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The Age

of Uncertainty

Books By John Kenneth CMlhraith

American Capitalism: The Concept

of Countervailing

Power

A

Tlieorv- of Price Control

Economics and the Art

of Controversy

The Great The The

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

Economics and the Public Pur[)ose

Money: Whence

It

Came, Where

It

Went

The Age of Uncertainty

The Age
John Kenneth

of Uncertainty

Galbraith

Houghton
Boston

Mifflin

Company

1977

For Adrian Malone With admiration and gratitude

Copyright in 1977 by John Kenneth Galbraith
All rights reserved.
in

No

part of this

work may be reproduced or transmitted

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,

John Kenneth, 1908-

The age
in 1977.

of uncertainty.

Based on a

BBC

television series scheduled for release

Includes index.
1.
I.

Economics
Title.

—History.

2.

Economic

history.

HB75. G27 330' .09 ISBN 0-395-24900-7

76-26965

Printed in the United States of America

W

10

987654321

A portion of this book has appeared in Horizon

Foreword On The Age
1. 2. 3. 4.

of Uncertainty

7
of Classical Capitalism

The Prophets and Promise The Manners and Morals
The Dissent
of Karl

11

of

High Capitalism
77

43

Marx
109

The Colonial Idea

5.
6. 7. 8. 9.

Lenin and the Great Ungluing

133

The Rise and

Fall of

Money
227 257

161

The Mandarin Revolution The Fatal Competition The Big Corporation

197

10. 11. 12.

Land and People
The Metropolis

280 303

Democracy, Leadership, Commitment

324

A Major Word of Thanks
Notes

343

345

List of Illustrations

349

Index

355

Foreword On The Age

of Uncertainty

One summer day
of the

in 1973, as

the great Watergate uncover-up

was the only

thing otherwise occupying

ni}'

mind,
to

1

received a

call

from Adrian Malone

BBC
call

in

London.
at

He w anted

know

if I

v\'ouId

do a

tele\'ision series

on some unspecified aspect of the history of economic or

social ideas. for

The

came

an exceptionally opportune moment

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

visibly reciprocated b\' their

minuscule classes speak feelingK' at the

Faculty Club of the depth of their devotion to this duty.
of this fraud
I

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
,

I

had been

told,

no chance that you could

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

constant and truly esteemed companions in the enterprise.

We

settled early on the title
it

sounded well:

did not confine

"The Age of Lfncertainty for the series. It thought; and it suggested the basic theme: we
"

would contrast the great
last

certainties in

economic thought

in

the last centur\

with the great uncertaint\ with w hich problems are faced in our time. In the

century capitalists were certain of the success of capitalism, socialists of
ruling classes knew they were now survives. Given the dismaying problems mankind now faces, it would surely be odd if it did.

socialism, imperialists ot colonialism,

and the

meant

to rule. Little of this certainty

complexity of the

As our
far

di.scussions continued, a further

theme emerged.

It

began with the
themselves but

from novel thought that ideas are important not onl\

for

also for explaining or interpreting social behavior.

The

ruling ideas of the time

are those by which people and governments are guided. Thus thc\ help to

shape history

itself.

What men

believe about the

pou er

of the market or the

dangers of the state has a bearing on the laws they enact or do not enact

— on

what thev ask of the government

or entrust to

market

forces. So our treatment

On The Age of Uncertainty
of ideas would

fall

very roughly into two parts:
First,

First,

the

men and
World.

the ideas,

then their consequences.

Adam

Smith, Ricardo and Malthus, then the

impact of their systems
history of

in Britain, Ireland

and the
history.

New

First, the

economic ideas, then the economic

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

the task as a whole. After a
inis

certain time
stitutions.

we would
last of

shift

men
is

to

consequences, from ideas to
I

The

the great figures in economics with which

deal

Keynes. That does not
that those

mean
is

that

he

the last to deserve mention;
late.

it is

only

who

followed were liorn too

Neither they nor their friends

should weep. Television

here to

stay. Ideas

and the resulting
series,

institutions

were the two building blocks from which the
constructed, and both have their claim.

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

surely have been sad. Effective presentation

intelligent planning, the

search for the relevant scenes, the photography and direction
possible
if

— was only

m\

colleagues immersed themselves deeply and professionally in

the ideas. This they did.

And

in

doing

so,

they greatly influenced

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

— that they have a deeply shared
it

re-

sponsiI)ility for the product.

Television, every author

who

encounters

realizes,

is

very different from

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

the need to select

to

concentrate on the main points and to choose
selects will

even between these. And what the author
no one should claim that what he chooses
Karl Marx, Lenin or John

be intensely personal;

to say

about

Adam

Smith, Ricardo,

Maynard Keynes

or even the selection of these in

8

On The Age of Uncertainty
preference to others reflects an immutable and objective wisdom. In

telex ision

one cannot be comprehensive. One can onl\ hope
considered.
his critics

his selection

is

reasonably

— those who,

The test one must propose with
deep perception

all

available diplomacy

and

tact to

in the tradition ot their craft,

unfailing generosity with


is

is

combine warm and whether he has added some-

thing that

is

accurate to knowledge.
carried by the pictures, part b\

In a television program, part of the story

the words.

No one

\\

ould think of publishing a book containing the pictures

without the words, although such a proposition should be advanced cautiously.

These are days when publishers

will publish

almost anything. Similarly

no one should publish the w ords as written
television script
is

for the screen.

A motion picture or
It

a mutilated thing, a form without a face.

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

instant replay at the viewer

discretion.

But there

isn't.

The w riter
his

of a book,
to tra\el

assumes that the reader
is

will,

on occasion, allow

back to see again what the author
In preparing the series,
to
I first

saying or trying to say.

wrote careful essays on each of the subjects

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.

On numerous occasions it goes be\ ond the ideas or e\ ents covered in
in

the television programs. Happily one does not ha\'c to limit a chapter to
p*

can be read

an hour

— not

what

yet.

There are pictures here but the\ are
to stand alone.
I

to illus-

trate the story.

The words w ere w ritten

emerged from m\
But
I

three years with the

BBC

witli

an enhanced respect
is

for tele\ ision.

do not

wish to believe that the printed w ord

obsolete or obsolescent.

1.

The Prophets and Promise of

Classical

Capitahsm

On one
Keynes

of the last pages of his last

— by wide agreement the most
".
. .

and most famous book John Maynard
influential

economist of this centur\

observed that

the ideas of economists and political philosophers.

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

some defunct economist." This was written
'

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;

"... the power of vested interests
for looking at the ideas that interpret

is

vastly

exaggerated compared with the gradual encroachment of ideas. "^

Keynes provides the case
capitalism

— or modern socialism — and which guide our actions
we
should

modern
in

con-

sequence. Presumably
This
is

know by what we

are governed.

so

even though Keynes overstated

his point.

For

in

economic

affairs

decisions are influenced not onl\ by ideas

and by vested economic
is

interest.

They are
of

also subject to the tyranny of circumstance. This, too,

severe. In
is

dail\- political

discussion

we think it greatly important w hether an

indi\idual

the right or ol the

lelt, lil)eral

or conser\'ativc, an exponent of free enterprise

or of socialism.

We do not see that, very often, circumstances close in and force
all

the

same

action on

— or on

all

who

are concerned to survive. If one must

stop air pollution in order to breathe or prevent unemplo\

ment

or inflation in

order to prove competence in economic management, there

isn't

much

differto

ence between what conservatives,
do.

liberals or social

democrats

will

be forced

The

choices are regrettably few.

Also

we had

best not close our eyes too completely to the idea of vested
to protect
is

interest.

People have an enduring tendency
to have, .^nd their

what they have, justifv
rigiit

u hat they want

tendenc\

to

see as

the ideas that

serve such purpose. Ideas

may be

superior to vested interest.

They are

also

verv often the children of vested interest.

11

The Prophets and Promise

of Classical Capitalism

The Source The ideas that
convenient and

interpret

modern economic hfe took form over a long span

of

time, as did the economic institutions that they seek to explain. But there

is

a

generally agreed point at which one can begin. In the last half
life in

of the eighteenth century, economic

Britain,

and

in lesser

measure

elsewhere

in

Western Europe and soon

also in

New England, was transformed

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

mule and power loom. Clothing was
tation

(as

it

remains) a major service to osten-

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

the product cheap

— 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

from the nearby

forest,

quarry or brick

kiln. Until

the Industrial Revolution,
all

and

in

many

countries for a long time thereafter,

economics was agricul-

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;

the state, the landlords, the capitalists and workers share

its

product, usually in an egregiously unequal way.

One might have

a better

impression by thinking of the economic world as a landscape. Before the

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

abundance of this labor and the
reflected this privileged status.

relative scarcity of land favored the landlord.

So did tradition, social position, law and education.

The house

of the landlord

Exercising a further and major claim on both landlord and worker
state.

was the
It's

Power ran from the
in

ruler to the landlord, from the landlord to the rural

worker. As power flowed down, income extracted thereby flowed up.
rule

a

worth having
in

mind. Income almost always flows along the same axis as

power but

the opposite direction.

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

the seventeenth century artistically and architecturally

more

primitive Europeans had begun finding their

way

all

land was

considered to be

owned

in

the

manner

of one great plantation by the Great

Moghul

himself.

The Founder
It

would be

reckless,

maybe

in these

days even a

an ethnic theory of economists.

All races

trifle dangerous, to propose have produced notable economists,

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

wholly pre-empt our

may be called. (Only in the last century did whisky name.) The only truly distinguished competition is
first

from the Jews.

The

greatest of

Scotchmen was the

economist,

Adam

Smith. Econ-

omists do not have a great reputation for agreeing with one another

— but on
it is

one thing there
Smith.

is

wide agreement.

If

economics has a founding father,

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

:

Adam Smith as professor.

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

remains to project a particularh horrid smell. The
time.

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
,

"Yessir, yessir," said the dri\'er.

"The founder of the Labour
to Balliol.

Part\

,

I

alw ays

heard.

Smith went to the good local school and on

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

The and w omen

— do

professors

were a metaphor of

his

economic system.

their best

when

the\ reap both the rewards of

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

w ent back Edinburgh. Here also he began
After Oxford, Smith

on English literature at

with his almost equalK
In 1751,

notable compatriot, the philosopher Da\'id
a professor at the Uni\ersity of Glasgow
.

Hume.

first

of logic,

he was made then of moral philo-

sophy. Scottish professors w ere paid parth in accordance with the
students the\' attracted; Smith thought this a far better s>stem.
thinking that Smith's view had application at Princeton
I

number of remember

when

I

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,

accordingly, that their courses should be

made
put,
it

a requirement for the degree.

Though

their

argument w

as plausib]\

seemed

to

me

better that the\' be exposed to their empt\ classrooms.

Smith was also suspicious of those
with low er self-interest.
subject on

who

laid claim to high principle in conflict

He was greatly attracted

b\ the

American

colonies, a
,

w hich he

ma\- have been instructed by his contemporar\

Benjamin

Franklin.' In one of the luminous pas.sages in Wcaltlt of Nations he observed

15

The Prophets and Promise

of Classical Capitalism

that "the late resolution of the
their

Quakers

in

Pennsylvania to set at liberty
"'^

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)

possessed of a vast land acreage of indifferent quality on the
it

The

post carried with

a good and secure salary and a pension at

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

was a very grand tour indeed.

The Men of Reason
The most notable
of those Smith visited lived outside Geneva, almost exactly

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

pleasant aspect of this

visit

must have involved the matter of

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

than two years (1726-1729) after a brief stay

the Bastille. His chateau,

which stands on a

small, tree-covered

hill

on large grounds, has been described

as appropriate to a

man

of the

Age

of Reason

— perhaps,
It's

in this respect,
;

something like Jefferson's Monticcllo. This may be partly imagination what is
certain
is

that

it is

the house of a

Voltaire

was a man

— perhaps the man — of reason. The word

man

of affluence.

a munificent dwelling.
is

one that
to

scholars often hesitate to define for fear of seeming simple.

Where

things are

simple, one should avoid

making them complicated; there are other ways

display subtlety of mind. For both Smith and Voltaire reason required that one

reach conclusions not by recourse to religion, rule, prejudice or passion;

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

The Agricultural System
All of

France was

for

Smith a major source of information and instruction. In
does, the rich land, the intelligent, patient and good-

1765, he .saw, as

one

still

16

Man of Reason

:

Voltaire receives visitors

who seem

appropriately nervous.

The Prophets and Promise

of Classical Capitalism
4

hiiiiKired
soil.

men
in

wlio work

it

and

tlic

OnI\

France

is tlic

cjuaHty of the farm products

cheese, wine needless to say

— vegetables, — of different regions, even different a
fruit,

vvondertully varied products of the French

villages,

major topic of interest and concern and also of scholarly dispute. At the time of

Smiths odyssey, the

agricultural faith of

France was

at

its

peak.

It

was
in

reflected in the ideas of a fascinating group of economic philosophers

known

the histor\ of economic thought as the Physiocrats.
Tlie Physiocrats held that
all \\ ealtli

originated in agriculture. Only there, as
\

the

gift of

nature, did productix e effort

ield a surplus

over cost. Trade and
sterile.

manufacture yielded no such gain. They were necessary but they were

The

surplus produced in agriculture

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

supply cooperative and

hum

lobb\
in

,

then at the height of

its

power. Each
wealth
is

December our members met
voice of physiocrac\'

— the claim that agriculture
I

con\ention. In the cla\s that followed, the
is

the soiuce of

all

rang through the
silent.

halls.

wrote some of the speeches. And the voice

not yet
tlie

When

i:)oliticians

campaign
still

h)r the

tew tarm votes that remain,

message

ot physiocrac\ ma\'
is

be heard. '"Yours,
feeds

my

friends,

is

the basic

industry; the farmer

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.

For a long lime after Quesna\ scholars dismissed the Tableau as an
arithmetical curiosilx';
seriously than
it

was another l^iench novelty, not
village.

to

be taken more
to

Marie Antoinette's

Adam

Smith had something

do

with the rejection. His authoril\ was great, and he thought economic scholarship

was good only

if

clearly usefid, a terrifying thought for

modern econ-

omists. For Quesnay's calculations he saw

no particular

use.

18

Physician, Physiocrat: This

is

Francois Quesnay, physician to Louis XV, pioneer in

quantitative economic relationships. His Tableau Economique, showing

how income flows

through the economic system.
-^t:lI.\•

cr"'

'-^c^^V'-

-i

-i

........

•*^

tjli^u^ »>.«U. iO.'-*-

iJEJ^tf^S-'^iS^

,-2:

A cottage in Marie Antoinette's Le Hameau at Versailles. In France agriculture was always
both an industry and an art form.

The Prophets and Promise of

Classical Capitalism

,

But

in

time Quesnay was redeemed. In 1973, Wassily Leontief, then of
his interindustry analysis, usually

Har\ard, received the Nobel Prize for
called the input-output system.

The

interindustry analysis shows in one great
sells to

table

what each industry

(really

each industrial category)
it

and buys
to cal-

from every other industry. Once compiled,
the sale of other industries.

becomes possible then

culate the effect of an increase in the output of automobiles (or weapons) on
all
It is

an idea

in distant

but direct descent from

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

the "produit net."

He

failed.

A

firm rule operated against him. People of privilege will always
ol their

risk their

complete destruction rather than surrender any material part
is

advantage. Intellectual myopia, often called stupidity,

no doubt a reason.

But the privileged

feel also that their privileges,

however egregious they may

seem

to others, are a solemn, basic,
is

God-given
top

right.

The sensitivity of the poor
it

to injustice

a trivial thing

compared with
tJie

that of the rich. So

was

in the

Ancien Regime.

When

relorm irom

became

impossible, revolution

from the bottom became inevitable.

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

Pins and the Division of Labor

public interest. In Smith's greatest phrase, he

is

guided to do so as though b\ an
visible, inept

unseen hand. Better the unseen hand than the
of the state.

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.

Pins and the Division of Labor

Along with the pursuit of

self-interest, the

wealth

ot

a nation

was

also

enhanced by the

division of labor.

efficiency of specialization

— Smith attributed the greatest importance. Some
specialization

To

this

— broadly speaking, the superior
by
line of business

of the gains in efficiency

were from

and some

from occupational specialization; some were from the
specialized in particular products or lines of trade.
specialization within the industrial process.

fact that countries

Some gains were from "The greatest improvement in the

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

described the division of labor

in his

most notable case;

in his pursuit of information

he must have encountered the manufacture of and obser\'ed the process with his usual care:

at the top for receiving the head; to

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

a pecuhar business, to whiten the pins

is

another;

it is

even a trade by

itselt to

put

them

into the

paper

^
.
.

.

Ten men

so dividing the labor. Smith calculated, could

day, 4800 apiece.

One man
in

doing

all

the operations

make 48,000 pins a would make maybe one,
line,

ma>be twenty.
centur\ of

It is still

widely belie\'ed that the assembly
,

with

its

attendant increase

labor producti\it\

was

the invention earl\ in the present

Henry Ford.

The
this

larger the market, the longer could be the production runs

whatever

— and the greater the opportunity
\\

— pins or
From

for the division of labor.

came

Smith's case against tariffs and other restraints on trade and for the

greatest possible freedom, national

and international,

in

the exchange of

goods, the

idest possible market.

Freedom

of trade, in

its

turn, enlarged the

freedom of the individual

in the

pursuit of his self-interest. His scope

became not

national but international.

From
result.

the combination of freedom of trade and freedom of enterprise

came

a

yet larger production of

what was most wanted

— the most

fa\

orable social

23

Many believe the assembly line was invented
one that assembled
pins.

by Henry Ford. Diderot's Encyclopaedia shows

25

The Prophets and Promise of

Classical Capitalism

Combinations and Corporations

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.

But the state was not the only threat, as almost

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

Smith made another great point, which
business oratory. In fact,
it

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-

holders of these he said:
of the business of the
to prevail

[They] seldom pretend to understand anything
spirit of faction
it,

company; and when the

happens not
but receive

among them,
them."'"

give themselves no trouble about

contentedly such half-yearly or yearly dividend, as the directors think proper
to

make
.

to

And

of directors he added:
of

.

.

being the manager.s rather

other people's
it

money than

of their own,

it

cannot well be

e.xpected that they should watch o\ or
in a private

with the same anxious vigilance with which the partners
of a rich

copartnery frequently watch over their own. Like the stewards

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.

Negligence and profusion, therefore, must

more

or less, in the
.
. .

management

of

the affairs of such a

compan\

.

.

.

Without an

exclusive privilege

[joint-stock

companies] have commonly mismanaged the trade. With an

exclusive privilege they have both
It
is

mismanaged and confined

'

it.

too bad that a

visit

by

Adam

Smith cannot be arranged to some

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

hear heads of great corporations

— or greater conglomerates or combines —
— told them their enterprises sliould not

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

1790, his last years
in

made
lie

pleasant by his being the
dis-

Commissioner

(Xistoms

Edinburgh. This was a sinecure of uhich he
ol

approved, involving customs duties

which

disappro\ed, but again he

was
26

far too practical to refuse.

He lies in a small burial ground just off the Royal

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

to jobs in the mills. In

Scotland they were also being abruptly

expelled from the countryside in consequence of the rising
principal industrial material

demand

for the

which was wool.
a
\'ast

The most
zontally

spectacular example of this expulsion was in Sutherland. This, the
is

northernmost of Scottish counties,

expanse of

rolling uplands; hori-

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

1814, the operation

in this treeless land, that the

houses could not be rebuilt, the people could not

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

thought to do distinctly more for the landscape than the Highlanders.

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."

A Model TextUe Town
Though
cruel, the

Clearances

brilliantly illustrated a

problem
It is

in

economic

development that
usable land

persists unsolved to the present time.

such a bad relationship between people and land

— that development

— so many people, so
result,

possible to have
little

is

impossible.

Even the best

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.

A Model Textile Town
By 1815
or 1820, there

were

factories, textile mills in particular,

where,

in

principle, the dispossessed tenants could find jobs.

But the male Highlanders

did not take easily to the rhythm of the machine. Their stronger instinct
to migrate,

was

most often

to

Canada. Nova Scotia was

in fact, as in

name, the

new

Scotland.

Women
it

and children

were better and more

pliable industrial

material, though

was thought well

to start the children young.

New Lanark, a half hour or so south and east of Glasgow in a deep valley by
the Clyde

— the water of a lovely

falls

turned the mills

— was the scene of the
To
this

most famous experiment

in using children in industry.

day the name.

New Lanark, is associated in many people's minds, perhaps a bit vaguely, with
enlightened humanitarian experiment.
tories for the workers, erect

and

stern,

and the houses and dormisurvive unchanged.
mills
initiated in the closing years of the

The

The New Lanark experiment was
pist

eighteenth century by David Dale, a noted Scottish capitalist and philanthro-

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.
\

ROYAL BANK OF SCOTLAND

FIVE

POUNDS

"Mji:'

The Prophets and Promise

of Classical Capitalism

Once two thousand workers
has

of

all

ages were employed.

What was
of the

the town

now

a population of eighty.
of the highest moral tone.

The atmosphere was
given an hour and

Each

orphans was
it

a half of rigorous schooling each day.
profit;

However,

was
in

recognized that the mills must also return a
as the

what

is

now commended

work

ethic

had

to

be protected and encouraged. So the schooling was

the evening after a good, honest, thirtcen-hom^ day in the mills.

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.

This was even more
took over.

when

Dale's son-in-law, Robert

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

and other recreation

for the orphans, a nursery school for the

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

manager w ho would get a day's work out

ol

the

little

bastards.

The Indiana Footnote

New

Lanark didn't

wiiolly satisfy the Utopian vision of

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

Harmony, Indiana, a cooperative elysium on the banks

service to others.
Idealists did

come

lo

New Harmony,

although the population was never

more than

a lew hundred. So did an historic collation ol misfits, misanthropes
to service but,

and free-loaders. Once there, they devoted themselves not

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

time, are frequcnlK less endangered by their enemies than by their
is

preference for argument. Their righteous feeling, very often,
thing should be sacrificed to a good
finish

that e\ery-

row over

first

principles or a fight to the

over who,

if

anxone,

is

to

be

in cliarge.

30

Building character at

New Lanark. Owen's Institution for the Formation of Character in

operation after ten and a half hours in the mills.

The

mills today. Spare, silent, beautiful.

The Prophets and Promise

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

and depth of philosophical research
" "^

will,

I

believe, furnish the best

solution of every question connected with the history of

the system of political economy.

'

commerce and with An economist could ask no more than that.

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

system works. Competition caused prices to be set
cost of production.

in

rough accord with the
in turn,

The

cost of production of

an item,

was the

cost of

reproducing, rearing and sustaining the labor that went into

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

never-to-be-rcprcssed population explosion.
In the twenty-five years following

Adam

Smith's death, both ideas were

taken up Ricardo

in
is

London by two close friends, David Ricardo and Thomas Malthus.
Smith's only serious contender for the
title

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

mind and terrible obscurity of clergyman, was English.
clarity of

prose. Malthus, a nonpracticing

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

increase only arithmetically
result: In the likely

2, 3, 4, 5.

.

.

From

this

came

the inevitable

absence of moral

restraint, population

would be subject

^^^

The Reverend Thomas Robert Malthus.

The Ricardian View

only to the recurrent and ghastly checks imposed by famine or by
natural catastrophe.

war

or

Adam

Smith, reflecting on the rewards from the freedom

of trade, the resulting pursuit of self-interest

and the

division of labor,

had a

generally optimistic view of

tlie

prospects for man. Not Malthus.
It

David Ricardo ever thought an

optimist.

Nor was was with Malthus and Ricardo that

economics became the dismal science.

The Ricardian View
Equally with his friend, Da\'id Ricardo foresaw a continuing increase
population, and Malthus
s

in

workers would be such competition
supply on the other that
fate.
all

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

In an "improving society" this fate might be postponed, and, as a moment's

thought

will suggest, in the

England of the nineteenth century

this

was a major
his majestic

qualification.

But Ricardo's qualifications never caught up with

generalizations. In the Ricardian world workers

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

man but it was damaging.
it

might raise hopes and income

in the short

accelerated the population increase by which both were brought

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

— again the labor theory
tliat,

The amount

of labor required estabof value. This, in

turn, nurtured the distinctly pregnant thought
things, the

since labor set the value of
in slightly different

whole product belonged
this

to labor.

Voiced

form

by Marx half a century on,
Ricardo's world

proposal would shake the world.

was

still

strongly rural.

By the
was

early decades of the ninefull

teenth century, the Industrial Revolution was in the

thrust of change.

However,
rents. In

in Ricardo's s\

stem

tlic

main

figure

still

the landlord.

The same
up

pressure of people on land

tliat

reduced wages had the

effect of shoving

consequence, the more numerous the people, the richer were the

landlords.

They
it;

fattened, their people starved.
to return

And

again nothing could be

done about

some

of the rent to the farm workers would onl\

cause their numbers to increase.
In Ricardo's world the state

was receding
Smith that
it

in

importance and power.

It

was

the continuing lesson of

Adam

should. Intervention by governit

ment would

not, as noted, help the poor.

But

would

limit

economic freedom

35

The Prophets and Promise of Classical Capitalism

and the pursuit of Ricardo was not, by

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

for accepting the least bad.

He

did provide the rich with a very satisfactory

formula for suffering the misfortunes of the poor.

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.

Jean Baptiste Say, the great
duced.

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-

What was saved was also spent,

never be a shortage of purchasing power.

On

this point

Malthus demurred. Perhaps the revenue might go unspent;
in

perhaps there might,

consequence, be a shortage of purchasing power;

perhaps, as a further consequence, the

economy would, on occasion,

falter

and

break down. There would be depressions resulting from a shortage of purchasing

power

as part of the natural order of things.
it

This too was a pregnant thought but

did not take. Ricardo's view, as

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

said there could be a shortage of

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

not an exact science.

England and Ireland

One measure of an idea, though economists have not always thought well of it,
is

whether
its

it

works. In the very year that Wealth of Nations was published,

1776, imperial Britain

was losing a territory of greater promise than all the

rest

of

lands combined. For Britain, Smith's idea

I

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

the wealth that

Adam

Smith had promised.

In the wars with Napoleon, Pitt used this wealth as a highly compassionate
substitute for British

manpower.

Britain's continental allies

had an abundance
also

of men. Britain supplied the subsidies that supported and encouraged their
valor. After Waterloo, trade

and industry surged again. Ricardo was

36

England and Ireland

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.

In the preceding decades Ireland's food

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

were good, fed

there was a lurking peril, to be noted in a

many people so moment, which made

well.
this

supply

much more

nearh' arithmetic.

Ricardian landlords were also ampK' present in Ireland

— or more often

also a safer place for a landlord to live.

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

the potato crop, then eliminated
blight, as in India
in

it.

Much

has always been attributed to the
to

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

the American language, corn

— was imported
down
prices.

lor the

purpose not of feeding the hungry but of keeping

Low

prices

37

The Prophets and Promise

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,

Charles Wood, assured the House of Commons at a time
that every elfort

when

the hunger

was severe

would be made

to leave trade in grain "as

much

liberty as possible."

On few

matters in

life is

the gap so great as between a dry, antiseptic

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

was sudden, thunderous death from planes

tliat

could not

even be seen.
Trevelyan's principles were enunciated in the old Treasury offices in Whitehall.

There they were impeccable:

in Ireland

they meant starvation and death.

In the

manner

of

men

in cjuiet offices

Trevelyan was content. The laws of

classical

economics had clearly

justified themselves. In a reflective letter in

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

another tendency here. That

is

for the

consequences of principled
ruthless

they are very unpleasant, to be given divine .sanction. Smith's unseen

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

from Quebec, you come

to

Grosse

a low, half-forested sliver of land with a scattering ol decayed
It is

and

decaying buildings.

now a minor center for research on contagious animal

diseases of the Canadian

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

The Prophets and Promise

of Classical Capitalism

unload their dead and dying.

A

tall

shaft

remembers 5294 people who
beautiful,

died after they arrived on the island. Nor was typhus the only hazard; the

memorial looks down on an

inlet

and beach, now deserted, not very

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.

Here land was abundant and

free. This

being

so,

it

conferred no power and

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.

In the treeless Highlands families

had seen the precious roof timbers

burned when they were

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\-

Charles Carey, an intelligent and exceptionally voluble American economist

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

regretted that Ricardo had not.

On
food

better land or worse,

some of the immigrants were soon producing more
in a lifetime.

year than their parents had seen

And

Irish construction

crews, perhaps the best celebrated of the refugees from the Great Hunger,

were building the
migration.

railroads

tliat

woidd make
tlie

this

food axailalile to the world.
set in

Malthusian pressiuc of poi^ulalion on lood supply

motion the great

And

the migrants tlien solved

world's food problem, at least lor

a century.
STuith,

Ricardo and Malthus might need re\ ision

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

the best land. In the
to be cut

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

down before getting at it.

The Prophets and Promise

of Classical Capitalism

Smith Now
In the present century the world of

Adam

Smith has

Some

of this has been from ideas, as

olutionary onslaught of
in the state the best

Marx and

the

Keynes more gradual

suggested — from

suflFered

heavy blows.
the rev-

attack by those

who

see
for

hope

for ameliorating the injustices

and compensating

the inadequacies of modern capitalism. But more of the

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.

damage has been done
to

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

have also changed Smith's world,
in

for

governments of such a state cannot be inexpensive and small.

The

tight control of births

another change
of Ricardo

— one that
it

and the birthrate
if

the industrial countries

is

strikes at the very heart of Smith's

system and that

and Malthus. And
will

improvement

in

eroding flood of births,
defeating.

be permanent; compassion

income does not bring an is no longer self-

But while these changes are great,

it is

hard to believe that

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 Manners and Morals of High Capitahsm

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

beyond the dreams of landlords

or, for that

matter, of kings. In 1900, a good year for

Andrew

Carnegie, his steel mills
tax.

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

rolling up, rolling
not,
it

up

like

an avalanche! You mu.st distribute

it

faster than

it

you do

will

crush \ou, and \our children, and your children's children.

However, Gates exaggerated. Rockefeller's
uncrushed by their
refineries mostly
this

son's sons

seem

still

to

be largely

assets.

Like the tenants on the land, the

men employed
in

in the steel mills

and

remained in that wholesome poverty that meant a hard life in
the next. This last was not an idle

world but assured an easy one

thought.

Many were so sustained, and nothing better expressed the hope than
left

the exuberant verse

behind by an English charwoman

— the legend has

it,

on her headstone:
Don't mourn for me, friends, don't

weep

for

me

never.

For I'm going

to

do nothing forever

and

ever.

The

rich,

by contrast,
I

set

more

store b\ the pleasures of this world.

There
a

can be no doubt,

think, that the possession of

money causes people
It is

to take

more favorable view
strategy.

of this world in comparison with the next.

also

sound

There

is

that terrible needle through
in paradise.

which the affluent must be
,

threaded before thc\ can emerge
rich or a camel,

AccordingK

if

\ou are either
life

you should, as a pureK' practical calculation, enjoy
I

now.

In this chapter

would

like to look at the

enjoyments of the rich

in

the last

century and the ideas by which these were sanctified. By what moral code did

43

The Manners and Morals

of

High Capitahsm

the rich live?
ideas did

How

did

it

affect the acquisition

and use

of wealth?

By what

men defend

their affluence?

Remembering

that ideas, like old sol-

diers (and certainly also old politicians), never die,
still

we may be

sure that these

influence our thoughts, our lives and our moral tone.

The Natural Selection
Of all classes
so
it

of the Affluent
it

the rich are the most noticed and the least studied. So

was, and

largely remains. In the last century compassionate scholars looked

thoughtfully into the conditions of the poor.

Why were they poor? Was it sloth?

Lack of ambition? Exploitation by cruel employers? Uncontrolled reproduction?
last,

The

natural order of things? All of these explanations, especially 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

delicacy appropriate to the age,

how

did they breed?

The

rich,

by contrast, were exempt from such attention. For the Victorians
to study; wealth,

they were a proper subject of novels but not of social investigation. Poverty

was something
vears ago a

though exceptional, was natural. Seventy

man

or

woman

of conscience might call on families in the slums of

East

London

to find out
to

open the door
Mayfair.

how many people slept in a room. No butler would an investigator who was looking into sleeping habits in

A

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

the rich themselves, not then a bookish

lot,

were often only dimly aware. They
on eco-

knew they were
nomics, a
little

better but not why.

These ideas depended a

on theology and a great deal on biology.
through a

One

should begin their
primates, in

study by a

stroll

museum

of natural history.

The higher

contrast with the slugs

and

snails or the dinosaius

and mammoths that never

made

it

to the present, are the

products of natural selection. Being the

strongest, best

adapted

to their

environment, they survived.
for adaptation

And

this

same
rich.

superior strength, this

same capacity

explained the

Charles Darwin explained the ascent of man. Herbert Spencer, know n

to the

world as the great Social Darwinist, explained the ascent of the
classes.

pri\ ilcged

Spencer and Sumner

The

life

of Herbert Spencer, 1820-1903, an Englishman, philosopher

and
to

pioneer sociologist, coincided almost exactly with that of Victoria.
Spencer, and not to Darwin as often imagined, that
"survival
ol

It is

we owe
it,

the phrase,

the fittest."

He wasspeakingnot of survival in the animal kingdom
more
testing world, as Spencer saw

but

ol

survival in the rather

of economic

44

Spencer and Sumner

and
. .

social life.

He was,

however,

explicit in his

debt to Darwin:
to the

.lamsimply carrying out the views of Mr. Darwin in their applications

human race
.

.

.

.

all
is

[membersofthe race] beingsubject to the"increasing difficulty ofgettingaliving
"these must be the select of their generation."^

.

."there

an average advance under the pressure, since "only those who do advance under it eventually
. . .

survive"; and

Spencer was a highly
States they

prolific writer,

deeply intellectual and exceptionally

gloomy. His numerous books were influential in England but in the United

were very

little less

than divine revelation. Across the United

States in the forty years following 1860

almost before bookstores

—a

this

was before paperbacks and
needs of American

reported 368,755 of his volumes were sold.
his ideas fitted the

Spencer was American gospel because
capitalism,

and especially the new

capitalists, like the

celebrated glove, per-

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

Spencer speak for himself:
partly by subjecting those

weeding out those of lowest development and

never ceasing discipline of experience, nature secures the growth of a race
to act

who remain who shall both

understand the conditions of existence and be able
degree
to

up

to them.

It is

impossible in any
its

suspend

this discipline

by stepping

in

between ignorance and

consequences,

without, to a corresponding degree, suspending the progress. If to be ignorant were as safe as to

be wise, no one would become

wise.''

Charity remained something of a problem for Spencer. Obviously it acted to
arrest the

wholesome weeding-out
was permissible. While
for

process. But to forbid

it

was

to infringe

on

the liberty, however misguided, of those
that charity
it

who

gave. In the end, he concluded

was an ennobling thing

was bad for those who received help, it those who gave. Thus it was justified, at least for
45

:

The Manners and Morals

of

High Capitalism

those

who were
it

so selfish as to seek their

own ennoblement

at the

expense of

the race.

Spencer,

will

be evident, was a stern Messiah. Equally

stern, as well as

very numerous, were his American apostles.
a generation younger than Spencer,

was

a

"^'ale

professor of

The most distinguished of these, was William Graham Sumner. Sumner independent and rugged mind and perhaps the most
in

influential single voice

on economic matters
It

the United States in the second

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

be persuaded. And the riches accruing
hard

to the rich

caused them also

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

his case for tlie ricli
Tln' niillidiiiurcs arc a product of natural selection.
\\

.

.

It is

because

tlie\

are thus selected that
their

caltli

— both their ov\n and that entrusted
live in luxurv,

to

them

— aggregates under

hands

.

.

.

Thc>

iiiav iairK

he regarded as the naturally selected agents of society
but the bargain
is

lor certain

work. They get high

wages and
It

a good one tor society.'

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

Jerusalem, Herbert Spencer

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

or twice he implied that, in the larger process ot social

evolution, the United States

Darw

inian

had lagged, was still in a slightK primitive stage. terms, Americans were still, maybe, with the higher primates.

46

Herbert Spencer: "I

am simply carrying out the views of Mi. Darwin in their apphcations to the human race."

William Graham Sumner

"The millionaires are a product of natural selection."

Carl Schurz: "If Spencer's Social Statics
in the South, the Civil

had been better read

War would not have occurred."

The Manners and Morals

of

High Capitahsm

There were also sour notes at the
place of the

last

supper

— the great
its

final

celebration at

Delmonico's Restaurant, then at the very height of

fame

as the watering
life, politics

New

York

rich.

Leaders

in business,

academic

and

even theology were present. The
Spencer

late Richard Hofstadter, a notable authority

on the Social Darwinists and their time, has written of the evening with much
joy.
in his

address said that Americans worked too hard. This was a
his

chilling thought.
rallied,

Suppose the workingmen heard. However,

audience

and

so strenuous

were the

tributes that Spencer, although notably a

vain man, was perceptibly undone.

One

speaker, Carl Schurz. said that

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

happy gathering seems
is

to

have worried about a small but

obvious point, which

how

the Social Darwinists would bridge the generation

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

accounted, pro tauto, for the splendor of a Rockefeller. "This

is

not an evil

tendency
of God. "
^

in business. It

is

merely the working-out of a law of nature and a law

The question,
Ill,

of course,

was whether

this

same

law of nature and of

God would
later of

also explain the purely inherited splendor ot

John D.,
id.

Jr.,

or yet

John D.

Nelson, Laurance, Winthrop and Da\

Surely, on the

contrary, a Rockefeller inheritance, even

more than

a handout to the poor,

would

cool the struggle to survive, devastate the moral

and physical tone of the

legatees and justify a confiscatory inheritance tax that would save their efforts
for society.

A

nasty problem.
relics

No one
past.

should imagine that Spencer and Sumner are
still

pureK

oi

the
is

They

restrain the

hand

of the well-to-do indi\idual
it

when he

approached by a beggar. Perhaps
doctrines
still

will

damage

the man's morale. Their

lurk in the inner cells of the Rockefeller consciousness.

Or maybe
12,

only in those of their speech writers. Speaking in Dallas on September
1975, to

a convocation of committed conservatives. Vice President Nelson

Rockefeller

warned against the continuing dangers
ill

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

u

iien

added

to

poMtical instiiuts, soinetiiiies causes people to

proniisi'

more

tlian tlie\

ean dehxei.**

48

How the Fit Were Selected

How the Fit Were Selected We turn now to how the rich

were singled out

for their success. It brings us

inevitably to the railroads. Nothing in the last century,
this century, so altered the fortunes of so

and nothing

so far in

American
estate

or

Canadian
could

railroad.

was

in its path, those
it

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

connected with the railroads
those

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

railroads got built.

A

great
this

many honest men bent
latter

their efforts to their

construction

and operation;

should not be forgotten. But the business also

attracted a legion of rascals.

The

were by

far the best

known, and they
it

may

well have been the most successful in enriching themselves. Spencer's

natural selection operated excellently on behalf ot scoundrels. Sometimes
tested

A railroad allowed for an interesting choice between two kinds of larceny —
and robbery of the stockholders. The most spectacurival practitioners

one

set against another.

robbePt' of the customers
lar struggle

occurred in the late eighteen-sixties between

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

lethal streak of rust. Cornelius Vanderbilt,

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

Control was the key to both forms of farceny.

The

struggle for the railroad

came

in 1867

and brought the kind of

collision that in those

days more often

occurred on the tracks of the Erie

itself.

49

The Erie Railroad The
:

cast.

Jim

Fisk.

Boss Tweed.

How the Fit Were Selected
Vanderbilt's advantage

was montn he had
;

buy a contioUing
in

interest in the stock.

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 '"">

1

....

jr.i^

The shares.
sequence, the\ could print n.ore stock than Vanderbilt could ever hope
to

buy
in

and then enough more

to

ensiue that they had the votes

to

keep themselves
it

power. This they proceeded to do. Tlie strength of their position,
the time, rested firmly on the freedom of the press.

was

said at

Vanderbilt turned to the courts. There initialK he had an advantage; he was
in

personal possession of George Gardner Barnard of the
C'oiut.

New

York State

Supreme

Barnard, tliough not a great

jiuist,

was frequentK described
tlie

as the best that

money could

buy. Vanderbilt had bought him. In return,
activities of

Barnard enjoined the publishing

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.

There was a thought

that Vanderbilt's
to

men might

try to

kidnap these refugees back across the Hudson
Accordingly, a defense force

Judge Barnard's jurisdiction.

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.

The Public Reputation

have the stock they had printed made

legal.

Later they bought Judge Barnard
involved; they also

away from

Vanderbilt.

More than money was
of

named a

locomotive for him. And, a more important accjuisition, they bought William

Tweed, Boss Tweed, the head
the Erie. Vanderbilt

Tammany

Hall,

and made him a director of
broke out. Fisk was able
to

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.

The Public Reputation
while the war
curve.
for the Erie

was

at

its

height, the express from Buffalo

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

the principal purpose of

was no serviceable locomotive to pull them. Since the management was the rape of the stockholders,
continuing and articulate complaint from
this

there

also, not surprisingly,

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

along with the fact that the

referred to in the history books as the Erie Gang.
families,

The public reputation ot

their

though somewhat redeemed

in later times,

has never been high.

In contrast, the

men who did in

their

customers fared far better in the public

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

selling dear. All

founded d>nasties of the highest

repute. All eventually

became names

of the greatest respectability.

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

law of nature and a law of God." His law in
operation

/W

John

£k
D., Jr.

David.

Nelson.

Natural Selection and the Church

is

— a nasty permanently the public predation — the mulcting of the people large — though
capitalists
left

an interesting and perhaps predictable one. To mulct investors
taste
in

— other

mouth. Public

at

criticized at the

time, eventualK acquired an aspect of high respectability, great social distinction.

Even within

their lifetimes

many

of

its

outstanding practitioners gained

the reputation of being impeccably God-fearing men.

The involvement

of capitalist predation with

God

in the last

century re-

quires a special word.

Natural Selection and the Church
God, as many have
them.
It is

said, loves the poor,

and that
But
in

is

why He made

so
in

many

of

one reason why poverty was regarded with equanimity
also, to

the last

century and

some

extent,

is still.

the last century there was, as

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

Alfred Doolittle rightly called himself, v\'ould be gone.
This
last

doctrine

was

socially tranquilizing

and otherwise admirable. But
this

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.

Man was created in

God's image: he was not
took exactly

descent from

monkey. Creation was not a thing of the ages;
so.

days because

the Bible said

Natural selection was a salutary remedy for the problem of
it

poverty but the ideas from which
religious belief.

derived were

in drastic conflict

with

As

late as 1925, the trial of

teaching his high school class

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

Clarence Darrow against William Jennings Bryan
circuses of the age.
It

showed how
if

evolution touched.
Still,

the stakes

were high;

natural selection could be reconciled v\ith

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

the Brooklyn Bridge in wliat

now an

unspectacular but decent neigh-

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

the eightecn-sixties and seventies,

55

The Reverend Henry Ward Beecher: "God intended
to be little."

the great to be great

and the little

Thorstein Veblen

w

ritings tar

more

fruitful

and quickening here than

in

Europe."' Beecher was

no

man

to resist a quickening.

His reconciliation involved a distinction between theology and religion.

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

God's morale. Beecher thereupon pro-

ceeded to follow
tative

his

own

advice. Robert Shaplen. the author of the definitive

studv of Beecher's private and litigious

life and later one of the most authoriwar, has show n how faithful he Vietnam the Vietnam and reporters on

was

in this regard.

Besides comforting his rich parishioners on the legitimacy

of their wealth, Beecher comforted their wives

— some of them

at least

— by

taking

them

to bed.

EventualK one, Elizabeth Tilton, was assailed b\ the

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

evidence has had any similar doubt.
I

Earlier on,

mentioned that Beecher had
en.

told

Spencer of his hope
,

tliat

they

would meet again in hea\ prefer not to meet either.
Thorstein Veblen

There must

l)e

man> and

I

am

one, w ho

would

There

is

a certain beguiling merriment in the ideas b\
in

\\

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

penetrating view of the American rich

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

was b\ a conpow er and

orthodox)
this.

in

the last years of the last centur>'

and the
still

first

decades of

Marshall has not been read for >ears: one can

turn to \'eblen witli

delight.

57

The Manners and Morals of High Capitalism

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.

(The etymology here

is

interesting:

envy always gnaws;

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;

Thorstein, after trying Johns Hopkins,

went on
still

to

study at Yale in 1882, the
his

year of Spencer's Coming, with the farm

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

did not regard the rich, those at the

summit of what would now be
possessed of

called the

WASP

establishment, as being

much

intelligence, culture or

charm. Their business success
Being proud, pomp-

depended,

at best,

on a low cunning which was abetted by the very great
rich.

advantage for accumulating wealth of being alread\
ous, intellectually obtuse

and more than a

trifle

insecure, they

were vulner-

able to a particular kind of ridicule.

The

rich

have regularly invited the resentment of the

less rich or the poor.

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

proceeds from envy, and

this

The Veblen weapon was

far

more

refined;

it

was

ridicule presented as the

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

purpose was the same — self-advertisement, exhibitionism.
exhibitionist

form and detail but their

And

for

every

mannerism

or

enjoyment of the

rich,

Veblen came up with some

deplorable barbarian counterpart.
corsets, thus proving they

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

Thorstein Veblen, 1857-1929.

The Manners and Morals

of

High Capitahsm

of the aboriginal

community was the potlatch
stick:
lliat

or orgy. Veblen could do

wonders even with a walking
The
a

walking-stick serves the purpose of an achertiscmcnl
in useful effort,

the bearer's hands are
ot leisure.

emploNed
it

otherwise than

and

it

therefore has

utility as

an evidence

But

is

also

weapon and

it

meets a

felt

need of barbarian man on that ground. The handling of so tangible
is

and primitive a means of offense
moderate share of
ferocity.

very comforting to anyone

who

is

gifted with

even a

Veblen himself lived a bemused, eccentric and very insecure
university presidents are a nervous breed;
as a class.
I

life.

American
ot tliem

have never thought well
all

They

praise independence of thought on
its

occasions of public

ceremony, worry deeply about

consequences

in private.

They are paid

above scale

to suffer for the free expression of the less

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

never believed that these academies should tolerate ideas

inimical to property

and men of property. They wanted professors who
lie

affirmed the conservative truths, treated wealth and enterprise with respect.

This Veblen did not do; in consequence,

was always regarded
academic
life

as an ideal

man
All

for

some other
to see

institution.

During

his

he moved from

Cornell to Chicago, to Stanford, to Missouri, to the

New

School in

New York.

were glad

him

go;

it is

now the pride
to

of

all

that he

was

there.

His moves were facilitated, on occasion, by the fact that, though far from
beautiful,

he was inordinately attractive
\\

women. He considered

it

a prob-

lem, and once,

hen rebuked by President Da\id Starr Jordan, the president

of Stanford, for the offense he

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,

Veblen's prospective colleagues were worried about their wives.
elaborately lighthearted hint
tliat

It

was an

Veblen should promise,

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.

seen the wives.

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

The Monument: Newport

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

the Leisure Class
that
is

is

centrally concerned with the

deep sense of the superiority
be enjoyed,
rich
this superiority
is

conferred on the rich by

their wealth. But, to

must be known; accordingly, a major preoccupation of the
considered displa\ of wealth.

the carefully

Two

things scr\e this

end — Conspicuous
is

Leisure and Conspicuous Consumption. Both phrases, especially the second,

were planted ineradicably

in the

language by Veblen. Conspicuous Leisure

the distinction gained by idleness in a world

where almost everyone has

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.

The Monument Newport
:

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

how the average
he had heard

American li\'es. Nehru answ ered, mention of the affluent society.
"

to m\' special pleasure, that

61

'

The Manners and Morals

oJ

High Capitahsm

When tlie Newport houses were mans worth was, indeed, measured

built

around the turn

of

the century, a

in simple,

straightforward fashion by his

wealth. Artists, poets, politicians and scientists did not

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

or a statement of his net worth

— although

some

tried.

The Newport houses were

not places of habitation, recreation,

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

only $500,000, later raised to a million.

The Newport houses had
structure of the society.

a secondary function; they also affirmed the class

establishments.
fitting to a

A large army of serxants was required to run these They u ere trained in the disciplined obedience and obeisance

subordinate. As Veblen observed:
if

It is

a serious grievance

a gentleman's butler or footman performs his duties about his master's

table or carriage in such

unformed
'

style as to suggest that his habitual occupation

may be

plowing or sheepherding.

Practiced and servile behavior was, in tiun, a constant reminder to those

served of their superiority, of their meml^ership
also,

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

possible, the servants got other jobs.

The masters thought

the>

w ere loved

until
ne.xt

the day one of their favorites farted loudK'

w hile

serving dinner and the
is

day was gone. The very

first

manifestation of the classless societ>-

the dis-

appearance of the servant

class.

The Ceremonials
Houses were not
barian tribes and
I)\

themselves

sufficient. In looking at the
rich,

customs of barsimilar,

tiie

contemporary
tribal chief
"

which he saw as

Veblen

concluded that neither a
put his opulence
in

nor a business tycoon could "sufficiently

evidence

by relying on Conspicuous Consumption alone.

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

audience that he was a

man dropped ten thousand or fifty thousand, he showed the man who could lose such sums."

Mrs. Stuyvesant Fish under

full

canvas.

^^iJ^:\!^

Conspicuous Consumption Of and by dogs.
:

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

indulgence" and that "infirmities induced by over-indulgence
attributes."

are

among some peoples freely recognized as manly The ceremonies at which \\ ealth was displaxed
ball"'"*

such as the potlatch or the
competition for esteem.

— were of particular importance
upon whose good opinion

— "costly entertainments
in the

The person seeking
to impress, those

distinction invited his friends

and

competitors to his feasts, orgies or other entertainments. These were the very

people he most needed

his

own

standing depended. His guests were thus the unwitting instruments of his
effort to establish his superiority
ball or potlatch,

over them. Naturally

when

his guests

had a
their

they showed him

how much they could spend and so got
was thought wise
to introduce

own

back.
certain of attendance,
it

To be

an element of
soon after

novelty, even of eccentricity, into the ceremonials.

One example,
Fish.

the turn of the century,

was the inspiration of Mrs. Stuyvesant

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

Veblen argued, the
in

festivals

here differed only

in

form, not at
Island.

all

in kind,

from those

Borneo or

New Guinea or on Christmas

Publicity

Next only to consuming
the rich
too.

in a suitably

conspicuous way, the greatest pleasure of

was

in

reading about themselves and in imagining that others did so
is still

This occupation

much enjoyed by

the affluent.
rare.

We speak wonderlate

ingly of a shy millionaire;

it's

because they are so

The

Mr. Howard

Hughes

built

one of the greatest reputations of our time almost exclusively out

of not being seen. Half of the pleasure in the dogs" dinner just
in thinking

mentioned was
it.

how amazed

the masses would be in reading about

The

society

columns of the modern newspaper can be understood only as one appreciates
the pleasure they give those

mention

will

arouse

in

who are mentioned, the envy it is hoped that such those who are ignored.
to the
Jr.,

For making sure that the denizens of Newport were publicized

enjoyment of
to

all,

the indispensable resident

was James Gordon Bennett,
press; in fact, as

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

James Gordon Bennett,
said, is

Jr.

