A Tale of Two Families Generational Succession in Filipino-And-American-Family-Firms

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A Tale of Two Families: Generational Succession in Filipino and American

Family Firms
Article in TRaNS Trans -Regional and -National Studies of Southeast Asia · March 2015
DOI: 10.1017/trn.2014.24
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A Tale of Two Families: Generational Succession in

Filipino and American Family Firms
Alfred W. McCoy
Abstract
Through comparison of two families, Filipino and American, this essay finds that
the axiomatic three-generational cycle of rise and decline, articulated famously
by Andrew Carnegie, proved predictive for an American family firm but not
for its Filipino counterpart. Over the span of a century, both families followed
a surprisingly similar move from agriculture to food processing and then pub-
lishing. Thereafter, however, divergent state policies shaped different destinies
for these two families. In the United States, impersonal enforcement of state
security and economic regulation allowed the unchecked rise of finance capital
that consolidated some 2000 US breweries, most of them family owned, into
two transnational corporate conglomerates. In the Philippines, by contrast, per-
sistent rent seeking by elite families, combined with personalised, partisan state
economic enforcement, has allowed the continuing dominance of family-con-
trolled corporations. Through comparison of two societies with close relations
for over a century, we can see how state economic regulation can encourage
the eclipse of major family firms in one society and the perpetuation of a polit-
ical-economic oligarchy in another.
KEYWORDS: Family, capitalism, state, sugar, brewing, oligarchy
INTRODUCTION
“T HERE ARE BUT THREE generations in America from shirt sleeves to shirt
sleeves”, industrialist Andrew Carnegie observed famously in 1886. Com-
pared to Britain, wealth matters far less in America where, he said, “it is much
more easily acquired and, what is more telling, much more easily lost” –
thereby bringing prominent families back to the worker’s symbolic shirt sleeves
by the third generation. More broadly, he concluded: “Wealth cannot remain per-
manently in any class if economic laws are allowed free play” (Carnegie 1886:
365–366).
By comparing the history of two family firms, a Filipino media conglomerate
and an American brewery, we can gain some understanding of the social forces
that make Carnegie’s maxim ring true for America but much less so for the Phil-
ippines. Over the span of three generations, the Lopezes of Manila have main-
tained their control over a dynamic media corporation, preserving the family’s
Alfred W. McCoy, Department of History, University of Wisconsin–Madison; awmccoy@wisc.edu
Downloaded from http:/www.cambridge.org/core. UW-Madison Libraries Wisconsin Historical Society, on 03 Nov 2016 at 17:19:13, subject to the Cambridge Core
terms of use, available at http:/www.cambridge.org/core/terms. http://dx.doi.org/10.1017/trn.2014.24
160 Alfred W. McCoy
position in their society’s upper stratum; while the Piel Bros. brewery in
New York was sold in the third generation midst the US brewing industry’s cor-
porate consolidation, pushing its family downward into the American middle
class. This comparison invites us to explore the eclipse of American family
firms by the rise of corporate conglomerates and the continuity of Filipino
“family dynasties” unchecked by the “free play” of those economic laws.1
Populists across the Philippine political spectrum have, for the past half-
century, criticised the persistence of family oligarchies, beyond those three
generations, as a barrier to country’s progress. First articulated by student dem-
onstrators in the late 1960s and later appropriated by the Marcos dictatorship,
an anti-dynastic rhetoric, with the Lopezes often serving as its bête noire, has per-
sisted to the present. In a 1973 treatise defending his declaration of martial law,
President Ferdinand Marcos insisted “the old alliances between oligarchs and
their retainers…must now be uprooted” (Marcos 1973: 151); while the 1987 con-
stitution written after his fall promised, under Section 26, “The State shall…pro-
hibit political dynasties as may be defined by law.”2 As recently as 2012, the
Center for People Empowerment at the University of the Philippines was still re-
porting that, “The concentration, expansion, and consolidation of political dynas-
ties over the past 100 years attests to the continuing hegemony of feudal
politics….Thus this will be the state of politics in the generations to come: A gov-
ernment dominated by oligarchs will not equalize opportunities for growth and
development among the vast majority of people.”3
While activist Filipino academics bemoan their persistent family dynasties,
mainstream American scholars, exemplified by Alfred Chandler’s Pulitzer-prize
winning study The Visible Hand, have celebrated their country’s ‘managerial
revolution’ that replaced family firms with modern corporations. Starting in the
mid-nineteenth century, ‘entrepreneurial’ or ‘family capitalism’ yielded, in
sectors requiring large funds for expansion, to ‘financial capitalism’. As both
family- and financier-controlled firms expanded after the 1880s, they needed
growing numbers of professional managers who had first appeared in the rail-
roads. During the 1920s, as DuPont, General Electric, and General Motors de-
veloped innovative industrial management, while “new accounting, budgeting,
and forecasting methods were becoming normal” (Chandler 1977: 463). With
more than 100 universities offering business courses by 1916, trained specialists
in cost accounting, finance, and marketing contributed to “the growing
1
Center for People Empowerment in Government, University of the Philippines. 2012. Election
2013: Horizontal and Vertical Expansion of Political Dynasties. Issue Analysis 8. Available at:
http://www.cenpeg.org/2012/issue_analysis/2012/Political_Clans_in_2013.html (accessed on 30
April 2013).
2
Constitution of the Republic of the Philippines (1987), The LawPhil Project. Available at: http://
www.lawphil.net/consti/cons1987.html (accessed on 1 May 2013).
3
Center for People Empowerment in Government, University of the Philippines. 2012. Election
2013: Horizontal and Vertical Expansion of Political Dynasties. Issue Analysis 8.
A Tale of Two Families 161
professionalization of the managers of large industrial enterprises” (Chandler

