
thousand dollars
around a
million.
could not have paid for the war. E\en had the erstwhile colonists been willing,
collection
ditficult.
No one
new
republic even a
passable credit
When the war was won, They could not have it said that
was conceived
practical
in financial sin.
Revolution was a terrible mistake, w ithout ever explaining what would have
been both
If
and
come clown
to us only as a
it
would have a place beside the Liberty Bell. The historians even edited Benjamin P'ranklin. His position on paper inone>' is rarely mentioned. Children are told only that he was a good man in diplomacN thrift and electricity.
properly treated,
,
runaway
In conseciuence, the
Constitution of the United States prohibited the states from issuing paper
mone\, even
It
also,
more
by a
\
reerv'
too. ()nl\
Creenbacks
money
the
in
Ca\\]
money made
United States.
182
ilh
inde-
legal,
\\
and, as
wc have
paper money by a go\ ernmcnt the issue of money by a I)ank did not.
notice
on ver\
sliort
capital. ;uid
The
ould
he accepted
initial
pa\ ment tor horses, cattle, machinery, an anvil and forge or the
in
more
luck,
The borrower would then be would he ])e able to pay off his loan. A ot the new repul>lic disco\ ered linking
There were objections, however, from the people w ho got the notes from whom the\ came for pavment of accounts, from the
more conservative Eastern bankers to w hom they came for deposit. When the notes were returned for collection ot the gold or silver t!ie\ promised, the issuing banks were often indifferent and frequenth not to l)e toimd. The Easterners wanted money that could be sent to England to buy goods and that did not lose its value from one day to the next. The obvious solution was to have a central bank on the model ot the Bank ot England to keep these new banks in line. No one doubted the pre-eminence of the British in financial matters. George Washington might have fought the Redcoats. But he left Barings, the great London bank, in charge of his personal finances throughout the war, and Barings did not let him down. The Bank of England, we have seen, disciplined its subordinate banks by
presenting their notes systematicalK for collection
in silver or gold. Thirs
it
required them to keep their loans and resulting deposits in some reasonably
safe relationship to their hard cash. This
would be the basic tunction oi an .\merican central bank. It could impose discipline and restraint on the local banks by similarly presenting their notes for collection. It was a tunction that the banks on the frontier thought less than necessary. They would ha\e to make good on their bad mone\ .\nd their purpose, however it might be
.
money for whatever it might bu> Here were the seeds of the most persistent political conflict in American history and, after slavery, the most bitter. It was between the men who wanted good mone\ and those who wanted the bad mone\ that put them in business. It began witli .\lexander Hamilton when he redeemed the C^ondenied, w as to issue bad
tinental notes at the distinctly extra\ agant rale ol
dollar, the
act of a
States
183
of
Money
incurred so
much
displeasure for
its
discipline that
its
William Jennings
Bryan
eighteen-thirties
and there were many echoes as late was in the the titanic struggle between Andrew Jackson, President of
Bank
of the
United States.
The President
the frontier
Tennessee. His rough appearance and manner are part of the legend and were, for a long time, a damaging model for politicians from the West.
Nicholas Biddle, polished, well-dressed, well-bathed, slightly bejeweled, was
pre-eminently a
member
since.
Writing
home
to his
mother of
visit
his
American
travels,
Edward
to Philadelphia, of a
most
family called
Biddle lacked the tact that the rich and successful have since developed
and which has perhaps become second nature. On public occasions he compared his power as President of the Second Bank of the United States with
greatly
that of the President of the United States.
if
When
his financial
power, he praised
own
restraint.
his
Although very few of the small banks "might not have been destroyed" by
discipline,
"none has ever been injured."" This allowed Jackson to thunder back: "Tlie President of the Bank has told us that most of the State banks exist
by
its
forbearance. "^
in
torces of civilization
their
Clay was from the but the way renewed the charter of the Bank.
also frontier
Bank
The
presidential election
was then
fought on the issue. Biddle had the money, and he had been generous with
and the press. (One of the journalists in his pay was James Gordon Bennett, whose son we encountered in Newport and on the Riviera.) Andrew Jackson had the votes. He won, and the Second Bank of the United States was defeated. Biddle then got it a Pennsylvania charter but power is often a onetime thing. Very soon he went broke. The smaller local banks were to remain free from serious restraint in man\ of the slates for a
century.
Once Biddies hand had been lifted, these state Ijanks exploded in numiier. To have a bank in the eighteen-thirties became, almost literally, a human
184
Andrew Jackson. He made Biddle's power an issue and destroyed him. Bankers ever since have been more reticent.
One
Gold
light,
roads, the
deeper
more remote the crossmore desolate the s\v amp, the more attractive
the
many
the location. For a remote or obscure address diminished the likelihood that
b\^
way back
for collection.
There was
history
is
was
far
from
reliable. In
were required
maintain a
minimum
rcser\c of gold and silver against their notes. Boxes of coins were
sent around through the lorest just in front of the commissioners sent out to enforce the law.
w ho were
As an
act of
found
to
conservative Massaoutstanding,
it
bank
failed.
Against notes of
Civil
$5()(),0(K)
different
in circulation in the
United States;
to these, nu.5()0()
merous
tliat
nil.
in 1865, a
few w ceks before Appomattox, the right states to issue notes w as finally
Often
that they
that
it w as in were taken
aw a\
Gold
The United States in the last century was. or seemed on mone\ to be. a maverick case. While wildcat banking flourished, especially on the American
frontier, the
of Britain
regulated. The\-
seemed
bank notes, bank deposits and government notes would be conx erted. SiKer and gold had for centuries been in conipetiti(jn. It w as contusing to haxc two
metals; they
changed
in
cheaper always got passed on. The one of more value people held. In 1867. the
leading nations of Europe
business
met
in Paris
and resolved
States
was
different.
The
Civil
War,
like
)
InWar, had been financed (though much paper mone\ When prices fell after the war, thvvv w ere powerful demands, particularK from the farmers, that the Greenlwcks be retained. And when
the Re\olutionary
.
less extensi\el\
were
187
vvitli
tlie
farmers
in
memorable
gold.
But eventually even the United States conformed. By the turn of the century
the Greenbackers belonged to history. Bryan had been defeated on the issue
of free coinage of silver.
Then
in the
United States, as
if
in
was now
is
com ertibility
rule.
few years.
now to the contrary, the gold standard was in World War I swept the gold out of Europe to buy
It
brought gold
to the
United States
here.
in such plenitude that it was far too abundant to serve as money The gold standard never tunctioned effectively again. It too was a prime
New
money could be exchanged
\\
A world
in
whicii
lias
all
equivalent
defects,
the purchasing
This certainty, a sadly neglected point, was always greatest for those with
money.
When
the
Bank
Bank Rate
or
moved otherwise
to
to restrain the
meet the
demands
were denied
loans. In further
consecjuence, prices
lost.
was a source of insecurity. The purchasing power ot the monev was maintained; it was only that tliey now had less or none. The difference was that, unlike the rich, these citizens were inarticulate and usLialK' innocent of the causes of their misfortune. (On this matter American larmers were nuich less innocent than most.) Latter-day admirers ol the gold standard, and ol stern monetary management in general, have but rarely
affected, the gold standard
understood that
its
those who were subject to its discipline. As economic life expanded in Britain and elsewhere in Europe, so did the number of workers who were subject to the uncertainty of employment and income that went with sound centralbanking practice. So did the unw illingness to accept it. To tJie consequences of
this
I
will return.
The United
deposits
tliat
States,
we have
bank notes and the bank larmers and merchants in business. This too had its
188
of
Money
and these too were severe. Banks would be created; the loans of the new banks and the old would finance a euphoric speculation in land, canals, railroads, commodities or industrial shares. Then would come the crash, and the banks would fail by the score. This cycle continued on into the present century with increasing severity. From crash to crash was usually around twenty years just time for the memory of the last disaster to fade. Each lioom was duly heralded as the response to a new era: doubters were
uncertainties,
invariably dismissed as
men
were being enriched. After each crash politicians called for confidence. Things were much better than the\ seemed. Men of financial wisdom counseled patience and, on occasion, prayer. In the panic of 1907, J. P. Morgan took an even more forthright step. He called together the Protestant clergymen of New York City and adjured them to tell their congregations the next Sunday to leave their money in the banks. It was a time for affirming faith, and tliat included faith in tJie banking system.
gain by which those ot true
fell,
men
lost their
The bank
failures
added greatly
no longer had
it
surviving banks,
had an astringent efiect on business. And the now sufi"ering badly from fright, ceased making the loans that
to spend. This to cancel or
to
this
created money.
make
The culminating
thousand banks
bit
crash
came
in
aroimd nine
failure individuals
and companies
lost
mone\
thc\'
March
little
6,
as
would otherwise have received. And the sur\iving banks when their depositors would come. Then, on 1933, all the banks in the United States were closed. Except lor w hat in hand, the mone\ came to a full stop. Ten years before, German)
in
an avalanche of reichsmarks
it
in
an inflation that
is
not
no mone\'.
It
cannot be doubted
2500
ears, there
w as
still
nnicli to
money.
seemed
American
banking system, those that produced the continuing c\cles of boom and bust,
had
finally
been corrected.
On
190
began
tlie
Eastern finaneial
set
up a central bank.
More
in
established
compromise designed to o\ercome the old hostilitx, it and a co-ordinating bocK ol ill-defined pow er Washington. This was the Federal Reserve System. The Federal Reserve System has alw ays been greatK lo\ fd by economists;
exactly, in a
t\\
it
little to
be
lo\ed in
early performance.
No one
in
who was
in
in
charge
Kansas City,
Or
was
it
the
New
York Bank w
the financial
capital?
instinct,
in
Bank of England, for w hatc\ er action made things w orse. In the \ ears followWorld War I, there was sharp speculation in farm commodities and farm real estate the boom of 1919-20. The Federal Reserve Banks looked on
tolerantly while
tlie
this
crash of 1920-21.
Now
make the resulting depression worse. In 1927, as the boom was getting imder w a\ it eased credit, an action to
.
w hich
ill
return in the ne.xt chapter. This helped finance the stock market
boom and thus made more se\ere the crash of 1929, although other laclors were more important. Alter the Crash, during the great deflation of 1929-32,
the Federal Reserve continued to worrv about inflation. In these \ears banks
were
on that morning
at the
its
Atlantic.
However, the prestige of the Federal Reserve remained undimmed. The head of the New York Federal Reserv e Bank o\ er much ol this period w as one Benjamin Strong; he was the first American central banker since Nicholas
Biddic whose
Strong
owed
is
Men
make such
of
st\le,
greatly
and
results for
much
less.
1)\-
1 .5 percent, hardK a usurious charge. The Federal Reserve also bought government bonds on a consideralile scale, and the resulting cash went out to the banks open market operations again. Soon the commercial ixmks were Hush with lendable funds. All that remained was
was
New
the rate
at
which
191
Fall of
Money
borrow mone\', increase deposits and enhance therewith the money supply. Recovery would then be prompt. Now came a terrible discovery. The customers wouldn't come. Even at the lowest
tor
customers
to
come
to the banks,
who were
make money. The banks wouldn't trust those That is how it was during the
The banking system liad made Now, when the Federal Reserve
tlie
Depression. Cash simply accumulated in the banks; soon they had billions
to lend
but couldn't.
management
ol monc)'.
Irving Fisher
fault of one of the two most American economics. With Thorstein Veblen, whom we've already encountered, that was Irving Fisher. Both were students at Yale at nearly the same time in the last century. Fisher, a neat, slender, handsome man with a patrician manner and a beautifully trimmed beard, was many things a learned mathematician, a successful inventor, a disastrous speculator and a committed impro\ er of the hmnan race. He invented a simple card index system which he then manufactured himself and later sold at a handsome price to Remington Rand. His design for improving the race was bv better nutrition and more thoughtful breeding if horses, cattle and wheat, why not people? Also to improxe the race, or anyhow its behavior, he was ardently for prohibition, although here economics entered. He argued, no doubt correctK that men were more productive when off the sauce. In the late nineteen-twenties Fisher went heax'ily into the stock market and in the Crash lost between eight and ten
was a
When
you read that the Consumers' Price Index has gone up,
partly to thank.
He pioneered in
way
of
keeping
om
s ts
occu pied
.
He
showed
in
its
value.
No
one,
however
by
it:
MV
P
also
is
M'V
money
or cash in circulation.
prices.
IVl is
tiie
cjuantity of ordinary
'
is
consists oi
192
of
Money
at whitli
each
ol
is
spent
their velocity of
was why
Con-
explicit
Ms,
to
go up. But
money
check
is
spending by
ill
if it lies
buried
mattress or
a purely sedentar\'
particular increase in
money
if it is
than
if it is
in the
of exchange
As a description of what determines the value of money, Fisher's equation is still accepted. Like nv-, it ma\ well endure.
For Irving Fisher, however, the equation was not merely a description of
higliK' operational.
By increasing or decreasing
oflFset
the
captured by
this thought.)
With
his
remedy.
He formed
an association
and had so was not the first to be formula in hand, he moved ahead on the to promote the regulation of the money
of speculation
life.
disaster that
(Fisher
was
employment would be stimulated. In 1933, his idea was adopted, more or less, b\- Roose\elt. The gold content of the dollar was reduced; for the same gold there would be more dollars. It didn't work, rhe trial was not w holK fair, lor tlie go\ernment kept most of the extra dollars. But Fisher's own formula showed why the effort failed. As money was created, people, frightened as they were in those Depression years, simply held on to it. Low velocity offset
the incieased ciLianlity.
More
important, an increase
in
in \i. or
hand-to-hand
',
or
The suppK
we have seen, neither borrowers nor bankers were w illing. mone\ could not be increased. Fisher discovered what people, including numerous economists, have been exceedingly reluctant to beliexe. There are no cheap and easy inxentions
involving
money alone
all,
V\
ere
it
194
Irving Fisher
so. tlic
inxcntions
\\
work w as not w asted; it paved the way ior a much more complex and imaginative step in economic policy. That was to ha\e the by government not only create moncN but also ensure its use its velocity spending it. That was what Ke\nes now proposed. What is now called tlie Ke>nesian Re\olution began vvith_ Irving Fisher. This Keynes himself
But
Ir\
ing Fisher
him
as
one of
his earliest
195
Cambridge and the Cam, 1911. "For him the world was excellent". (Keynes
arrow.
is
indicated by the
7.
The
ideas
tliat
made
vvitli
the
people who,
liy
for revolt.
in-
also
would dissolve
in
purposeless con-
literal
Those who are comfortable with things as they are, conservatives in the sense, ha\e often and rightly been suspicious of intellectuals and have
thought them troublemakers, unable to leave well enough alone, more reprehensible by any measure than the poor or discontented
the\ arouse. Intellectuals
whom so unnecessarily
others
w ere jealous
of their brains.
More often
much,
it's
and
after
World War
II,
of capitalism.
As the ideas of socialism did not come from the masses, those come from businessmen, bankers or owners of
\\
shares
\\
ind. The\'
came
was
to
he rescued.
Cambridge, England
Keynes was born
in 1883,
Marx
Morence
Ada Keynes, a woman of high intelligence, was diligent in good works, a respected community leader and. in late life, the mayor of Cambridge. His father, John Neville Keynes, was an economist, logician and tor some fifteen
years the Registrary, which University of Cambridge.
to Eton,
is
where
his first
as
in
for its
its
Cambridge colleges and the economists. Ke\ nes was to add both to its prestige
its
economics and, as
Churchill held
where
.\t
bursar, to
I
wealth.
confess escapes
usualK
I)\
Iia\
unhapp> childhoods.
liis
own
197
account and that of his contemporaries, was exceedingly happy. The point
could be important. Keynes never sought to change the world out of any sense
of personal dissatisfaction or discontent.
Marx swore
would
and
his carbuncles.
povertv nor
While
wives
at King's,
Bell. All,
with
would assemble later in London as the Bloomsbury Group. All were much under the influence of the philosopher, G. E. Moore. In later years Keynes told of what he had from Moore. It was the belief that: "The appropriate subjects of passionate contemplation and communion were a beloved person, beauty and truth, and one's prime objects in life were love, the creation and enjoyment of aesthetic
lovers,
and
Of
these, love
came
a long
way
inevitably,
Keynes found
from mathematics
economics.
The more important instrument of the change was Alfred Marshall, who was not at King's but along the river in the equally beautiful precincts of St. John's, known as John's. Marshall, who combined the reputation of a prophet with the ama of a saint, presided over the world of Anglo-American economics in nearh undisputed eminence for forty years from 1885 until his death in 1924. When I was first introduced to economics at Berkeley in I93I, it was Marshall's Principles students were required to read. It was a majestic book. It was also superb for discouraging second-rate scholars from an> further pursuit
of the subject.
When
in 1905,
Keynes
"The examiners presumably knew less than I did."' But this deficiency was not fatal, and he went to the India Office. Here he relieved his boredom by work on books a technical treatise on the theory of probability and his later book on Indian currency. Neither much changed the world or economic thought; soon he returned to Cambridge on a fellowship provided personally by Alfred Marshall. It was the economics of .\lfred Marshall the notion, in particular, of a benign tendenc) to an ecjuilibrium where all willing workers were employed that Keynes would do most to make obsolete.
He
to the Treasury,
all
possible o\ erseas
war
198
Alfred Marshall.
He "combined the
purchast-s.
was involved,
getting
And hv lielpcd the French and the Russians do the same. No magic as many have since suggested. Economic skill does not extend to \'ery much for nothing. But an adept and resourceful mind was useful,
Keynes had. In the course of time Keynes received a notice to report for military service. He sent it back. When the war was over, he was a natural choice for the British delegation to the Peace Conference. That, from the
and
this
official
The mood
indifferent to
economic
realities,
and
in
the next two months, he composed the greatest polemical document of modern
times.
it,
It
he saw
Europe would onK' punish itself by exacting, or seeking to exact, more trom the Germans than the\ had the practical capacity to pay. Restraint by the
victors
\\
as not a matter of
self-interest.
The
case was documented with figures and written with passion. In memorable
men who were writing the peace. Woodrow Wilson he called "this blind and deaf Don Quixote."^ Of Clemenceau he said; "He had one illusion Erance; and one disillusion, mankind ."'' On Llcnd George he was rather severe:
passages Keynes gave his impressions of the
How
can
who does
not
know him,
an\'
ju.st
goat-footed bard,
tliis
half-human
our
age from
tlie
Alas, no
man
is
George at the last moment. The Economic Consequences oftlie Peace was published before the end of 1919. The judgment of the British Establishment was rendered by Tlie Times: "Mr. Keynes may be a 'clever' economist. He may have been a useful
Treasury
official.
But
in writing this
disservice for w hich their enemies will, doubtless, be grateful."'^ In time there
that in calculating the would be a responsible view that Keynes went too far limits on Germany's ability to pay, he was excessively orthodox. Perhaps he contributed to the Clcrmans' sense of persecution and injustice that Hitler so effectively exploited. Ikit the technique of The Times attack should also be noticed. It was not that the great men of the Treats and the Flstablishment were suffering mider the onslaught, although that, of coiuse, was the real
point. Rather, the criticism
was causing
It's
men
ill
regularly resort.
"
"Even
il
noli
are
be pleased.
200
1919. Lloyd George, Clemenceau and Wilson on the way to sign the Treaty. Keynes called ." But Lloyd George "tliis syren, this goat-Jooted bard, this half-human visitor to our age. on second thought he deleted the description.
. .
The
Lydia Lopokova and fellow ballet member. "Was there ever such a union of beauty and brains As when the lovely Lopokova married John Maynard Keynes?"
And
it is
when
men most
ranks. So the\' greatK' resented Ke\nes. For the next twcnt\ years he
headed
in shares,
He
arts, old
books and
his
Blooms-
He had
broken the
We saw earlier that, as often as not, the intelligent man is not sought out.
is
Rather, he
excluded as a threat.
Keynes's exclusion was his good fortune. The curse of the public
man
is
that
he
first
accommodates
his
his
nicely
becomes a
On
the
outside one can at least ha\ e the pleasure of inflicting the truth. Also, as a free-
who had
just en-
M\ mcmor\
retains
from
somewhere a
.\s
couplet:
there e\ er such a union of beaut> and brains
lo\ el\
Was
For a
w hen the
ci\
il
have been a
in
brave. As
it
Cambridge professor. Lopoko\ a would then was (according to legend), old famiK friends
Cambridge asked: has Ma\'nard married a chorus girl? MostK in those \ ears Ke\ nes wrote. Good writing in economics is suspect and w ith justification. It can persuade people. It also requires clear thouglit. No one can express well what he does not luiderstand. So clear writing is percei\ed as a threat, something deepK damaging to the numerous scholars who shelter mediocrity of mind behind obscurit) of prose. Ke\ nes was a superb writer when he chose to try. This added appreciably to the suspicion \\ itii w hich he was regarded. But while Keynes was kept outside, he could not, as would a Marxist, be ignored. He was a Fellow of Kings. He was the Chairman of the National Mutual Insurance Company. He was the director of other companies. So he was heard. It might ha\e been better strategy to have kept him inside and
under control.
was
Winston Churchill.
disastrous error by a
most dramatically
.
government
in
modern economic
histor\
It
w as Ke\nes
who made
it
famous.
the attempted return to the gold standard at the prewar
The mistake w as
to
1 23.27 fine grains of gold and 4.86 dollars pound the pound. Churchill was Chancellor of the Exchequer.
\\
and
wages
liad risen
more in the postw ar slump. And in France, as elsewhere in Europe, though prices had risen more than in Britain, the exchange value of the local currencies had fallen e\en more than prices had gone up. When you bought the cheap foreign currencies and then the
United States they had risen
and
fallen
ith
Had
well.
to the
poimd
4.40 dollars,
all
With
sterling
bought
at that rate,
manufactures or services
coal, textiles,
u ould
in line
and the cost of their currencies. With pounds bought at 4.86 dollars, British prices were about 10 percent higher than those of her competitors. Ten percent is 10 percent. It w as enough to send bu\ ers to France, German) the
,
show that
British financial
as solid,
cenlm\
it
was a thought
in
to
which Winston
people participate
such decisions,
C^hurchill, historian and prowas highly susceptible. Also, only a tew and the instinct is strongK conformist.
The man
hasten to
Keynes, are not invited. They are not responsible, serious, effective.
that financial decisions, like those on foreign polic>
to protect error.
,
follows
The countr\ responded w ell to C^hurchills House of Commons announcement of the return to gold. The New York 'f//?K^s said in its headline that he had carried "Pahliamkni and nation io iiKiciir ok enimlsias.m. Keynes wrote instead to ask why Churchill did "such a silly thing." It was because he had "no instinctive judgment to prevent him from making mistakes."^ And "lacking this instincti\e judgment, he was deafened !>> the clamorous voices of conventional finance. Also, he was misled b\ his experts. One cannot
'**
exports
were
il
could
come dow
n oni\
n.
.\nd
only one of two ways. There could be a horizontal slash, w hate\ er the imions
tliere could be unemployment, enough imemployment to weaken imion demands, threaten employed workers w ith idleness and thus bring dow n wages. This Kevnes foresaw.
might say. Or
204
The mine-owners
tell
their story.
Miners on
Why, Keynes
silly
Charles Rist.
Ijalniar
(left)
There was.
coal
tell.
in llic
mcnt and
a horizontal
wage
cut.
As
came back
To meet
this
the
pits,
abo-
the minimum w age, lower wages for all. (Let Enoch Powell, Ronald Reagan and Milton Friedman take comfort; there was a day when such
Who
Commission agreed that the lower wage was necessary. The miners refused; the owners then locked them out. On the fourth of May, 1926, the transport, printing, iron and steel, electricity and gas and most of the buildingtrades unions
came
was
some
it
slight
exaggeration,
few u orkers
didn't
were alreacK on the dole, for unemphjyment, was by then well advanced. In these years unemployment ranged betw een ten and twelve percent of the British labor force. The General Strike lasted only nine da\s. Those who had most ardenth applauded the return to gold were the first to see the strike as a threat to
too
difference; they
make
much
strike
through most of
1926 but were exentualK defeated. Keynes's judgment was redeemed but he
was not
forgiven.
it is
It
are w rong.
Money
that
might
ha\e come
to Britain tor
goods continued
France.
to
go elsewhere,
meant to proclaim the strength and integrit\' of sterling. It demonstrated its weakness and the strength ot the dollar instead. In later years A. J. Liebling of The New Yorker magazine formulated w hat he called Liebling's Law It held, roughK that if a man of adequately complex mind proceeds in a sufficiently perverse wa\, he can succeed in kicking himself in his own ass out the door into the street. The return to gold in 1925 was a superb manifestation of Liebling's Law. By 1927, the loss of gold to the United States was alarming. AccordingK in that \ear, Montagu Norman, the head of the Bank of England, in company w ith Hjalmar Horace Greeley Schacht, the head of the Reichsbank (a man whose reputation for financial wizardry- was supported by an exccptionalK austere appearance and a notabK frozen mind), sailed for New "^'ork to tr\ and get it back. There, in companx w ith (Charles Rist ol the Banque de France, the\ asked the Federal Reserve to low er its interest rate, expand its loans and thus ease monetar\ polic\ The low er interest rates would discourage the How
United States and later
to
. , .
.
The
207
money to the United States. The easier money would mean more loans, more money, higher American prices, less competition in Britain and elsewhere from American goods and easier sales by Europeans in the L'nited States. The Americans obliged. This was the action, as previously told, that is held to have helped trigger the great stock market speculation of 1927-29. The easier money went to finance purchases of common stocks instead.
of
Everybody Ought
to be
Rich
in Britain,
years
wonderful
in
Wages
But
so,
and so did
profits
and
most of and especially those that reflected the marvels of the new technology. Radio the electronic Corporation of America was the greatest speculatixe favorite miracle, although that word had not yet come into use. For many investors
common
in the
was a railroad. Most exciting of all were the holding companies and the investment trusts. Both were companies formed to invest in other companies. And the companies in which they invested, invested in yet other companies that, in turn, invested in yet others. The layers could be five or ten deep. Along the wa\ bonds and preferred stock were sold. The resulting interest payments and preferred dividends took some of tlie earnings of the ultimate operating company; the
remaining earnings came cascading back
to the
common
the
stock
still
held by the
promoters. Or this happened as long as the dividends of the ultimate companies were good and
ferred stock soaked up
rising.
all
When
these
fell,
bond
interest
and preleft to
of the rexenues
go
in
was an
Goldman
Sachs.
would be nothing
again
The golden age of Goldman Sachs was the nearly elexen months beginning December 4, 1928. On that day the Goldman Sachs Trading Corporation was formed. This was an investment trust w itii the fimction onK ot inxesling in other companies; $100 million of stock was issued, of which 90 percent was sold to the public. This was put in other stock selected in accordance with the superior insights of Goldman Sachs, in Februar\ the Trading C'orporation was merged with the Financial and Industrial Securities (Corporation, another
investment
trust.