:

Journalist and faithful son.

The purpose

of a newspaper, his father

"not to educate but to startle."

The Riviera

proclaimed,

is

"not to educate but to startle."
in its

-^

'

His son agreed, and his Herald

had plent\
for
it

ot

room

columns

lor tlie activities

and depra\itics of Newport,
shall

did not go in heavih' for pulilic affairs.

"We

support no party,

"

liis

father

had
dull,

also proclaimed, "... care nothing for an\ election or an\ can-

didate, from President

down

to a Constable." '*

When the rich showed signs of
Livingstone and another

being

Bennett sent Stanley into Africa

to find

expedition into the Arctic to find the North Pole. But

Newport was

his base.

The Riviera

A

troublesome problem of affluence

in

the last century

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

rather crude and

\\

ere so
first

regarded. Only in the subsequent generations did these families
civilized,

become

then distinguished. There was the companion circumstance that
it is

industrial wealth, until

exceptionalh' well-aged,
last

is

inferior to

landed or

even mercantile affluence. In the
a Whitney or a Rockefeller.

century a

titled

Englishman of modest
ecjual of

means, even an impecunious and venereal Polish count, was often the

Among Americans,

Lowells, Cabots and Coolidges

were much

better. Their

A

further

wealth had aged. and much neglected feature of wealth

is

the problem posed by
of modest

its

more sensuous use and enjoyment. The poor and people
have always believed that the principal delights of the
sensuous consumption

income

rich arc in such

— 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

a\ailable fornication. Given

some

extra

,

sets of clothing,

after losing a few do/.en

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.

an organ uniqueh important

Sex

may

well have ranked ahead of horsemanship as a source of masculine

pleasure and a measure of accomplishment.

But there are physical
ingested,

limits to the

and there are

similar, although

amount of food and drink that can be more variable, limits to the time that

can be spent activcK
of excessive eating

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.

Similarly, sexual promiscuity

.

once considered the greatest of the delights of

67

The Manners and Morals

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.

Mucli of the enjoyment had always consisted
Riviera, in the last centin>

having that of which

others were deprived.

The

,

had many advantages of scenery and

climate and

much less traffic and

pollution than now.

"A sunny shore," the late
visit there,

Adlai Stevenson once wrote to a friend while paying a

"where
of the

shady characters from underdeveloped countries consort with overdeveloped

women." But
Bennett,
Ferrat.

its

much

greater advantage

was

in the

way

it

soKed

all

problems of the affluent just mentioned. Not surprisingly, James Gordon
Jr., the indispensable citizen of Newport, also had a villa at Cap With him he took his gift for publicizing the playtime of the rich. The Paris Herald, which he founded, recorded the movement of the American rich into European society, and an item in the social column of the ver\' first issue brought the news that "Mr. William K. Vanderbilt will return from London on Wednesday." As ever a Vanderbilt. liut the Riviera was pre-eminently the resort of the European aristocracy, and from this came its major service. Daughters of the American rich could here be traded for the esteem that went v\'ith older landed \\ ealth or title, or sometimes merely the title. By this single simple step the new wealth achie\ ed
.

.

.

the respectability of age.

And

the anciently respectable got money, something

they could always use. So inevitable was this bargain that the\ were negotiated by the scores,
social

rank — appeared

and brokers
to

— often impoverisiied women of imagined
The
resulting flow of dollars

make

the deals.
in

would

have been a recognizable item
a

the American balance of pa\inents, had

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

or nearly the greatest, of the English families in this age
is

w ere
was

the Churchills; their palace, Blenheim,
title,

one of the grandest of English
It

Marlborough,

is

the most honored in British history.

natural, therefore, that a
derbilt for

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

pletely excised from the Vanderbilt family tradition. All descendants

and

even, ex paste,

all

antecedents, including the

Commodore, became people
far

of the highest repute.

Less was invested

in

making respectable the

more awkward name of

68

Consuelo Vanderbilt and parent: She brought
distinction to Vanderbilt, solvency to

Marlborough.

Anna Gould and Count Boni de

Castellane

The Goulds paid less and got less. Compare the

The Manners and Morals

of

High Capitahsm

Gould, and, as might be expected,
$5,500,000 was paid to

was accomplished. Onh about marry Anna, daughter of Jay Gould, to the Count

much

less

Boni de Castellane, a figure far inferior in grandeur to a Duke of Marlborough.
Partly in consequence of trying to do
it

on the cheap, the Goulds achieved only

a very modest grandeur.

that of Lord Winston Churchill was the son of a somewhat similar union Randolph Churchill with the American, Jennie Jerome. This, however, seems
to

have been the limiting case where love was an operative

factor.

Gambling
The
Riviera's other service to the rich
its

came from
for

the casino at

Monte

Carlo.

This derived from

incomparable efficiency

shown, the

rich

most sought and needed

— advertisement of the existence and
doubt,

doing what, as Veblen had

extent of their wealth.

The
and
also

sociology of gambling
to

is little

understood. Most people think that

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

make money. And, without
last

men But many

money. In the

century

this

To

build a big house required a

modicum

of taste. For suitably expensive

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

two aphorisms, neither quite deathless.
that has never gained
to

He

asserted before a congressional committee that influence on Wall Street

depended on character, not money
complete acceptance.

— a proposition
if

And he
all

told

an acquaintance who wanted he had
to ask,

know
it.

what a yacht would
afford.

cost to operate that

he couldn't afford
>'ou

But the casino solved

problems. You could lose whatever

could

And

this

required no taste, no entree, no social grace, no friends,

nothing but the money.

i
of the

The Manners and Morals

Modern Rich
problem of finding distinction has greatly

What

of the

modern
in

rich? Tlic

changed. Nowhere

the United States (to \\'hich m\'
its

own

studies have mostly

been confined) docs wealth and

conspicuous display any longer serve by

70

The Manners and Morals of the Modern Rich

itself.

The modern

politician

now

ranks well above the
or

man

of wealth as a
it

person of distinction.

No Washington

New
is

York hostess would consider
millionaire for dinner.

the slightest source of dignity to get a

mere

Any
the

decently high and honest political figure
distinction conferred

infinitely superior.

Such

is

by public

office that

men of great wealth gladly pay large
in-

sums

to

be ambassadors

to small countries. Television performers, journalists,

artists

with minimal standards of personal deportment and h\giene,

tellectuals of conservative or harmlessly radical beliefs far outrank the

modern

millionaire in esteem. In consequence, the

man

of wealth

must either seek

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

There are some regional differences

Boston and

New

England generally, affluent males

affect plain, often repellent attire,

large but rather shabby dwellings.

Women dress similarly, feature a utilitarian
Esteem
is

or athletic appearance according to personality or taste.

then sought
or, in appli-

by association, however innocent, with music,
nothing for a family except as
collecting

art,

philanthropy

cable cases, intellectual effort or harmless public service.
it

Mere wealth does

makes them an

object of attention for those

money for New York is much
is still

charitable or political causes.
the same. But there, by

many women

of means, extrava-

gant attire

thought a useful

way

of attracting attention. Eccentrically

furnished apartments of considerable discomfort are also thought useful. In
the

New

York suburbs large houses, boats and entertainment that avoids
still

excessive reliance on a servant class

confer

some

distinction within the

particular subculture. But, although these residual obeisances survive, they

are far from being sufficient.
the arts or public issues
is

A

reputation for knowledgeable association with

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

can also be a significant source of distinction.
relatively
is still

where wealth

new and hence

has a high novelty
its

quotient, a family's position

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

influenced by the extent and cost of

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

most notable market

for costly

consumer

artifacts

in Dallas.

Texas. With age this too

w

ill

change.

71

'

^i.>

>'
wi.'

m

4 ^
S

^

^
1

6A, THE TIME
Pulsor.

COMPUTOR.

by

digirol

A colculotor or o worch - or rhe touch of
Sroinless steel

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
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mm

The Manners and Morals

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

necessary, are no longer sufficient.

An

adequately publicized association with figures of substantial notoriety in telein the late sixties and early vision, motion pictures, politics or crime

seventies high figures in the Nixon Administration
is

were

especially valuable

now

essential.

Have

the manners and morals of the

moneymakers improved?
to the

— a quesno doubt;
fiestas just

tion, alas, that

everyone

will ask.

As

manners, there

is

Vanderbilt, Jim Fisk, Jay Gould showing up at

one of the Texas

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

must present himself
that
is

as a public benefactor, speak ad-

miringly of his primary concern for serving the people of a free society.

He

makes money but
It is

a passive consequence of the free enterprise system.
is

not his primary concern. Regular bathing

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

of America, though possibly

more

sophisticated in accelerating

the separation of widows, orphans and fools from their money, are not, most
will think, a

quantum

step up to righteousness from Erie.

Vanderbilt and the Erie

Gang bought

judges. In recent times the great U.S.

corporations have bought politicians at

home and abroad

or, in an\- case,

paid

for tliem. In the last century Pavel Ivanovich Chichikov traveled over Russia

buying dead serfs

— Gogol's Dead

Souls.

He bought them from

landlords and

used their ownership as security
in

for

loans from a bank. In the nineteen-sixties

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,

their behavior will reflect that preoccupation

and be much the same, whatever

the time or place.
being, as

Out

of moral sense, caution or conscience
said,

— conscience

Mencken once

ma\ be looking"
74

"the inner voice which warns us that someone
it

most,

may be

expected, will remain within the

I

The Manners and Morals

of the

Modern Rich

law. But a largely stable minority will be impelled to step over the line into forthright rascality.

The

rascalit\ will not

vary

much

as to form from

one period
is

to the next.

Popular opinion and popular
ingenuit>- of his larceny

fiction to

the contrary, this

not a line of work-

that attracts the highly innovative mind.
is

The man who is admired for the almost always rediscovering some earlier form of
known, have
all

fraud.

The

basic forms are

all

been practiced.
not. But, equally,

The manners

of capitalism improve.

The morals ma\-

they do not get worse.

75

Karl Marx at 49.

3.

The Dissent of Karl Marx

Adam

Smith. David Ricardo and their lollowers affirmed as the natural order
in

an economic society

which men owned the things

raw materials
the capital or

as well as land

— by which goods were produced. Men owned

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

The massive dissent originated with
used the ideas
of

Karl Marx. In considerable measure he
in-

Ricardo to assail the economic system which Ricardo
I'x
is

terpreted and described.
ii

e used the a

word massi\ e

to

describe his onslaught,

we agree
Marx

that the Bible
in the

work

of collective authorship, only

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

obscure corner, almost unmarked.

Now

it

lies at

Herbert Spencer.
pleasure in the

It

would be hard

to tliink of

no great distance from that of two men w ho are taking less

company

of each other.

The Universal
The world

Man
Marx
as a revolutionar\
,

celebrates Karl

and

for a centin\

most of

the world's revolutions, serious or otherwise, have invoked his name.
also a social scientist,

He was
late

many would

say the most original and imaginative

economist, one of the most erudite political philosophers ol his age.

The

Joseph Schumpeter, the famous Austrian (and Harvard) economist, iconoclast

and devout conservative, introduced
of
all

his

account of Marx's ideas with the
"first

statement that he was a genius, a prophet and. as an economic theorist,
a very learned man."'
also a brilliant jomnalisl,

Marx was

and

all

.Vmerican Republicans, includl)oth highly

ing Mr. Gerald

Ford and Mr. Ronald Reagan.

prominent as

I

77

The Dissent

of Karl

Marx

write,

may

note

\\

ith suitable

pride that, during an exceptionally

meager time

in his life,

he was sustained by the

New York Tribune and was described by its

editor as

its

most esteemed as well as best-paid correspondent. The Tribune,

with the Herald another parent of the Herald Tribune, was, for generations,
the organ of the highest Republican establishment.

Marx had another involve-

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

spangled banner carried the destin\'

oi their class.

"-

Marx was

also an historian, a

man

for

whom history was less a subject to be
M. Sweezy, the most
it is

studied than a reality to be lived and shared. Paul

distinguished of prescnt-da\ American Marxists, has said that
history that gives Marxist
distinction.

this

sense of

economic thought

its

special claim to intellectual

Other economists have heard of
their ideas a part of history.

history; Marxists

make themit

selves

and

Finally,

Marx was

a major historical event. Often

it

can be imagined that

someone hadn't
stance.

lived,

ing force, to recur to a familiar point,

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.

Marx, as an historian, would expect one
Trier
It

to begin with his historv.

begins in Trier, or Treves, at the head of the Moselle Valley.
in
181<S,

When Marx
is

was born there
loveliest in

the surrounding coimtr\'side must ha\e been the

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

but \i\idK contrasting strips that remain a

common

feature of Rhineland agriculture. J^elegations
countries to Trier as they do to Highgate.

come from

the

From

the West, travelers

Communist come to
of

drink the wine, i'he local tourist oHice reports that onl\ the most occasional
visitor asks

about Marx.

A

largish store in the

town features a variety
in

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

n

1.5, (MM)

it

then had a |5opulation

\

ariousK
.

to stimulate a feeling for histor\

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

Porta Negra, the great black gate from 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

wall, stands to this

day as the most impressive Roman
in 1818,

relic in

what was
so.

northern Gaul.
is

now, of course, part of Germany;

it

was only recently

When Marx was born,

French occupation had just given way

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

High Court and

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

by now strongly secular.
His Jewish antecedents were, nevertheless, to be wonderfully useful to

Marx's enemies

in later times.

Anti-communism could be combined with
it

anti-

Semitism. This was a fine start for anyone with an instinct for rabble-rousing,

and Hitler and the Nazis found
use of
it.

especially valuable. But

many

others

made

However, there would
anti-Semitic. After
all,

also

be a lurking suspicion that Marx was himself
his

he had been baptized. More important, some of

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

not a passive but an active atheist.

One
It

of his most

famous phrases

described religion as the opiate of the people.
patiently in hardship
revolt.

taught them to acquiesce

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

Beecher, though with very different

helped people
lot in this

to

suffer patiently and unprotestingly however meager that might be, and

their assigned
this

economic

world,

was one of the things Beecher thought
hov\' a

good about
Marx.
Karl

it.

It

obviously matters greatly
lot

proposition

is

phrased;

Beecher's formulation was a

more acceptable

to the

devout than that of

Marx never

cultivated popularity but

where

religion v\as concerned,

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

The Young Romantic Marx was a deeply romantic youth. He wrote poetry, much of it unreadable
or so his family thought

— and
.

idealistic essays

(some of which have survived)
tears of noble

on nature, Hfe and the choice of a career.
contribute most to humanity
fall
.

A

career should be where one "can

.

and glowing

men

will [then]

on our ashes. "^ While

still

in his

middle teens, he affirmed
citizen of the town.

his love for

Jenny von Westphalen. Jenny was the daughter of the leading

Baron Ludvvig

von Westphalen. Baron von Westphalen, obviously a rather remarkable man,

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

maintain communications with his family. But after a year
to Berlin.
It

he moved on from Bonn

This was in 1836, and
into

a change in universities.

was a move

was much more than the very mainstream of German,
it

even European, even Western intellectual
Berlin and Hegel

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

young Hegelians, took themselves and

their scholarly mission very seriously

indeed. Recurrently in history intellectuals have been so impressed with their

unique vision of truth that they have seen themselves fated

to

change how

all

men think. This was one of those moments. What is not so easy to describe is the change
Hegel
is

the young intellectuals sought.

not a very accessible figure for the Anglo-Saxon or American mind;
I

certainly

have never found him

so.

Once, years ago,

I

was greatly comforted

by a story told
of the

me by Arthur

Goodhart, the Oxford law professor and onetime

Master of University College.

Home

It concerned a night in 1940 when, as a member Guard, he was deployed with a fellow professor, a distinguished

81

Georg Wilhelm Friedrich Hegel, 1770-1831.

Berlin and Hegel

philosopher at the universitx

.

to
t\\

guard a small pri\ate

airstrip

near Oxford.

They mav well have been the
British militar\ histor\-.

o most improbable soldiers in the annals of
fortJi in

But the> marched back and

a light mist, one a fow ling piece.

with a

rifle

of

Crimean \intage more

or less, the other

w

ith

Occasionally, being professors, the\^ stopped to conxerse.

Toward dawn,
and
said, "I

during one of these pauses, Goodhart's fellow soldier
say, Arthur,

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

what Hegel meant
and

to Ijotli of

them comes
first

Ironi liim:

"The

great
tlie

merit of Hegel's philosoph> was that for the
natural, historical
spiritual aspects of the

time the totality

ot

world were concei\ed and
"='

represented as a process of constant transformation and de\elopment and an

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

condition of constant change.

Once
it.

it

had developed a structure that was
tliat

seemingK' secure, the structure would nurture the antagonistic forces

w ould challenge and then destroy
Thus,
in

A

new structure w ould then emerge, and

the process of conflict and destruction would begin anew.

the real world at the time, the capitalists

tlie

bourgeoisie

— were
ot

challenging and destroying the old and seemingK immutable structure

feudalism, the traditional ruling classes of the old aristocratic system. In

gaining power, the bourgeoisie would nurture the de\ elopment of a classconscious proletariat from the exploited, propert\less and denationalized

workers. In time, the proletariat would
capitalists, including the

move

against the capitalists.
o\

The

bourgeois state,
structure.

would be

erthrown. The workers'

state

would be the next new
all

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

the literate masses

do modern Marxists as they look
Rigoroush applied to
problem.
Hegel's ideas did not

at their dissident .scientists, no\ elists, poets.

modern Communist

society,

Hegel could

l)e

quite a

come

easily to

Marx. Their acceptance, or more

likely

The Dissent

of

Karl Marx

the experience of serious study

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

how good it was for his health. It was a lesson he would
of his
life

soon forget. For

much

he would be

in

poor health, the result of
said,

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

of the transformation which

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

the capitalist world.

On

the other side

is

the next stage; there the triumphant

masses. For years

all

excessively articulate visitors to Berlin have been seeing
iisLiallx

preciseh

this,

although those viewing the Wall from the West have

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;

Marx has had an enormous

success in the rhetoric of the Wall.

I've long believed, alas, that in highly organized industrial societies, capitalist or socialist,

the stronger tendenc\'

is

to

convergence

— that

if

steel or

automobiles are wanted and must be

made on

a large scale, the process will

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

conlrontation; rather, as those

on each side become aware of their higlier commitment
of goods and to
tlie

mass production
it

vast

and

intricate organization that this requires,
It is

will

become

progressively less important.
is

hard, visiting

West and Fast

Berlin,

to believe that this

not already happening.

The preoccupation

witli the

production of goods and the practical

]:)r()ducti\e

arrangements are becoming

more, not

less, alike.

In 1841,

process — one of the prime instruments of

Marx

left Berlin.

Henceforth he would be part of the Hegelian
its

transfonuation.
1

A new

iactor

would

also

now

begin to influence his mo\ ements.

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'

another insufficiently recognized point, there are two sources
protection: one
is

and
in

to

be innocent of the crime. The other
al\\a\s to

to

be righteous

connnitting

it.

Marx was

ha\e

this

second and greater support.

Cologne and Journalism

Marx went
Trier,
it

to

Gologne. Like Trier, Cologne

is

also in the Hhineland, and. like
b'

was

also tlu-n rect'iitK

redeemed irom

ranee and somewhat more

84

Cologne and Journalism

liberal for the experience. In

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

"

.

.

.

scrawls pregnant with world revolutions and enipt\ ot thought, written

in a

slo\cnK

stvle

and flavoured with some atheism and communism (which these gentlemen ha\e never
I

studied) ...

declared that

I

considered the sinuggling of communist and
.
.

socialist ideas into

casual theatre reviews

was

unsuitable, indeed immoral

.*

Marx would

still

be a force
left

for editorial

good

in

dealing w ith higliK moti-

vated writers of the

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

They reacted important collision was o\er dead wood.
went
to press.

who review ed the proots each night before it adverseK to Marx on many things; the most
I

must acknowledge m\ debt on
lucid biograpln
of

numerous matters
Marx, and

to

Da\id McLcllan's recent and \er\

the\ include the stor\ of this conflict.^

From

ancient times, residents of the Rhineland had been accustomed to go

into the forests to collect fallen

wood

for fuel. Like air or

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

clogged the Prussian courts.

Some

eightv to ninetx percent of

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

everv violation of propertv. without distinction or more precise determination,
all priv

is

theft,

would not
person of

ate propertv he theft?

Through mv

priv ate propertv

.

do not

I

deprive another

this

propertv ?

Do

I

not thus

\

iolate his right to propertv ?*

In these

same months

of 1842,
tlie

Marx

also

came

to the

support

oi

old

neighbors, the winegrowers of

.Moselle \'alley.

The\ were suffering

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

and bureaucratic, an element which
civic heart,

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

also criticized the

Czar and urged a more secular approach

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

can be said without exaggeration that for no

woman

since

Mary

did

marriage portend so much.

A few months earlier Jenny had \\ ritten
to

her future

husband urging him, come what may,
Birth of a Socialist

keep clear of

politics.

For Marx, Paris was the beginning of a

then, as so often, the nursery of revolution.

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.

Their influence on Marx during his stay

was

very great.

The Marx family lived at various addresses on rue Vaneau
time at number 38,

for the longest

now

a small hotel-boardinghouse.

A

sign in the entrance

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.

A

review

in

the very
it

first

the censors. Again

sounds rather innocuous — also complicated, labored,

issue of the

Yearbooks led

to

another collision u

ith

with distinct elements of wishful thinking:

Jenny Marx "For no
:

woman since Mary did marriage portend so much."

Friedrich Engels.

Birth of a Socialist

The emancipation
is

ot

Germany
is

is

the emancipation ot man.

The head
itself

of this emancipation

philosoph>

,

its

heart

the proletariat. Philosophy cannot realize

w

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

double-issue of the Yearbooks was

confiscated at the border. There could

now be no German

readers,

there never

were

any French contributors or readers, the publication
issue of the

and since was

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

met again and formed what was
partnerships. Engels

to

be one of the world's most famous

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.

Like Marx, Engels was a German.

And

like

Marx, he was a
(it is

member
hard

of the

upper middle
did they

class. All of

the early revolutionary leaders
intellectuals.

to think of

any exceptions at all) were middle-class

Only in hope and oratory
in the

come from

the masses.

However, the Engels family
early way, a multinational

enterprise — was much wealthier than that of
his life in

textile

manufacturers

Ruhr and,

in

an

Marx. Engels would spend most of
the family firm.

England, in Manchester, where
local

he comliined revolutionary thought with the supervision of the
Relieved of his editorial duties,

branch of

Marx

settled

down
life.

for a period of serious

reading and study, perhaps the most intense of his

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

Germans, were sources of Marx's thought.
89

The Dissent

of

Karl Marx

Marx, during these years, was not only gathering ideas but considering the
role of ideas themselves.

For John Maynard Keynes ideas were the motivating

force in historical change. Marx, while not denying the importance of ideas,

carried the proposition a step further back.

The accepted

ideas of any period

are singularly those that serve the dominant economic interest:
.
.

.

intellectual production

changes

its

character

in

proportion as material production
class.
'-

is

changed. The ruling ideas of each age ha\e ever been the ideas of the ruling
I

have never thought Marx wrong on
economic truth

this.

Nothing more reliably characthan
its

terizes great social truth,

in particular,

tendency

to

be

agreeable to the significant
teach,

economic

interest.

What
iet

economists believe and
is

whether

in

the institutions
that reflect the

— the private business enterprise, the Communist Part\ —
dominant economic power. Not
to notice this takes effort,

the United States or in the So\

Union,

rareK hostile to

although

many

succeed.
also, in

Taking form,
student of

these years were Marx's views on the process b\

\\

hicii

capitalism itself would be changed. Sir Eric Roll, a remarkably eclectic English

Marx

— he

has been a professor, a senior

civil

servant, an ac-

complished international negotiator
of

who

led the negotiations for both the

Marshall Plan and the EEC, a banker, a

member
summary

of the Court of the

Bank

England and a respected writer on the history of economic tliought
years ago gave the most succinct
ot the
in capitalist
to

many
ence
It
.

motivating influ-

change:
in

had
.

be some contradiction

the system which produced conflict,
is

movement and change
(as
]

.

This basic contradiction of capitalism

the increasingly social, cooperative nature of
of production which

production

made

necessary by the

new powers

mankind possesses and
.
.

opposed

to this) the individual
. . .

ownership of the means of production
classes

.

[From

this

comes the
''

inevitable antagonism

between the two

whose

interests are incompatible.

The

notion of contradiction and inevitable conflict
result,

was leading Marx

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.

With all many, and

else,

his

he continued writing. His preoccupation was still with Gernew outlet was Vorwdrfs (Forward), the organ of the German
in Paris.

refugee community

But the censors were

still

on guard. Once again

one must read what he
.
.

said:
is all

.

Germans has
ol

a vocation to social rexokilioii thai

the

more

classic in thai

il

is

incapable

of political resolution. For as the impotence ol the

tence

German)', so the situation

ot

the

German bourgeoisie is German proletariat ... is the
political de\
It is

the political imposocial situation ot
in

Germany. The disproportion between philosophical and
no abnorniaIil\
.

elopmcnt

Germany

is

It is

a neccssarx disproportion.

onK

in socialism thai a philosphical
it

people

can find a corresponding

activity, thus only in the proletariat that

tinds the active

element of its

freedom

. '

^

90

The Communist Manifesto

One

>

earns for policemen w ho could be aroused toda\ b> such prose. But.

reliabK, the Prussian police

harbor such a writer was not a neighborly
fraternal gesture of repression. Guizot, the

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 Communist Manifesto
The Communist Manifesto was composed by Marx with the help of Engels in the next rather peaceful and happy years in Belgium. The Manifesto was an organizing document, a brochure for the League of the Just (soon to become the Communist League) which Marx v\as now actixeh' promoting. It is, incomparabh'. the most successful propaganda tract of all time. There was also, in comparison with Marx's early writing, a quantum advance in the impact of the prose. What before had been word\' and labored was nowsuccinct and arresting a series of hammer blows:

The

history of

all

hitherto existing society
lord

is

the histor\' of class struggles.

Freeman and

slave,

patrician

and plebeian,

and

serf,

guild-master and journe\man, in a word, oppressor and

oppressed, stood in constant opposition to one another, carried on an uninterrupted, nowhidden, now- open
fight,

a fight that each time ended cither in a re\olutionar\' reconstitution of

society at large, or in the

common

ruin of the contending classes.

.

.

.

The executive of the modern
.
. .

State

is

hut a committee for managing the

common affairs of

the whole bourgeoisie

The

bourgeoisie. b\ the rapid

impro\ement of all instruments of production.
all.

b\ the

immenscK
ci\'ili-

facilitated

means of communication, draws

e\en the most barbarian nations, into
it

sation.

The cheap prices of its commodities are the hea\ y artiller\ w ith w hich
.
.

batters

dow n

all

Chinese walls
It

[the bourgeoisie] has created
rural,
. .

enormous

cities,

has greatly increased the urban population as

compared w ith the
idiocy of rural life
.

and has thus rescued
its

a considerable part of the population from the
it

during

rule of .scarce

one hundred years,
all

has created more massi\e
. .
.

and more
[InitialK
1

colossal productive forces than

have

preceding generations together.

the proletarians do not fight their enemies

|

the great lw)urgcnisic or capitalists], but

the enemies of their enemies, the remnants of absolute
industrial bourgeoisie, the petty bourgeoisie.

monarch)

,

the landow ners, the non-

The Communists

disdain to conceal their

\

iew

s

and aims. Thc\ openK declare that
all

their

ends

can be attained only by the forcible overthrow of
classes tremble at a

existing .social conditions. Let the ruling
to lose but their

communistic re\olution. The proletarians have nothing
to

chains.

They ha\ e a w orld

win. Working men of all

countries, unite!

'

^

91

:

The Dissent

of

Karl Marx

The Communist Manifesto
Its

crescendo tones

still

somid when modern
pohticians are

moved
faith.

to

proclaim their
laiiifcsto

of

tljc

Comiminist ^artji.

KARL MARX and FREDERICK ENGEL3.
SPECTRE
i

A

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

German poHce-spiea. Where is the party
mtintstic

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,

London, and sketclied the
EoijUsh, French,

followiiif,'

Italian,

of various nationalities have assembled in the manifesto, to be published Flemish and Danish lauguaiics.

m

I.

DOURGEOIS AND PiiOLETARlANS.
«

(a)

The history of truggles.
Freeman
(a]

all

hitherto existing society {b)
patrician

is

the history of class
SL-rf,

and

slave,
i'-

and plebeian, lord and

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

lalio(u-[Xiwer in ordijr lo live.

{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

Even more durable than the
has been
its

political

impact of The Commii}}ist Manifesto

effect

on

political style. Its assertive,

uncompromising, thrusting
including those
it

mood
tor

has become part of the consciousness of
the

all politicians,
\\

whom

name

of

Marx

is

anathema and those

lio identifx

onl\ with

Hart, Schaftner and men's

suits. In

consequence, when American Democrats

or Republicans, British socialists or Tories,

Frenchmen

of the right or

left

decide to

tell

the people of their purposes, the crescendo tones of the Maui-

Jcsto sound in their ears and presently in those of the public.

The prose

so

contrived

is,

invariably, a terrible thing.
is

The Manijesio
might suppose,
lor
its

not without

its

contradictions.
its

There

is

none, as some
his call

in

Marx's praise of capitalism and

accomplishments,

extinction.

These are different stages
is

in

the historical process. Nor, as

pedants have suggested,
olution

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

inevitable. I^nt there

was a great and

intetisek practical conflict

between

his

92

Revolution

— Of a Sort

immediate program and
is.

by

all

his hope of rc\ ohition. 'Hie program in the Manifesto modern standards, mostly a collation of reformist measures. The
lor:

demands are

Ending of private ownership

oi'

land.

A

progressive income tax.

Abolition of inheritance.

A

national

bank with

a

monopoK

of banking operations.

Public ownership of railroads and communications.

Extension of public ownership
of idle lands.

in industr>

;

cultivation

Better

soil

management.

Work by

all.

Combination of agriculture with industry;
decentralization of population.

Free education.
Abolition of child labor.
'*

Education along with work.

In

one way or another

in

the advanced capitalist countries quite a few of

these things

population and a public monopoly of banking arc the major exceptions

— ending of the private ownership of land, decentralization of — have
off capitalism.
all

been done. And these reforms have helped take the raw edge

Thus they have had the

effect of postponing that "forcible

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,

A

revolution did

France,
fell,

Germany and

governments now tottered and crowned heads

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

view of the nature

of

revolution. For that reason the e\ ents in Paris require a closer look.
E\er\' great event has
its

geographical epicenter

— that of the .\merican

RcN'olution

Halls in

around Carpenters' and Independence Philadelphia; that of the great French Revolution was the Place de la

was the few

city blocks

93

1848 was the year of revolutions: Paris.

Berlin.

Vienna.

,iii

t>«

I
,

.1

;
IT-

"i

'.'

"
::

:

;

^

i,|,

it.

,hiii '

'NsMMdinf
jj' , si.

..k- w „ « -,•]'" ."

" r

~ H

B, a.

i S S jM'f S /j|,-;

^

A

.J«l

Prague.

Revolution

— Of a Sort
The

Bastille; that of the

Revolution of 1848 was the Luxembourg Gardens.
to

setting

had something
to

do with causes and participants, neither of which

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

In particular, the circumstances greatly encouraged a dangerous line of

thought now coming into circulation.

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

influence of Saint-Simon, Charles Fourier, Louis Blanc

now

stands for opposition

the principle that no person should have to join a union to hold
at least

a job.

It is

heard by conser\ati\'es with approval, or

with a pleasant sense

of nostalgia,

and never by a devout
s,

liberal

without a distinct shudder.
is,

A

state

with right-to-work law

e\

en though they are unenforced,

in

trade-union

matters, a very retarded place indeed.
right to

Time changes

everything. In 1848, the

work was a

truly radical thought.

The

uprising in February 1848 united highly disparate groups, something

that did not

encourage Marx. There were the w orkers w ho w anted work and
recoup the losses suffered

income. They were joined b> businessmen, mostly smaller entrepreneurs,

w ho wanted freedom of enterprise and a chance
in

to

the preceding years of depression. And, initially, there

was support from the

peasants w ho w anted better prices.

w anted freedom of expression — freedom from censorship and the attentions
ol

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

assemblage there was, or has been called,
history.
It

congress of workers in
for segregating
in

was

also,

more than incidentalK.
to

a

means

and
the

keeping under control the most troublesome and dangerous participants
re\()lt. It

was one thing

be

liberal, republican, romantic.

It

was another

95

The Dissent

of

Karl Marx

thing to question private property, be for workers' rights, higher pay, a twelvehoin- day.

Let there be a revolution but
revolution
If

let

it

not be irresponsible.

The word

comes

easily to the tongue; revolutions are

always

being threatened.
safer than they

we knew how

hard

it is

to

have one, we might use the

word less, and conservatives might fret less about the danger. They are far, far
know. Three conditions are absolutely
essential.

There must be determined leadSuch

ers,

men who know exactly what
men who have an eye

they want and
lose.

everything to gain and everything to
attract
for the

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

they should think for themselves,

own
all,

beliefs.

There

opportunity and attraction for windbags.
will

These cannot be allowed. Such men
And, above
the lacking in of a rotten door.

be crushed while they debate.
the violence of
it

the other side must be weak. All successful revolutions are

The

violence of revolutions
in

is

men
the

who charge into a vacuum. So it was
Russian Revolution

the French Revolution. So

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

moment of revolutionary truth came in
23, the
at the

the early

summer days of 1848.

On June
assemble

workers decided to leave their revolutionary ghetto and

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.

The romantic tendencies
prostitutes

of revto

olutionaries

now

asserted themselves.

Two handsome

climbed

the top of the barricade, raised their skirts and asked

what Frenchman,

I

To London

however reactionary, would
Presently the barricades

fire

on the naked belly of a woman. Frenchmen

rose to the challenge with a lethal xoUey.

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

The massacre extended

to the

Gardens. In another thoughtfor several

gesture, again according to legend, these

were kept closed

days

until the

blood was washed or cleaned away. Already by 1848, people were

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

concerned, the timing and sequence were wrong:

first,

there had to be the
the year
in the

bourgeois revolution, tlien the socialist triumph. Later
that the revolution, symbolically at least,
flag.

in

Marx noted

had succeeded

matter of the

"The

tricolour republic

now
'^

bears only one colour, the colour of the

defeated, the colour of blood."

Elsewhere

in

Europe even the monarchies sur\i\ed. Concessions were

made

to the

bourgeois power but not to the workers. Before 1848, to speak

generally, the old feudal classes

and the new

capitalist class

were

in conflict.

Thereafter they were united, with the capitalists gaining

in real, if not visible,

power. This union would be secure tor another sixty-five years
great ungluing of

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

in all the dossiers.

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

was expelled from

However, the revived paper was,
ation.

financialK' speaking, a shoestring oper-

And

it

existed only because of the uncertainty of the conservative

and

counterrevolutionarx forces as to whether the\ had the power to suppress

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.

Nevertheless he had once more to mo\'e.
available,

Onh two

countries
to

were

still

England and the United

States.

Marx gave thought

going to the

97

,

The Dissent

of Karl Marx

United States, and
Rt'pnhlic liad he

it

is

inteiestinti to spfcnlatc

on his Inture and that of the
lie

done

so.

But

lie dichi

I

ha\ e the nione\\ So

w ent

to

London.
the ex-

This was his

last

move; he

lixed in

London

tor the rest ol his Hie.

Marx crossed

the Cliannel on August 24. 1849.
lilclinies

Though
.

lie liad

perience ot several

behind him, he was, incredibK

only thirl\-one.

Before him lay three further tasks: the Hrst was to put
organization that would bring

in final

lorm the ideas

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

and lead the

rex'olution; the third

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\

s

a terrible

the bi'hest of the |iolice,
cix'ditors.

hand w ith mone\'. Where before his mo\cments were at now ihey were at the behest ol landlords and

Thus the migrations

— Irom rooms
Dean

in

Leicester Square to a

flat

oH

the King's Road in Chelsea, to 64
the street. Children came,

Street in Soho. to

number 2<S
in

further up

six in all,

and three of them died
.

the squalid,

crowded rooms
uncerlainlx
,

in

Soho. (There was, additionalK

an illegitimate son.) The
s

the sudden
it.

portion. She accepted

mo\es and the sc|ualor were Jenin .Marx one gathers, w ith inlinite good nature.
1(S52, a

mariiage

The
is

Prussian police maintained their interest in Marx. In

police spy
It

infiltiated

Marxs rooms and
.

sent back a lucid account ol the
files

Marx menage.
forth

a \aluable contribution to histor\ Irom the

and holds

hope as

to

what, one da\
.\s

the (4.\ ma\ oiler:
in

lather and lui.shand. \lar\.
el
I

spile el
el
llie

liis

wild and restless eliarailer,
iil

is tlie

iienllesl

and

mildest

nuMi, Milin lives in
le oeeiipies
l\\

one

wiirsl. lliereliire (ine

ihe eheapesl.
llu'

(|liarti'rs ol

London.
is

o rooms,

I'lie

one

lookm'j, onl
is

on

llie

sireel

is

salon,

and the hedroom
lurnitnre.

at the liaek.
\

In the

whole apartnunt there

not

one ek-an and
ol
,i

solid pK'ec' ol

I'A ei

thill',; is
t'\

hroken.
\\

tal tei'ed

and

torn,
ol

w

ilh a

li.ill

meh
is

dust o\ er e\ er\ thm'4 and the urealesl
t'o\

disorder

er\

lieie. In
it

the imdille
lie

the salon there

hn ne old-lashioned tahle
\\

ert'd
s

with
to\
s.

an

oilelotli. lai^s

and on

there

mamrseripls. hooks and new spapers. as
se\ era! eiips with
-

ell ,is tlu'

ihildriai

the

and

tatti'is ol his

wiles sew in^ haskit.

hroken rims,

kni\t's. lorks.
\

lamps, an inkpot, tiimhiers, Dutch ela\ pipes, tohaeeo ash

in a

w old,

e\ ei\ thin',; tops\ -tin\ to
'j.i\

and

all

on the sanu'

talile. .\ st'ller ol

st'conddiaiid 'j,oods w onld he

ashamed

e

awa\ sneh

a

reinarkahle colleetion

ol

odds and ends.
tiiliaico
I

W

lu'ii

\on entei \lar\
\

s

room smokeaiid

nines
hut

make our e\ t'S w ater so iniieh
\
.

that lor a
to the

moment on seem ion. on can make
\

to

he uropinu ahoiit

m

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

with dnst. so that to

sit

dow

n

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

was better then.

The Dissent

of Karl

Marx

In 1856, seven years after coming to London, a small inheritance enabled

the family to escape, as Jenny
frightful

Marx wrote
all

of

them

to a friend,
all

rooms wliich encompassed
vast delight to a

our joy and

"the evil, our pain. "" They
real

moved with

suburban

villa in

Hampstead, a brand-new
years in

estate development.
over. Although the

There were more
is

financial troubles but the worst

was

myth

to the contrary, in later

London Marx had a

very satisfactory income by the standards of the time.
In the thirty-odd years that he lived in England,

Marx had something more

important even than income, although income
those

is

rarely a secondary matter for

who do

expression.

not have one. This was nearly complete security in thought and The governments under which Marx had previously lived had the

greatest difficulty in seeing

why he

should be so favored.
life

On

arriving in London, the practical problems of his
into political work.

notwithstanding,

Marx plunged immediateh'
egy and
official

He

attended meetings; highh

disreputable characters gathered in his sc]ualid cjuarters to consider the strattactics of revolution. In

1850, the Austrian

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

emigrating to the I'nited States. Regicide could not be practiced there.
ever, in the following year,

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

read and wrote.

He

wrote,

in particular, his

(.nduring testament, the three volumes of Da.s Kapital.

No
will

one, least ol

the person w ho attempts

it,

can be satisfied w

ith a short

characterization of the conclusions of this vast work.

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

especially the case

if

Marx's words are taken literalK as he ma\ have meant.
,

The decently
meaning.

subtle

mind

a]\\a\s discerns a deejier,

more

\alid, less

\

ulgar

Still,

the ellorl must be made.

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

be recalled, gave the world

(or gets credit for giving,

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

the labor theor\ of \'alue \\ent the

iron law of wages, the ineluctable tendency of
to the low est level that
still

sustained

life

wages to reduce themselves and perpetuated the race. Gi\ en

an\ thing more, the workers proliferated.
sistence

The
up.

price of the

— food,
Ricardo

means

of sub-

in

the main

was bid
at,

Wages were
to,

bid down.

The

landlords did well; workers

were kept

or returned

the level at which

they just sin-\i\cd.

Where

left off,

Marx began.

It is

David Ricardo's unique position

in

histor\ that

he was an innovating force

in

both capitalist and

socialist thought.

For Marx the value that labor gave

to a

product was divided between the

worker and the owner of the means

of production.

What workers

did not get

was surplus

value. This siu'plus value accrued not as in the case ot Ricardo

primariK' to the landlord but to the bourgeoisie, to the capitalist.

Wages were

now kept down
wages
\

by unemplovnient. bv an industrial reserve armv' alvvavs

waiting and eager for jobs. Should that labor be brought into emplov ment and
rise, tliis

would reduce

profits, precipitate

an economic

crisis, later

ariously to be called a panic, a depression, a recession or, in the days of

Richard Nixon, a growth correction. The requisite unemplovnient and wage
level

would thereby be
the surplus
v

restored.

From

alue accruing to the capitalists w'ould also

come

invest-

ment. This would grow more rapidlv than the surplus; thus capitalism would
suffer a declining rate ol profit. Finallv
.

out of the surplus value would

come

the wherewithal by w hich the large capitalists would gobble up the small

the process of capitalist concentration. In consequence of this concentration,
indiv idual capitalists

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-

created, a force lulK

aware

plined by

its

work,

therc>

would come the
this

final
liic

attack and collapse:
niay;natcs ol capital,
ijjroxvs

.VlonS with the conslantlv (llminishinj; luimlier ol

who usurp and
ol

monopolise

all

acKanlasjcs

ol

process of translormation,

the mass of niiserv. opthe lexoll the x\oikmn

pression. sla\er\. (leiiraclation, evploitalion; hut \xllh ihis too
class, a class

mows

always increasins;
the process
ol

in

mmilxTs. and disciplined, miited, orjianised hy the \ery
production
itself.

mechanism
letter
it,
(

ot

ol capil;dist

The monopoK

of capital
\\

hecomes

a

upon the mode

production, w hieh has sprunii up and lloiuished alonii

ith,

and under

'enlralisation ol the mean.s ol production

and

socialisation of lahour at last reach a point
is

\\

here the\ become incompatihle with their capitalist inteiinment. This inte<4ument
ol capitalist pri\

hmst
-

asmuler, TIk- knell

aIv propiM"t\ sounds. The impropriators are evpropriati'd.

102

The International

So the capitalist world ends. B\ such words the pohce miyht w
aroused, for by

ell

ha\ e been
phrases.

now Marx was endowing
a bang.

his great

events w

ith lireat

His capitalist was given the satisfaction of knowing that his end

came

not

w

ith a

w himper but with

The International
The
first
\

olunie ot Capital

in

the

German

original.

Das Kapital:

Kritik der

Politischen Oeko)iomic von Karl Marx, Erster Band,

Buch

1:

"Der

Pro-

duktions process des Kapitals" (Hamburg: Verlag von Otto Meissner)

— was
many
for

published

in 1867.

The second

t\\

o \olumes. w

ith

a claimed readership

times the real, were not published in Marx's lifetime.

They were prepared

the press from notes and manuscripts b\ the e\ er-faithful Engels and could not

have been completed by anvone

else.
p<)\ ert\

One
until

reason for the delay w as the earK

and

struggle.

Another w as

scholarship; as his friends obser\ed,

Marx was incapable

of writing anything

he had read everything. Yet another was the endless swirl of discussion,
in

debate and polemic
great pleasure

w hich Marx
instinct for

lived.

What he

disliked he described with

and no
dail\
:

understatement. Thus he described a well-

known London
By means of an
filth

artificialK

hidden sewer sy.stem

all tlie la\

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

all its social filth

papered central sewer called the Daily Tclcurapli.--

Thus Adolphe Thiers. President defeat and fall of Napoleon III:
.\

of the French Re]7iiblic. following the

master

in

small state roguers

.

a \irtuoso in perjur\

and treason,

a ci-altsnian in

all

the pt'tty

stratagems, cunning devices,
ling,

and base

perfidies of jxirliamentars
il

parl\-uarlare; nexcr scrupat

when

out of office, to fan a re\olution. and to stiHc

in

blood u hen

the helm

ol state.--'

But the most important reason w as that
himself to believe was imminent.

in

these years

Marx was

laving the

foundations for the revolution which he hoped and occasionalK allowed

The instrument
in

of revolution
jnu-poses

would be an

organization that would link together

workers of

all

the industrial countries

— those proletarians who, as
Now known

common

and action the

Marx

powerfully averred, knew no motherland.
national, the organization

as the First Inter-

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

in the First International.

-ff^
IIITEflN>^

^
WORKING MEMS ASSOCI*\*^^
jlfil [^»^

i^^W *

/^SSOCIATIOM INTtRN'.'.t»OUVBIERS\

^^-J^hi^a^^
IWTtHIIK'

ylWTERimARBEITEW ASSOCI'n*SSOCI'«

DOPCaAl./

MEMBERS ANNUAL SUBS€8ieTiON
_
tPtt

CARD.

-was

(uhnMed. a'Mnrriher on^

first

day ofJartiLa/yJSfJ,

muL /tauL

as hts Ajuii/m'I SiU>scriptu>n'

G.-^-^T-

<!!yc^^^-<ij?

._

J'rrside7it' of Cr.-nfrnZ Ccnoictt.
-

Mmiorary Trea^novr.
^i<crcfitfy
<-''?/-yx

( 't>ri '•'pai^^iiiu.
•"^"'^

for JPrance.
Germcory.

itdfy.

CiATVO^iJ*^

-

SwOxerhouL

Soncrrzry General Secretary.

y^

•si

^^MM.
>

(.-ttt.-g .- ... ,^:

.

wit w- .^^'-';:A Ji^ltJaiKlii^/ lUtthAtl

Leaders of the First International.

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

communication, no new colonies, no emigration, no opening
these things put together.
... to concjuer political
\\ ill

markets, no Iree trade, nor
. . .

do au ay

\\

ith

the miseries ot the industrial masses.
^ireal

power has therefore heeome the

dutv

ol llu'

working

classes.'''

And, once again,

tlie call:

"Proletarians of

all

countries, unite."
aHiliated trade luiions

The

International had indi\ idual

members and
it

and
the

other organizations. In the ne.xt years

grew
in

in

menihershi[) and influence.
in

Notable Congresses were held, especially
follow ing years in Brussels

1867

Lausanne and

in

and Basel. The resolutions

— calling

tor limitations

on working hours, state support

tor education, nationalization of railways
itself to

were not very revolutionary. Reform was again showing
nemesis of
re\'olution.

be the

Revolution had another nemesis. That was nationalism. In 1870, Bismarck,

who had once made
fatherland,

overtures to .Marx to put his pen at the ser\ ice of his
III.

went

to

war with Napoleon

In a prelude to the \astK greater

drama

of August 1914. the proletarians of the two coimtries

showed them-

selves far from being denationalized; instead the\ rallied to the deiense, as

they saw

it,

of their respective homelands.

Then, as

later,

nothing was so easy
ot the

as to persuade the people of

one country, workers included,

wicked and

aggressive intentions of those of another.
l:)y

The

First International, alread\ split

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

and trade unions,

it

rose again

— the Second

Inter-

national. This

Marx

did not li\e to see.

Paris

Again
the

But

if

war was the

nail in

thecoHin of the international,
is

it

alsogaxe .Marx a

moment

of hope. For

where revolution
effect.
It

concerned, \sar

in

modern times has

worked with double

has been e.xtremeK efficient for mobilizing the

proletarians of the world into opposing armies, defeating the
internationally unified working class for which

dream of the

Marx (and

those to follow

hoped. But
tile

it

has been equalK efficient for discrediting, at least temporarily,
it

ruling classes that conducted

— a tendency by no means confined
in

to the

countries suffering defeat. This

now happened
and the
its

France.

On March
of

I,

1871, the .\ssembl\ of the Tliird Republic tnet.

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,

knowledge that the
trf

experience

hunger and

ng
:s Of

revTjlt. It

the

-

-ecure guns »"hich
;
"
'

:

began on Montmartre when the were in the hands <rf the ^^ ttrusLTberewere echoes. ~. Toulouse and other cities. —
Paris

Only
cftv.

in

Paris was power ~

.


May
-1

:

'

-r

Conunune rf 1S71.
f the

It lasted

bat a few weeks. On

Republic entered the

and oo

Mav 2S.

.t

-

-

e revolt

was over. The

^^ftenbIood\'.

When
was

.Ages, including, in

ssion in fbe aftermath

esceetunei>

ciruei. SiMrh oi

the ieadmg

.

-5

as

were spared execution

-.tr

.\ew Caledonia.

Thewc_tiie a^idit^"

:

__

^

._:.

r
---

r.e

with

wfai:.

ers are

w ere repeated with much of now enjoyed. Again Paris
it

events were foflowed ckeeK by Mars, and by ih>w such wias his fame that

^re was P-r^ T"
:
'

_

dooaries.
i:trast
:

was

attributed to

with his doubts of a
It is

-

leadership and aims.
rship of the

-ear

whvhe
<-

Commune

w as

middle-class

r

The aims were incoherent. The r barrels. The requirements for
plete.
-

WTjen
the r

ft

was all

over.

Marx

sent a h

itive

and saddened Address to

dying I
of
s

Thie Civil

War in France. It is one of
harbinger
ex-

ther
Worfana mem
of

Mar
IS
.114 class. Its
:

Pans, wttb

a new

society.

The

its OooHninae. »tB be for ei e --:'--- j - .'martvrs =;

terminators history has already
priests

prayers of their

»il not avail

to redeeto tfaenoi.^^

The Commune
.

ive not been forgotten. But neither
le

great heart of the working class.

.

-_

.

^..

.,:.

:..^:. ..^,

ctbove

some wishful

thinking.

Thus ended the
.

first

re>olution that

accurateh the root word of communism.

was to use. seriously. howe\er inIt was the onlv one Marx was to see.

Deafli and Life
.After

the Paris revolt

Marx

li\.

eri

on for another \\\ elve years.

He continued his

work: he also remained the

higf».

though not the undisputed, judge of %vhat

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

possible that these last
all

twelve words enlisted for Marx more followers than

the hundreds of

thousands
His
last

in

the three volumes of Capital combined.