1977: 464). Through the sum of these changes, Chandler argues, “managerial
capitalism soon replaced family or financial capitalism” (Chandler 1977: 10).
Seeking to understand why this “institution appeared so quickly and in such
profusion in the United States” Chandler (1977: 298) posits several factors – a
national market “not only larger and faster growing than in other nations” but
“less defined by class lines than they were in Europe;” and, above all, “legal dif-
ferences based on cultural values” exemplified by the US Sherman Anti-Trust Act
“prohibiting cartels of small family firms” that survived, by contrast, “through
holding companies in Britain or through cartels in Germany” (Chandler 1977:
498–500). Indeed, by 1963, just 200 industrial corporations, many of them
conglomerates, controlled 56 per cent of all US manufacturing; while none of
the leading 200 non-financial companies were still privately owned, whether by
families or individuals (Chandler 1977: 492–493; Larner 1966: 777–787).
Brewing was one major US industry that initially resisted these changes. The
‘managerial revolution’ of the 1920s coincided with Prohibition, stalling any mod-
ernisation of these family enterprises for nearly fifteen years. Even Pabst, one of
the most dynamic of pre-Prohibition brewers, had to adapt to “the change that
had taken place in methods of business policy” by introducing, during the
1930s, “modern functional divisions and specialized jobs” (Cochran 1948: 392–
394). After World War II, however, these economic forces spread to brewing,
and family-owned breweries were, in just a half-century, amalgamated into a
few national and then transnational conglomerates.
Offering a global comparative perspective on this Philippine–American con-
trast, recent research has explored the state’s role in advantaging major corpora-
tions over small, often family-based firms, which “account for 60–90 per cent of
all companies in most countries” (Bennett 2014: 8). Since the 1920s in the older
market economies such as Europe and the UK, “small firms, family firms and
individual entrepreneurs lose out at each stage of policy to oligopolies and
large firms that increasingly distort policy decisions away from economic effi-
ciency” (Bennett 2014: 46). By the 1970s, large firms were so dominant in the
US economy that policymakers tried to protect the ‘little guy’ by fostering
small businesses, often family firms, “as vibrant sources of renewal” (Bennett
2014: 59). Over the past 40 years, a similar tension has recurred in the mature
market economies of Japan, South Korea, the UK, and US: large corporations
remain dominant through a mix of market advantage and state support (the 10
largest firms produced 79 per cent of South Korea’s GDP in 2011), while govern-
ments struggle for strategies to assist the welter of small, often family-owned
firms (4.8 million in the UK, 4.3 million in Japan), usually defaulting to a
policy that favours the larger companies within this loosely defined sector
(Bennett 2014: 63, 74–83, 94–100). Despite government attempts to promote
small and medium enterprises, large corporations with professional management
still dominate the world’s more dynamic economies.
162 Alfred W. McCoy
This oligopolistic bias finds its most extreme form in developing economies
controlled by powerful oligarchies, particularly in Africa, Latin America,
Eastern Europe, and, Western and Central Asia. As businesses divert resources
to become “political entrepreneurs” who court the “close presidential allies that
control state enterprises” (Bennett 2014: 53), the country’s power players “favour
policies that increase barriers to mobility” (Bennett 2014: 55). Hence, the key
policy challenge is not support for entrepreneurs per se, but “broad institutional
reforms and shifts in oligarchy control” that require “oligarchies to participate in
the broader economy” beyond their borders – an assessment that seems to res-
onate with current Philippine conditions (Bennett 2014: 135). To summarise
Bennett’s implicit comparison, “corporatism” and its consequent oligopolies in
the UK and Europe “distort policy decisions away from economic efficiency”
(Bennett 2014: 46), a problem requiring moderate policy reforms; while the
“endemic corruption by ruling elites” in the oligarchies of former Soviet republics
and developing economies worldwide will serve as a serious drag on development
until mitigated by major structural change.
By comparing families at opposite ends of an organisational spectrum, from
the sweeping US managerial revolution to persistent Philippine family dynasties,
we can better understand the forces at play in both societies and the wider world
economy. While there is one collection of academic essays on Filipino families
(McCoy 2009) and numerous American family histories, there are few if any
multi-generational comparisons. Just Carnegie found the contrast between a de-
clining Britain and ascendant America poignant in the late nineteenth century, so
we, a full century later, might find juxtaposition of a fading America and an ascen-
dant Asian nation equally revealing. And just as Chandler emphasised the role of
the US economic regulation in superseding family firms, so we might explore the
political dimension of the state’s role in promoting or retarding such change.
THE LOPEZ FAMILY

Emerging as sugar planters on the Negros frontier in the 1870s, the Lopezes
were leaders of a regional industry that quickly became integrated into the na-
tional economy, providing them with the capital and connections to begin har-
nessing the power of the state to bestow rents, or preferential access to
restricted markets. Tracing a line of direct descent through six generations, we
can follow the Lopez family from its progenitor, Basilio, a timber merchant
and Iloilo municipal leader of the 1850s; to his great-grandson Eugenio, presi-
dent of Manila corporations with assets over US $300 million in 1970; and
then to Eugenio’s eldest son ‘Geny’ or Eugenio, Jr., and his grandson ‘Gabby’
or Eugenio III. Among these six generations, the first three were prominent in
the Western Visayas region, while the next three, the main focus of this article,
have played major roles in the national economy. Within this familial line, the
leaders of each generation seem to share some discernible personal and profes-
sional traits akin to what historian David Musto called a family “world view”
(Musto 1981: 41–42).
First and Second Generations

The modern Lopez family begins with the marriage of Basilio Lopez, a Chinese
mestizo timber merchant, and Sabina Jalandoni in the Jaro district of Iloilo City
during the early 1830s. Between 1834 and 1859, Sabina gave birth to sixteen chil-
dren of whom ten survived to maturity – the first of the couple’s 2676 direct de-
scendants over the next 150 years. Although Sabina bequeathed a 148-hectare
hacienda in Sarabia, Negros Occidental to her heirs in the late 1870s, neither
spouse participated actively in the opening of the plantation frontier on Negros
Island and left that venture to their children (Lopez 1982: xxv–xxxix).
It was the third son, Don Eugenio (1839–1906), who became “the central
figure among the second generation Lopezes” (Lopez 1982: xliv). As a teenager,
Eugenio acquired 1500 hectares of sugar lands in Balasan, Iloilo, before crossing
the straits to Negros in the early 1860s where he spent the next fifteen years
developing sugar plantations. Between the 1850s and 1890s, Don Eugenio pur-
chased 4000 hectares and sold 1000, leaving him with a net of 3000 hectares at
the time of his death in 1906 – holdings that ranked among the region’s largest
(Lopez 1982: xliv–xlvi).
Not only was Don Eugenio himself a leading planter, but he also had six sib-
lings with substantial haciendas of 1440 hectares, one of the five largest holdings
of sugar lands on the Negros frontier.4 By every possible index – urban property,
sugar farms, and liquid capital – the Lopez family had emerged, by the 1890s, as
one of the region’s wealthiest families.
The Third Generation