Assets were
now
$23.5 million. In
208
Dark Thursday
Shenandoah Corporation. Preferred and common stocks to a total of $102.3 million were authorized, again for investment in other stock. The public share of issue was oversubscribed sevenfold so yet more was issued. In August Shenandoah, in turn, launched the Blue Ridge Corporation for $142 million. A few days later, back at the Trading Corporation, $71.4
prise launched the
million
at $17.50
and had
risen to $36.00,
down
to fifty cents.
loss.
The Trading
itself, it
Two years
later
it
"He
it
my
into a shoestring."
Shenandoah and Blue Ridge was John Foster Dulles. A more introspective man might have wondered. Dulles emerged with his faith in the capitalist
system unshaken.
a director of both
Dark Thursday
For Goldman Sachs, as for stocks
in general,
was
Thursday, October 24, 1929. The market had been weak on the da\s before.
On
far
they had been ruined or would soon be ruined. So they sold and
were
Exchange the noise was deafening. Outside in Wall crowd gathered. Perhaps capitalism was collapsing, v\ hich would be an interesting thing to see. The police were called; maybe the brokers and bankers would get out of hand. A workman appeared on one of the high buildings to make some repairs. The crowd assumed he was a suicide and
sold. Inside the
Street a
to
jump.
\\
Around noon the Exchange authorities closed the xisitors' gallery. It One who had been watching was Winston Churchill.
if
as
all
In the
established
subsequent
It
would be good
it
to believe that
isn't so.
money
New York
About the time the gallery closed, things took a turn for the better. A little earlier that day the great New York bankers had gathered at Morgan's next door to consider the situation. A rescue operation seemed indicated. Richard Whitney, the Vice-President of the Exchange who was known to all as a
209
Wall Street on the day of the Crash. waited impatiently for him to jump.
The crowd
Solutions
Morgan broker, was told to go in and buy. This, with grt-at ostentation, he did. The amounts authorized, tliough unknown, seem not to ha\e been large.
But the
re.scue
worked, and
tlie
it bceame soft again. Whitney was a hero, his achievement was wideK celebrated and he was made President of the Exchange. Not long thereafter, he was off to Sing Sing for embezzlement. The following Tuesda\ the real crash came. This time the bankers did not intervene. According to rumor they were unloading the stock the\ liad bought the pre\'ious Thursday. With occasional rallies, the market w enl on dow n for nearK three
years.
The Crash
vency
ot
blighted consumer spending, business investment and the solfirms. After the
Depression;
fourth of
tional
failed.
all
By
1933, nearly a
jobs. Production
Product
was down by a
Gross Na-
third.
The government reacted normalh': in June 1930, things were bad and getting much worse. A delegation called on President Hoover to ask for a public works relief program. He said: "Gentlemen. \()u ha\ e come sixty days too late. The depression is over."^ In Europe, it was World War 1 that shook the old certainties. The trenches would linger in social memory as the ultimate horror. In the I'nited States it
was
ask:
tlie
in
When
an\ thing
seemed w
rong, people
would
"Does
this
Solutions
The effects of the Great Depression spread, and they spread around tlie world. The richer the coimtr\ the more advanced its industry the worse, in general, the slump. Onl\ Russia was untouched, although this w as not an unqualified case for the Soviet s\stem. The time had come for that finther stage of the revolution that Lenin saw to be necessar\ so agriculture was being collectivized. This stage was infinitely more blood\ than the first. What was called sutfering in the West would ha\e seemed like a miracle of economic affluence in Russia. Stalin himself was later to tell Churchill that these years were the most painful of his life. When Stalin was pained by the pain of others, it was pain indeed. The first solution that occurred to statesmen was to propose tightening of
, ,
belts,
to patience.
This
is in
is
a natural reaction.
Few can
vain.
An\ thing
that
is
211
' .
Then
there
The
Trial
Runs
Herbert Hoover
in the
in
Germany
were cut; salaries were raised. All this was done at a time w hen around a quarter ot'all German industrial workers w ere unemplov ed. Not many have wanted lo ask the question which some millions oC German workers did ask themselves, if this is democracN can Hitler be worse? Andrew Mellon. Hooxers Secretary ol the Treasury, had a similar proposal': "Liquidate labor, liquidate stocks,
cut; prices
w ere the most devoted exponents of this view ly.'jl was especially memorable. Wages were were
cut: taxes
."
. .
it is
true,
be no w ay
.\Ian\
left
economists
United States
tion; the
in
Lionel Bobbins England, Joseph Schumpeter the agreed that depression had a necessary, therapeutic funcin
in
but up.
metaphor was
that
it
that
easier
when supported by
was
to
that
affirmative measiues by
effect in all cases
The
practical
for
come
It
economists. Britain did abandon the gold standard and free trade. Otherwise
to the l3epression
was receiving from John Ma\ nard Keynes. Keynes was wholly clear as to the proper action. He wanted borrowing by the government and the expenditure of the resulting fimds. This was the
of
How
advice
it
the
money suppK
in
was spent by the goxernment and would then be respent by workers and others receiving the money. The government spending and the further spending by the recipients ensured that there would be no offsetting dro[) in elocit\ in V and V. You not only created money liut enforced its use. Keynes in these years did have one notable friend. It was the "goat-footed bard," David Lloyd George. Keynes explained helpfulK that he supported Llo\cl George when he was right and opj^osed him when hv was w rony. iiut Lloyd George was by now in the political wifderness with the other w inners and losers from World War L Gradually for Keynes there was compensation. He became a prophet with honor except in his own country. The most
\
where he was
all
but
imknown.
The
Trial
Runs
not gi\en to Ijooks. Tluir rt'aclion was to circumstanct', and
tin-
liritain
and the
it
bono wed
and he did
213
seemed the obvious thing to do, given the unemployment. At first, the spending was mostly for civilian works railroads, canals, public buildings, the Autobahnen. Exchange control then kept frightened Germans from sending their money abroad and those with
liberally as
It
rising
By late 1935, unemGermany. By 1936, high income was pulling up prices or making it possible to raise them. Likewise wages were beginning to rise. So a ceiling was put over both prices and wages, and this too worked. Germany, by the late thirties, had full employment at stable prices. It was, in
The
were
at
all
ployment was
an end
the borrowing and spending and uniformly predicted a breakdown. Only Schacht, the banker,
they said, was keeping things patched together. (They did not
and Ameri-
know
that
Schacht, so far as he was aware of what was happening, was opposed.) And American liberals and British socialists looked at the repression, the destruction of the unions, the Brownshirts, the Blackshirts, the concentration
camps, the screaming oratory, and ignored the economics. Nothing good, not
even
full
Hitler. It
that
Keynes addressed a letter to Franklin D. Roosevelt, which, not seeking reticence, he published in the New York Times. A single sentence summarized his case: "I lay overwhelming emphasis on the increase of national purchasing power resulting from go\'ernmcntal expenditure which
is
financed by loans.
." '"
. .
The
FDR
had been a better means of communication. Each man was puzzled by the face-to-face encounter. The President thought Keynes some kind of "a mathematician rather than a political economist." ^^ Keynes was depressed; he had "supposed the President was more literate, economically speaking." 'If corporations are large and strong, as they already were in the thirties,
they can reduce their prices.
And
il
were
company
work
in reverse;
the
to its force.
trying to
Through the National Recovery Administration arrest this process a reasonable and even wise
given the circumstances. This Keynes and most economists did not
see;
NRA
wrong, and
e\'cr since
il
press.
One
of
FDR's
foolish mistakes.
214
- with
Republicans
indeed, reluctant.
as then called,
\\
he said he had
never heard of a
fashion, to pro\ e
girl
as
now
after a
Walker w
seduce
\\
Ha\ ing
he proceeded
to
Walker,
it
The b((jk was The General Theorij of Employment Interest and Money. (For some reason Ke\ nes omitted the commas, He at least w as not in doubt about its influence. Shortly before it w as published in 1936. he told George Bernard the w a\ the w orld thinks about Shaw that it w (juld "largeK re\ olutionise
i
economic problems.
Bible and
'
'^
So
it
did.
The General Theory was published long before it was finished. Like the Das Kapital. it is deepK ambiguous and. as in the case of the Bible and Marx, the ambiguit\ helped greatK to w in con\ erts. I'm not reaching for
parado.x.
When
understanding
is
achieved after
much
efi^ort.
readers hold
The
pain. the\
w ish
to think,
there are enough contradictions and ambiguities, as there are also in the
Bible and Marx, the reader can alwa\s find something he wants to believe.
Keynes's basic conclusion can. how ever, be put very directly. Previously
it
capitalist system,
found
its
to itself, it w as thus that it came to rest. were an aberration, a w hoik temporarv failing. Ke\ nes show ed that the modern econom\ could as well find its equilibrium w ith continuing, serious unemployment. Its perfectly normal tcndenc\ w as to w hat economists ha\ e since come to call an underemplo\ ment equilibrium. The ultimate cause of the underemphjyment equilibrium lay in the effort by individuals and firms to sa\e more lr(jm income than it was currently pr(jfi table for businessmen to invest. What is saved from income must ultimately be spent or there w ill be a shortage of purchasing pow er. Previously for 150 \ears such a possibilitv had been excluded in the established economics. The income lr(jm pr(jducing goods was held alwa\ s to be sufficient to buy the goods. Savings were always invested. Were there a surplus of savings, interest rates fell, and this ensured their use. Kevnes did not denv that all savings got inv ested. But lie show ed that this
employment. Left
men and
idle plant
could be accomplished bv a
a
fall in
in the
economy as
lo.s.ses,
h(.)k'.
216
it
reduced in\estment.
it
reduced
to invest-
was
in this
way
that sa\in2s
and in\est. If it borrowed and invested enough, all savings woidd be offset bv investment at a high, not a low. level of output and emplovTuent. The General Theory \ ahdated the remed\ that Kevnes had previousK uraed. It w(iuld have been incon\ enient if it had come out the other w ay.
the foregoing
From
came
the remedy.
The
ashin^ton. as noted,
u as cool
to
weapon, he captured the United States by way of the uni\ ersities. His prinw as Har\ ard. It w as something I w as fortimate enough to
first
see at
hand.
was
living as a
young tutor
at W'inthrop House,
v\
one of the
undergraduate residence
units. W'inthrop
House
as an unpretentious place,
but not anti-Irish as were more dignified places of residence. It was perhaps the for this reason that among our inhabitants were the Kennedy brothers, something that had a considerable effect on mv later life. Resident tutors had free rooms, free meals and as much monev as the\ needed. We met each morning tor a leisurely breakfast and to hear of the exceptionallv deprav ed sexual adv entures of one of our colleagues on the previous night. He subsequentlv became a v er\ great S(.x?ial scientist. It w as a lovely and tranquil world; the onlv drawback w as that things w ere so difterent just outside the university walls. Once in those Depression vears I spent Christmas in Los .\ngeles. The streets were filled with desperate men who pled desperately for a little monev you could sense that they hated what they had to do but thev had no choice. When v ou tried to pass them bv you saw the look of hopelessness and fright in their eyes. That w as the contrast with our comlortable w orld. Keynes had a solution without revolution. Our pleasant world would remain; the imemployment and suffering would go. It seemed a miracle. In 1936. after the publication of The General Theorij. there were meetings several times a week to discuss this w onderful thing. One meeting in W inthrop House remains in mv memorv. Professor Schumpeter presided; he disliked
slightly anti-Semitic like the rest of the univ ersity
; ,
vmmg Canadian,
it
seminar
in the
other Cambridge, as
was called.
When
the
policv
in doubt, as we often were, he told us what Kev nes realK meant. For next thirtv years Bryce w as the pre-eminent figure in Canadian economic
.
else
he caused Canada
to
217
was the young who were captured. Economists are economical, among other things, of ideas. It is still so. They make those they acquire as graduate students do for a lifetime. Cliange in economics comes only with the changing generations. The great economists ol that day read and reviewed Keynes and uniformly found him wrong. But so influential was Keynes among the young at Harvard that in later years an association of alumni was formed to combat his influence. They threatened to cease financial support to the university unless his ideas were repressed or expunged, although it is not clear that many had given much
It
management
of
tlieir
personal resources. I was singled out for attack as the Crown Prince of "Keynesism." I was greatK pleased and hoped that m\- friends would be properK' resentful.
to
for
And by
won
To Washington
From Harvard
Boston
to
went
to
Washington
by
New
train.
On
Washington would be
All
half-filled
and young.
Harvard
that they
impart wisdom
Deal.
The
(Uim.soii
were \\ hat lie gave while catching the train to Washington. After The General Tlieory was published, the wisdom that the younger economists sought to impart was that of Keynes. It was thus that we learned of the Washington reluctance. To spend public money to create jobs might be necessary. But it was not something you urged the out of choice. And to urge that a budget deficit was a goof/ thing in itself of sound judgment Keynesian remedy seemed insane. Men heart of the were repelled. Even one's best friends, if in positions of responsibility, were
One
your rescue.
It
came
galloping
in
those years.
appalling.
to cut
The men
of sound
spending, raise taxes and bring the federal budget into balance.
The tew
to a halt.
the recovery
came
gl8
Herbert Hoover.
Hooverville.
pression.
It
was
t-ntirely as
case.
Reserve System.
We
Washington? They were, of all places, in the Federal tJiink of a central hank as a stronghold of myopic,
It is
form outside
money.
He had
seen
men
get the
Why
money
to
provide jobs and help the farmers back to solvency? His experience
to those of
Keynes
to pass
to
Washington.
Eccles's principal
to rescue the
to be \ iewed was not promoted. In economics one should never be right too soon. The shrewd scholar always waits until the parade is passing his door and then steps bravely out in front of the band. Eccles and Currie became the leading exponents of Keynes in Washington. Scholars now speak of the Keynesian Revolution. Never before had a rexolution captured a country by way of a bank. No one should worry that it
some
of the
with doubt
b\'
will
went to the White FDR. This was a strategic spot. When an economic post oijcned in the goxernment or someone was needed for a special economic task, he would sec, if possible, that someone with reliabh Keynesian views was employed. Several times he called on me. Conservatives always believed that there was a conspiracx to promote the Keynesian ideas. This exeryone
From
House
as an assistant to
Much depends
He was
not.
But for
many
people the diflerence between Keynes and ('ommunism wasn't too great.
Also
in
won
his
at
Minnesota and
the American
then
at
figiu-cs in
scholars
Sexmoin-
220
Lessons of
War
E. Harris, another diligent evangelist at Harvard, and Paul \I. Samuelson. whose textbook, in face of sharp initial attack, instructed millions made Keynes an accepted part of American economic thought.
Although the recession of 1937 made Keynes's ideas respectable in Washington, action to lift the level of employment remained lialf-heartcd. In
war came to Europe, nine and a half million .Vmcricans were unemployed. That was 17 percent of the labor force, .\lmost as many (14.6 percent) were still unemployed the following >ear. The war then brought the Keynesian rcmcd\ with a rusli. Expenditures doubled and redoubled. So did the deficit. Before the end of 1942, uncmplox ment was minimal. In many places labor was scarce. There is another wa\ of looking at this histor\ Hitler. lia\ing ended unemployment in Germany, had gone on to end it for his enemies. He w as tl:c
1939, the year
.
Lessons of
War
The war revealed two of the enduring features of the Keynesian Revolution. One was the moral diflFcrencc between spending for welfare and spending for w ar. Dining the Depression ver\ modest outla\ s tor tlie unemplo\ cd seemed
socially debilitating,
economically unsound.
soldiers
Now
expenditures
many
times
still
greater for
persists.
weapons and
were perfectly
ell
before
it
disappeared, inflation
his
ith
became
followers;
was
to put
by
all
possible
if
means
to
Keep the
cost of
ing stable,
w age
increases for
it
Some
price control
and
should
it all
in especially short
set
The Times.
If
In
Washington and
now
in
must sureK'
w hich
I'd
It
was an
consequence,
the most
in the spring of 1941, 1 was put in charge of price control, one of pow erful economic positions of the wartime years. To sa\' I was overjoyed would be a gross understatement. I got the news in the Blaine Mansion, a fine Victorian structure on Massachusetts .\venue at Dupont Circle and the first headquarters for wartime price control. James Blaine, like man\ others, acliiexed a well-deser\ed
221
less
complete than
for most.
right,
good
in
proxenance:
James G. Blaine, James G. Blaine,
Gontinental
liar
hom
In a
few weeks we outgrew the Blaine house. Three times during the war
we
and had
to the
to
move.
We
ended
in a sizable
acreage previousK inhabited by the Census and later taken over by the FBI.
The expansion
in staff
was related
deeper discovery
the ideas of Keynes as adapted by Galbraith did not work. Long Iiefore
the
imemplo\ed had
led, in turn, to
and the\
did. This
spiral.
on, potentialK
to a
price-wage
spending.
Meanwhile taxes could not be raised fast enough to keep pace with wartime The excess ot pinx'hasing pow er could not, as Keynes had proposed,
be mopped up.
to
go
in for price-fixing
in
the spring
we did, and
I
were kept
now
had argued against a general ceiling on prices with great I argued for it w itii equal passion. Almost no one noticed this
change
tiling to
ot
mind.
No one
to
at all criticized
it.
In
economics
it is
be right than
be consistent.
now
w as
holds that price increases were only bottled up, to be released after the war.
a bulge
when
in
it
by
far
every year.
to higher authorit\
If
and the
No
ith
one much
a smile,
painful.
backed us up.
an\ one
we felt we had not done our job. To be effective, price control had to be To be charged with inflicting such pain, mostK on those who could
it,
for a
\oimg
was
accu.sed of liking
which, perhaps,
did.
People appealing
fiuilding. 'I'hose
came to a s made
large table
in
the Census
Know ing
222
Triumph
We
someone was pleading his meretricious case and notice that one or more staff members would have a hand resting flat on the table, the index and second fingers niox ing up and dow n, each in opposite direction to the other, ft was in reference to a fable the vear
look clow n the row of chairs w hile
w ould
One day a
on the side
found food, a lo\el\', large, round piece of horse up the slope from the col()n\. All the ants were mustered out to bring back the food. They rolled it down the hill, and presently
of a
steep
hill
manure.
It
was
directly
it
was
rolling faster
and
faster
and threatening
colony
and
lie lost.
who w ere
Her antennae
was while directing price control that first met Keynes. I had gone to stud\ under him at Cambridge (>amhridge, England, of course in 1937-38, but it was then that he had liis first heart attack, and he did not
I
appear
He came
into
my
outer office in
it
said, was Kines. M. Keynes. The paper was a lucid condemnation of the prices we were setting on corn and hogs. He called them maize and pigs. It was as though St. Peter had dropped in on some parish
and
said
he seemed
to feel
was,
].
priest.
less
There too
it
war ended, led a group of economists who studied German and Japanese wartime economic management. None doubted that the British management w as far more rigorous.
Triumph
After 1941, the economists no longer went to Washington b\
train.
They
were already
there. All
it
plo\ment from, as
in
saw the Keynesian remed\ The conclusion was inescapable: war would work in peace. The Keynesian victory was
for
now
assured.
The
failure of the
Keynesian system
to deal
ith inflation
w as
Liberal businessmen
in
these
Committee
for
Economic Development
promote the
ideas.
The\ w ere
er\-
223
careful,
however,
to avoid
Keynes's name.
to a close, a
employment. They succeeded, and the Employment Act of 1946 became law. I was one of the many who were surprised at their success. I had thought the
idea premature and had not participated in the effort. But, by 1946,
it
was
becoming
against
difficult
even
for conservative
full
employment, although,
in the end,
many
Bretton
Woods
his last crusade.
At Paris he had
fought the Carthaginian peace. In 1925, he had fought Churchill and the
Woods
in
New
Hampshire
to
Bretton
made his reputation were not repeated. The Woods Conference was not a conference among nations. It was a
rival
was Harry D. White, his friend and disciple at the U.S. Treasury. The result of Bretton Woods was the Bank for International Reconstruction and Development and the International Monetary Fund. The first would guide the minds of the victorious powers to reconstruction, not punishment. The second would give a modicum
country
in
When the war was over, Keynes also negotiated the loan $3.75 billion
was
to see Britain
until exports
would
was the Americans. Sterling had been It was made a condition of the loan that it would become fully and freely convertible into dollars (and thus into gold) according to timetable in 1947. This was done. And all who had
this
now another
it
time
speculators, blackto
rushed joyously
change
their
money into dollars. The loan was used up, literally in a matter of days. In 1925, sterling had been made convertible at an unduly high rate with disastrous
Twenty-two years later the same error was repeated with infinite Keynes was a reluctant participant. Keynes had always believed that men of self-confessed financial wisdom were wonderfullv consistent, especially in their mistakes. He did not li\'c to see this further proof. On April 21, 1946, he died of another heart attack.
results.
The Age
of
Keynes
came
more
practical
Marshall Plan was a good example of the kind of concerted effort backed by
money that Keynes had called for at Bretton Woods. Germany was a full participant in the Marshall aid. This
of Keynes. In the years after 1945,
too
men
told
Treaty was
not punished.
Europe and the United States the two decades following the Second World War will for long be remembered as a very good time, the time when
In
Everywhere in the industrialized countries production increased. Unemployment was everywhere low. Prices were nearly stable. When production lagged and unemployment rose, governments intervened to take up the slack, as Keynes had urged. So these were good and confident years, a good time to be an economist, and economists took and were given credit for the achievement. Only the occasional, very mild recessions were still acts of nature or of God.
capitalism really worked.
in the
the faults were less celebrated. After the Marshall Plan there was hope that a
money capital would also rescue the poor countries from their poverty. The rich countries weren't overwhelming in their generosity. But enough was done to show the problem. In the European countries in the years immediately following the war
capital
by the Marshall Plan. In the poor countries, on the other hand, industrial
experience, industrial
tration, transportation
skill,
systems and
many
exist.
These
could not be supplied from abroad as was the capital. Nor could anything be
done from abroad about the relentless pressure of population on land. Keynes, it was learned, at least by some, was a man for the rich countries, not the poor.
war was rediscovered. The Keynesian remedy was asymmetrical; it would work against unemployment and depression but not in reverse against inflation. It was a discovery that was only very slowly and reluctantly accepted, and now, more than thirty years later, there are still some followers of the master who are reluctant to admit the fault. Unemploythe great lesson of the
And
ment, as
years.
this
is
written,
is
high
in the
in thirty
And industrial
is
What is
true in the
United States
worse
is
now
the
225
faith.
One must
that
cures unemployment.
One can
and
trade-union wages by direct action. (I've long thought such action inescapable.) This does not leave the
market system
servative,
face.
had intended.
It is
many wish
to
There are other problems. Keynesian support lo the econom\ has come to involve heavy spending for arms. This, we've seen, is blessed as soimd while spending for welfare and the poor is always thought dangerous. With time,
it has become evident that Keynesian progress can be an uneven thing: man\ automobiles, too tew houses; many cigarettes, too little health care. The great cities in trouble. As these problems have obtruded, the confident years have come to an end. The Age ot Kevnes was for a time but not tor all time.
too,
226
8.
[The American people must be on] siuird against the acquisition of unwarranted influence,
\\
The potential
rise of
misplaced power
exists
and w
ill
persist
We
tlie
United States
A high
In his testimonx toda\-,
official
of the
Department
ot State
to the author,
1974
to characterize the
.
pa>ments
call
[to other
govern-
lawvers
s
preferred to
them "kickbacks."
'
.\Ir.
Haughton
said, "it
be made."
From the
Chairman
of the
\'cic
Haughton.
Lockheed
.Aircraft C-orporation,
August
25, 1975
Politics, in
cliches,
is
the art
ol
the possible.
Equally, in
highest development,
it is
important, no matter
how
difficult.
No problem
in
our time
is
and the Soviet Union. This competition has now dexclopcd the means mutual and reciprocal destruction of the two nations, along with the rest ot
the world, in a matter of hours. Vast technical resources are being in\ested in the effort to reduce this to minutes.
ideas that explain our societ\
the
circumstance
important.
lie
and guide our belia\ ior. What doctrine and back of this aw ful effort? There is nothing else that could be so
227
The competition
conflict
just
mentioned
conflict
rests
between inherently hostile economic, political and social systems. There can be no reconciliation between Communism and capitalism, authoritarian discipline and personal liberty, atheism and spiritual faith. That is the great fact of life. The second and more recent idea is explicit in the words above of President Eisenhower and the nameless State Department official, only slightly less so in the response of Mr. Daniel Haughton, the since-deposed head of Lockheed. It holds that the arms race is the result of the way we are ruled. It is a manifestation, both in the t^Jnited States and in the Soviet Union, of the public power of the military establishment and of those who make the arms. It involves a double symbiosis. In the United States the great weapons firms supply the armed services with the weapons they seek. The Air Force, Navy and Army reciprocate with the orders to the corporations that provide the profits and employment by which they function and flourish. The corporations and the services combine to conduct the research and development which
irreconcilable
the concept of
make
make necessary
the next.
This
the
first
symbiosis.
The second
is
States
and the
Soviet Union.
The same
its
Each power, by
self-perpetuating.
difference
between Communism and capitalism, freedom and authority, progress and reaction, Marx and Jesus, is cited but this is liturgical, not real. No faith sustains the arms competition. All who are knowledgeable agree that neither system would survive the conflict. Both countries are caught in a squirrel wheel, a
trap.
There are many ways in which the history of the last thirty years could be written. I see no part of that history as so important as the changing vision of
the arms race, from
its
tendency to view
it
as a
are ensnared.
We are all
in Berlin
Mine began
War
II.
Berlin: 1945
I
knew
Hitler's
life,
had
the
taken to
is
My
in
the
summer
of 1945.