\ears were not a happ\' time for Marx. His health w as bad and not
I)\

improved

the abuse to

\\

hich he had long subjected himself in matters of

food, sleep, tobacco

and

alcohol.

(He was a prodigious consumer of beer.) On
to

trecjuent occasions he

was

forced, in the fashion ol the time, to retire to a spa

for the cure. Several times

he went

Carlsbad

in

w hat w as then Austria and

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.

A

few months later she was followed by their daughter
of

and most belo\ed

Marx's children. Distraught and \ery

Marx
little

too ceased in an\ real sense to live.

On March

13,

1883, with

Engels

at his bedside,

he died. Not since the Prophet has a man's influence
his death.

been so

diminished by

108

4.

The Colonial Idea

The

ideas ot w liich

we have been
of

speaking so far had appheation

in

the last

cenluiN only to a small corner

the world. The\

were important

for

Western

Europe and

for the L'nited States.

They had

India, China, the

Middle East,

.\frica.

meaning or relevance for Latin America or Eastern Eurojie. This
little

part of the world
industi\
.

was without

capitalists,

without proletarians, without
or landlords;

much
a

0\eru helmingly the people were farmers
still

much was
ol

feudal socict\
.\lar\ spoke.

awaiting the progressive onslaught of capitalism

which
of

Much

of this world was, directh or indirectly, a colonial deof the industrial countries.
real.

pendency of one or another
Spain,

The independence

China was more nominal than
Doctrine) the protection
of

Latin America, although released from

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

rescue b\ what no one hesitated to

call

the

coimtries.
lia\

Colonialism being so general a phenonu-non. one would
great economists to have considered
of its
it

e expected the

at length,
of its

produced a major justification
methods. The\ did nothing of

purposes and a detailed consideration

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

general or for specific

— the\ w ere called enumerated — commodities such
fins

as tobacco, molasses,

w hale

and, for a time, sugar. For the rest he w as

content to

condemn

the East India

Company and
in

all its

woiks. "Such exclusi\e
less

companies, therefore, are nuisances
inconvenient to the countries
in

every respect; al\\a\s more or

w hich the\ are established, and destrncli\ e
fall

to

those which ha\c' the misfortime to
earlier

under their go\ernment.

'

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

British or .\merican inii\ crsity such stalwart

conclusions might be thought a sign of inferior scholarship.

Anyone would expect
East India Coiupan\
.

that Mallhus.

who

taught the future servants

of

the

would diaw.

for his pessimistic e\ idence.

on the

iuige,

109

-

The Colonial Idea

poor and
erence
to

prolific

population
in his

ol

India.
Es.saij

There

is,

however, only passing
of Populalion.

refol

Hindustan

great

on The Principle
ol

Most

his case tor the relentless

tendenc\

population growth conies from his
in

observations

in

Europe and America. Ricardo,

his Piincii)le.s, confines

himself to some mild corrections of

Adam

Smith. There might, he argued, be
in i'.\clusi\

some
with

selfish ad\
its

antage

lor the

mother countr\

e trading pri\ ileges

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.

read, lie too abhorred the
for colonialism
is

political

compan\ s tiading nionopoK otherwise his case and administratix e, not economic. He looked lor;

vvard to the da\ w hen "India will be the

first

countr\' on earth to boast a

s\

stem

of law and judicature' as near perlection as the circumstances of the people

would admit."' John Stuait Mill, who, like supported b\ the compan\ did not get ai'ound
,

his lather

and Malthus, was

to colonial c|ueslions Luitil the

There he contented himself with mging goxernment-assisted emigration w here population was excessive and empty
last

pages of

his

Principles.

lands needed people.

The

recent famine, he noted, had
Ireland.

made

this inter\

ention

imnecessar\

in

the case

ol

The great scholars

of classical capitalism

took colonialism lor granted and concernt-d ihemseK es with the conditions lor

progress
as
it

in

the ad\ anced countries.

The

colonial world

earned attention only

afiected that progress.

Marx and Imperialism
Marx,
in contrast,

did

make

the colonial world an organic part of his system.

He
ol

saw the rush
it

for colonies as a

wa\ of gaining markets
the
still

lor capitalist

production. Thus

postponed for a

little

ine\ itable crisis
s

and collapse

capitalism, l^ul. like earliei" economists,
capitalist state itself.
It

Marx

primarx inteiesl was the

advanced

w as here that the climactic struggle betw ecu
v\as the focus of all Marx's passion.

bourgeoisie and proletariat

was coming. This

The

colonial world, in contrast,

had no bourgeoisie, no
It

proletariat. So tor that

it

the climactic slruggli'

was
in

lar in the distance.

was capitalism

would
to

transform [iioduction

these countries and dt-wlop a disciplined re\
in

olutionary proletaiial. So

the colonial world capitalism
If,

was something

be urged

— a progressixo

force.

as in India, colonialism helped to break

down
In

the leudal structure and nurture capitalism, that
\\

hat w as once called the colonial woild

and

is

was iirogiessive. now the Third \\ orld. no
Nothing
is

one has greater standing as a prophet than
colonialism; capitalism has also a
\

,\tarx.

so rexiled as

t'r\

poor press. There would be astonishto acce|it

ment and some discomlort were Marx
(ieneral .\ssembl\
ol

an

in\ itation to

address the

the

I

nited Nations.

110

The Colonial Mission

The Colonial Mission The nature ol our discussion
been
said. It

ol

the colonial ideas follows From what has just

was

not, lor the ijreat figines in

economics, the subject

of

a

developed doctrine. The ideas sioxerning colonialism were merged into the
experience
itself,

appreciate these ideas,
\\a\ this
It

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
.

forget that the colonial world far exceeded in population
industrialized world that coloni/ed
it.

and extent

tlie

The
did.

ideas that interpreted capitalism, at least in
justified colonialism
this.

its

earh stages, were

reasonabK candid. The ideas that

ha\e ne\er been can-

There

is

nothing remarkable about

On man\

matters

men

sense that
is

the underlying reasons for action are best concealed. C'onscience

better

serxed by a myth.

And

to

persuade others one needs,

first of all.

to [lersuade

one

s self.

.Myth has alwa\s been espeeialK important where

war was conkilled.

cerned.

Men

must ha\ e a

fairly ele\

ated moti\ e for getting themselves
oi-

To

die to protect or

enhance the wealth, power
the same.

pri\ilege of

someone
stated,

else, the

most

common

reason for conflict o\ er the centuries, lacks beaut\
is

The case

of colonialism

The

real moti\ es,

w ere the\

woidd be altogether too uncouth,
in\()l\ed people

selfish or

obscene. So where colonization has

where
of

it

settlement

of

unused lands

— the

has not meant

mcreK

the appropriation and

colonialists ha\ e almost

always

secMi

them-

seKes as the pur\e\ors
social worth.

some transcendental moial,

spiritual, political or

The

realit\

has as regularK included a consideiable component

ol pecuniarx interest, real or anticipated, for

important participants. Those

who have
wrong:
far

questioned the m\ th ha\e been lucky to be considered mereK

more

often the\ ha\e been thought unpatriotic or ti'aitoious.

Colonial rule, the go\ ernment of one people by another and geographicalK
or ethnically distant power, has

had another great constant. Sooner or
is

later

it

alwa\s comes

to

an end.

I

sualK the end
ihitin'

bloocK
is

,

both for those lea\ing and
less the result of (he rising

those remaining behind. .\l\\a\s

departure

power of the All modern
most
likely

colonial peo|:)le than

diminishing

intei'i'st ol

those w ho lea\e.

empire's

Spanish,

l^ritish.

l-'rench,

.\merican, Portuguese,
if

Dutch and

Belgiari

— could ha\e bc^cn kept
it

the people

of

the

metropolitan coimtr\ had thought

worthwhile

to

do

so.

But none was as

111

The Colonial Idea

willing to

expend blood and treasure
suspend disbehef as

to

keep the colonies as

it

had been

to

win

them. Also, an important point, the people of these coimtries were no longer
willing to
to their

purpose

in

being there. They would no

longer accept the

myth

of righteous purpose as opposed to the lower facts of

pride, prestige or the pecuniary interest of those

who had committed themTo
this

selves

and

their

money

to the colonies.

One
much

final

feature of colonialism must be stressed.

day

in

the United

States, the other

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.

developed or not developed, the justice or injustice of the colonial

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
\\

respect too, colonialism remains a lively source of m\'th.
b\ those
\\

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

the Crusades begun

in

the year of

American independence, they
of

would

be very actively under way. Were the\ imder the auspices
it

the

Pentagon,

would

still

be heard

that, in the

Holy Land, there was

light at

the end of the tunnel. However, in

more

skeptical quarters there

would be

emerging doubl as

to the ultimate success of the enterprise.

The

C'rusades are important for the singular and enduring importance of

myth. The m\th was of
sense of connnitmenl.

men

of the highest religious purpose, the most selfless
to

The purpose was
in

redeem Jerusalem Irom the

inlidel

and

to

save the f^astern Christians
to this

(Constantinople Irom the

Turks.

A

crusader

da\

is

a

man

\\

ho

is

ruled by basic moral or spiritual force; in

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

the I'rankish nobility. Later scholars have suggested that the
in

HoK
ol

Father had also

mind

to (ind
in

"a job

lor tin-

I'Auope,"^ Better to ha\t' them

Asia than at

unemploved brigandage home.

112

nn
.'.

roixxpi cxx

cc c)tiatraiuT; urn

flcT

4 mmpamgntximcivi ."ljaie.£ri9<>r'4 grew ornem m
11

^

ipiC©

(incamonon

tc>i^'i

umnr qxic t^'an-

Hiuene'i:

^

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

tiop ScngvctCTt cr mi en fjtmct cnii or nom

fxnw fTcwc
|x)fc)itce'Sc
,
°

ic^ce ^om . crriAuoir yMQ pCe^

wx .iMX?.llc
'

fi

c|xtcnet

[ocx'snoiicir
cp

amlE- cTirhiutlie fi cfVcntrcET 5m To- mamc c pane, cr ifcrcpp

paepiue^.wVij.am.CiJVlu
tr

cjjmr hotioii

(c tic>-->c

"W crtmoir Ca patToicfic^fiiiur
.c

,^ f\
'

crxxfxrvgmxxain

q crncuon leVxn
ffuncc

.-Et arfbfmice'Snt le nortn «

'fccn^ctcrrcSifautx-cpdrr.

nienca a -pmcr^^lcii parftim
"

'

"iCfcc&.i

.amtre^rmlcrcnr

crrrtrrc9.'mtiT6tcJTC0cntn.
.

_

I'.TixurrraC-RjnJxi^frare.

n nfc fin® fi|V mamtce TnaTru:&
•x ct'^iiiir

'OvTxxoTie>cmonfbtt-qucnaii?i
'^nioTmniil.a'»u(rfx*granrl<xtr

l^mc ijui trnir cjiicie;

';

nonxccpixrtcetrnxeqiuxnraru.
'

f\itrr(mxc

fcix nt»if]fhTntr.

j

jmr.ctTiirftptfic cnuoiii cnjtttn
cc

ct mtinSU

rtfpioS^c p ifpcn
icir

/^^ll atrrrc crttrv.[iioaxir^ai V,i pamgnc^ npifd gTrmxcrsG'
cixM)uc6tr nt>ic0. u oucno 6iir
"

civil
'

rSlh-ot? T>ar f 1

ttr.cropf

lenuow im
m^^^lN^

flicn cKirS»ruif

mai
Cti

merest

b:'inxc.]c/i'n>i>clpcnml«

.

>av pciTOn'ft

c-otx^ipce atJiflc-

' qxti

'

par uii

;c

pm€Jm ojfcvte

*
,

orfbicfHvin© li ui mxt-lio forflefxTtre.ffaimcrB^ffdin
cfToiurldne.Gme

aof c>.mt .Cuir oTflui fc aT>tffcro 'cnr cr fcTOxenr cptii(c*Sii uran
c n loft

gIXOU^.<?auturT0^Jmom£rli«ut;
Ctxtftiiiceetx
hi^

fcroicnr qu 'tr& S^ to? 'orw

jSifficfce fmre. Ixcnne'Mr

'T'ta oiici
'

tuioicnr fSn "^ir if|^

^ilicxxre.

rutcirconfe-TCMoeqaTpai^nft
iffi gi-nm . fx fm cfmutxnr imB acucre^gTme.ctTniiC-fcn cm 'laxnrvo a ^ parSccrrp gxxin^.

OfruT©^ fiiincf>CTt»r>.>t Cams tt itiufn . ^offiri "S VxfcCir

Ri

•Ain. fi mrtrcf\:(>imo>c axmprt c.lofRri ftenjcr©. Pmffcr ce 5^ ximflj . (?4>incro ^c^nP

el

aiinr .txx apice
-DiirG CD
'*"

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

The Colonial Idea

Crusade — the

We

do know thai the

lootin'j; ot

Constantinople

in

1204 by the Fourth

eity that the

men

oi

the C^ross were initially sent to save
its

\\

as

one of the most impressive operations of

kind in histor\ and designed to

make

the inhabitants yearn for the Turks. Even the improving
III

moment. Pope Innocent given an example only of iniquity and
aside for the

m\ th was cast "The Latins have of works of darkness."' Certainly it was
was moved
to sa\
:

not an act of C^hristian beneficence.

The

First

Crusade rather quickly achie\ ed

its

most distant

goal.

Jerusalem

I

;

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

lew more men,

all

would be won. The

losses

continued, and,
I'
.

when another

centur) had passed, the inxaders had been

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

Though the was thought

I

in \

ietnam, to retain encla\es. These would

i!

also be

'

good for trade. Of the enclaves. Acre,

in
it

w hal
too

is

now noithern

Isiael,

w

as the

most imporin

tant.
}

On

Ma\'

IS.

1291,

came under
later.

assault.

Things were much as
all

;

Saigon se\ en hundred \ears
sur\
i\

A

blood bath was promised lor

the

ing defenders,

w

ith

the dilference that the validit\ of this i^romise w as

'

not in doubt, .^nd to ha\ e planned the e\ acuation would ha\ e been to concede
deleat. So v\hen

Space, as later, the course

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.

oi that single night.

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-

ingly ruthless in their serxice to the

crusading cause. The\ wore also excep-

tionally connnitted to the acciuisition ol wealth,

and increasingK
(

so with the
ol

passage of time. The Tt-mplars. the I'oar Knights of

'hrisl

and the Temi^le

Solomon, the most austere
ternational l)ankers.
financial world.

ol

the Ordeis,

Their inteicsl

became higliK accomplished inre\onues were admired by all the early

114

Acre today.

.

The Colonial Idea

The

Hospitallers, a slightly

more relaxed con\ocation, had. before becom-

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

fulfilled ever> expectation.

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 Hospitallers wh Grand MastcM- there is
()

1

the belter

others, the late John Strachey

in

the great courtx ard.

The program was not a

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

.

but deeply real admixture of motives, and
of the cause.

among the holiest men

in

the service

The long shadow

of colonialism has
It

been mentioned. No shadow
of Islam that

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

did return would be

\

iew ed with the utmost hostility,
like religious

claimed anything that seemed remoteK
matter too

and especialK sanction. Thus

so
it

il

the>

did not

much whether

those returning were C;hristians or Jews.

The

shadow of the Crusades

is still

over Israel.

The Spanish Achievement
or regaining the Crusaders i)een exclusixcK concerned w ith protecting home. Not to closer work Christian lands from Islam, they could have found many years after the fall of Jerusalem to the .\rabs in 637 and long before the Constantinople, Moslem armies had moved along the

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

sonu'thing of the strength

the colonial idea that in the

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

salens trip; lie

had come

to

persuade

Queen

gt'l Iht attention until .she the building of Spanish did. he had finished with the Moors. InnnediateK that

Isabella lo back his \oyages but could not

.\merica was under wax

116

The Spanish Achievement

The Spanish Empire was
voyages
of

a rcmarkal)le creation. Thai of the

Romans
oi

look

centuries to build. Likewise that of Britain.

W

ilhin a \er\

tew \ears

the

Columbus. Spain was

in possession ot a

major share of the Ameri-

can continent. B\ the middle of the si.xteenth century Peru, a vice-regality of
the Spanish Crown,

was being administered on
it

a parit\ with Spain herself.

Spaniards thought of

almost as lhe\

might think of Holland. Oregon.
little

Washington and

British

Columbia, only a

more remote but out

of the

Spanish orbit, remained anon\ mous, trackless wilderness for another three

hundred years. With Spain, the
of con\erting

colonial idea took definite

was a strongly avowed purpose. As
. . .

Adam

explicit form. To rescue souls obserx Smith ed. " The pious purpose

and

[the inhabitants] to Christianity sanctified the injustice of

the project.

"

Ikit

economic purpose was now also openK proclaimed. No one
to enrich the colonists

doubted that the purpose of the colonies w as
Spanish realm.

and the

The

effort

being Spanish, there was no reason to share these rewards.

Accordingly, the colonial trade was monopolized b\ Spain. Mercantilism, the
notion that trade must be

managed
its

b\ the state,

and the idea aboxe

all

that

Adam

Smith attacked, had
in

classic expression in the Spanish

Empire. Land,

mines and inhabitants
their Spanish masters.

the Americas w ere to be w orked exclusi\i-ly to enrich

There was recurrent
fairly

conflict

between the two

puri^oses. although also a

adept reconciliation. The conquest of the .\mericas by Spain was so
of all time.
its

fortunate as to attract the interest of one of the greatest historians
\\'illiam

Hickling Prescott. His History of the Conciiic.sl oj Mexico and
Ili.stonj oj

companion,

the Conquest oJ Peru.
I

I

think of as two

of

the most

completely engrossing books

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

during a juvenile scuffle w hen he was an undergraduate at Har\ ard.

He w as so

highk regarded

in

Spain for his scholarship that, risking the hazards of

nineteenth-centur\ shipping, the Spanish scholars sent great boxes of valuable

documents. laboriousK-made copies of original manuscripts, from

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

good work of conversion
solemn
.

in

the

New World
"
. .

with the same zeal
this did not

showed
.\

for persecution in the
priestlv coiumission
.

Old

.

tint

exclude
in

useful

toil.

on colonial practices concluded,

Prescott's words, '.

that the Indians

would not labor w
."'^

ithout compulsion,

and

that, unless then labored, thev

could not be brought into conununication
Bv this

with the whites, nor be converted to Christianitv

means Christianilv
it

became the sanction

h)r slav erv

.

It

was

not an association,

luav be

added.

117

The Colonial Idea

tliat

escaped

llie

notice of the inhabitants.

Around

1511, an Indian chief

named Hatuey was taken into custody in Cuba resistance movement and was sentenced to be burned
the end, gain admission to heaven.

for devclopino; a small-scale
at the stake.

As a
in

compassionate gesture he was advised to embrace Christianit\' so he would,

He

inquired

it

white

men would
I I

already

have ani ved.
cruel."""

On

being assured of this probability, he said, "Then
I

will not

be
so

a Christian: for

would not go again

to a place

where

must

find

men

The Bureaucracy
The
CJrusaders

were

sul)ject to

no control by home governments
slightest

in

France,

England or Germany, and only the
in contrast,

by Rome. The Spanish Empire,

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

after room, in the Archivo

General de Indias. Built

in 159(S, this
\\

great square
ot

building was the stock exchange until 1875, a place

here businessmen
it

various sorts met to exchange money, property or goods. After that,

was

used, as

it still is,

to

house the paper produced by the colonial bureaucrac\

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

of the survixing paper

is
1

a delight.
1

There

is

a letter Irom
it

Columbus
describes

himself, dated Februarv 5, 1505.

is

to his

son Diego, and

deals wilh lamily,
in 1526,

and business

affairs.

Anotlu-r letter, irom Cortes
b\

vo\age from Havana

to

Mexico

way

ol

San Juan, Puerto Rico.
.\

He warns
1539 from

of

some very

rebellious tendencies in the

New World.

letter in
is

Francisco Pizarro to the

Queen

oi

Sixain tells

her that he

sending some

emeralds.
that

He
II

asks ihoughtfulK for a recei|il. Some, \'\v suggested, believe

Urban

launched the Crusades because he was attracted by the idea
a\

of

having the Crusaders safely aw

from Eiuope

in

the

Holy Land. Anyone who have

knew
mailer

the Pizarro brothers, the conquerors of Peru, must certainK
in

rejoiced al their being
ol

the .\mericas. h"i-ancisco Pi/.arro's caution in (he

a receipt

may

well ha\e conn- Irom ihe tendency to

measure

118

The Archive General de Indias
governing colonial
affairs.

in Seville.

By 1700, Spain had some 400,000 regulations
The flow
of paper

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

,^^

y

/.;

/'

" »**

-A.
colonialists

Letters

from some notable Columbus to his son.

Francisco Pizarro sending jewels
to the

Queen, requesting a receipt.

The Colonial Idea

other people's character by one's own. Prescott's assessment ot liim

is

blunt:

"Pizarro was eminently perfidious.
brothers.

"

He goes on

to his cruel t\

and that of his
about the

The docimients
Valladolid,
is

in the
.

Archive have also their

o\\

n tale to

tell

colonial bureaucracv

In 1654,

one

file

advises that the Cathedral Church at
restoration. Permission to proceed
later in 1672;

Mechoacan. needs repairs and
cjuestion

sought.

The

w as

still

under discussion twenty years

the repairs were finally completed

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

Along with much

legacy of bureaucracy

responsibility for colonial affairs. This tradition, in turn,

encouraged Smithian
es,

ideas

in

the colonics and caused the colonists to look to thcmseh
lor their

not to their

government,

own

well-being.

Mexico
In the third

decade

of

the last centin\
\\

,

Spanish rule on the American mainland

came

to

an end. Again there

as the declining interest. Spanish gov

ernments

were no longer willing were no longer eager to

to recruit

and pay the required

military force.

Men

fight in the colonies to preser\ e the glor\ of

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

Luulone, the great estates w hich

had been

the economic reward for colonial acKentiue were undislurl)ed.

the owners to live on the

toil of Others

was not

affected.

The right of Indeed, it was partly

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

mother country than among those more imniediateK inxoKed

in

the exploi-

tation ol the natives. Tiie colonists lelt the\ spoke Irom experience, felt the\

knew
120

'their people,

"

how

feckless the\ realK

\\

ere,

and knt-w how necessary

it

The Louisiana Case

w as

of the colonists that

\\ 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

they be go\ enied

\

otes that continued to count.

The

result in
first.

Mexico was anotlier longer and much deeper revolt
This was the true revolt against colonialism.
in

a century

after the

The

first

was a
than

changing of the guard: that

1910 and after in\ol\ed the land and the people.

More being
the
first.
it

involved, this revolution, not surprisingly,

was

far bloodier

So

was

also in
ovv

Cuba. There

too.

w hen Spain

handful

who

ned the land.

In the vears that followed, the

further concentrated, quite a bit of it in
that

power remained with the ownership was New York. It was not until Fidel Castro
left,

Cuba made

its final
is

break with colonialism. In

much

of the rest of Latin

America the break
protect old or

still

incomplete. Dictators, militarv
privilege.

and otherwise,
for injustice

more modern

The United
it

States serves a dual role:
gets

sometimes

it

helps the local dictators: sometimes

blamed

and exploitation w hich might better be attributed

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

completelv the old colonial structures.

I

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.

The Louisiana Case
and the southvsestern states, the United States had experience of Spanish colonialism. But, with Florida as a slight exception, these were distant and sparselv populated lands, and they remained unpopulated and unused. The Spanish colonial legacy was far slighter
In California, Texas, Florida

also

and

less

enduring than

in

more
there

interesting colonial influence

Mexico and Central and South .\mcrica. The much was that of the P^rench. although here
ot
I

was

also a Spanish interlude.

Again economics and religion were joined. The pursuit

precious metals
later tell,"

was the economic
issuing
that only

objective. In 1719, John
in Paris.

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

The Colonial Idea

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

the best in nomenclature.

One

thinks of a city

named,

sa\

,

for Edv\

ard VIII

New Windsor.

Soon after

New Orleans was founded, an
state of morals not

Ursuline nun, Mariethe heathen but

Madeleine Hachard, surveyed the

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!"
'-

Unlike Spanish colonialism, that of France was casual
the shortage of precious metals

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.

did not hunger for great estates in the wilderness. Natives

Spanish rule until Spain dispatched an oflBcer of
O'Reillv, to be the governor. O'Reilly

Irish

origin,

Alexander

was a man

of affabilit}'

and much charm.

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\'

areas to be accjuired not as boot) or

right of discover) but in a straight-

forward

real estate transaction.

The 530

million acres (embracing

some water)

cost $27.3 million, including interest, or about five cents

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

,

as in Latin .Vmerica, land
it

the hacienda; here

This began
in

in 1861

with the Civil

War and

has continued to our

o\\

n time. As
.

Mexico, the Civil
it

War was the true
was the
classical

re\'olt

against the colonial societ\

As

in

Mexico,

was a

ver\ bloody passage.

Here

too there

admixture of moti\es. The plantation

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
.

unprepared. Religion entered

in

another w a\

:

men spoke

of

the sacredness of

122

American colonial architecture Hacienda in Mexico.

after the fall

Plantation house in Mississippi.

k

The Colonial Idea

property rights, and slaves were property. But, as
eties,

in the

other colonial soci-

none doubted that the people were very useful

tor

growing crops and
«

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

Bengal and Madras far to the south and

east,

was

like that of

Spain and France in America, a relatively candid thing.

Indeed, no one seriously suggested that the East India
ligious or philanthropic foundation.
It

came

to trade

Company was a reand make money. It
if

conquered, pacified and ruled but these were necessary

mone\' was to be

made.
(Colonialism

came

late to the

Punjab; the Sikh rulers were finalK subdued

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.

In 1859, the year after the

Honoinable CJompany was interred, a yoimg
to the

Englishman, John Beames, aged twenty-one, came
servant.

Punjab as a

ci\il

He was
to the

posted to Gujrat, a large district north and west ot Lahore.
is

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

Assistant Commissioner, which

man who

ruled the region. Later,

something very near

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-

oughlv inferior caste. Beamess concern was with government

— with the

124

John Beames "Governing men the most difficult."
:

is

grand work, the noblest oJ

all

occupations

.

.

.

though perhaps

British justice under a tree.

^4

British recreation

:

The hunt

breakfast.

The American Experience

people being goxerned.

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

.

.

.

though perhaps the most

difficult.""'"'
its

This functional

separation of go\ ernment from pecuniar\ concerns and

ow n categoricalK
al in

superior status was the prime achievement of late British colonialism.

Largely

iii

consecjuencc,

in

the hundred

\

ears following Beames's arri\

the Punjab. India

and property were
times.

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

famine and improve comernment, no detail w here

munications.

The

coiuts functioned impartialK and to the very great pleasure
cost ot the gov

ot the litigiouslv

-minded Indians. The

so

man\ w ere

so poor,

u as

relativeK light, far lower than under the rulers

predators that the British displaced. In other respects
putting

— building

and

railroads,

down commimal

riots

it

was

far

more

etficient

than the pettv
hich.

corrupt, arbitrary
in later

and anarchic despotisms w hich had gone before and w

\ears, the liritish tolerated, the British rulers
Ikit if

were snobbish,

race-

conscious and often arrogant.

colonialism could an\ where ha\ e been
it

considered a success (the empty lands alwavs apart),

about the eth)rts
tail,

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

was in India. .\nd it the one certain thing
is

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

and Moslems disagreed deepK on the terms
to go.

ot their going, thev

agreed

in

w anting them
to the

The
not. In

British reputation for fair rule survived the

withdrawal Irom India, a

testament

connnitment. The law,

in

the innnediate aftermath, did

northern India the end of British rule brought w hat was, perhaps, the

most intimate crucltv of modern times. Moslems slaughtered Sikhs; Sikhs
slaughtered Moslems. This thev did with clubs and knives, bv hand.
.\ll ol

the pent-up law lessness of a centurv w as suddenlv released. 'Hie rules gov erning colonialism

ment

— and the alwavs messv

were atfirmed. Thev are the
vnd.

reaction to previous achieve-

The American Experience
It

wasnt
ietnam.

the last such ending-

There were

also the

Gongo.

.\lgeria. .Angola.

\

127

The always messy end

India, 1946. (Opposite) Vietnam, 1975.

128

The Colonial Idea

For the current generation of Americans the experience

seemed unprecedented, unique.
ot a

country cHstant from our own.

We We failed and were rejected.

Vietnam has sought to guide the pohtical development
in

The end was

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

extends for forty miles across the forest, across the

Connecticut River, across southern

New
is

Hampshire,

all

the

way

to

Moimt

Monadnock.
works.

In his study,

which

wrote The jungle Books and Captains Courageous, among

unchanged since he used it, Kipling his most famous

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

colonial experience began.

No one

tlien

blushed to speak

ot

white

men and

their responsibility.

However, one should know w hat

to expect.

Take up the White Man's burden

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!
\

Take up the White Nlan's burden
.And reap his old reward:

The Blame ol The halc' ol

those ye better. those \e uuard


willi

The wars
surrection

—a

of peace

began almost immediateK'

the Philippine in-

long, frustrating struggle. But the truly sa\age

one came

sixty

years later in Vietnam.
In
it

Vietnam the words were different, the colonial idea
to rescue

\\

as the same. Earlier

had been
it

people from backwardness, idolatry, indolence, misrule.

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

sought to go\crn through Diem. K\ and Tliieu;
sultans or chiefs but freely chosen rulers.

tlu>\

wore not
a crusade,

called princes,

For some, saving Vietnam from

Communism w as
For others,

was

so called,

and seemed as high-minded

as saving Constantinople
infidel.
it

from the Turks or

redeeming Jerusalem from the

make a little money. For \et others,
and a co\er
for the
first.
If

was an opportunit\ to the admixture of motives w as more subtle;

imited with tree enterprise was freedom.

The second
danger
;

v\as both important

Communism succeeded
in

in

Vietnam, freedom

and therewith free enterprise would be
Singapore, Hawaii. This was the

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

the colonial esprit.

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 United States. People

the higher motives, ignore the lower economic ones. Again there

was the
space
in

mess> end.
.\s at

Acre, the\
s.
it

came with cash
out was

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

more quickly over.

.-Mso

it

all

be w atched on

telexision. I3y this

much

only had the experience of colonialism changed o\er

seven hundred \ears.

Requiem
Does the
badl\
colonial experience belong fore\er to histor\
fingers;
?

The

I

niled States has

burned

the elfort to go\ crn indirectly and shape political

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

So\ iet L'nion, in

the years following

World War

II,

sought to extend

its

influence in Yugoslavia,
it

China, Egypt, Indonesia and Ghana. Conteiuplating the results,
feel pleased.

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 Colonial Idea

businessmen or economic policy

The
to

colonial experience also
rich countries
is

would be a more salutary explanation. makes deeply sensitive the relationships berich lands
I

tween the
the

and the poor. That the
It's

have an obligation
if

help the poor

widely accepted.

one

strongly avow. But even

money and

the will to help are available, the difficulties do not end. If
it

the assisting country remains remote, waits to be asked, does not interfere,
will

be thought indifferent. And, very often, the help
alternative
is

will

be badly used.
to urge

The

to

be interested, forthcoming, watchful, anxious

what seems wise and

right.

Then you
I

risk

being called a neocolonialist, one

who is
To

seeking to re-establish imperial pre-eminence or rule.

the delicacy of this line

can

testify as a

onetime ambassador

in India,

although India was never the most
involved.
is

difficult case.

My

instinct

was

to get

Economic development
it.

is

a great

and fascinating

enterprise.

There

none

like

How

does one ease the escape from the age-old tradition of
I

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

said earlier that to bring the colonial idea
is

and experience

into our disin

cussion
\\

to digress

from the main development of capitalism and socialism
call

hat

we

choose to

the advanced countries.

It is

now time

to return.

132

5.

Lenin and the Great Ungluing

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

their conflict as the great

greater change could there be than this?
\\'e

should be allowed our

\'anity,

our personal rendezvous

\\

ith history.

But
ith

we

should know that,
I.

in social terms, a tar

more decisive cliange came w

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

social systems, centuries in the

associated exercise of power. This had everywhere involved a coalition, one

partner of w hich w as an aristocratic class whose power had originated
possession of land and the allegiance of the people

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

secondary force. In Western Europe and

in

the United States,
class.

h()we\ er

might be denied, there was also a traditional ruling
to old families, graduates of

But here
left

the capitalists asserted a primary claim to influence, e\en though the\
tasks of

the

government
'\'ale

Oxford and Cambridge,

Princeton,

and Har\ ard.
133

Lenin and the Great Ungluing

In

Western Europe and the United States there was a large
in

industrial

proletariat. In Britain,

France and Germany trade unions were commonplace,
in

and

France and Germany they were represented

parliaments by large

working-class parties.
coalition

The

trade unions and their parties annoyed the ruling
disliked by
it.

and were greatly
all

Thc\ did not threaten

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

there was no labor

In 1914, in
still

the industrial countries e.xcept Britain, farmers and peasants

rivaled or exceeded in

number

the industrial workers. They, not the indus-

trial

workers, were also the hard substance of military power. Especially in East-

ern Europe the peasants, led in

who owned

the land, were to
it

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

that the\ should re\olt;

was only necessary

The Eastern European scene
in

especially important for us.
first

u as
It

here, not

Western Europe,
it

that the cracks in the old order

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

The View from Cracow
It

one had

to select a city

irom which
is

to

watch the change,
for this

it

would be Cracow,

in

what

is

now

Poland. There

the greatest precedent possible for the choice.

Cracow was

the city that

was selected

purpose by the

man w ho, more

than any other, led and catalyzed the breakup of the old order
Ilyich Ulyanov,
in 1912.

— Vladimir
to

known, except

to his intimates, as Lenin.

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

w

hite

men

in Asia,

Africa and Latin America.
in

It is

what the

British

had

in

India, the

Americans

the Philippines, the Portuguese in Angola and

Mozamin

bique. There

was

also another kind. Its

primary manifestation was here

Eastern Europe. This was the rule of Europeans by other Europeans.

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\

eryone — Austrians, Germans. Russians — ruled the

And

in

Poland, specifically,

184

Lenin.

The

Castle over Cracow.

Lenin and the Great Ungluing

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

— the rule of the English — and they were famous

in

Ireland and of the

for the

resentments

they nurtured. In the East

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

Europeans because the subject peoples

in this colonialism

could not be per-

suaded that they were
washed, were white.
masters
in

inferior to their rulers. Rulers

Many

of the ruled

and ruled alike, when were the equal of their colonial

education, cultural achiexement, economic well-being.
this

Some

re-

gaided themseKes as superior;
ruled
1)\

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 just observed, we think of the \ears following World War

as the time

when
It

the colonial empires
in

came

to

an end. This

is

another vanity of our day.

was

Eastern Europe after World

War

I

that the great retreat from

imperialism began.
In I9I4,

however, the hold on the subject peoples seemed secure. Indethreat: rulers worried mostly about rival rulers
It

pendence was not a
territorial

who could

claim closer ethnic affiliation with those ruled.

was

this

and the general
to

ambitions of the other rulers that were feared.

Out

of these fears

had come the

alliances. Austria

had turned

Germany

for the industrial

support and the disciplined, reliable military force that
her large, though excessively

Germany could provide. On her side, she offered
diversified, supply of military

financial

and engineering help

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,

the early clays of World
It

War

I,

led to the innumerable references to the
to roll inexorably

Russian steamroller.
it

was meant

over Germany. Instead

rolled back on Russia herself.

The
(the

Territorial Imperative
to hislor\

No subject know n
more

interesting ([uestion

debated as the causes
into the war. A.

Rome how it lasted so long), has been so much of World War I. Perhaps great events can ha\'e simple
,

not even the reasons tor the long decline ol
is

explanations; Llo\d George once suggested that the powers simpK stumbled
J.

P.

Ta\lor has put almost the same case

in fuller

persuasive form. Marxists and
inevitable

many

others saw, and

still

see, tlu'

and more war as the and

outcome of the

capitalist

and imperial

rivalry

between

Britain

France on the one hand and Germany on the other. German capitalism was

136

The Stupidity Problem

challenging that of Britain and France for the markets that were indispensable
for capitalist siir\ival.

Any explanation derixed from Marx

has,

even

for

non-

Marxists, the appeal
that the

ol iorthright truth.

This one leaves us with the problem

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

the traditional territorial attitudes of prein that time,

dominantly rural
capitalist world.

societies.

dangerously belligerent

— more

Their governments, at least
so,

were

Marx

Tiotw ithstanding, than those of the

Ever since the beginning of
the basis ot

and men had been both wealth and military power: the two went together. The
historical experience, land
in proportion to the extent

wealth of a prince had always been

and quality of
of the land

the land he controlled. For varying with the extent and
,

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

In 1914, the belief in land

and men

this territorial
It

imperative

— was part
between

of the deepest instinct of the old ruling houses.

was

a factor as

France and Germany. Had German\ won, something more of France w ould

have been added
Romano\s, and
rulers
in

to

Alsace and Lorraine. Between the Habsburgs and the
it

the Balkans,

was

mortal.

It

was

lor this reason that the

e\ed each other with suspicion; each believed that

his

neighbor w anted

the territory that
In 1914,
all

was decisive

for

wealth and power.

plans — plans
this

the continental powers had immensely detailed mobilization
for getting troops into

uniform and
ol its

to the frontier.

Once started,
territory,
it

mobilization had a further

momentum

own; the

act of mobilization

signified

an intention to

fight.

And, given the importance of
to mobilize, strike

naturally signaled a preference (and thus an intention) tor fighting on
else's land. Better, if you

were the other party,

someone first and 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.

The Stupidity Problem
There was a
final

consideration, one that

it

is

always thought a

trifle

preall

tentious to stress. Rulers in

Germany and Eastern Europe,
and
tradition.

generals in
II

countries, held their jobs by right of family
qualifies
likely to

inheritance
is its

one for office, intelligence cannot be a requirement. Nor
be a
disqualification.

absence

On

the contrarv

,

intelligence

is

a threat to those

137

Lenin and the Great Ungluing

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

was thought on the

social

consequences

ot

war,

tliis

was what

was believed.

The Rogue Reaction
In August 1914. the territorial imperati\
e,

the fears

it

engendered, the threat

inherent in mobilization and the stupidity of rulers and generals combined to

put the war process out of control. Tlic alliances

tlicn

made

the conflict

general. Historians have always spoken of a chain reaction.
predictable, has a

A chain reaction is

known

result.

rogue reaction
foretell.

— one

One needs

a better metaphor. This was a

witli a

course no one could foresee, a result no one could

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

suffered on the battlefield,
in

who

got killed. So for a

generation or more before 1914,

trade-union meetings, political meetings

and the conferences

of

the Second International, polic\ in case of
it

been exhaustively discussed. Workers,
tional frontiers for their

war had was agreed, must unite across nafor war.

common

protection. So united, they could use their

parliamentary power to oppose credits

— money —

And strikes w ould

make
If

mobilization impossible.

necessary, the final

This was thought to be a truly

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

sense of party responsibility,

lie

spoke for the majority position

in

the

138

Lenin in Poland

Reichstag. "In the hour of danger

we

will not desert

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

mobilization of strikers into the army, a crackdown on public protest.

To

the

undoubted regret of some of its authors, the plan had
no need.
In Britain, there

to

be sheK ed. There was

was no

conscription, no plans as on the Continent for mass

mobilization. Being on an island, the British

had been generalK' exempt from

the anxiet\ about their frontiers, although in the xears before 1914, with the
rise of

German

naval power, alarm had increased.
(or

A

\erse at the time had

even celebrated

undercelebrated) the concern:
as plaxing golf that da\

I \\

When

the

Germans landed.
were stranded.
and shame
ofF

All our soldiers ran a\va\ All our ships

Such were

my

surprise

They almost put me

my

game.^

With war the
and
opposition

British

workers flocked as volunteers to the recruiting

offices,

their leaders affirmed support of the

government. The onl\
pacifists, the

political
ot

was from a handful

of socialists

and

most prominent
think that
it

whom was Ramsay MacDonald. It was a stalwart act; manv
him of all further such tendency for life. In St. Petersburg, now suddenh become Petrograd, the
the
in

cured

Social

Democrats

in

Duma did abstain from voting and, instead, w alked out.
and evicted from the chamber.
reallv'

number, and very soon the militants among them
counted.
It

— the Bolsheviks — were

But thev were few

arrested

In Russia, unlike

supposed that the workers

Germany, no one was the peasants who mattered,

and those who were called marched as a matter of course.

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 they rushed to join.

The True Revolutionary

ska\a, Lenin's wife, speaks of tliem witli appreciation.

And

access to Russia

was
\

easy. Revolutionaries

came and went

across the border.

man\ coming

to

isit

Lenin whose stature as a revokitionary leader was now w idely accepted.
eas\
,

Though

it

remained a wondertulK conspiratorial

traffic.

Once one
cl.

VI ur-

anov, a leading Bolshevik

member

of the

Duma, came

to visit Lenin.

He had

parliamentar\' immunity so no one could question his right to tra\
less

Nonethe-

he made a clandestine crossing.
tliat
it

apologized and explained
cross a border legalK

When Lenin rebuked him for doing so, he had never occurred to him that one could

Like Marx, Lenin combined revolutionary action with joiunalism. Piavda,
as man}- will be surprised to

know, was then being published

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

Lenin wrote, "Are you quite sure that the workers of
simpletons you take them for?"-'

tlic

world are the

The

revolutionaries seeking Lenin in

Cracow could
still

often find him at

Jama

Michalikowa. This, a deep, darkly pleasant cafe,

exists. It

was then a great

center of political discussion, and, Poland being Poland, the discussion continues.

But

in

August of 1914, Lenin was not there.

He had

long believed that
in those

capitalist rivalry

made war inevitable. But no more
did he think
it

than anyone else

summer months

imminent. So,
in

like

any good bourgeois, he was

vacationing in the country.

He was

the tiny village of Poronin in the Tatra

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

Mountains, not far from the modern Polish

in

socialist pilgrimage.

The True Revolutionary
Lenin was
forty-foiu' that

smimier. Like the other revolutionaries, he was

o{

middle-class origin: his father

But revolution ran

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

IIL His mother had gone to

Petersburg to urge her son to ask lor a pardon.
to the Czar,

This he had refused to do.

He was not sorry. An appeal was carried

141

Lenin and the Great Ungluing

who spoke admiringly of the

boy's staunch character. Then, w ith a thoughtful
to proceed.

view of the lesson involved, he allowed the hanging
Marx, no one could doubt, was a
indeed, be
piercing eye, exceptionally untidy appearance

re\'oliitionary; the free-flowing beard,

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

remains the revolutionary colossus
still

who

stands astride a whole
lines beside the

age, the point of reference

for the long, slowly

moving
ver\'

Kremlin Wall. With

his higii

forehead greatK accented by the bald

dome

above, his neat mustache, dark, quiet suit and something
Trotsky, with his fierce and glittering eye and
a

near a \'an Dyck
beard, was

beard, he looked like the head of a firm of chartered accountants. Leon

much less disciplined
\

man

of far

more

satisfactory aspect.

Once
old

C]uite a

few years ago a Soviet
and
told

historian

isited Har\'ard.

man and had

served in Budenny's cavalry during the Revolution.

He was an He had
of a

knov\ n Lenin well

w

ith

amused pride

that Lenin

had once paid him a

high compliment; he was, Lenin had said, the world's only

known case
Lenin spoke,

cavalryman with brains.
so tidy, looking so

I

asked him the source of Lenin's leadership
like a clerk.

— a man
we

much

He

replied:

"When

marched."

Lenin and Marx
Lenin was the disciple
ot

Marx but

not his sla\

beyond the master, and two were

vital.

successful revolutionary action — a point Marx did not emphasize — was a
closely knit, intellectually disciplined, utterly

e. On several He believed that the

matters he went
first

essential for

committed group of men. Far

better such a body than a larger, less reliable,

more contentious mass. The
. . ,

aim was

".

.

.

not indiscriminate unit\

.

but unit\

for the merciless

revolutionary struggle ot the proletariat against the ruling class.

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

terminolog\' on which Lenin

was

then a reference

to Social

Democrats was a reference

to the

workers' party. Thereafter the truK di.sciplined cadres, those

who were

wholly connnitted to revolution, would be called the Communists.
it is

And, though

thought reluctantly, Lenin departed from Marx on the role

of the peasantry in the rexolution. This

Lenin was a Russian; the industrial
wait for a bourgeois revolution
capitalism

was an intensely practical matter. proletariat in Russia was still small. To
then for the growth of Russian
industrial

in Russia,

and therewith the growth of a large

w orking

class,

be

to wait forever.

Why

not enlist the peasants?

They were

infinitely

would more

14S

The Guns

of

August and the Pohce

numerous. Tlicn

\\

t^ic

also poor, abused, ridiculed. i<j;nored

and

often,

though
of

by no means al\\a\s, landless. Those
ancient right, they

who

were, belie\ ed
tilled for

that, as a

matter

owned

the land that they

the landlords.

They had

gi\en up their

title

only for militar\' protection that was no longer needed.

Marx saw
practical

capitalism bringing the peasants,

man\

of

them, into industr\ and
it

rescuing them from the "idiocy of rural life." Lenin believed

a far
tliis

more
did.

comse

to

w

in their

support by promising them land, and

he

Once

the peasants had their land, they would, no doubt,

become conservative

property-owners. Another (or continuing) revolution would be necessary to

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

landlords back home.

The Guns
All this

of

August and the Pohce
in

was

still

the future. For Lenin the guns of August brought
in the

more
he

practical

problems

form of the

police. Previously, to the Austrians,

had been a useful thorn

in

the side of the Czar.

Now \

conceivably, he was a

Russian patriot and a spy. So the police

came

to the

house

in

Poronin, and

he was arrested. The arresting
statistics

officer seized several

notebooks containing

on the agrarian problem.

He

thought these might be codes. There

was a suggestion, perhaps
by casualness,
of exile, they

ironic, that a jar of paste in Lenin's

room was
his

probably a bomb. Austro-Hungarian despotism was, as ever, being tempered
if

not incompetence. After a short stay in

jail,

Lenin and

family were allowed to go to Switzerland, a countr\ w here, from earlier years

were very much

at

home.

Machine Guns and the

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

the old social structure,

143

Lenin and the Great Ungluing

MOUNTING, TRIPOD 303

INCH,

MAXIM GUN

CrossheRd
E/evating gesr

Socket

Arm crosshead
Block,jSitiming with
Turnbler, e/efating
screi*'

t handle

asa"

Boft,jamminq, eteyating gear

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 years before 1914, military technology

had advanced greatly

in the

matter of small arms ordnance. This was a cheap and easy
innovation;
difficulty,

field for technical

the product

was one

that the generals could,

though with

understand. The most important result was the machine gun.

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
.

support him, something

now hard

to believe possible in

wartime. His place of

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

occurred to someone to ask one of the library

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
:

praise for Swiss culture."^

The library was the source of the
the library,
it

first

of the

weapons

of revolution this
;

was
left

the tract or pamphlet. Every revolutionary task required one.

When

Lenin

was

to involve

himself with

tlie

second instrument of revolution.

This was the conference.

The Conferences
Conferences were a very serious business
for the revolutionaries.

Nothing

could be accomplished without one. After a conference everything would be
possible.

Any new development demanded
is

one. Not even the

modern

sales

executive

more committed
to

to the

conference as a

way of life than were Lenin
rec-

and

his revolutionary friends.

Conferences need
reational.

be understood. Some, of course, are purely

Men and sometimes women

gather at the expense of a corporation
is

or a foundation.

The purpose is free or tax-paid enjoyment. The justification
is

the exchange of ideas, and the value of this
difficult to

fiercely proclaimed. It

is

very

say in criticism of such a conference that no ideas were exchanged.

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

i

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

Imperialism and Capitalism

participants that they arc not alone

and thus
is

to reinforce confidence.

Or they

are to simulate action where action
the participants, and often others,
is

impossible. B\ occmrini^. thev persuade

tliat

something;

is

happening u hen nothing

happening or can happen.

The most ambitious
September 1915,
course,

of the

\\

artime conferences w as held at

Zimmerw aid

in

now

a

fev\-

minutes out

in

the country by car from Bern.

Attending were the Left or militant Social Democrats; the avowed purpose, of

was

to settle

on a strategy toward the war. This conference was both

to

simulate action and to pro\ e to the participants that, in a hopeless situation,
there might
still

be hope. Thirty-eight delegates were present from eleven

countries. Conspiratorially. the\

were

in

top form. The\ allowed

it

to

be be-

lieved that they
at

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

enemies. All had enemies
capitalists.

in

common

the Czar,
tliese

tlu'

other rulers, the

Let the workers turn the guns on
his case for a

enemies, not on each other.

He argued

manifesto along these lines with force and elocjuence

but without success. OnU' a handlul supported him. National teeling was
strong even

among
As

the militants. There was also
to

some simple
isolated,

pacifism.

And,
to

most of all, the delegates had
go

be cautious. Ornithologists or
morale.

not, they

had

home
,

again.

in 1914,

Lenin found himself

marching almost

alone.
lihrars

The conference
by
his wife's

did

little for his

He

retinned to Bern and the

account

much

irritated.

Imperialism and Capitalism

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

set forth his theory of
It

imperialism

— Imperialism:
it

the Highest Stage of

Capitalism.

was published only

after his return to Russia in 1917.

Not e\en a committed disciple could think
although man\ ha\e risen to the challenge.
It is

an impressi\e dociunent,

asserti\e

and contentious, and,
full\

though short,

it is

very tedious. Nor
J.

is it

original.

As Lenin

concedes,

it

draws heavily on the ideas of
socialists

A. Hobson, the most original

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

than half a century earlier,

immiseration of the workers

his phrase.

147

Lenin and the Great Ungluing

lutionary than

fifty

years before. This he

now
for

explained. Capitahsm had gone

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

stage. In this stage colonies

Marxian orthodoxy held, but as an outlet

militant. Instead they rode comfortably

on the backs of their Asian, African

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.

There was Marx had thought

another, e\ en greater consecjuence.
revolution only an issue for the advanced industrial
first

countries of the West. Others had
letariat.

to industrialize

and develop a pro-

Then and then only would

the idea ot revolution

become

relevant.

Imperialism and associated industrial development helped bring the day of
revolution nearer in the colonial world. This

was why,

for

Marx, the British

in

India were a progressive force.

Lenin, in contrast,

made

revolution as urgent for industrialK backward

countries as for the advanced

as necessary for the Chinese, Indians,

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.

The Supreme Test
I've run ahead of the story. Back in Switzerland, the socialists once again convened one of their conferences. This one was in the spring of 1916 at Kienthal. The slaughter. West and East, was by now having some effect

twelve instead of eight delegates
festo,

now went
it
. . .

with Lenin. The resulting manito establish lasting

though

still

careful, held that

would be "impossible

peace on the basis of capitalist society

the struggle for a lasting peace can

only be a struggle for the realisation of socialism."''

had been
privates

in

order at these conferences, three
in the following

To prove thai the caution German officers and thirty-two

were shot
in

month

for distributing copies of thc\se

sentiments

the trenches.