In contrast to the family’s second generation who prospered in Negros’s 30-year
sugar boom, Don Eugenio’s twelve surviving children, born between 1866 and
1885, reached maturity during the long sugar crisis that lasted from 1882 to
1913. When Don Eugenio died in 1906, these children divided some dozen
haciendas totalling 2500 to 3000 hectares, leaving each heir 200 to 250 hectares
(Lopez 1982: xliv–xlvi, 167–168).
Benito Lopez (1877–1908) had, like his father, Don Eugenio, remained aloof
from the Philippine Revolution, and later joined the conservative Federalista
Party after a branch was established at Iloilo City in 1900. As publisher of El
Tiempo, Iloilo City’s leading newspaper, Benito became an influential politician
and won the first elections for Iloilo’s provincial governor in 1903. Four years
later, Benito ran for re-election on the conservative Progresista ticket against
Nacionalista Party candidate Francisco Jalandoni, another wealthy Jaro planter.
4
Estadisticas, Negros Occidental, Philippines National Archives.
164 Alfred W. McCoy
On 27 December 1907, two months after Lopez’s re-election, one of Jalandoni’s

followers walked into the governor’s office and shot him four times. At his death,
Benito Lopez left his widow Presentacion Hofileña and their two children,
Eugenio and Fernando, a limited legacy of Hacienda Casalagan, a printing
press, and miscellaneous properties.5
Benito’s surviving siblings proved formidable entrepreneurs and were among
the few planter families that made the transition to industrial-scale sugar milling
after World War I. In 1927, seven of Don Eugenio’s ten surviving children com-
bined their capital to establish Central Lopez at Cadiz, Negros Occidental,
chaired by the eldest, Doña Maria Lopez. Although not active in the mill’s man-
agement, Eugenio and Fernando were among its investors. With total profits of
P3.5 million (Philippine Pesos) over ten years on an investment of only P700,000,
Central Lopez had a 500 per cent return – ranking seventh among the country’s
45 mills (Lacsamana 1939: F3–4, F18–19). Thus, the third Lopez generation’s
move into sugar milling created substantial resources that their orphaned
nephews, Eugenio and Fernando, could later use to reach national prominence.
The Fourth Generation