One
thought of the
228
Berlin: 1945
was a phrase that came to many hps. When eventually we saw the landscape of the moon, it was more austere and chaste, less broken and much less alarming than Berlin in those summer davs. In 1945. Berlin was literalK a cit\ of death, for the bodies were still in the
landscape of the moon;
this
From Tempelhof
ci\ilian,
I
air-
drome where you came in, one saw burial parties passing into the big cemetery
nearb\
,
and
also
American
As a
had not
make
love with an
M-1
war.
rifle
Half-destroyed buildings are the metaphor of the suffering that goes with
The experience of horror is by people. But its image does not persist; very
it
soon
the
cannot be seen at
all.
Only
in structures
does
it
Haus Vaterland was a famous conglomerate of restaurants and cabarets. Each of the different watering places featured the music, costumes, food and alcohol of a different part of the Reich. In 1945, most of Berlin was a metaphor of destruction. Today the visitor must search out the Haus Vaterland in a wilderness near the Wall to see how the horror of war endures. In the summer of 1945, 1 was at a headquarters near Frankfurt with a group that was assessing the effects of the air attacks on the German war economy. later One morning one of my fellow directors of the enterprise, George Ball Under Secretary of State, Ambassador to the United Nations, a banker and
Churchill, Stalin, much else called to remind me that the Big Three Truman would soon be meeting at Potsdam to decide the future of Germany and the world. He thought we should attend. I noted, as a difficulty, that we hadn't been invited. George said that to allow hurt feelings to keep us away would only compound that error. So we flew to Berlin in an old C-47 we'd been
compound on
we had come
to participate
I
chairman,
wondered how many attendvolunteers. In the followwere self-invited summit conferences ing months I was concerned with German matters; eventually, in the State Department, I was put in charge of economic affairs in the occupied countries. (There is a lesson here: reticence and modesty ought not to stand in the way of
public service.) These responsibilities brought
me
back to Berlin.
and black
in
were taking form: one party wanted very much to get along with saw little hope the Russians. They I should say we, for I was among them two powers. There were for a world in w hich there was conflict between the
two
parties
ACH TU NG!
Sie verlassen
je^
WEST-BERLIN
Berlin.
When
the
Communism,
armed representatives of capitahsm met the armed was to do a little business. The market was here
in 1945.
thinsis to
encourage
lis.
When we met
soeiallx
illi
the Russians,
we
learned
Some
how passionate was their fear were similar!) moved. They had it. We had as s\nibohc aUies our
ith their
Russian counterparts
and exchange of merchandise; tlie market was in the shadow of the Brandenburg Gate which stands between East and West Berlin. Thus they
show ed that trade was abo\ e ideology, that w hen the armed representatives
met the armed might of Communism, the natural tendency was not to Hght liut to do a little business. There was a second party. It regarded our hopes as ridiculously soft-headed. (There is an interesting point here: political wisdom is thought alwa\s to lie with the hard, imper\ ions head and the tough, im> ielding mind. One wonders why.) Some members of this group w ere only concerned to sliow how tough
of capitalism
genuine knowledge of
and a genuine concern for his intentions. Also the Soviet activities in Eastern Europe left no room for doubt. It was easy to assume that these would be the same in Western Europe as well. Present too were the pathologically belligerent, those who even more than the poor are always w ith us. And there w ere a tew for whom the war had been
an exciting thing, a blessed escape from
Better another
shire.
to Toledo,
Hamp-
met in tlie late afternoons and evenings in the houses of the former Nazis and the German bourgeoisie. The bombs had wrecked the working and middle-class sections of Berlin but largcK spared the affluent suburbs. Now the rich had their turn.
occasion, the debate
intense.
On
became rather
We
evicted to
make way
for those
many
of the latter
remarked on how
of a
had ever been housed so well before. All easily and gracioush Americans accomot ser\ ants.
modated
to the
management
complement
Marx and
Lenin. Not all who spoke of their design remembered mucli of their texts but they were confident of their purpose. It was world re\olulion, a world Communist order. Everyone in Berlin was a potential hostage to this ellort.
nessmen,
alony;
\\ illi
tlie
achievement
had been
lationship
excellent. Profits
This was the beginning of the political alignment, the symbiosis of which
earlier spoke.
The
power, prestige,
men and
into
existence to provide the ecjuipment and technology and share the gains. There
followed a very simple, very practical point, far too obvious to be ignored.
If
there were a continuing menace, these gains would be continued. If not, they
would be
lost.
The
Germans,
No one
many admitted
this
ot public
is
more
easily
persuaded of
who
stands
self-
who
The
its
down-to-earth
man
of affairs or a general.
He
can function
in
One
felt,
The Blockade
But one cannot discoimt the support the doctrine of inevitable
from the
Soviets. This, intended or otherwise,
conflict liad
was comprehensive and superbly timed. In 194S. land and water communications with Berlin through tlie Soviet zone were interrupted. The barriers were closed. The ostensible cause was the currency reform in West Germany and its application to West Berlin.
was to force the Allies out of Berlin. \n heroic gesture was called for; it would be shown that a great city could be supplied, if necessary, entirely tlirough the air. There followed the Berlin
But, as read, the Soviet intention
airlift.
Time has
were seeking
232
a final
The Airlift.
Its
proud
statistics
American commander
itself firmly at
the check-
let
through.
But
we had airplanes. Having air power, air power must be a solution. More
it
often than imagined, this has been the basis of military policy. However,
is
at
whatever
cost, to
minimize the
risk
of the
armed confrontation
seemed to avoid. I do not do so. By were being landed each day planes of the time. That was enough, though
of the city.
Then agreement was readied, communications were resumed, the airlift came to an end. Coal, the principal cargo, had for a brief moment enjoyed the prestige of air passage; now it was returned to the trains and barges. But by
this
Communist power was fully consolidated in Czechoslovakia. By Communist victory was complete in China. On Sunday, June 25, 1950, the United Press dispatch began: "The Russian-sponsored North Korean Communists invaded the American-supported Republic of
In
May
Two
years later,
if
in
elected, to go to
Korea
to seek
an end
to
in
response:
tlie
Korea.
It lies in
Moscow."'
these events had
its
In retrospect, each ol
The Czech
final
wartime agreements or
in Russia,
in
with
Stalin.
Like Lenin
again
is
He was
seems now an
not in
it
as a riposte to Soutli
Korean
some
But thai the Soviets sponsored the action as part of the larger strategy of
Communist expansion
now,
this
is
very
much
it
in
doubt. Far
more
likely, as
with
to
much
was an
were it
happen
would be believed. But together the effect of these events was devastating. Those w ho hoped for accommodation w ere silenced. Henceforth tiie Cold War was the reality. Those w ho questioned w ere no longer defeated in argument. They were suppressed. Searching out the doubters became for some an industry and for Joseph McC^arthy a career.
234
McCarth\ how
,
e\ cr.
by
alcohol
and
his
came from a tar more reputable figure: John Foster Dulles. They were not doctrines of great sophistication or depth. Even at the time they were regarded by many with doubt. Dulles was never an object of instinctive
ideas of the period
the prevailing
mood and
need.
in its
own terms
I)ra\'e
The
it
justification
is
and land and lesser spoils to the w inner. This is no must now be fully above economic interest. One good for the Air Force, for the supph ing industries or
or output in the
even that
econom\ at large. As with war, so it was with mobilization of energies short of war the Cold War. Even
sustains
employment
Communism
The
passion for free enterprise was too obviously related to the revenues
therefrom.
And
those
who were
paid the
least.
tliat was much used. disliked the Soviet Union was argument with which those who most But this an were not completeh comfortable. Radicals defended Roose\clt, Mrs. Roosevelt, unions, a better distribution of wealth and tiie emerging weltare state in the name of freedom. Freedom could obviously be abused, be damaging. It was accepted in the earl\ fifties that some had misused their freedom by espousing Communism, by holding pro-Communist thoughts or by being insufficiently passionate in their Americanism. B\' those v\'ho were most impressed with the Soviet menace this was deemed highly inimical. Freedom, clearly, was not an unqualified good. It was not, in consequence, the best case
against
Communism.
It was John Foster Dulles who came up with the completeh acceptable doctrine on which to base the Cold War, one that avoided all embarrassment. The Cold War had nothing to do with economics; indeed, an excessive preoccupation with material values w as a basic fault of the other side. Freedom was mentioned but was not central. The Cold War was a crusade for
moral values
atheism.
It
for
right against
was the defense of the faith of the average, neighborly. Godfearing American one's own beliefs and those oi the people next door. For this Dulles could turn to the faith of his fathers. He grew up with it in the small citv of Watertow n in far northern New York where his father was the
235
"Where MacCrimmon sits is the head of the table." John Foster Dulles and Douglas
MacArthur.
Presbyterian minister.
sailed
a step away.
his
As a boy Dulles
younger brother,
battles to
War
come.
From Watertown
for the ministry.
work almost
assistant to
However, early on he persuaded them he could do God's were he a lawyer. So, after going as a young The Hague and Versailles Conferences and seeing the great in
as adequately
down
By
most prestigious of the great Wall Street law firms. There he made This involved a certain wandering from his faith. Wall Street
poration lawyers as being primarily concerned with God's work.
believed, no doubt accurately, to have
not the
Shenandoah and Blue Ridge Corporations, the classic aberrations of that larcenous year. Hundreds of millions of dollars were lost. Governor Thomas E. Dewey, who launched Dulles in politics, explained later that Dulles took a
temporary leave of absence from religion during
ambiguous. Almost
statesman of
this period.
trifle
speak of his
brilliant
whom
pace with
his
who saw much of him, was reminded of a was said, "... his speech was slow, but it easily kept thought."^ Most believed him paranoiac where Communism
it
was involved. But others held that he got along well with the Russians, for he was what they expected a capitalist to be. In the Suez crisis of 195.5-56, he lined up with the Soviets against the British, French and Israelis. It is certain that Dulles had an instinct for command. There is a kind of person who, out of the very certainty of his purpose, right or wrong, both assumes leadership and is conceded leadership. No quality so assures public success. Douglas MacArthur was such a man. So was Charles de Gaulle. So, though with slightly less inner certainty, was Winston Churchill. So, we have was Lenin. An old Scottish saying celebrates this leader: "Where MacCrimmon sits is the head of the table." To be a MacCrimmon is far better than to have brilliance of mind, eloquence of speech or charm of personality. In the years following World War II, bored with the law and even with making money, Dulles prepared himself for command. He returned to religion
seen,
He
resumed
Senate but
237
made him
for the
Secretarv
He came Many
to office,
and so did
his
moral sanction
Cold War.
liberals of
my
who
said that
. . .
judgment of Reinhold Niebuhr, the "Mr. Dulles' moral imi\erse makes e\er\is
Self-righteousness
it is only fair to let him speak for liimself. This he Watertown on October 11. 1953, nine months after he became Secretary of State. It is the clearest statement we have or would \\ isli of the ideas underlying the Cold War:
moral judgments,"-' So
s
cliurch in
'I'lu'
arc liappfniiii; in
some
due
pohtical
and
social practices
is
Tliat separation
almost
Communist
moral law.
materialistic creed
denies that
men
are spiritual
beings.
It
As a
human
standpoint
how much
the\ can be
made
to
produce
Labor
is
working
to build
cr.
It is
us.
But
it is
important
He
added:
it
But
is
gross error to
.
assume
tliat
monopoK
thc\
ol
dynamism. Moral
power
to secure
mean
that they
have no ends or
tiiat
all
all
the nations.
Any
its
institutions
a d\iiamic nation.^
The Cold War was a moral crusade. It was also a religious crusade. .\nd came close to l)eing a Cliristian crusade. There was more than a hint that
strong,
it
even militant
polic\',
so long as
it
a\ oided "liriite
pow
er,"
would ha\e
There was a corollary here. Christians were as numerous east of the Iron Curtain as west. Their case, if religion was the issue, could not be less urgent than that of tlu'ir coreligionists in Western Europe or the United States.
Christians
Cold
War
thus
were as entitled to rescue as to defense. The Dulles case for the became a case for liberation, ibr rolling back the Iron Curtain.
first
This Dulles at
in revolt, that
proclaimed. However,
in 1956.
Thus the
setting.
On
the So\
let
side
ol
238
Launching the U.S.S. Richard B. Russell. A recent Secretary of Defense suggested that President Eisenhower might have spoken of the Military-Industrial-Congressional complex. Senator Russell was long a major voice on military affairs.
affirming
it.
In the
hberation from
West was the matching moral and rehgious commitment to Communism, or much language that could be so interpreted.
dangerous passage.
set for a
Dulles.
The idea
went
virtually unchallenged.
The
questioning to which,
state should
minor way, at
fifties
hand.
for
domestic
opposition
the
lucidly, brilliantly
on the
almost
Soviets.
The debate on
exclusively of efforts
Lehman and
other moderate
members
to tone
down
his declarations of
level, the
Pentagon
in these years
developed weapons
systems that were often duplicating or competitive and which were routinely
itself
now became
synonvm
for military
bureaucracy and power, and a large and growing weapons industry responded
to its will.
in
Washington
managing
all.
their
development or manufacture
in California.
Few
Armed
Services
Committees of the
tlie
Congress endorsed
reference to
Oppenheimer,
in the history of
architect of the
science.
American
"Oppy" was
if
name-dropping, superior
security clearance
liberation
was lifted; he was excluded from all Washington deand meditation. His substantive sin was in expressing doubts about the wisdom and desirability of the H-bomb. The Oppenheimer case showed as
nothing else could have shown that no one
prestigious,
in
official
position,
however
had the
right of dissent.
and dissent outside the government were equally unimpressive. The best scholars in the universities studied Cold War strategy. So with particular prestige did the new Think Tanks. To have spent a summer in
cjuestioning
The
the
fifties
at the
240
Before the Fall. Robert Oppenheimer at Alamogordo after the first nuclear General Leslie R. Groves, military head of the Manhattan Project.
test.
With him
is
all
sociologist so favored
might not
even return
all
to his university.
as central to
Cold
Intelligence
CIA was
can
were
ganda.
as later
When
be
dissembling.
In addition to ambitions in
all
countries), the
Communists were
brilliantly
and
was
in
keepright
ing with the Dulles doctrine of a battle between moralitx and immorality, and wrong, with the Communists always immoral.
it
does
when
was between morality and immorality, you could not fight immorality and remain pure. Once it might have been imagined that Christian principles were a weapon of independent force. The CIA was more practical. So, to fight Communism, it was given a specific exemption from the Dulles ethic; its scholar!) members were given a special license for immorality. They were then placed under the direction of Allen
Dulles.
There was no danger that this juxtaposition to his brothers principles would cause Allen embarrassment. As noted, there was a difference of opinion on
the speed and subtlety of John Foster Dulles's mind. Allen's
mind presented
no
sucli
problem.
Intellectuals,
we have
it
much
enjoyed. Not
War
whether on
slkIi
\\
matters an author
\\
esehew the
latter,
242
Khrushchev
Khrushchev
As always, we know much
So\"ict policy in the
less
\
about
\\
liat
w cut on
in
postw ar
is also certain. This would be plausible if onK as a response but it was more than that. And that an\ such polic\ must build if not a military-industrial pow er. then a militar\ -bureaucratic power can also be assumed. Some consequences of the same circumstances w ill be the same. But in both the So\'iet Union and the I'nited States e\ents were in train in the fifties w hich u ould change the perception of the conflict \\ hich w ould
contiiet
cause
it
to
be seen
e\'er less as
a conflict of
s>
stems. e\er
more
as a manifes-
tation of
tries.
I attribute prime importance to fix c influences. The\- w ere Khrushchev, Cuba, the N'ietnam war. the increasingly sharp and \ isible divisions w ithin the Communist world and the persistent unw illingness of the human mind to
is
in conflict
itli
e\ idence. All
w ho exercise power
ith
find
by
far the
w hich
the\ ]ia\e
to contend.
After nearK thirt\ years of rule. Stalin died in 1953. Five \ears later Nikita Khrushchev emerged as his successor, and he held pow er for the next six. He was then suddenly and summarih discharged from office. By any calculation he was one of the decisi\ e men of the midcentury. He had been, as he fulK acknow lodged, an unde\'iating supporter of Stalin.
The nearh inescapable instinct of any man so situated is to continue things as before. Such is the w hole
otherwise, he would not ha\ e kept w
ell.
Had he been
incredibly,
committed himself
to a reversal ot Stalinist
policies.
terror
goxernment
ot the Soviet
can say
thai,
uhcn
went
to India in
eaiK 1961.
wa.s piotoundly
impressed by the
I
political
unwisdom. acK
cntuiist tendency
and amateurism
was
e\
en more
as
would
suffer
when,
ot their co\ er
w ould be blow
n.
'
Draw in^ on
conscr\
ati\
an ambassador o\ er
India. (The\
official
abolished
all
restored, or so
\e been
told,
In
was so ans^ry and distressed that he came to tears. In India the competent officers engaged in intelligence reporting w hose tunctions uiri' know n to tiie Indians were, in the
end,
Nikita Khrushchev.
Khrushchev
Union.
He
enlarged perceptibly
tlie
the intellectual
and
cultural
lite ot
He recurred
theme that there must be peaeetul coexistence with the nonCommunist world. He traveled with obvious enjoyment to other countries to
make
his case.
Stalin,
told me),
ci\ ilized
the Soviet Union a stench in the nostrils ot the see that this was changed.
The
effort included
two
visits to
American presidents
seems
to
Moscow, with
He
have sensed,
if
would
who argued
The defenders of the idea of irrepressible conflict did not give up easily. They warned solemnly against Khrushchev: a typical Communist trickster; an infinitely devious man; a very clever peasant. Khrushchev had promised that socialism would bury capitalism. Better be literal and believe that he meant The Bomb. There could be no reconciliation v\ith a man wh(j took ofl his
shoes in public. There can be no doubt that Khrushchev
his visits to the Ihiited States
s
diplomacy, including
much
later,
provided a
coming
that he
to
be perceived on both
sides. In 1971
and
1974, Khrushchev's
were published. Although there were then questions as to their authenticity, was the ultimate source is not now seriously in doubt. In the United States and possibly also in the Soviet Union any writer with the talent and imagination to bring off the fraud would be w riting more profitably on his ow n.
Khrushchev
told
tells
"dacha
"
at
Camp David.
weapons expenditure.
end, the intention of the Soviets being cited and the seciuit) ot the Lfnited
in. He asked Khrushchev if he had had similar experience. Khrushchev replied that he had. He was subject to similar pressure. He, however, talked back firmK to his generals. True, he
to say that
if
of the Soviet Union against the I'nited States could not be guaranteed.
in.
And
in
pow er
in
Russia
245
Cuba
There arc countries, which
in
them to be heroes, are meant for historical neglect. One of these is Cuba. Another is Vietnam. Both, in these years, had a decisive effect on the ideas with which we
rarely, the wise belief of their people that nature did not intend
months of 1961. In the previous year there had been the inspired journey of Gary Powers across the Soviet Union as the nations were meeting for a summit at Paris. That the moment called for
Cuba's
first
impact was
in the spring
caution was well beyond the mental reach of Allen Dulles. Next
came the Bay Members was conceived, planned and executed by the CIA. of Pigs. This too of the new Kennedy Administration had accepted and even admired the
boldness of the enterprise. Presently
it
trumpets at Jericho had there been a military operation in which there was so
band of half-trained refugees was landed from some rusty freighters on a badly selected beach. A few ancient Cul^an planes frightened off the ships that were to give them further support. The victims were soon rounded up. The Cuban masses, detesting Communism as did Americans, were expected to rise. Of this there was no sign. At the United Nations Adlai Stevenson was allowed to identify the pilots of the attacking expedition who had landed at Florida after largely missing the Cuban air force as defectors from Castro. Any other American involvement was indignantly, even aggressively, denied. These untruths unraveled within hours. Nothing in the Cold War years was more striking than the incapacit\ of the scholarly persoimel of the CIA for talented falsehood. Perhaps this was not surprising. The\ had been well brought up in good families, had gone to good schools and been hired on the basis of character and intelligence. So they were
little
helpless
without experience
in sustainable
mendacity.
their exposure
of Pigs.
were the most consequential single The unhappy flight of Gary Powers in
in a
moral crusade.
President Eisenhower had moved quickly to affirm the truth. Now, closer to home, there u'as mendacity on a much larger scale. And the special license was here being used not against the Communists but against the American people and, as in the case of Stevenson, the American government. It was
being used,
in
same people
appeal
to
whom
John Foster
was designed
to
to
I
\\
horn, in an address to
believe that
we can
still
in
foreign policy.
246
Bay of
E. Howard Hunt. "Not since Joshua's trumpets at Jericho had there been a military operation in which there was so little rational expectation of success."
. .
.
The contradiction between claim and practice was too great. Cynical men were not bothered but cynics were not the people for whom the Dulles ideas were meant. And while Foster Dulles was now dead, the man in charge of immorality was still his brother Allen. (In the aftermath ot the Bay of Pigs he was sacked. So tactfully did the Establishment deal with its own in those days it is doubtful if he ever knew he was a failure.) It should surprise no one that, in later years, discussion of the immorality of the Soviet Union would give way to an extremely intense discussion and investigation of the immorality of the CIA. The problem with an appeal to moral values is that such values can be
deeply held.
came
the
Cuban
missile crisis.
Cuba
was on the concept of the irrepressible conflict itselt. tlie conflict had been hypothetical, even academic in tone. Cenerals made speeches threatening the Communists with nuclear annihilation and calling for its calm acceptance by all patriotic Americans. The response was much as to sermons threatening or promising eternal punishment. The fear is in the sermon, not tlic prospect. Now for a few tense and terrible days the prospect was faced. People looked directly into the pit. There can be no doubt as to the result: thousands and perhaps millions began to wonder if there was not some sligiitly less heroic but substantially more pleasant alternative. Though it was little noticed at the time, after the missile
again.
effect of this
The
crisis
the generals ceased to make the speeches. Something else became evident from this crisis,
It
was
that
the decisions are afraid to resist the accepted view, however catastrophic
may
seeming
sile crisis
be weak, they urge the most dangerous course. During the mis-
men who advocated an attack t)n the missile sites, what was called a surgical strike. No one could say tlieij lacked guts, the charge of which they were most afraid. The men of independent courage Adlai
these were the
Kennedy
urged
crisis,
I
restraint.
Coming back
one
went
to the theater
we went
Mr.
out by the curtain and sat on the stairs near the stage. This saved the President
from the handshakers and the autograph hunters. "I didn't vote
President, but
I
for you,
certainly
admire you."
He
lold
feeling, of the
The
worst, he said,
afraid to be sensible.
248
Vietnam
Iiricf
the assumpthis
is
tions of conflict as
seen
can the Vietnam war be understood as one of the great watersheds of modern
history. It
was an
evil
and
light.
crusade for moral purpose requires a certain minimal moral tone on the
whom
the crusade
is
been dispatched
dividuals
to the
Holy Land
allied the
whose moral posture few could defend. The gallery included corrupt and despotic politicians, corrupt and cowardly generals and a vast assortment of independent larcenists. Moral purpose was most strongly manifested by
those in opposition to the government. Often,
in
if
common
privileges of others.
showed little disposition to die for the indefensible gains and It was a thought to which American warriors were not
between precept and practice had China. Chiang Kai-shek and his supporters had also been greatly
earlier the
conflict
same
lacking in moral tone. But in the absence of direct military involvement the
Nhu
family
and the
villainy
its
showed
that, as capitalism
tliat
it
capitalist countries
cannot understand.
American people reacted, caused a President to retire, placed great pressure on his successor when he showed signs of enlarging the war into C^ambodia and Laos and brought the Vietnam conflict to an end. It
In the end, the
It
flowed
John Foster
The Vietnam war destro\ed the moral sanction of the war against Communism. Our allies were too immoral. It eliminated also another prop to the doctrine of irreconcilable conflict. This was the concept of Communism as a
unified, centrally-directed
Communism; Dean Rusk, his equally Oomwellian successor, spoke of monolithic Communism. China was a Soviet Manchukuo. .411 official references
249
Opposition to the war became respectable. This decorous gathering where government bondholders are cashing in their bonds.
is
in
Madison, Wisconsin,
from 1961
to
1969
w ere
a
to the
The conception
differences
of
Communism
It
\'ital.
it
seem
new and
powerful torce
the world.
and conspiratorial, relentlessK probing for weak spots in armor of the non-Communist world. A Communist world divided along national lines and with conflicts w ithin itself lost much of its power, much of its menace and much of its conspiratorial aspect. Some parts might be led to search for friends in tlie non-Communist world. Polemics and policies would have to be modified accordingly. The Cold War as a conflict between right and wrong had an appealing simplicity. With division in the Communist world
faced, calculating
the
w rong.
It became evident, as the Vietnam war progressed, that the Vietnamese Communists, however mucli they might be helped by the Soviets and the Chinese, were fighting very much on their own. And through the nineteen-
sixties,
evidence accumulated
of conflict
between the
So\'iets
Soviet assistance to
or expelled.
There w as
China was suspended; Soviet technicians were withdrawn talk of minor fighting along the frontier, fighting that
could only be a manifestation of suspicion and hostility, for neither country could be imagined to set
much
manner
that should
grimage
to
more principled men. He made a pilPeking. This was followed in May of the same year by a trip to
l)e
a lesson to
Moscow and
meaning
that
new
of detente
remained obscure;
in 1976,
he was dropping the term but not the emphasis on peace.) At a minimimi, whatever cost
to itself.
the policy signified the end of the doctrine of irreconcilable conflict, of one
side seeking the destruction of the other at
justification of the strategic
The
in
itself
Truman
according
tiial
contemporary
he phoned
have since
same day to order all possible acceleration in the Soviet dexelopment of the same w eapon. The competition followed. Each side develops the weapons that make
the
obsolete those currentK in use or on order. In each c()untr\' scientists, en-
Moscow
251
gineers, the
armed
services
and
An example, summer
Cod
in
Massachusetts
in
the
engineers from the defense industries gathered for ten weeks that
summer
to
consider the military opportunities deriving from the recent successful tryouts
Edward Teller was there. So was Rear Admiral L. P. From IBM came James S. Crosby. The Associate Director of Nobska was Ivan Getting, Vice-President for Research of Raytheon Industries; the Director was Columbus Iselin, the head of the Woods Hole Oceanographic Institute. The entire enterprise was under the auspices not of the military but of the National Academy of Sciences. From such a congregation something remarkable could surely be expected. Something remarkable came a nuclear missile that could be fired from a
of the nuclear submarine.