148

The Supreme Test

This
not
tlie

\\

as brutal hut harcll\' essentiah For the
of

w ar

in

the

West

\\

as

show ing
its

weakness

the coalition of capitalists and the old ruling classes in

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

da\ of the Battle of the

Somme

— but one

da\" in

one battle
in

19,240

British soldiers
all ol

w ere

killed or died ol

wounds. To liberate France
six

1944 cost

the .\llied armies around 40. ()()() dead. For a gain of under
in 1916, British

miles on the
'i"he

Somme
point.

and F^rench deaths were an estimated 145.000.
partly to relie\ e pressure on X'crdun

Battle of the

Somme w as

— a disputed
soldiers
recalls the

At \'erdun. w
killed.

ithin that

same year. 270,000 French and German
II.

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

one with the tragcd\ of World

War

I.

One

of the most compelling

is

a threeIt is

quarter-hoiu" dri\ e south from Arras, a similar distance

w

est

i

rom .Vmiens.
It is

only a few lumdred acres; sheep

mo\ e across

it

as o\ cr an\ pastme.

called

Newfoundland

Park.

It

w

as the scene of

one of the most kmiinous

acts of

cruelty of the entire struggle.

On
still

the

first

day

ot the

can see, the First

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\

occupied the crater.
quickly, there

)

Because the attack had been programmed
onl\

to

succeed

was not

no surprise but

this

time no artillery support.

Within

tort\

minutes. 658

men and 26 officers w t're dead, wounded or missing.
lorce. All the officers

That was 91 percent of the entire attacking
casualties.

were

The

survivors

were then

calmlv' ordered to regroup

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

the nature of the war.
s\

It

was

for

King and countrv

,

roughlv

speaking for the rulers and the
sonal way, to the

stem.

The men were

not told that the\ w ere

fighting tor their livelihood or their liberty; they

were responding, in a perbad character and outrageous ambition ot the Kaiser. Not
149

Further to remind the men for a quiet day George V.
:

whom they were fighting, the traditional rulers showed up on

The Kaiser.

Revolution

until the

United States entered the war did our superior capacit\
itself. It

(or finding

moral justification assert

then became a v\ar

to

make the world

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

who held that

rank because of superior birth and social position.

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,

could be both very brave and
this

\'ery safe.

Most important, the system best withstood
talist

awful

test

w here the
relati\el\

capi-

power was

The

British

Dominions were the leading example

of the bourgeois as opposed to the traditional power.

The

well-

educated and

literate soldiers of these countries

most w

illingly

accepted their

own

death. As fighters, the Canadians, Australians and

New Zealanders

had

an especially high reputation. But the soldiers of the older capitalist countries
also fought well.

The

industrial proletariat of

German\ and England was

highly reliable, a hard fact for Lenin.
In contrast, the peasants were, on the whole,

much

less

amenable. In 1917,

following the Nivelle offensive, the predominantly peasant French soldiers

showed
ment.

signs of objecting to their

mass immolation and associated mistreat-

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,

and the Ruthenians and
by marching over
least
to the

later the

Czechs showed

their excellent

discipline

enem\
all

not as individuals but in units.

And

the most illiterate and backv\ ard of

the armies, the one from the country
quit.

where capitalism was army of the Czar.
Revolution

advanced, was the one that

That was the

On Januar>
purpose.

22, 1917,

Lenin spoke

to a

gathering of youthful rexolutionaries at
still

the Volkhaus in Zurich. This venerable gathering place

ser\es

its

old

When

I

vi.sited

it

one Sunday morning

in

197.5, Italian
It

Connuunist
a rather

workers employed

in

Switzerland were having a meeting.

seemed

subdued convocation. At

his meeting Lenin assessed the prospect. Ol the
in exile

eventual triumph of the proletariat he had no doubt. But he had been

now

for

more than

a decade;

it

was two and

half \ears since he iiad

been

151

Lenin and the Great Ungluing

expelled from Poland. Years of waiting. Wasted years?
speecli

his

wife said sadly

— with the thought: "We of the older generation
tJiis

He concluded

his

nia\ not

li\'e

to see the decisive battles of

coming revolution."^
house that
sur-

He was w rong. One
had
vives.

da\ only a few weeks later, Lenin and Krupskaya
still

just finished lunch at 14 Spiegelgasse in Zurich, a

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

the very best of the revolutionaries.

Who could lead a revolution from Spiegelhome
of

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

must believe, a good deal of
extraterritorial or

initiative

and

skill,

a Swiss socialist,

Fritz Flatten,

made an arrangement: Lenin would go through German\'. But it

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

was Lenin who wanted
ol

to

minimize

his

exposure to the
Fhere was a

Germans.
Al)()ut

twenty

Lenin

s

fellow liolsheviks

were on the

train.

child or two,

and

also Inessa

Armand, a sharply

beautiful,

French-born rev-

and a seem important
olutionar\

close friend, brilliant collaborator

— a mistress of Lenin's. The joinnex
was deepK w
still

and possibly

it

does not
festi\e
all,

was not a xery

exclusion, f^enin

orried about his reception in Russia. ,\fter
at war. lie

Germany and

Russia were

might not even be allowed

in.

He
in

was, although Fritz Flatten was excluded as a foreigner.

On

.\pril 3,

1917

(according to the Russian calendar), he arrived at the Finland Station
Petrograd. In October he took power.

152

Lenin,

Kmpskaya and party in Stockholm on the way home.

Moscow, May 1919. Lenin's great achievement was not the Revolution but
resulting anarchy.

in

conquering the

Lenin and the Great Ungluing

Again the Rotten Door
Not
e\ CT\ thinti

had i^one smootlils A few weeks after arriving
.

in

Petrograd,

Lenin was back
soldiers

in

Finland, in hiding. Bnt

in

the end his disciplined political

followers, the tin\ Russian proletariat in Petrograd, their allies

among

the

and

sailors,

together

v\'ith

the Anarchists and the Left Social Rev-

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

and caste would have led one
style

to expect. Its generals,

with

notable exceptions, were the supreme example of promotion by family, social

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

cerebral. So the regime
if

had sunk under

ment w as not in taking power; power was there for the
workers and soldiers had demonstrated
the government.
to

taking.

\s early as

Jul\\

urge the Petrograd So\iet to seize
a phrase had

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.

The View from Turin

i

Lenin's failure was in not seeing how great would be the further task of
building a socialist econom\\

how complex would be

the problems of socialist

planning and management. "Accounting and control

— that

is

mainly w hat

is

needed
of

for the

'smooth working', for the proper functioning, of the first phase

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

his miscalculation. "i\!a\ lie oiu"
too.
"'°

apparatus

is

prett\'

bad

.

.

.

the

first

steam engine invented was bad

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

The View from Turin

property

in

land effectively abolished. That u as
is still

lialf

a century ago.
in

To have
more

rcsponsii)ilit\ tor agriculture

to

have the most perilous post

the Soviet

administration.

It

was the

failure here that cost

Khrushchev

his job. In

recent times the shortcomings of Soviet agriculture ha\c been one of the most

important factors
arrive, prices
It

in capitalist living costs.

When
by

the Russian grain buyers

go up and up.

could be that land

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\

with long hours and
Yugoslavia,

little

sleep.

Hungary

— have made concessions
owned
is

The other

socialist countries

Poland,

to this necessity. So, in smaller

measure, has the Soviet Union, where a surprising proportion of marketable
production comes from privately
other small-scale enterprise)
plots of land.
is

Where

agriculture (and

concerned, there

a perceptible convergence,

East or West, that accepts the rule of the market.

From

Turin, Italy,

home

of the vast Fiat works, one perceives another
less

convergent tendency. Large-scale production under socialism, no

than

under capitalism, requires large business enterprises, and these must have
intelligent, careful, disciplined
scientist,

management. Peter Kapitza, the great Soviet
Harvard, that automobiles were not part of the

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

— the cost of production and the
is

profit

made.

We see from
is

case

how

universal

the

modern business
for large-scale

firm. If in

agriculture there

conxergcnce on the market,

production
cor-

modern
There
part. In

capitalism and

modern Communism converge on the business
its

poration.
is

another similarity betvv een the Tiuin plant and

Soviet counterit

Turin a good many of the workers are Communists. So,
in Russia.

must be

assumed, are those
munists
olutionaries, they

But here the parallel ends. The
to

Italian

Com-

no longer look forward
will

the

day when, as triumphant reva prime cause.
It

take over the government and have a monopoly of
is

powt-r

in

Rome. The growth of the modern corporation

It

develops a huge administrative, technical, scientific apparatus.

has a pen-

umbra

of smaller firms that supply

it

with materials, parts, legal and advertis-

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.

The Western Contrast

thc> are not disposed to siurcnder
letariat,

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

This, of course, Lenin did not foresee. His

first

Itah

,

w ould surely be adverse
the\-

— another cop—
politician, as

reaction,

he came now
in 1914.

to

out. as b\ the

German w orkers
But

w hen

voted with the bourgeois parties for the war credits

Lenin was also a very practical
percei\ ed

we have

seen.

how power,
its

since his time, has been diffused to

He would have new groups and the
ell

impossibilit} of

being seized and monopolized by one. There might w
proletariat, lie

have been another pamphlet. The dictatorship of the
ha\"e conceded,

would

had surrendered

like so

much

else to the t\rann\ of circum-

stance.

The Western Contrast
West the war ended, Germany was defeated but the glue seemed to German)' Friedrich Ebert, a Social Democrat, became President. Rosa Luxembourg and Karl Liebknecht led a militant minority whose view of revolution was as Lenin's. But the moderate opposition in German\ the counterpart of the Mensheviks, was far stronger than in Russia. Gusta\ Noske, a Social Democrat, became Minister of Defense and put clown their re\ olt. Luxembourg and Liebknecht w ere both killed b\ anti-Communists. But in the Western countries too, the United States partly excepted, there was a quiet re\ olution, one that deserves the name. In all European countries the old coalition of capitalists and traditional rulers was at an end. There would still be a ruling coalition; it would be of business interests, large and small, and the trade unions and their parties. Sometimes these joined in power. More often the\ traded it back and forth, increasingK sharing it with yet other groups. So it was in Britain, France and the British Dominions. And so, with the passage of time, it w ould be in the United States. It was a prospect that .Marx did not foresee. The new ruling coalition of capitalists and workers (and others) lacked the certainties of the old it had none of the old sense of a natural right to rule. The partners e\ed each other w ith dislike, sometimes with suspicion. They didn't follow NIarx but the\ remembered that he had said the\ were meant to be enemies. And eventually ItaK and Germany would seem to bear out Marx's warning. Blackshirts and Brownshirts, with the active or tacit backing of industrialists, would seize power. One saw thereafter what happened to workers, unions and their political parties. But then in Britain, the L nitcd States and the British Dominions capitalists and workers would come together in unparalleled harmon\ w ith enormous power to put dow n fascism. And they
In the hold. In
,
;

157

The two who failed Rosa Luxembourg.

H-

-

^"."i

Karl Liebknecht.

A Recollection
\\

oulcl litiht side

!:>>

side w ith the
tilings

S()\ iet

Inion

to

do

so.

Anothei' problem ior

Marx and Lenin. More

unylued.

A Recollection
The
ehaniie brouglil h\
in

World War

1

u ent
w
ar,

far afield, in the \ears follow
\\

in'j;.

1

w as a \ oungster
politics.

southwestern Ontario.
to the

My father
although

as aeti\ ely

concerned

in

He had been opposed
it

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,

I

foimd m\self
conflict

in opposition to the

Vietnam
w
ise

inter\ ention at a time

u hen the

was generally considered
criti-

and

essential.
1

I

lia\

e no natinal preference for unpopular, highly

cized positions.

disliked being excluded

from foreign

polic\ discussion
I

w as then

in

the go\ ernmeut

— because

I

1

took an unrealistic line.

comforted

myself, though not
father's position
It

much, b\

recalling the speed with

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

way, had had a traditional ruling

class. It

was

conser\'ati\e,

English, with a prestige
identification

and influence that came from its Englishness, its with the King, Empire and the Church of England, and its feeling
er

that

it

had a natural claim on positions of pow

and rew ard imder the Crow

n.

In the nineteenth century

people had spoken freeh' of the luonopoK of high

position so enjoyed.

It

w as called the Eamily Compact.
class

The Canadian ruling And as Canadians now

had

also invested

its

prestige hea\ iK in the
at

w ar.

reflected on

w hat had been gained and
that

w hat

i^rice,

and especialK' on the mindless emotion and propaganda
slaughter, that prestige e\aporatcd like the
influential
if amorphous aristocracy Canadian forces in Em-ope, General

had sustained the

What had been an became an anachronism. The leader of
morning
mist.
Sir .Vrthur

the

W
in

.

C'urrie,

had returned
defend

home

to great acclaim.

Soon he was

in a

courtroom

a libel case to

himself against the accusation that he had caused imnecessar\ casualties

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

workers. So did Erench Canada, which

made

it

clear that

sons would ne\er again be conscripted for a European
in

war. .My elders did not doubt. e\ en

those distant precincts, that something

very important had happened to

pow er.
159

Lenin and the Great Ungluing

Thus the beginning of the Age of Uncertainty.
mately from the

Its

character derived
that

ulti-

new

social alignments, the

new governing coalition

now

emerged. But there was an
great certainties of

effect

on the narrower questions of economics.
eternal. After 1914,

A

notable case was money. In the years before 1914, that had been one of the
life. It

was good and
look.

it

was never the

same

again.

It is

worth a special

160

6.

The Rise and Fall of Money

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

one of two ways: either

it

has been abundant

and very unreliable, or been a third affliction:
For studying the
psychiatrist's

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

next best thing to the
It

couch

perhaps, the modern supermarket.

could be

why

the

modern

politician goes there to solicit votes.

People entering or emerging from

a supermarket are in the grip of their most

common fears, are deeply sensitive,
upon
if

accordingly, to the political issues that bear

this anxiety. In

times of

depression or recession they are wondering

their

money

will continue, if

they will have any to spend the next time they push a cart. In times of

boom

and

inflation they are asking
still

themselves

if

next time there will be anything to

buy that they can
the person

afford.

In recent years this last

worry has been the worst.

It is

the special terror of

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

"In the supermarket people are
Politicians

in the grip o£ their greatest !ear. Will

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.

The Origins Monc\ lias been an e\er\da>
more
ol

tact of life for at least

2500 \ears. Herodotus,
tells

or less as an afterthought

and with a nice juxtaposition of concepts,

the in\ention of coined nione\ in Asia Minor:
\

All of the

oung women of Lydia
.

prostitute

themseK

es.

i)\

\\

hich they procure their marriage

portion

.

.

The manners and customs
in this prostitution of

of the L>dians do not essentialK' vai\ from tliose of

Greece, except

the young

women. The\ are the
in retail.'

first

people on record

who

coined gold and si!\cr into nioncN, and traded
It

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

centuries, a few brief episodes apart, no one recei\ ing

money

could be quite sure what he or she w as getting; few inventions

e\er lent themselves more profitabh to abuse.

The

coin might

I)e

of

its

proclaimed weight of gold and siher.
metal melted
in.

It

might be

less. It

might ha\'e a lesser
to pa\
.

Banks and go\ernments made promises
.

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

promises was one of the few

Then,

in the last centin\

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

there w ould again be uncertaint\ as to what
it

it \\

ould
\

bii\

Most of us, w hether we admit
think that, oxer a long
history of

or not,

li\

e

w

itlT

a linear

iew of history.

We
The

enough span of time, men

learn, things improx e.

money

gives no support tor this optimism.

The Function
Though one begins the
quality
histor\ of

money with

the in\ention of coinage
specific (claimed)

tlie

stamping or minting of pieces of metal of a

weight and

this is quite arbitrar\

.

Cattle, shells, chunks of metal, whiske\,
ol

tobacco ha\e also been used. The\ periorm the essential timction

monex
163

Every monetary innovation contains the seeds of weighing
.
.

its

own

abuse: Coinage eliminated

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

where the weight

of the coins could be trusted.

Coins, although not

many have

noticed

it,

are

now

obsolescent.

They no

longer figure in major transactions.

They

survive only as minor change, for

occasional nervous hoarding, as collectors' items and as an adjunct to slot

machines. They are only an attenuated reminder, a souvenir,
all

ot

w hat w as once

money.

Banks and Money
Alter coins

came

banks.

They

flourished in

Roman

times, reached a high level

of development in Venice, Florence

and Genoa. With banks came the power,

164

Coins were then debased, so back to weighing.

The Rise and Fall

of

Money

gi\

en

to few pii\ ate eitizens, to create

money.

It

may be w hy
full

l:)ankers

are so

solemn.

A

certain responsibilit\
is

is

inxolved. For a
It is

view of hanks and

money

the city to visit

Amsterdam.

associated with not one but two of

the great developments in their history.
In 1609,

money

— hard, coined 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

was, for the time, a normal commercial transaction. Following the
silver

voyages of Columbus, covered
this

mines of unparalleled richness had been
in

dis-

in the

New

World, principally

Mexico. In the sixteenth century

metal flooded into Europe to demonstrate one of the fundamental prop-

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

equal, the less

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.

Such was the state of abuse that no one, w hen
getting.
It

he sold goods

for

money, could be sure what he was

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

j

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

stood to the credit
,

of

the original di'posilor. That too could be s}ienl. \lone\

spendable money,

166

The Amsterdam Scene

had been created. Let no one
da\-.

nil) his or

her e\

es. It's still

being done

e\ er\

The

creation

ol

nione\

1)\

a

bank

is

as simple as this, so simple. \'\v often

said, that the

mind

is

slightK repelled.
.

The important
The\ must
creation of

thing, ob\ iousK
at the

is

that the original depositor
for their deposits
it

rower must nexer come
trust their
it

same time

their

and the bormoncN
it

bank. The\ must trust

to the extent of belie\ing
is

isn't

doing what

does as a matter of course. That
b\ a

the thin edge on w hich

mone\

bank alu a\

s

rests.

The Amsterdam Scene
hi the
first

hundred years

after the founding of the bank, the cit\ of Amster-

dam grew

painting and music — flourished.

uondcrfulK': the population and area greatK' expanded.
.Alter 16.31,

The arts

the city had a fair claim to being
it

considered the center of the

\\

hole art world, for

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

time survive. Some are

still

in

the possession of the .same families.

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

the guest book of the time.
to attribute the prosperity' of

tempting

Amsterdam and

the consecjuent
its

flowering of
institutions

tlie artistic spirit to

the excellence and stability of

financial

and particularK

to the

Bank

of

Amsterdam. Bankers would ap-

plaud: Da\id Rockefeller would be especially pleased. There were other
factors.

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.

Jan Six by Rembrandt. Triumphant meeting of economics with

art.

169

The Rise and Fall

of

Money

York

ill

the nineteen-seventies, the

London and Countv
their

in the

same years

in

England, was partly the result of bankers lending to business firms which they
greatly admired

and trusted because they were

own.

In the eighteenth

century the East India

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

England, ships did not come back.

It

\\

eakness ensures weakness.
Early in the last century suspicion spread, the weakness was affirmed.

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

Louis XIV died
it

1715. His legacy to France

was great and

varied,

and

included two major misfortunes.
I)ankrupt;
tlie

One was
result

the French Treasury which

was

other was the Regent, the

intellectualK

and morally bankrupt. The

situation that gives opportunity to a rascal,

Due d'Orleans, who was was the seemingly hopeless someone \\ ho promises by magic
for a solution

or legerdemain to put everything right.

Men who are desperate

are easy to persuade because they wish desperateh to be persuaded.

The Due

d Orleans was an especially easy case.

The
to this

available rascal

we have

already encountered.
rascal.

He was

John Law, and

day some historians regret the word

Perhaps he was a genius
father
the>'

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

time goldsmiths, since

have good
this service

strongboxes, stored valuables

and coins

for other people,

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,

he got permission from the Regent

to establisii a

bank,

the

Banque Royale. As part

of the bargain the bank took over the debts

of the Regent and of the realm. These debts

were then paid

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

not hard to see

Then

in 1717,

Law organized

how the Regent was persuaded. the Company of the West, later the Company
as the Mississippi

of the Indies but

known ever afterward

Company. There

170

John Law at High Noon. Dictator of French finance and Due

d' Arkansas.

The Rise and Fall

of

Money

was no doubt
Mexico
that his
to

as to

its

assets; potentially they
It

were greater than those of any
from the Gulf of
to the Alleghenies.

company before or since.
This spacious

held absolute

title

to all land north

Minnesota and east from the Rockies

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

imagination of the note-holders was stretched to include Louisiana.
it

There,

was

said, gold

and

silver

were

in

unlimited supply As Ixe told in an
.

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,

backing for the notes.

But Parisians were by now
riches

in

a trusting mood. Hearing of these conceptual
to get them, they rushed to

and that colonization was under way

buy the

stock ot the

Company

of the West.

The

stock

boomed.

Law

helped the price

along by sundry forms of thimblerigging and fiduciary levitation. In a strong
in combination with some suitabK' and attract the buyers who will send them up mucli more. By 17 19, the boom had become a wild speculation. The price of the stock went up, sometimes liy the hour. The old Paris Bourse was outdoors in the Rue Quincampoix. The excitement was intense and even violent, and the noise was hideous. Crowds swarmed also to the Place Vendome, to Law's headquarters. Some hoped only to catch a glimpse of him; some, on one pretext or another, tried to get inside. Those who got inside asked Law to sell them stock. Women investors, tlie histories tell, offered themselves as an added inducement. This must have been an unprecedented experience for someone from Scotland. The year 1719 in Paris was truly a wonderful time. Law's notes went out by the hundreds of millions. Government creditors who were paid off in the notes then rushed to buy stock in the Banque Royalc or in the Mississippi Company. From tlie monex so in\ ested more could be lent to the government, \ et more notes could go out and \ et more stock could be sold. It w as a complete closedcircle system for recycling worthless paper. In consequence, all involved were getting rich on or in iiajier. It is to that > ear that we ou c^ the useful French word "millionaire.

market some well-timed purchases of stock,
reckless promises, will send

up

prices

In 1719,

John

Law was the most famous man
title

in all

France.

He was ennobled

as the

Due d'Arkansas, a
Mills.

not revived in later years even by Congress5,

man Wilbur

On

January

1720, he

was made Comptroller General

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
:

regulate the frenzy.

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/>/,//;// vv^< ' /^,; /fu<i^y^'-

A London comment after Law's fall. The English,
foolishness

as always, found pleasure in the

and caprice of the French.

The Rise and Fall of Money

the Banqiic Royale tor the silver and gold that

not there. Tlie Prince de Conti sent three

were wagons

still

in Louisiana,

and

also

to carry

back the gold to
(and

which

Iiis

notes entitled him. Paying off the notes in gold and silver was
in

suspended:

modern terms, the Banque Ro\ale went

off the gold

siKer) standard. And, in a further, rather se\'ere step, ownership of precious

metals except in small quantities was
the elementar\ fact that the

made a crime. But nothing could disguise
that the notes
life.

Banque Ro\ ale could not pay,
that

were

now
got

worthless.

Law

only narrowly escaped from Paris with his

Parisians

what pleasure they could from a song

recommended

that the paper he

put to the most vulgar possible use.

Law's colonization and gold mining had not been
Parisian. Press gangs, accordingly,

attractive to the average

vagabonds and

e\'en reputable citizens

had been sent out to round up sundry who were not sufficientK aware of their
\\ i\'cs
\

opportunities abroad. There was a special need for
recruit

and a special

effort to
\'outh,

what were then called women

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

most interesting observations on John
life

Law we owe
and
s

to the

Due de
dinnng
for

Saint-Simon, the relentless chronicler of
the reign of Louis

at Versailles

in Paris

XIV and

after.

He

thought
said,

Law

bank was a good idea

any country but France. The French, he

lacked restraint.

There

is

much

to his case.

Law's, one William Paterson

pre-eminence of the Scotch
idea as the

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

— on money, as on unchallenged — had

Twenty years

earlier, a fellow counlrN
political

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

William Paterson, 1658-1719. Founder of the

Bank of England

The Rise and Fall

of

Money

bank.

A few

years later Scotchmen were seized with the notion that vast

fortunes could be

made by founding
It

a colony (Darien) near what
rightly, to

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

wife and children there and barely

escaped with

his

own

life.

But Paterson's bank survived and flourished, and no financial institution
before or since has had such prestige.
still

suggests grave financial

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

which the Bank
the decision.

is still

vigilant. It

does reduce appreciably a man's impact on

The glow extends

across the seas, continues

down through
for

the generations.
regular]\'

In the United States in past years, the Federal Reserve

Board has
in office,

been used by American presidents as a place of deposit
reliably

men who could

not

be trusted

to

balance their

own

checkbooks. Once

they are

addressed with reverence as Governor and dispense deeply ambiguous judg-

ments on the economic and

financial prospect,

which susceptible journalists,
illiterate,

bankers and economists treat with the utmost respect. However
England.
In the early years of the eighteenth century the

economically or otherwise, they are sustained by the reputation of the Bank of

Bank was saved from

a

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

lating the creation of

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

loans in notes against their

holdings of gold and silver coin.
notes, returned

The Bank

of England,

when

it

received these

'

for collection in gold or silver. This required the

banks

to

maintain reasonable reserves of cash against their note issues. They could not

be reckless

in the issue of notes as
first in

was Law. Later the Bank acquired

lor itself
It

a monopoly of note issue,

London, then throughout the country.

had

then only to discipline

itself.

176

fhidbkic.

,

^_

The Bank condemned. The paper so

criticized helped finance the defeat of

Napoleon.

The Rise and Fall

of

Money

Tlie subordinate or cominereial l:)anks could
depositors. This

still

would mean deposits

— money —

lend the funds of their

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

money-creation could be carried

de\ eloped a

called in Britain, could replace their depleted reserves by borrow ing from the

Bank

of England. But that could be restrained by raising the rate of interest.

This charge by the Bank of England

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

the rediscount rate or, latterly, the discount rate.

Such were the regulatory functions as developed b\ the Bank of England.

found

for itself

one other major piupose. Recurrently there were the moments
to the clearing

of fear
.

and suspicion when depositors came

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

wasn't always easy to
for their

rise

abo\ e the panic that sent people to the clearing
turn to the

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

money and these in

way

of infecting everyone, including the great

I

'-'

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).

The Rise and Fall

of

Money

insane lending by the banks. Its the old question:
lators?

who

regulates the reguisn't
'

Who

is

king in the world of the blind
\\ ill

when

there

even a one-

eyed man? The problem
Still,

recur.

in the last

century the Bank of England showed a remarkable capacity
All of the functions of a

for

economic innovation.

modern
its

central

bank were

identified

and developed. Not surprisingh, then,
art.

operations were viewed

with admiration, even as high
the

Victorians heard with grave attention that
it

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,

meant. But they

Dutch, French and
central

were the developers of banks and

banking.

We come now to paper money. This, in singular measure, was the gift

of Americans and Canadians to the Western world.

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

passed from hand
It

to

hand

as

money.
to

seemed

a most [painless

way

pay

bills.

The other colonies followed suit;
in

some, notably Rhode Island and South Carolina, issued notes

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

— Pennsylvania, Maryland, New York —

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

falling prices with the

consequent ad\ erse
of paper

eifect

on business.

The prime exponent

money

in

these years

was Benjamin

Franklin.

He

thought

it

a good

and

useful thing,

and

his

advocacy had an intensely

practical touch.

He

printed

mone>

lor the colonial

goxermnents on

his

own
a

printing press.
In

London

this colonial

invention o( paper

monev seemed,

in contrast,

most

loolish contrivance. So,

toward the middle of the eighteenth century,

180

The Canadian Variant

Parliament forbade further issues of

it

in

peacetime. Franklin journe\ecl to

London

to

oppose the prohibition but was unsuccessful. Tlie action caused

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
.

colonies thought that Parliament

was absoluteK

right. So, for

a long time, did

the reputable historians.

The Canadian Variant
In
all

countries ot the world
distinction

dream of such
same.
It

— the con\ention as regards paper mone\
figure, a

— Commimist,

capitalist

and those

\\

hich only

is

now the
of ink

requires a rectangular slip of paper covered with suitable

s\\ iris

and featuring a dead hero, a Rubens

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
,

onl\ half their value.

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

was greatK diminished.
All
this

must weep

that, after

Wolfe met Montcalm on the Plains of Abraham,
Its

currency came to an end.
financial
life.

sin\i\al

would everyw here ha\e lightened
pla\ for

and informed

At Las \'egas
.

men and women w ould now

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

w

ell

as clubs

into the
for the

world of real estate trusts
it

and spades. The bank's recent \enture would ha\e been recognized immediateK

gamble

really was.

181

The Rise and Fall

of

Money

Paper and Revolution
It

one

is

planning a revolution, he should
all

first,

army. Then, based on
against bad

experience, he — or she — should get a printing
it

no doubt, get a cause and an

press. Re\'olutionar\ go\ crnnients cannot easily levy taxes, especialK

the

revolt

is

taxes.

Their credit

is

not likely to

be good so they cannot
for the revolt of

borrow. There remains only the printing ot money.

Money so printed paid for the Russian Revolution.
assignats
nobility.

Likewise

the Confederate States. Likewise for the French Revolution

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

issued by the states.

The

rest,

the Continental notes, were

authorized by the Continental Congress.

A

half billion dollars worth alto-

gether was put in circulation.
inflation:

The

predictable result, as at Quebec, was
fi\e

by the end ot the war a pair of shoes cost about

thousand dollars

in Virginia, a lull outfit

around a

million.

But there was no alternative. Taxes
thought the

could not have paid for the war. E\en had the erstwhile colonists been willing,
collection

would have been
risk.

ditficult.

No one

new

republic even a

passable credit

Paper money saved the day.
the history.

This too has never been recognized.

money men wrote
States

When the war was won, They could not have it said that

the soundthe Lhiited

was conceived
practical

in financial sin.

So they held that the financing of the

Revolution was a terrible mistake, w ithout ever explaining what would have

been both
If

and

right, 'fheir \'ie\\ persists.

The Continental note has

come clown

to us only as a
it

symbol of opprobrium. "Not worth a Continental!"

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,
,

Banks and the Central Banks
Though paper money financed
remorse:
prices.
this

the Rexolution, the resulting inflation bred
oi

has been, through history, a highh' reliable result
that
it

runaway

There were vows
as the

would not happen again.

In conseciuence, the

Constitution of the United States prohibited the states from issuing paper

mone\, even

Westminster Parliament had done.

It

also,

more
by a
\

reerv'

markably, forbade the Federal Covernment to do so

too. ()nl\

strained interpretation of the Constitution, and after paper

Creenbacks

— had been issued
legal in the

money

— the

in

volume during the

Ca\\]

War. was such

money made

United States.

182

Banks and the Central Banks

Banks had also been prohibited

in the colonies b\ tlic Brilisli.

W

ilh

inde-

pendence these were now
manufactured monc>'. And
had
to

legal,
\\

and, as

wc have

sufficiently seen, they too

hilc the issue of

await action b\ a legislature,
it

paper money by a go\ ernmcnt the issue of money by a I)ank did not.
notice

Almost an\()ne could do
the results
in

on ver\

sliort

and even smaller
print notes

capital. ;uid

were wonderful. The proprietor could
in

and make loans
\\

these notes to his triends. neighbors or himself.

The

notes, with luck,

ould

he accepted
initial

pa\ ment tor horses, cattle, machinery, an anvil and forge or the

small stock of a grocery or hardware store.

in

business. Perhaps, with

more

luck,

w onderlul thing, a bank. The citizens
as an adolescent discovers sex.

The borrower would then be would he ])e able to pay off his loan. A ot the new repul>lic disco\ ered linking

the Eastern merchants to

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

one cent on the
Eirst

dollar, the

act of a

States

sound-money man. It was established in accordance with Hamilton's recommendations and

w as continued w hen the

Bank oi the Inited

183

The Rise and Fall

of

Money

incurred so

much

displeasure for

its

discipline that

its

charter in 1810 was

allowed to lapse. The struggle did not end

until the defeat of

William Jennings

Bryan

in the presidential election of 1896,

as the administration of Franklin D. Roosevelt, Its high point

eighteen-thirties

and there were many echoes as late was in the the titanic struggle between Andrew Jackson, President of

the United States, and Nicholas Biddle, President of the Second

Bank

of the

United States.

Jackson versus Biddle

The President

of the United States,

Andrew Jackson, was from

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.

of the Establishment, as the Biddies of Philadelphia

have been ever
the eventual
distinguished
called biddle.

Writing

home

to his

mother of
visit

his

American

travels,

Edward

VII told, after his
Scrapple,
a

to Philadelphia, of a

most

family called

most appetizing breakfast dish

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

asked by a Senate committee
his

he had ever abused

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

The historic showdown came in Congress led by Henry Clay
had worked

torces of civilization

their

— Clay was from the but the — way renewed the charter of the Bank.
also frontier

1832. Early that year the friends of the

Bank

Jackson responded with a stinging veto.
loans to congressmen, senators

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.

Nicholas Biddle. His power, he said, rivaled that of the President.

One

of the small banks.

Gold

light,

MaiiN were well numagecl. But for

roads, the

deeper

the torest, the

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

the notes issued

b\^

the bank would e\er find their
it

way back

for collection.

There was
history
is

state regulation but

was

far

from

reliable. In

Michigan, w here the
to

better than elsewhere, the banks

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

economy, a thin layer of gold w as once
glass. In

found

to

be coxering a thick deposit of broken

conservative Massaoutstanding,
it

chusetts in these years a

bank

failed.

Against notes of
Civil

$5()(),0(K)

had cash reserves of $86.48. By the time of the
kinds ot

War some 7000

different

bank notes were

in circulation in the

United States;

to these, nu.5()0()

merous

artists v\ith access to a printing press

had added another
er

tliat

were counterfeit. Legal or bogus, the pmchasing pow
same, meaning
It

was often about the

nil.

w as too confusing, and

of the small banks

— those chartered by the

in 1865, a

few w ceks before Appomattox, the right states to issue notes w as finally

abolished. But by then

bank deposits and bank checks were taking the place of
to do.

hand-to-hand money. Nothing prexentcd the banks from creating money by

making loans and creating deposits. This the\ continued
the

Often

same open-handed way
in Ijank notes.

that they

had made the loans

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

major countries of Europe were accepting the lessons

of Britain

and the Bank of England on
resoKing,
it

how banking should be

regulated. The\-

seemed

for all time, the cjuestion of the kind of

were also metal into w hich

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

value in relation to each other, and the one that w as

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

that, henceforth, their

w ould all be done in gold. The course of events in the United

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\

great deposits of siKer

were

later discovered in the

West, the miners joined

187

The Rise and Fall of Money

vvitli

tlie

farmers

in

a crusade to keep silver. William Jennings Bryan, in

memorable

oratory, invoked Jesus

and the Crucifixion against

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

Europe, gold became

the onl\ metal into which other money,
convertibility
as such

good, could be converted, and this

was now
is

general. In Western countries the gold standard,
called,
is

com ertibility

was almost everywhere the

rule.

Although the impression
effect only for a

few years.

now to the contrary, the gold standard was in World War I swept the gold out of Europe to buy
It

mimitions. This destroyed the gold standard there.

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

casualty of the great ungluing.

Uncertainty Old and
:

New
money could be exchanged
\\

A world

in

whicii
lias

all

into gold coins or their
its

equivalent

always seemed marvelousK certain. Whatever
hat such

defects,

there was, indeed, a high certaint\ about
the wliole of the last centm\ prices
ixised Tiioney increased.
fell,

the purchasing

mone> could buy. Over power of gold or gold-

This certainty, a sadly neglected point, was always greatest for those with

money.

When

the

Bank

of England raised the

Bank Rate

or

moved otherwise
to

to restrain the

banks and ensiue that they would have the gold

meet the

demands

ot their depositors, business firms
fell

were denied

loans. In further

consecjuence, prices

and jobs were

lost.

For the farmers and workers so

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

success in the last centur\

owed much to the helplessness of

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

seen, rejected central banks and opted instead
to create the

for giving the local

banker the right

put the local

bank notes and the bank larmers and merchants in business. This too had its

188

WUliam Jennings Bryan. He invoked Jesus and

the Crucifixion against the gold standard.

The Rise and Fall

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

incapable of appreciating the opportunities for
\'ision

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

Despite such calming counsel, w lien panic struck, prices
jobs and banks failed.

fell,

men

lost their

The bank

failures

added greatly

to the severity of the

crash. For then deposits in failed banks

w ere no longer usable mone\'; people

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.

The monetar\ s\stem was thus superbly arranged

reduce the money supply precisely when
things worse.

would do the most

make

The culminating
thousand banks
bit

crash

came

in

1929. In the next ioiu- \ears
all

aroimd nine

the dust, a third of

the banks in the country. With each

failure individuals

and companies

lost

mone\

thc\'

would otherwise have

spent, loans thev

battened clown against the day

March
little

6,

w

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

had been buried

an avalanche of reichsmarks
it

in

an inflation that

is

not

forgotten to this day. Finally

stabilized at a thousand billion of the old

currency to one of the new.

Now the United States, for practical purposes, had
that, after
of

no mone\'.

It

cannot be doubted

2500

\

ears, there

w as

still

nnicli to

be learned about the management

money.

The Federal Reserve System
This was a saddening discowry. In 1914, the gold standard had seemed
forever. So also in that year
it

seemed

that the uncertainties of the

American

banking system, those that produced the continuing c\cles of boom and bust,

had

finally

been corrected.

On

almost exactl\ the da\ that the guns of August

190

The Federal Reserve System

began

to sound, tlu- \ictory ot

establishment was finally reversed.

Andrew Jaekson over The United States

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\\

elve central banks

it

e\'en has a nast\ but affectionate
its

nickname. The Fed. There was
knew^ for sure
St.

little to

be

lo\ed in

early performance.

No one
in

who was
in

in

charge

Washington, the regional Banks

Kansas City,

Louis, San Franci.sco.

Or

was

it

the

New

York Bank w

ith its special

ad\ antage of being

the financial

capital?

More serious was an
ing

instinct,

one that was exident

in

the earliest da\s of the

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

banks made the loans that financed

this

crash of 1920-21.

Now

the Federal Reserve clamped

boom. Then came down on bank

lending and helped to
great stock market

make the resulting depression worse. In 1927, as the boom was getting imder w a\ it eased credit, an action to
.

w hich

I

w

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

falling like the soldiers

on that morning

at the

Reser\ e w as indifferent to their fate, even to that of
idea of the lender of last resort

its

Somme. The Federal ow n memlxMs. The

had not crossed the

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

name was known.

Strong

owed
is

his high reputation to the to

elegance of his errors.

Men

mar\ eled that an\ one should ha\ e the power
In central lianking as in

make such
of
st\le,

sophisticated mistakes. But this

an occupation w lure standards
diplomacy,

performance are pleasantK relaxed.

conservatixe tailoring and an eas\ association with the affluent comit

greatly

and

results for

much

less.
1)\-

Gradually during the Depression interest rates were brought down;
1931, the discount rate at the

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

banks could borrow

— was

New

York Reserxe Bank

— the rate

at

which

191

The Rise and

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,

rate they didn't think they could

who were

so foolisii as to believe they could.

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

which they were able
decided
to act,

to lend

but couldn't.

worse the boom and made worse the crash.

nothing happened. Yet more remained to be learned about

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

That such deficiency remained so late was not the
interesting figures in the liistory of

,

million dollars. This

was a

sizable sum, even for an economics professor.
it is

When

you read that the Consumers' Price Index has gone up,
partly to thank.

Fisher >()u have

He pioneered in

the development of index

numbers and also in

mathematical economics. Though mathematical economics has not \et taught
us e\ er\'thing about the economy,
ec< )n
it

has proved a valuable

way

of

keeping

om

i

s ts

occu pied
.

Fishers greatest contribution was to our understanding of mone\

He

showed

in

one simple formula what determines
oil

its

value.

No

one,

however

averse to mathematics, should be put

by

it:

MV
P
also
is

f

M'V
money
or cash in circulation.

prices.

IVl is

tiie

cjuantity of ordinary

M

'

is

money, being that much larger part which

consists oi

bank deposits. V and

192

Irving Fisher, 1867-1947.

The Rise and Fall

of

Money

V arc the rate
circulation.

at whitli

each

ol

these two kinds

is

spent

their velocity of

For centuries a relation had been recognized between prices and

the supply of money. This
tinental notes

was why

prices rose with the issue of the

Con-

and the Greenbacks. Fisher's formula refined and made
go up as the amount of money, the
mone\'
in a
is

explicit

this relationship. Prices

Ms,
to

go up. But

money
check

is

— M — must be added. And,
'

not merely hand-to-hand cash.
if

Bank deposits subject
is

spending by
ill

quickly spent, the effect w
is

obviously be greater than

if it lies

buried

mattress or

a purely sedentar\'

deposit in a bank. So quantity in each case

multiplied by rate of turnoxer

the respective V's or velocity ot circulation.

A

particular increase in

money

supply will have more effect on prices

if it is

concentrated on a few transactions

than

if it is

spread over many. So you divide by the number of transactions (the
is all.

T

in the

equation) to allow for the volume of trade. That

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.

how things work; he thought it

By increasing or decreasing
oflFset

the suppK' of money, you could, he concluded, increase or decrease prices. By

reducing or increasing prices, you could suppress the euphoria,
depression and thus moderate the
c\'cle

the

long been such a blight on economic

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

supply and thus to stabilize prices.
In the nineteen-thirties, prices being depressingly low, the obvious step
to increase the supply of

was

money. Prices would then recover, business and

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

money, did not mean necessarily an increase
the Depression,
of

M

',

or

bank deposits. These
In

increased only as borrowers wanted to borrow, bankers wanted to lend.

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

that will solve

all,

or any, economic problems.

V\

ere

it

194

Irving Fisher

so. tlic

inxcntions

\\

ould already have been made;

we would now all be saved

from depression or inflation and be otherwise prosperous and liapp\

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

s

affirmed. Writing to Fisher in 1944, he referred to

him

as

one of

his earliest

teachers on these matters.

195

John Maynard Keynes.

A drawing by Gwen Raverat.

Cambridge and the Cam, 1911. "For him the world was excellent". (Keynes
arrow.

is

indicated by the

7.

The Mandarin Revolution

The

ideas

tliat

made

revolutions did not originate with the masses,

vvitli

the

people who,

liy

any reasonable calculation, had the most reason
intellectuals. Tliis

for revolt.
in-

The\ came from

was noticed by Lenin: he thought
lie

tellectuals disputatious, perverse, undisciplined. But without them,

also

believed, the armies of the proletariat
fusion.

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

have usualh thought themseKes disliked because

others

w ere jealous

of their brains.

More often
much,

it's

because they make trouble.

But intellectuals can render conservative as well as radical service. Before

and

after

World War

II,

their ideas did

for a time, to save the reputation

of capitalism.

that saved capitalism did not

As the ideas of socialism did not come from the masses, those come from businessmen, bankers or owners of
\\

shares

\\

hose value had gone with the
fate

ind. The\'

came

principalK from John

Ma\ iiard Keynes. His
class

was

to

be regarded as peculiarly dangerous b\ the

he rescued.

Cambridge, England
Keynes was born
in 1883,

the year that Karl

Marx

died. His mother,

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

to say the chief administrative officer of the

where

his first

Ma>nard, interest was

as
in

he was alwa\s known to friends, went mathematics. Then he wi'iit to King's

College, after Trinit> the most prestigious of the

one noted cspeciallv
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

me — that great men

usualK
I)\

Iia\

e

unhapp> childhoods.

both Eton and Cambridge, Ke\nes,

liis

own
197

The Mandarin Revolution

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

that the bourgeoisie

would

suffer for his poverty
boils.

and

his carbuncles.

Keynes experienced neither
intellectuals

povertv nor

For him the world was excellent.

While
wives

at King's,

Keynes was one of a group of ardent young
Bell

which included Lytton Strachey, Leonard Woolf and Clive

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,

— Virginia Woolf, Vanessa

— and

experience and the pursuit of knowledge.
first.
"'

Of

these, love

came

a long

way

With these thoughts,
to

inevitably,

Keynes found

his interest shifting

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

he finished with Cambridge
in

in 1905,

Keynes

sat for the Civil Service

examinations and did badly

economics. His explanation was characteristic:

"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.

War and the Peace
When
went
the Great

War came, Keynes was
where
his
in

not attracted to the trenches.

He

to the Treasury,

job was to take British earnings from trade,

proceeds from loans floated

the United States and returns from securities

conscripted and sold abroad and

make them co\er

all

possible o\ erseas

war

198

Alfred Marshall.

He "combined the

reputation of a prophet with the aura of a saint."

The Mandarin Revolution

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

view, was an appalling mistake.
in Paris in the early

The mood
indifferent to

months of 1919 was vengeful, myopic,
it

economic

realities,

and

horrified Keynes. So did his fellow civil

servants. So did the politicians. In June he resigned

and came home, and,
as

in

the next two months, he composed the greatest polemical document of modern
times.
it,

It

was against the reparations clauses of the Trcat\ and,

he saw

the Carthaginian peace.

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

compassion but of elementary

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

I

con\ c\ to the reader,

who does

not

know him,

an\'

ju.st

impression of this extra\isitor to

ordinary figure of om- time,

this syren, this

goat-footed bard,

tliis

half-human

our

age from

tlie

hag-ridden magic and enchanted woods of CeUic anticjuity.*

Alas, no

man

is

of perfect courage. Ke\ nes deleted this passage on Llo\ d

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

book, he has rendered the Allies a

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

rejoicing to the nations enemies.

It's

a

device to which highly respectable
right,
it is

men
ill

regularly resort.
"

"Even

il

noli

are

onb' the (Communists w ho w

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

signing. Allied officers get a peek at the proceedings.

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?"

Churchill and Gold

And

it is

when

they are wrong that great

men most

resent the breaking of

ranks. So the\' greatK' resented Ke\nes. For the next twcnt\ years he

headed

an insurance company and speculated

in shares,

commodities and foreign

exchange, sometimes losing, more often winning.

He

also taught economics,

wrote extensiveK and applied himself to the

arts, old

books and

his

Blooms-

bury friends. But on public matters he was kept outside.
rules.

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

tongue and eventually
it

his

thoughts to his public
habit.

position. PresentK" sa\'ing nothing but sa\ing

nicely

becomes a

On

the

outside one can at least ha\ e the pleasure of inflicting the truth. Also, as a free-

lance intellectual, Keynes could marr\ L\dia Lopokova

who had

just en-

chanted London as the

star ot Diaghile\''s ballet.

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

Lopoko\a married John Maynard Keynes?

ci\

il

ser\ant. e\en for a
bit

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.

Churchill and Gold

The man who

suffered most from Ke\nes"s freedom from constraint
In 1925, Churchill presided over the

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

gold and dollar value of the

1 23.27 fine grains of gold and 4.86 dollars pound the pound. Churchill was Chancellor of the Exchequer.

The Mandarin Revolution

In retrospect, the error

\\

as not an especialK subtle one. British prices
in

and

wages

liad risen

during the war as they had
less

other coiuitries. But in the

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

goods, the\ w ere, in comparison w

ith

those of Britain, a bargain.
at, sa\\

Had
well.

Britain gone back

to the

poimd

4.40 dollars,

all

would ha\e been

With

sterling

bought

at that rate,

the cost of British commodities,

manufactures or services

coal, textiles,

machinery, ships, shipping

— u ould

have been pretty much

in line

with those of other countries, gi\en their prices

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
,

Low Countries, the United States. Wh\ the mistake? To go back to
and dollars was
nothing.
to

the old rate of exchange of poimds tor gold

show that

British financial

management was again

as solid,

as reliable, as in the nineteenth
It

cenlm\

.

it

proved that the war had changed

was a thought
in

to

which Winston

fessional cust(xlian of tlie British past,

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

of greatest public prestige states his position at a meeting; the others
|)raise his

wisdom, 'fhose who

liaxe a reputation lor dissent, like
It

Keynes, are not invited. They are not responsible, serious, effective.
that financial decisions, like those on foreign polic>
to protect error.
,

follows

are carefidly orchestrated

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
'**

believe that Churchill read this exculpation with any pleasure.
If British

exports

were
il

to continue, British prices

could

come dow

n oni\

wages came dow

n.

.\nd

come dow n. I^rices wages could come down in
had
to

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

strike, 1926. After Churchill

Why, Keynes

asked, did he do "such a

silly

took Britain back to gold, wages had to come down. thing?"

Charles Rist.

Ijalniar

Horace Greeley Schacht

(left)

and Montagu Norman.

The American Impact

There was.
coal
tell.

in llic

end, botli imemploN

mcnt and

a horizontal

wage

cut.

As

the mines ot the Ruhr

came back

into production after 1924, world prices of

To meet

this

competition with the more expensive pound, the British
in

coal-owners proposed a three-point program: longer hours
lition ol

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

actions could be urged.
R()\al

Who

knows, mavbc their sun

will sliine again.)

A

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

out in support of the miners. This, with

some
it

slight

exaggeration,

called the General Strike. For cjuite a

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

the other remedy,

constitutional government, a manifestation of anarchy. C'hurchill took an

especialK' principled stand.

The miners remained on

strike

through most of

1926 but were exentualK defeated. Keynes's judgment was redeemed but he

was not

forgiven.
it is

It

had happened again: when the men of great reputation

are w rong.

the worst of personal tactics to be right.

The American Impact
After 1925, British prices remained stubbornK too high.

Money

that

might

ha\e come

to Britain tor

goods continued
France.

to

go elsewhere,

cjuite a lot to the

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

return to gold was

207

The Mandarin Revolution

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,

The twenties were bad
unemployment was low,
all,

years

wonderful

in

the United States for
did not
rise.

everyone that counted. Farmers were very unhappy.
industrial production rose,

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

did the stock market. All

common

stocks rose during these years,

Seaboard Airline was a foothold
it

in the

new world of axiation. although, in fact,

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

and more. Nothing was
It

go

upstream the stock
;

in

the investment trusts and holding companies then went,

often in a week, from wonderful to woithless.

was an

e\entualit> that almost

no one had foreseen.

The metaphor for all
nothing
like
it

these promotions was

Goldman

Sachs.

There had been
like
it

since the South Sea Bubble; there

would be nothing

again

imtil I.O.S. (Investors

Overseas Service) and Bernie Cornfeld.

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

JuK the combined enter-

208

Dark Thursday


a

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

more in securities was West Coast bank.

issued to buy another investment trust as well as

Shenandoah, which had been issued
eventually went

at $17.50

and had

risen to $36.00,

down

to fifty cents.

This was quite a

loss.

The Trading
itself, it

Corporation did worse. In February 1929, aided by some purchase of

had reached $222.50.
took

Two years

later

it

could be had for a dollar or two.

"He
it

my

fortune," said one saddened commentator of his broker, "and ran

into a shoestring."

A

principal in this vast expropriation

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

We shall encounter him again.