To these familial assets, one of the orphaned brothers, Eugenio H. Lopez (1901–
1975), added personal boldness and broader vision that made him the first Lopez
to move beyond the family’s home in the Western Visayas region and achieve na-
tional prominence. Instead of building individual corporations slowly, Eugenio
was a financier who mobilised capital to purchase a succession of interlocking
conglomerates, draining each acquisition’s assets through management fees
and then investing in new enterprises.6 Through this pyramid-building tech-
nique, unrestrained by the regulatory efforts of a weak state, Eugenio steadily in-
creased the size of the consortia he controlled – from the P250,000 of Panay
Autobus in 1937 to P1,022,000,000 of the Manila Electrical Company in
1973 (Meralco Securities Corporation 1973: 28–35).7 As he moved beyond the
restraints of agriculture’s slow natural rhythms to the ceaseless spinning of elec-
trical dynamos, he accelerated capital accumulation, increased profitability, and
reduced risk.
Paralleling Eugenio’s financial success, his brother Fernando (1904–1993)
built a formidable political apparatus at both provincial and national levels
after World War II. Starting as mayor of Iloilo in 1945, Fernando became
5
Ruperto Montinola, Report of the Governor of the Province of Iloilo, 30 June 1908, Bureau of
Insular Affairs, US National Archives; Chief, Law Division, Give Result of Investigation of
Joaquin Gil, Benito Lopez, 26 November 1907, Dean C. Worcester Papers, University of Michigan.
6
The Times 19 January 1939; Jacinto Montilla, Memorandum to Integrity Board, 12 September
1952, President Elpidio Quirino Papers, Ayala Museum, Manila; Isabela Sugar Co., Inc. vs.
Eugenio Lopez et al., CFI Manila, Civil Case 14831 1951), Enrique J.C. Montilla complainant.
7
The Times 12 January 1939; Makinaugalingon 2 March 1938; Sugar News January 1952: 31;
Andres Soriano, Memorandum Agreement, n.d., President Elpidio Quirino Papers, Ayala
Museum, Manila; Order, Isabela Sugar vs. Eugenio Lopez, CFI Manila, Civil Case 14831.
senator in 1947 and vice president of the Philippines in 1949. In 1965, Fernando
ran for the Nacionalista Party presidential nomination, but withdrew to become
Ferdinand Marcos’s running mate and eventual vice-president. This symbiosis of
the family’s political influence and corporate growth was a key factor in Eugenio’s
spectacular rise from provincial bus operations to the Philippines’ largest private
fortune in only a quarter century.
Eugenio Lopez’s phenomenal financial success seems to spring from his
manipulation of the Philippine state by “rent seeking” (Buchanan 1980: 7–8).
Throughout his career, he used his capital to secure political protection, investing
in elections and taking profits in political favours. Understanding the paramount
importance of state power, at each step Eugenio won support from politicians
through his powerful media organisations – from local newspapers in Iloilo
City during the 1920s all the way to the Manila Chronicle after World War II.
Most importantly, he recognised the unique power of the Philippine presidency
and worked to cultivate close personal relations with the executive. His enter-
prises thus prospered when an ally occupied Malacañang Palace and suffered
under the tenure of an enemy.
As the Lopez brothers moved beyond local newspapers into the state-
regulated transportation business during the 1930s, they found relations with
Manuel Quezon, president of the Senate and then the Commonwealth, essential
to their success. Midst Iloilo City’s long slide from national sugar entrepôt to pro-
vincial backwater during the 1930s (Bureau of Customs 1925, 1932, 1934: 37, 31,
33), the Lopezes launched a series of small enterprises – a dance band, an ice
cream parlour, and rental properties – until Eugenio realised that transportation
was the city’s only profitable business. By 1933, he had built a comprehensive
transport network – Iloilo Shipping Co. (inter-island ferries to Negros), Iloilo
Transportation Co. (urban buses) and, later, Iloilo-Negros Air Express
Company (national air transport) (Jose Jimagaon interview 19 April 1974).
During the Depression years of the early 1930s, the region’s transport inter-
ests competed intensely to survive. In the first of their state-regulated enterpris-
es, the Lopez brothers negotiated a generous government subsidy of P75,000 and
monopoly rights on key routes to launch the Iloilo-Negros Air Express Company
(INAEC) in 1933.8 Under the terms of the franchise granted by the Philippine
Assembly, INAEC received a 20-year permit to open routes anywhere in the
islands, subject to approval by the Public Service Commission, in exchange for
one per cent of gross revenues – a classic rent-taking arrangement.9 As one of
only three Philippine airlines, INAEC enjoyed a monopoly on several major
routes, but volume was low and profits were limited.
8
El Tiempo 5 and 8 November 1937.
9
El Tiempo 17 February 1937; Sugar Central and Planters News January 1933: 40, March 1933:
152.
166 Alfred W. McCoy
After spending the war years quietly in Baguio, Eugenio moved to Manila
after its liberation from Japanese occupation and soon emerged as a major
national entrepreneur. The devastation of World War II had liquidated most of
his investments in Iloilo City. But building upon the sugar industry’s historic
relations with state finance, he secured credit for his new corporations from
the Philippine National Bank (PNB) and the Development Bank of the Philip-
pines (DBP) that totalled P88 million by 1962.10
In this rapid post-war expansion, Eugenio was riding a tide of economic na-
tionalism that promoted Filipino entrepreneurs by establishing the Central Bank
in 1949, reducing US economic privileges through the Laurel-Langley agree-
ment of 1954, and, under legislation allowed by a nativist clause in the constitu-
tion, reserving retail trade for Filipinos, also in 1954. By the mid-1960s, these
policies would raise the Filipino share of the import trade sharply to 70 per
cent and investments in new enterprises to 88 per cent, but did so by “the rep-
lication of oligarchic formation in industry, partly because of the state’s policy of
encouraging Filipino entrepreneurship” (Doronilla 1992: 50–57, 70–73, 88–89).
Apparently wary of depending solely on government for operating capital,
Eugenio worked with close allies during the 1950s to organise his own source
of finance, the Philippine Commercial & Industrial Bank (PCIB). After long
delays springing from policy disputes between the sugar bloc and the Central
Bank, PCIB’s incorporators finally won a license in 1958 and opened for business
in February 1960 (Golay 1956: 253–264).
Drawing from these diverse sources of capital, Eugenio made a series of
major acquisitions after the war. His first post-war investment was Far Eastern
Air Transport Inc. (FEATI), the successor to the pre-war INAEC, which was
now reorganised as an international flagship and equipped with US war-surplus
aircraft.11
Reflecting the character of regulated airlines as rents, FEATI’s fortunes
would follow the ebb and flow of the Lopez group’s relations with Malacañang
Palace. Under President Sergio Osmeña, the Lopez-owned FEATI won routes
through the cabinet officer responsible for aviation policy, Defence Secretary
Alfredo Montelibano, Eugenio’s close ally.12 After his inauguration in mid-
1946, however, President Manuel Roxas cancelled FEATI’s monopoly by declar-
ing an open skies policy – thereby rewarding his ally Andres Soriano, owner of
Philippine Airlines, and punishing the Lopez brothers who were ambiguous in
their support for his candidacy in the April presidential elections.13 In May
10
The Manila Times 24 February 1962.
11
The Times 25 October 1945, 17 November 1945.
12
Andres Soriano, letter to President Sergio Osmeña, 20 October 1945; Sergio Osmeña, telegram
to Colonel Andres Soriano, 22 November 1945. Box 2, Sergio Osmeña Papers, Philippine National
Library.
13
Ildefonso Coscolluela, letter to Manuel Roxas, 26 October 1945. Box 51, File: Iloilo Politics,
Manuel Roxas Papers, Philippine National Library.
1947, Eugenio Lopez sold his family’s 78 per cent interest in FEATI to Philippine
Airlines for P2.8 million.14
With his profits from FEATI and other investments, Eugenio acquired the
Manila Chronicle Publishing Company in September 1947 and then purchased
a network of radio stations. With bylines by many of the capital’s leading journal-
ists, The Manila Chronicle quickly established itself as a leading national daily. By
acquisition of a radio-television conglomerate, the Lopez brothers gained politi-
cal leverage in post-war Manila through two different audiences – peasant voters
who listened to vernacular broadcasts on transistor radios and Manila’s middle-
class professionals who viewed television as a less partisan medium than the
daily press.
Recognising the profit potential of US army surplus goods, Eugenio estab-
lished the Bolinao Electronics Corporation in June 1946 to manufacture radio
receivers from war surplus parts. When the exhaustion of these supplies and
import controls closed manufacturing in 1949, Bolinao opened its first station,
Radio DZBC, in the Manila suburb of San Juan. In 1953, Bolinao, now called
ABS, opened Radio DZAQ with a powerful 50-kilowatt transmitter that
covered the country. That same year, Bolinao introduced television to the Philip-
pines, operating at a loss for several years until there were enough consumer re-
ceivers to make the medium profitable. Thereafter, the Lopezes’ radio network
expanded quickly since their ally President Ramon Magsaysay had reportedly
foreclosed on government loans to stations owned by Antonio Quirino, brother
of their mutual enemy President Elpidio Quirino (Pineda-Ofreneo 1984:
124–125).
Established as a separate network in 1956, the Chronicle Broadcasting
Network (CBN) opened a string of radio and television stations until the two
were later merged into the sprawling ABS-CBN network. Indicative of this cor-
poration’s success, Eugenio ‘Geny’ Lopez, Jr. (1928–1999), Eugenio’s first born,
opened the ABS-CBN Broadcast Center in 1968 as the most modern media
studio in Asia after the NHK complex in Tokyo.15 By 1972, ABS-CBN had
become the largest media network in the Philippines with seven television chan-
nels, 21 radio stations, 2300 employees, and assets of P119 million (Almeda-
Lopez 1984). The Lopez brothers financed this growth from internal sources
and controlled both ABS-CBN and The Manila Chronicle through their
Benpres Corporation, an investment firm wholly owned by the two brothers
(Lopez 1987). Throughout this quarter century of steady expansion, the
dozens of ABS-CBN broadcast licenses required an initial government approval
14
Pio Pedrosa, letter to President Manuel Roxas, 3 May 1947, File: Memorandum, Misc., Manuel
Roxas Papers, Philippine National Library; Andres Soriano and Eugenio Lopez, Memorandum
Agreement, n.d., Elpidio Quirino Papers.
15
The Manila Chronicle 14 September 1986.
168 Alfred W. McCoy
and periodic renewals, a process that would have been prohibitive without polit-
ical connections.
Illustrating the value of their proximity to the presidency, the Lopez fortunes
waxed under the administration of Carlos Garcia and then waned under his
successor Diosdado Macapagal. In 1957, the Lopez brothers became the
“chief contributors” to Carlos Garcia’s successful presidential campaign and
prime beneficiaries of his ‘Filipino First’ programme of economic nationalism
(Doronilla 1992: 74–75, 87–88; Reynolds and Bocca 1965: 183). In the final
months of the Garcia administration, Eugenio organised leading businessmen
to acquire the country’s premier utility, the Manila Electrical Company
(Meralco), valued at P244 million in early 1961 (Manila Electric Company
1976: 57). In the largest transaction in Philippine business history, Eugenio
formed the Meralco Securities Corporation (MSC) to purchase Meralco from
its American owners in January 1962 and install an all-Filipino board – including
Eugenio, his son Geny, Salvador Araneta, and Luz Magsaysay, the widow of their
former ally.16 In keeping with their rent-seeking approach to politics, the Lopez
acquisition of Meralco, finalised only days after President Garcia left office on 30
December 1961, had required six months of sustained government support, in-
cluding permission for transfer of the franchise and state finance for the acqui-
sition (Manila Electric Company 1976: 59).
After 1961, however, the Lopez alliance with President Garcia proved a
liability when opposition candidate Diosdado Macapagal scored a surprising
upset in the presidential elections. In January 1963, the Palace intensified its
pressure on the Lopezes by demanding that Meralco’s directors fire Eugenio
from its board for franchise violations.17 In a withering blast at their rent-
seeking, the president’s press secretary enumerated government loans to thirteen
Lopez-owned corporations totalling a remarkable P88 million, saying their
“adroit…application of political power and connections allowed the Lopezes to
acquire…a vast radio-television network”.18
When the Meralco board defied the President’s demand that they fire
Eugenio, the Palace threatened to cancel its license to distribute electricity
and repeated its demand for his dismissal.19 Represented by ex-Senator
Vicente Francisco, however, the Lopez brothers soon won an injunction from
the Supreme Court blocking the government’s planned seizure of TV Channel
9 that was later extended to include all radio and television stations owned by
their Chronicle Broadcasting Network.20 As these legal battles merged into
the 1965 presidential campaign, Eugenio pursued two alternatives – first, his
brother Fernando’s candidacy that stalled for want of delegates at the
16
The Manila Chronicle 14 March 1987.
17
The Manila Times 4 January 1963.
18
The Manila Times 14 January 1963.
19
The Manila Times 15 and 18 January 1963.
20
The Manila Times 22 January 1963, 10 February 1963, 10 May 1963.
Nacionalista Party convention, and then a fusion ticket with Ferdinand