Arleigh Burke.
to
devastate a
up
to three
it
Polaris.
Polaris,
later developed,
were only contemplating. But this is unimportant. By the nature of the symbiotic trap, the Soviets would have led if they could. Had they been leading, this would have increased the urgency of the meeting at Woods Hole.
On few
The
must respond. The imperialists are guilty; therefore the people of the Soviet Union will defend themselves. The debate is precisely on a parity with one
between the
squirrel
two powers
the conflict.
is
necessary or inevitable;
all
know
The
classical
New
Woods Hole
To
\dsualize
visit
its
economic
effects
one
Monthan
252
is
lot.
it
deals.
arms trap, initiating action, East or The threat these men countered did not yet exist.
Davies-Monthaii Air Force Base in Arizona. The world's greatest junkyard. The end of the wild blue yonder. B-52's (inset) will one day soon be cut up.
The Beginning
Change
Some
ill
he
sold.
bargains here for poor countries seeking a small place in the sun. wishing to
And
;
newer,
oil.
civilizations at low
faster,
more complicated
will
for
fly
rich in
never
roundup.
No matter what
the original cost, however wonderful the original performance, the paths
to the
junk\ard.
There
place?
is
agreement e\en
in
Some
will take
What of the jobs it pro\ ides? What will replace the purchasing power generates? John Ma\nard Keynes proposed that the British govern-
ment put bundles of pound notes into disused coal pits and fill the pits up. This would create jobs. And much more employment w ould be created b\ men digging out the poimds. and much demand would then be generated b\ the spending of the notes. The idea was never taken up; instead, in the postKe\ nesian world, weapons expenditures the c\cle of design, production,
obsolescence, replacement
once called
it
militar\
Keynesianism.
All candid economists
in sustain-
ing the
purposes
health,
private consumption
w ould do
it
more
and keeps
its
shut.
The transition would be rather easy. it ignores the economic power that Behind a new manned bomber is tlie
It is
it is
and
industrial colossus
we
strong and
strong and
resourceful in defending
interest,
resourceful in the Soviet Union too. Back of improved housing and cities there
is
is
is
onl\
by
comparison, a vacuum.
of a smallish fleet of
One should also observ e that there is a problem of magnitudes. For the price manned supersonic bombers, a modern mass transit
in virtually
every
citv'
large
enough
What would be
of
built
then?
The Beginning
The question
entrapment
is
Change
for a later
one
w ord. Yet
it
is
come more
In
all
rapidlv than
most imagine.
themselves from the convention that they were meant, for reasons of race.
255
have
less.
They are
ments
leisure,
formerly considered
this,
Along with
come
in
consumption
is
The
an
the
itself in
wage claims and resulting inflationary pressomewhat more closely examined now than in the days when the planes that are rotting at Davies-Monthan were ordered. That scrutiny will, we must hope, continue and with luck become more severe. In
Western
industrial countries in
all
to those
who can
consumption.
is
So there
a chance that, with passing years, the economic question will not
be what
an increasingly
classless
spending. Rather, it will be how military make way for the other, more urgent claims of consumption. The economic pressures will be for
to
it.
agreement on arms
That
is
at least a prospect.
for
to await the
directly, a
need
to
which
will return.
SS6
9.
The
institution that
we
least
understand
is
it
or,
more
most elaborateK'
misunderstand. That
the
modern corpor-
Week
exercises a greater
live
myth which is carefully, assiduously propagated. And there is the reality. They bear little relation to each other. The modern corporation lives in suspension between fiction and
government. There
a corporate
truth.
is
rewarded body of men serving under a dynamic leader. He reflects the owners at whose will he serves. His subordinates carry out his orders or transmit them on to the minions below. This is the organization. Its purpose, like that of all business firms large and small, is to make money by making things to do well by doing good. It does best when it serves the public best. This is accomplished through the market, to which the corporation
is
wholly subordinate.
sales, best
What
is
and
rewards.
wholly
consumer,
it
it
cannot be in
power
of
its
economics from Paul A. Samuelson, an early Nobel Laureate in economics, the pre-eminent teacher of his time. His textbook puts the position with clarity and
simplicity:
his
"The consumer,
so
it is
said,
is
the king
each
is
a voter
who uses
money
is
subject to sovereign
done that he wants done."^ Anyone power can have no power of his own.
is
This
when he
markets
He
pay
that
to use his
manage
corporation also
which the not-so-sovereign consumer responds. And the shapes the tastes of consumers to its products. No one can fail
267
"There axe no great men. my boy 1975 The New Yorker Magazine, Inc.
i:
to
be aware of
this
and b> way of government. This too is agreed. Its pa\Tnents to poUticians and pubHc officials are believed by no one except the recipients to be acts of philanthropy or affection. And less mentioned but more important is the naturalK ad\antageous relationship between between the modern corporation and the public bureaucracx
those
fighter aircraft
who build cars and those who build highw a\ s. bet\veen those who make and those who guide the Air Force. Bet\\een the modem
modern
state there
is
The
is
in fact,
The Esalen
Institute
its power is perpetuated. Colonialism, we saw, was possible only because the myth of higher moral purpose regularly concealed the reality of lower economic interest. Similarly here. Were it part of our everyday education and
comment
it
is
an instrument
power, that
debate on
we are governed, there would then be how that power is used and how it might be made subordinate to the
is
exist. It is especially
is
young be
so instructed.
By
not present,
we
need
to
worry
for
we do
guided by the
It
modern
those
The myth
disguises but
it
leaves
who head large corporations unhappy in the knowledge that they are not loved, wondering why newspapermen, politicians and intellectuals do not share their sense of their own virtue. In the Age of Uncertainty the corporation is a major source of uncertainty. It leaves men wondering how and by whom and to what end they are ruled. One response to this uncertainty will be
obvious.
It is
to look
scene.
The modern
Men
All
And
in the corporation
but the most elementary decisions require the information, specialized knowl-
a world, as Charles
Addams
Our
has observed, where there are no great men, only great committees.
power
is
always to our
own
appreciation, our
own view
many do
This
is
of
their information
what should be done. To adjust to the view of others, to accept and experience, requires a sensitivity and a restraint that
not have.
the reason that executives go to Esalen on the California coast below
sensitivity
and the
One
harmony and
life is
sex.
There
the
same need
to understand; to
that, at
an association; above
power,
all,
to
some point
in the exercise of
his
Standard Oil of California and Memorex, along with the State Department and Internal Revenue Service have been
Since 1965, major corporations
to that of another.
259
Know Your
Learn How Bring Your Body and Mind Together Feed Your Soul, Feed Your
Spirit
What
The Founder
sending their executives to Esalen for sensitivity training, meaning the sensitive exercise of
been astonishing. One communicant at Esalen found himself rejecting the world of shared power and the \\'orld as well. He forever abandoned his three-piece business suit,
power.
occasion, the results have
On
changed
to jeans,
How the rest were changed we do not know. The world of corporate power is
Even social investigators do not intrude. The personal habits of potentates and politicians have always been the stuff of conversation, as they are of history. The psyche, home life, personal hygiene,
a carefully protected one.
even the sex habits of the great corporate executive have been
in the
little
studied.
But what Esalen says about the intensely interpersonal exercise of power
modern corporation is very plain. From this interpersonal exercise of power, the interaction and resulting purpose of the participants, comes the personality of the corporation. No two are exactly alike. No two exercise power to precisely the same ends. A corporation in which scientists and engineers interact IBM, ICI, Xerox
its
will
like
skill in
measure success primarily by earnings, others by their growth. In yet others technical achievement is a partial measure of accomplishment. Some corporations use the language of service and public responsibilit}'. If men speak often enough of their virtue, they may well persuade themselves to its practice. Others see their corporation as the continuing shadow of the hardboiled, moneymaking capitalist. Let the Boy Scouts and the do-gooders worry
will
Because corporations
history
differ,
no single enterprise
and personality.
All,
when
unguarded mo-
been
to synthesize
to
numerous corporations the history that best illuscorporate development and the modern corporate personality. Our
exists
but
does not
with
exist,
its
to
do
UGE,
inside
and
out, could
to
curing
sizable
hams and making sausage. Within the decade he had developed a meat-packing business. It was a time when things went rapidly.
official
"James Ballantyne
261
of the century
Glow
Armour, Wilson and Cudahy, was one of the Big Five. was big with a difference. The Swifts and the Armours dominated Chicago society; their pork and beef underwrote the cultural life of the city. James Glow and his two sons paid attention only to their business and to their church. They knew many of their men by their first names; they watched over their families' lives. Their rules were firm and implacable. No single worker could board with a married employee. With husbands away on the night shift, that was temptation. All employees were visited regularly by the company social and religious adviser, who was paid a modest salary by the company itself. Glow Packing, as would now be said, was involved. The Glows were also famous, even in Chicago, for the work they could
extract
from their
men
in
No Glow
warning
Re-
their
employees received,
at
deep
James
B.
Glow was
several
was said, the meat packers found a use for every The Glows did better; they found a use for ingredients that had never been near a carcass. Glow sausages were known to a generation of Americans as Glowworms. The company held that it was an affectionate nickname derived from their shape.
In Chicago in those years,
it
it
were not
high.
War more
bullets.
soldiers
is
were
felled
There
no reason
to believe that
And no
other
well.
Glow Packing never thereafter failed to stress quality There was also a happy side to this history. The discovery
that a
wide range
flavored,
and
Glow Packing
it
rest.
For presently
began
to
was
From these materials it was a simple step on to breakfast foods, including the famous Corn Husk and Flaked Barley lines, and thence on to canned dog food and biscuits, as well as to glue and adhesives, liver extracts, regenerative
drugs and mineral laxatives.
262
UGE Today
In 1910,
James
B.
Glow
Jr..
from
have foreseen, he bought the trade name and syrup formula of Uni-Cola. To this he added, a few years later, the companion beverage, Uni-Up. Uni-Cola
owed
its
popularit\ to
its
and the threat of government had been expected, and the action has often been cited by business philosophers to show the essential harmon\ between private interest and the public good. In 1929, the name of the company was changed to reflect the w ide range of food products and the new importance of
his religious convictions
It
became Glow Food and Beverage, Inc. The in the boom that summer.
hat
its
stock,
now
cited as "basic
And
James Glow,
Jr..
now
wanting a share
in his
was becoming as unapproachable and had been before him. He suspected all subordinates of power; he was deeply averse to unions and the New
Labor Relations Board order requiring a union election in his Chicago plant. There was a long strike; in the end, union recognition had to be accorded. The
James Glow, Jr., came to be known, out of his hearing, as The Last Glow. Arthur Francis Glow, his nephew and only male heir, came briefly into the family firm in these years but soon returned to his art collection and his lifetime interest in Japanese erotic painting. A. F. Glow was always called The After Glow.
said in the trade to be foundering.
II things were much better. Younger men took hold. company products expanded. The United States Army marched on C and K rations from Glow Food and Beverage, this time with-
company was
Demand
the
its
regular
plant in downstate
company undertook the management of a large shell-loading Illinois. The operation was eventually successful. After
organized
logistics
D-day, Glow,
Inc.
UGE Today
James Glovw
of the
Jr.,
was
finally hospitalized in
became
have
his personal
chauffeur
made
President
year. Harold
McBchan became
President
Officer,
since
McBehan
began.
Many
McBehan
them from McBehan's own speeches: a concept sustained growth. Professionalized management by professional managers.
national security.
The
of the
that
Glow Food and Beverage became is silent, the company house organ proclaimed. By now the old exclusive tie with food and beverages was a
Unified Global Enterprises UGE. "The 'H'
In 1955
"
UGE
was big
in
insurance
company, UCEAIR and UGEHOTEL. Harold McBehan left in 1969 to become Assistant Secretary of Defense for Procurement Planning under Richard Nixon. The loss to the company was
regretted. But an opportunity for public service in the critical area of national
and free-world defense could not easily be refused. And it was recognized, even if not mentioned, that UGE, as a major supplier of equipment and
components, would not suffer from McBehan's presence
better understanding, a close v\'orking relationship
in this
key
post.
No
government.
McBehan's departure UGE was seventh on the Fortune list of the 500 largest American industrials. Its Annual Report for that year
By the time
of
counted sales
manufacturing oper,
ations in twenty-four.
"Your management,
"
"directs
modern man-
alltime liigh; earnings, refiecting the favorable effects from the consolidation
was being shown, was a creative art. (In subsequent \ears the methods of UGE's accountants came under increasingly close scrutiny from both the Securities and Exchange Commission and private analysts. They were shown to have contributed almost as effectively to earnings as the managerial techniques for which the company is justly celebrated.) Not everything was good in these years. McBehan acquisitions had attracted the attention of the Department of Justice. The company was the subject
Accounting,
it
264
Our
history
is
of
James Glow, Harold McBehan, Howie Small. Here and fellow descendants
is
Henry Ford
of Ford
Henry Ford H.
Thomas J. Watson
of
IBM.
Tom,
Jr.
Sosthenes
Behn
~ of ITT.
Harold Geneen.
its
insurance
The
landmark step in halting the trend toward increased industrial concentration. issue was resolved after lengthy court action by a consent decree limiting
further acquisition
rental business.
and providing
The
attention,
UGE by a team of experienced antitrust lawyers, nearly all of whom had previous experience in the Department of Justice. Legal costs were
out for
substantial.
Command Post
Since 1965,
more than a
third of
all
UGE
in overseas
were from outside the United States. Brussels, the home ot EEC, NATO and numerous satellite organizations, is the multinational capital of Europe. Streetwalkers and mendicants address their prospects as Your Excellency. UGE, somewhat exceptionally, operates from Paris. "The intellectual, artistic and quality consumer goods capital of Europe," Harold McBehan said in his speech at the opening of the new headquarters at La Defense. Also, better food, better whores and the Crazy Horse Saloon, a jovial and somewhat alcoholic minor executive was heard to add. There were more substantial reasons, although they were little publicized. UGE has always enjoyed close and mutually beneficial relationships with French political and military leaders. The Paris location was not unrelated to promised tax advantages and
anticipated military orders.
structures
of every age
its
and
its
counterparts, the
modern sport in the Astrodome modern corporation in the skyscrapers. The UGE structures across Sixth Avenue at Rockefeller Center.
its
as "gross, pretentious, in
to
own way
hideous." Harold
at the opening,
our signature.
It
The board
of directors
meet
in
command
directors
post." Harold
McBehan
come
has called
it
is
corporation.
authority.
From
their lips
That
is
the myth.
went
266
to his
James Glow died, a large chunk of stock three daughters. None of this is now in the family. More went into
the
first
When
Architectural convergence:
G.M. in
New
York.
Comecon in Moscow.
the
B.
Glow
Jr.,
and
his
which
tax. In
subsold.
Glow
this stock
was
his stock
when he
in alimony. All of McBehan's acquisitions and an exchange of these for the stock of the company being accjuired. UGE stock holdings were thus further dispersed. In 1932, the two noted Columbia Universit\ professors. Adolf A. Berle and Gardiner C. Means, studied the control of the two hundred largest
more
to his tour
former wives
involved
new
issues
were controlled by
their
to
management appointed the directors who represented the stockholders. The directors did not appoint the managers. There would now I)e no question as to UGE's membership on the management-controlled list. No individual stockholder owns as much as one percent of the stock of UGE. None of the directors owns more than the
hire or fire the managers; the
recjuisite
qualifying shares.
All
McBehan and were voted in automatically by proxies returned for the management slate. McBehan's tests for selection were high standing in the
financial world, past political scr\ice in
for ne\'er
interfering with
now been lowered slightly by the addition consumer advocate and a nun. With the others they meet for two hours every two months and ratify decisions that have already been taken and which several of the board members do not understand. Two cannot remain awake. None has ever opposed management on any matter of more than cosmetic importance. All recognize the overwhelming advantage of those whose information is derived from day-to-day involvement with planning and operations. If UGE were losing money or moving into bankruptc\ the directors, prodded b\ the two bankers on the board, might w ell be led to question
until recently, sixty-seven. This has
of a black, a
management. Nothing short of this, or the suspicion oi major fraud, would cause them to act. The board has confidence, on the uhole justified, in the honesty of UGE's management.
the quality of the
UGE is
is
on
Street.
It is
Paris but by
called the
I'GE
presence
lation
Washington
considered
company
and
and truth
in advertising;
drug safety;
268
The Technostructure
of these
UGE Washington
and a dozen other matters call for the constant vigilance men. For particularly sensitive operations against the
public interest, they engage the services of two large Washington law firms famous for their public-spirited assistance to worthy public causes. Neither Harold McBehan nor an\ other I'GE man has ever overthrown a foreign government or would know how to begin. Their men do pla\ a large part in the
government of the United States: otherwise the Washington office would not be worthwhile. UGE has come far since James B. Glow Jr., traveled each
,
The
UGE
Washington men govern w ithout being known, without having had the risk or expense of running for office. It is this public role more than anv other
which makes
uncertainty.
The Technostructure
when
J.
he went
to the
Pentagon, Harold
McBehan
in the
vv
as succeeded
bv'
Howard
was
Howie, as he
McBehan
8812,000 a
known
v
in the firm,
is
same
salary bracket as
He
is
entitled also to stock options but since the recent slide in the value of
the stock, these have not been mentioned. Howie's jet carries as large and
attentive an entourage as any sovereign's. But Howie, unlike
little
McBehan,
vv
is
known
He
is
going, and,
were he a
ital
ould
be the source of the gravest concern. The Dow-Jones wide tape would
carrv his electrocardiogram
and
no investor
gives
Howard
J.
av
the passage of
UGE
from
Howie doesn't matter. The mv th of modern company management is of a hierarchv in w hicli orders flow dovv n from abov e. The reality is of a circle. At the center of the circle is the top management in the case of UGE, Howard J. Small and his staff of executive vice-presidents, financial viceAgain the myth and the
reality
.
head of the Washington office. In the next circle are the heads of the companies at home and abroad that make up vv hat is still called the UGE family. In the ring beyond are those whose specialized know ledge contributes to decisions in the many constituent companies and div isions
urer, the counsel, the
the engineers, scientists, sales managers, adv ertising specialists, dealer relations
vvlio
269
manage
the
get out the goods. In the final outer ring are the blue-collar workers.
In the inner rings of
power that proceeds from knowledge. In the outer the power proceeds from numbers and union organization. Power flows
the
in as well as out.
Corporate action
is
between the
rings.
man who
enlarges his space on one or another of the rings. This he can do by coming up
witli a product, a label, a slogan, a
sales.
That
is
many people
in
UGE
their
its
perquisites
when
there
own
turf.
With
so man\'
for
growth,
UGE grows,
test of success.
social gains of
to
Growth
is
also very
it
good
UGE.
This
more
to
receives.
UGE
is
is
is
an inevitable con-
We see this in
1944,
it
Eindhoven, a
Once it liad its moment in world history; in was taken by Montgomery's armies w hen the further jump to Arnhem proved a bridge too far. Since 1891, Eindho\ en has been the headquarters of Philips Gloeilampenfabrieken. which in 1974 was ranked third in size among the industrial corporations outside the United States by Fortune and thirteenth in tlie world. This came from sales that year of electrical goods and other technical hardware of $9.5 billion and employment, in some sixty
south and east of Amsterdam.
countries, of 412,000 people.
more durable Dutch tradition there is still a Pliilips on the Philips board. James Glow's concern for the chastity of his workers and their wives is remembered around Chicago only as a minor manifestation of a dirty mind. Howie Small's mind tiuns to liis working force onK when they want a wage increase or
In the
The Glows have long since gone from UGE, and nobody weeps.
threaten a strike.
He
then
270
is still
still
with
to shoot the
it is said in Eindhoven, to be fired from chairman of the company or to molest the coffee girl.
The
first is
recommended,
for the
second
is
is
But
in
Eindhoven,
the same.
its
workers, saw to their health, was concerned with their education. Those tasks
Once
the
company
instructed
wishes.
Now
it
power
Its
of
modern corporation, an important distinction must be made. power increases. Its parental power steadily diminishes.
the
Philips, like
public
UGE,
is
all
Whether
in
Eindhoven,
New
on organizational competence
efforts of the
on the success
fill
the rings.
These men of the technostructure are the new and universal priesthood.
Their religion
bible
is
is
The
communion bench is the committee room. message to the world, and a message is what it is
interdict as
under
contacts. Sex
The
The Harvard men were the first in the faith. They still are but now there are numerous subordinate orders. One of these trains at a French business school
INSEAD
is
in the
Forest of Fontainebleau.
The technostructure
of the
corporation
disciplines.
make up what,
effort.
needless to say,
called a team.
From
this
The word
effort
deserves emphasis. Neither here nor elsewhere does the business seminary
favor the deeply reverenced leisure of the liberal university, the leisure that
is
assumed
to rest
an
Learning
is
problem-solving.
is
by the case
will
that students
hope they
soon
The
result of
Harvard,
INSEAD and
the rest,
still
surprisingly unnoticed,
is
271
at
in Spain.
a race of
men who. no
less
tlie>
is
a careful
tie,
The
best of
them
can be dropped on a week's notice into Brussels. Gene\a or Indianapolis. There, like a coin in a slot, the> \\ ill immediateK produce. The proletarian.
.Marx avowed,
true of his present-day employer, the
knows no motherland. This has never been quite modern corporate man.
true.
But
it is
one of his
more thoughtful moments, he called his empire b\ airplane. 0\ erseas managers were summoned once a month to La Defense. The heads of the U.S. operating di\asions met monthK in New York or in December at the compan\ 's depressing hotel and golf club in the Bahamas. The head of each di\ ision had a sales and profit goal for the \ear: at the meetings each explained how gi\ en properbudgetsupportby the head office, a decent break on consumer confidence and some accounting adjustments, the goals would be substantialK exceeded. Howard Small is also often airborne. But now the management team keeps itself current on all operations. The computer printouts are on Howie's desk every morning. RegularK he ratifies actions w hich he does not understand.
.
but as
a federation.
The heads
of
of the
sell
are
left to
do their
best.
become
is.
indeed, an inescapable
Once
e\'er\
together to report on operations of the past \ear and on plans for the next
The\ assemble
year plans.
Lausanne in Sw itzerland again the conscious denationalization. Not onK do corporations plan: the\ ha\e fi\ein
There
is
a further,
in
elsewhere
more important line of command. In Eindhoven and the Netherlands are some thirteen dixisions (with one in Ital\
the de\ elopment and marketing of Philips products
concerned w
ith
lamps.
rest.
st'lling
heavy
electrical
These product
who
making or
273
tlieir
item
in tlic national
companies.
under review. Engineering, quality control and marketing virtuosity can thus
be kept up
to the
same standard
for the
meet from
flights,
and a
fleet of airplanes
travel.
than
UGE
but
it
style
is
more
staid
Why Is It Unloved?
Why
does
UGE
remarkably
to the
The
things
UGE
makes are
better,
Glows. No modern worker would remain lor a da\ in tlie factory of the saintly James B. Glow. None would tolerate even for a day Glow's intrusive and prmient interest in his religious, alcoholic and se.xual preoccupations.
Harold
so
is
Howie
Small.
life;
their curious
reward
the
to
trivial
money they do
spend.
He
loolish;
is
between myth and reality in the modern corporation and how this generates unease and suspicion. Where the myth departs so sharply from the reality, it is only natural to suppose that its purpose is to conceal. No one can believe that
UGE
is
No one
with
UGE's Washington operations can believe that it is No one can believe that its management is the responsive servant ot directors and stockholders. Yet all these things the myth affirms. Where so much must be done to conceal power, only one conclusion is possible. The exercise of power must surely be malign. Some of the unease disappears when the corporation is looked at candidly and without the covering myth. UGE, when so examined, does not appear as a convocation of saints. Some of its achievements, in a rational world, would seem at least mildly insane. But much of its effort, and some of its exercise of
the slightest knowledge of
without power
in
the state.
power, is for the manufacture and sale of routine, useful and useless things. Thus does the unease diminish w hen the myth is dissolved. There remain the multinational operations of the corporation, which are regarded with special alarm. And also its relation to governments and the part it plays in the weapons cultine.
274
And of Philips
Eindhoven.
London.
Brussels.
Vienna.
lllillllTia iciiiiiiiiiiiiiii
I
III ill! II II II
iiiiiiiiiliiiiiii iitiiiiiil
"!
iliiiiiiSiiiitii
Madrid.
Sao Paulo.
It's
as
much
in
Howie
Union.
Hong Kong and Singapore as in New York, Brussels or Madrid. won a soft drink concession in the Soviet
it is
intended to cut into the consumption of vodka. They have hopes for
ceremony the executives of multinational corp(5rations themselves listen to grave lectures from American professors on how they transcend national power and undermine national identity. All who impart such wisdom, without exception, view the multinational corporation
time.
On
occasions ot introspective
Again
their
we can be a trifle skeptical; were the multinationals as pernicious as billing, we should hardly have survived until now. In no place does one
international corporations bring in the materials, bring in the fuel,
The great
buy or
sell
make
who come to
and take the products away to market. No one can be in doubt as to remade the city in the image of the industrial West. But one must ask if this is so bad. Once it was the pride of Singapore that it was a Little England a small tropical port that had tennis, cricket, billiards, Scotch, The Illustrated Loudon News, Dickens, ail the benefits of British civilization. The impact of Philips and Chase Manhattan is different but who
the result; they have
can say
It
is
it is
worse.
tliat
held
comes
in
from abroad
to
in
some measure, by
is
UGE,
them
This
It
is
the basic
could be that
more
is
UGE can
be throw n out
of
(Canada as
Canadian
FinalK
plored.
in
The
if
is
to
tlie
be deBritish
The assertion
and
ihe
first
two
the result of a sudden access of economic enlightenment World War II. Miraculously, after two hundred years, statesmen sat down and began reading Adam Smith on the adxantages of tlie dixision of
276
was limited
onl\
by the
More
modern multinational corporation, national boundaries and the associated tariffs and trade restrictions \\ ere a nuisance. It had a better \va\ of keeping toreign competition under control. That was to be the competitor.
into being because, for the
EEC came
large corporation
\\
is
here
to sta\
Those u ho
\\
ould break
it
up and confine
operations
ithin national
\\
stance. People
oil
it.
million to use
Nor can the indi\idual decisions of corporations be too extensixely secondguessed. There can and must be ndes: but within the rules there must be freedom to decide. More than an indi\ idual. an organization, if it is to de\ elop and be effecti\ e, must have autonom\ and ability to act. The one thing worse
than a u icked corporation
\\
is
rong decision
is
a decision that
greatK' delayed.
is
The
multinational
authority
go\ernment that
is
is
coordinate in scope w
is
ith
the corporations
in national identity
er, that
it
There
no danger, howe\
is
will
come
Europe
international authoritx
it is
answer
governments and national corporations the only framework of rules that align the exercise of corporate pou er with the public purpose. This is not an e.xercise in hope and pra\ er. It is one of the dominant trends of the times. What a corporation can do to air, water, landscape, truth and the health and safet\ of its customers and the
for national
is
Meanwhile
a strong
public
is
far
more carefulK
specified than
it
Nader
is
continue.
it
less discussion.