Dark Thursday
For Goldman Sachs, as for stocks
in general,

the day of reckoning

was

Thursday, October 24, 1929. The market had been weak on the da\s before.

On

that morning, a story I've told before, there
to sell. This hit

unexplained headlong rush
torrential force.

was a great unrestrained and the floor of the Exchange with

The machinery could

not adjust to the panic.
tell

The ticker fell

far

behind the market. People across the country could not
ing, only that

what was happen-

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

waited impatiently for him
too obscene.

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

unduly simple view,

his return to gold in 1925, the

subsequent

rescue of Britain by low interest rates and easy
the cause of
it all.

It

would be good
it

to believe that

had Churchill on hand but

isn't so.

had been was design or guilt thai He only happened to be there.
in
it

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.

A man came to work on a high building.

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

market turned dramatiealK' around, although

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

later in the da\

years.

The Crash
vency
ot

blighted consumer spending, business investment and the solfirms. After the

banks and business
first

Great Crash came the Great

Depression;
fourth of
tional
failed.
all

the euthanasia of the rich, then of the poor.

By

1933, nearly a

American workers were w ithout

jobs. Production

Product

— was down by a

— Gross Na-

third.

As noted, around nine thousand banks

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

Great Depression. This remained

in

the American social niemor\ for

the next forty years and more.

When

an\ thing

seemed w

rong, people

would

"Does

this

mean another depression?"

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,

acceptance of hardsliip, resort

to patience.

This
is in

is

a natural reaction.

Few can

believe that suffering, especialK by others,
lia\

vain.

An\ thing

that

is

disagreeable must sureK

e beneficial economic effects.

211

Andrew Mellon "Liquidate labor, would be no way left but up.
:

liquidate stocks, liquidate the farmers

' .

Then

there

I

The

Trial

Runs

Herbert Hoover

in the

United States and Hcinrich Briining
.

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

Briining's remedial aetion in

.

liquidate the farmers

."
. .

After Mellon w as finished, there would,

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

extruded poisons that had been accimiulating
a regular income.

the economic system. Others joined in urging patience, a course of action
is

that

easier

when supported by
was
to

And many warned
inflation.

that

affirmative measiues by
effect in all cases

government would cause

The

practical
for

come

out for inaction.

It

was not a good time

economists. Britain did abandon the gold standard and free trade. Otherwise

Westminster and Whitehall reacted

to the l3epression

by ignoring the steacK

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

essential step on fiom Irving Fisher.

the

money suppK

in

bank deposits or Fisher's famous

The borrowing ensured the increase in M What was spent
'.

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
\

successful application of his policies was, in fact,

where he was

all

but

imknown.

The

Trial

Runs
not gi\en to Ijooks. Tluir rt'aclion was to circumstanct', and
tin-

The Nazis were
this

served them better than

sound econonnsts serxcd
iuoiua and spent

liritain

and the
it

tfnited States, f-'rom 1933, Hitler

bono wed

— and he did

213

The Mandarin Revolution

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

Keynes would have advised.

It

rising

incomes from spending too much of it on imports.
results

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

a Keynesian could have wished.
in

ployment was

an end

the industrial world, an absolutely unique achievement.

can conservatives looked at the Nazi financial heresies

— the borrowing and — spending and uniformly predicted a breakdown. Only Schacht, the banker,
they said, was keeping things patched together. (They did not

The German example was

instructive but not persuasive. British

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

employment, could come from
1933,

Hitler. It

was the American case

that

was influential. At the close of

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

following year he visited

FDR

but the letter

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

unions arc nonexistent or weak, as they

were

at the time in the United States, labor can then

reductions. Action by one
inflationar>
spiral will

company

will force action b\' another.

work

in reverse;

the

wage The modern reduced purchasing power of
be forced
to accept

add Washington was
workers
will
effort,

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;

he and they beliexed the

NRA

wrong, and

e\'cr since

il

has had a poor
\'igorous

press.

One

of

FDR's

foolish mistakes.

Keynes wanted much more

214

Franklin D. Roosevelt, 1932. The Metropolitan Opera House was packed
for Roosevelt.

- with

Republicans

The Mandarin Revolution

[

borrowing and spending: he thought the Administration

far too cautious.

And Washington w as.

indeed, reluctant.

In the earh thirties the

Ma\ or of New York w as James J. Walker. Defending
dirt> literature, as
it \\

a casual attitude toward

as then called,
\\

he said he had

never heard of a
fashion, to pro\ e

girl

being seduced by a book. Keynes
rong.

as

now

.

after a

Walker w
seduce
\\

Ha\ ing

failed b\ direct, practical persuasion,

he proceeded

to

ashington and the w orld by w a\ of a book. Further

to pro\ e the point against

Walker,

it

was a nearly unreadable one.

The General Theory
f

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

tenaciousK to their belief.
if

The

pain. the\

w ish

to think,

w as w orthw hile. And

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.

This too wins disciples.

Keynes's basic conclusion can. how ever, be put very directly. Previously

it

had been held that the economic system, any
equilibrium at
Idle
full

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

output (and employment)

in the

economy as
lo.s.ses,

u

h(.)k'.

Such a slump reduced earnings, changed business gains into

216

The University Route

reduced personal incomes, and. while
sa\in2s even more.
It

it

reduced in\estment.

it

reduced
to invest-

was

in this

way

that sa\in2s

w ere kept equal

ment. -\djustment. a benign word in economics, could be a chilling thins.

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

sov emment should borrow

The University Route
\\

ashin^ton. as noted,

u as cool

to

Kevnes. So. with The General Theorij as his

cipal point of entrv

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.

I

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
; ,

KevTies but loved argimient more. Robert Brvce. a brilliant

vmmg Canadian,
it

had just come from Keynes

s

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
.

More than anvone

else

he caused Canada

to

become, even betore the

United States or Britain, a pillar of the Kev nesian faith.

217

The Mandarin Revolution

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

before. Conservatives regularly extend their faith to the

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.

That was Keynes. You came
peaceful change.
radical.

to

him out of conservatism, your desire

for

And by

urging his ideas you

won

a reputation for being a

To Washington
From Harvard
Boston
to

the ideas of Keynes
in the

went

to

Washington

— by
New

train.

On

Thursday and Friday nights

New Deal years the
to

Federal Express out of

Washington would be
All

half-filled

with Harvard faculty members, old
to the

and young.
Harvard
that they

were on the way

impart wisdom

Deal.

The

(Uim.soii

once said of the lectures of a noted professor of government

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

cautious in the presence of such heresy.

One

does not overcome such caution
to

by logic or eloquence but almost always the opposition comes

your rescue.

It

came

galloping

in

those years.

In 19.37, reco\'ery from the Great Depression

was slowK under way; prostill

duction and prices were rising, although unemployment was

appalling.
to cut

The men

of sound

judgment now asserted themselves. They moved
in

spending, raise taxes and bring the federal budget into balance.

The tew
to a halt.

Keynesians protested; our voices were drowned out
applause. As the budget
Presently there was a

the roars of orthodox

moved toward balance, new and ghastU slmnp,

the recovery

came

a recession within the De-

gl8

Herbert Hoover.

Hooverville.

The Mandarin Revolution

pression.

It

was

t-ntirely as

Keynes predicted. The men of sound judgment

had made our

case.

The American Keynesians
Wliere were our
allies in

Reserve System.

We

Washington? They were, of all places, in the Federal tJiink of a central hank as a stronghold of myopic,
It is

unyielding conser\ atism.

not an extravagant \ie\\ hut the Federal Reserx e

was then headed Eccles had seen the
their

h\ \Iarriner Eccles, a I'tah
lines of depositors

hanker of highh original mind.
his

form outside

money.

He had

seen

men

looking without hope for work.

own banks to He knew

get the

worried, broken farmers outside town.

Why

not have the government spend

money

to

provide jobs and help the farmers back to solvency? His experience
to those of

had caused ideas very similar
Roose\'ell

Keynes

to pass

through his mind.

had brought him

to

Washington.

Eccles's principal

economic aide was Laiichlin Currie, another of the no-

table Canadians who, in their selfless way,
Repidilic. PrexiousK

had come south
of

to rescue the

he had been a faculty

published a iiook on the supply and control

member at Harxard and had money that had anticipated

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

important propositions of Keynes. This caused him
the great economists, and he

with doubt

b\'

will

liappen often again.
the Federal Reserve in the late thirties C'urrie

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

concerned indignantly denied.

Much depends

on the point of view. In later

years Currie was accused of being a Commimist.

He was

not.

But for

many

people the diflerence between Keynes and ('ommunism wasn't too great.
Also
in

the latter thirties, Kexnes

won

his

most important influential .\merfirst

ican reciuit; that w as Alvin

Harvey Hansen, a professor

at

Minnesota and
the American

then

at

Harxard and one of the most prestigious

figiu-cs in

economic pantheon. Hansen was no yoimgster xvhose
students he propagated the
faith.

xiexxs could i)e dishis

missed by the economic establishment. In books, articles and through

Hansen and Iwo other

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
.

true protagonist of the Keyne.sian ideas.

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

safe. It's a difference that

Also as unemployment diminished, but w

before

it

disappeared, inflation
his
ith

became

a threat. Ke\ nes belie\ed himself to have a
it

remed\ and so did

followers;

was

to put

everything into reverse. Raise taxes to keep pace w
try
li\

wartime spending, thus
deficit.

by

all

possible
if

means

to

keep dow n the budget

Keep the

cost of

ing stable,

necessar\' b\ subsidizing the cost of

food and other staples. Labor could then be asked to forgo
the duration.

w age

increases for
it

Some

price control

and

rationing might be necessary;
.

should
it all

be applied selectively to essentials
out in a famous series of letters to

in especially short

suppK Kc\ nes
b\
so.
it

set

The Times.
If

In

Washington and

now

in

London the proposals were wideK accepted.
work.
I

Ke\ nes said

must sureK'

circulated a paper with a similar set of proposals in Washington to

w hich

I'd

been summoned by Lauchlin Currie.

It

was an

inspired action, for, as a

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

The Mandarin Revolution

obscurity by running unsuccessfully for the presidency. But his obscurit\
is

less

complete than

for most.

A

verse from the campaign, simple, forth-

right,

good

in

scan and rhyme, survives to celebrate his character and

proxenance:
James G. Blaine, James G. Blaine,
Gontinental
liar

hom

the State of Maine.

In a

few weeks we outgrew the Blaine house. Three times during the war

we

burst at the housing seams

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

that, for inflation,
all

the ideas of Keynes as adapted by Galbraith did not work. Long Iiefore

the

imemplo\ed had
led, in turn, to

jobs, corporations could raise prices

— and the\

did. This
spiral.

wage demands and

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.

The only hope was
ot 1942,

to

go

in for price-fixing

on a vast scale. This,

in

the spring

we did, and
I

rationing followed. Tliat polic\ did work; prices

were kept

nearly stable throughout the war.
Previously
conviction;

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

a tar, tar wiser

be right than

be consistent.

A

revisionist view, greatly favored l)y partisans of the free market,

now
w as

holds that price increases were only bottled up, to be released after the war.

There was, indeed,
less

a bulge

when
in

the controls w ere lifted in 1946, but
\

it

by

far

than the increase

the single peacetime

ear of 1974. Without the

controls prices before the

w ars end w oidd ha\ e been doubling and redoubling
ol all

every year.

With minor exceptions we eventually had control
United States. There could be appeal

the prices in the
courts.

to higher authorit\
If

and the

No
ith

one much
a smile,
painful.

did, for higher authorit\

backed us up.

an\ one

left oiu" offices

w

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,

handsomely afford man.
I

was a psychologically damaging experience
it,

for a

\oimg

was

accu.sed of liking

which, perhaps,

I

did.

People appealing
fiuilding. 'I'hose

lor price increases

with the worst case alw a\

came to a s made

large table

in

the Census

the most compelling plea.

Know ing

thai ihi'ir case

w as fraudulent, the\ had rehearsed with the greatest

222

Triumph

care at the greatest length.

We

usually liad the figures on their earnings:

I

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

of the great famine in the land of the ants.

One day a

patrol from an ant colony

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

to roll right b> the ant

colony

and

lie lost.

The queen ant went up and down

the lines encouraging her troops,

who w ere

holding against the food, to ever greater exertions.
n like the fingers. In ant language
it

Her antennae

were going up and dow
horse-shit."
It

meant, "Stop that

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

at the university at all that year.

He came

into

my

outer office in
it

Washington imannounced one
in
I

da\' to deliver a paper.

M\' secretary brought

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

he should see me. The name, she
it

looked at the paper; there

was,

].

priest.

With much more emphasis on rationing and
economic
polic>

less

on price control, the British
to oin\s.

during the war was otherwise similar
less

There too

it

worked. British wartime planning got more from
country. As the
I

than that of any other

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

what would work

in

saw the Keynesian remed\ The conclusion was inescapable: war would work in peace. The Keynesian victory was
for

depression and unem-

were, the front row

.

now

assured.

The

failure of the

Keynesian system

to deal

w

ith inflation

w as

not stressed. Inflation w as surely pecuHar to the war.

Liberal businessmen

in

these

\

ears began to show interest: the\ iornied the
to

Committee

for

Economic Development

promote the

ideas.

The\ w ere

\

er\-

223

The Mandarin Revolution

careful,

however,

to avoid

Keynes's name.

And they spoke not of deficits but of
to seek

a budget balanced only at a high level of employment.

As the war drew

to a close, a

group of young economists decided

Congressional sanction for the idea of government planning to maintain

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

Republicans (or Democrats) to be

full

employment, although,

in the end,

many

did rise to the challenge.

Bretton

Woods
his last crusade.

Meanwhile Keynes himself was completing

At Paris he had

fought the Carthaginian peace. In 1925, he had fought Churchill and the

tyranny of gold. In 1944, representatives from 44 countries had assembled at
Bretton

Woods

in

New

Hampshire

to

ensure that the errors on gold and

reparations on which Keynes had

Bretton

made his reputation were not repeated. The Woods Conference was not a conference among nations. It was a
rival

conference of nations with Keynes. His only

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

of flexibility to the rule of gold.

A

country

in

trouble could win time by

borrowing from the Fund.
that

When the war was over, Keynes also negotiated the loan — $3.75 billion —
was
to see Britain

through the postwar years and

until exports

would

again pay for imports. There was

orthodox financial mind

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

terrible aberration of the

time

subject to rigid exchange controls during the war.

accumulated wartime hoards of inconvertible sterling

market currency operators, the banks

— 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.

precision. This time

The Age

of

Keynes

The Age of Keynes
After the fiasco of the British loan

came

the Marshall Plan. This took a far
it

more

practical

view of the postwar world; with

Europe recovered. The

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

was the legacy

men

told

each other there must, on no

account, be another harsh peace. Keynes's philippic against the Versailles

Treaty was

now the conventional wisdom. A defeated enemy was now helped,

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.

But these years showed the flaws
similar infusion of

in the

Keynesian miracle as well, although

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

was the missing

ingredient. This could be provided

and was provided

by the Marshall Plan. In the poor countries, on the other hand, industrial
experience, industrial
tration, transportation
skill,

industrial discipline, effective public adminis-

systems and

many

other things did not

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

United States the highest

in thirty

And industrial
is

prices are going steadily, steadily up.
in Britain.

What is

true in the

United States

worse

But Keynes, once a heretic,

is

now

the

225

The Mandarin Revolution

prophet of the established
work.
Inflation
this
it

faith.

One must

believe that for his remedies to

can be cured by having enough unemployment. However, with
is

cure no Keynesian can agree; the essence of the Keynesian system

that

cures unemployment.

One can

stop the increase in corporate prices

and

trade-union wages by direct action. (I've long thought such action inescapable.) This does not leave the

market system

intact as Keynes, the con-

servative,
face.

had intended.

It is

a portent of radical change that not

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 Fatal Competition

[The American people must be on] siuird against the acquisition of unwarranted influence,
\\

liether sought or unsought, b\ the militar\ -mdustrial complex.

The potential

for the disastrous

rise of

misplaced power

exists

and w

ill

persist

.

.

.

We

should take nothing for granted.

— President Dwight D. Eisenhower, 1961
To understand
this

world \ou must know that the militarx establishments of
civilians ot both countries.

tlie

United States

and the So\ iet Union ha\e united against the

—A high
In his testimonx toda\-,

official

of the

Department

ot State

to the author,

1974

Mr. Haughton refused
of his

to characterize the
.

pa>ments
call

[to other

govern-

ments] as bribes, explaining that one
"If
to
\

lawvers
s

.

.

preferred to

them "kickbacks."

ou get the contract,

'

.\Ir.

Haughton

said, "it

pretty good evidence that the pa) mcnts had

be made."

— From the
Chairman
of the

\'cic

York Times account
J.

of the testimons ot Daniel

Haughton.

Lockheed

.Aircraft C-orporation,

before the Senate Banking and Currency Committee,

August

25, 1975

Politics, in

one of the oldest of professional
its

cliches,

is

the art

ol

the possible.

I

Equally, in

highest development,

it is

the art of separating the important
is

from the peripheral and then concentrating on w hat

important, no matter

how

difficult.

No problem

in

our time

is

a fraction so important, no source oi

imcertainty a fraction so valid as the arms competition between the United
States
for

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\

We are concerned in these pages with

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 Fatal Competition

The competition
conflict

just

mentioned
conflict

rests

on two broad currents of thought,
is

both exceptionally ominous

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

in their implications. First, there

the concept of

make

the current generation of arms obsolete and
is

make necessary

the next.

This

the

first

symbiosis.

The second

is

between the United

States

and the

Soviet Union.

The same
its

process in only slightly different form exists there.

Each power, by

innovations and acquisitions, then creates the need and

incentive for the other

power to do the same
is

— or more. Thus each works with
The

the other to ensure that the competition

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

perception as a conflict between systems to the present

tendency to view

it

as a

web of power by which we

are ensnared.

We are all
in Berlin

greatly the product of our education in these matters.

Mine began

very soon after the end of World

War

II.

Berlin: 1945
I

knew

Berlin rather well before the war;
I

I

went there in 1938 to study
academic
is

Hitler's
life,

land and agricultural policy.

had

just learned that, in

the

selection of improbable subjects of study involving extensive travel

taken to

suggest an imaginative and inquiring mind and

is

also a relief from tedium.

My

next glimpse of the great city was

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

canals and tunnels and under the broken buildings.

From Tempelhof
ci\ilian,
I

air-

drome where you came in, one saw burial parties passing into the big cemetery
nearb\
,

and

also

American

soldiers with their girls.

As a

had not

previously realized that an accomplished warrior could

make

love with an

M-1
war.

rifle

slung on his shoulder. Life in Berlin went on.

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

endure. In Nazi times

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

— —

given for our work, were admitted immediately to the conference

compound on

our word that

we had come

to participate
I

excellent lunch at the senior officials' mess.

and began operations with an was immediately made welcome
its

by the committee that was considering reparations policy;
Isador Lubin, was an old friend. Ever since, I've

chairman,

ing the great

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.

Soldiers, businessmen, civil servants, diplomats, assorted idlers

and black

marketeers were gathered

in

the city for the tasks of the occupation. By 1946,

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

The Brandenburg Gate,
might
of

Berlin.

When

the

Communism,

the natural tendency

armed representatives of capitahsm met the armed was to do a little business. The market was here

in 1945.

The Bureaucratic Interest

thinsis to

encourage

lis.

When we met

soeiallx

w

illi

the Russians,

we

learned

how grim had been
ot another.

their experience with war,

Some

of oiu" senior arm\ people
ol

experienced war and wanted no more
enlisted

how passionate was their fear were similar!) moved. They had it. We had as s\nibohc aUies our
ith their

men. The\ were meeting regularK w

Russian counterparts

for the sale

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

and hence how

intelligent they were.

But some, the Foreign Service Officers
Stalin

especially, spoke out of a

genuine knowledge of

and the great purges

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.

dull jobs, dull

w i\'cs, deadly routine.

war than going back

to Toledo,

Ohio, or Nashua, Nev\

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

They were summarily
occupation. Not
visitors to Berlin

evicted to

make way

for those

w ho were guiding the

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

In these rather grand surroundings the talk turned regularly to

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.

The Bureaucratic Interest
These v\ere the heroic thoughts. There was a deeper practical interest. Tlie war had brought great prestige and influence to the armed forces. It had also done wonders for American business, in the previous [Repression \ears l>usi-

The Fatal Competition

nessmen,

alony;

\\ illi

the banks, liad been a favorite target of abuse. Then,
in

during the war,

tlie

achievement

increasing production and supplying arms
re-

had been
lationship

excellent. Profits

had also been good. And a new and close

between industry and the armed services had been forged.
I

This was the beginning of the political alignment, the symbiosis of which
earlier spoke.

The

Air Force, in particular, had expanded wonderfully in
airplanes.

power, prestige,

men and

And a whole new industry had come

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

Soviets, not the French, not the British, not the
to

Germans,

were obvious candidates

No one

— certainly not many — argued that the gains of war should be
new menace. This is not the kind of thing that is
to fear
little

be the new menace.

preserved by the invention of a
said openly; the world has

from forthrightly cynical men. Not

many admitted

this

motivation even to themselves. Personal interest always

wears the disguise

ot public

purpose, and no one

is

more

easily

persuaded of

the validity or righteousness of a public cause than the person
personally to gain therefrom. Those
interest often hesitate to cite
it.

who

stands
self-

who

perceive the underlying role of

Nothing so interrupts the flow of polite
side the businessmen but

conversation and so badly repays an invitation to drink and dine.

The

doctrine of inevitable conflict had on
It

its

there were others.

pleases the slightly insecure intellectual to agree with a

down-to-earth

man

of affairs or a general.

He

proves to himself that he too

can function

in

the world of practical action.

One

felt,

as time passed, that the practical

and respectable men would

prevail. So they did.

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

altered the earlier view of this event.

seeking to harass, di.scourage and protest. Not

The Soviets were certainly many historians now think they

were seeking
232

a final

showdown. They may well have been surprised by the

The Airlift.

Its

proud

statistics

on display at the Rhein-Main base near FrankJurt.

The Fatal Competition

reaction. General Lucius Clay, the

American commander

at the time, has

always believed that an Allied convoy presenting
points

itself firmly at

the check-

would have been

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

not easy to criticize

men who wished,

at

whatever

cost, to

minimize the

risk

of the

armed confrontation

that the airlift

the spring of 1949, eight thousand tons of freight
in Berlin

by the primitive piston
life

seemed to avoid. I do not do so. By were being landed each day planes of the time. That was enough, though

barely, to sustain the

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

time a further chain of events was proclaiming the inevitability of conflict.
1948,

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

the end of 1949, the

South Korea today."

Two

years later,
if

in

the presidential campaign of 1952,

Dwight D. Eisenhower promised,
the conflict. Adlai Stevenson said
his intention to

elected, to go to

Korea

to seek

an end

to

in

response:
tlie

"The General has annoimced
Korean problem does not
separate
logic.
lie in

go to Korea. But the root ot

Korea.

It lies in

Moscow."'
these events had
its

In retrospect, each ol

The Czech

takeover was the

final

step in the consolidation of the Soviet position in

Eastern Europe. Earlier steps had not been seriously resisted.
sanctioned
in

Some had been

wartime agreements or
in Russia,

in

Churchills wartime conversations

with

Stalin.

Like Lenin

Mao in China mo\ed into a vacuum
this

— again
is

the rotten door.

He was

then thought a Soviet instrument;

seems now an
not in

impossible fantasy. That the North Koreans invaded South Korea

doubt; the sulxsequent eflorts to portray

it

as a riposte to Soutli

Korean

aggression proves only that, with enough faith,

some

will believe anything.

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

since in that part of the world,

was an

act of local initiative;

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

John Foster Dulles

McCarth\ how
,

e\ cr.

w as a mindless aberration, soon
from

to Ije struck clow n

by

alcohol

and

his inability to distinguish his friends

his

enemies. The basic

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

popularity or trust. But ideas do not need to be deeply right to be deeply
intiuential. Better that the\
fit

the prevailing

mood and

need.

John Foster Dulles
Once war could be justified
medals
longer
to the contestants
so.

in its

own terms

—a

I)ra\'e

participant sport with

The
it

justification
is

cannot say that war

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

the defense of free enterprise against

Communism

by then raised questions.
defense were those

The

passion for free enterprise was too obviously related to the revenues

therefrom.

And

those

who were most

likely to suffer in its

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

Defense of freedom was a much better case and one

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

good against bad,

right against

wrong, religion 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

John Foster Dulles. At Princeton, 1907.

"Where MacCrimmon sits is the head of the table." John Foster Dulles and Douglas
MacArthur.

John Foster Dulles

Presbyterian minister.
sailed

The countryside was

a step away.
his

As a boy Dulles
younger brother,
battles to

on the waters of Lake Ontario. His companion was

Allen Welsh Dulles, his partner at law and in the Cold

War

come.

From Watertown
for the ministry.

Foster went to Princeton and was intended by his parents

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

diplomatic discussion, he settled
the age of
thirty-eight,

down

to the practice of corporation law.

By

he was the senior partner of Sullivan

& Cromwell, the
his career.
is

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

epitome of church-going, small-town America. People do not think of cor-

especially so of Dulles. In 1929, as I've earlier told, he

more remunerative clients. was a director of the

They are This was

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

However, almost everything about John Foster Dulles remains a
all

historians, friendly or otherwise,

speak of his

brilliant

mind. But Harold Macmillan,

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,

and took an active part

in the affairs of the

National Council of Churches.

He

resumed

his earlier interest in foreign policy

and helped negotiate the peace
in the

treaty with Japan. For a

few months, by appointment, he was
his

Senate but

he was defeated when he sought election on

own. His power of command

237

The Fatal Competition

did not extend to the average voter. In 1953, Eisenhower
of State.

made him
for the

Secretarv

He came Many

to office,

and so did

his

moral sanction

Cold War.

John Foster Dulles was not a very popular figure with
generation.
of us agreed with the
liberal theologian,

liberals of

my

who

said that
. . .

judgment of Reinhold Niebuhr, the "Mr. Dulles' moral imi\erse makes e\er\is

thing quite clear, too clear
simjile

Self-righteousness

the inevitable fruit of

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

did at his father

cliurch in

'I'lu'

tcrrililf tliint;s tliat

arc liappfniiii; in

some

parts ol the wiirkl are
spiritual content.

due

to the fact that

pohtical

and

social practices
is

have been separated from
total in the Soviet
ol

Tliat separation

almost

Communist
moral law.

world. There the rulers hold a
It

materialistic creed

which denies the existence

denies that

men

are spiritual

beings.

It

denies that there are any such things as eternal verities.

As a

result the Soviet institutions treat
u\

human

beings as primariK nnportant Irom the
for the glorification of the state.
ol

standpoint

how much

the\ can be

made

to

produce

Labor

is

essentially sla\e labor,

working

to build

up the military and material might

the state, so that

those w ho rule can assert ever greater and

more Irightening pow
to

cr.
It is

Such conditions repel
irreligion."'

us.

But

it is

important

understand what causes those conditions.

He

added:
it

But

is

gross error to
.

assume

tliat

material forces ha\'c a

monopoK
thc\

ol

dynamism. Moral

forces too are mights

Christians, to be sure, do not believe in iiudking brute

power

to secure

their ends. But that does not

mean

that they

have no ends or

tiiat

have no means of getting

there. Christians are not negative, supine people.

Jesus told the disciples to go out into

all

the world and to preach the gospel to

all

the nations.

Any

nation which bases

its

institutions

on Christian principles cannot but be

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

a

even militant

polic\',

so long as

it

a\ oided "liriite

pow

er,"

would ha\e

the endorsement of Jesus.

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.

w hen the Hungarians rose
to

promise was revoked.

Thus the

setting.

On

the So\

let

side

was the proclaimed commitment

world revolution and a secjuence

ol

actions that could easiK be interpreted as

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.

The Fatal Competition

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.

The world was

set for a

The Cold War in Washington
The
nineteen-fifties in

Washington were the years not of Eisenhower but of

Dulles.

The idea

of the irrepressible conflict
in

went

virtually unchallenged.

The

questioning to which,
state should

a democratic society, every important action of the
in abeyance. I saw this, in a was cochairman with Dean Acheson in the latter

be subject was almost completely
first

minor way, at
fifties

hand.

I

of one of the subsidiary organs of the Democratic Party, the Democratic
I

Advisory Council. Acheson was chairman for foreign policy,
policy.

for

domestic

The Council was, by common agreement,

opposition

— the

the most liberal wing of the

leading edge. At our meetings Acheson attacked Dulles

lucidly, brilliantly

and with resourceful invective

for being too soft

on the
almost

Soviets.

The debate on

exclusively of efforts

his draft foreign policy resolutions consisted

by Adlai Stevenson, Avercll Harriman, Herbert

Lehman and

other moderate

members

to tone

down

his declarations of

war. That was the opposition to Dulles.

At the more practical

level, the

Pentagon

in these years

developed weapons

systems that were often duplicating or competitive and which were routinely

approved. The word Pentagon

itself

now became

a

synonvm

for military

bureaucracy and power, and a large and growing weapons industry responded
to its will.
in

Men moved with case from managing the procurement of weapons
to

Washington

managing
all.

their

development or manufacture

in California.

Few

spoke against their decisions. The
In 1945, Robert

Armed

Services

Committees of the
tlie

Congress endorsed
reference to

Oppenheimer,
in the history of

architect of the
science.

atomic bomb, was the most heroic figure

American

A

"Oppy" was
if

the highest American achievement in the art of

name-dropping, superior
security clearance
liberation

anything to a British reference to Winston, though

hardly as imaginative as a French allusion to Charles. In 1953, Oppenheimer's

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

Rand Corporation, the

special intellectual instrument of the

Air Force, established the position of an economics, mathematics or political

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

The Fatal Competition

science professor for

all

the coming year.

A

sociologist so favored

might not

even return
all

to his university.

The intelligence agencies were seen
all

as central to

Cold

War strategy, and

the most centra! ot

was the Central

Intelligence

Agency. In these years the
of being mildly suspect.

CIA was

a convocation of intellectuals to the point

The License for Immorality
The
controlling doctrines of the

CIA, on which as a former ambassador

I

can

speak with firsthand knowledge, involved an important modification of the
Dulles conception of the Cold War.

The CIA accepted

that the Soviets

were

bent on world revolution. This involved a selective response to Soviet propa-

ganda.
as later

When

Soviet leaders affirmed this goal, they

were believed. When,
to

happened, they spoke of peaceful coexistence, they were held

be

dissembling.
In addition to ambitions in
all

non-Communist countries (which more than
all

incidentally required that countering force be deployed in

countries), the

Communists were

brilliantly

and

relentlessly unscrupulous. This

was

in

keepright

ing with the Dulles doctrine of a battle between moralitx and immorality, and wrong, with the Communists always immoral.

But here a problem arose, as often
universal rules. Allhough the battle

it

does

when

action seeks the sanction of

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

seen, yearn to prove that they can be tough-minded
license lor

and very tough. So
to a

was with those who manned the CIA. The

immorality was greatly exploited and

much

enjoyed. Not

many gave thought
,

day when, the Cold

War

having abated however slighth

the license lor

immorality would be revoked and the Foster Dulles-Watertown moralilN
restored with retroactive effect. This happened. For the former licensees
it

would be an unhappy time."
"The reader has a
right to ask

whether on

slkIi
\\

matters an author

\\

riles Ironi loresiijlit or the

woncleriullv jjreater advantages of hindsigiit.

ithoul elanning always to

esehew the

latter,

I

242

Khrushchev

Khrushchev
As always, we know much
So\"ict policy in the

less
\

about

\\

liat

w cut on

in

the Soviet Union. That

postw ar

ears w as founded on the idea of irrepressible

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.

power, military, industrial and bureaucratic, within the two coun-

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

accept persuasion that
this latter obstinac\

is

in conflict

w

itli

e\ idence. All

w ho exercise power
ith

find

by

far the

most anno\ ing tendenc\ w

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

tendenc\ of bineaucratic interest and inertia, the most powerful of influences
in

our time. Khrushche\

,

incredibly,

committed himself

to a reversal ot Stalinist

policies.

And in this he had major success. He publicK condemned the Stalinist
role of fear in the

terror

and sreatK reduced the

goxernment

ot the Soviet

can say

thai,

uhcn

I

went

to India in

eaiK 1961.

I

wa.s piotoundly

impressed by the
I

political

unwisdom. acK

cntuiist tendency

and amateurism

of the ('l.\ operations. .\nd
of tiie I nited States
(.All

was

e\

en more
as

impressed h\ the embarrassment the Ambassador
ine\itab]\

would

suffer

when,

wduld happen, these operations were known.
tiiat.

inxoKod the participation of

enou<;h Indians to ensure
the support
t)l

one day. some or all

ot their co\ er

w ould be blow

n.

'

Draw in^ on

President Kenned) and Lewis Jones of the State Department, a principled

conscr\

ati\

e w ho then presided over South Asian Affairs, and also on
his mission,
I

pow ers recentK accorded
Washington a senior CI.\

an ambassador o\ er
India. (The\
official

abolished

all

of the nonintellisence operations of the CI.V in
I

were not thereafter

restored, or so

\e been

told,

i

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,

I

alwavs thought, re!ie\ed.

Nikita Khrushchev.

He traveled with obvious enjoyment to argue that existence and

peaceful coexistence were identical.

Khrushchev

Union.

He

enlarged perceptibly

tlie

scope lor debate, liberalized appreciably
the country and proclaimed the obvious
little

the intellectual

and

cultural

lite ot

truth that, after an atomic exchange,

would distinguish the Communist
repeatedly to the resulting foreign

ashes From the capitalist ashes.
policy

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,

he once told Jawaharlal Nehru (w ho

told me),
ci\ ilized

had made the name of
world. His task was to the United States

the Soviet Union a stench in the nostrils ot the see that this was changed.

The

effort included

two

visits to

unrequited pilgrimages which somewhat resembled later journeys of
to Peking. In

American presidents
seems
to

Moscow, with

a certain genius for the

opportunity, he engaged in impromptu debate with Richard Nixon.

He

have sensed,

if

he did not fulh know

,

that millions of .\mericans

would

believe that anyone

who argued

with Nixon could not be w holK w rong.

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

and the United Nations, was a major tinning
flash of insight into the

point in the Cold War.
It also,

much

later,

provided a

way the Cold War was
memoirs

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

of his visit in 1959 to President Eisenhower at his

"dacha

"

at

Camp David.

In the course of informal conversation
his generals lor

one evening, Eisenhower
In the

him of the pressure from

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

States being at risk, he found himself giving

added, they went on
then he too gave

to say that

if

denied the requisite resources, the security

of the Soviet Union against the I'nited States could not be guaranteed.
in.

And

Khrushchev, perhaps fortimately, was
the stage.

in

pow er

in

Russia

when Cuba came onto

245

The Fatal Competition

Cuba
There arc countries, which
in

consequence of size, location and, though more

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

are here concerned.

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

developed that not since Joshua's

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

rational expectation of success.

A

helpless

without experience

in sustainable

mendacity.

These untruths and
1960 had been
first

their exposure

feature of the events at the Bay

of Pigs.

were the most consequential single The unhappy flight of Gary Powers in
in a

described as a badly navigated excursion to look at the

weather. Sensing better than most the danger of falsehood

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

other words, against the

same people
appeal

to

whom

John Foster

Dulles's moral crusade

was designed

to

to
I

\\

horn, in an address to

the National Council of Churches, he had said: "But
follow
tlie
"*

believe that

we can

still

good American tradition of openness, simplicity and morality

in

foreign policy.

246

Confrontation (of a kind) at the
Pigs. Fidel Castro
. .

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."
. .
.

M

The Fatal Competition

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.

A Look into the Pit
A
year and a half after the Bay of Pigs

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

Until then discussion of

crisis

the generals ceased to make the speeches. Something else became evident from this crisis,
It

at least to the President of

the United States.

was

that

men of little moral coiu^age who get caught up in
it

the decisions are afraid to resist the accepted view, however catastrophic

may

be. So, paradoxically, out of cowardice, the fear of being in dissent or of
to

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

Stevenson, George Ball, Robert

Kennedy

— urged
crisis,
I

restraint.

Coming back
one

from India a few days after the end of the
evening
witli

went

to the theater

President and Mrs. Kennedy. During the intermission

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

me, with much
crisis.

feeling, of the

recklessness of the advice he had received dining the

The

worst, he said,

was from those who were

afraid to be sensible.

248

Vietnam

Vietnam The Cuban education was
prolonged and,
in

Iiricf

and deep. The education by Vietnam was
all

the end, decisive. In one fashion or another,

the assumpthis
is

tions of conflict as

framed by Dulles were there eroded. Only as

seen

can the Vietnam war be understood as one of the great watersheds of modern
history. It

was an

evil

and

bitter thing, out of

which came much

light.

A

crusade for moral purpose requires a certain minimal moral tone on the

part of those for

whom

the crusade

is

being moimted. Armies would not have
for the

been dispatched
dividuals

to the

Holy Land

redemption of cither Sodom or
United States with
in-

Gomorrah. The saving of South Vietnam

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

not invariably, moral purpose

Vietnam brought people
soldiers

into such opposition.

Meanwhile the country's

common

privileges of others.

showed little disposition to die for the indefensible gains and It was a thought to which American warriors were not

immune. Twenty years
arisen in

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

contradiction had not been so serious. With President Diem, the

Nhu

family

and the
villainy
its

politicians that followed as in a revolving door, the impression of

was inescapable. Marx had held that capitalism becomes vulnerable at
like

most advanced stage. Vietnam,

China, proved almost precisely the

reverse. Both countries
is

showed

that, as capitalism
tliat

emerges from feudalism,

it

characterized by an anarchic rapacit\

the pet)ple ol the advanced

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

was a remarkable demonstration
Dulles had sought to arouse.

of democraticalK expressed will.
that, for the opposite ends,

It

flowed

from the very sense of moral outrage

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

world conspiracy. Dulles had spoken of atheistic

Communism; Dean Rusk, his equally Oomwellian successor, spoke of monolithic Communism. China was a Soviet Manchukuo. .411 official references

249

I

Opposition to the war became respectable. This decorous gathering where government bondholders are cashing in their bonds.

is

in

Madison, Wisconsin,

The Symbiotic Trap

during his long and diligent term of office
Sino-Soviet bloc.

— from 1961

to

1969

— w ere
a

to the

The conception
differences

of

Communism
It

as a united world transcending national
It

and aspirations was
in

\'ital.

was what made

it

seem

new and

powerful torce

the world.

could then plausibly be presented as many-

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

there would be complicating degrees of

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

and the Chinese.

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

store b\ the real estate at issue. In earl\ 1972,
to opportunity in

w hilc the Vietnam war continued, Richard Nixon responded
a

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

the affirmation of the

new

policy of detente. (The English

of detente

remained obscure;

in 1976,

President Ford announced

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

arms race could no longer be found
trap.

in

the old ideas.

The arms race

itself

was now the

The Symbiotic Trap
At Potsdam
in
194.5,

Truman

told Stalin about
Stalin,

the successful tests and
to tlie

imminent use of the atomic bomb.

according
tiial

contemporary
he phoned

accounts, reacted calmly; observers tliought
significance of the news. So\iet scientists

he did not appreciate the
told that

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

The Fatal Competition

gineers, the

armed

services

and the supporting industries

join the effort

and

arc rewarded by the task.

An example, summer

spectacular but not atypical, of this

broad-spectrum collaboration was Project Nobska at Woods Hole on Cape

Cod

in

Massachusetts

in

the

of 1956. Naval officers, scientists and

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.

Ramage and Admiral

Arleigh Burke.

submarine while underwater, out of sight and undetectable,
target

to

devastate a

up

to three
it

thousand miles away. This was

Polaris.

Polaris,

later developed,

countered a threat that the Soviets, at the time,

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

matters has the capacity of adults, presumptively sane, for the
in the effort to justify this

polemics of the schoolyard been more manifest than
contest by ascribing blame.

The

Soviets are guilty; therefore the United States

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

and the wheel.

The Economic Consequences
comes down to this: the armed services of the United States want to exist; to exist thev must have weapons. The weapons firms want to exist and make money; to do this, they must produce weapons. The Soviets provide the justification for this existence. We justify the same institutions and the same process in the Soviet Union. It is no longer believed that conflict between the
It

two powers
the conflict.

is

necessary or inevitable;

all

know

that neither system could

survive the conflict.

We are reduced to believing that the competition prevents
England scenery
at

The

classical

New

Woods Hole
To
\dsualize
visit

celebrates the highest

technological achievement of the contest.

its

economic

effects

one

should travel west to Tucson, Arizona, and there

the Davies-Monthan Air
to the horizon. Davies-

Force Base. Here the economic effects stretch almost

Monthan
252

is

the world's largest used-airplane

lot.

Project Nobska which created Polaris. In the nature of the

West, creates the danger with which

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

of the aircraft on the Davies-Montlian lot

w

ill

he

sold.

There are good

bargains here for poor countries seeking a small place in the sun. wishing to

emulate the destructi\e tendencies of the more advanced
cost.

And
;

there are better ones
it

— newer,
oil.

civilizations at low

faster,

more complicated
will

for
fly

nations that have just struck

rich in

But most of the planes
last

never

again here on the range the\' are headed for the

roundup.

No matter what

the original cost, however wonderful the original performance, the paths

through the wild blue yonder lead but

to the

junk\ard.

There
place?

is

agreement e\en

in

high militar\ circles that the naked w capons
will ask the

competition cannot go on.
its
it

Some

hard question, what

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

— — have served instead.

I

once called

it

militar\

Keynesianism.
All candid economists

concede the role of military expenditures

in sustain-

ing the

modern economy'. Some have held

purposes

— health,

that expenditures for civilian

private consumption

— w ould do
it

housing, mass transport, lower taxes leading to
as well.

more

This ignores the entrapment. .\nd
sustains the trap military

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

ha\ e been here examining.

strong and
strong and

resourceful in defending

interest,

and we may assume that

resourceful in the Soviet Union too. Back of improved housing and cities there
is

no similar power as there

is

no similar competition. There

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

system could be built
line.

every

citv'

large

enough

to hav e a serious bus

What would be
of

built

then?

The Beginning
The question
entrapment
is

Change
for a later

one

w ord. Yet

it

could be that the economics of the

is

changing. .\nd the change, and opportunity for escape, could

come more
In
all

rapidlv than

most imagine.

the industrial countries hitherto-disadv antaged groups are releasing

themselves from the convention that they were meant, for reasons of race.

255

The Fatal Competition

class or national origin, to

have

less.

They are

asserting their claim to enjoy-

ments

leisure,

good housing, vacations, education, more than minimal

clothing, cultural activities

— formerly considered
this,

the prerogatives of the

affluent or the rich.

Along with

a point to be noted presently, have

come

the unimaginably large public costs of a highly urbanized existence.

Similar forces in slightly different form are at

There serious inequity
is

in

consumption

is

work in the Soviet Union. even more difficult to defend. So
and
nonsocialist,
is

a standard of living too far below that of the nonsocialist world.

The

result in all of the industrial countries, socialist

an
the

unprecedented demand on economic resources. This manifests

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

sures. Military budgets are

the Soviet Union the pressure of competing claims, by

all

even stronger. Popularity there too accrues
civilian

to those

who can

outward evidence, is offer more

consumption.
is

So there

a chance that, with passing years, the economic question will not

be what

will take the place of military

resources can be economized

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

limitation, not against

at least a prospect.

But it would be unwise

for

the United States or the Soviet Union
survival

— anyone, indeed, with a concern
in

men of reason in either
for

to await the

day and acquiesce

the present entrapment. That

entrapment had better be confronted

directly, a

need

to

which

I

will return.

SS6

9.

The Big Corporation

The

institution that

most changes our hves
to

we

least

understand
is
it

or,

more

correctly, seek ation.

most elaborateK'

misunderstand. That

the

modern corpor-

Week

by week, month by month, year by year,

exercises a greater

influence on our livelihood
politicians, the

and the way we
is

live

than unions, universities,

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.

The corporate myth
interests of the

is

of a disciplined, energetic, dedicated but well-

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

the consumer most wants, the market, in prices

and

rewards.

Since the corporation

wholly

in the service of the

consumer,
it

it

cannot be in

the service of itself; being subject to the power of the public,
significant

cannot have any
their

power

of

its

own. Generations of students have learned

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

as votes to get the things

subject to sovereign

done that he wants done."^ Anyone power can have no power of his own.
is

This

the myth. But Professor Samuelson
like

a sensible as well as distin-

guished man. So,

other economists, he reverts to the reality

when he

leaves the classroom.

markets

— the prices they charge, the
prices to

He

recognizes that corporations greatly influence their
costs they

pay

— that

in the real world,

to use his

words, they are "price-administering oligopolists."^ Thus they

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:

— only great committees."
it

to

be aware of

this

pow er. The ad\ ertising that does
also exercises po\\ er in

dominates our \ision

and pre-empts our ears. The modern corporation

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

corporation and the

a deepK s\Tnbiotic relationship
the puppet of the market, one of the de\ices b> \\ hich

based on shared pou er and shared reward.

The

m\"th that holds that the great corporation
is,

is

the pou erless ser\ ant of the consumer,

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

that the corporation

is

an instrument

for the exercise of

power, that

belongs to the process by which

debate on

we are governed, there would then be how that power is used and how it might be made subordinate to the
is

public will and need. This debate

avoided by propagating the myth that the
useful that the

power does not
about
its

exist. It is especially
is

young be

so instructed.

By

pretending that power
exercise.

not present,

we

greatly reduce the

need

to

worry

But not completely,
VV^e

for

we do

not eliminate entirely the associated unease.
is

sense that our lives are shaped and that government
corporation.

guided by the
It

modern
those

The myth

disguises but

it

does not reassure.

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

through the myth at the reality of the modern corporation.

The Esalen Institute One begins with an Arcadian
love the exercise of power.

scene.

The modern

corporation has power.

Men
All

And

in the corporation

power must be shared.
It is

but the most elementary decisions require the information, specialized knowl-

edge or experience of several or many people.

a world, as Charles

Addams
Our

has observed, where there are no great men, only great committees.

instinct in the exercise of

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

Monterey; Esalen seeks to provide the
organized exercise of power requires.

and the

restraint that the

One

thinks of the effort of married couples to achieve greater
so, for in its

harmony and
life is

understanding. .\nd rightly

intimacy of association corporate
is

marriage with love but without
civilize; to perfect

sex.

There

the

same need

to understand; to
that, at

an association; above
power,

all,

to

persuade the individual

some point

in the exercise of

his

purpose must be subordinated,

without sense of defeat,

— 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

Discover You Find the Center of Your Body

Know Your

Learn How Bring Your Body and Mind Together Feed Your Soul, Feed Your
Spirit

Pressure Points to Release Tension

Branch Out From ThereBlossom

What

Esalen could do for you too.

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,

allowed his hair to grow and remained on as a gardener.

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

be very different from one which,

like

Revlon or Unilever, survives by

skill in

mass persuasion or even public bamboozlement. Some corporations

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

about truth and the public good.

Because corporations
history

differ,

no single enterprise

fully exemplifies corporate

and personality.

All,

when

studied, revert, except in

unguarded mo-

ments, to their myth. The exercise of power so central to corporate personality
is

at least partly concealed. So the solution here has
realities of

been

to synthesize

to

draw from the
trates

numerous corporations the history that best illuscorporate development and the modern corporate personality. Our

corporation will be Unified Global Enterprises

— UGE. Since UGE

exists

but

does not
with

exist,

there was no one to defend

its

myth. Everything having

to

do

UGE,

inside

and

out, could

be seen without censorship.

The Founder James B. Glow came
in 1871.

to

Ghicago from Greenock on the Clyde below Glasgow

He opened a butcher shop on the South Side and presently went on 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

Thereafter, in the words of the

history of the firm,

"James Ballantyne
261

The Big Corporation

Glow never looked back." By the end
Swift,
It

of the century

Glow

Packing, along with

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

the course of a standard seventy-two-hour

week, twelve-hour day. However, again there were differences.
plant ever

No Glow
warning
Re-

worked on the Sabbath. And along with
all

their

weekly pay. Glow
tracts

employees received,

at

no expense, Bible lessons and

against alcohol, tobacco, spendthrift living
strikes of the eighteen-nineties,
flecting the

and immorality. During the great
in effigy.

Chicago bosses were hanged

deep

religious feeling in his plants,

James

B.

Glow was

several

times burned at the stake.

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

part of the pig but the squeal.

In defense of the Glows,

it

should be said that, at the time, the standards

of the meat-packing industry

were not

high.

During the Spanish-American

War more
bullets.

soldiers
is

were

felled

by the embalmed beef than by the Spanish

There

no reason

to believe that

lethal than the industry average.

And no

other

Glow products were greatly more company learned its lesson so
in its advertising.

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,

of inexpensive vegetable products, suitably disguised, processed

and

could be sold as canned meat and sausage was what launched

Glow Packing
it

on a path different from Swift, Armour and the
develop
its

rest.

For presently

began

to

own sources of vegetable oils, oatmeal, cornmeal, cottonseed meal,
it

wheat bran and,

was

said although never admitted, freshly milled sawdust.

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..

well trained in the family traditions, took over

from

his father; in 1922, in a step of far greater significance

than even he could

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

modestly addicti\'e qualities

— the syrup contained
He was

an operative infusion of cocaine. Eventually Glow dropped the drug.
troubled both
b\-

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

regulation. Sales did not suffer as

the soft drinks.

It

wideh' held, was a marked favorite
In the Depression, despite
strengths," sales
\\

became Glow Food and Beverage, Inc. The in the boom that summer.
hat
its

stock,

now

annual reports alwa>
hit

s

cited as "basic

and earnings of the firm were

by the general slump.

And

James Glow,

Jr..

now

in his late sixties,

autocratic as his father

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

Deal policies of Franklin D. Roosevelt.

A memorable photograph of the period
submit to a National

shows him being tarried from

his offices rather than

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

With World War
for

Demand

the

out noticeable peristaltic effect. In a striking departure from
operations, 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.

support for the Quartermaster's food

operations in the European Theater of Operations. There was a glimpse of
larger horizons.

UGE Today
James Glovw
of the
Jr.,

was

finally hospitalized in

1947; his resignation

became

inevitable following his attempt to

have

his personal

chauffeur

made

President

Company. He died the next

year. Harold

McBchan became

President

b

The Big Corporation

and Chief Executive
of

Officer,

and what has ever

since

been called the Era

McBehan

began.

Many

phrases have been used to describe the

McBehan

business philosophy, most of
of

them from McBehan's own speeches: a concept sustained growth. Professionalized management by professional managers.

A

partnership with people. Profit with service. Technology in the service of

national security.

The

nation's host. Nutrition for a free people. Constructive

acquisitions for balanced diversification. All these mirrored the thinking

of the

new and dynamic team
came

that

McBehan had brought

with him from

the Pentagon and the Harvard Business School.

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

the final change of name:

"

thing of the past.