Marcos backed by P14 million in Lopez campaign funds (Roces 1990: 143, fn.
185, 187).21
After Marcos’s victory in the 1965 campaign, Eugenio launched a major ex-
pansion and diversification program at Meralco. Along with purchasing adjacent
electric companies to give his company the widest possible distribution area,
management created subsidiaries for the manufacture of transformers, construc-
tion of power stations, and, in 1969, the refining of lubricating oil (Lopez 1987).
In the decade before Marcos declared martial law in 1972, the revenues of MSC,
Meralco’s public holding company, increased from P5 million in 1962 to P69
million in 1972. During the same period, MSC assets grew seven-fold from
P155 million to P1037 million (Meralco Securities Corporation 1973: 26–27).
For the first six years, the Lopez–Marcos alliance was amicable. With Lopez
support and Fernando Lopez again on the ticket, President Marcos overcame
formidable odds to win re-election in 1969. In January 1971, however, a break
erupted into the most vitriolic split in Philippine political history. According to
Marcos, the Lopezes were demanding concessions to advance their interests. Ac-
cording to the Lopezes, Marcos was demanding shares in their family corpora-
tions (Mijares 1976: 174). Using the Manila Chronicle, the Lopezes began
their attack by publishing exposés of “the hidden wealth of the Marcoses”
(Lopez 1987). Marcos counter-attacked, denouncing the Lopezes as “oppressive
oligarchs” (Mijares 1976: 177). After suffering five months of constant criticism,
Marcos finally sued for peace by calling on Eugenio Lopez at his Parañaque res-
idence and helicoptering to the Chronicle Building for reconciliation with Vice
President Fernando Lopez (Mijares 1976: 180–181). In his own account
written two years later, Marcos recalled “the humiliating exercise of seeking to
propitiate some of the oligarchs, visiting them in their lairs, breaking bread
with them and temporizing on their demands for special favours from the Gov-
ernment” (Marcos 1976: 23). The humiliation clearly stung, and his revenge
came quickly.
When President Marcos declared martial law sixteen months later, the Lopez
family became the main target of his ‘revolution from above’. Just before mid-
night on 22 September 1972, Metropolitan Police Command troopers occupied
ABS-CBN Broadcast Center in Quezon City while other soldiers seized Lopez
properties across the archipelago (Almeda-Lopez 1984: 2–3). In exchange for
“the unsealing of the Chronicle Building by the military”, the Lopezes allowed
Imelda’s brother, Benjamin ‘Kokoy’ Romualdez, to purchase the Chronicle’s
presses worth P50 million for a mere P500,000 (Lopez 1987: 2–3). After all
broadcast companies automatically lost their licences, rendering the Lopez net-
work’s P119 million in equipment useless, Roberto S. Benedicto, a Marcos’s in-
timate and owner of KBS television, reached an agreement with ABS-CBN for
21
The Manila Times 22 November 1964.
170 Alfred W. McCoy
temporary use of the Lopez Broadcast Center. For the next six years, Benedicto’s
KBS grossed over P1 billion in broadcast revenues without paying “a single
centavo as rent or compensation”, and then transferred the facilities to the
National Media Production Center after the Marcos regime confiscated
the complex to settle customs fines levied against the Lopezes (Almeda-Lopez
1984: 3–27).
While expropriations of the Chronicle and the ABS-CBN network were
crudely done, Marcos’s moves against Meralco were subtler since its holding
company, Meralco Securities Corporation (MSC), “was a public corporation
with 12,000 stockholders, including many foreign creditors” (Lopez 1987: 1–5).
In November 1972, Marcos used his martial law powers to imprison Geny
Lopez, Eugenio’s son and heir apparent, and two years later ordered him
charged with plotting to assassinate the president (Mijares 1976: 305–312).
With his son facing possible execution, Eugenio signed over his US $20 million
share of Meralco to the Marcos Foundation for a payment of US $1500 (Psinakis
1981: 140–142). On 6 July 1975, Eugenio Lopez died of cancer in San Francisco
while his son Geny was still in prison awaiting trial on capital charges (Mijares
1976: 148–149).
The Fifth Generation

President Marcos’s fall from power in 1986 brought the restoration of the Lopez
fortunes. On 28 February 1986, only 48 hours after Marcos fled to Hawaii, his
successor President Corazon Aquino appointed Manuel M. Lopez, Eugenio
Sr.’s fourth child, as officer-in-charge of Meralco, a designation that was soon con-
firmed by the new board.22 That April, President Aquino appointed Oscar Lopez,
Eugenio Sr.’s second son, president of First Philippine Holdings, the holding
company for Meralco (Lopez 1987: 1–2).
Landing at Manila from San Francisco only four days after Marcos’s flight,
Geny Lopez, who had earlier escaped from Marcos’s military prison, began
rebuilding the ruined tri-media conglomerate that he had headed before
martial law.23 In July 1986, the Aquino administration leased Channel 2 to
ABS-CBN and the Lopez company began broadcasting on 17 August.24 Using
his “close ties with officials in the Aquino administration”, Geny leased equip-
ment from the sequestered networks of Marcos crony Roberto Benedicto and
cut the cost by avoiding any payment during the six years of Aquino’s rule.25
But when Geny petitioned the Aquino administration for return of the entire
ABS-CBN network of six television and 21 radio stations, including the govern-
ment’s Channel 4,26 an Aquino administration spokesman responded that
22
The Manila Chronicle 14 March 1987.
23
Malaya 2 March 1986.
24
The Manila Times 12 July 1986.
25
Manila Standard 13 and 14 April 1992.
26
Business Day 20 March 1987.
“returning PTV-4 to the Lopezes would revive oligarchy which is inimical to