United States
work of God and man. Other things can be perfected; these cannot. A di\ ine hand guided the corporate building by the churchK Glow s. b\ the profane and secular McBehan and e\en by Howie Small. The residt is perfect. To suggest the possibility or need for further change is the modern
heresy.
Still,
women and
is
discussed.
It
The
to
participation of
trade unions
\er\
dubious reform.
seems
me, on balance, a
of directors
w ho do not
parti-
277
cipate in day-to-day
management
are,
we have
aceordingly will be the representatives of labor, eonsumers and the public are added h\
tliis
who
change.
would be
to abolish
boards of directors
in the
large firms
now
of
management honest and ratify or, in the event management command. You w ill ask who then would represent the stockliolder. The answer is that no one does now. The shareholder in the modern large corporation is without power and w ithout function. He (or she) is also obsolete. A further plausible
public interest, otherwise keep
of inadecjuacy or failure, order changes in the top
development would be
socialism.
It is so.
to
pay
off
in
bonds and
say,
is
it
That,
all will
The
great corporation, as
develops, takes power awa\ from the ow ners, from the capitalists.
The most
is
tinat is
rareh mentioned,
socializes itself
in
two wa\s.
It
is
It
takes
all
power from
its
owners
We
to
also
makes
itself
it
socialK indispensable.
now know
fail
that
if
a corporation
large enough,
Penn
Central, the other eastern railroads in the Lhiited States, Krupp, British
.Ml
is
those to
whom
in
they
who appear
Washington or Whitehall on the day when bankruptcy seems government to come in.
Small
On
dut\
this too
Howard
line of
is
How ie makes
citizens. It
him
b\ a
Yaleman w ho
was once an Associate Editor of Time. Vhcx (\\\v\\ on the tradition of rugged independence in American life; the dangers of big government; the withering eflcct of welfare on the morale of those receixing it; and the\' do not fail to mention the omnipresent threat of socialism. This is the wa\ Howie Small put it in his speech to his ow n stockholders onl\ last year:
I
spc;ii< Id \()ii
now
in)l
as a
l)iisino,s.siiian. ni)l
is
clcL-pi\
concerned .Ann
regulations,
tlie
rican.
My
message
government
tiie
is
doing
to
the
278
What Comes
work
ethic, the belief that all
I
iiit;
little
of \our
and nn
nioiiex'
at them. In a word.
speak
.
you of socialism
socialism
not as
some
socialism here
and now
My
work
to
do
iti
come \\ hen we must re\erse this deadK trend w hen \()LI must when 1 must work to do it; w hen together we must put our shoulders to the w heel
tide.
Later
in his
tor "'an
He
to
said:
In
am proud
tell
keeping w
ith
UGEAIR has been caught between ever-rising costs and stable passenger revenues, problems,
need not
you, that are not of our
line.
ow n making.
.\s \
ou ha\ e read,
we
takeover of the
airmail subsidy, an equally C(jnstructive support to our short-term debt refinancing and a
new equipment
financing. This
is
Howie Small is thus strongK opposed to socialism. But, though he does not know it, he makes a distinction between socialism for the profitable firm and
socialism for the iailing corporation.
There
is
between socialism
that
and socialism
ilh
the corporation.
What
can be
made subordinate
to the state
and that
is
can thus he
made
pow
in
it
is
a
it
modern state an integral part of larger arrangements governed. To this thought, and to its particular application peace and war, we shall return.
must
inciuire
if
the corporation
is
an extension
which
we are
to the issues of
279
10.
We have been talking mostly of the tew countries, capitalist or socialist, that as
the world measures such matters are exceedingly rich.
However
serious their
other problems, they have gone tar to solve the one that tor most of the people
ot the
world
is
transcendent. That
is
poverty
it
faces
those
aflflicted
Whether or not
for
To
we now
is
turn.
many people are so poor. There is none concerning the human condition to which so many different and contlicting answers are given with so much contidence and sucii nonchalance. The people are naturally lacking in energy and ambition. Their race or religion makes them so. The country is wanting in natural resources. The economic system capitalism, socialism.
so
why
Communism
There
is
is
wrong. There
is
insufficient saving
rewards
ot toil
inadequate.
There
is
Every day
I^'or
in
is
ottered.
mankind's most
common
affliction
a painful thing.
It
would be w
ell
we knew
There
is
the cause.
no one answer
ob\
we
iously.
It is
have a
is
little
truth that so
is
many
pervasive. That
The reason
tion
is
s ol
the
lirst
escape from
If
pri\ a-
comes
l)e
these
poverty.
they cannot
in relation to
endines.
u ho work
tlie
I'heir
prt)-
280
The Punjab
c-d
culture
fertilizer,
could
increase >ields
is
not in doubt.
real.
But these
vv ill
to live,
there
be nothing
will
left
in
be nothing left
ov er,
and no incentive
to invest, in
any case,
taxes.
if all
education
And there will be no incentive to invest in the advantages of the new methods
technicjues.
professional economist.
not
wise, efficient
all. Perhaps a benign Providence or, often more improbai)lv', a and benign government aided bv oil or the World Bank vv ill
the canals,
ferti-
And perhaps
land to the cultivator. In India these things have partly happened. Indian
foodgrain production averaged 63 million
metric tons annually
in
the
when production increases, the ghost of the Rev erend Thomas Robert .Malthus then vv alks. The increased food is consumed by the increased population. There is an equilibrium ot poverty; when broken, it re-establishes itselt. That too is the historv of modern India. In 1951, there were 361 million Indians. In 1976. to eat the
very bad vears)
it
added
said,
revolution,
it
devours
children.
Green
our them-
selves.
We
shall
we
knt)vv
questions:
How
How
can
it
be
broken?
The Punjab
It
has, in fact,
been broken on one part of the Indian subcontinent. To the India, Pakistan, Bangladesh
however diverse
within
itself,
in religion, culture
those close to the scene have long remarked on a region ot substantial and
increasing well-being. This
is
i:)lain
ot historv
and development
ot fitteen to thirty this
plot of land.
Farms
land
Punjab
is.
its
name. The
.
incomparabK
the
281
The Possibilities
And
tlie
canals have tube wells that tap the vast underground lake which
plain
a lake
below the
from the
up
in
salt
and reduce
to infertile
marsh the
now
more land in a smaller area. It more effective use of fertilizer, which is also a substitute for land. And with water and fertili'/er there is an improved response from hybrid grains. From the increased product comes the w herewithal to Ihi\ the fertilizer and improved seed and even, on occasion, a tractor. Improvement then continues. There is an incentixe to protect the gains, partly bv familv
to give the family
The
limitation, partly
into
urban occupations.
first
It is
I
from the Indian Punjab that much of the increased production of grain w
liich
Pakistan
and India believe, the Punjabis work harder than the rest. But this also is made possible by better food. Perhaps, by nature, they are technologically more apt and progressive. This too is widely believed. It could be because their higher
income has long sustained better schools. And
ing provides an early acquaintance
their
more
sophisticated farm-
ith
What
is
not in doulit
is
that the
India and
The
Possibilities
are, in principle, ioiu'
There
broken.
One
is
to provide
wa\s in which the ec|uilil)rium of poverty can be more land or its effective substitute in the form of
must, as in the Punjab, ha\e a
water and
sufficient
fertilizer.
For
minimum
of land
is
w ith which
to start.
possibility
to alter land
tenure
to
reward the
foin-th
efforts of the
answer
is
for
is
people
to
breed
less.
The
is
for
them
to
disappear.
land supply
indeed
two answ
ers will
Birth Control
The control
of
It is
practiced with ease by the affluent to protect their well-being. For the poor,
is
283
^:
\\\
Land and very few
people. Saskatchewan.
Birth Control
oi
li\
ing to protect.
Tlie
have
pay
for
poor
a higliK
religion
not.
The
affluent get
knowledge of contraceptives
and the
ability- to
them
as an aspect of affluence.
romantic
It is the only moment of brightness and escape u hich the worker from the fields returns. It is one of the very few enjoyments on w Inch wealth is not thought greatly to improve.
is
[uit
their
who measure
success
by
results. Births
who measure
by the number and eloquence of their speeches and the weight of the pamphlets they distribute.
Manx
because
in the
it is
poor countries believe that the rich nations luge birth control
a painless
if
of them,
more
attractive
One consequence
The
is
sensitive reluctance by
control. This
is
practice contraception.
selves.
And
These consequences,
terrible
it
come
suddenness
in the
means
that
it is
in
is
such as to
Gunnar
is
iVIyrdal.
He
is
man he
anticipated
much
of the
of the
race relations in the United States. Myrdal has show n that the competence
itself
They are not subject to the desperate political pressures of the impoverished. They can make mistakes, for they have a margin tor error. The governments of poor countries are politically far more \'ulnerable. They must assume responsibility for po\ert> that it is not w ithin their power to ease. The\ do not
have the resources, human or material,
service. In
to sustain a strong, effective civil
is
consequence,
in
an intimate
285
Gunnar Myrdal. He
government
to deal with
association
more
between poverty and the soft state. And nowhere is the softness deahng \\ ith population <j;rov\'th. There are exceptions to the rule. China is a ver\ poor countr\ But, perhaps
inhibiting than in
.
in organization,
hirtli
it is
not a soft
control
measures
visit
who
each
pill.
the obligator^'
I
are
On
was there
in
1972
is
forthcoming.
being made.
There
is
And compulsory sterilization after two or three children is being actively proposed. One must hope that tlic Chinese and the Punjabis will have success and will point the way for all others. For a li\ablc relationship
control of population
is
essential.
for
overpopulation
is It
continues to be
so.
years the need for readjustment betw ecn land and people has set in motion
great migrations within and into Europe and within the United States.
It
has
attracted only a fraction of the respectable discussion that has been evoked by
birth control.
That
is
The
rich
warmth
to this
mood
and
of
some
righteousness, they
to think that a
have sought
redistribution of population,
to the equilibrium of povertv
It
however
logical
Neither the pressures in the poor communities nor the tensions otherwise be understood. This
is
can
States.
But
it is
we have seen,
the equilibrium of
poverty was broken by the forthright expulsion of the people and the burning
of their villages so they
would not
who remained,
much higher
Wool expelled
we saw, worked
with double
effect.
the people; spinning and weaving employed them in the mills to which they
went.
287
two Inindicd
\'eais tlic
manufacture of
The
made
changed the
Eli
United
Yankee,
away from the seeds that were imbedded in it. Tliis in\ ention, the cotton gin, and the new spinning and weaving machinery produced both a big supply and a big demand for cotton fiber. Slaver\' in the
really, for tearing the cotton lint
in decline;
it
was marginally
with
it would soon come to an end. Cotton econom\ and the sla\'c trade. And, as we saw
made cotton fiber cheap, allowed cotton textiles drum raked the cotton lint from the seeds.
to be
mass-
288
earlier,
it
transformed
sla\'er\'
itself
from a
sliglitK
abhorrent
tiling to a
to
cope
\\ itli
this
world and
of economics on moral
judgment
as never
more
for
\'isible
and
direct.
for cotton
grow ing
it.
This was along and back from the low er reaches of the Mississippi, and there
the sla\ es
were brought.
to relax
himself.
tendency
w hen out of
sight of others
for his
own
and punished
for
own
arrangement
immortal
acquire a
also, in the
"We
must, at
all
costs,
To make
a cotton crop
cotton
required, in contrast, a
plantation, planting
much
The
plants
were
all
done
b\-
gangs.
And he
w hip. There has recentK been over how frequently slaves were
less
One
than once a
to
exceptionalK
la/,\
toilers the
do agree that this punishment was a well-regarded inccntixe. Cotton and sla\ery were dcepK symbiotic. To the antebellum planter, as we ha\e seen, the slaxe w as a happy, irresponsible child, protected in his innocence b\ his ow ner. i'o the abolitionist, and man\' since, he was dehumanized, toiling flesh. His ensla\ement and exploiAll
his
e in a free-enterprise
iew the
slave
business.
was a valuable piece of property, serving with intelligence in a profitable As such, he was fed adequatcK treated with some decency and
.
when
were not much better off. It is this last view, recently adxanced with supporting claims to measurement, that has been bitterly contested.^ In all views there is common ground. 'Vhv income to the slave was at least as low as the .self-interest of the planter allowed. The cotton econonn was a
embodied. Free workers
at the time
all
but the
\'er\
lew
This equilibrium was not altered by the Civil War. With emancipation
sharecropping replaced
slaver\'.
Now
it
w as
289
Mexico
enforced
b\'
in debt. Though cotton was higher than ever before the great majority of people associated with its production were still poor. Even if all income had been distributed to the sharecroppers, poverty would still have been acute. The basic relation of people to land was wrong. The true emancipation came onl\ after World War II. Then machinery and chemistry arrived on the cotton plantation as had the sheep in the Highlands power cultivation, chemicals to suppress the weeds, the flame cultivator,
arrangements
by 1877,
it
most important of all the cotton picker. And with these came the remedy, the
same in all but detail as in Sutherland and Ireland. There it was the factories or the ships, here it was the high\\a\ north. There were jobs in the cities and, if not jobs, welfare checks that would allow for survival. Before World War II, there were 1,466,701 blacks in the rural farm labor force in the states of the Confederacy. In 1970, there were 115,303. In Mississippi, the greatest of the old cotton states, there were 279,176 before the war. In 1970, there were only 20,452.-' Thus the equilibrium of po\ert\' was broken. The migration is now over, for there are few left to go. People say rightly that the South has changed.
Not so
of
nian\'
mention
tlie
cause.
Pegple caught up
in the
its embrace, search for an escape with great ingenuity, vigor and courage and with very little encouragement from the people in the places to which they seek to go. The rural poor in the United States have been more fortunate than
They have had some place to which, by entitlement as citizens, they could move. And the South was not the onh source of such migrants. There was also Puerto Rico. Here, follow ing its takeoxer from Spain, the relationship of people to land sustained an equilibrium of po\erty that was almost as
most.
intractable as in India
itself.
No journalist visited
less the
"the poorhouse of the Caribbean." Then after World change. Here the cause was
War
II
came
the
which
to
in
Puerto Rico was relatively slow, than the airplane and cheap tickets
York.
New
afford to go,
in
Puerto Rico
less so
became
available.
Mexico
The
field
less. To see the importance of migration as modern remedy one need only go a step farther south to look at an equilibrium of po\crt\ in Mexico where such escape is not easiK available.
291
ji7;'>i*spjij..;;tc:-,..;.
:?.ffv
SS
Turkish Village.
left
communal lands of the people. By 1910, 95 percent of the families owned no land. The remaining 5 percent of the families ow ned nearK half of Mexico; seventeen persons owned nearly a fifth. Some holdings reached sixteen million acres fi\e times the area of Connecticut."" The
in agriculture
own
were especialK bra\c. Prominent still among the big landow ners was the Church. It is a strain on faith if the Church is the landlord and the rents are high. Faith in Mexico was put strongh to the test.
Mexico
thc\'
communal
is
a large
lands the ejidos were and di\erse country; no generalstill too man\ people on too little, too
was an escape, and it grew prodigiously. But too often it offered The better passage was to Texas, New Mexico, Arizona and California. As in New York for blacks and Puerto Ricans, life would be grim. But it was better than in the o\erpopulated Mexican village. So, legally or illegally, the\' crossed the border. They w ere called w etbacks for the illegal immigrants who once w aded across the Rio Grande. The\ still wish to come. Employers wish them to come. But a higher social conscience
Mexico
Cit\
only unemployment.
A
is
man
is
He
tries
tr\
He
or sixth
he ma\ make
it.
No one w
ill
doubt
Mexican
continues.
the Civil
War
more stubborn
War
II, in tlie
Europe.
People came
villages of Eastern
Communist from
the
other Eastern European countries to escape poverty rather than to find libertv
Germany from
.\sia
myth was
carefully propagated.
for a
England.
Harlem,
Where
It
Worked
were temporary workers, foreign workers, guest workers who would one day go home. No one will now need to be persuaded that something far more fundamental was involved. The guest
short time
and highly
reversible; they
in the
equilibrium of poverty. Only a determined effort to resist the obvious has kept
this
In Britain alone
was
this great
West
Indians,
some Africans
Empire
had been dissolved in the nick of time. One generation had defended it. Their sons defended the home island from its people. Had Britain been protected only by the Rio Grande, they would never have stemmed the tide. No subject is so lovingly discussed in our time as the economic problem of Britain. No cause is cited with such assurance as the low productivity of her labor force. An obvious explanation goes unmentioned. As compared with
Germany and
is
workers impelled to
price.
in
Where It Worked
On
hard cases
we have been
looking at the
is
social study.
Only the man who finds everything wrong and expects it to get worse is thought to have a clear brain. (There will be occasion to remark on this
again.)
was a brighter
side. It
me it has
I
allows
me
know rather well. The example is on the north shore of Lake Erie. Its focal point is about midway between Detroit and Buffalo or, by Canadian calculations, between Windsor and Niagara Falls. Port Talbot on Lake Erie may well be the most modest center of water-borne commerce in all the world. There are no piers,
no berths, no warehouses, no ships, no unions, no dockers, no pilferage and, for
that matter, no harbor and no
commerce
fertile
its
claim on history.
From
and
when a young Irishman fresh from the King's service Colonel Talbot. Having name was Thomas Talbot
295
been a good
places,
soldier,
in
high
to
land.
He had come
make
supervise
settlement. Migrants
were beginning
'
to arrive
Highlands, a race of which the Colonel greatly disapproved. "They worst settlers
.
themselves here both then and since, were the available talent. The Clearances
again.
coming to Port Talbot was given fifty acres, were the Colonel in a good mood, attracted to his appearance and sober that day. Business was done through a u indow in the Colonel's house. Those who made an adverse
Each
settler
impression had
it
laying out the roads, the Colonel then got the other 150 acres. This
in, his
estate
at a
wonderful pace.
landlordism on a large
elite.
Government would be affected. Political power went with the ownership. Political democracy required, above all, democracy in the possession of the
land.
own land was cleared, the wanted the acres next door. They clamored for its purchase. The Colonel had rank but no troops. There were none on which he could call. He could not withstand the pressure, and so he sold. At a nominal price the settlers got the rest of the land. Henceforth there was no irreconcilable issue dividing the haves from the have-nots, the kind of issue that would make democratic government impossible. It was not an exceptional solution. The land problem in the Middle West and Great Plains in the United States the 160 acres, and later more, of the Homestead Act was similarly solved. Likewise in the Canadian West. .And here the solution was deliberate. The resulting relationship of people to land allowed of general well-being and made political democracy possible and perhaps inevitable. If all have some wealth, all will \\ ant and achieve some
But here democracy was saved. Once their
settlers
share
in their
government.
the land the vision of a
With the
loss of
aristocracy on
Lake Erie
not in doubt.
He
built
himself a feudal retreat on the height of land above the lake, although onK the
name
was of logs. It was a stopover for well-regarded travelers from England who were not impressed by its comforts. In old age Colonel Talbot traveled himself and \ isitcd Napoleon
castle
111,
apparently as an equal.
made
the
296
Port Talbot, Ontario, on Lake Erie. The most modest center of water-borne commerce in the world. No piers, no ships, no unions, no exports, no imports, no trade of any kind.
all
nephew and
heir.
accident, one of the most disastrous in the long history of military misfortune.
was recalled to the colors for the war in the Crimea. It was Richard Airey 's name, and no other, that was on the order that dispatched the Light Brigade. Others were to blame but he did not return. Five or six miles from Port Talbot, to add a further nostalgic word, is the lovely farm to which the Primordial Galbraiths came from Argyll: in my time we still called it the Old Homestead. The sun shone in on it from the south, and the north wind was kept out by a low ridge, and everything ripened a little earlier than anvwhere else to the north of the lake. The apples were famous and lovingly discussed. We came for Sunday dinner with a carefully implanted sense of reverence. It was, we knew, an important place.
In 1852, Colonel Aircy
The urge
Of those who settled on such farms none became rich but lew were poor. farms, All, within a few years of arrival, a generation at most, had propert\
any ancestor
hardship.
in Scotland.
From our
in fact, for
earliest
days
of great courage
suffered great
those
who remained
in the
homeland.
Our farm was three miles away. We had a hundred acres, another fitty up the road. Our purebred Shorthorns were modestly famous, of equable disposition and much admired, especially by their owners, and they led me briefly to a career in animal husbandry. It was in this sul)ject that I took my first degree
at the
My
first
team especially accomplislied in the judging of livestock. We trained at Michigan State, Purdue and the University of Illinois and competed with marked unsuccess at the International Li\ebeyond Detroit was
of a
member
298
The
City State
Some have
should liave
remained with
I
this field of
knowledge.
But
toil.
I
remember without
If
one
is
born on a
like
work.
the
settling of the
Canadian West.
still
surprisingly recent;
(as
it
when I was
still
a Noungster, people
to
were
up stakes
Alberta.
was
still
said)
and nioxing
Manitoba, Saskatch-
ewan and
The Canadian
railroads
to cook.
had
colonist cars
hunks
These, at nominal
cost, ferried
peans of the empty, grain-growing lands of the world. In the United Today, though insignificant
In a
Argentina, Australia and on the Canadian prairies, the Europeans took over.
in
fifth
of
much
the
common view
America
soil,
materials for the industrialized lands of Europe and North America. These are the hewers of wood, the haulers of water, the plow
civilization. It's a vision
men
for the
machine
the
which has
little
relation to reality.
Canada and
and a huge
variet\' of
other minerals.
breadgrains
in
is
commonly defined, Canada and the United States are the first of the Third World countries. It is another example of what happens when the conjunction of land and people is fortunate. Where the equilibrium is good, there is wellbeing; there
in the
is
which helps
to feed the
people
\\
ho are caught
equilibrium that
not good.
The
City State
Even from the Ontario countryside some people had to go. There were more in a famiK than the land could use; had all remained, many would ha\e been poor. Detroit (in addition to the Canadian West) was the salvation. We were
patriotic.
\'
week wage
possible?
To absorb extra
of rural poverty,
There
is
is
It is
on the edge
xisibly
ol
the
It
most
extreme.
299
lacks
all
The Singapore
state
is
and 14 miles
in
ide; a
on foot
and a fortuitous
Panama
tliat
it \\
or Suez.
Singapore has a per capita income around eight and a half times
si.\
of India,
riu^al
poverty
orks
and
Some
three races
The
talents of
in
a harmonious blend.
w hich they or their parents came. Migrants and immediate descendants always work harder and better than people who
in their
To put people dow n in a new place without accustomed support from land or position, give them the challenge of survival and force them to think ma> be \ cry cruel but it enormousK
have been long settled
surroundings.
increases their productivity.
contribution
is
to
make pragmatic
Is
use of
in
Adam
Smith alive
in
the world
visible
liere
pecuniary self-interest
is
matter of course against the availabilit\ of workers and the current and
prospective capacity of the economy.
a view which
and
to
is
ith
respect in Singapore.
again
as a matter of course, to
minimize
inflation
When
incomes
policy,
know
Is
11
to
yaw
n.
for years.
Have the Webbs, Franklin Would Enoch Pow ell and Barr\ Goldis
yes.
If
and
government provides.
purpo.ses.
recognized
in
Singapore
tliat
it
all
And it serves best within a framew ork of systematic and Some of the success of Singapore must be attributed to
is
deliberate planning.
the rule that nothing
i>e<)[ile to
good or bad
is
wlietlu-r
it
works or helps
work.
300
The
is
lacking.
an aesthetic
life;
it is
The unions
gives no
wage
encouragement to those who suggest that the Chinese in China have a Even travel to China by the young is disdo not applaud such caution.
principles that
is
couraged.
there are
some
all
It seems unnecessary; in any case, must defend. But the larger point is clear.
an urban solution
live well
to the
Many
on
little
space.
must be secure
in its
Much depends
Change anywhere
routes
affects Singapore. It
it
cannot
be defeated by narrow
ha\'e the
community
to accept
change, including
when
it
hurts.
Singapore must also master the increasingly intricate and costly problems of
the great metropolis. That
is
a different
and
302
11.
The Metropolis
everyone goes
to the city.
it is
size or
in agriculture.
By
1975,
it
was 4 percent.
In Britain
it
was
2. .5
is still
aroimd
live,
city.
modern
his
big-city
blamed instead on the way the city is governed. The mayor is a most convenient figure in our time. He gets, and in
so important as
an
in
understanding of
urban
life.
must be examined
is
some
ing.
historical depth.
is
mislead-
There
Merchant
The
The
Political
Political
Household
Household, for most of time, has been the extension of the
it
was an expression
of his taste
and
more
They spoke
was the magniBcence. Over the centuries nothing has been so thought to enhance royal personality, competence in armed slaughter apart, as the architectural embellishment of the scat of government. Rome, Persepolis,
Mostly
it
303
The Metropolis
Angkor. Constantinople,
and
literally a
The late Joseph A. Sehumpeter of Harvard, a man who rejoiced in awkward or unpalatable truth. enjo\'ed remarking on the migration each summer of the tens of thousands of rcsolutch democratic .Americans to see the
result.
architectural
wonders
imposed
oi
The
ruler
his will
and therew
imagination, has
was important. S\nmietry. even without taste or some claim upon the e\e. Disorder, a point oi importance w hen we come to the Industrial Cit\ has none. But also, and more often than might ha\e been imagined, there was a conjimction between power, imag.
ination
and
taste.
One
hundred
years.
it
survived but
it
is
is no conuncrcial or w hich the \ isitor must peer or pick his wa\ The city, the archetvpe of the Political Household in its high royalist aspect, is Fatehpur Sikri. It has rightly been called "the w orlds most perfecth
'"
n.