UGE

was big

in

pharmaceuticals, electronics, missile guidits

ance systems, computer software, modular dwellings, along with

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

one expected or wanted favoritism. But no one doubted the advantages of a

between industry and

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

offices in sixty-two countries, substantial

manufacturing oper,

ations in twenty-four.

"Your management,

"

the Report said proudK

"directs

a closely articulated, internally reinforcing, inherently dynamic enterprise
that responds well to the capabilities that are fundamental to
agerial

modern man-

methodology and systems." In early 1969, the stock of

UGE was at its

alltime liigh; earnings, refiecting the favorable effects from the consolidation

and subsequent revaluation of intercorporate holdings and other advanced
accounting practices, had reflected their sixteenth straight annual gain.

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

gallery of contemporaries, friends

James Glow, Harold McBehan, Howie Small. Here and fellow descendants

is

a

Henry Ford

— of Ford

Henry Ford H.

Thomas J. Watson

of

IBM.

Tom,

Jr.

Sosthenes

Behn

~ of ITT.

Harold Geneen.

The Big Corporation

of a suit calling for divestiture of

its

insurance

electronics subsidiary. Liberal economists

affiliate and its advanced and lawyers hailed the action as a

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

for the divestiture of
little

The

settlement, which attracted

attention,

UGE's automobile was worked

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

employees have been

in overseas

operations; by the late sixties approximately one half of consolidated earnings

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.

Since 1962, the world headquarters of
York.

UGE has been not Chicago but New
is

The dominant theme

structures

of every age

reflected in the grandest of

its

religion in the cathedrals, the nation state in Versailles, the

Industrial Revolution in the railroad depots,

and

its

counterparts, the

tower dwarfs the lesser
Critics described
it

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,

McBehan is not known
"is

have heard. "This building," he said

our signature.

It

writes three letters large in the heavens

The board

of directors

meet

in

— UGE." — "the the boardroom on the 79th
floor

command
directors

post." Harold

McBehan
come

has called

it

is

the voice of the stockholders, the

The board ot men and women who own the
the great room.

corporation.
authority.

From

their lips

the marching orders; they are the ultimate

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 Big Corporation

the

Glow Foundation which James
also

B.

Glow

,

Jr.,

and

his

brother established for

the propagation of the essential principles of free enterprise, a philanthropy

which

reduced substantially the impact of the inheritance

tax. In

subsold.

sequent diversification moves by the Foundation much of
Arthin- Francis

Glow

— The After Glow — sold some of
more went

this stock

was

his stock

when he

established his gallery;

for his Institute for Oriental Erotic Art, yet

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

nonfinancial corporations in the United States. Nearly half, thc\ discovered,

were controlled by

their

management. No power remained with the owners

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

the directors were selected by Harold

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

Washington and a reputation
oi

for ne\'er

interfering with

management decisions. The average age

the directors was,

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

The Washington Scene
The Washington
those in
office of

UGE is
is

on

H

Street.

It is

modest as compared with
is

New York and
in

Paris but by

no means obsciuc. What
vital for

called the

I'GE

presence
lation

Washington

considered

company

welfare. Tax legis-

and

decisions; food labeling

and truth

in advertising;

drug safety;

268

The Technostructure

product safety and standards; environmental impact statements; Pentagon
orders and intentions: intelligence filtering in from countries
business;
of the
all

where IJGE does

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
,

year to the Capitol to lobb> against imports of Argentine beef.

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

UGE a source of unease and

uncertainty.

The Technostructure

when
J.

he went

to the

Pentagon, Harold

McBehan
in the

vv

as succeeded

bv'

Howard
was

Small, previously Executive Vice-President for Corporate Operations.
is

Howie, as he

McBehan

— 8812,000 a

known
v

in the firm,

is

same

salary bracket as

ear plus deferred compensation and pension rights.

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

outside the firm.
v

He

is

a two-pack-a-dav smoker, drinks to keep

going, and,

were he a

ital

factor in the enterprise, his heart condition

ould

be the source of the gravest concern. The Dow-Jones wide tape would
carrv his electrocardiogram

and

also his latest lung X-ray. In fact,

no investor

gives

Howard

J.

Small's health the slightest thought.
vv

McBehan 's departure
power
in

completed a process long under
indiv iduals to organization.

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
.

presidents, vice-presidents, assistant vice-presidents, the controllers, the treas-

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

men, designers, lawyers, accountants, economists, the men

vvlio

269

The Big Corporation

manage

the computers. Next beyond are secretaries, clerks, typists

— the

white-collar workers. Next are the

men who supervise production on the floor,

get out the goods. In the final outer ring are the blue-collar workers.
In the inner rings of

UGE there is the power that proceeds from position. In
is

the middle rings there
rings

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.

Reward — higher pay, more power — goes

the product of an intense interaction
to the

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

commercial or a campaign that increases
as a goal; a great

sales.

That

is

why UGE emphasizes growth
power and
working

many people

in

UGE
their
its

are rewarded in pay,

perquisites

when

there

own

turf.

With

so man\'

for

growth,

UGE grows,

is growth on and growth is

test of success.

Economists and politicians speak often of the
to

social gains of

economic growth. These they often believe
pccuniarv' interest.

be an abstract good unrelated
for

to

Growth

is

also very
it

good

UGE.

This

may have even

more

to

do with the emphasis
:

receives.

The Practice Eindhoven

UGE

is

an American compan\ but the corporation
is

is

worldwide. The cor-

poration's most notable achievement
industrial countries alike.

to diminish national traits

and make all
it

Americans are blamed
its

for this. In fact,

is

a

powerful tendency of the corporation, whatever
vergence.

national origin. For large

tasks the socialist countries too use the corporation

— an inevitable con-

We see this in
1944,
it

Eindhoven, a

city of 190,000 people, a

couple of hours' drive

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

calls for a firm

stand on principle by those re-

sponsible and later accepts a compromise. In Eindhoven the Philips presence

270

The Practice; Eindhoven

is still

a powerful thing; workers and the firm

still

live in close association

with

each other. There are only two ways,
Philips

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,

too, the trend

the same.

more serious. Once the company housed

its

workers, saw to their health, was concerned with their education. Those tasks

have now gone or are going
the workers as to
its

to the city or state.

Once

the

company

instructed

wishes.

Now

it

asks the union. In talking of the

power
Its

of

modern corporation, an important distinction must be made. power increases. Its parental power steadily diminishes.
the
Philips, like

public

UGE,

is

a creature of its technostructure. In this respect, too,

all

corporations are alike.

Whether

in

Eindhoven,

New

York or Houston the
brilliance but

quality of the corporate performance

on organizational competence
efforts of the

— on the success

depends not on individual
in

choosing and combining the

men, and the rare woman, who
is

fill

the rings.

These men of the technostructure are the new and universal priesthood.
Their religion
bible
is

business success; their test of virtue

is

growth and profit. Their

the computer printout; their

The

sales force carries their
is

communion bench is the committee room. message to the world, and a message is what it is
interdict as

often called. Alcohol

under

an intoxicant but allowed as an

adjunct of communion and as an instrument of friendly persuasion. Recreation
is

for regeneration of the business spirit, for a
is

widened range of business

contacts. Sex

for better sleep.

The

Jesuits of this austere faith are the

graduates of the Harvard Business School.

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.

a design for drawing on the specialized knowledge of different

In keeping with this, engineers

work here with accountants,

economists with marketing men. All and more
is

make up what,
effort.

needless to say,

called a team.

From

this

comes experience of group

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

and refresh the brain but which

also serves excellentK' as
faith,

an

excuse for pleasurable idleness. In the corporation

the most important

word is work. There is little time
method, by practice
be encountering
in

for speculative theory.

Learning

is

problem-solving.
is

Following the technique pioneered at Harvard, instruction

by the case
will

making the decisions

that students

hope they

soon

in the executive suite.

The

result of

Harvard,

INSEAD and

the rest,

still

surprisingly unnoticed,

is

271

The Priesthood Seminarians
:

at

Harvard Business School.

The Priesthood: Seminarians

in Spain.

The Corporate World

a race of

men who. no

less

than the corporations

tlie>

sene, are the same.
not
alty
to Philips.

National identity has been excised.
English, not Belgian but
all

They are not Dutch, not French,
first lo\
is

slightK .American. Their

IBM, Exxon. BP. Nesdc;
the same: a quiet
suit,

not to the Netherlands, the United States. Britain or
all

Switzerland. Their uniform in

countries, the occasional eccentric apart,

is

a careful

tie,

decently polished shoes.

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

The Corporate World
Harold McBehan coordinated the worldwide operations of what,
in

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.
.

The\ have been, he knows, well staffed-out.
Philips
is

less centralized. It likes to think of itself not as a corporation

but as

a federation.

The heads

of

its o\'er sixt\

national organizations are appointed

by Eindhoven: major capital
national companies

— some that manufacture and
The\ are encouraged neon
to
lights

outla\'s are appro\'ed there.
sell,

Then each some that onK

of the
sell

are

left to

do their

best.

become
is.

part of the local scene.

In e\er\ countr\ the Philips sign in

indeed, an inescapable

feature of the landscape.

Once

e\'er\

twelve months the heads of the national companies come
fi\e.

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

Ouch\', not far from

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

television sets, radios, appliances,

heavy

electrical

apparatus and the
ari'

These product

divisions deal directK with those

who

making or

273

The Big Corporation

tlieir

item

in tlic national

companies.

A board of management keeps their work
whole enterprise. Principals from

under review. Engineering, quality control and marketing virtuosity can thus
be kept up
to the

same standard

for the

different countries concerned with a particular line of products

meet from

time to time. There are scheduled company
stands by at Eindhoven to facilitate
t]:is

flights,

and a

fleet of airplanes

travel.

than

UGE

but

it

hasn't eliminated executive

The Philips movement.

style

is

more

staid

Why Is It Unloved?
Why
does

UGE

— or Philips — arouse unease? Why do they contribute so
Age
of Uncertainty?

remarkably

to the

The

things

UGE

makes are

better,

safer and, relative to the

incomes of the buyers, much cheaper than the

adulterated, indigestible and sometimes lethal merchandise of the ineffable

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

McBehan was a driven man;

so

is

Howie

Small.
life;

another time or world would marvel at their view of
sacrifice their time

A philosopher from wonder why they so
concept
ot

and health; be pnz/Ied bv

their curious

reward

— the
to

trivial

obeisance of subordinates and

money they do

not have time

spend.

He would wonder why

they work so hard.

He

might think them
the conflict

loolish;

From our view

he would not think them wicked. and Philips of I'GE

— we can see how great

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

the powerless and passive instrument of market forces.

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.

The Big Corporation

The Multinational Syndrome
For the modern great corporation no place
evidence
in
is

too far away.

It's

as

much

in

Howie
Union.

Small's people have recently
It is

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

business in North Korea. Because

everywhere, omnipresent and seemis

ingly omnipotent, the multinational corporation

greatly celebrated in our

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

with grave concern.

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,

see the multinational presence so vividly as in the tiny city-state of Singapore.

The great
buy or
sell

finance the production,

make

the products, house and feed those

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

the multinational corporation

comes

in

from abroad

to

influence the decisions of national governments. In consequence, Frenchmen
or

Canadians are governed,

in

some measure, by

foreign corporations. This
to

is

so. But domestic corporations seek, as does

UGE,

persuade or even instruct
birth.

the government of the countries that gave

them

This
It

is

the basic

tendency of the large corporation, national or international.
the foreign corporation, conscious of
tact than
its

could be that

external origins, proceeds with

more
is

does the large domestic firm.
Pacific could not.

UGE can

be throw n out

of

(Canada as

Canadian
FinalK
plored.
in

The

fact of life in all industrial countries

corporate power, not international corporate power.
,

one must ask

if

the suppression ol national identity

is

to
tlie

be deBritish

The assertion

of such identity by Frenclnnen, CJermans

and

ihe

first

half of this centur> brought millions of people to their deatli in

two

intra-European wars. In the general view the European Conmion Market

came into existence as
after

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

What Comes After General Motors
labor and liow production
plausibly, the

was limited

onl\

by the

size of the market.

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

What Comes After General Motors
The
its

large corporation
\\

is

here

to sta\

.

Those u ho

\\

ould break

it

up and confine

operations

ithin national
\\

boundaries are at war with history and circum-

stance. People

ant large tasks performed

oil
it.

reco\ ered from the North

Sea, automobiles organizations.

made by the That is how it is.

million to use

Large tasks require large

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

an incompetent one. The one thing as bad as a
is

rong decision

is

a decision that

greatK' delayed.
is

The

ultimate answer for the multinational corporation

multinational

authority

— go\ernment that
is

is

coordinate in scope w
is

ith

the corporations

being regulated. The decline
solution.

in national identity
er, that
it

pa\ ing the wa\ for this
too soon. In
not.

There

no danger, howe\
is

will

come

Europe

international authoritx

distantly in sight. Elsew here

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

was a mere decade ago. Ralph
It will

Nader
is

didn't bring this regulation.
is

The need brought Nader.
EspecialK
in the

continue.
it

Of further reforms there
are the

less discussion.

an article of the free-enterprise faith
final

that General Motors — and L'GE —

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,

there are suggestions. Putting representatives of labor, minorities,
the public on boards of directors
is

women and

is

discussed.
It

The
to

participation of

trade unions

\er\

dubious reform.

much an issue in Europe. Those members of the board

seems

me, on balance, a

of directors

w ho do not

parti-

277

I

The Big Corporation

cipate in day-to-day

management

are,

we have

seen, without power. So

aceordingly will be the representatives of labor, eonsumers and the public are added h\
tliis

who

change.

A

better line of development

would be

to abolish

boards of directors

in the

large firms

now

that they ha\ e no function.

These w ould then be replaced with

a board of public auditors, which

would keep out of management decisions but

ensure the entorcement

of

public laws and regulations, report on matters 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

such functionless stockholders
to the public.

in

bonds and
say,
is
it

have the dividends and capital gains accrue
But
it is

That,

all will

socialism after the fact.

The

great corporation, as

develops, takes power awa\ from the ow ners, from the capitalists.

The most
is

profound tendcnc\ of the modern corporation, one
to socialize itself.
It

tinat is

rareh mentioned,

socializes itself

in

two wa\s.
It
is

It

takes

all

power from

its

owners


We
to

disenfranchises the capitalists.

also

makes

itself
it

socialK indispensable.

now know
fail

that

if

a corporation

large enough,

can no longer be allowed

and go out of business. The recent

history of Lockheed, Rolls-Royce,

Penn

Central, the other eastern railroads in the Lhiited States, Krupp, British

Leyland, British Chr\sler afhrms the point.

.Ml
is

have been rescued or are
of politicians or

supported by go\ernment. Modern socialism
college professors.
It
is

not the work

the accomplishment of corporation executives and are the cutting edge.

those to

whom
in

they

owe money. They

They are the men

who appear

inevitable to ask the

Washington or Whitehall on the day when bankruptcy seems government to come in.
Small

On
dut\

this too

Howard

— Howie of UGE — has shown the way. In
concerned
for

line of
is

How ie makes

frecjuent speeches to groups of

citizens. It

something he must do. The speeches are written

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

as \our president l)ut as an .\nu'iican

—a

clcL-pi\

concerned .Ann
regulations,
tlie

rican.

My

message

government

tiie

ever-expanding maze of go\ernmenl

ever-increasing cost of tjLireaucracN', the dead liand of go\ernment on enter-

prise, tile bligliting

impact of welfare checks on peopie, wliat the handout state

is

doing

to

the

278

What Comes
work
ethic, the belief that all
I

After General Motors

problems can be soK ed by throw
to

iiit;

a

little

of \our

and nn

nioiiex'

at them. In a word.

speak
.

you of socialism

— socialism

not as

some

distant threat but

socialism here

and now

My
work

friends, the time has

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.

and stand firm against the

Later

in his

speech Howie called

tor "'an

adequate national defense" and

spoke of other areas "for constructive cooperation between government and
industrv."
I

He
to

said:
In

am proud
tell

announce such a step today.

keeping w

ith

the rest of the airline industrv,
I

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

proposed a go\ ernment

takeover of the

Instead, in a constructi\ e step. Washington has promised an increase in the

airmail subsidy, an equally C(jnstructive support to our short-term debt refinancing and a

constructi\e guarantee of our
association betw een industr\

new equipment

financing. This

is

the kind of constructive
in a free society. It is

and government which we should welcome
of socialism.

our best guarantee against the march

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

a somevv hat similar distinction

between socialism
that

for the rich
\\

and socialism

for the poor.

We are not through
it

ilh

the corporation.

What

has just been said assumes
it

can be

made subordinate

to the state

and that
is

can thus he

made

subject to the public interest. But the corporation

pow

erful in the state

in

the very public institution by which
contradiction here.

it

must be controlled. Surelv there
not, in fact,
bv'

is

a
it

How can the corporation be controlled by the institution

controls? Surely one of the

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.

Land and People

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

— poverty so severe that
living.
still

it

faces

those

aflflicted

with the stark problem of how to keep on
is

Whether or not

they will succeed
ol all.

for

most of the world's people

the greatest uncertainty

To

the ideas that explain poverty

we now
is

turn.

Ot these there are an abundance. There
tant as

no economic question so impor-

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

and investment. Propis

erty, profit or the

rewards

ot toil

are not secure. Education

inadequate.

a shortage of technical, scientific or administrative talent.

There

is

a

legacy ot colonial exploitation, racial discrimination, national humiliation.

Every day
I^'or

in

every part of the world every one of these explanations

is

ottered.

mankind's most

common

affliction

we have a multitude of diagnoses, each
is

offered with the utmost casualness. Poverty
if

a painful thing.

It

would be w

ell

we knew
There
is

the cause.

no one answer

— ob\
we

iously.

It is

because so many explanations

have a
is

little

truth that so
is

many

are offered. But one cause of poverty

pervasive. That

the relationship, past or present, between land and

people. Ihiderstand that, and
ot deprivation.

understand the most general single cause

The reason
tion

is

simple. Everything that allow
shelter
If

s ol

— food, clothing, elementar\
is
it

the

lirst

escape from
If

pri\ a-

— comes
l)e

from the land.
increased

these

cannot be provided, there
the

poverty.

they cannot

in relation to

numbers of the people,

endines.

In India, Bangladesli, tiie Nile Valley, Indonesia, the people

u ho work

tlie

land are exceedingU niunerous,

I'heir

product, no matter how di\ ided,

prt)-

280

The Punjab

vides only the merest subsistence, or less. That improx

c-d

culture

fertilizer,

more water, high-yielding hybrid
protection

— could

cereals, better cultivation, better plant
is

increase >ields
is

not in doubt.

dramatic; the Green Revolution

real.

But these
vv ill

The increase can be cost monev It all that is
.

produced must be consumed

to live,

there

be nothing
will

left

over to inv est

in

fertilization, irrigation or better

seed stock. Also there

be nothing left

ov er,

and no incentive

to invest, in

any case,
taxes.

if all

of the product above a bare

minimum goes to a landlord or in
and improve unless there
is

education

And there will be no incentive to invest in the advantages of the new methods

and the required
But
this
is

technicjues.

For some calculations one does not need a

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

provide some of the means for agricultural improv ement
lizer,

— the canals,

ferti-

seed and the guidance in their use.

And perhaps

land reform will give

land to the cultivator. In India these things have partly happened. Indian
foodgrain production averaged 63 million
metric tons annually
in

the

nineteen-fifties. So far in the nineteen-seventies (which

have included some

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

has been 104 million metric tons.' But

added
said,

food, there are an estimated 600 million.
its

A

revolution,

it

has often been

devours

children.

Green

rev olutions are different; thev dev
if

our them-

selves.

We

shall

know much about povertv

we

knt)vv

the answer to two

questions:

How

does the equilibrium of poverty develop?

How

can

it

be

broken?

The Punjab
It

has, in fact,

outsider the vast population of this area

been broken on one part of the Indian subcontinent. To the India, Pakistan, Bangladesh

however diverse
within
itself,

in religion, culture

and language and however contentious
its

has always seemed completelv homogeneous in

pov erty. But

those close to the scene have long remarked on a region ot substantial and
increasing well-being. This
is

the Pimjab, the great

i:)lain

that stretches across

northern India and Pakistan. Here the fortunes

ot historv

and development
ot fitteen to thirty this

have given the average farmer a sizable
acres, vast

plot of land.

Farms

by Indian or Pakistani standards, are commonplace. To
five great rivers that give the

land

comes water from the
result, including the

Punjab
is.

its

name. The
.

land along the Indus to the south,

incomparabK

the

281

People and land on the Punjab Plain.

The Possibilities

world's greatest irrigation project.

And

the farms that do not draw on
lies

tlie

canals have tube wells that tap the vast underground lake which
plain

— a lake

below the

that until recently threatened to rise as the result of leakage

from the

irrigation canals, bring

up
in

salt

and reduce

to infertile

marsh the

cropland on the surface and which,

an agreeable symbiosis, the tube wells

now

help to keep under control.
effect of irrigation
is

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

allows, as well, of the

limitation, partly
into

because well-prepared sons and daughters mo\'e readily
It is

urban occupations.

the Indian Punjab, predictably, that has
.

first
It is
I

moved toward making

family planning not permissive but compulsor\

from the Indian Punjab that much of the increased production of grain w

liich

mentioned a moment ago has come.
So the equilibrium can be broken. Perhaps, as people elsewhere
in

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-

w

ith

machinery and other technology.
in

What

is

not in doulit

is

that the

good fortune of the Punjabis

India and

Pakistan begins in a better relationship of land and people.

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

this the cultivator

minimum

of land
is

w ith which

to start.

The second The
serve.
tliird
If

possibility

to alter land

tenure

to

reward the
foin-th

efforts of the

people with what they produce. For

this too there

must be enough land.

answer

is

for
is

people

to

breed

less.

The

is

for

them

to

disappear.

land supply

indeed

insufficient, only these last

two answ

ers will

Birth Control

The control

of

population always seems the wonderfully obvious solution.

It is

practiced with ease by the affluent to protect their well-being. For the poor,

unhappily, the population increase

is

part of the equilil)rium of povert>

b

283

»

r

/

^:

\\\
Land and very few
people. Saskatchewan.

Birth Control

People of means liavc a standard
indisputaljle fact

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.

The poor do not. Welland
limited rec-

to-do people have a diversity of recreation.

romantic

fiction unite in ignoring, rely for

The poor, a point that much more of their

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.

reation on sexual intercourse.
to

Because the task

is

so unrewarding, governments have usualh
in

[uit

their

most congenitally inadequate minister
locusts are controlled their success

charge of family planning. Rats and
officials

and epidemics are prevented by
are controlled by people

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

way of being rid

of them,

and the remedy becomes even

more

attractive

the poor are dark, vellow or black.

One consequence
The

is

a

sensitive reluctance by
control. This
is

many in the affluent countries to press the case for birth
affluent

unfortunate; no one sliould be so constrained.

practice contraception.
selves.

They are not

offering advice they

do not accept them-

And

the consequences of uncontrolled population growth arc visited

not upon the rich but upon the poor.

These consequences,
terrible

it

should be noted, season
\\

come

not gradually but with

suddenness

in the

Iumi tlie rains fail.

As we saw with the

potato blight in Ireland, this

means

that

it is

the weather, not the preceding

population increase, that gets the blame.

However, the problem of population control
invite

in

the poor country

is

such as to

sympathy, not reproach. The most penetrating student of national
is

poverty in our time
also the

the Swedish Nobel Prize winner,

Gunnar
is

iVIyrdal.

He

is

most eclectic economist of the age. As a young

man he

anticipated

much
of the

of the

work of Keynes. His An American Dilemma
is

the classic study of

race relations in the United States. Myrdal has show n that the competence

government of the poor country

itself

a part of the equilibrium of

poverty. Rich countries have the financial resources to govern effcctiveK.

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

Myrdal's most famous phrase, there

an intimate

285

Gunnar Myrdal. He
government

identified the inverse association
it.

between poverty and the capacity of the

to deal with

Expulsion and Migration

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
.

because of thousands of years of experience
state.

in organization,
hirtli

it is

not a soft

And there is no doubt as to the energy with which
\\

control

measures
visit

are being pressed. There are stories of committed vohmteers
birth-susceptible house before bedtime each evening
ith

who

each
pill.

the obligator^'
I

— are

On

the statistics on the effect on population, one's hosts
less

was there

in

1972
is

forthcoming.

One must be content

with assurances that progress

being made.

There

is

also progress in the Punjab.

NearK' twice as large a proportion of all
in

couples has been estimated to use contraceptive protection in that state as
the rest of India.

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

between land and people,

control of population

is

essential.

Expulsion and Migration

The other remedy
turies,

for

overpopulation

is It

for the people to go. This, for cen-

has been the primary solution.

continues to be

so.

In the last thirty

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

because the redistribution of people has been from the
rich.
in a

poor countries or communities to the

The

rich

have not responded with

warmth

to this

remedy. More often,

mood
and

of

some

righteousness, they
to think that a

have sought

to erect barriers to the tide.

The\ ha\ e not wanted
effective,
is

redistribution of population,
to the equilibrium of povertv
It

however

logical

the right answer

remains, nonetheless, a solution of the greatest social consequence.
in tlie rich

Neither the pressures in the poor communities nor the tensions otherwise be understood. This
is

can

most impressively true of the United

States.

But

it is

also true of Europe.

In Sutherland in the Scottish Highlands, as

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

return. Agriculture could then be based on

wool, not food; this sustained, tor the few

who remained,

a

much higher
Wool expelled

standard of living. Textiles,

we saw, worked

with double

effect.

the people; spinning and weaving employed them in the mills to which they

went.

287

Land and People

The Cotton Equilibrium
It is

possible, indeed, that in tlic last

two Inindicd

\'eais tlic

manufacture of

clothinji lias l^een a greater force tor chans^e
textile in\ entions,

than the search for food.

The

along with steam power,

made

the Industrial Re\ olution. In
social history of the

1794, another elementary device
States. In that year, the

changed the
Eli

United

Yankee,

Whitney, patented a machine, a saw

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

Americas had been
sensiti\'it\' to

in decline;

it

was marginally

profitable only for tobacco,

sugar and a few other plantation crops.

Men who combined compassion

with

economic need thought
sla\

wonderfully restored the
Whitney's cotton
gin. It

e

it would soon come to an end. Cotton econom\ and the sla\'c trade. And, as we saw

produced. The teeth on the

made cotton fiber cheap, allowed cotton textiles drum raked the cotton lint from the seeds.

to be

mass-

288

1

The Cotton Equilibrium

earlier,

it

transformed

sla\'er\'

itself

from a

sliglitK

abhorrent

tiling to a

profoundl\ beneficent arrangement for protecting the black liondsman from
his

own inabilit\' next. The impact
As the demand

to

cope

\\ itli

this

world and

for ensuring his salvation in the
\\

of economics on moral

judgment

as never

more
for

\'isible

and

direct.

for cotton

expanded, so did the suppl\' of land

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

In tlie North by the nature of
b\'

mixed agriculture the

farmer worked on a variety of tasks

himself.

The fundamental human
effort

tendency

w hen out of

sight of others

w

as countered by his being an

independent proprietor and thus rewarded
his

for his

own

and punished

for

own

sloth. (In time, this

arrangement

for inducing eflFort, the
it,

immortal
acquire a

famiK farm, would
family farm.")

also, in the

eyes of those associated with

transcendental moral \alue.

"We

must, at

all

costs,

To make

a cotton crop

preserve the American
is

cotton

made, not grown

required, in contrast, a
plantation, planting

much

larger labor force.

The

basic tasks on the

which was then by hand, chopping or thinning the
cotton,

plants

and picking the

were

all

done

b\-

gangs.

The laggard worker

could easily be identified.
producti\'ity

And he

could then be encouraged to greater
his

by the \ oice of the oxerseer and

a grave dispute betw een economic historians
flogged.

w hip. There has recentK been over how frequently slaves were
less

One

greatK contro\erted study reduces the per-sla\ e a\'erage to
\'ear,

than once a

which could ha\ e pro\'ed

to

exceptionalK

la/,\

toilers the

extreme unwisdom of relying on averages.

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

tation saved the planter

from the penalties of
i\

his

own incompetence and trom
w orld.
In a third
\

his resulting inability to sur\

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
.

given medical care

when

sick, for this best

preserved the capital that he

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

forced equilibrium of poverty for

all

but the

\'er\

lew

.

This equilibrium was not altered by the Civil War. With emancipation

sharecropping replaced

slaver\'.

Before, peonage had legal force.

Now

it

w as

289

Ultimate mechanization: The cotton picker.

Mexico

enforced

b\'

the absence of alternati\ es, and also by various and ingenious
for

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

keeping the sharecropper eternally

production was quickh restored

— 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

equilibrium of povert\', people

who sense the power

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 island without writing of

"the poorhouse of the Caribbean." Then after World change. Here the cause was

War

II

came

the

mechanization of sugar production,

which
to

in

Puerto Rico was relatively slow, than the airplane and cheap tickets
York.

New

The people could
is still

afford to go,
in

and the\ went. This, and the
itself,

development of alternative industry
equilibrium. Puerto Rico

Puerto Rico
less so

broke the old

poor but far

than before migration

before the great and unspoken remed>

became

available.

Mexico

The Puerto Ricans needed
a

only the price of the cheapest air ticket.

The

field

hands from the South needed even

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

Whence they came.
Kingston, Jamaica.

SS

Puerto Rican shanty tovm.

Turkish Village.

The Guest Workers

Mexican independence, we saw.
the ancient

left

the landlords nndisturbed. In the

following decades they thoughtfulK increased their holdings at the expense of

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

privileged have regularly in\ ited their

own

destruction with their greed. In

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\'

In the long revolution after 1910. the

communal

returned to the people. Mexico
ization
fits it all.

is

a large

But the usual result w as

lands the ejidos were and di\erse country; no generalstill too man\ people on too little, too

barren land. The familiar problem.

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.

holds the\' should not come.

A

large border guard seeks to stop the escape.

A
is

man

is

arrested and sent home.
fifth

He

tries
tr\

again next day or next week.

He

arrested again but on the

or sixth

he ma\ make

it.

No one w

ill

doubt

the social pressure for this remedy.
It is

not, in fact, sufficient. In the

Mexican

villages the equilibrium of poverty

continues.

The Mexican Revolution
in

restored the land to the people. But. like
it

the Civil

War

the United States,

too left unsolved the far

more stubborn

problem of the balance between land and people.

The Guest Workers
After World

War

II, in tlie

v

ears of the great migration from Puerto Rico and
similarlv motiv ated, in

the rural South, there

was a similar movement,

Europe.

People came

to the cities of the industrialized countries

from the poor rural

villages of Eastern

and Southern Europe and adjacent Asia Minor. Yugoslav
line that div ides the

workers came by the tens of thousands, crossing the

Communist from

the

non-Communist world. More w ould have come from the
to

other Eastern European countries to escape poverty rather than to find libertv

had thev been allow ed. Turks came
In
all

Germany from

.\sia

Minor, Italians and

Spaniards to Sw itzerland, Algerians, Portuguese and some Turks to France.
countries a

myth was

carefully propagated.

The movement was

for a

Where they are.
Liverpool,

England.

Harlem,

New York City.

A hostel for Turkish
workers in France.

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

workers arc another chapter

in the

very long history of the escape from the

equilibrium of poverty. Only a determined effort to resist the obvious has kept
this

from being recognized.

In Britain alone

was

this great

process effectively resisted.

West

Indians,

Pakistanis, Indians, Bengalis,

some Africans

started to come. But the

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

other continental countries, there
effort

is

no large force of foreign

workers impelled to

by the memory of harder work and greater

poverty in the villages whence they came.

And impelled also by the fear that, if
is

they relax, they might have to go home. There

satisfaction in Britain over

having escaped the

social tensions that

go everywhere with the migration.

Almost no one mentions the economic
the main, by Englishmen.

price.

Automobiles must be made,

in

Where It Worked

On

the relationship between land and people

hard cases

— the dark side of the moon. This

we have been

looking at the

is

in the established tradition of

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.)

Where land and people

are invoK ed, there once

was a brighter

side. It

shows, by the contrasting success, the power of this relationship. For
also a pleasant, nostalgic value.
It

me it has
I

allows

me

to return to a countr\ side that

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

of an\ kind. But Port Talbot has

its

claim on history.

From

a tin\ inlet where, on occasion, a creek runs into the

lake the settlement of a large

and

area of Ontario began.

This was in 1803,

arrived on this shore. His

when a young Irishman fresh from the King's service Colonel Talbot. Having name was Thomas Talbot

295

Land and People

been a good
places,

soldier,

being highly anghcized and having influence
of

in

high
to

he had been given a substantial grant
its

land.

He had come
make

supervise

settlement. Migrants

were beginning
'

to arrive

from the Scottish
the

Highlands, a race of which the Colonel greatly disapproved. "They worst settlers
.

.

.

English are the best."

But the Scotch, as they called

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

shut in their face. For surveying the land in 200-acre lots

laying out the roads, the Colonel then got the other 150 acres. This

addition to his original grant. As the others flocked

in, his

estate

and was in expanded west
scale,

toward Windsor and Detroit

at a

wonderful pace.

Here was the

potential for terrible trouble

— landlordism on a large
elite.

the beginning of a North American landed

As we've elsewhere seen,

nothing would have such lasting eftect as

this initial distribution of the land.

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

also evaporated. Colonel Talbot's

new landed ambitions were

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,

— Malahide Castle — had grandeur. The
.\t

apparently as an equal.

mi(lcentur\, to protect the line, he

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

Land and People

estate over to his

nephew and

heir.

Colonel Richard Airey. Then came the

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

to immortality. Early carving

by author on door of local bam.

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\

houses, barns, livestock, a buggy, furniture, clothing^

— beyond the dreams of
we were who had
told that our

any ancestor
hardship.

in Scotland.

From our
in fact, for

earliest

days

forebears had been

men and women

of great courage

suffered great

The hardship was,

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

Ontario Agricultural College.
as a

My

first

travel into the I'nitcd States

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

stock Exhibition in Chicago.

Some have

since suggested that

I

should liave

remained with
I

this field of

knowledge.
But
toil.
I

remember our tarm

also as a lovely place.

remember without
If

pleasure the exceptionally tedious and repetitive

one

is

born on a

working farm, nothing thereafter ever seems

like

work.

From such farms and
began the
pulling
last

others across the border in the United States there

of the great adventures in colonization
It is

— 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

and benches and stoves on which
families to the West.

These, at nominal

cost, ferried

The Canadian westward movement completed

the occupation by EuroStates,

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

number, they produce an estimated one

fifth

of

the world's breadgrains and a

much
the

greater share of the exportable surplus.

common view

of the world, the poor, densely populated countries of
till

Asia, Africa, Latin

America

soil,

work the mines, supply food and raw

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.

United States are large producers of raw materials
print, coal, cotton, iron ore

— lumber, pulp, newsAnd
in foods,

Canada and

and a huge

variet\' of

other minerals.

breadgrains

in

particular, they are pre-eminent.

As the Third World

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

also the surplus
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.

But our passion for King George
differential.
is

\'

did not survive a five-dollar-a-

week wage
possible?

To absorb extra

people, to break thus the equilibrium
Is this

of rural poverty,

one of the major functions of the modern metropolis.
Singapore.
is

There

is

an encouraging case, w hich

is

It is

on the edge
xisibly

ol

the
It

continent where the equilibrimn of rural poverty

most

extreme.

299

Land and People

lacks

all

resources, inckiding space.
\\

The Singapore

state

is

only 27 miles long
it

and 14 miles
in

ide; a

moderately ambulatory citizen can easih cross

on foot

either direction in a day. Along with space, Singapore lacks minerals,

materials, food, energy, everything indeed except people
location. It
is, all

and a fortuitous

agree, on one of the great ocean crossroads of the world. But

being on a crossroad has worked no similar miracle h)r
times that of China. As a place of refuge from

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

far better than Calcutta or Shanghai.

There must be a lesson here.

Some

of the credit accrues, not surprisingly, to the people.

three races

— Chinese, Indians, Malays — are united

The

talents of

in

a harmonious blend.

The people work without
their

the fettering traditions to which they would be

subject in the countries irom

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.

The Singapore government's
all

contribution

is

to

make pragmatic
Is

use of
in

ideas and refuse to be the captive of any one.
is:

Adam

Smith alive
in

Singapore? The answer

Very much. There can be few places
is

the world
visible

w

liere

pecuniary self-interest

pursued more diligently and with more

satisfaction in the material result.
Is

Keynes there? The answer

is

also yes. Public outlays are balanced as a

matter of course against the availabilit\ of workers and the current and
prospective capacity of the economy.

The post-Keynesian view of inflation
also treated

— a view which
and
to

1

ha\e long urged

is

w

ith

respect in Singapore.

Wage settlements are controlled,

again

as a matter of course, to

minimize

inflation

keep Singapore's manufac-

turing competitive in world markets.

When

others talk of the need for an

incomes

policy,

Singapore economists, businessmen and union leaders are

know
Is

11

to

yaw

n.

They've had one

for years.

there planning, even socialism in Singapore?

Roosevelt, Clement Attlee been here?

Have the Webbs, Franklin Would Enoch Pow ell and Barr\ Goldis

water be distressed? The answer again
transj^ortalion

yes.

If

housing, harbor works,

and

industrial sites are needed, the

government provides.
purpo.ses.

Public apartment blocks control the horizon. Self-interest serves well as a
motivation. But
it is

recognized

in

Singapore

tliat

it

does not serve

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

in i)rincipl('. Tlu' test

is

wlietlu-r

it

works or helps

work.

300

The

City-state: In Singapore everything except people

is

lacking.

Land and People

There can be few countries
treat.

so little interested in ideological dispute, so free
is

from the rhetoric of both free enterprise and socialism. This
Singapore has a lively intellectual and universit\
outside Japan.
It is

an aesthetic

life;

the best in the East

not a place of fear. But

it is

not a place of perfect freedom.

The unions
gives no

are subject to the

wage

restraints just mentioned.

sympathy for anything that seems to interfere with work.
model
that should be emulated.
I

There is little The government

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.

Singapore shows that there
people.
It is

an urban solution
live well

to the

problem of land and

Many

people can, indeed,

on

little

space.

not a secure or easy solution. Singapore must have friendly, wellit

disposed neighbors, and

must be secure

in its

trade with the world at large.

Much depends

also on the continuing tolerant

the ability of the government to adapt.

Change anywhere
routes —

good sense of the people and in the world must always
It

recession, inflation, alterations in the trade

affects Singapore. It
it

cannot influence such changes; being small and without power,
adjust. This

adjustment must be governed by thought, not formula.
political interest or passion.

cannot

be defeated by narrow

The people must

ha\'e the

confidence, good nature and sense of

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

\er\' difficult task.

302

11.

The Metropolis

So, in the end, almost

everyone goes

to the city.

Whatever the beginning,

it is

to this that the industrial civilization

comes. Better even than the

size or

composition of the national product, the extent of urbanization measures that

development. At the beginning of the present century 38 percent of American

workers were employed

in agriculture.

By

1975,

it

was 4 percent.

In Britain

it

was

2. .5

percent. B\' contrast, in ItaK the agricultural labor force

is still

aroimd

16 percent of the total; in India

some 72 percent are employed, underthe problems of the industrial civilization

employed or unemployed on farms.
Since
it is

there that people

live,

are seen as the problems of the

city.

What should be blamed on expanding
different

income and output, the changing composition of product, higher and
fully to starve gets

consumption, the modern role of unions, the unwillingness of people peace-

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

innocence largely accepts, the responsibility for the tensions, discomforts,
follows that to understand that system nothing
its

maladjustments and failures of the industrial system.
It
is

so important as

an
in

understanding of

urban

life.

This, like most things,

must be examined
is

some
ing.

historical depth.
is

For the word
cit\

city itself, in its singular form,
all

mislead-

There

not one kind of
in

but several, and

are combined, in varying

mix and form,

the great metropolis. Four different types are readiU' rec-

ognizable: the Political Household, the

Merchant

City, the Industrial City

and the Camp. These together make the modern Metropolis.

The
The

Political
Political

Household
Household, for most of time, has been the extension of the
it

dwelling of a ruler. Like his palace,

was an expression

of his taste

and

personality and a manifestation of the grandeur of his realm. Visitors spoke of

the elegance (or

more

rarely of the modesty) of the ruler's palace.

They spoke

as frequently of the magnificence or, on occasion, the squalor of his capital.

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

I

The Metropolis

Angkor. Constantinople,

Paris, Versailles, the

Forbidden City, Leningrad nee

St. Pclershury;. Vienna. Segovia

and

literally a

hundred other wonders are the

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 Old World. Their attention during these months,
e.xclusively

he noted, would be centered

on the monuments to past despotism.
ith his

The

ruler

his will

and therew

order on the Political House-

hold. 'i1ie order itself

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

of the most remarkable results of that combination has

ix>en kept intact lor four

hundred

years.

Not only has

it

survived but

it

is

unsullied: imlike Leningrad or Florence or Paris there
industrial overlay or extension through
.

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

preser\'ed ghost tow

'"

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

— a failme of the w ater supply, a
in

strategically

imsatisfactor\' location.

other rulers tired of a palace and
of their

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

so did the [ieople.

The

pri\ate dwollings and shops
,

decayed and disappeared. The walls, mosques, mint, treasur> caravansary,
palaces and other public bm'ldings remained.

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."

Peking: Forbidden City

And modern

Canberra.

Temple

at

Angkor Wat

,

And National Assembly,

Islamabad.

Versailles

.

.

The Metropolis

cut

wood structures made of stone.

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

In the clean, dry air

see in the purest possible form the city that
hold.

I

have called the

Political

House-

Almost ever\ thing that survives

— the single and double columns that make
medley of great and small

up the
in

basic design, their massive capitals, the

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
:

enigmatic quotation "The world

pleasure they give. This
hold, along with the
city

is

important also because from the
City,

Political

House-

Merchant
it

comes the image we

still

retain of
in

should be.

From

also has

come an important convention

what a modern

urban architecture and design.
claim to architectural and

It is

the belief that government has a special

mban

magnificence. Industrialists are expected to
live, in cities ot

work, e\'en though they do not themselves

routine squalor.

Their office buildings

may be tall but they must be functional.
oft.

Executive offices

may be large and

expensively furnished but only because cost/benefit analysis
Politicians

shows that the resulting impression pays
believed to need elegance for
its

and public

officials

are

own

sake.

The

capital in

which they work

should be planned and

its

buildings embellished, even though in a depraved

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

— Washington, New Delhi, (Canberra,
conception and design.
It

Brasilia,

Islamabad,

all

cities that reflect a ruling

deserves a thought that

these are almost the

onK wholK modern
visit.

cities that the

present-day tomist

ever believes worth a

The Merchant
'f he

City
also a unity of conception

Merchant City had

result of central authority than imity of taste.

and design. This was less the Merchants must be sensitive to

fashion.
is

At any given time

in

architecture, as in dress,
ol

manners or crime, there

a rulin"; stvle. This gave unil\ to the houses

the merchants. .\lso the

306

The Merchant

City

merchant
had a

coiiimuiiitics in tlie mercantilist era before the Industrial Revolution

stron<4

sense of their collective interest. This led to a meticulous

reiiu-

lation of the

terms and conditions of trade and the antecedent manufacture.
desij=i;n

The The

regulation extended natiualK to the plan of the tow ns. the

of the

houses. Within this larger framework there
quality

was then

a rewarding competition.

and

style ot the

house w as an advertisement of the qualil\ and
In consecjuence,

st\le of the

merchant therein, the merchandise therefrom.

the Merchant Cities

N'enice,

Genoa. ,\mstcrdam, the Hansa towns that

survived the bombers of World
Political

War

II

ri\al in

order and elegance

tlie

Households.
differed not in quality but in
its

The architecture and design
central purpose ot the city.

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

We still assess the qualitv of a citv streets. We do not accept
functional: the
first
le.

bv the elegance

and

glitter of its principal

that

department stores and shops can be

must have a certain residual grandeur and the
similar standards are brought to bear on
if
its

second a modicum of stv
the

Somew hat

modern shopping
\v

center;

distinction increases

not with

its

beautv

then
citv

ith its size,

ostentation and apparent cost.

When the shops of the central
traffic
is

decav or close up, even though branches are burgeoning on the
n.

exchanges on the edge of tow

the whole

citv

said to be in decline. Oiu"

tendency
shopping

to test the qualitv
districts
is

or distinction ol an urban

comnnmity

bv
.

its

one of the continuing legacies of the Merchant
is

(]itv

The .Merchant

Citv

now part

ol

the Metropolis. Only in a subdued

and

degraded form, related not

to ships
in

and the sea but
loini.
It is

to agriculture,

can the

modern Merchant

C'itv

be found

piuf

the onetime crossroads in

307

The Merchant

City.

Once: Bruges

.

.

And now

:

Frankfort, Kentucky.

The

Industrial City

Iowa, East An<4lia and

NormancK

to wliich

farmers repair lor

Ic-rtili/rr.

larm
Its

machinery, building materials, clothing and the education

oi their

Noung.

most ubiquitous mercantile establishment

is

the automobile service station.

Merchants

still

live in the largest
is

houses back from the road and behind a wall

or lawn. But there

an aspect of shabby impermanence about these retreats

flaking paint, loose shutters,
civil

unraked leaves.

It is

because the occupants are

now
in its

servants, the current

managers of

J.

C. Penney, Sears,

Spencer.

One day
is

soon they will be
a depleted and

moved

along.

Marks & The modern Merchant C'itN
ot its great precursors.

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

Before 1776, the word had

an overtone of grandeur. Dick VVhittington's

glimpse of London was of the promised land. Dr. Johnson was even more
affirmative:

"No,

Sir,

when
that

a

man

is

tired of

London, he
in

is

tired of life: for

there

is

in

London

all

life

can afford."

The American Republic was
the English-speaking

launched
world.

in Philadelphia,

then the second largest city

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

beauty; soon thereafter a reference to a city became a reference to something
not grand, not beautiful, not even solid but something

The

Industrial City

became the

characteristic city,

mean, and all

ill-built

and

dirty
to

cities

came
this

be

thought somewhat sordid.

There was much about the
tation.

Industrial City

which helped assure

repu-

The
and

Political

Household housed

courtiers, coiutesans, civil servants,
officials,

soldiers

ser\ ants. In the

Mercliant Cit\ w ere clerks, petty
Cities there

trades-

men. In both of these pre-Industrial
small shopkeepers and an
of the mendicants,

were craftsmen,

artisans,

most of those who lived
repelled b\

abundance of mendicants. But, with the exception in these cities were required to be

generalK' presentable. That
gentility

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

Industrial City, by contrast,

made no such demands.
in

Peo]:)le

w ere now a
b\'

servo-mechanism. That service was not diminished
being shabby, unwashed, rough of manner and ripe
these characteristics were approved, for
tenance. In the Industrial City
tlie\

the slightest

their

ot smell.

On

the whole,
oi

minimized the expense
all,

main-

men

sought, above

the lowest
("ity,

cost.

The
its

reasons were not entirely to be deplored; the Industrial
predecessors, served cheaply those

imlike

who were

also poor.

309

The Industrial

City.

A place to shelter the work-stock

:

This

is

Halifax, England.

The Birminghams

The people

of the Industrial City

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

carefully monitored for pollution than the multitude of

chimneys

replaced.

Indeed,

we

take

it

for

granted that the older the industrial communit\ or the
factory, the dirtier
it

more obsolescent the

all will

be.

The

early processes
place.

HrmK

established the reputation of the Industrial City as a dirt\

Finally,

among

the constants of the Industrial City were the industrialists.
to

While a merchant had

be a

man

of style

and

taste, not so a
;

manufacturer.
tor coal, steel,

His concern was with methods and machines and efficienc\
chemicals, machinery, the buyer

was concerned not with charm, only with

— cloth and more
not crude.

performance and

cost.

And

the early consumer products of the Industrial City
tin trays

cloth,

cheap

— made no demands on

taste.

So the

early manufacturer

was

like his

product, solid, efficient and graceless, where

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

leading industrialists impressed

themselves strongh upon the

life

of the city,

and sometimes

to

its

ad\ antage.

Retiring in 1874 as the world's most eminent manufacturer of screws, Joseph

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

art gallery created, the

water and gas supply taken

into municipal ownership, sanitation
that,

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

the I'nited States

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

Coal, iron ore and limestone were

all

there

in close

proximity.

They were
in 1907,

brought together by

tiie

Tennessee Coal and Iron Company which,

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

bears the simple imprint of

its

industrial origins. I'ntil recent times

its

principal expression of civic pride
gration.

was

in its firm
is

resistance to racial inte-

However, nothing, even when bad,

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

industrialist took full

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

was, however, designed not lor

economy and

ensure that the inmates, however sullen,

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

controlled social design

was ever

so uniformly reviled as this, the

the employer-landlord

company town. When all was quiet, w ould sometimes be celebrated by his sycophants as a
in

Christian idealist or a genial and wise paternalist, and sometimes he would
belie\ e his notices.

Then,

moments ol

truth

and high ceremony he would be
,

himg

in effigy

by people

who deplored
City

only the

need

for the substitution.

The Economics of the
The government
was a
city

economic ethic — the belief
government;
it

of the Industrial City reflected admirably

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

pro\ ided. Again the imprint of economics on culture.

312

I

London, England The
:

city as the Industrial

Revolution made

it.

The Metropolis

The

Industrial City in
in

Europe

in

the last ccntiir\ u as better served than

its

counterpart

the United States. Those elected or appointed to office were

usually nonlarcenous. In the United States

men were measured
officials,

in straight-

forward

fasliion

by the money they made. City
this the\

not surprisingly,

sought also to show their worth;

did b\ appropriating public money,

sometimes
Bryce, the

in

some decently

circuitous fashion, for themselves. In 1888,

Lord

first

great British student of American political institutions

and

folkhabits, concluded that the
failure of the United States."^

"government

of cities

is

the one conspicuous

Two

decades

later Lincoln StefFens, then the

dean of the American muckrakers, a man with a unique capacity
etition, told at appalling

for rep-

length of the evil association of reputable economic
political

power and disreputable

power

in

the American metropolis. Neither
city that so distressed

Bryce not Steffens should have been surprised. The

these observers corresponded precisely to industrial need.

The

industrialist

was

free from restraint.
city sheltered his

He

could do as he needed with
at the

air,

water, landscape.
Since he

The
city

work stock

lowest

possible cost.

the politicians, they were reliably in his service. Given that the

owned pmpose of 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.

The Camp A most important
income.

influence for urban change has been money, rising real

In the Industrial City this, in time,
in

was

reflected in the housing

even more

the shops, shopping centers, cinemas and stadia
social

and where incomes
class

were

spent.

The

pow or

of

mone\

is

great for the rich but also for others

as well.

With higher income came a much enhanced prolessional

doctors, lawyers, accountants. Also a

new

race of artisans, surgeons to auto-

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

proletariat of the Industrial City has

been submerged

in

the great and growing
class.

artisan, clerical, technical, professional

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

a well-founded desire by the

stitution of a mercantile class

and the appearance of the new managerial
live in

elite,

the

number who could

afford this escape increased greatly. In the suburbs the

rich or the

modestly affluent coidd

comparatively clean

air

with their

private trees and grass.