public interest”.27 The administration also blocked Geny’s ambitious plans for a
50-year license to operate a satellite-powered television channel that would inte-
grate local broadcasting with global telecommunications.28 Clearly, the identifica-
tion of the Lopez family as oligarchs who were a barrier to the nation’s progress
had persisted beyond Marcos and his martial law regime.
With his media ambitions momentarily checked, Geny turned to banking. In
a test of his entrepreneurial ability, he joined with Chinese-Filipino financiers
John Gokongwei and Antonio Chan in November 1987 to form a consortium
with a capital of P1.34 billion for the successful takeover bid of PCIB against
strong local and international competition.29 Under this leadership, PCIB
posted an impressive 38.2 per cent increase in gross earnings during 1989 and
26.5 per cent in 1990 – while expanding its branch network to 226, the largest
among private banks in the Philippines.30
Reinforcing this financial success, Geny also negotiated a skilful shift of pres-
idential patrons during the 1992 elections – a critical transition for any rent-
seeking entrepreneur. In the tumult of the 1992 elections, Geny simultaneously
backed Fidel Ramos, President Aquino’s anointed successor, and formed the
Media Citizen’s Quick Count (MCQC), leading other media executives in an
effort to frustrate vote fraud by professional politicians.31
When the counting was over after weeks of tension and Fidel Ramos
proclaimed president-elect, Geny had a new patron in the Palace, a former
employee as presidential press secretary, and prestige as the leader of a non-
partisan movement for good government. As Ramos’s term drew to a close in
1997, one account described Geny as “a billionaire with perhaps the most far
reaching influence in Philippine society, being the leader in strategic industries,
such as electric power generation and distribution, broadcasting and cable, film
making, toll expressway, water services, telecommunications, real estate and
banking” (Brazil 1999). When he died from cancer in San Francisco in 1999,
Geny, then 70, was about to stand as sponsor at the marriage of his nephew to
the daughter of the newly elected president, Joseph Estrada.
By then, Eugenio ‘Gabby’ Lopez III, Geny’s son and a leading figure in the
family’s sixth generation, had completed his second year as chief executive officer
of ABS-CBN. Showing the dynamism of his grandfather and father, Gabby was
presiding over the family firm’s diversification into multi-media platforms as
head of SkyCable, a subscriber television network, and Bayan Telecommunica-
tions, one of the country’s leading cell phone providers (Lopez Holdings Corp.
2011: 17, 32–33).
27
The Manila Chronicle 5 May 1987.
28
Philippine Daily Inquirer 2 April 1989; Manila Standard 6 April 1989.
29
The Manila Chronicle 2 December 1987; Manila Bulletin 2 December 1987.
30
Philippine Daily Inquirer 13 May 1990, 4 May 1991.
31
Philippine Daily Globe 22 April 1992.
172 Alfred W. McCoy
Over the span of five generations, this line of the Lopez family had demon-
strated the vision to perceive change and the dynamism to seize new opportuni-
ties. Throughout the twentieth century, each Lopez generation produced at least
one entrepreneur who grasped the importance of both technological and political
change. While sugar milling created great profits for the third Lopez generation
during the 1920s, this industry’s income was still tied to nature’s slow seasonal
rhythms. Instead of mills and plantations, Eugenio H. Lopez, the most promi-
nent member of the family’s fourth generation, began his career by investing
in transportation, and later accelerated his capital accumulation by moving into
national energy and media markets. Freed from the constraints of sun and
season, Meralco’s electrical generating dynamos spun ceaselessly, accelerating
capital accumulation and servicing a diverse market that could weather any eco-
nomic downturn.
Carrying on his father’s flair for innovation, Geny, the most skilful entrepre-
neur among the fifth generation, tried, albeit unsuccessfully, to recast the coun-
try’s broadcast industry by linking his regional television network to global
telecommunications. But just a few years later, Geny’s son Gabby began
moving the family’s media conglomerate beyond print and broadcast to multi-
platform information services.
While these three generations under Benito, Eugenio, and Geny maintained
the rent-seeking symbiosis of politics and business, the Lopez family’s future
direction, at this writing, remains unclear. If their rising sixth generation were
to remain aloof from politics, then we might see some discontinuity in the coun-
try’s persistent rent seeking. The family’s ties to their home region, with the con-
sequent inclination to politics, have attenuated, but the main Lopez enterprises –
media, electrical power, and water – are still state-regulated and their survival
depends on political patronage.
The history of the Lopez family, in particular the story of brothers Eugenio
and Fernando, illustrates the symbiosis between the weak Philippine state and
the country’s dominant political families. By skewing regulations and their
enforcement to favour its allies, the Philippine executive has compromised the
integrity of the bureaucracy and allowed the privatisation of public resources,
limiting the state’s capacity to direct entrepreneurs and lead the country’s devel-
opment. Through this problematic pairing of weak state/strong families, the Phil-
ippine economy declined steadily in the late twentieth century when compared to
its more dynamic neighbours in eastern Asia. In sum, the Philippines became, in
the half-century after independence, a very poor country with a very wealthy
oligarchy (Boyce 1993: 1–3).
Such a system has left a tangled legacy. By fusing politics and business, elite
Filipino families have proven adept at rent seeking, subverting public institutions
to promote private accumulation. Many of these families have, like the Lopezes,
also proven skilled entrepreneurs, introducing innovation and a modicum of eco-
nomic dynamism. Yet these oligarchs have also accumulated sufficient power,
prestige, skill, and wealth to perpetuate a system that sustains their privileged
position beyond Carnegie’s three generations to four or, in the case of the
Lopezes, five. Any attempt to use the state to restrain these families may, as in
the Marcos era, mask a partisan attack on established elites by new families
even more ambitious and avaricious.
Ironically, the only available antidote to these entrenched Filipino families
may be a different kind of family firm. While the Filipino oligarchs damaged
themselves in martial law intrigues, the so-called Chinese taipans quietly
focused on business to emerge from the Marcos dictatorship as the country’s
most dynamic entrepreneurs. At the end of his regime in 1986, Chinese-Filipinos
already owned 45 per cent of the top 120 manufacturing firms. After Marcos’s
downfall, these Chinese-Filipino families profited from the fire-sale privatisation
of some P43 billion in mismanaged government corporations, including the
national flag carrier Philippine Airlines. By 1994, Chinese banks held 38 per
cent of the country’s total commercial banking assets, and the six top Chinese
entrepreneurs controlled conglomerates with some visible corporations –
banks, insurance, shopping malls, popular alcoholic beverages, the national
airline, telephone networks, and the capital’s premier newspaper. Yet this
ethnic leavening did not change the overall oligarchic character of Philippine
business since many of these Chinese families were even “more predisposed to
a family-based type of business than their Filipino counterparts” who often mit-
igated the familial influence with foreign equity or public listing (Hedman and
Sidel 2000: 67–71; Rivera 1994a: 3–4, 9, 19, 23; Rivera 1994b: 99–106).
Although the top taipan firm Gokongwei Holdings established joint ventures
with Geny Lopez and grew into a diversified conglomerate of 36 major corpora-
tions by 1994, the family retained firm control through a holding company, JG
Summit Holdings, Inc. With an executive committee of seven Gokongwei rela-
tives, ranging from 68-year-old John to 28-year-old Lance, any “non-family
member is definitely excluded from decision making at the Group’s headquar-
ters, indeed” (Rivera 1994a: 21–22). In their centralisation of management
under family control, a trait shared with Spanish-Filipinos at Ayala Corporation
and Filipinos such as the Lopezes, these Chinese taipans were thus ensuring
“transfer of power along their hereditary lines to solidify their concerns as
family business in the true sense of the word” (Koike 1994: 39–45, 60–63).
In the decades since Marcos’s downfall, Filipino scholars have identified
family-based political dynasties and economic oligarchies as an impediment to
both democracy and development. In 1988, the Institute for Popular Democracy
argued that the “continuing domination of political clans was one of the most for-
midable obstacles that block genuine democratization” (Gutierrez et al. 1992:
4–11). A careful study of the 2010 elections reported “an expansion of political
dynasties” to 68 per cent of the House and 80 per cent of Senate – a concentra-
tion of power that arose from “a social structure where a tiny elite of families
maintains economic hegemony…by political dynasties for 2–4 generations”
174 Alfred W. McCoy
(Tuazon 2012). Summing up these trends in 2007, one analyst concluded that
until socio-economic change leavens the country’s symbiosis of weak state/
strong oligarchy, the Philippines is likely to struggle through “its perpetual
state of varying levels of crisis”, mired in a politics marked by slow development
and spreading poverty (Cibulka 2007: 257).
THE PIEL FAMILY