Fatehpur
It
Sikri
Akbar the Croat on a low rock\ ridge twenty-four miles from Agra, one of the inspired capitals of the .Moghuls. (Delhi and Lahore were yet others.) Tlie legend, possibly more trustworth\ than most, is that the site was chosen because there in a village lived a holy man. Shaikh Salim Chishti. whom Akbar the Great had visited when he w as in despair because he had no son and heir, his near infinity of wives notwithstanding. A son, named Salim for the saint and later to succeed his father as Jahangir, was then forthcoming. In gratitude Akbar, around 157 1, cjuarried the ridge, made a lake some tw ent\ miles around and built a new capital. N'isitors coming from Furopc in the next years found a city larger than London and in its public buildings by a wide margin more elegant. Fourteen years later Akbar mo\ ed on. There are various
built In
was
solemn explanations
for this
strategically
imsatisfactor\' location.
The explanations overlook the most plausible reason: mo\ed on; the Moghuls, as a legac\ perhaps
central Asia, tired of a city
nomadic antecedents
left,
and
lelt.
When Akbar
The
No commerce, no
industr\ has
since near. The ridge that Akbar converted to his capital was of rich salmon-red sandstone. This bt'came the palaces and walls: Ireciuentlv it was
come
304
Fatehpur Sikri: Archetypal city of the princes, "the world's most perfectly preserved ghost town."
And modern
Canberra.
Temple
at
Angkor Wat
Islamabad.
Versailles
The Metropolis
cut
were timbers and boards so that one thinks of and hot sun this marvelous material mellowed but did not crumble or decay. So at Fatehpur Sikri v\'e can
and assembled as though
it
Political
House-
up the
in
domes, the mosque, the tolerant combination of Hindu and Islamic decoration
Hindu queen, the towering Victory Gate with its is a bridge, pass over it but do not build upon it" is symmetrically a part of the larger whole. That this city was the extension of one man's personality is not in doubt. The elegance and symmetry of the Political Household are important for the
the cjuarters of the
:
is
Political
House-
Merchant
it
still
retain of
in
should be.
From
also has
what a modern
It is
mban
routine squalor.
Executive offices
and public
officials
are
own
sake.
The
capital in
its
way, as were the royal palaces. What rejoices the eye must, at a minimum, be
balanced with what distresses the taxpayer. Aberration
at great cost
the
Rayburn Building on Capitol Hill, the new FBI fortress on Pennsylvania Avenue, the Woolworth-Gothic towers of the Stalin era in Moscow, the Rockefeller elephantiasis in Albany is briefly deplored and then forgiven.
the
The Political Household places its stamp on the city hall and ci\ic center of modern city. But its influence is most strongly reflected in the modern
planned capital
Brasilia,
Islamabad,
all
present-day tomist
The Merchant
'f he
City
also a unity of conception
fashion.
is
in
architecture, as in dress,
ol
306
The Merchant
City
merchant
had a
stron<4
reiiu-
lation of the
The The
of the
was then
a rewarding competition.
and
style ot the
st\le of the
N'enice,
War
II
ri\al in
tlie
Households.
differed not in quality but in
its
reflection of the
Its supreme expressions in the older Political Household were the palaces of the ruler. In the Merchant Cit\- it was inevitably tlie houses of the merchants, the guild hall and the tow n hall. To these, on occasion, were added the cathedral or church, for these ad\ ertiscd, legitimized and. in some measure, sanctified the gains from trade. Two great Merchant Cities survive, as does f'atehpur Sikri. with little modern clutter. One, of course, is Venice, the greatest and b\ far the bestpreserved of all museums of ci\ ic design. The other, less well know n but more easily encompassed and comprehended, is Bruges in Belgium. It w as a member of the Hanseatic League, w hich was also a source of common ideas in civic design, and in the fourteenth centur\' it was considered the northern counterpart of N'enice itself. It is intact l^ecause of two accidents the silting up of the river Zwin which separated it for four hundred years from the sea and thus from the ravages of progress, and the heaven-sent accident in 1914-IS which left it a mere twentv' miles remov ed but totallv imtouched Iiv the guns of the bloodiest battles of all time. Bruges and its beautiful companions of the mercantile era have also left a deep imprint on our thinking about the city.
shopping
strictlv
bv the elegance
and
that
Somew hat
modern shopping
\v
center;
distinction increases
not with
its
beautv
then
citv
the whole
citv
tendency
shopping
or distinction ol an urban
comnnmity
bv
.
its
(]itv
The .Merchant
Citv
now part
ol
and
to ships
in
to agriculture,
can the
modern Merchant
C'itv
be found
piuf
307
The Merchant
City.
Once: Bruges
And now
Frankfort, Kentucky.
The
Industrial City
NormancK
to wliich
Ic-rtili/rr.
larm
Its
oi their
Noung.
is
Merchants
still
unraked leaves.
It is
now
in its
managers of
J.
C. Penney, Sears,
Spencer.
One day
is
moved
along.
pure form
trivial
reminder
The Industrial
City
With the Industrial Re\ olution the Industrial City became synonymous with
the city. In consequence, the very connotation of the
word
city
changed.
first
glimpse of London was of the promised land. Dr. Johnson was even more
affirmative:
"No,
Sir,
when
that
man
is
tired of
London, he
in
is
there
is
in
London
all
life
can afford."
launched
world.
in Philadelphia,
It was regarded by all as beautifully planned and admirably built, and what was then built is so regarded today. This was near the end of urban
The
Industrial City
became the
characteristic city,
ill-built
and
dirty
to
cities
came
this
be
Industrial City
repu-
The
and
Political
Household housed
soldiers
trades-
were craftsmen,
artisans,
abundance of mendicants. But, with the exception in these cities were required to be
was because they served people of professed unduK crude appearance, manner or aroma. With the different occupations went a pleasing variet\ in dress, speech
who might be
style.
and personal
The
Peo]:)le
w ere now a
b\'
the slightest
their
ot smell.
On
the whole,
oi
main-
men
sought, above
the lowest
("ity,
cost.
The
its
imlike
who were
also poor.
309
The Industrial
City.
This
is
Halifax, England.
The Birminghams
The people
commonplace point, were made. These all but uniformly involved much smoke and grime. Coal had to be dug and washed; ore had to be smelted; locomotives had to be fired; steam engines had to be tueled; these were all necessary even for processes that otherwise were clean. So almost all industrial operations nurtured or spread filth. Amidst the valuable modern concern over the effect of industrial growth on the environment few note that the course of industrial progress has invoked a remarkably steady march trom the toul process to the relatively pure one from dirty coal to clean gas, oil and electricity: from smoke-filled foundries to automated processes and air-conditioned control rooms; from
dwellings. Nor, a
were not beautiful. Nor were their were the processes by u hich their iz;oocls
belching steam engines to cleaner internal combustion engines and the wholly
antiseptic electric motor, the ultimate
power plant
of which
is
it
far
more
chimneys
replaced.
Indeed,
we
take
it
for
all will
be.
The
early processes
place.
HrmK
Finally,
among
be a
man
of style
and
taste, not so a
;
manufacturer.
tor coal, steel,
performance and
cost.
And
cloth,
cheap
made no demands on
taste.
So the
early manufacturer
was
like his
He built his house above the mills. Unlike the merchant's house it was expected to be ungainK if not hideous. Economic determinism is omnipresent and extends itself strongly to art.
The Birminghams
Not
all
Industrial Cities
were
alike.
The
life
of the city,
and sometimes
to
its
ad\ antage.
Chamberlain was thrice mayor of Birmingham, England. There followed a remarkable burst of civic pride and enthusiasm. Slums were cleared, parks
established, a library
and
and health made a civic concern. The city after Manchester, epitomized English industry became a nn)del of luban
in
development and administration for all the kingdom. It was, alas, the exception. By the turn of the century
its
Alabama was on its way to becoming the leading of the South. It was much nearer the mode.
namesake
in
Industrial City
311
The Metropolis
all
there
in close
proximity.
They were
in 1907,
brought together by
tiie
was brought by J. P. Morgan into the United States Steel Corporation. The result was absentee management t\\ ice removed. The Steel Corporation was operated for Morgan by Elbert Henry Gary, of whom it was said that he never saw a blast furnace until after his death. Tliis Birmingliam was merely a place of work. In the early nineteen-twenties, as elsewhere in the American steel industry, men worked a twelve-hour day and a seven-day week, and Christmas like Sunday was just another day of toil. The Alabama Birmingham
still
its
its
was
in its firm
is
forever.
its
Of
late, this
Birming-
ham
In
too has
moved on
to pride in
its
hospitals,
other civic
facilities
and
its
athletic teams.
one extreme variant of the Industrial City the and owned the houses,
built
and administration. He laid out streets, and operated the store or stores where people shopped and sometimes w ere recjuired to shop. And he laid on water supply and sewerage, if any. This, as in the cities of the princes, was an
responsibility for inception, design
built
imposed order, an
grandeur but
for
industrial Iiousehold.
to
It
economy and
would not be mutinous. A rewarding calm was enforced by keeping them permanently in debt to their employer w ho could expel them on demand from
their houses.
It
seems
possil)le that
no experiment
in
was ever
the employer-landlord
company town. When all was quiet, w ould sometimes be celebrated by his sycophants as a
in
Then,
moments ol
truth
himg
in effigy
by people
who deplored
City
only the
need
the dominant
in self-interest and classical lais.sez-faire. There was operated on loose leash from the local capitalists. Since city services added to taxes and living costs and led ultimately to the dimiTUition of profit or the enhancement of production expense, they were kept to the mininuim. The (illh of the industry was mingled w itii theoHal of the inhabitants. Streets need not be lighli'd loi- toilers w ho should be asleep. The factories required only an unleltcMcd ])roletarial so that was what the schools
312
Revolution made
it.
The Metropolis
The
Industrial City in
in
Europe
in
its
counterpart
in straight-
forward
fasliion
not surprisingly,
sometimes
Bryce, the
in
some decently
Lord
first
and
"government
of cities
is
Two
decades
for rep-
power
in
The
industrialist
was
He
air,
water, landscape.
Since he
The
city
work stock
lowest
possible cost.
the politicians, they were reliably in his service. Given that the
was to produce goods cheap, nothing more was to be asked or expected. As the visible face of the industrial civilization in the leading industrial countries Britain, Germany, the United States the Industrial City had its sharpest delineation around the beginning of the present century. Sheffield, Essen, Pittsburgh were its purest form. Since then in the older countries the image has again been blurred. A new city the Camp has appeared. And this and all of the antecedent cities have melted into the Metropolis.
was
even more
were
spent.
The
pow or
of
mone\
is
as well.
new
mobiles, television sets, washing machines, electricity and the plumbing. And,
we've seen, the industrial firm itself no longer consisted of only an owner, a few bookkeepers, a few foremen and a large toiling mass. Instead there was a complex superstructure: sales managers, advertising managers, controllers and those who understantl the computers. Along u ilh the bankers, lawyers,
as
advertising
ment, these
men and public relations flaks who serve the industrial establishmade up a new and sizable la\ er between workers and owners.
They were joined by the expanding white-collar mass who, in the industrial nations, now lar outnumi)er those who iim the machines. The servo314
The
industrialist
need not be a
man
of taste.
The Metropolis
been submerged
in
and managerial
few who could afford it to escape its smoke and grime and unloveK landscape and, even more, its inliabitants. So with the Industrial City came the suburb. With the reconWith the
Industrial City
came
elite,
the
rich or the
comparatively clean
air
with their
And
and the
cost kept
down by
and moderate-income suburbs, those favored by bankers and stockbrokers, those that excluded the Jews. In time, every sizable city was surrounded by
these classified enclaves.
Unlike the Political Household, the Merchant City or the Industrial City
itself,
were mercK' places where people found space and lived. Increasingly, given the peripatetic character of the modern organization man, the space w as occupied only for a brief time. In the absence of central function and the impermanence of its residents, the modern suburb is
not govern,
sell
or
make.
T]ie\'
often less a
there
is
name: the Camp. In the United States yet another Birmingham, this one a bivouac for the peripatetic affluent
citv
its
irom Detroit.
Migration
In the classical Industrial
C'it\
procreation apart, in
its
One was
mills,
satanic.
The second was because ol between land and people. The people had nowhere
the compelled corin
The
workers with a wage which, however low, was better than could be had
Ilowcxer
idyllic,
a \er\
in
And
was
oil
in fact
men who
ot
temporary petition moaned, are being "driven from necessity and want
employ,
their
in vast
may waste
their strength,
and
316
Migration
"-^
English agriculture
was
substituting
the greater intelligence, energy and economics of the large-scale farmer tor the inefficient, labor-intensive husbandry of those
shared the
common land.
population of Ireland was expelled to the Industrial Cities (and also to mines
and
rail\\a\ construction
camps)
in
I)\
agricultinal
change. In the same and subsequent years there was a great and accelerating
movement
to the
World War
from the
II
came
to Britain,
less to the
more
industrialized
to north in the
told.
chapter has
With these waves of immigrants the cit\' underwent a further change. Previously it had been taken for granted tliat its internal tensions were those of the industrial society. The workers confronted the capitalist. The strike was its o\ert manifestation. The people in the valle\' went into the streets in angry
and his housecarls in the police. After sometimes w ith violence, always with weeks, sometimes months deprivation, one side or the other gave in. Work was resumed but the anger persisted. This was the conflict that was thought basic in all industrial society.
opposition to the employer on the
hill
of struggle,
With the
rise of the
from owners
to organization men.
organization
men
strikes; better
managers avoided
Those who
bargained did not themselves pay the higher w ages that w ere the cost of the
makes a difference. The modern industrial firm was powerful in its markets so, after some ceremonial acrimony, it could pass higher wage costs along to the public in higher prices. Strikes still occurred. But now they were mostly without rancor. Sometimes they usefully reduced burdensome business inventories. But with migration a new conflict appeared. That was between the two proletariats of the Industrial City, between the old, established, relativcK secure, relatively well-paid working force and the new dark tide which it
settlement. Not liaving to pay
its
language or
country of origin. For the new migrants the capitalist was no longer the enemy. Many who cleaned the streets, tended the buildings and labored without skill on construction sites wished the\' had industrial employment. Many others simply wished they had employment. Or housing, .schools or transportation or a societv that was decentlv color-blind. Their enemy was the government or
317
The Metropolis
soiii^ht their
exclusion Ironi
and
social life.
When
ish to
burn the
capitalist;
to
burn the
city.
race prejudice
racial
xenophobia
I
nited States,
Southern
affliction.
It
pandemic.
and the thought and action it proNokes are the most oi modern times. On this \\ ill
I
have a tiuther
\\
ord picsently.
ol
the
modern
cit\
oi
and unites
all
Industrial C^ity;
rai.soii
more simpK'
otteii
is.
it is
d'elrc
and
has
ceased
to exist.
n.
Affluence
has brought the shops and sho]:)ping centers and the ancillar\ ser\ ices that are
in
descent from those of the Merchant Cit> Around, about and forming a part
.
of the Metropolis are the Champs. All have a governing nucleus, which
is
the
residue
ol
London,
Paris,
Rome, Tokyo,
New York
its
this
still
character.
Metropolis,
modern
tangible,
visible expression.
The assimilation of the new arri\ als w ill be the easiest of the problems of the modern .Metropolis. The scale ot this movement in modern times has been
\er\ large. At least w ithin the
I
nited States
it
ill
be
liciuidate
its
And
nuich
attributed to race
the inward
in
mo\ement and
coLmlr\ side
movi'ment
oi
er\
lation
from the southern Great Plains into California, the Okies and Arkies
Emope
tlu'\
w eie
[Ticlurt'd as a
race ai^art.
'i'heir
318
Where
Capitalism Fails
children are
it
ill
lie
ith
ill
These aspiratitins, in greater or less measure, the\ w ill achie\ e. When happens, the problems of race and color will diminish and even seem this archaic. The rich and the poor of the same language, color and race do not live
easily side
by
side.
The
The more
dwellers
less
plausible problem of
t\\
ill
be how
to
cities. F'or.
moves up the
demand
for
someone
to
do the
prospect
is
more grim.
First there
is
automobiles,
.
But
it
inherenth incompetent
in
at
moderate
services,
cost.
Housing,
it
seems unnecessary
life.
an important
li\e close
made more
the
city,
would
in
cabin.
Nor does
of the Metropolis.
Western Europe and Japan the failure of capitalism in the fields of though not completely, housing, health and transportation is largeK accepted. There industries have been intensiveK socialized. In the United States there remains the con\ iction that, however contrary the experience,
In
.
To
still
seems
Nothing
;,v
is
now
services
There
the city
ruler.
is
far
at
present the
No
artistic
319
The Metropolis.
All that
went before
is
here.
what would now be regarded as may well have absorbed the larger share of the aggregate
public and private income. With the Industrial City it came payment for public tasks education, police protection,
to
be assumed that
courts, sanitation,
and impoverished
would
total rc\
The consequences
all
recognize.
Among the
affluent
income are far more amply endowed than those provided b\ the
are clean, streets are
officers to protect
it.
Houses
filthy.
Bathing
is
possible in a private
Where capitalism is efficient, it adds to the public tasks of the cit\ it increases the number of autoniobiles that must be accommodated in and through the
city,
adds
streets
and makes
progressively
sustaining a
more
difficult
This
life is
is
aspect of
modern metropolitan
yet imagined.
wc have
The notion
City
that these social costs are only a deduction from total public
private expenditure
a view that
It
and
is
is
is
now obsolete.
Metropolis
to
expendi-
The
test
is
to look at the
no a
priori
for street
is
The question
satisfaction at the
is
community
as to
what
good.
If
higher than that from private goods for the typical urban dweller, there will
obviously be
more
social
good
in
in resisting
it.
Not
questions of bread and butter, of housing, health care, clean streets and safe
also involves another dimension, that of art
We've seen
And man\
also go to see
Wash321
The Metropolis
ington, Canberra,
New
visit,
even
in their
The
elementary.
The
Political
no proof that
St.
to artistic
need
in the
days of Dresden or
St.
common
style.
These were enforced as the architect enforces a common conception for a whole house. This concept can be good or bad. But one rule can be laid down as final: whether good or bad. it will be better than w hen there is no governing
order at
all.
As a legacy of
classical liberalism
there
is
marked unwillingness
to
It
is
the result serves better the classical utilitarian goal of the greatest good
number.
is
The
real.
One
the public ownership of urban land. This too accords with the inherently social
character of the city and the inescapably socialist character of housing. I've
wondered why European socialists or American liberals, u hen gathering on occasions of high ceremony to affirm their faith, give so little attention to the
long
public ownership of
mban
is
the public
case so clear.
The Tyranny
To speak
socialist
is
of
Circumstance
and of the necessarily to arouse instant suspicion. There
discounts should be
advocacy here.
socialist
is
speaking.
The proper
applied.
To
is
it is
not
appropriate
As often
when,
all
we imagine choice
is little
scope
social
or none.
It
The
follows, as earlier
noted, from the far harder circumstance that millions of people live in close
the friction,
It is
all
all
of circumstance.
322
onl\
one
became
New York,
323
12.
Democracy,
Leadership,
Commitment
Man,
on
at least
when
educated,
is
is
a pessimist.
He believes
it
his
achievements; Jove
tasks, failures
known
to strike such
uncompleted
Still,
remain
in his
mind.
in
some remarkable things have been live more contentedly and much
The decline of religious faith in our time proceeds many get so much more out of this world and feel it
hope in the next. White men no longer were meant by nature or sent by heaven to rule those who are black, brown or yellow. No one, two hundred years ago, could have foreseen man's capacity, public, social and corporate, to organize for such vast and intricate tasks as arranging travel to the moon, getting oil from under the North Sea or making a television series. Adam Smith thought the joint-stock doomed to incompetence company the corporation, in modern language and failure because it taxed this capacity for cooperation beyond feasible limits. Maybe we even understand war better than in the heroic days. Perbelieve they
is
in earlier times.
Being
killed
is
mended, even for other people, with some slight diffidence. Our tendency, however, is to reflect on failure. We remind ourselves of the number of people who are still poor in the poor countries and also in the rich. We reflect that, two hundred years after Adam Smith, economists have achieved not the control of inflation, not the prevention of unemployment, but the ability to have both at tlie same time. Organization the capacity for cooperative eff^ort we note, can get us to the moon but not into and around New York. Our perception of war now includes the ability to destro\' all lite it war comes.
Perhaps
"Well,
v\
this
pessimism
I
is
good.
It
causes us to ask:
hat can
do?
"
It is
good question.
can do?
But there
is
problems
is
The
324
very best ones will be only a temporary achievement, although nobocK- should
that.
We
need
mechanism by which we
waves on the
How
good,
in particular,
this
continuing task?
\\
worse? That
ultimateK comes.
I \\
as
it \\
as going badly.
illage in the
hat
I \\
ould
\\
rite
The
results
The Affluent Society, \\ as held, not least of all b\ me, to be Ive been returning to Switzerland and to Gstaad to write e\ er since. I've become a part-time Swiss professor; a librarian at the Swiss national library told me some years ago, to m\' satisfaction, that I was being reclassified
come
to feel that
know
this small
country
moderately well.
The Swiss example has alwa\ s encouraged me to believe that there is power
and effectiveness
sol\
in
democracy.
It is
ed by the
is
collecti\ e responsibilit\'
and
them-
selves. It
that responsibility
The Swiss
delegate to the great in the belief that they have the answers.
He
seeks the
all voters still meet as a and referendum a direct \ote on issues are much used. In consequence, many more elections are to resolve issues than to choose leaders. In further consequence, the Swiss ha\e had few noted leaders, few heroes. The most famous Swiss was Calvin, who was French.
answ
ers. In
legislative body.
The
initiative
After
Tell,
whose
on a somew hat
winter da\ a few years ago a telephone message was relayed to me man in Bern w hose name seemed familiar; he wanted me to come over for lunch to discuss economic problems. sought out my \er> intelligent Swiss neighbor to find out w ho he was. "He might ha\ e been last year's President,"
One
from a
she said.
"Anywa\
isn't
President now
."
Small countries are far from being masters of their people's destin\.
and recession come in from abroad. In a nuclear w ar these countries would be no less the victims than the nuclear powers themselves. But for protection of the questions within the power of the Swiss democracy
Inflation
325
environment;
ethnic reconciliation
it
on the whole.
there, to dismiss this democratic
common, even
accomplishment by
is a small country that also has had no wars. Perhaps it was the good sense of Swiss democracy that kept it out of Europe's internecine wars, as some have called them. To say that a small country has no problems
is
a small country. So
is
Lebanon. So
is
The
may
feel
a form of
compensation.
For the task of governing themselves, the Swiss have three sources of
Each participant in the democracy has a personal concern for the result. Small size and the continued protection of the authority and autonomy of the canton and the responsibilities of the commune or local government the celebrated Swiss federalism is a help. One person's vote and voice can have an appreciable bearing on the outcome. So they are worth using and
strength.
in
to the
to pass
people
on issues
(new
taxes,
new
women,
limits
workers) and are not, as elsewhere, to select between parties and politicians.
The
is
The
Swiss, one
need hardly
interest.
But they
the
community
is
Meeting
politicians,
Switzerland over the years, I've always been impressed by the feeling,
implied or expressed, that the interest of the
commune, canton
or country has
were
far
more
interested in
economics and
politics, as in
war, an astonishing
number
right of
man on
way. This
is
No country
so
firmly
avows the
we bank
bills
at a publicly
pay our
through the
more numerous and varied. When in Switzerowned cantonal bank, ride the national railroads, Post Office giro, talk on a publicly owned telephone
which can be heard over public telephone wires.
system, send telegrams over state-owned wires, look at public television, get
radio,
We
do not
o\\
li\e
\\
hile tlierc. as
do
iiian\
is
deserving
Sv\ iss, in
clean, bright.
publicK
to
u hich
considered a pubhc
indi\'idual
is
to replace
is
a house in case ot
This
not
in condition
No
industry
is
so uniquely Swiss as
watchmaking. For
around
halt a centur\
the
movements
made by
was sponsored by
the Swiss government. Only the cases, watchbands, boxes and ad\ertising
in the
realm
The Swiss do
trifles.
The Leadership
Instinct
The Anglo-American instinct in government is very different from that of the Swiss. We do not soKe problems ourseKes: we search instead for the man or
woman who
States
will
do
so.
Ours
is
and Britain
it
and American
the
in
of
Parliament.
ecstatically
pleading for
past.
better leaders
for men \\ ho \\ ould weaken their legislatures > et more. in the collective There could be more pow er in the democratic process than the political sages imagine. That judgment of legislators and citizens power does not consist primariK in passing or not passing laws. Presidents w orry but little about independent legislative action and prime ministers e\ en
less.
In both countries,
is
and especially
in
power
the
power
to inform.
From
tliis
On
comes the public response, and this the Vietnam war, Watergate, the
legerdemain of the great corin .\merica.
political
to
power
president
w ho wants
can
I
thought:
How
Or
in
ignorance?
w hat American
committees and their investigations either at the top of their hst or right next to
the press.
I've spent a
A great deal of
I
the rest,
exaggerate only
My
first
thought, divide
members
those members
to get
be mean and
down
to
would this afiFect the average guy in my part of Michigan?" But there is merit even in the mentally retarded legislator. He asks the questions that everyone is afraid to ask for fear of seeming simple. The legislative hearing informs. Along with the legislative debate it also converts the good idea into the human right. Democratic power survives in
these institutions.
Still, it is
How
is
concerned. In the
United States
politics
means
This
I
is a process of which I'm alsosomethingof a veteran. In my first campaign worked on speeches for FDR. I campaigned twice with Adlai Stevenson, and then for John F. Kennedy, Lyndon Johnson, Eugene McCarthy, briefl> for Hubert Humphrey and for George McGovern. I have had a growing affinity for lost causes. On occasion, no doubt, I contributed the slight added shove which helped ensure the loss. Presidential selection for the next campaign begins as the last campaign
subsides. In
dollars, has
erratic.
its
intensive form
it
hundreds of millions of
is
many
Eugene McCarthy observed that, in the first two hundred years, it brought us from George Washington to Richard Nixon, from John Adams to Spiro Agncw, from John Jay to Jolm Mitchell and from Alexander Hamilton to John Connally. He went on to say, "You have to ask yourself how much more
of this kind of progress
we
can stand."