And

they could have schools, churches and rec-

reational facilities of superior cjuality, the quality ensured

and the

cost kept

down by

their not being

shared with the poor. Tliere could also be a rewarding

segregation according to income, occupation or race. There were rich suburbs

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,

these settlements liad no central political or economic function they did
;

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

than a bivouac. Thus

its

irom Detroit.

Migration
In the classical Industrial
C'it\

the working lorce grew

,

procreation apart, in
its

response to two forces.

One was

the attraction of the wages ot

mills,

however dark and
else to go.

satanic.

rection of the imbalance

The second was because ol between land and people. The people had nowhere
the compelled corin

The

Industrial Cities ol late-eigliteenth-centur\ Britain attracted

workers with a wage which, however low, was better than could be had

Aubiun was simultaneously the Acts of Enclosure and
agriculture.

Ilowcxer

idyllic,

a \er\
in

low -income place.

And

Scotland the alread\'-noticed

Clearances, along with an increasing population, were liquidating even that
alternative. 'Tndustrv

was
oil

in fact

the onl\- refuge for thousands of

men who
ot

found themselves cut

from their traditional occupations.""'' People, a con-

temporary petition moaned, are being "driven from necessity and want
employ,
their
in vast

crowds, into manufacturing towns, where the ver\ nature of
forge,

employment, over the loom or

may waste

their strength,

and

316

f

Migration

consequently debilitate their posterity.

"-^

English agriculture

was

substituting

the greater intelligence, energy and economics of the large-scale farmer tor the inefficient, labor-intensive husbandry of those

who worked small plots and

shared the

common land.

Seventy-five years later, as we've also seen, the rural

population of Ireland was expelled to the Industrial Cities (and also to mines

and

rail\\a\ construction

camps)

in

the United States, again

I)\

agricultinal

change. In the same and subsequent years there was a great and accelerating

movement

to the Ihiited States,

Canada and South America from Northern,
of
it

Eastern and Southern Eiuope, mucli
also to the Industrial Cities. After

to the

vacant lands but increasingly

World War
from the

II

came

the aborted migration

from the erstwhile Empire

to Britain,

less to the

more

industrialized

European countries and from south
migrations and their causes the
last

to north in the
told.

United States. Of these

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

new managerial class,
The

negotiations with workers passed

from owners

to organization men.

organization

men

could be blamed for

strikes; better

managers avoided

or negotiated out of conffict.

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

perceived as being both socially and economically
dislike

its

nemesis. Suspicion and
in color,

were, as often before, facilitated b> differences

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

the social order, whicli resented their presence and
schools, politics
\\

soiii^ht their

exclusion Ironi

and

social life.

When

these inhabitants re\ olted. the\ did not
.

ish to

burn the

capitalist;

they sought, loyicalK

to

burn the

city.

In Britain prior to the arrival ot the Pakistanis. Indians

race prejudice

racial

xenophobia
I

— had been thought an American
it

and West Indians,
dis-

order. And, in the Northern

nited States,

had long been thought a
it

Southern

affliction.
It

Following the great migrations

pandemic.

also ran in Switzerland against Italians, in

was discovered to be German> against

lurks. This tension

dramatic and debated luban dexelopmenl

and the thought and action it proNokes are the most oi modern times. On this \\ ill
I

have a tiuther

\\

ord picsently.

The Metropolis The dixersilicalion
changing structiue

ol

the

modern

cit\

caused by rising incomes and the
type of city. As noted,
It

oi

industr\. the arri\al oi the
final

growth of the Camps have created the

new immigrants and the it draws on
be a major
C^it\

and unites

all

the kinds that have gone before.

might be called the poststill

Industrial C^ity;
rai.soii

more simpK'
otteii
is.

it is

the Metropolis. Industrv can

d'elrc

and

But the old class structuii' ot the Industrial
sical

has

ceased

to exist.

So haxe the ph\

lineaments of the iactor\ tow

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

the Political Household. In the greatest of the Metropolises

London,

Paris,

Rome, Tokyo,

New York
its

(with the Ihiited Nations)

this

still

has an important bearing on

character.

When we ask as to the future of the modern
the iulure of the

Metropolis,

we are asking about
is its

modern

industrial socii'ty. for the Metropolis

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

w

ill

be

smallei' in the iuture; a

coimtr\ can onl\
tension that
ol
is

liciuidate

its

agricultural working lorce once.
is

And

nuich

attributed to race

realh the result of the unsettling etlects

the inward
in

mo\ement and

of the economic and cultural po\ert\ of the

coLmlr\ side

w hich the people were reared.

In the ninelt'en-lliirties. tlu'

movi'ment

oi

a

\

er\

poor agricultural popuol

lation

from the southern Great Plains into California, the Okies and Arkies

John Steinbeck's great novel, was the soiu^ce of major
subject peoples of Eastern

social tension. Like the

Emope

the Okies and Arkies were, w hen clean,

indubitabK white. Nonetheless

tlu'\

w eie

[Ticlurt'd as a

race ai^art.

'i'heir

318

Where

Capitalism Fails

children are

now indistinguishable from other Cahfornians. So

it

w

ill

lie

w

ith
ill

the children, or at most the y;randchilclren. of the recent migrants. The\ w

ha\e higher educational and economic aspirations than
parents.

their parents or grand-

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

affluent of different races usualK li\e quite peaceabK'

with one another.

The more
dwellers
less

plausible problem of

t\\

ent\ or thirty years hence w

ill

be how

to

arrange a ne\\ migration into the

cities. F'or.

as the present generation of urban

moves up the

ladder, there will be a

demand

for

someone

to

do the

agreeable jobs that the\ lea\e behind.

Where Capitalism Fails On two other matters the

prospect

is

more grim.

First there

is

capitalism performs excellentk in providing those things

disposable packaging, drugs, alcohol
is

— that cause problems

the fact that

automobiles,
.

for the cit\

But

it

inherenth incompetent

in

pro\iding the things that city dwellers most

urgently need. Capitalism has ne\er an\

where provided good houses
to stress,
is

at

moderate
services,

cost.

Housing,

it

seems unnecessary
life.

an important

adjunct of a successful urban

Nor does capitalism provide good health
together with attendant health
risks,

and when people

li\e close

these too are important. The\ are

made more

urgent because, on coming to

the

city,

people no longer accept as ine\ itable untended sickness and then a

quiet death as they

would

in

some lonesome sharecropper's

cabin.

capitalism provide efficient transportation for
the
life

people — another essential of

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
.

private enterprise will eventually .ser\e.

To

assert the inherently public
it,

character of these industries, e\en though the practice affirms
radical.

still

seems

Nothing
;,v

is

now

so important as to agree that the nature of these
is not mereh a w ill never be good while housing,

services

public and then to ensure that their performance
life

matter of adequacy but of pride. Cit\
health care

There
the city
ruler.

is

and transportation are poor. a larger need. That is to see

far

more clearK than
its

at

present the

essentialK social character of the Metropolis. In

days of greatest elegance,

was a household, an extension of the domestic arrangements of the
line

No

then separated pri\ ate from public tasks. Construction,

artistic

319

The Metropolis.

All that

went before

is

here.

Where Capitalism Fails
embellishment and maintenance of the city
public tasks

— 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,

recreation, public entertainment, care of the old

and impoverished

— would

be only a small subtraction from
doubted, had the major claim.

total rc\

cnue. The private household, no one

This continues to be the assumption.

The consequences

all

recognize.

Among the

affluent

and even among the poor, services supplied out of private
city.

income are far more amply endowed than those provided b\ the
are clean, streets are
officers to protect
it.

Houses

filthy.

Personal wealth expands; there arc too few police

Television sets are omnipresent; schools are deficient.

Bathing

is

possible in a private

bathroom but not

safely at a public beach.
;

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

to the detritus that

must be picked up from the

streets

and makes

progressively
sustaining a

more

difficult

the problem of keeping breathable the air and

This
life is

is

minimum tranquility of life. another way of saying that the social

aspect of

modern metropolitan
yet imagined.

extremely expensive, far more expensive than

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

a legacy of the attitudes of the Industrial

is

now obsolete.

may well be in the future that, if the

Metropolis

to

be pleasant, healthy, otherwise agreeable and culturally and intellectually
rewarding, public expenditures will have to be higher than
tures.
pri\ ate

expendi-

The

test

is

to look at the

Metropolis as one would look at a household and,
is

indeed, as the rulers regarded the Political Household. There

no a

priori

case for one class of expenditures, public or private, over another

— for street
is

sweepers over vacuum cleaners, schools

o\'er television sets.

The question

which returns the greatest
of the

satisfaction at the
is

margin and serves best the sense
is

community

as to

what

good.

If

the satisfaction from public services

higher than that from private goods for the typical urban dweller, there will
obviously be

more

social

good

in

accepting the fact than
is

in resisting

it.

Not

ideology but the social character of the Metropolis
stance.

the controlling circum-

The acceptance of the
parks.
point.
It

social character of the

Metropolis involves more than

questions of bread and butter, of housing, health care, clean streets and safe
also involves another dimension, that of art

We've seen

that people travel

and design. This is m\ last by the millions to view the Political
past.

Households and Merchant Cities of the

And man\

also go to see

Wash321

The Metropolis

ington, Canberra,

New

Delhi and Brasilia. They do not

visit,

even

in their

present and improved manifestations, any of the three Birminghams.
difference
is

The

elementary.

The

Political

Households were conceived as a unity.
cities

Their design was envisaged as a whole. The

which people forswear carry
is

the aesthetic legacy of classical liberal capitalism. There

no proof that
St.

people were more sensitive
Petersburg than
in the

to artistic

need

in the

days of Dresden or

age of Diisseldorf or Pittsburgh. But Dresden and

St.

Petersburg were faithful to their central conception and their

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

a

marked unwillingness

to

socialize design, to specify overall architectural styles to

which the sub-

ordinate units must conform.
rights

It

is

an unjust interference with property
is no place where the substitution more urgent and v\'here, paradoxi-

and personal preference. But there
is

of social tor classical liberal expression
cally,

the result serves better the classical utilitarian goal of the greatest good

for the greatest

number.
is

The

interference with property rights

real.

One

solution lies in extending

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

land. For no other form of property

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

of the social character of the Metropolis
is

character of its important services

advocacy here.

A

socialist

is

speaking.

The proper

applied.

To

suspect advocacy in such matters
in this case.

is

not a bad precaution but

it is

not

appropriate

As often

in these matters, in fact, there

for ideological preference

— when,
all

we imagine choice
is little

— scope
social

or none.
It

The

character of the Metropolis derives not from preference.

follows, as earlier

noted, from the far harder circumstance that millions of people live in close

proximity to each other with

the friction,
It is

all

the antisocial opportimit\

,

all

the social needs that this ordains.
character. This
is

this that forces
It is,

not the product of preference.

upon the city its social once again, the tyranny

of circumstance.

322

The Tyranny of Circumstance

Had one wished

to forestall this tyranny, there

would have been

onl\

one

way. That would have been

to forestall the people.
it

have been aborted long before

became

New York,

The Metropolis sliould London or Tokvo.

323

12.

Democracy,
Leadership,

Commitment

Man,
on

at least

when

educated,
is

is

a pessimist.

He believes

it

safer not to reflect

his

achievements; Jove
tasks, failures

known

to strike such

people down. Dangers,

uncompleted
Still,

remain

in his

mind.

in

the last two hundred years

accomplished. Millions now escape poverty,
longer than ever before.

some remarkable things have been live more contentedly and much

partly from the fact that so

The decline of religious faith in our time proceeds many get so much more out of this world and feel it

possible in consequence to repose less

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

sonal proficienc> in killing

is

no longer praised so hilsomely as

in earlier times.

Being

killed

is

not thought quite so transcendent a glory. Both are recom-

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.

I

certainly think so.
Is

It

causes us to ask:

hat can

do?

"

It is

a

good question.

there anything the individual

can do?

But there

is

a prior question. Social existence, as
its

we have sufficiently seen, is
is

a continuing process. As one of

problems

is

solved, others emerge, often
to ask for solutions.

from the previous solutions themselves. Our habit

The

324

The Swiss Case

very best ones will be only a temporary achievement, although nobocK- should

minimize the importance of

that.

We

need

also to spare a thought for the

mechanism by which we

tackle the flow of problems which, like

waves on the

beach, will continue to come.

How

good,

in particular,

are the mechanisms of

democratic go\ernment tor
or

this

continuing task?
\\

And what makes them better

worse? That

I

perceive to be the task to

hich this small adventure in ideas

ultimateK comes.

The Swiss Case More than t\\ enty years ago
sought out a small Swiss
\

I \\

as

working on a book, and

it \\

as going badly.

I

illage in the

Bernese Oberland, secluded myself and,

out of boredom, thought each afternoon, evening
\\

and much of the night of

hat

I \\

ould

\\

rite

the next morning.

The

results

by accepted standards were

excellent; the book.
useful.

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

as a semi-Swiss author. I've

come

to feel that

I

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

the Swiss instinct that problems can be

ed by the
is

collecti\ e responsibilit\'

and

intelligence of the people

them-

selves. It

that responsibility

and intelligence that count. Accordingly, the

solution lies with the citizen, not the leader.

The Swiss

citizen does not

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

a few of the 22 (very recentK 23) cantons,

legislative body.

The

initiative

After

Cabin comes William

Tell,

whose

distinction rests only

on a somew hat

perilous approach to parental dut\

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

I

she said.

"Anywa\

,

I'm quite sure he

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

Democracy, Leadership, Commitment

environment;

ethnic reconciliation

between those who speak German,

French, ItaHan; a tolerant relationship between religions; provision of good

housing and public services; sensible support to agriculture and industry;
education that nurtures the democratic idea
solutions
It is

it

has found solutions, brilliant

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

saying that Switzerland

sliows only an instinct for error. Ulster
Chile.

is

a small country. So

is

Lebanon. So

is

The

Belgians quarrel dutifully over language. Small countries
It is

may

feel

especially obliged to assert their capacity for self-destruction.

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

worth careful thought. Important issues are submitted
referendum. Indeed, as noted, most Swiss elections are

to the
to pass

people

on issues

(new

taxes,

new

spending, votes for

women,

limits

on the number of foreign

workers) and are not, as elsewhere, to select between parties and politicians.

The

next source of strength
say,

is

the Swiss sense of community.

The

Swiss, one

need hardly

have a keen sense of personal pecuniary
if

interest.

But they

recognize the greater loss

the

community

is

sacrificed to the special interest.
in

Meeting

politicians,

businessmen, trade union leaders, even bankers

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

precedence over the interest of the individual, party or organization and
that this
is

not generosity but good sense.

Finally, I've always thought that the Swiss
results than in principle. In

were

far

more

interested in

economics and

politics, as in

war, an astonishing

number
right of

of people die, like the

man on

the railway crossing, defending their

way. This

is

a poorly developed instinct in Switzerland.

No country

so

firmly

avows the

principles of private enterprise but in few ha\'e the practical

concessions to socialism been
land,

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

news from the public
326

radio,

The Leadership Instinct

We

do not
o\\

li\e

\\

hile tlierc. as

do

iiian\
is

deserving

Sv\ iss, in

clean, bright.

publicK

ned housing, access

to

u hich

considered a pubhc

not pay private insurance on our house because the local
siders
it

But we do government conright.

cheaper for the
fire.

indi\'idual
is

and better for the communit\' just

to replace
is

a house in case ot

This

also thought to discourage arson, a risk that

not

extreme. Swiss farmers are massively supported by the government, partly

because the\ are thought cheaper for keeping the countr\side
than a parks
ser\'ice.

in condition

No

industry

is

so uniquely Swiss as

watchmaking. For

around

halt a centur\

the

movements

of most Swiss watches, a not un-

important feature, ha\e been

made by

a firm that initially

was sponsored by

the Swiss government. Only the cases, watchbands, boxes and ad\ertising

have their origins

in the

realm

ot strict private enterprise. In other countries

such arrangements would be thought inconsistent with the fundamental
principles of free enterprise.

The Swiss do

not worry about such

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

not the politics of people but the politics of
In the United

leaders. In Switzerland the

and Britain

it

word leadership is scarceK known. has a familiar and resonant sound.

Its the cause of a wonderful schizophrenia in both British
political life.

and American
the
in

All British political journalists of

depth deplore the decline
over
congenital

of

Parliament.

American sages weep
People
in

ecstatically

ineifectualit\ of the Congress.

both countries unite

pleading for
past.

better leaders

— stronger presidents, the great prime ministers of the —

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

They are asking

less.

In both countries,
is

and especially

in

the United States, the legislative

power

the

power

to inform.

From

tliis

response no political leader can ignore.

On

comes the public response, and this the Vietnam war, Watergate, the
legerdemain of the great corin .\merica.

CIA, the international and domestic
porations, the impact of the

political
to

power

inform was very great
democratic
Hill quiet?
will

A

president

w ho wants
can
I

to act in conflict with the

has onh* one

thought:

How

keep the people on Capitol
if,

Or

in

ignorance?

This would be affirmed
presidents on

with help from hea\en, one could poll recent
political institution the\
all

w hat American

could ha\ e best done

without. In the unlikely event of honest answers,

would put congressional
327

Democracy, Leadership, Commitment

committees and their investigations either at the top of their hst or right next to
the press.
I've spent a

good part of my adult hfe writing in Switzerland.
slightly.

A great deal of
I

the rest,

I

sometimes think, has been spent before congressional committees.

exaggerate only

My

average of three a year since
that
is

— a few years none, some as many as twenty —
I

first

appearance was forty years ago. At an

120 days, a third of a year.
its

can look at a committee and, without

thought, divide

members

into the three basic categories

— those members
to get

you might persuade; those you watch,
the practical level:

for their questions could

be mean and

even damaging; those you can safely ignore. "Professor,

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

with leaders that our politics
selecting the president.

is

concerned. In the

United States

politics

means

Politics as a Spectator Sport

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

lasts a year, costs

hundreds of millions of
is

many

of the aspects of an endurance contest and, on the record,

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

a precise clue to the major flaw.

a great spectacle, and

United States has become a spectator sport. Lhilikc hiotball or
.

hockey,

it's

an all-season show Reporters greatK enjo\

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

counts, not substance. Points are

awarded not

for

wisdom on

issues but for

The Equilibrium

performance
All this

in the

game. Winning

is,

of course, the only test of achic\ement.
is

becomes evident

at a national convention. It

covered at vast

expense by the television networks. Their most experienced commentators
patrol the floor. Their experience
is

with tactics and strategy: they are not
the making.

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\'

sensible historians will ignore. Reporters interview the

managers of
tell

the several candidates, the leaders of the state delegations. These

of

complex designs which
I've

will

soon be abandoned and hopes presented as
I

predictions that will never be fulfilled. Again

been attending these

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

in 1972. I've sat

many weary

hours as a delegate.
chairs.

My

bottom bears a permanent latticework design from the

Once

I

opposed, and possibly helped to \cto, the proposed selection of a vice-

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

statesmen could, accordingly, be bartered or brokered. They are gone forever.
Delegates of intelligence and honest\up.

now assemble w ith

their

minds made

The

real decisions

on candidates come

before, in the primaries

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

almost alw a>

s

know w ho the candidates w
in their

be. This

another giant step

toward democracy. The conventions,

great days, gave

power

to the

3S9

Democracy, Leadership, Commitment

few.
to

The primaries give it to the people. As with many others, my commitment
is

democracy

an
I

article of faith,

and
is

I

am not really open to argument on the
ground
is

alternatives.

But

do think there

rational

for believing

it

to

be both

stronger and safer than any other form. This

because weakness and danger

— when people can
that the

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

errors are their errors,

aberrations their aberrations,
a remarkably
it.

any revolt

will

be against themscKes. But what
gives

It's

shrewd and rather conservative

arrangement when one thinks of

we call democracy is considerably less than that. The limousines at
to the voter.

the candidates' headquarters on election night are a clue.

power

And,

let

there be no doubt,

it

gives

Our electoral system power to money.
which
is

The people
indignation

are many, the rich are few. But politicians need money.

well-to-do are far
is

more

articulate than the average,

And the why their
is

regularly mistaken tor the voice of the masses.

The

result

an

equilibrium between voters and money.

But even here democracy
election costs.

is

advancing. Public funds

now pay

a part of the

The

rich arc not quite as

much needed

as before.

The Nature
look?

of Leadership
in leaders,

For what do people look

however selected? For what should they
\\

Again

I

plead some qualification. I've had a distant acquaintance
I

ith

most

of the political leaders of the last half century.

missed Hitler, Mussolini

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

1945 but the\ only proved that National Socialism was a

gangster interlude at a rather low order of mental capacity and with a
surprisingly high incidence of alcoholism.
All of the great leaders

have had one characteristic
else,

in

common:

it

was the
in their

willingness to confront imec|ui\()calK the major an\iet\ of their people
time. This,

and not much

is

the essence ot leadership.

In 1933, the Great Depression
anxiety.

was the great and perxading soince of President Hoover was not a foolish man; few ha\e been trained more
for the presidency.

comprehensively

But he could not face directly the eco-

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

.

Democracy, Leadership, Commitment

committed
concern.

to the

economic miseries of the time. The people's concern was

his

What
let

could be done, he would do. There would be no pretense.

Roosevelt was a captivating speaker.
people; he

He

sustained a sense of intimacy with

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

that these qualities

himself. In 1932, Walter

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.
"

'

Nehru The leader

I

knew

best

was Jawaharlal Nehru.

We both

had association with

the University of Cambridge. Once,

pressed amused alarm over the

Dean Rusk, numerous
relief.

others

when visiting the United States, he exWilliam Fulbright, number of Oxford men

in

high positions.

India, the decisive posts

were

held b\

I assured him that, as in Cambridge men. He professed great

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 clubs, in the railway stations, on the benches in the parks,
of India.
to ec]uivocate

the social

life

For Nehru the temptation

was

especially strong.

He came
morning

from a wealthy,
pioneer
in

aristocratic, socialK conser\'ati\'e family.

His father was a
it

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

me, again not quite serioush, that he would be the

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

himself, his charm,
his

informed mind (much more informed than Roosevelt's),
ith

famous

sense of communit\' u
His

the Indian masses
i>e

would have counted

for nothing.

name would

not

now

know

n.

332

And Nehru

.

And Martin Luther King,

here marching for

civil rights.

Democracy, Leadership, Commitment

When
as did

Hitler

became

the great source of anxiety, Roosevelt faced that fear,

Winston Churchill and Charles de Gaulle. Nehru did not have a similar

capacity for change. After independence

was won, poverty and the

relentless

Malthusianism of the Indian people were the all-embracing problems of
India.

These Nehru did not

similarly confront. Surely there

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

true. In his last

years his leadership suffered.
his time.

A leader must be able to confront the anxieties of

He must

also

change as these change.

Leadership and Vietnam
John F. Kenned\ once told mc, as he told others, that he never wanted
to let a

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

never know. In his few years he served only

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

was distressed and guessed

I

might have a different view.

A

short passage,

helped perhaps by more knowledge and experience of that part of the world
than most of m\' colleagues possessed, persuaded
of

me of the futility and danger
allied,

the enterprise.

Given the larcenous incompetence and the inspired

selfishness

and corruption of those with

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

the ski lodge; a couple of

hunched were

334

Martin Luther King

expected.

When we arrived,

the mountain top

was covered with people.

I

had

a damaging sense of exaltation.

A sermon on

the mount. People were, indeed,

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

a

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

do so but they recognized a
through.
It

member

of the Establishment

and escorted

me

was disconcerting

but better than being clubbed.

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.

Martin Luther King

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

the spring of that

friend.
I

He

asked

me

to

speak at a memorial gathering on the campus.

in Gene\ a. King. Like was with Dr. Andrew Young, now a congressman from Atlanta,

recalled a meeting with King a year earlier

— 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

(Jandhi and Xoliru uhoin he

mcatK admired, Martin Luther
lie

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

leader must eschew

\

iolence, for

iolencc evokes other anxieties and repels

those supporters

who

are most needed.

Now

King

felt

must face
I

another

issue.

Men, black and w hite, were

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

I

learned that afternoon.

Berkeley
Is

there an education that serves the democratic purpose.

gi\ es

democrac\

Iioth

power and the w isdom to use it well? The answ er brings me to familiar and belo\ ed
.

scenes, to the older

campus

of the Uni\ersit\ of California at I^erkele\
thirties.

and we then thought

it

w as here during the nineteenthe best university in the w orld. I am happ\
1

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

and the hot
profes,sors

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

A

massive questioning of the u isdom of accepted

man\

a rexolt, began here

and spread

to uni\ersities to

around the world.

\c)u

mentioned Berkele\

,

men and women began
democracy.

discuss, often with alarm, the role of education in a

That education has,

I

believe, tw o requisites. Both follow directK from the

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.

must give way

to the general interest; that

what best serves

all

best

serves \ou.

W ith

this

must go a shrewd awareness that those who

resist the

general interest must themselves be resisted.

When corporations, trade associ-

ations, generals, bureaucrats, trade imions. law\ers, phxsicians, professors

put their ow n pecimiar\ or bureaucratic interest ahead of the pulilic interest,

people must sense, react and oppose. Democratic education must be a lesson
in this

recognition and this dul\

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

Second, education must
to

and w omen

il

337

Democracy, Leadership, Commitment

his coniniitmenl to the anxieties of the

day and then deftly persuades those
weakness.
"

who

dishkc the requisite action that they have nothing to fear from his

election, "I

am

tor

peace but not

at the price of

"Poverty must be

eliminated but without placing

new burdens on

the taxpayer." "I stand for

a better distribution of income but without interference with the rewards
to individual enterprise."

The

leaders

I

standards of his

— Roosevelt, Nehru, Kennedy and, by the community, Martin Luther King — had what today would be
have mentioned

called an elitist education. Perliaps this gave

them the sense of

security that

allow cd of their

commitment. There

is

involved here,

we

should not doubt, a
of participants in

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

conflicts arc irreconcilable in principle but not in practice.

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

be done; for reasons
to say so.

ot inertia,

pecuniary interest, passion or ignorance,

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 poor countries to

the rich.

The

relentless population increase in the poor coimtrics cannot be

checked

except by the control of births. The C>hincse, and increasingly the Indians, are

concluding that

this

cannot be purely permissive.

Few

elsewhere wish

to

commit themselves to this hard truth. The poorer the coimtr\ the poorer
,

it is

in

administrative resources

— the

special case of the

Chinese with

their ancient organizational skills possibly

apart.

The

less,

accordingly, can there be reliance on highly organized effort,
is

of which socialism

the extreme example.

The

greater the po\crt\

,

the more,

338

Skidoo

in

general, must the poor countries rcK on that release

ol indix

idual cncriJiies

that l)oth

Adam

Smith and Karl Mar\ heliexcd essential

in

earK economic

de\ elopment. Not
\

man\

in

the poor coimtries w ant to confront this seeminiily

er\ conscr\ati\e truth.

In the rich countries there

is

similar difficult\ in conlrontinii the
to the poor.

problem

ol

poverty.

No solution is so effective as providing income No
truth has

Whether in

the form of food, housinsj;. health services, education or
excellent antidote lor deprixation.

money, income is an spawned so much ingenious
u hat can
oj-

evasion.

We
done

protect our environment only as
to the

we

sav plainK
is

cannot he
Better an

ambient

air,

water, landscape. This

a difficult truth.

exception for the encrg\ shortage, to protect jobs, for one's

own

automobile.

We make
No

resources

last

longer b\ using

less.

Also a

cliHicult truth.

politician can praise

unemployment

or inflation,

and there
for

is

no way of

combining high employment with stable prices that does not inxoKe some
control of

and more income
prices.

— a struggle that modern corporations, modern drive up unions and modern democrac\and encourage —
to sustain
it

income and

prices.

Otherwise the struggle
all facilitate

more consimiption
will

Only hea\\ imem[ilo\nient

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

The greatest support
difficult,

to e\ asion

comes from complexity,

'fhe

problem seeming
politics.

we

postpone, compromise, yield to the conveniences of

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,
.

not far from the

Nevada border,

56()()

\'allev

Skidoo

a force lor claritv

flourished as a mining
,

town

in

the earlv part of this centurv

.

(The 23
to the
s

refers, apparentlv

to the distance

w ater w as piped over the mountains
in 19()(S,

mines.)

Its

greatest

moment came

the vear

of

mv

birth.

Skidoo

most

339

Democracy, Leadership, Commitment

dissolute citi/cn, Joe Simpson, shot

and

killed

Jim Arnold, the storekeeper,

hanker and the most respected

memhcr of the

Skidoo Establishment. Simpson

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

— the release of individual energies — made Skidoo. No one
one sees here. No one here could

that eroded, so did Skidoo.

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

collectivist or socialist miracle that

would

similarly

populate the desert.

men mined gold.
it,

E\erything there shows
all

finalK'

how^

much energy
which
is

men

can expend lor no social purpose. Let
still

reflect

on the

idle piles in

the gold, most of

resides. This capacity for wasting effort

a useful

thought to take to the subject of competitive weapons manufacture.

Death Valley

Dow n
Again

below Skidoo

in

Death Valley, truth has
is

also a
it.

wonderful

clarity of line.

we

see that the problem
is

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

a living from this land, he

people

in

the valley would starve
is

— or have

to go.

The

situation of the poor
is

countries
poverty.
fact

the same. For theiu, too, income from outside

an antidote

for

It is

no

less a

remedy

for

poverty

when

it

comes

as aid

—a

gift. It is

a

which people of the

rich countries try very

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

post for nuclear war. Outside. (Below) inside.

.

-..-

... t<^-i*J!i"r—
Jf^.

Death Valley. After the

first

nuclear exchange the landscape between
this.

New Haven and

Philadelphia will look generally like

Democracy, Leadership, Commitment

Connecticut-New York-New Jersey-Philadelphia area
don and the

Home

C^ounties.

Or the

Or LonMoscow metropolitan area. Or the
is

urbanized.

Tokyo-Yokohama
tains.

plain.

Imagine that the urban and suburban area covers

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

not far from Colorado Springs.

The Nuclear Evasion The trutli that men seek
differing ideology

there to evade

is

that this small planet cannot survive

a nuclear exchange; that conflict in support of either national passion or
is griniK absolute; that those bunkered up within Cheyenne Mountain would last for only a few weeks longer than the possibly more fortunate in the town outside. We do not yet confront this truth. Asked if we want life for our children and grandchildren, we affirm that we do. Asked about nuclear war, the greatest

threat to that

life,

we

legularly dismiss

it

from mind.

Man

has learned to live
to the
It's

w

ith

the thought of his
all

ow n

mortality. .\ncl he

now has accommodated
v\ ill
I

thought that

may

die, that his children

and grandchildren
only marvel.
reality.

not exist.

a capacity for accommodation at which

we can

suspect that our
act of imag-

minds accept the thought but do not embrace the
ination
is

The
in

too great or too awful.
in

Our miads can extend
it.

to a

war

some

distant

jungle and set
holocaust.

motion the actions that reject

But not yet
our

to the nuclear

A connnitment
no

to this reality is

now the supreme
is

test of

should accept the easy evasion that the decision
less perceptive,

not ours.

politics. None The Russians are

no

less life-enhancing,
oi

no more inclined

to a

death wish
is

than we. Their experience

the death and devastation of

war

far

more

comprehensive than
willing as

ours.

We

must believe, for

it

is
,

true, that the\

are as

we

are to comnnt ihemseb es to this realils

to the existence oi this

threat to

all life

and
is

to its elimination.

That, indeed,

the highest purpose of politics in both countries, one that far
first

transcends the differences in economic or political systems. For after the

exchange

of missiles,

as

Khrushchev was mov ed

to

wain the world, the ashes
tlu-

of

Conmiimism and the ashes
will

of capitalism will be indistinguishable.

Not even

the most passionate ideologue will be able to speak of

difference, for he too
is

be dead. In an age when so much

is

uncertain, there

one certainty; This

truth

we must

confront.

M2

A Major Word of Thanks
I

These are usualK called acknowledgments;
inadequate word. Adrian Malone, to
the originator ot this enterprise,

k)v this

book

it

is

a grievousK
v\

whom

I

have dedicated these pages.

as

my companion and mentor

throughout. .M\

debt

is

great to him, and only slightly less to Dick Gilling, Mick Jackson and
responsibi]it\ for

David Kennard, the three directors who divided and shared

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

Sue Burgess, Jenny Doe. Sheila Johns and
in all

Sarah Hyde. These are persons of high proficiency
that go with filmmaking

the myriad functions

associated and notabK proliferated paperoffices,

uork. and extend on to managing travel, running

driving automobiles

and typing
All
less

scripts.

This proficiency they combine with great charm and e\ en

greater good humor.

My thanks

to all four are

deeply tinged w

ith lo\ e.

who watch

television should

know - as
and

on the luan on the screen than on the
gets the most care
It is

now know — that merit depends people u ho put him there. (The man
I

who performs
the most pa\
view.)
.

attention, has the best hours

and gets

a beautiful arrangement, allowing always for the point of

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

and Dav e Brinicombe presided more silentK but not
It is

less

valuably o\ er

the sound recording.
that, in

their

highK defensible position, rigorously enforced,
to see clearK but to

watching tele\ision. people need not onK

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,

with the sound,

in

the studio and even on

m\

lace.

The
John

continues: Paul Carter, Jim

Latham and Pamela Bosw orth u ere

the film

editors; Charles

McGhie and Karen

(JodsoTi the graphic designers:

343

A Major Word o! Thanks
Horton the
v

isual effects designer.

On the final programs Peter Bartlett, Ehner
were the very able cameramen, Chris

Cossey, John Walker and

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

Murphy and Paul McAlinden, who
select the pictures

also designed the book,

searched out and helped

on these pages. The arrangement
I

of these illustrations, a thoroughly pleasant chore which
else,

shared, was, like

all

under the direction of Peter Campbell

ot

BBC

Publications.

Paul
help.

M. Sweezy, an old To

friend, read the chapter

on Marx and gave

Adam

I'lam, another friend of distinctK contrasting view, helped
both, thanks,
\\

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

turned for help,

would

mention especially

Sir Eric Roll,

whose

eclectic

and thoughtful knowledge
ot us

the history of economic thought has helped so

many

over the years.

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

immediate associates and

word

of thanks.

television programs, edited this book, saw
else
I

it

through the press, did e\er\ thing

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

are exceptions to the best rules. Catherine CJalbraith joined

in

on

this etlort

from the
intiiiders

first
l)y

day, accompanied
i)y

me

for all the filming, stood oft curious

da\ and

night,

showed
in

heiself a competent pholoiirapher as

these pages attest, performed

the last two programs and kept a journal

which

will

one day

tell

of the talented people and the improbable procedures

with which the BHC^ produces a tele\ ision series.

John Kenntlh Galbraith

Cambridge, Massachusetts 1976

344

Notes for pages 11-67

Notes

Chapter
'Joliii

1

Chapter 2
'

Vhiynard Keynes, The General Theory

.\llan

Nevins, Study In Power. Vol,

II

(New
300.

oj

Emploijmi'iil Interest

and Money (New
p. 3.S3.

\ork: Charles Scribner's Sons, 1953),

p.

York: Haicourt. Brace and Co., 1936),

-Peter Collier and
Rockejellerx:

Da\

id

Horowil/.

The
(.New
p. .59.

Mhid.
3

An American Dynasty
ol I'rederick

Ibid.

York: Holt, Rinehart and Winston, 1976),

•a

stronsj ease will

he made

for F. Y.

Edge-

From
'

tile

manuscript

T. Cates's

worth who, thouijh he spent

his life in
ol

Kngland.

unpublished aulobioyraphx
Herliert Spencer,

was one of the Edgeworths
town. County Lonjjford.
'

Kdseuorths-

The Study

oj

Sotiolomi
1.S91),

(New
ol liberal

York:

D,

\pplel(in

and Co.,

Unlike

Hume

and other men

mind
ol a

p.

438.
Social Statics
p.

at the time, .Vdani

Smith did not welcome
vision

Herbert Spencer,

(New ^ork:
Richard

American independence. His

was

D. .Yppleton and Co.. 1S65),

413.
in

commonwealth embracing
speakint; world.
ica
in

all

the

Eiiillish-

'William Crahani Simmer quoted
Ilofstadter,

.Members from North .\merin

Social

Darwinism

in

American

would

sit

the

House

ol

Commons
increasinii

Thought

/.S'6r;-/.9/o

(Philadelphia: L'ni\ersit>

London';

eventualK,

with

of Penns\l\ania Press, 1945), p. 44.

population

in ."Xmerica,

the capital would be
tlu'

"John D. Rockelcller quoted
p. 31.

in

Hotstadter.

moved

to a

more

central location across

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.

Henr\ Ward Beecher
rhorstein Veblen,

<|uoti'd in liiilslailler,

missed.

p. 18.

*Adam Smith, W
don:

eallli

(ifSalions, Vol.

I

(Lon-

'"

The I'hcory
llduuhldn

oj

the Lei-

Methuen &
I,

Co., 19.50), p. 412.

sure Class (Boston:
1973), p, 176.
'

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

before the House

Commons
M.

'^James

Cordon
Cil\

Bennett.

Sr..

((noted

in

on February

17,

1792. quoted in John Rae.

Richard O'Connor. Tin- Scandalous Mr. Bennett
C:o.,

Life of Adam Smith

(New York:

.\u£;iistus

(Garden

,

New

'^ork:

Doubleday

&

Kelley, 1965), pp. 290-291.

1962). p, 82.
Sr..

'^Charles
ley

Edward Trevelyan quoted
19561. p. 2.57.

in

Dud-

'"James Gordon Bennett.

in

the \'eiv

Edwards. The Great Famine (Dublin:

York Herald. Ma\
Seit/,

6,

18.3.5,

(|Uoted in

Don

(.'.

Brown and Nolan.

The James Gordon Bennetts:

I'atlur

k

345

Notes for pages 68-130

and Son

(liulianapcilis:

Tlie

B(ibl>s-Mcriill

Co.. 1926), pp. 8.36-837.
'-

Co., 1928), p. 39.

Karl

Marx quoted

in

.McLellan, p. 315.

'^Gustavus Myers

in

Matthew
340.

Josephsoii,

-^Karl Marx, The Civil

War

in

France: Ad-

The Robber Barons (New York: Harcourt,
Brace and Co., 1934),
p.

dress of the International Working Men's Association,

quoted
II, p.

in Karl

Marx and

Friedrich

Engels, Vol.
^^

208.

Karl Marx, Address to the Working Classes,
in

Chapter 3
'

quoted
--^Karl

McLellan, pp. 36.5- .366.

Marx,
in

The

(Uiil
p. 400.

War

in

France,

Jo.seph Schunipetcr, Capitalism. Socialistn.

quoted

Democracy. 3rd
^Karl

cd.

(New

McLellan,

York:

Harper's

" Karl

Marx, Critique of the Cotha Proin

Torchbooks, 1967),

p. 21.

Marx

in

Karl

Marx and
II

gramme, quoted
Friedrich

McLellan,

p. 433.

Engels, Selected Works, Vol.
1962), p. 22.

(Moscow:
Chapter 4
'

Marx quoted in David McLellan, Karl Marx: His Life and Tliouglii (New York: Har^

Karl

.\dain

Smith, Weallli of \'alions. Vol.

II

per

&

Row,

1973), p. 14.
16.

(London: Methuen
-Smith, Vol.
p. 28.
II, p.

&
in
in

Co., 19.50), p. 158.

•MeLeilan.p.
'

131.

Friedrich Kniiels quoted in McLellan,

'James Mill quoted
i)\

"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.

Economic Writings. Donald Winch,
burgh

"

Karl .Marx quoted in .McLellan, Karl

&

London: Oliver

&

Bovd, 1966),

'

Marx quoted

in

McLellan,

•R. Ewart Oakeshott.
M'capoii.sp. 183.
^

The .Archaeology of

i''KV//7

Marx: Early Texts. Da\id McLellan,
Engels

(London: Lutterworth Press, 1960),

ed. (Oxford: Blackwell, 1972), p. 129.

"Friedrich
p. 131.

quoted

in

McLellan,

Pope Innoci'nl

111

(juoted

in

Ik'nry Treece,

The Crusades (New ^ork: Random House,

''Karl

Marx
I,

in

Karl

Vhirx and

Friedrich

1963), p. 229.

Fngels. Vol.
'-'Eric Roll,

p. 52.

"Smith, Vol.

II, p.

72.

A

History of Economic Thought

"William Hiekling Prescott, History of the
Ccniqiicst of Mexico. Vol.
B.
I

(London: Faher

&

Fabcr, 1973). pp. 2.57-258.
p.

(New York: John

''Karl Marx: Early Texts,
'^Karl
in

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

PrescotI, History of the

'"Karl Marx,
Karl

The Commtinist Manifesto,
Friedrich Engels, Vol.
I,

in

C()ii(/i(('.s7

oj Perti

(London: Rii-hard Bentle\,

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

Left Re\iew, 1973), p. 129.
lor Or'

Ursuline of

New

Orleans 1727-1728 (Newp. 58.

'"A sp\

Prussian governrniMit quoted

Orleans: Laboard Prinlinij Co., 1974),

McLellan, pp. 268-269.

''John Beanies. Memoirs of a Bengal Civilian
p.

'"'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.

'

Rud\ ard Kipling,

Choice
S.

oj

Kipling's

"

Karl Marx, Capital: a Criliqne oj Political
Vol.
1

Verses

Made

by

T.

Eliot

(New

York:

Economy.

(Chicago: Cliarli's

1

1.

Kt'rr

(S:

Charles Seribner's Sons, 1943). pp.

1.3('>-1.37.

346

Notes for pages 139-237

Chapter 5
'Hus^o Haase quoted
Rciclist(ifi\.

ington:
.\rl.

Bureau

ol

National Literature and

in \'crliaii<lliinticii

dcs

19(1S). p. 5.S1.

Stenosirapliisclu' BL-riclite.

Band
Chapter
7

306 (Berlin: Xorddeutschen Buchdruckcrei

und

\'erlags-Anstalt. 1916). p. 9.

^Fireside Booh of Humoroii.'i Poctnj. William
Cole. cd.

(New York: Simon and
in

'John Maxnard Kexnes.

Schuster.

.\/f/

Early Beliefs

in

Tiio Memoirs (London: Rupert Hart-Daxis.

19591. p. 122.

19491
N.
K.

p. 83. in R. F.

^V.

I.

Lenin quoted

Krupska\a.
Foreign

-John Maxnard Kex nes quoted
rod.

Har-

Reminiscences of Lenin

l.\lo,sco\\;

The

Languages Publishing House, 1959).
•N. K, Krupskaya.
-'

Life of John

Maynard

Keyni-s (Lon-

p. 258.

don: Macmillan

&

C:o..

1951). p. 121.
in

p. 307.
llie Ui^jjiest StUfic

'John Maxnard Kexnes. Essays
(London: Mercurx Books. 1961).

Biography

\

.

1.

Lenin. Imperialism:

p. 20. in

of Capitalism (.Moscow: Foreign Languages
Publishing House, 1947).
*\'.
I.

"John .Maynard Kexnes quoted
p. 257.

Harrod,

p.

16

Lenin cjuoted

in

N. K.

Krupska\a.

'John Maxnard Kexnes quoted
p. 256.

in

llarrod.

p.

323.
1.

"W
*

Lenin quoted

in

\.

K.

Krupska\a.

"Robert
Theory:

Lekachnian.
Reports
oj

Keyiu's'

General

p. 3.35.

Three Decades (New
p. 35.
in

Christopher

Hill.

Lenin and the Rn>.sian

York:

St.

Martin's Press. 1964).

Revolution (London:

The Fnglish Lni\erand
Hi-iolntioii
p. 92.
.\Ios-

John Maxnard Kexnes. Essays

Persnasion
i.

sitics Press. 1947). p. 117.

(London: Macmillan
i

6v;

C^o..

1931

pp. 24S-

'V.
cov\

I.

Lenin.

The

State

249,
:

Progress Publishers. 1969).
I.

"John

Maxnard Kex

ik's

(|Uoted

in

Robt-rt

">y.

Lenin quoted

in Hill, pp. 20>S-209.

"

Lekachnian. The .Age

of

Keynes (Nexx ^ork:

.\dani

llam. The Bolsheviks (New York:
Co.. 1965). p. 531.

Random House.
singer,

1966). p. 47.
in

The Macmillan

''Herbert Hoox er quoted
Jr..

Arthur

\1. Schle(

The

Crisis oj the

Old Order Boston:
231.
in

Chapter 6
'

Housihton Mifflin Co..
1.

19.57). p.

HenKJotus. Book

Clio. Hex

.

W

'"John Maxnard Kexnes ciuoted
illiani

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.

"Charles Mackax. Memoir'^

of Lxtraordiiuiiii

Popular

Deln>iions

and the

Madness
Clo..

'-John .Maxnard Kexnes CjUoted

in

Lekach-

of
1.

man. The

.Age oj Keynes, p. 123.
(|ui)led in

Crouds (Boston:
p. 55. ^.\.

L. C.

Page and

19.32

''John Maxnard Ki-xnes
p.

llarrod,

162.

.Andreades. History (f the Bank
P.
S.

of

Lmi-

land (London:
p,

King and Son, 1909).

250, citing Juglar. Les Crises Economiques.

p. 334.

Chapter S

^Nicholas Biddle quoted in .Arthur
sinsier. Jr..

M.

Schle'

The

.Age if Jackson (Boston: Little.

.\dlai

Slexenson
.\dlai

(|U(ile(l

iii

John Bartlou
Illinois
p.

Brow

II

\-

Co.. 1946). p. 75.
J.

Martin,
D. Richardson.
o\

Steveir\on
6i

if

(New

-\-Vndrew Jackson quoted in

York: Doubledax
-

Co.. 1976).

743.

A

Compilation
Presidents

of the

Messaties and Papers
\ ol
II

Toxxiisend

Hoopes. The Devil and John
\tlanlic

the

irS9-I9()S.

iWash-

Toiler Dniles (Boston and Toronto:

347

Notes for pages 238-332

MontliK- Press Book,
1973), p. 42fl

Little,

Broun and
lloopes,

C^o.,

States: 1940 Population, Vol.

II,

CAuiracteris-

ticsofthe Fopuliition (Washington, D.C.: U.S.
in
p. 37.

^Reinhold Niebuhr quoted

C^overnment Printing Office, 1943) and U.S.

••John Foster Dulles, "Faith of

Our

Fathers,"

Bureau
lation:

ol

the Census, Census of the PopuI,

based on an address
byterian Church
U.S.

s;i\

en at the

First Pres-

1970, Vol.

Characteristics of the

of

Watertown,

New

York.

Population (Washington, D.C.: U.S. Govern-

Department of State publication 5300.
84, released

ment
""

Printing Office, 1973).

General Foreign Policy Series
January 1954, pp. 5-6.
5

Henr\

Bamford

Parkes,

A

History

of

Mexico, Sentry ed. (Boston: Houghton MifHin
Co., 1969), pp. 30.5-.306.

Dulles, p.

6.

'John Foster Dulles,
pose,"

The

Christian

"Freedom and Its PurCentury (December 24,

^

Colonel

Thomas Talbot

c|uotc>d

in

Fred

Coyne Hamil, Lake

Erie Baron (Toronto:
1955), p. 146.

The

1952), p. 1496.

Macmillan Co. of Canada,

Chapter 9
'

Chapter

1

Paul A. Samuelson, Economics. 9th ed.
p. 58.

(New
'

Figures for the United States, Britain, Italy
of

York: .\lcGrau-Hill, 1973),
point, in slightK different
earlier editions.

The same words, is made in
in

and India are from The Yearliook
Statistics

Labour Labour

(Geneva:

International

Office, 1975).

-Paul A. Samuelson ciuoted

Newsweek,
-

Bam her

Gascoigne,

The Great Moghul.s
Row,
1971), p. 95.

September

8,

1975, p. 62.

(New

York: Harper

&

^Viscomit James Br\ce,

Chapter 10
'

monwealth. 3rd
from "Area and
Paul Mantoux,

ed.. Vol.

The American ComI (New York: Mac6.37.
in

millan and Co., 1893), p.
^

These

figures are derived

The

Industrial Rciolnlion

Production of Principal Crops," 1960/61 and
197.3/74 issues

the Eifihieenth Century, rev. ed. (London:

and preliminary reports from

Ministry

of

Agriculture,

New

Jonathan Cape,

1961.), p. 182.

Delhi,

and
Mbid.

IN

60t)5, 1-21-76,
in

from the U.S. Agricultural

Attache

New

Delhi.

-RolxTt William Fogel and Stanley L. Fnger-

Chapter 12
'

man. Time on the
Brow
n

C'ross

(Boston:

Little,

and Co.,

1974).
LI.S.

Arthur M. Schlesinger,

Jr.,

The

Crisis

of the

'These ligmes are derixed trom

Biueau

Old Order (Boston: Houghton
1957), p. 29

Miffiin Co.,

of the Census, Sixteenth Census of the L'nited

348

List of Illustrations

page

List of Illustrations

69

(top)

Consuelo Vanderbilt and her
Boni de Castellane, and

father,

William K. Vanderbilt (Bettrnan Archive); (bottom)

Cx)iiiit

his wife,

Anna, nee Gould (Radio Times Hulton Picture

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).

Marx's birthplace. Trier, West

Germany Verkelwsamt der Stadt
(

Trier).

Georg Wilhelm Friedrich Hegel (Popperfoto).
Jenny Marx,
c.

1851 (International Institute for Social History. Amsterdam).
.

88
92
94

Friedrich Fngels, 1891 (International Institute for Social History Anviterdam).
First

page from The Communist Party Manifesto.

(top) Paris, 1848; (center left) Bedin,

March 1848;

(center right) \ienna, October 1848; (bot-

tom) Prague, June 1848

(all

Man/ Evans

Picture Library).

99

Marx's house
Library).

at

41 Maitland Park Road,

London

NWS (Greater London Council Photograph

101

Reading Room,
(top)

British

Muicum
in

(Mansell Collection).

104

Membersiiip card

the First International (Popperfoto); (bottom)

members

of the First

International, 1868

(Marx Memorial Library).
Elysees, Paris, 1871 (Radio

107

(top)

The ('hamps

Times Hulton Picture Library); (bottom) dead

Communards,
113

1871,

MuseeCarnavalet

(B(///o;:).

Page from The Conquest of Constantinople, by Count GeofTrey de Villehardouin, (Bodleian
Library).

1

15

Acre (Barnaby
(top)

s

Picture Library).
Indias, Seville, Spain ijim Black);
5,

119

The Archive General de
to his son, Diego,

(bottom

left) letter

from

0)lunibus

February
(all

1505; (bottom right) letter from Francisco Pizarro to

Queen
123
(top)

Isabella of Spain, 1539
in

Archivo General de Indias).

Abandoned hacienda
Press).