By contrast, the Piel family of New York provides a clear example of Carnegie’s
three-generation maxim. Landing at New York in 1883 during the high tide of
European immigration to America, the founders of the Piel Bros. brewery
brought with them a modest capital and considerable entrepreneurial skills as
the managers of farms and small factories in Germany’s Rhineland. Migrating
to New York as an import–export merchant, Gottfried Piel (1852–1935) found
opportunity in the form of a derelict brewery in the East New York section of
Brooklyn. Since his older brother Michael (1849–1915) had recently trained as
a brewmeister back home in Dortmund, Gottfried invited him to join this new
enterprise. In their first year of operation, 1883, the Piel Bros. brewery produced
just 850 barrels of beer, a slender start for a major corporation.
The Piel brothers founded their Brooklyn brewery in the 1880s just as craft
factories for consumer goods were benefitting from industrial innovation that cut
costs and amplified sales. In America’s Gilded Age, capital was still industry’s
servant, though it would, in a matter of decades, become its master. In America’s
industrial age, German-American breweries, almost all family firms, began pro-
ducing lager beer in cities across America, reaching a peak of 2011 plants in
1887.32 In this creative business climate, Michael Piel, adapting the traditional
craft practices he had learned in Germany, began building his new model
brewery in Brooklyn, with modest finance from family savings and local banks,
using methods that balanced quality with efficiency.
The First Generation

To the challenge of starting a new business in a foreign land, the Piel brothers
brought considerable resources – Gottfried’s money and Michael’s knowledge
of brewing. Born in March 1849 at Stofflen, Düsseldorf, Michael was descended
from farming families who, in the words of an anonymous biographer, “succes-
sively aimed to expand their patrimony of tillable lands.” To the original Piel
farm at Stofflen, his father added substantial fields at Mörsenbroich just
outside Düsseldorf where Michael spent his youth learning “the arduous disci-
pline of farm labor from sun-up to sun-down” (The Cyclopaedia of American
Biography 1918: 403). At the age of eighteen, Michael started his compulsory
32
Brewers Association, Craft Brewing Facts. Available at: http://www.brewersassociation.org/pages/
business-tools/craft-brewing-statistics/facts (accessed on 24 April 2013).
military training with the Kaiser Alexander First Grenadier Guard Regiment at
Berlin, earning an Iron Cross for service with this unit during the Franco-
Prussian War.
Stimulated by his exposure to city life in Berlin, Michael returned to the
family’s Mörsenbroich farm at war’s end bent on modernisation – developing a
new breed of bees, inventing a prize-winning centrifuge for honey extraction,
and eventually turning his talents to brewing. “As the protégé of a machine manu-
facturer,” his biographer continues, “he visited the industrial centers of the pro-
gressive Rhineland and soon chose the ancient German industry of brewing as
the one offering the best opportunity for his talent of applying machinery to
natural processes.” Fascinated by “the new science of modern refrigeration,”
Michael completed a brewing apprenticeship “in the old-style subterranean
cellars at the breweries of Dortmund, Westphalia.” He had just finished this
training when the summons arrived from his brother Gottfried to join him in
New York (The Cyclopaedia of American Biography 1918: 403).
The Piel brothers arrived in America in an era when fortunes could be made
brewing beer. Between 1850 and 1890, the country’s annual consumption of beer
surged from 36 million gallons to 855 million annually. By 1900, there were
300,000 saloons nationwide, many of them important social institutions. Across
the country, German-American immigrants became wealthy beer barons in a
single generation – a success exemplified by Frederick Pabst’s lakefront resort
in Milwaukee with 10,000 daily visitors in 1889 and Adophus Busch’s brewery
that covered 70 acres of the St. Louis riverfront by 1900 (Okrent 2010: 26–33).
The most devout of these drinkers in saloons and beer gardens were German
Americans, the largest group of immigrants to the US from 1840 to 1880, number-
ing some ten million by 1910 (US Senate 1919: vi; Wittke 1952: 43–55).
Michael Piel’s extraordinary energy was central to the firm’s ability to over-
come the ruthless competition in Brooklyn’s saturated beer market. “At the
outset,” reads a biography about his role building the company, “Michael was
its brewer, superintendent and engineer, his accumulated experience fitting
him admirably for the multiplicity of his duties. In the early days of the converted
plant, Michael found that his hours were four o’clock in the morning till ten at
night” (The Cyclopaedia of American Biography 1918: 403). After five years of
these eighteen-hour days, this effort secured the firm’s survival. “At last, in
1888,” Michael’s biography continues, “the ability of his brother as the financial
head of the firm and excellence of his own products assured success and the long
struggle was won” (The Cyclopaedia of American Biography 1918: 403).
Brewing beer in Brooklyn was a challenge and an opportunity. As site of 48
breweries by 1898, Brooklyn was one of the country’s leading beer producers
with large plants and cut-price distribution could readily crush a small firm like
Piels. Instead of building a large, mechanised plant like their competitors, Piel
Bros. started small, emphasising quality and clientele. Instead of the usual ar-
rangement of discount marketing through ‘tied’ saloons, the Piels made their
176 Alfred W. McCoy
brewery a resort destination, selling direct to consumers through a beer garden