It's
The convention
politics in the
is
hockey,
it's
it,
an enjo\ment that
is
enhanced because they can believe, as they cannot of watching a football game, that their work has redeeming social consequence. When, as sometimes happens, they are assailed by doubt, they remind their audience, and therewith themselves, that history
is
being made. As
in lootball,
it
is
form that
awarded not
for
wisdom on
The Equilibrium
performance
All this
in the
game. Winning
is,
becomes evident
at a national convention. It
covered at vast
expected to feel deeply about issues or policy. In tense, confidential, condescending tones the\
that
all
tell
their
audience of history
in
It is
a histor\'
managers of
tell
of
will
festivals, off
ordinator for
Kennedy
in
speak from some experience. and on, since 1940. I was a floor co1960, a floor manager for McCarthy in 1968, a
through
McGovern archon
many weary
hours as a delegate.
chairs.
My
Once
was because 1 w as thought to have power in my delegation which I didn't in the slightest possess. There was no chance that its members would necessarily agree with me. With that negati\ e exception, I do not believe that I ever had the slightest influence on the selection of a candidate. Once, in Los Angeles, I did tell Edward R. Murrow w ho asked me, that "everything was under control. He went immediately to the booth and reported it to Walter Cronkite. They were both \ er\ e.xcited. So, the Kenned) forces were admitting that they had everything under control. They discussed this compelling piece of news for fi\e full minutes. Once the convention that the commentators believe still to exist did assemble. In the case of the Democrats it w as made up of two major groups semi-literates from the rural South and semi-criminals from the urban North. Both were under the command of those who had selected them. The first were kept in line b> playing on their natural awe of their surroundings and the threat of not paying their return fare. Those from Tamman\ Jerse\' Cit\
president.
It
, "
Boston, Chicago, Kansas Cit\ knew the> could be depriv ed of illegal income, even threatened with imprisonment, if they did not conform. These malleable
their
minds made
The
real decisions
on candidates come
and the
state caucuses
and conventions.
The Equilibrium
Henceforth, w hen the California primary, the
will
last
ill
and the
is
largest,
is
o\ er,
we
be. This
power
to the
3S9
few.
to
democracy
an
I
article of faith,
and
is
alternatives.
But
do think there
rational
for believing
it
to
be both
in the
modern
state
come when there is a rift between governing and governed feel that government is not theirs. The more democratic
the process, the less this danger, the smaller this weakness.
When
people put
their ballots in the bo.xes, they are, by that act, inoculated against the feeling
government
is
not theirs.
its
They then
accept, in
some measure,
tliat
that
its
any revolt
will
It's
power
And,
let
there be no doubt,
it
gives
The people
indignation
are many, the rich are few. But politicians need money.
more
The
result
an
is
now pay
a part of the
The
much needed
as before.
The Nature
look?
of Leadership
in leaders,
Again
ith
most
and also Stalin. Hermann Gocring, Joachim von Ribbentrop, Albert Speer, Walther Funk, Julius Streiciicr and Robert Ley did pass under my inspection and interrogation
in
in
common:
it
was the
in their
is
was the great and perxading soince of President Hoover was not a foolish man; few ha\e been trained more
for the presidency.
comprehensively
nomic disaster of his time. Repeatedly he told people who knew belter that the slump \\ as over. Roosevelt, in his Inaugiu'al Address and in the legislation of the first lumdred (la\s. k'il no one in doubt. .\11 his energies would be
330
Leadership Roosevelt
is
.
unqualified
commitment
to the
major anxiety
of the people.
As
it
was
for
committed
concern.
to the
his
What
let
He
it them believe they were in his confidence. He had charm would now for some reason be called charisma. ("Senator Roman Hruska has charisma. "Sir Keith Joseph has charisma.") These qualities would never have been noticed if Roosevelt had failed to commit himself to the anxieties of
"
the time.
The proof
committed
one's view
is
made little impression until he had so Lippmann looked over the candidates; no
was thought to be more acute. Roosevelt, he said, "is a pleasant man, who, without any important qualifications for the office, would very much like to be President. A leader can compromise, get the best bargain he can. Politics is the art of the possible. But he cannot be thought to evade.
"
'
knew
best
We both
others
when visiting the United States, he exWilliam Fulbright, number of Oxford men
in
high positions.
were
held b\
Nehru confronted, with Candhi, was the independence of India. India should govern herself. More important was the question of equality and an end to the belief, accepted as truth for dignity for all the people of India two centuries, that Europeans were superior to Asians. This trutli had been
The
issue
proclaimed
in
in
the social
life
was
especially strong.
He came
morning
from a wealthy,
pioneer
in
the Congress
Movement
but at a time
when
met
in
and no one needed to be reminded that it had been founded by an Englishman. Nehru himself moved easily among Europeans, often with a poorly concealed sense of his own superior grace and education.
clothes, accepted the Raj
Once he
told
last
Eng-
lishman to be Prime Minister of India. But he faced the principal issue of his time and accepted fully its personal cost, including the years of imprisonment.
This affirmed his right to lead.
his highly
Had he
failed so to
commit
famous
sense of communit\' u
His
for nothing.
name would
not
now
know
n.
332
And Nehru
civil rights.
When
as did
Hitler
became
Winston Churchill and Charles de Gaulle. Nehru did not have a similar
relentless
was some
magic that would wave them away. Heroes of his English years
Beatrice Webb, Harold Laski had thought
so,
socialist
Sidne>'
and
and
it
must be
He must
also
day go by v\'ithout asking what he could do to lift the fear of nuclear annihilation from mens minds. If he had lived, it would have been, perhaps, his
claim to leadership.
We
will
to
establish a much lesser commitment. That was to the notion that modern government can be interesting, exciting and a proper concern of the idealistic, the enthusiastic and the young. I came back from India just before Kennedy's death. For much of the rest of the decade I was concerned with what many consider one of the legacies of his presidency, our invoKement in Vietnam. I do not share this view; I do know that lie was largely responsible for m> own education on the subject. Kennech' sent me to Vietnam in tlie autumn of 1961. A report from Maxwell Taylor and Walt W. Rostow had luged greater involvement, including troops. (They would be disguised, rather imaginatively, as flood control workers.) Kennedy
short passage,
helped perhaps by more knowledge and experience of that part of the world
than most of m\' colleagues possessed, persuaded
of
the enterprise.
selfishness
whom we were
we
could not
more sobering thought: perhaps we should not succeed. The Vietnam u ar showed wonderfully the relationship betw een leadership and commitment. Eugene McCarthy had never previously been celebrated for strong, uncompromising positions. He was amused, civilized and somewhat la/y. It was a time when almost every other major politician was trying to be against the war in principle, for it was a matter of practical necessity. McCarthy scorned such cant and came out in unecjuivocal opposition. Millions to whom lie had prexioush been unknown flocked to his side. I had guessed they might. One day in the late summer of 1967, 1 went up to Mount Ascutney in Vermont to address a meeting urging the opening of peace
succeed. There was a
negotiations,
II
was
to
be held
in
hunched were
334
expected.
When we arrived,
had
A sermon on
waiting for some leadership, an\ leadership, on Vietnam. Across the Con-
New Hampshire a few months later. McCarthy came \\ ithin few votes of beating Lyndon Johnson in the primary. It was clear that in the Wisconsin primary a few weeks later he would win. Johnson called a halt to
necticut River in
bombing and \\ ithdrew as a presidential candidate. In the next months 1 marched with Gene, if that is the word, and resisted the thought that Robert Kennedy might be the stronger candidate. Mostly I raised money, an easier thing than might be imagined. People who felt guilty about the war assuaged their conscience with cash. Ours must have been one of the few presidential campaigns in history in which no one worried about finances. I led the McCarth\ forces on the convention floor, though without great confidence that I was being followed. I seconded Gene's nomination, and when I returned home, m\' wife asked \\ hat had happened to my speech. The tele\ision cameras had all been on the riots downtown. In Chicago I had crossed the police lines to address the more violent protesters. The Chicago
the
police dutifully clubbed others
who thought
to
member
of the Establishment
and escorted
me
was disconcerting
Of all the men I've known in politics, Eugene McCarthy had the most subtle mind and by far the greatest sense of the music of words. He was, indeed, the first serious poet in the American political pantheon. In speaking for his
nomination at Chicago,
but
it
I
said that this might not yet be the age of John Milton
was no longer the age of John Wa\ne or John Connally. John ConnalK New York and California delegates sitting near, with that genius for originalit\ that marks .\merican liberalism, jumped to their feet and proposed sexual violence on ConnalK John told reporters, "Where ah come from, it helps to have Galbraith against yoou. We owe the end of the Vietnam war to Eugene McCarthy. If he had not committed himself but had tried like the others to straddle the issue, he too would have remained unknown, with
u as
sitting there.
.
"
his poetry
unheard.
One
same year I was to lecture at the I'nix ersity of California at Los Angeles. My lecture was canceled. There was unrest on the campus, and for good reason. Word had come of the killing the day before of Martin Luther King. The Chancellor of UCLA was Franklin Murphy, an old
da\
in
friend.
I
He
asked
me
to
in Gene\ a. King. Like was with Dr. Andrew Young, now a congressman from Atlanta,
a long afternoon
335
Chicago Convention, 1968. The pohce dutifully clubbed these opponents of the war, made way for the author. It's better to be a member of the Establishment.
Berkeley
Kiny;
had
to
confronted the issue of justice and equahty for his people. This
the onI\ test of a black leader.
knew
he
He knew
\
also, as did
Gandhi, that a
that he
ci\ ili/.ed
iolence, for
those supporters
who
Now
King
felt
must face
I
another
issue.
d\in<i to
no purpose
in \'ictnam.
was identified with that issue, and thus our meeting. He said that a leader must mo\ e on to the next great issue when it comes. Some of the lesson that I
am
stressing here
Berkeley
Is
gi\ es
democrac\
Iioth
power and the w isdom to use it well? The answ er brings me to familiar and belo\ ed
.
campus
it
to sa> that
man\
since ha\e
come
to accept
our insight.
Undergraduates in m\ da\ were not politicalK \er\ concerned; as elsewhere and o\er the centuries the principal s\mbols of student acliiex ement were sex, alcohol and idleness, along with a more modern commitment to
intercollegiate athletics. But in the sixties
London Johnson, the X'ietnam w ar i)reath of the local draft board succeeded where books and had failed; the \er\ word Berkeley became a s>nibol of student
in
involvement
authorit\.
public issues.
called
It
it
man\
and spread
to uni\ersities to
\c)u
mentioned Berkele\
argument I'x e just made. Education must seek to develop the needed sense of commmiit\ tlie feeling that, at some point, the special interest, even if it is
\()urs.
all
best
serves \ou.
W ith
this
resist the
people must sense, react and oppose. Democratic education must be a lesson
in this
instill the sense of personal securit\ that cairses men make a clear and unaml)iguous commitment to the task at hand, in or to distinguish between those who do and those w ho do not. The e\ modern spectator politics is in the praise it accords the politician w ho affirms
and w omen
il
337
who
dishkc the requisite action that they have nothing to fear from his
election, "I
am
tor
at the price of
"Poverty must be
new burdens on
The
leaders
standards of his
Roosevelt, Nehru, Kennedy and, by the community, Martin Luther King had what today would be
have mentioned
security that
allow cd of their
commitment. There
is
involved here,
we
conflict in goals.
Wc
want the
largest possible
number
democratic discussion, and the tens of thousands that the University of Cali-
want these students to believe that, in a democracy, they are sovereign; they ha\e the right and the responsibility and the power to decide. And we want also to train leaders men and women who are equipped with the knowledge, selfconfidence and self-esteem to decide for others and win acceptance for their w ill. That is the meaning of leadership. We ask, at the same time, for leaders and for followers who are told that leadership belongs to them. It is possible
fornia enrolls arc proof of the seriousness of the effort.
We
that
some
Commitment
commitment is to see in full perspective the problems we have here been discussing. Few, it any, are ditficult ot solution. The ditfieulty, all but invariably, is in confronting them. We know what needs
To understand
the impoitance of
to
ot inertia,
we
do not wish
and poor cannot be solved except by some redistribution of wealth, present or at a minimum potential, between the two groups. That is not ditficult to see. But not many want to commit themselves to that solution. They are even less inclined to urge what we have seen is the
of rich countries oldest of the remedies,
The problem
which
is
for
people
to
move from
the rich.
The
checked
except by the control of births. The C>hincse, and increasingly the Indians, are
concluding that
this
Few
elsewhere wish
to
commit themselves to this hard truth. The poorer the coimtr\ the poorer
,
it is
in
administrative resources
the
Chinese with
apart.
The
less,
of which socialism
The
the more,
338
Skidoo
in
ol indix
idual cncriJiies
that l)oth
Adam
in
earK economic
man\
in
is
problem
ol
poverty.
Whether in
evasion.
We
done
we
sav plainK
is
cannot he
Better an
ambient
air,
a difficult truth.
own
automobile.
We make
No
resources
last
longer b\ using
less.
Also a
cliHicult truth.
unemployment
or inflation,
and there
for
is
no way of
combining high employment with stable prices that does not inxoKe some
control of
a struggle that modern corporations, modern drive up unions and modern democrac\and encourage
to sustain
it
income and
prices.
more consimiption
will
will
then temper
this
upward
thrust.
Not
man\ w ish to confront the truth that the modern econom> gives a choice only between inflation, unemployment or controls. The problem of the great metropolis is not complex. 0\erw helmingly it is monev For people to li\ e close hv or on lop ol each other in great numbers is
.
exceedingK expensi\e.
ff
we
so li\e,
we must be prepared
cit\
,
to pa\
And
if
some or man> will go. The economic base will then be eroded, the problem of monc> be more severe. But again it is more blessed to evade. Better a speech promising more efficient on w astelul spending, a stronger lini' w ilh tlu' cit\- goxernment, a clampdow teachers, the police and the sanitation unions.
people can escape pa\ nient by mo\ ing from the
ii
Skidoo
to e\ asion
'fhe
problem seeming
politics.
we
To
how we use complexitx as a device, it is good, on community or a countrv side where things are sufficienth
see
is
occasion, to go to a
stark so that e\ asion
It is in
not possible.
One admirable
is
such place
is
Skidoo 23.
the Panamint
feet over
Mountains
Death
It
in Calilornia,
.
Nevada border,
56()()
\'allev
Skidoo
flourished as a mining
,
town
in
(The 23
to the
s
refers, apparentlv
to the distance
mines.)
Its
greatest
moment came
the vear
of
mv
birth.
Skidoo
most
339
and
killed
memhcr of the
was strung up on a telephone pole, the wires of which gave the news to the world. Reporters rushed in. and the media-conscious citizens strung Joe up a second time to show them how justice of a sort had been done. No one can look at the deserted and empty mine shafts of Skidoo and escape the fact that resources are exhaustible and nonrenewable. Skidoo shows also how fragile is the fabric of modern urban existence. Once it was a thriving community oi 700 souls. Now the population is precisely nil. For Skidoo the problem was the economic base, as no one on this desert could
fail to see.
When
Self-interest
could imagine that any other force could bring people hundreds and thousands
of miles to biuy themselves in the holes
beliew there
In Skidoo
is
some
would
similarly
finalK'
how^
much energy
which
is
men
reflect
on the
idle piles in
a useful
Death Valley
Dow n
Again
below Skidoo
in
also a
it.
wonderful
clarity of line.
we
in
confronting
is
No one
lationship
poor
in this valley.
That
because there
is
an excellent
re-
between land and people. There are no people. If anyone tried to would not be rich. On occasion in the past, people have come to the valley. They alwa\ s moved on. If they could not have done so, they would have been miserable indeed. Such movement from poor lands to rich has been, we've seen, one of the great soKents for povert\', and for a long time. No one here can doubt its need. I exaggerate slightly. There are a few families in this valley. People live on income that flows in to theiu From outside. One resident earlier in the century. Death Valley Scotty, was subsidi/.ed in much style by an eccentric millionaire and built the castle that still stands. Without such external support, the few
make
people
in
or have
to go.
The
countries
poverty.
fact
an antidote
for
It is
no
less a
remedy
for
poverty
when
it
comes
as aid
gift. It is
hard
to forget.
Death Valley has another and yet more important truth to affirm. It is 140 miles long, from 4 to Ifi miles wide. Imagine it to have been urbanized as the
340
Cheyenne Mountain
in Colorado.
The command
-..-
... t<^-i*J!i"r
Jf^.
first
Home
C^ounties.
Or the
urbanized.
Tokyo-Yokohama
tains.
plain.
the whole length and breadth of the valley from the mountains to the
moun-
Death Valley is how such a metropolis would look after a mere four twenty-megaton bombs. It is how an> metropolitan area of similar extent anywhere in the world would look after a similar weight of bombs. To confront this truth fulK we must travel east from Death Valle\' to the eastern slope of
the Rockies to the North American Defense
inside
Command NORAD.
It is
deep
Cheyenne Mountain
there to evade
is
threat to that
life,
we
legularly dismiss
it
from mind.
Man
ith
ow n
mortality. .\ncl he
thought that
may
and grandchildren
only marvel.
reality.
not exist.
we can
The
in
to a
war
some
distant
to the nuclear
A connnitment
no
to this reality is
test of
not ours.
no
less life-enhancing,
oi
no more inclined
to a
death wish
is
war
far
more
comprehensive than
willing as
ours.
We
it
is
,
are as
we
threat to
all life
and
is
to its elimination.
That, indeed,
exchange
of missiles,
as
to
of
Not even
is
uncertain, there
truth
we must
confront.
M2
k)v this
book
it
is
a grievousK
v\
whom
as
throughout. .M\
debt
is
great to him, and only slightly less to Dick Gilling, Mick Jackson and
responsibi]it\ for
The Age
oj Uncertainty.
no television series
Without these four colleagues there would have been and, of course, no book.
Supporting the work of Messrs. Malone, Gilling. Jackson and Kennard and
in
constant support of
me were
and
its
driving automobiles
and typing
All
less
scripts.
My thanks
deeply tinged w
ith lo\ e.
who watch
television should
know - as
and
now know that merit depends people u ho put him there. (The man
I
who performs
the most pa\
view.)
.
and gets
Thus tor a year while filming the series, I worked with two superb cameramen, Henry Farrar and Phil Meheux, and Phil, who was longest uitli us. shall regard ulwa\s as one ot the most amused, amusing and accomplished artists an economist has ever been privileged to encounter. John
I
Tellick
less
valuably o\ er
their
hear
clearly.
in
Robyn Mendelsohn handled all details for the BBC in New York, and London and on location Ke\'in Rowle\ Jim Black, Kevin Baxcndale. Ton> Mayne, Dennis Kettle. Dave Gurney, Da\e Ghilds, Terry Manning, Sid Morris, Francis Daniel, DougCorr\. Stuart \Ioser. Michael PurcilK Douglas
, .
John Lindley, Richard Brick, Ciolin lj)\\re\. Sue Shearman. Hilary Henson. Barbara Lane, Jacque Jcfieries and Jeni Kine assisted on the camErnst,
eras,
list
on the
lights,
in
m\
lace.
The
John
the film
editors; Charles
343
Adam
Gifford
Cox and Bob McDonnell their assistants. I must add a special word for Mick Burke who, as assistant cameraman, was a truly good companion through all the earl\ filming. Tlien he took a lea\ e of absence to join the British team that, in the 197.5 season, was to climb Mount Everest. 11iere, a feu hundred yaicis from the top. he walked into the gathering clouds and darkness to complete his passage. He did not return. Going on from television to this book: Joanna Roll, a family friend, and Ben Shephard of the BBC helped well and diligentK on research and checking
of facts. Angela
all
ot
BBC
Publications.
Paul
help.
M. Sweezy, an old To
Adam
me much me
like to
ot
similarK on Lenin.
ith lull
freedom from
I
responsibility tor
I
the result.
Among
the
many
others to
whom
would
mention especially
whose
eclectic
many
relatives in Cambridge remain for my final Londa Schiebinger typed and retyped and then went on faithfulK to check and correct m\ facts. Emm\ Da\'is managed the oflice and much of my life while the enterprise was in progress, in her spare time also typed and checked, and she journeyed with me during the American filming to provide help, protectioTi and safe movement and to calm the emotions oi all concerned. As so often before, Andrea Williams was not my assistant but m\ full-fledged partner. She worked with the BBC on all the details of the
My
word
of thanks.
it
would otherwise ha\ e had to do. always been suspicious of authors who use these acknowledgments to proclaim their lo\ e for their w i\es. Most likely it is a co\er lor secret distaste, occasional beatings and adulterous yearnings, fulfilled or unfulfilled. But there
I've
in
on
this etlort
from the
intiiiders
first
l)y
day, accompanied
i)y
me
da\ and
night,
showed
in
which
will
one day
tell
344
Notes
Chapter
'Joliii
Chapter 2
'
.\llan
II
(New
300.
oj
Emploijmi'iil Interest
p.
Da\
id
Horowil/.
The
(.New
p. .59.
Mhid.
3
An American Dynasty
ol I'rederick
Ibid.
he made
for F. Y.
Edge-
From
'
tile
manuscript
T. Cates's
his life in
ol
Kngland.
unpublished aulobioyraphx
Herliert Spencer,
Kdseuorths-
The Study
oj
Sotiolomi
1.S91),
(New
ol liberal
York:
D,
\pplel(in
and Co.,
Unlike
Hume
mind
ol a
p.
438.
Social Statics
p.
Herbert Spencer,
(New ^ork:
Richard
was
413.
in
commonwealth embracing
speakint; world.
ica
in
all
the
Eiiillish-
Social
Darwinism
in
American
would
sit
the
House
ol
Commons
increasinii
Thought
/.S'6r;-/.9/o
(Philadelphia: L'ni\ersit>
London';
eventualK,
with
population
in ."Xmerica,
in
Hotstadter.
moved
to a
more
Atlantic. Cincinnati,
Memphis or,
consideriui;
'Ibid.
the claims of Canada, perhaps Creen Ba\ Wisconsin. That was the destinx that was
"Neic York
"
Post.
September
13. 1975.
<|uoti'd in liiilslailler,
missed.
p. 18.
*Adam Smith, W
don:
eallli
(ifSalions, Vol.
(Lon-
'"
The I'hcory
llduuhldn
oj
the Lei-
Methuen &
I,
Mililin Co.,
"Smith, Vol.
"Ibid.
p. S.
'
Veblen.
p. 57.
"Smith, Vol.
I,
p. 144.
'^Veblen,
'n'eblen.
p. 64. p. 62.
6.5.
'"Smith. Vol.
II,
p. 264.
"Smith,
Vol.
II,
pp. 264-26.5.
ol
'n'eblen.p.
'^William
Pitt
Commons
M.
'^James
Cordon
Cil\
Bennett.
Sr..
((noted
in
on February
17,
(New York:
.\u;iistus
(Garden
New
'^ork:
Doubleday
&
1962). p, 82.
Sr..
'^Charles
ley
in
Dud-
in
the \'eiv
6,
18.3.5,
(|Uoted in
Don
(.'.
I'atlur
345
and Son
(liulianapcilis:
Tlie
B(ibl>s-Mcriill
Karl
Marx quoted
in
.McLellan, p. 315.
'^Gustavus Myers
in
Matthew
340.
Josephsoii,
War
in
France: Ad-
quoted
II, p.
in Karl
Marx and
Friedrich
Engels, Vol.
^^
208.
Chapter 3
'
quoted
--^Karl
Marx,
in
The
(Uiil
p. 400.
War
in
France,
quoted
Democracy. 3rd
^Karl
cd.
(New
McLellan,
York:
Harper's
" Karl
Torchbooks, 1967),
p. 21.
Marx
in
Karl
Marx and
II
gramme, quoted
Friedrich
McLellan,
p. 433.
(Moscow:
Chapter 4
'
Marx quoted in David McLellan, Karl Marx: His Life and Tliouglii (New York: Har^
Karl
.\dain
II
per
&
Row,
1973), p. 14.
16.
(London: Methuen
-Smith, Vol.
p. 28.
II, p.
&
in
in
MeLeilan.p.
'
131.
"Biographical Sketch"
^
'
Karl
Marx quoted
in
McLellan,
p. 58.
Donald Winch
James
Mill.
Selected
ed. (Edinp. 19.
.VlcLellan, pp.
o6-5~
p. .56. p. 60.
"
&
London: Oliver
&
Bovd, 1966),
'
Marx quoted
in
McLellan,
R. Ewart Oakeshott.
M'capoii.sp. 183.
^
The .Archaeology of
i''KV//7
"Friedrich
p. 131.
quoted
in
McLellan,
Pope Innoci'nl
111
(juoted
in
Ik'nry Treece,
''Karl
Marx
I,
in
Karl
Vhirx and
Friedrich
1963), p. 229.
Fngels. Vol.
'-'Eric Roll,
p. 52.
"Smith, Vol.
II, p.
72.
(London: Faher
&
217.
Alden, 1886),
p. 163.
Marx,
The-
Commiinisl
I'rit'dnch
Manifesto.
I,
"Pre-scott.pp. 163-164.
Karl
Marx and
Engels, Vol.
"Prescott, p. 165.
pp. 10,8-1.37.
"HVilliam
llickliuii
'"Karl Marx,
Karl
in
C()ii(/i(('.s7
oj Perti
Marx and
p. 126.
I:
18,54), p.
314.
\'I,
'^Karl Marx,
T/ifRei<./i(//i./i.s<-/;S-(.S', Vol.
"See Chapter
'
pp. 170-174.
Political Writings.
(London:
.\llen
Lane and
Letters
of
Marie-Madeleine
Hachard.
New
in
Ursuline of
New
'"A sp\
'"'Jennx
Marx quoted
in
in
McLellan,
265.
(London: Chatto
'*
'^
6c
W'indus, 1961).
^"Sir
George
C^re\, British
p.
Home
Secretary,
Beanies,
p. 151.
:\
quoted
McLellan,
231.
'
Choice
S.
oj
Kipling's
"
Verses
Made
by
T.
Eliot
(New
York:
Economy.
(Chicago: Cliarli's
1.
Kt'rr
(S:
1.3('>-1.37.
346
Chapter 5
'Hus^o Haase quoted
Rciclist(ifi\.
ington:
.\rl.
Bureau
ol
in \'crliaii<lliinticii
dcs
19(1S). p. 5.S1.