Mexico (Popperfoto); (bottom) Plantation house, Longwood,

Natchez (As.sociated
125

John Beanies (India Office Library).
(top)

126

The jirga.

a tribal council adopted b\ the British in the North

West Frontier

Province,

Wana, 1929
Club, Nilgiri
128 Bodies

(Sir

John Dring); (bottom) The hunt brcaklast on the
hKlia (Mansell Collection).

steps of the

Ootacamund

Hills,

in Calcutta, 1946,

photo by Margaret Bonrke-White (('olorific/Time-Life).
of Saigon, 1975 (.\s.sociated
Pres.s).

129 135

Civilians at the U.S.
(to/j)

Embass) during the evacuation

Vladimir Ilyich Lenin (Camera Press); (bottom) Cracow Castle (Radio Times Hulton Pic-

ture Library).

140

(top) Kitchener

s

poster appeal for

World War
White

I

volunteers on a postbox in London; (bottom)

New
144 146 150

recruits taking the oath at the
Lilirary).

Cit\ recruiting office,

December 1915

(both Radio

Times Hulton Picture
Side view of a

Maxim Gun Mark
at

IV from a 1918
at

amn

handbook (National .Army Museum).
Press).
at

Leon Trotsky
(top)

wartime coutcrcncc

ZimmenNald (Camera

George V decorating Lieutenant Yagle, September 1918; (bottom)Thv Kaiser
JuK' 1917 (both Radio Times Hullon Picture Library).

the bat-

tle front,

153

(top) Lenin, Knipska\'a
to Russia (Nooos/i Press
Press).

and Zinoviex

in

Stockholm, April 1917, on their
)

\\a\
.

from Switzerland

Agency); (bottom Lenin

in

Red Square. Moscow Ma\ 1919 (C,'(H?iera

156

(top) Fiat factory in Turin (Piat SpA); (bottom)

Fngine as.sembK shop

in Fiat Factor)', Togliat-

tigrad (Novosti Press Agency).

350

List of Illustrations

158
162

(top) Rosa

Luxembourg; (bottom) Karl Liehknecht (both Marx Memorial Library).
at

Senator

Edmund Muskie campaigning
Press).

Dadeland Shopping Center, Miami,

P'lorida,

1972

(James Pickerell. Camera
164

Earl) engra\ ing of aiin-minting (Fotomas).

165

The Money-Changer and Old
Jan
print of
Six.

/m- Wife,

by Quentin Metsvs, 1514, Louvre,

Paris (Giraudon).

168
169
171

Amsterdam (Amsterdam City Archives).
(Art Promotion, .\m.fterdam).
Folhj,

h\

Rembrandt

Jofin

Law. Engra\ing b\ Leon Scherk from The Great Mirror of

1720 (British Mii-

setim).

173

(top)

Dragoons guarding the bank

at

the "hotel des Monno\ea,'" Rennes. 1720

(Musee de Rre-

tagne. Rennes). (bottom)

An

English adaptation of a Dutch broadsheet criticizing

Law (Brite/i

Museum).
175

William Paterson Pen and ink drawing

(British

Museum).

177

"Midas transmuting

all

into paper.

b\

James GiWray (Bank of England).
in

179
185

The Court of Directors of
(top)
sijlvania

the

Bank

of

England

1903 and 1974 (Bank of England).
in the
>

Andrew Jackson, by James Lambdin Painted
)

ear of Jackson's death, l84o(Penn-

.Academy of Fine Arts): (bottom Nicholas Biddle (Antiques).

186
159

RosK n Sa\ings Bank (Culver Pictures).
William Jennings Br> an speaking during a presidential campaign (Associated
lr\

Press).

193
196

ing Fisher sailing for Europe on the Mauretania, 1927 (Irving Fisher,

Jr.

).

(top) John

Maynard Keynes.

b>

Gwen

Raverat, National Portrait Gallen; (/jo»om)
1.

Cambridge

students and friends on the barge .\dibah in 191

Ke\ nes

is

arrowed; on the prow are Rupert

Brooke, Roger Fr\ and X'irginia \A bolf

(

W. M.

Keynes).

199
201

Alfred Marshall

(St.

John's College Library, Cambridge).

(top) Lloyd George.

Clemenceau and

\^'ilson

on

their wa>' to sign the
officers

peace

treat\

on June 28,
at

1919 (Syndication International); (bottom) Allied
sailles

peer into the Hall of Mirror?

Ver-

(Radio Times Hulton Picture Library).
at the

202

L\dia Lopokovaand Leonide Massine dancing
tasque,

Coliseum

in

Diaghile\s" Boutique Fan-

June 1919 (W. M. Keynes).

205

(top) E.\planaton' strike posters; (bottom)

Midland miners during the General

Strike (fxith

Radio Times Hulton Picture Library).

206

(top) Charles Rist (Radio

Times Hulton Picture Library); (bottom) Hjalmar Horace Greeley

210
212

Norman (Keystone). The surface of Wall Street, New York, on October 29, 1929
Schacht and Montagu

(Popperfoto).

Andrew Mellon, 1926 (Radio Times Hulton Picture
Franklin D. Rixise\elt
(.Associated Press).
at

Library).
in

215

the Metropxilitan

Opera House, New York,

November 1932

219

(

top) Herbert Htxiver.

March

1932, photo by Erich
in Seattle,

Salomon (John Hillekon .\gency); (bottom)

Hooverville on the

w aterfront

Washington, March 1933 [Associated Press).

230
233

The Brandenburg The
statistics

Gate, Beilin (Syndication International).

chart at

Rhein-Main
at

airfield, in

near F"rankfurt. Jul) 24,

1

948 (Popperfoto).

236

(top)

John Foster Dulles

Princeton

1907; (bottom) with General

MacArthur (Princeton
1974 (U.S. \avy

University Library)

239

Launching the
Photo).

L'.S.S

Riclmrd B.

Rus.iell at

Newport News on Decemlx-r
Alamogordo

1,

241

Rol^rt Oppenheimer and General l^slie Gro\es
April 15, 1&44 (Pojtperfoto).

in

the

Desert,

New Mexico

on

351

List of Illustrations

244

Klirusliclicv laugliiiig with reporters

during (»\v of

his visits to

the U.S.A., October 23, 1964

(Albert Fenn,

© Time-Life Inc. 1976).
John Uillehon Agency); (bottom)
Y,

247

(top) Fidel Castro, 196() (Sergio iMrmin.

Howard Hunt,

1973 (Associated Press).

250
253
254

Anti-war protesters
Project Nohska,

in

Madison, Wisconsin, 1970 (Associated

Press).

Woods

Hole, Massachusetts, 1956 (National Academy of Science.'i).

$6
(

fiillion

worth of

stock,

Davies-Monthan Air Force Base, near Tucson, Arizona, March 1975
(inset) B-52's in

Tony Korody, Sygma; John Hillekon Agency);

May

1971 (H.J. Kohojan, U.S.

.\ir P'orce).

258 260
265

(Charles

Addams
Heiin

cartoon from Tlie

New

Yorker magazine.

Page from the Esalen
(top
left)

Institute brochure.

P'ord, 1941; (top right)

Henn. Ford

II,

1976; (center

left)

Thomas]. Watson,
1964; (bottorn

President of
left)

IBM, 1937;

(center right)

Thomas J. Watson, Jr., Chairman of IBM,
S.

Colonel Sosthenes Behn, Founder of ITT, 1957; (bottom right) Harold
(all

Geneen,

Presi-

dent of ITT, lf)66

Associated Press).
Building,

267

(top)

The General Motors

New
Blau.

"S

ork (Camera
Press).

and Pen

International); (bottom)

The

Comeain
272
(top)

Building, Mo.scow

(Tom

Camera

Harvard Business School

class photo, outside the

Baker

I. ihrar\'

(Fogg .\rt Museum. Har-

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

A

\

illagc

on the Punjab Plain
\

Indus Basin irrigation project {Jacohy. Camera

All aerial

iew of the Saskatchewan plains (Carmdian Government).

286
288

Professor Clunnar Myrdal (Press .Association).
Fli

Whitnc)

s

cotton gin (Mansell Collection).

290
292

C^)tton-piiking machine at work in Mississippi (Delta Council).
(to;))

Kingston market, Jamaica (Penny Tuecdie. Daily Telegraph Colour Library); (center)
in

Housing

Puerto Rico (Eve Arnold, John Hillekon Agency); (bottom) Peasants

at

Selg°

Turke\ (Picturcpoint).
294
(to;))Slur7i conditions in

Liverpool (Bert Hardi/. Radio Times Hulton Picture Library); (center)

Tenement
297
298

blocks in liark'm.

New

York (Dick Saunders, Camera

Press); (bottom) Living

quarters of Turkish migrant workers in France (Cities Peress.
Port Talbot, Ontario (Cliff Maxwell).

John

Hillelson Agency).

The

inilialsof Professor

J.

K. Galbraith inscribed for posterity at thcCIalbraith

fann

in

Ontario,

( ;aiiada (Cliff

Maxwell).
district, Singa|)ore, \97(t

301

rheconimercial

(Professor Charles

,'\.

Fisher).
t^ity,
'.

305

(lop) FatehpurSikri (lent Berry, John Hillelson Agency); (1st

row lcft)Thc P'orbidden
Canberra
\\'at
(

Pe-

king A7«rr Biliouii. John Hillelson Agency);
(

(

1st

row

right) Civic C-entre,
left)

W

Peder-

.sen,

Auslrali(m

Ncics

h

Information Bureau); {2nd row

.Angkor

(/,.

loncsco.
A,ssoci-

Colorilu); (2nd
atcs);

row

right) National

.AsscmbK, Islamabad
l(-)(i4.

(Sa.s.soon,

Robert Harding

(hollom

left)

Louis .Mil's chateau at Versailles,

In Pierre Patel, Versailles

Mu.seum

((Jiche Mu.sces Mationaux, Paris); (bottom right) Brasilia (Joachim C.Jung, Colorific).

308

(top)

A

street off the

main

sijuare in Bruges (Bartmby's Pictinc Library); (bottom) the

main

street ol T'ranklorl, Kciituck\ {Picturcpoint).

310
31')
'

I

lalila\ in

the late 1930's (Bill Brandt,

from the book Shadow of Light)
ead)
19.30
s

Uainsucpt Roots,
Light).

London,

in

tile

(Bill

Brandt, Jrom the hook Shadow

of

352

List of Illustrations

315

Leo Baetk House, Bishop
Lilnary).

s

Avenue, Barnet, England {Greater London Council Photograph

320
331

An

aerial

view of Tokyo (Japan hiformalion Center).

President F. D. Rtxisevelt delivering his inaugural address,
(top) Pandit Jawaharlal

March

4,

1933 {Associated

Press).

333

Nehni, 1947; (bottom) Martin Luther King,Jr., leading

civil rights
Pre.is).

marchers from Selma to Montgomery, Alabama, March 24, 1965 (both Associated

336

Police

manhandling a demonstrator outside the Democratic Convention

in

Chicago, 1968

(Constantine Manos. John Hillelson Agency).

341

(top)

Cheyenne Mountain;

(center)

The

NORAD

tunnels inside
Galbraith).

Cheyenne Mountain (both

U.S. AirFcn-ce); {bottom)

Death Valley (Catlierine

I

353

Index

Bold

figures indicate illustrations

Acheson, Dean, 240
Acre, 115; assault on (1291), 114

Ball. Ck>orge, 229,

248

Bangladesh:
famine, 37

equilibrium of povert)', 29, 281;

Adams, Henry, 55

Addams, Charles, 259; cartoon
Address
to the

by,

258

Bank
Bank
6.5,

of

Amsterdam, 167-70
founding
of,

Working

Classes (Marx), 105

of England:

174; Court of

affluent class: display of, 61-7; enjoyments,

Directors, 176, 179;

and control of

creation of
to clearing

67-70;

God

and, 55-7; natural selection

of,

money, 176-8, 183; and lending
l)anks, 178, 188; capacit\ for
tion,

44-8, 49; publicity, 65-7; of today, 70-75;

economic innova-

Veblen on, 57-62
agriculture: C()llecti\ization,
of,
1.54,

180

211;

economy
12-13;
in

Bank

for International Reconstruction

and Devel-

before

Industrial

Revolution,

opment, 224

eighteenth-centur\
shortcomings,
1.55,

France,

16-18; Soviet

Bank

Rate, 178, 180, 188

211

banks and banking, 164-,80, 182-7, 190-2;

Am176;

Airey, Colonel Richard,

298

sterdam and, 166-70; central banks, 178, 1824,

Akbar the Great, 304
Alaska, 122
Algeria, 131

191-2; creation of mone>,

166-70,

Depression, 191-2; failures, 190; regulation of
monc>', 166, 174, 176-8

Alsace-Lorraine, 136, 1.37

Banque
Barnard,

Royale, 170-4

America
American

see United States
Civil

Oorge

Gardner, 51-.3

War: financed b\ paper money,

Bay

of Pigs (1961),

246-8
his

182, 187; as revolt against colonial socieh, 122

Beanies, John,

125;

ideal

of

go\cnunent,

American Dilemma, An (Myrdal),

2(8.5

124-7
Beecher, Re\. Henr\
V\'ar(l,

Amsterdam,
166-70

168; banks

and creation of mone\,

56, 80;

and Spcncvr

and natural

selection, 48, .55-7

Angkor Wat, 305

Behn, Sosthenes, 265

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

228, 232, 240, 245, 252-5

arms

race, 227-8, 2.5 1 -5

Arnold, Jim (Skidoo storekeeper), .340

Berle, .Adolf

A, 268
.84;

assembly

line,

earK. 24-5

Bedin: Marx and, 81-4; Wall,

\fyiH re\oluairlift,

Austria, pre-1914 alliance with

Germany,

1.36

tion, 94;

Brandenburg Gate, 230, 231;

automobile industr\

,

Italian

and

Soviet, 155

232-4, 233; pos(-«ar, 228-.34

355

Index

Bern, Ixnin

in,

145, 147

Callaghan, James, 15

Biddle. Nicholas, 185;

showdown with Andrew

Calvin, John, 325

Jackson over hank power, 184

Camp city, 314-16
Canada: and World
revolution, 159;

Birmingham (Alabama), 31 1-12

War

I,

149, 151, 159; quiet

Birmingham (England),
birth control, 42, 283-7,

31

and variant

of paper

money,

Birmingham (Michigan), 316
338

181;

and Keynesian doctrine, 217;

settling of

West, 299

Bismarck, Otto von, 105
Blaine,

Canberra, 305

James G, 221-2

Cap

Ferrat,

68

Blanc, Louis, 89, 95

capitalism: coalition with workers after

World
in

Blanqui, Louis Auguste, 89

War

1,

157; converging with

Communism

Blenheim

Palace,

68

business, 155;

Marx

s

theory

of,

100-103; mo-

Bloomsburv' Group, 198

tivating influence in change, 90; overthrow of,

Blue Ridge Corporation, 209, 237
Bolsheviks, 139, See also

by

proletariat, 83, 102-3,

147-8
of,

C.otwmunism
81

capitalism:

manners and morals

43-75; cere-

Bonn

University,

Marx

at,

monials, 62-5; Conspicuous

Consumption and

Brasilia,

305
at,

Leisure, 60-70; gambling, 70;
130, 132

modern

rich,

Brattleboro (Vermont), Kipling

70-75; natural selection of affluent, 44-8; natural

"Breakers,

The

(Vanderbilt mansion, Newport),

selection

and the Church,

.55-7; railroad

62,63
Rretton
Britain:

struggle, 49-.55; publicity, 65-7; Riviera, 67-8,
( 1

Woods f :onference

944

),

224
rights, 13; loss

70; Veblen on,

57-62
s

landowners and workers

Carey, Henry Charles, challenges Ricardo

view,

of

American
and

colonies, 36; expansion of produc-

40
Carnegie, Andrew, 43
Castellane,

tion

trade, 36;

and colonialism, 124-7; pre1.34;

1914 trade unions,

and World

War

1,

139,

Count Boni

de, 69,

70

149; niling coalition of capitalists

and workers,
to

Castro, Fidel, 121, 247

157;

banking system, 174-8, 183, 188; return

Central Intelligence Agency (CIA): and Cold

gold standard, 203-7; unemployment, 207;

War, 242, 246-8;
Pigs,

in India,

243n; and Bay of

Great Depression, 213; eainoniic policy during

246
11

World War

II,

223; and immigration, 295,

Chamberlain, Houston Stewart, Chamberlain, Joseph, 311

317, 318; low productivity of labor force, 295;
agricultural labor force, 303; race prejudice,

Chase Manhattan Bank, 181

318
British

Cheyenne Mountain

(Colorado), 341, 342

Museum Reading Room, lOL
1(X);

145;

Marx

Chiang Kai-shek, 249
Chicago Convention
(1968), .335,

and,

Lenin and, 145

336

Brooklyn, Plymouth Church, 55
Bruges, ,308;
;is

China, 249; Revolution after Worid

War

II,

96,

Merchant

City,

307

234; and coinage, 163; enmity with Soviets,
131, 251
;

Rniuiug, Heiurich, 213

birth control, 287,

338

Brussells,266;Marxin,91,97
Bryan, William Jennings, 55, 184, 189; opposes

Cholera Bay (Queliec), 40
Churchill family, 68
Churchill, Lord Randolph, 70 Churchill,

gold standard, 188
Bryce, Lord, 314
Bryce, Robert, 217

Lady Randolph, 70

Churchill, Winston, 70, 144, 197. 224, 237; disastrous return to gold standard, 20:3, 204, 209;

Burke, Admiral Arleigh, 252

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

306-9; Metropolis, 318-23;

356

Index

I

migration, 316-18; PoliHcal Household, 303-6,
309, 322; race prejudice, 318
city state,

syndrome, 274-7; myth
Philips,

of,

257-9, 269. 274;

270-74; power

of,

257-9;

Adam

Smith

299-302
France,

on, 26, 35, 324;

UGE,

261-70; unease over,

Civil

War in

The (Marx), 106

259, 274

class structure,

ungluing of in World

War 1,

133-4

Cortes,

Hernando, 118

Clay, Henry, 184
Clay, General Lucius, 234

cotton economy, 288-91 cotton gin. 288

Clearances, the, 27-9, 287, 316

cotton picker, mechanical, 290

Clemenceau, Georges, 201; Keynes on, 200
coinage, 164, 165; debasing
of,

Cracow, 134; Castle, 135; Lenin
Critique of the Gotha
Cronkite, Walter, 329
for,

in,

134. 139-41

166; invention of,

Programme

(Marx), 108

163,180

Cold War, 234-5, 243-51; moral sanction
235, 238, 240, 246, 249

Crosby, James

S.,

252
27
112-16,

Grossman,
in,

Ricfiard,

Cologne, Marx
colonialism,

s

journalism

84-6, 97

Crusades,
as

113; as colonial enterprise,

109-32;
in Eastern

Britain

and,

124-7;

118;mythof, 112, 114

Crusades

Mediterranean, 112-16;
of,

Cuba, 246-8; break with colonialism. 121; missile crisis,

Eastern European form

134-6;

fiscal aspect,

248

114-16; France and, 121-2, 170-2; ideas governing,

Currie, General Sir Arthur W., 159
Currie, Lauchlin. 221; as exponent of

111-12; Marx on, 110, 148; revolts

Keynes

in

against, 121, 122;

Adam

Smith on,

109. 117;

Washington. 220
Czechoslovakia. Soviet takeover, 234

Spain and, 116-21; United States and, 121,
127-31

Columbus, Christopher: and colonialism, 116,
118; letter to son, 119

Dale, David, 29;

New Lanark experiment,
Consumption

29
in,

Dallas (Texas), Conspicuous

71

Comecon

building,

267

Darien venture, 176

commitment, 338-9

Dark Thursday

(1929), 209-11,

210

Committee

for

Economic Development, 223-4

Darrow, Clarence, 55
Darwin, Charles, 44; Spencer
to
s

Communards, 107

debt

to.

45;

and

Communism, Communists: American aim

natural selection, 55. 57

save Vietnam from, 130-1; and Cold War,

Davies-Monthan Air Force Base. 252-5. 254.
256

234-5, 238, 243-51; converging with capital-

ism
;

in business, 155; divisions within,

243-5.

Dead Souls

(Gogol), 74
(California), 340.

251 Lenin's insistence on term, 142; victory in
Eastern Europe and Asia, 234; Vietnam war's
effect on,

Death Valley

341
in,

democracy: commitment. 388-9: education

249-51

337-8; elections, 328-30; leadership, 327-8, 330-7; Swiss model, 325-7
91-3, 92

Communist League, 91, 100 Communist Manifesto. The (Marx),

Democratic Advisory Council, 240
Detroit,

Company
rise

of the
fall of,

West
170-4

(Mississippi

Company),

299
E.,

and

Dewey, Thomas

237

Connally, John, 335

Diderot, Denis, Encyclopaedia. 24-5

Conspicuous Consumption, 60-70 Conspicuous Leisure, 61
Constantinople,
1

Dominicans, and Spanish colonialism, 117

Drew, Daniel,

50;

and Erie Railroad, 49-53 and CIA, 242, 246, 248

14

Dulles. Allen Welsh. 237;

Continental Congress, and paper money, 182,

Dulles, John Foster. 209, 2;35-8; 236; moral sanction for

194
corporations, 257-79; control
stitute,
of,

Cold War, 235, 238, 240, 246, 249;

268; Esalen In-

career,

237-8
167. 170

259-61 future
;

of,

277-9; multinational

Dutch East India Company,

357

Index

Eastern Europe, pre-1914
13;3;

aristcicratie ruling class,

Fish, Mrs. Stuyvesant. 64. 65; party given by, 64,

and revolution, 134;

rule of

Europeans by

65
Fisher, Ir\'ing. 193; formula to determine value of

other Europeans, 134-6; retreat from imperialism. 136;

and World
in,

War

I,

137-9; Soviet con-

money, 192-5,213; influence on Keynes, 195
Eisk, Jim, 50, 52;

solidation

i31; emigration to industrialized

and struggle

for Erie Railroad,

countries, 293-5,

317

49-53

Eastern Mediterranean,
terprise
in,

Ousades

as colonial en-

Ford, O-rald, and detente, 251
Ford, Henry, 265

112-16
as source of

East India

Oimpany:

income

for

Ford, Henr\

II.

265

economists, 32,

110;

condemned by Adam

Fourier, Charles, 89, 95
F'rance: land-ow nership before Industrial Revolution, 13;

Smith, 109; and colonialism, U)9-10, 124
Ebert, Friedrich, 157
Eccles, Marrincr,

Adam

Smith

s

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

1.S48 Revolution, 93-7; 1871
6;

Commune,

105-

and colonialism, 121-2, 170-2; pre-1914
[political

democracy, 337-8

workers

strength, P34; pre-1914
territorial
I,

alli-

Edward

\' II,

1.S4

ance with Russia, 136; and
tive,

impera149;

Eindhoven, as Philips headquarters, 270-4
Eisenhower, Dwight D., 234, 246; on danger of
misplaced military-industrial power, 227, 228,

137; and

Wodd War
Law,

139,

142,

ruling coalition of capitalists

and workers, 157;
Revolution

finances

imder
b\'

170-4;

243
emigration. 30-40. 287-99. 316-19

financed

paper money,

182;

Turkish

workers hostel, 294

Employment Act (American)
Engels.
Friedrich.
88.

(1946),

224
as

Franco-Prussian War, 105
Frankfort (Kentuckx
Franklin.
),

108;

on Hegel, 83;

308
15;

Marx'spartncr, 89, 91.98. 103

Benjamin.
180. 182

exponent

of

paper

England

see Britain

mone\.

Equitx I'unding Corporation. 74
Erie Railroad «ar, 49-53

Franklin National Bank. 167

Funk. Walther. 330
brochure. 260
PopiikitUin (Malthus).

Esalcn Institulc. 259-61
Ensafi

;

on

tin:

I'liiiiiple

(if

Gandhi. Mahatma, 332, 337
Garv, Elbert Henrv, 312
Gati's.

no
EuroiX'an (lominou Market, 276-7

Frederick

T,.

43

Gaulle. C:harles de, 237, 334

famine. 35. 37-8

Geneen. Harold. 265
General Motors. 267. 277
Political

Farm Bureau
Fatchpur

Federation. 18

Sikri.

305; as arcliel\pe ol

General Strike (1926), 207

Household. 304-6
Federal Reserve System. 190-2; anil Keyncsian
Rc\olulioii,

General Theory of Eniploijnient Interest and

Money.
George
George,
\
,

T/ic (Keynes). 216-17,

218

220

150
Progress

Feuerbach, Ludwig, 89
Filenc.

Ilenr>',

and Poverty. 60
s

Edward

A., 141

Gernum-French Yearbooks. Marx
86-9

editorship

of,

Financial and Industrial Securities C'orporation.

208-9
First
I'irst

Germain: workers
I

[M)litical

strength after 1870,

Bankollhc

inilcd States, I.S3

108,
ot,

1.'34;

prt'-I914 imperialism, 136;

and
I,

terri-

lulerriatioual:

loundingol, 103-5; death
address
to.
I()(i;

torial 9,

imperative, 137; and

World War

138-

105;

Mar\

s final

membership

142, 149, 157; fa.scism, 157, 214; inflation,

card, 104; leadcTS, 104

190; reparations, 2(K); Great Depression, 213;

358

Index

Nazi borrowing and S|x>nding to cure iinemploNineiit,

Histonj of

t

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,

221; as true protagonist of Kcvncsiau ideas, 221

86

Hobson,

J.

A.,

147

Glow, Arthur Francis, 2&3
Glow, James
B.,

Hofstadter, Richard, 48

265; and founding of

UGE,

Hoover, Herbert, 219; and Great Depression,

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

Humphrey, Hubert, 328
Hungary,
Hunt,
E.

Goldman Sachs Trading
203-7; abandonment

revolt (1956),

238

gold standard, 187-8, 190; Britain
of,

Howard, 247

213
imperialism
Iniperialisni:

Qiodhart, Arthur

L.,

81

see colonialism
the

Gotha, working-class parties' program, 108

Highest Stage of Cupitahsni

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-

librium of po\ert\, 29, 281-3; famine, 37;
colonialism
in,
1

10,

124-7; result of independ-

remecK

for,

213-26

ence, 127, 128, 3'34; American aid, 132;

CIA

in,

Great Hunger, 37-8, 40, 110

2+3n; agricultural labor
Indonesia,

force,

303
.

Greenbacks, 182, 187-8, 194
Griffin,

and equilibrium

of po\ert\

29
city,

James (Erie engine
Isle

driver),

53

Industrial Cit\\

309-18; as characteristic

Grosse

(Quebec), 38; fever hospital, 39

309-11;
ics of,

class structure,

314-16, 318; economto,

Groves, General Leslie R., 241

312-14: migration

316-19; subud),

316
Haase, Hugo, 138
Industrial Rcxolution, 12, 13, 27, 288,

309

Hachard, Marie-Madeleine, 122
Hamilton, Alexander, 183

Indus Valley, and coinage,

16;3
of,

inevitable conflict, doctrine

228, 232, 240-2,
of,
s

Hansen, Akin Har\e\, as American exponent of

243, 245, 249;
inflation:

abandonment
190;

251

Ke\ nes, 220

Germans,

Ke\nes

remedy, 221-

Harlem (New York Cit\
Harris,

),

294

3,

225-6, 300
III, Pojie,

Se\mour

E.,

221

Innocent

114

Harvard Business

SchtKil, 271,
s

272
influence on, 217-

INSEAD
Ireland:

(Erench business school), 271

Harvard University, Ke\nes
18

Inteniatioiial

Monetary Fund, 224

Maltluis and Ricardo ideas tested in

Haughton, Daniel
race, 227,

J.,

on

"kickbacks

in

amis

Great Hunger, 37-8; emigrants to America,
.38-40,110,317
Iselin,

228

Hegel, Georg Wilhelm Eriedrich, 81-4, 82;

('olumbus, 252
,

Marx

s

acct'ptancc

of, .S.3-4

Islamabad. National Assembly 305

HeriKlotus, on invention of aiined

money, 163

Italy

:

automobile industry, 155; famine, 157; ag-

Highgate Ometerv, Marx

s

grave, 77
1

ricultural labor force, '303

Histonj of British India (Mill),

10
Jackson, Andrew, and struggle against Biddle
s

Histonj of the Conquest of Mexico (Prescott),

117

bank,

1.S4

359

Index

Jan Six (Rembrandt), 169
Jefferson,

Krueznach, 86
Krupskaya, Nedezhda, 139, 145, 152, 153
1

Thomas, 122
13,
1

Jerusalem, and Crusades,

14,

131
labwr, division of,

Johnson, Lyndon, 328, 335
Johnson, Dr. Samuel, on London. 309
Jones, Lewis,

23

labwr theory of value, 32, 35, 37, 102

2ASn

Lahore, 124
landlords;

Jordan, David Starr, 60

absentee

Irish,

37;
of,

Malthus
36;

and
of,

Ricardo theories on revenue
Kapital.

power

Das (Marx), 100-103 and

against workers, 13, 35
Lassalle, Ferdinand,

Kapitza, Peter, 155

89

Kennedy, John

F.,

61, 243n, 328, 329, 338;

Latin America, colonialism and, 116-21

Cuban

missile crisis, 248; as a leader.

334

Law, John,

121, 171;

and Banque Royale, 170-4;
collapse of

Kennedy. Robert, 248, 335
Keynes, Florence Ada, 197 Keynes, John Maynard,
18,

and

Mississippi

Company, 170-4;

schemes, 173, 174
196, 255, 300;

on

leadership instinct, 327-8, 330-7

power

of

vested

interests
ideas,

compared with
and shortage
of

League
91

of the Just (later

Communist League),
Cracow, 134, 139-

encroachment of

11;

purchasing power, 36; on ideas as motivating
force in change, 42, 90; his debt to Irving Fisher,

Lenin, V.

I.,

135. 153, 211; in

41

;

as true revolutionary

compared with Marx,

195, 213; at

Cambridge, 197-8;
at

interest in

141-2; on role of peasants in revolution, 142-3,
1.54; in

economics,

198;

Treasury during World

Switzedand, 143, 145-8, 151-2; revolu-

War

1,

198-200; condemns reparations in Eco-

tionary conferences 145-7, 148; theory of im-

nomic Consequences of the Peace. 200, 224;
unpopularity, 203, 207; attacks return to gold
standard, 204-7, 224; advocates

perialism
olution,

and capitalism, 147-8; and 191 7 Rev151-4;
takes

power

in

Petrograd,

government

152-4; his miscalculation, 154. 157; on intellectuals role in revolution, 197

borrowing and spending as cure for Depression,

213-14; his

General Theory of Employhis

Leontief, WassiK, great tabulation of
industry, 20-21, 22

American

ment Interest and Money, 216-17, 218;
views
in

America and Canada, 217-21, 223-4,
inflation,

Ley, Robert, 330

225-6; his cure for

221-223, 226;

at

Liebknecht. Karl, 157, 158
Liebling, A.J., hislaw,207

Bretton W(K)ds, 224, 225; negotiates American
loan, 224; "legacy" of,

225-6

Lincoln,

Abraham, congratulated by Marx, 78

Keynes, John

Neville, 197
Nikita,
155, 244, 342; as decisive
Stalinist

Lippmann, Walter, on Roosevelt, 332
Liverpool, 294

Khmshchev,

man
245

of midcentury, 243-5; reverses

Lloyd George, David, 201; on World

War

I,

136;

policies,

243-5;

and

peaceful

coexistence,

Keynes on, 200, 213
London; Marx
in.

97-108;

First

International

Kienthal, socialists'

conference (1916), 148

born

in,

103; Dr. Johnson on, 309

King, Martin Luther, 333, 338; and leadership,

London and County Bank, 170
Lopokova, Lydia, 202,
2(X5

335-7
Kingston (Jamaica), 292
Kipling, Rudyard, 130

Los Angeles, 217
Louisiana Purchase, 122

Kirkcaldy, birthplace of

Adam Smith,
ot St

15

Lowell, Abbott Lawrence, 60

Knights of the Hospital
114-16, 115
Korea, 234

John of Jerusalem,

Lubin, Isador, 229

Luxembourg, Rosa,

157. 158

Lydia (Asia Minor), invention of coined money,
163, 180

KrakdesC'hevaliers, 116

360

Index

MacArthur, Douglas. 236, 237

Civil

War

in

France,

106;

Critique of the

McBehan, Harold,

265; and

UGE,

263-5, 266,

Gotha Programme. 108
Massachu.setts.

268, 269, 273, 274

and development

of

government

McCarthy, Eugene, 328, 329; and Vietnam war,
334-5

paper money. 180, 181

Ma^im gun, 144
,

McCarthy Joseph. 234-5
MacDonald, Ramsay, 139

Means, Gardiner C, 268
Mellon, Andrew, 212, 213

McGovem,

George, 328, 329

Mencken, H.

L.,

on conscience, 74

machine guns, 144
Macmillan, Harold, on Dulles, 237

Menon.

Krishna. 132
City.

Merchant

306-9
s

Madison (Wisconsin), 250
Malthus, Rev. Thomas, 34; pessimistic Principle
of Population, 32-5, 40, 109-10;

Metropolis. 318-23; capitalism

failure in, 319:

race prejudice, 318-19; social character. 319-

on shortage of

22
Mexico:
revolt

purchasing power, 36

against

colonialism.

121.

122;

Manchester, Engels

in,

89

hacienda. 123: equilibrium of povertv. 291-3

Mansfield, Josie, 51, 53

Michigan, and bank regulation. 187
Mill,

Mao Tse-tung,

234

James, 32; and colonialism, 110; History of

Marie Antoinette, 18
Marlborough, ninth Duke
of,

British India.

110
32;

68

Mill,

John

.Stuart,

and colonialism,

1

10

Marshall, Alfred, 199; his economics rendered obsolete by Keynes, 198

miners' strike (1926), 205
Mississippi.

121: plantation house. 123: migra-

Marshall Plan, 225

tion of rural labor force. 291

Marx, Heinrich. 80

Mississippi

Company,

rise

and

fall of,

170^

Marx. Jenny

(wife). 81, 86, 87, 98, 100,

108

money. 161-95: banks. 164-80. 182-7. 190-2;
creation
of.

Marx, Jenny (daughter), 108 Marx, Karl, 35, 42, 76, 157, 198, 339; "universal

166-70. 176: function. 163-4: gold.

187-8. 190: government borrowing and spending
of.

man", 77-8; journalism, 77-8, 85-6, 90-91.
97-8; birth and early
life

195. 213-14. 216-18; origins. 163;
of.

paper

in

Trier.

78-81;

money. 180-4; regulation
value
of.

166. 174, 176-8;

birthplace. 79; Jewish ancestry, 80; atheism
[/
'

Fisher

s

formula

for.

192—

and suspected anti-semitism,
versify, 81; in Berlin,

80; at

Bonn Uni-

Monte

Carlo, 70; Casino. 63

81-4; and Hegels ideas,

Moore, G. E, 198

83-4; continual harassment by police, 84, 89,
91, 97, 98; in Cologne, 84-6; edits Rheinische

Morgan,

J.
.

R, 70, 190,312

Moscow

153:

Comecon
sv

building. 267

Zeitung, 85-6; marries Jenny von Westphalen,
86; in Paris, 86-91 edits
;

multinational

ndrome. 276-7

German-French Year-

Murphy, Franklin, 335
Murrow. Edward
R..

books. 86-9; partnership with Engels, 89, 91.
98. 108; fonns ideas
edits

329

on Communism, 89-93;

M\ rdal.
ertv.

Gunnar, 286; and study of national pov-

Vorwdrts. 90-91; in Belgium, 91, 97;

285

composes Communist Manifesto. 91-3; and
1848 revolution, 93, 97; revives Rheinische
Zeitung, 97; in London, 98-108; one

Napoleon

111.

105,296

London

National Recovery Administration (NRA), 214
natural selection: of affluent, 44-8. 49; ("luirch

home. 99; writes Das

Kapital.

100-103; and

progressive immiseration of workers. 102. 147;
helps to form First International. 103-5; and
Paris

and.

.55-7

Nehru, Jawaharlal, 61, 241. 333, 338;
.332-4. .337

as a leader.

Commune.

105-6.

last years,

106-8; on

colonialism. 110. 148;

compared with Lenin.

Neue

Rlieinische Zeitung.

Marx

as editor,

97

142-3; Address to the Working Classes. 105;

New foundland

Park battlefield. 149

361

Index

New Harmony (Indiana), 30 New Lanark; Owen's industrial
Character, 30, 31

Philippines,

American

colonial experience

in,

130

experiment, 29-

Philips Gloeilampenfabrieken. 270-4,

275

30; mills, 31; Institution for the Formation of

Phxsiocrats, 18-19,
Pitt,

22

William, 36, 176; on

Adam

Smith, 32

New Orieans,

122
Island): as

Pizarro, Francisco, 118; letter to

Queen, 119

Newport (Rhode

spicuous wealth, 61-2, 65;

monument to con"The Breakers, 62,
"

Flatten, Fritz, 152

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,

266; General Motors build-

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

population explosion, 32-5; control
Poronin, 141, 143
Port Talbot (Ontario), 295-8; 297

283-7

Potsdam Conference
povert)',

(1945), 229, 2.51
of,

Niebuhr, Reinhold, on Dulles, 238
NLxon, Richard, 245, 264; and detente, 251

equilibrium
cit\- state,

29, 280-1; breaking of,

281-91;

299-.302; ratton

economy,

Nonnan, Montagu,

206, 207

288-91; Mexico, 291-3; migration of workers,
29.3-9; Puerto Rico, 291; Punjab, 281-3,

287

North American Defense 342
Noske, Gustav, 157

Command (NORAD),

Powers, Gary, 246

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,

presidential elections, 328-^30

Principles of Economics (Marshall), 57, 198
Principles of Political

Economy

(Mill),

110
Taxation

Due d and Laws
,

plan for na-

Principles of Political (Ricardo), 110

Economy and

tional bank, 170, 172

Owen,

Robert: and

New

Lanark and

New

Har-

Progress

and Poverty (George), 60
253
89

mony,

30; influence

on Marx, 89

Project Nobska, 252,

Proudhon,

P. J.

paper monev, 180-4; revolution financed b\, 182
Paris:

Puerto Rico: breaking of equilibrium of povert>
291; shanty town, 292

Marx

in,

86-91

;

IS4H Re\()lution. 93-7, 94;

Commune of
from, 266

1871, 106, 107;

LIGE operations

Punjab, 282; British colonization

of,

124-7; and

breaking of equilibrium of po\'ert\\ 281-3,

Paterson, William, 175;

and Bank

of England,

287; birth control, 287

174-6
peaceful coexistence. 242, 245
|X'a.sants:

purchasing power, shortage

of,

Malthus's idea

of,

36
I'>4;

decisive class in war,

not

amenable
Quebec, and paper money,
Qucsna\,
mique.
Fran(,'ois,

to slaughter, 151;

and p(jwer

of landlords, 13;

180. 181, 182

role in resolution, 142-3,

154-5

18-22, 19: Tableau F.eono-

Pentagon, and

v\

capons s\stems, 240
of, 117,

18,

19

Peru, Spanish colonization

118
race prejudice, .318-19

Petrograd (now Leningrad), Lenin fakes power
in,

152, 154

Radio
lritiTn;ilioiial in,

(

lorporation of America, 208

l'hila(lrl|ihiii.

309; First

105

railroads,

and affluence from, 49-.55

362

Index

Ramage, Rear Admiral

L. P.,

252

Scopes, John T., 55
Scotland,

Rand

Oirporatioii,

240

and Clearances, 27-9, 287, 316
Airline,

reason,

men

of,

16
Six,

Seaboard
169

20S
United
States,

Rembrandt, 161 Jan
revolution:

Second Bank
182;
of,

of the

184

financing
of,

by

paper money,

Second International, 105
self-interest,

Lenin's view

142-3, 148; Marx's view
in,

and wealth

of nations, 22-3,
in,

30

148; peasants role
for,

142-3; three conditions

Seville,

Archivo General de Indias

118, 119

96
of,

Shaplen, Robert, 57
85-6, 97

Rheinische Zeitimg, Marx as editor

Shaw, George Bernard, 216

Rhodes, Knights Hospitallers

in, 1

16

Shenandoah Corporation, 209, 237
Simpson, Joe (Skidoo murderer), 340

Ricardo, David, 32, 33, 77, 176; his labor theory of
value, 35-6, 37, 40, 102;

Singapore, 301; multinational presence

in,

276; as

on landlords revenue,

prosperous
Six,

city-state,

299-302

36; and

colonialism, 110

Jan (Rembrandt),

167, 169

Skidoo 23 (California), 339-40
Small,
Ricliard B. Russell, U.S.S., 239
right to work, as

Howard
Adam,

J.,

265; and

UGE,

269, 270, 273,

274; on danger of socialism, 278-9

motive of 1848 Revolution, 95

Smith,

13-27, 14, 46, 77, 300, 339; as

first

Rist, Charles, 206, 207

economist, 13-16, 32; academic career, 15;

Riviera,

its

service to the rich,

68-70

Grand Tour, 16-22; impressed by France and
Physiocrats, 16-22; as
rejects

Robbins, Lionel, 213
Rockefeller,
Rockefeller,

man

of reason, 16, 42;
18;

Da\ id, 54
John
D.,
4.3,

Quesnay's Tableau.

on division of

48,

54

labor, 23;

on combinations and corporations,

Rf^kefeller,

John D,

Jr.,

54

26, 35, 324; his

economic model, 32; optimism

Rockefeller, Nelson
sion,

A., 54;

on dangers

of

compas-

a)ntrasted with Ricardo and Malthus, 35; and
colonialism, 109, 117;

48 on motivating influence on
capital-

Wealth of Nations,
55-7
1,

15,

Roll, Sir Eric,
ist

22-6, 36
Social Darwinism, 44-8,
Social Democrats:

change, 90

Roosevelt, Franklin D., 215, 331, 338; puzzled by
,
'

and Worid War

138-9, 142;

Keynes, 2 1 4 as a leader, 330-2, 334
;

Zimmerwald conference

(1915), 147

Rosenberg, Alfred,

1

Somme,
Soviet

Battle of (1916), 149
176, 178

Rostow, Walt W., 334

SouthSeaBubble,

Ruge, Arnold, 86, 89

Union

{see also Russia): colonialism, 131;

Runnymede,

13

agriculture,

155,

211;

automobile industry,

Rusk, Dean, 249
Russia (see also Soviet Union): Revolution. 96, 142-3, 151-4, 182; pre-1914 Empire,
ances, 136;
takes pf
l.'M; alli;

155; collectivization, 211; arms competition

with America, 117-8, 251-5; consolidation in
Eastern Europe, 231, 234; and Berlin blockade,

and World War
1

I,

139, 151

l^Miin

232-4; and Korea, 234; Cold War, 234-5, 238,

m cr,

52

243-51

;

and Cuba, 249; and Vietnam,
16-21

2.51

and detente, 251
Saint-Simon, Ducde, 89, 95, 174, 180
Spain,

and

colonial achievement,

1

Samuelson, Paul

A., 221,

257

Spanish-American War, 130
Spencer, Herbert, 47, 77; as the great Social

Saskatchewan, 284
Say, Jean Baptiste,

36

Darwinist, 44-8; originator of "survival of
test,
"

fit-

Schacht, Hjalmar, 206. 207, 214

44;

and ascent of privileged
45;

classes,

44-5;

Schumpeter, Joseph
Schurz, Carl, 47, 48

A., 77, 213. 217,

304

allows

charity,

American

tour,

46-8;

Beecher and, 48, 55-7

1

Index

Stalin, Joseph, 211, 231,

243; policies reversed by

Truman, Harry
Turgot,

S.,

251

Khrushchev, 243-5; and atomic bomb, 251
Steffens, Lincoln,

Anne Robert Jacques, 22

314

Turin, automobile industry, 155, 156

Stevenson, Adlai, 246, 328; on Riviera, 68; on

Turkey, 292

Korea, 234; and

Cuban

missile

crisis,

248

Tweed,

Boss, 50,

53

stock market speculation (1927-29), 208-1
Stokes,

Edward, 53

Ulam, Adam, 154

Strathnaver, Highland Clearances, 27
Streicher, Julius,

underemployment equilibrium, 216
unemployment, 204, 207, 225;
Hitler's cure for,
for,

11,330

213-14, 221; Keynes's remedy
Strong, Benjamin, 191
216, 220-1, 223

213, 214,

Suez

crisis

(1956),

237
as Social

Unified Global Enterprises (UGE): as illustration
of corporate development, 261-70; founding
of,

Sumner, William Graham, 47, 58, 77;
Darwinist, 46,

48

261-3; changes of name, 262, 263, 264;

supermarkets, 161, 162
Sutherland, Highland Clearances, 27-9, 28, 287

present-day, 263-6; Era of

McBehan, 264-6,

268, 273, 274; overseas operations, 266; control
of,

Sweezy, Paul M., 78
Switzeriand: Lenin
in,

266-8; Washington

office,

268-9; techno-

143, 145-8, 151-2; as revo-

structure, 269-70; reason for unease, 274;

and

lutionary capital of world, 145; race prejudice,

multinational syndrome, 276

318; democratic example, 325-7

United States of America: emigration
110, 317;

to,

38-40,

and

Social

Darwinism, 45-8; railroad

Tableau Economiqite (Quesnay),
Talbot, Colonel

18,

19

struggle, 49-53; high capitalism in, 49-75; rec-

Thomas, and settlement of Port

onciliation of natural selection with Christian
faith,

Talbot, 295-8
Taylor, A.
J. P.,

55-7; Conspicuous Leisure and Conspic-

136

uous Consumption, 61-70; publicity, 65-7;
marriages with European aristocracy, 68-70;
the

Taylor, Maxwell, 334
Tell,

William, 325

modern

rich,

70-75; painful colonial expe-

Teller,

Edward, 252

rience, 127-31; aid to India, 132; pre-1914 industrial proletariat, 134;

Templars, 114

and

Wodd War
money,

I,

149,

Tennessee Coal and Iron Company, 312
territorial

151

;

ruling coalition of capitalists

and workers,
180, 182;

imperative, 136-7, 138

157;

and invention

of paper

Teutonic Knights, 114
Texas, the

financing of Revolution, 182; banks and the

modem New

rich in, 71,

72-3

central

banks,
political

182-7,

188-90; struggle be-

textile revolution, 12, textile

288
as

tween
model, 29-30
191;

and banking power, 183-7,

town,

Lanark

and

gold, 188, 207-8; stock market specu-

Theory of Business Enterprise, The (Veblen), 61 Theory of the Leisure Class, The (Veblen), 60-1
Theirs, Adolphe, 106;

lation, 191,

208-10; Great Depression, 190-2,

211-13, 214, 330-2; and Keynesian Revolution,

Marx

on, 108
in,

217-21, 223-4, 225-6; recover, and

fur-

Third World: Marx's standing

110;
of,

Canada
299

ther recession, 218-21; price control, 222-3;
aid to Europe, 225;

and United

States as

first

countries

arms race with Soviet
l)e-

Tilton, Elizabeth,

57

Union, 227-8, 251-5; close relationship

Times, The, attack on Keynes, 200
Togliattigrad, automobile industry, 155, 156

tween

industr\'

and armed

services, 288, 232,

240, 245, 252-5; Bedin aidift, 234; Cold

War,

Trevelyan, Charles Edward, 38
Trier,

234-5, 240-2, 245-51; and Korea, 234; and
life in,

Marx's birthplace, 79; Marx's eady

Cuba, 246-8; and Vietnam, 249-51, 334-5;

78-81
Trotsky, Leon, 142, 146

and big corporations, 261-70, 274-9;

cx)tt()ii

economy and equilibrium

of poverty, 288-91;

364

Index

as

first

a)untr\ of Third World, 299; agricul-

Washington, George,

18.3

tural lalx)r force, 303; race prejudice, 318;

and

Watson, Thomas J., 265 Watson, Thomas J, Wealth of Nations,
Jr.,

leadership instinct, 327, 330-2; presidential
elections, 328-30,
.3.35

265
Inquiry into the Nature
.36

An

United States Steel Corporation, 312

and Causes of the

(Smith), 15, 22-6,
class

Urban

II,

Pope, and real motive of Crusades, 112

Western Europe: pre-1914 ruling
talists,
1.3;3;

and
1.34;
1,

capi-

industrial

proletariat,

pre-

Valladolid, 120

1914 imperialism, 136; and
9,

Wodd War

138-

Vanderbilt, Consuelo, 68, 69
Vanderhilt, Cornelius, 50, 74;

149-51,

1.57;

quiet revolution, 157; coalition
157; failure of capi-

and Erie Railroad

of capitalists

and workers,

stniggle, 49-53; policy of robbing the public,

talism in health

and housing, 319

49,

.53;

and Conspicuous Consumption,
K.,

62,

68

Westphalen, Baron Ludwig von, 81
White, Harr> D., 224
Whitne\',
Eli.

Vanderbilt, William

68

Vanderbilt Universit\ (Nash\ille), 62

289; cotton gin, 288

Veblen, Thorstein, .57-61, 59, 77, 192; his view of
the American rich, 57, 58-60, 61, 62-4; eccentric life,

Whitney, Richard, 211

Wilhelm

II,

Kaiser, 150

60; on distinction

behveen makers and

William of Orange, 174
Wilson, W(x)dro\\, 201; Keynes on, 200

moneymakers, 61; Conspicuous Leisure and
Conspicuous

Consumption,

61,

62-4,

70;

Wood,

Charies, 38

Theory

of Business Enterprise, 61; Theory of
Class.,

workers: coalition with capitalists after

World

the Leisure

60-61

War

I,

157; and law of wages, 35; migration to

Venice, 307

industrialized countries, 293-5, .316-19; over-

Verdun, 149
Versailles, 305;

throw of capitalism, 83, 102-3. 147-8; and

"Le Hameau,'

18,

19

power

of landlords, 13,

.35;

pre-1914

political
I,

Versailles Treaty, signing of, 200, 201

force, 1.34; support for

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

social s\sof, 1.36-8;

1.30-1,

.334-5; opposition to, 250;

ia3-4. 1.57-60. 163; causes

relationship

between leadership and commit-

workers reaction,
ing, 140; stupidity

1.38-9, 142-3. 157; recniit-

ment, 334-5
Voltaire, 17; as

and

slaughter, 143-4, 148-

man of reason,
work
for.

16

51; heroism a matter of rank not courage. 151;

Vortvarts, Marx's

90-91

end, 157; Peace Treatx 200
,

World
wages: cuts
in,

\^'ar

II:

as

watershed of change,
business, 231-2,

l.>3;

204, 207; law

of, 102,

213

benefit to

American

263

Walker, James J, 216 Wall Street Crash, 209-1

1,

210

Young, Andrew

,

.33.5

Warsaw,

1.34

Washington,

DC:

and Cold War, 240-2; and

Zimmerwald,
Zurich. 1^'nin

socialists'
in.

a^nference (1915). 147

Kevnesian Revolution, 218-2-3;

UGE in, 268-9

151-2

365