Stenosirapliisclu' BL-riclite.
Band
Chapter
7
und
\'erlags-Anstalt. 1916). p. 9.
Schuster.
.\/f/
Early Beliefs
in
19591. p. 122.
19491
N.
K.
p. 83. in R. F.
^V.
I.
Lenin quoted
Krupska\a.
Foreign
Har-
Reminiscences of Lenin
l.\lo,sco\\;
The
Life of John
Maynard
Keyni-s (Lon-
p. 258.
don: Macmillan
&
C:o..
1951). p. 121.
in
p. 307.
llie Ui^jjiest StUfic
Biography
1.
Lenin. Imperialism:
p. 20. in
Harrod,
p.
16
Lenin cjuoted
in
N. K.
Krupska\a.
in
llarrod.
p.
323.
1.
"W
*
Lenin quoted
in
\.
K.
Krupska\a.
"Robert
Theory:
Lekachnian.
Reports
oj
Keyiu's'
General
p. 3.35.
Christopher
Hill.
York:
St.
Revolution (London:
Persnasion
i.
(London: Macmillan
i
6v;
C^o..
1931
pp. 24S-
'V.
cov\
I.
Lenin.
The
State
249,
:
"John
Maxnard Kex
ik's
(|Uoted
in
Robt-rt
">y.
Lenin quoted
"
of
.\dani
Random House.
singer,
1966). p. 47.
in
The Macmillan
Arthur
\1. Schle(
The
Crisis oj the
Chapter 6
'
19.57). p.
HenKJotus. Book
Clio. Hex
llarrod.
Beloe.
p.
447.
\).
trans.
(Philadelphia:
\lX:art\
and Da\is.
''Franklin
Roosc-xell (luoted in
oj
Lekach-
1S44). p. 31.
tnan.
The Aae
Keynes,
p. 123.
of Lxtraordiiuiiii
Popular
Deln>iions
and the
Madness
Clo..
in
Lekach-
of
1.
man. The
Crouds (Boston:
p. 55. ^.\.
L. C.
Page and
19.32
llarrod,
162.
of
Lmi-
land (London:
p,
p. 334.
Chapter S
M.
Schle'
The
.\dlai
Slexenson
.\dlai
(|U(ile(l
iii
John Bartlou
Illinois
p.
Brow
II
\-
Martin,
D. Richardson.
o\
Steveir\on
6i
if
(New
York: Doubledax
-
Co.. 1976).
743.
Compilation
Presidents
of the
Toxxiisend
the
irS9-I9()S.
iWash-
347
Little,
Broun and
lloopes,
C^o.,
II,
CAuiracteris-
Our
Fathers,"
Bureau
lation:
ol
based on an address
byterian Church
U.S.
s;i\
en at the
First Pres-
1970, Vol.
Characteristics of the
of
Watertown,
New
York.
ment
""
Henr\
Bamford
Parkes,
History
of
Dulles, p.
6.
The
Christian
Colonel
Thomas Talbot
c|uotc>d
in
Fred
The
1952), p. 1496.
Chapter 9
'
Chapter
(New
'
Labour Labour
(Geneva:
International
Office, 1975).
Newsweek,
-
Bam her
Gascoigne,
September
8,
1975, p. 62.
(New
York: Harper
&
Chapter 10
'
monwealth. 3rd
from "Area and
Paul Mantoux,
ed.. Vol.
These
The
Industrial Rciolnlion
Ministry
of
Agriculture,
New
Jonathan Cape,
1961.), p. 182.
Delhi,
and
Mbid.
IN
60t)5, 1-21-76,
in
Attache
New
Delhi.
Chapter 12
'
C'ross
(Boston:
Little,
and Co.,
1974).
LI.S.
Arthur M. Schlesinger,
Jr.,
The
Crisis
of the
Biueau
Miffiin Co.,
348
List of Illustrations
page
List of Illustrations
69
(top)
father,
Cx)iiiit
his wife,
Library).
72-73
76 79 82 87
Pages from the catalogue of the Neiman-Marcus store in Dallas, Texas (Neiman-Marcus).
Kari Marx, 1867 (International Institute for Social History, Amsterdam).
Trier).
88
92
94
March 1848;
(all
Man/ Evans
Picture Library).
99
Marx's house
Library).
at
London
101
Reading Room,
(top)
British
Muicum
in
(Mansell Collection).
104
Membersiiip card
members
of the First
International, 1868
107
(top)
The ('hamps
Communards,
113
1871,
MuseeCarnavalet
(B(///o;:).
15
Acre (Barnaby
(top)
Picture Library).
Indias, Seville, Spain ijim Black);
5,
119
(bottom
left) letter
from
0)lunibus
February
(all
Queen
123
(top)
Abandoned hacienda
Press).
Natchez (As.sociated
125
126
The jirga.
West Frontier
Province,
Wana, 1929
Club, Nilgiri
128 Bodies
(Sir
steps of the
Ootacamund
Hills,
in Calcutta, 1946,
129 135
Vladimir Ilyich Lenin (Camera Press); (bottom) Cracow Castle (Radio Times Hulton Pic-
ture Library).
140
(top) Kitchener
World War
White
New
144 146 150
December 1915
(both Radio
IV from a 1918
at
amn
Leon Trotsky
(top)
wartime coutcrcncc
ZimmenNald (Camera
the bat-
tle front,
153
and Zinoviex
in
\\a\
.
from Switzerland
in
156
350
List of Illustrations
158
162
(top) Rosa
Senator
P'lorida,
1972
165
/m- Wife,
Paris (Giraudon).
168
169
171
h\
Rembrandt
Jofin
setim).
173
(top)
at
(Musee de Rre-
An
Law (Brite/i
Museum).
175
(British
Museum).
177
"Midas transmuting
all
into paper.
b\
179
185
the
Bank
of
England
186
159
Press).
193
196
ing Fisher sailing for Europe on the Mauretania, 1927 (Irving Fisher,
Jr.
).
(top) John
Maynard Keynes.
b>
Gwen
Cambridge
Ke\ nes
is
W. M.
Keynes).
199
201
Alfred Marshall
(St.
Clemenceau and
\^'ilson
on
peace
treat\
on June 28,
at
Ver-
202
Coliseum
in
205
Strike (fxith
206
210
212
Norman (Keystone). The surface of Wall Street, New York, on October 29, 1929
Schacht and Montagu
(Popperfoto).
Library).
in
215
the Metropxilitan
November 1932
219
March
Hooverville on the
w aterfront
230
233
chart at
Rhein-Main
at
airfield, in
948 (Popperfoto).
236
(top)
Princeton
MacArthur (Princeton
1974 (U.S. \avy
University Library)
239
Launching the
Photo).
L'.S.S
Riclmrd B.
Rus.iell at
1,
241
in
the
Desert,
New Mexico
on
351
List of Illustrations
244
during (\v of
his visits to
(Albert Fenn,
247
Howard Hunt,
250
253
254
Anti-war protesters
Project Nohska,
in
Press).
Woods
$6
(
fiillion
worth of
stock,
May
.\ir P'orce).
258 260
265
(Charles
Addams
Heiin
New
Yorker magazine.
Institute brochure.
Henn. Ford
II,
1976; (center
left)
Thomas]. Watson,
1964; (bottorn
President of
left)
IBM, 1937;
(center right)
Geneen,
Presi-
Associated Press).
Building,
267
(top)
New
Blau.
"S
ork (Camera
Press).
and Pen
International); (bottom)
The
Comeain
272
(top)
Building, Mo.scow
(Tom
Camera
Baker
I. ihrar\'
vard); (bottom) a .seniinar\ outing in Burgos, Spain, 1953 (Henri Cartier- Bresson. John Hillel-
son Agency).
275
The
Philips organi/atiori
throughout the
in the
wodd
(Philips
i.r
Co
Ltd).
Press).
282 284
illagc
All aerial
286
288
Whitnc)
290
292
Kingston market, Jamaica (Penny Tuecdie. Daily Telegraph Colour Library); (center)
in
Housing
at
Selg
Turke\ (Picturcpoint).
294
(to;))Slur7i conditions in
Tenement
297
298
blocks in liark'm.
New
John
Hillelson Agency).
The
inilialsof Professor
J.
fann
in
Ontario,
( ;aiiada (Cliff
Maxwell).
district, Singa|)ore, \97(t
301
rheconimercial
(Professor Charles
,'\.
Fisher).
t^ity,
'.
305
Pe-
1st
row
Peder-
.sen,
Auslrali(m
Ncics
.Angkor
(/,.
loncsco.
A,ssoci-
Colorilu); (2nd
atcs);
row
right) National
.AsscmbK, Islamabad
l(-)(i4.
(Sa.s.soon,
Robert Harding
(hollom
left)
Mu.seum
((Jiche Mu.sces Mationaux, Paris); (bottom right) Brasilia (Joachim C.Jung, Colorific).
308
(top)
main
main
310
31')
'
lalila\ in
Uainsucpt Roots,
Light).
London,
in
tile
(Bill
of
352
List of Illustrations
315
320
331
An
aerial
March
4,
1933 {Associated
Press).
333
civil rights
Pre.is).
marchers from Selma to Montgomery, Alabama, March 24, 1965 (both Associated
336
Police
in
Chicago, 1968
341
(top)
Cheyenne Mountain;
(center)
The
NORAD
tunnels inside
Galbraith).
353
Index
Bold
248
Bangladesh:
famine, 37
Adams, Henry, 55
by,
258
Bank
Bank
6.5,
of
Amsterdam, 167-70
founding
of,
Working
of England:
174; Court of
and control of
creation of
to clearing
67-70;
God
of,
economic innova-
180
211;
economy
12-13;
in
Bank
and Devel-
before
Industrial
Revolution,
opment, 224
eighteenth-centur\
shortcomings,
1.55,
France,
16-18; Soviet
Bank
211
Am176;
298
166-70,
Banque
Barnard,
Royale, 170-4
America
American
Oorge
Gardner, 51-.3
Bay
of Pigs (1961),
246-8
his
Beanies, John,
125;
ideal
of
go\cnunent,
2(8.5
124-7
Beecher, Re\. Henr\
V\'ar(l,
Amsterdam,
166-70
168; banks
56, 80;
and Spcncvr
and natural
Armand,
Inessa, 152
Ben
\\
Bella,
Ahmed,
131
armed
try,
services,
and
close relationship
ith
indus-
Bemiett, James Gordon, 65-7, 184 Bennett, James Gordon, Jr. 65-7, 66, 68
f?erkele\, Universit) of California at, 19.8,.3;37-8
arms
Berle, .Adolf
A, 268
.84;
assembly
line,
earK. 24-5
\fyiH re\oluairlift,
Germany,
1.36
tion, 94;
automobile industr\
Italian
and
Soviet, 155
355
Index
Bern, Ixnin
in,
145, 147
Callaghan, James, 15
War
I,
Birmingham (England),
birth control, 42, 283-7,
31
and variant
of paper
money,
181;
settling of
West, 299
Canberra, 305
James G, 221-2
Cap
Ferrat,
68
World
in
War
1,
Communism
Blenheim
Palace,
68
business, 155;
Marx
theory
of,
100-103; mo-
by
147-8
of,
C.otwmunism
81
capitalism:
43-75; cere-
Bonn
University,
Marx
at,
Consumption and
Brasilia,
305
at,
modern
rich,
"Breakers,
The
selection
.55-7; railroad
62,63
Rretton
Britain:
Woods f :onference
944
),
224
rights, 13; loss
57-62
s
view,
of
American
and
40
Carnegie, Andrew, 43
Castellane,
tion
trade, 36;
and World
War
1,
139,
Count Boni
de, 69,
70
and workers,
to
157;
in India,
246
11
World War
II,
318
British
Cheyenne Mountain
145;
Marx
and,
336
War
II,
96,
Merchant
City,
307
338
Brussells,266;Marxin,91,97
Bryan, William Jennings, 55, 184, 189; opposes
Lady Randolph, 70
Churchill, Winston, 70, 144, 197. 224, 237; disastrous return to gold standard, 20:3, 204, 209;
and General
California: emigration ol poor whites into,
19; University of, Berkeley,
Strike,
207
Industrial City, 309-18;
318-
citv
life:
Camp, 314-16;
City,
337-8
Merchant
356
Index
of,
270-74; power
of,
257-9;
Adam
Smith
299-302
France,
UGE,
Civil
War in
259, 274
class structure,
ungluing of in World
War 1,
133-4
Cortes,
Hernando, 118
in,
134. 139-41
Programme
(Marx), 108
163,180
Crosby, James
S.,
252
27
112-16,
Grossman,
in,
Ricfiard,
Cologne, Marx
colonialism,
journalism
84-6, 97
Crusades,
as
109-32;
in Eastern
Britain
and,
124-7;
Crusades
Mediterranean, 112-16;
of,
134-6;
fiscal aspect,
248
Keynes
in
Adam
Smith on,
109. 117;
Washington. 220
Czechoslovakia. Soviet takeover, 234
29
in,
71
Comecon
building,
267
commitment, 338-9
Dark Thursday
(1929), 209-11,
210
Committee
for
Darrow, Clarence, 55
Darwin, Charles, 44; Spencer
to
s
Communards, 107
debt
to.
45;
and
ism
;
243-5.
Dead Souls
(Gogol), 74
(California), 340.
Death Valley
341
in,
249-51
Company
rise
of the
fall of,
West
170-4
(Mississippi
Company),
299
E.,
and
Dewey, Thomas
237
Drew, Daniel,
50;
14
194
corporations, 257-79; control
stitute,
of,
career,
237-8
167. 170
259-61 future
;
of,
277-9; multinational
357
Index
rule of
Europeans by
65
Fisher, Ir\'ing. 193; formula to determine value of
and World
in,
War
I,
solidation
and struggle
countries, 293-5,
317
49-53
Eastern Mediterranean,
terprise
in,
Ousades
as colonial en-
112-16
as source of
East India
Oimpany:
income
for
Ford, Henr\
II.
265
economists, 32,
110;
condemned by Adam
Adam
Smith
impression
of,
16-18;
IS, 22;
220
oj
agricultural s\stem,
18;
Ph\siocrats,
Econonuc Consequcnccf;
(Keynes), 200, 224
education, role
in
the
Peace,
The
Commune,
105-
democracy, 337-8
workers
alli-
Edward
\' II,
1.S4
impera149;
137; and
Wodd War
Law,
139,
142,
finances
imder
b\'
170-4;
243
emigration. 30-40. 287-99. 316-19
financed
paper money,
182;
Turkish
(1946),
224
as
108;
on Hegel, 83;
308
15;
Benjamin.
180. 182
exponent
of
paper
England
see Britain
mone\.
on
tin:
I'liiiiiple
(if
no
EuroiX'an (lominou Market, 276-7
Frederick
T,.
43
Farm Bureau
Fatchpur
Federation. 18
Sikri.
305; as arcliel\pe ol
Household. 304-6
Federal Reserve System. 190-2; anil Keyncsian
Rc\olulioii,
Money.
George
George,
\
,
218
220
150
Progress
Feuerbach, Ludwig, 89
Filenc.
Ilenr>',
and Poverty. 60
s
Edward
A., 141
editorship
of,
208-9
First
I'irst
Germain: workers
I
[M)litical
Bankollhc
108,
ot,
1.'34;
and
I,
terri-
lulerriatioual:
torial 9,
World War
138-
105;
Mar\
s final
membership
358
Index
Histonj of
lie
Conquest of Peru
(Prescott), 117,
213-14, 221;
and Marshall
aid,
120
Hitler. Adolf,
11, SO;
225
Getting. Ivan, 252
Gicle, .\ndre,
economic
|xilic\,
213-14,
86
Hobson,
J.
A.,
147
Hofstadter, Richard, 48
UGE,
261-2
Glow, James B,
Jr.,
1
211,213,330
263, 268, 269
Hoovervillc. 219
Goeblx>ls, Joseph,
Hughes, Howard, 65
Gogol, Nikolai,
Dead Souk, 74
Corp<iration,
s
Hume,
208-9
return
to,
David,
15,
27
Gt)ldblum, Stanle\, 74
revolt (1956),
238
Howard, 247
213
imperialism
Iniperialisni:
Qiodhart, Arthur
L.,
81
see colonialism
the
Gould, Anna, 69, 70 Gould, Ja\, 50; and Erie Railroad, 49, 51, 53
Great Cra,sh( 1929), 191,210,211 Great Depression, 190-2, 211-13, 330; Keynes's
(Lenin), 147
India, 128; land-ownership b\
Moghuls,
13; equi-
10,
remecK
for,
213-26
CIA
in,
force,
303
.
and equilibrium
of po\ert\
29
city,
driver),
53
Industrial Cit\\
309-18; as characteristic
Grosse
309-11;
ics of,
class structure,
312-14: migration
316-19; subud),
316
Haase, Hugo, 138
Industrial Rcxolution, 12, 13, 27, 288,
309
16;3
of,
abandonment
190;
251
Germans,
Ke\nes
remedy, 221-
),
294
3,
225-6, 300
III, Pojie,
Se\mour
E.,
221
Innocent
114
Harvard Business
SchtKil, 271,
s
272
influence on, 217-
INSEAD
Ireland:
Inteniatioiial
Haughton, Daniel
race, 227,
J.,
on
"kickbacks
in
amis
228
('olumbus, 252
,
Marx
acct'ptancc
of, .S.3-4
money, 163
Italy
grave, 77
1
10
Jackson, Andrew, and struggle against Biddle
s
117
bank,
1.S4
359
Index
Krueznach, 86
Krupskaya, Nedezhda, 139, 145, 152, 153
1
Thomas, 122
13,
1
14,
131
labwr, division of,
23
2ASn
Lahore, 124
landlords;
absentee
Irish,
37;
of,
Malthus
36;
and
of,
power
89
Kennedy, John
F.,
Cuban
334
Law, John,
121, 171;
and
Mississippi
Company, 170-4;
on
power
of
vested
interests
ideas,
compared with
and shortage
of
League
91
Communist League),
Cracow, 134, 139-
encroachment of
11;
Lenin, V.
I.,
41
as true revolutionary
195, 213; at
Cambridge, 197-8;
at
interest in
economics,
198;
War
1,
perialism
olution,
power
in
Petrograd,
government
213-14; his
American
221-223, 226;
at
225-6
Lincoln,
Keynes, John
Neville, 197
Nikita,
155, 244, 342; as decisive
Stalinist
Khmshchev,
man
245
War
I,
136;
policies,
243-5;
and
peaceful
coexistence,
97-108;
First
International
Kienthal, socialists'
born
in,
335-7
Kingston (Jamaica), 292
Kipling, Rudyard, 130
Kirkcaldy, birthplace of
Adam Smith,
ot St
15
John of Jerusalem,
Luxembourg, Rosa,
157. 158
KrakdesC'hevaliers, 116
360
Index
Civil
War
in
France,
106;
Critique of the
McBehan, Harold,
265; and
UGE,
263-5, 266,
and development
of
government
McGovem,
Mencken, H.
L.,
on conscience, 74
Menon.
Krishna. 132
City.
Merchant
306-9
s
on shortage of
22
Mexico:
revolt
purchasing power, 36
against
colonialism.
121.
122;
Manchester, Engels
in,
89
Mao Tse-tung,
234
Marie Antoinette, 18
Marlborough, ninth Duke
of,
British India.
110
32;
68
Mill,
John
.Stuart,
and colonialism,
10
Marx, Heinrich. 80
Mississippi
Company,
rise
and
fall of,
170^
Marx. Jenny
108
Marx, Jenny (daughter), 108 Marx, Karl, 35, 42, 76, 157, 198, 339; "universal
paper
in
Trier.
78-81;
Fisher
formula
for.
192
80; at
Bonn Uni-
Monte
Moore, G. E, 198
Morgan,
J.
.
R, 70, 190,312
Moscow
153:
Comecon
sv
building. 267
multinational
ndrome. 276-7
German-French Year-
329
on Communism, 89-93;
M\ rdal.
ertv.
285
Napoleon
111.
105,296
London
Kapital.
100-103; and
and.
.55-7
as a leader.
Commune.
105-6.
last years,
106-8; on
Neue
Rlieinische Zeitung.
Marx
as editor,
97
New foundland
361
Index
Philippines,
American
colonial experience
in,
130
experiment, 29-
275
Phxsiocrats, 18-19,
Pitt,
22
Adam
Smith, 32
New Orieans,
122
Island): as
Queen, 119
Newport (Rhode
playing cards, as currency, 181 Poland: ruled by other East European aiuntries,
63
New
York:
modem
of
rich
in,
71;
wt)rld
head-
LSI; Lenin
Polaris,
in, 1.34,
139-43
(_)uarters
UGE,
252
Household, 303-6, 309, 322
of,
ing, 267;
Harlem, 94
Political
New York and Erie Railroad Compan>', share, 51 New York Herald. 65-7 New York Tribune, Marx's journalism for, 78, 98
Niarchos, Stavros, 86
283-7
Potsdam Conference
povert)',
equilibrium
cit\- state,
281-91;
299-.302; ratton
economy,
Nonnan, Montagu,
206, 207
287
Command (NORAD),
Poznan,
1.36
Prague, 94,
1.34
s
Pravda, Lenin
contributions
117, 120
to,
141
Old
Homestead
(Ontario),
Galbraith
faniik
Prcscott.
W. H,
home, 298
Oppenheimer, Robert, 240, 241
O'RcilK, Alexander, 122
Orleans, Philippe,
Economy
(Mill),
110
Taxation
Economy and
Owen,
Robert: and
New
Lanark and
New
Har-
Progress
mony,
30; influence
on Marx, 89
Proudhon,
P. J.
Marx
in,
86-91
Commune of
from, 266
LIGE operations
of,
124-7; and
and Bank
of England,
174-6
peaceful coexistence. 242, 245
|X'a.sants:
of,
Malthus's idea
of,
36
I'>4;
not
amenable
Quebec, and paper money,
Qucsna\,
mique.
Fran(,'ois,
to slaughter, 151;
and p(jwer
of landlords, 13;
154-5
Pentagon, and
v\
18,
19
118
race prejudice, .318-19
152, 154
Radio
lritiTn;ilioiial in,
l'hila(lrl|ihiii.
309; First
105
railroads,
362
Index
L. P.,
252
Rand
Oirporatioii,
240
reason,
men
of,
16
Six,
Seaboard
169
20S
United
States,
Second Bank
182;
of,
of the
184
financing
of,
by
paper money,
Lenin's view
and wealth
of nations, 22-3,
in,
30
Seville,
118, 119
96
of,
Shaplen, Robert, 57
85-6, 97
in, 1
16
in,
276; as
on landlords revenue,
prosperous
Six,
city-state,
299-302
36; and
colonialism, 110
Jan (Rembrandt),
167, 169
Howard
Adam,
J.,
265; and
UGE,
Smith,
first
Riviera,
its
68-70
man
Da\ id, 54
John
D.,
4.3,
Quesnay's Tableau.
on division of
48,
54
labor, 23;
Rf^kefeller,
John D,
Jr.,
54
Rockefeller, Nelson
sion,
A., 54;
on dangers
of
compas-
48 on motivating influence on
capital-
Wealth of Nations,
55-7
1,
15,
22-6, 36
Social Darwinism, 44-8,
Social Democrats:
change, 90
138-9, 142;
Zimmerwald conference
(1915), 147
Rosenberg, Alfred,
Somme,
Soviet
SouthSeaBubble,
Union
Runnymede,
13
agriculture,
155,
211;
automobile industry,
I,
139, 151
l^Miin
m cr,
52
243-51
2.51
and
colonial achievement,
Samuelson, Paul
A., 221,
257
Saskatchewan, 284
Say, Jean Baptiste,
36
fit-
44;
classes,
44-5;
Schumpeter, Joseph
Schurz, Carl, 47, 48
304
allows
charity,
American
tour,
46-8;
Index
Truman, Harry
Turgot,
S.,
251
314
Turkey, 292
Cuban
missile
crisis,
248
Tweed,
Boss, 50,
53
Edward, 53
11,330
213, 214,
Suez
crisis
(1956),
237
as Social
48
McBehan, 264-6,
266-8; Washington
office,
268-9; techno-
and
to,
38-40,
and
Social
18,
19
Talbot, 295-8
Taylor, A.
J. P.,
136
William, 325
modern
rich,
Teller,
Edward, 252
Templars, 114
and
Wodd War
money,
I,
149,
151
and workers,
180, 182;
157;
and invention
of paper
modem New
72-3
central
banks,
political
182-7,
288
as
tween
model, 29-30
191;
town,
Lanark
and
Theory of Business Enterprise, The (Veblen), 61 Theory of the Leisure Class, The (Veblen), 60-1
Theirs, Adolphe, 106;
lation, 191,
Marx
on, 108
in,
fur-
110;
of,
Canada
299
and United
States as
first
countries
Tilton, Elizabeth,
57
tween
industr\'
and armed
War,
78-81
Trotsky, Leon, 142, 146
cx)tt()ii
of poverty, 288-91;
364
Index
as
first
Washington, George,
18.3
and
265
Inquiry into the Nature
.36
An
Urban
II,
and
1.34;
1,
capi-
industrial
proletariat,
pre-
Valladolid, 120
Wodd War
138-
149-51,
1.57;
of capitalists
and workers,
talism in health
49,
.53;
62,
68
Vanderbilt, William
68
Wilhelm
II,
Kaiser, 150
60; on distinction
Consumption,
61,
62-4,
70;
Wood,
Charies, 38
Theory
World
the Leisure
60-61
War
I,
Venice, 307
Verdun, 149
Versailles, 305;
"Le Hameau,'
18,
19
power
of landlords, 13,
.35;
pre-1914
political
I,
Wodd War
and
138-9,
Vienna, 94
142-3.
129, 249-51;
1.59,
1.57
I:
Vietnam war,
tion,
American interven-
World War
tems
in,
cx)llapse of political
1.30-1,
relationship
workers reaction,
ing, 140; stupidity
ment, 334-5
Voltaire, 17; as
and
man of reason,
work
for.
16
Vortvarts, Marx's
90-91
World
wages: cuts
in,
\^'ar
II:
as
watershed of change,
business, 231-2,
l.>3;
of, 102,
213
benefit to
American
263
1,
210
Young, Andrew
.33.5
Warsaw,
1.34
Washington,
DC:
Zimmerwald,
Zurich. 1^'nin
socialists'
in.
151-2
365