attached to their East New York brewery. After modernising and incorporating in
1898, they expanded sales within the New York metropolitan market, taking ad-
vantage of the Brooklyn Bridge, which offered ready access to Manhattan.
During the first decade of its incorporation, 1898 to 1907, the brewery’s
performance confirmed the optimism of its initial million-dollar capitalisation.
By sticking to their principles of quality, financial independence, and industrial
innovation, the Piel Brothers achieved financial success, marked by a ten per
cent dividend on capital stock only two years after incorporation and a steady in-
crease in total sales from $545,000 in 1900 to $838,000 by 1906. Reflecting the
reputation that drove this success, Piels was one of just four among the 1500 US
breweries that “made beer according to the brewing methods and standards used
in Germany” (Piel 1920: 1–4). This quality was responsible for the 35 per cent
increase in sales from 1900 to 1906 since the brewery did not use “modern ad-
vertising,” did not employ salesmen, and deployed only a “minimum number
of ‘Collectors’” (Meeting of the Piel Bros. Directors 1900).
But at the very moment when this upward trajectory in sales and profits
seemed so promising, Piels faced a ‘boycott’ by Manhattan’s established brewer-
ies. As the 1907 recession and Piels’ success cut into their sales, other New York
brewers decided to “shut out” this competitor whose rising sales threatened their
markets (Meeting of the Piel Bros. Directors 1915). In the decades before Pro-
hibition in 1920, most breweries controlled so-called tied saloons, through loans
or direct ownership, which served as the main outlet for their beer and a powerful
mechanism to choke off competition (Joyce 1962: 40). By 1909, over 80 per cent
of all the saloons in New York City were somehow ‘indentured’ to the major
breweries – an oligopoly that made this shut-out of the Piel’s product devastat-
ingly effective (Okrent 2010: 30).
The Second Generation

Faced with a sudden drop in sales that threatened the firm’s survival, Piel’s
second-generation management, led by Michael’s eldest son William (1883–
1953), was forced to innovate. Not only was William the eldest among his
seven surviving siblings but he also been groomed as his father’s successor –
given a costly education that included a personal library, schooling at an elite
academy, and both a Bachelors of Arts and legal training at Columbia University.
In later conversations, William would express his “frustration at having been
dragooned out of his own budding law practice into running the family business
so that his immigrant father…could…shoot bear in Maine and take his yacht
down the Intracoastal [waterway] for winter fishing in Florida” (Piel and
Moore 1981: 184–185).
To break out of the New York boycott, in 1909 William initiated long-distance
marketing and creative advertising to spread the brand. Within a few years, Piels
closed the beer garden and was selling to bars, hotels, and grocery stores along
the eastern seaboard through an aggressive sales force and creative advertising.
Over the next five years, this effort recovered sales lost to the boycott and
raised bulk keg revenue by 20 per cent to $510,000 (Piel 1920: 13; Meeting of
the Piel Bros. Directors 1913). After the brewers’ shutout reduced the value of
Piel’s assets from $970,000 in 1908 to $907,000 in 1910, this marketing strategy
raised the company’s worth steadily to $1,273,000 by 1916.33
Just about the time Piels had mastered their new marketing strategy, the
United States prohibited the sale of alcohol in 1920. By brewing low-alcohol
cider and near beer, Piels survived the fourteen years of Prohibition under
William’s leadership, emerging in 1933 with plans to borrow heavily and
become a major national brand. But bitter sibling rivalries among the second-
generation shareholders blocked that move, consigning the firm to a decade of
slow growth in New York’s regional market.
Prohibition’s end brought New York’s mid-sized American breweries both the
promise of expansion and threat of competition from national brands, located in
the Midwest, that were determined to capture a share of the lucrative New York
market. With the guidance of a professional board that included lawyers and cor-
porate executives, the Piel brewery moved beyond the closed, familial manage-
ment that marked its first half century – first, Gottfried and his brother
Michael from 1883 to 1912, and then, for the next 20 years, Michael’s two
sons, William and Henry. Both sets of Piel brothers had combined the essential
skills of brewing and management, but intense competition with national brands
for New York’s beer market after the repeal of Prohibition in 1933 required spe-
cialist skills that only a modern corporation could provide – notably, advertising,
marketing, finance, and legal counsel. A new board of external directors, most of
them executives in major national firms, led the brewery in hiring professional
management to address these critical areas, lifting the firm from stagnant sales
circa 1940 to steady growth by the end of World War II.
During the post-Prohibition decade from the mid-1930s to mid-1940s, the
need for expertise to meet competitive pressures eased most of the Piel family
out of the business, producing a clear division between management and stock-
holders. In the four years after repeal, William removed the relatives who had
been his partners during the difficult years of prohibition – his younger
brother Rudolf, a contrarian critical of his executive perquisites; brother
Henry, a brewmeister highly skilled in the traditional craft; and cousin Arthur,
a specialist in plant management. As rising dividends allowed family members
to buy homes or farms and pursue private interests, siblings who once fought
passionately over the brewery’s direction at company meetings sent proxies
concerned solely with the size of the dividend.
33
Piel Bros., City of New York, Department of Taxes and Assessments, 13 March 1908; Piel Bros.,
City of New York, Department of Taxes and Assessments, 10 January 1910; Piel Bros., City of
New York, Department of Taxes and Assessments, 2 October 1916.
178 Alfred W. McCoy
By 1940, moreover, finance capital was becoming dominant within the US

economy, consolidating industries into conglomerates that supplanted craft
quality with standard brands marketed through nationwide advertising on radio
and television. To grow the firm, William Piel embraced the tenets of modern
management – Madison Avenue advertising, Wall Street financing, professional
executives, and large-scale production.
While national brands encroached relentlessly on New York’s post-war beer
market, Piel’s management made expansion their first principle. Advantaged by
economies of scale for mass production and television advertising, national
brands were squeezing regional brewers in their home markets, cutting the
number of US breweries from 725 in 1934, to just 440 by 1949 (Maeder
2002). To survive, William devoted his last decade at the brewery – 1943 to
1953 – to an expansion of sales that would cut the unit cost for advertising.34
With major finance finally secured in 1944, William expanded the brewery’s
production by aggressive advertising and plant acquisition, raising annual sales to
a million barrels of beer by 1951. That landmark figure, which came near the end
of William’s 40-year tenure as company president, made Piel’s the seventeenth
largest beer producer in the United States (Modern Brewery Age 1952: 34).
Yet if William hoped to survive by raising Piels a few notches further, then his
strategy suffered from an underestimation of powerful forces driving the US
brewing industry toward heightened concentration that would, within several
decades, leave just a few conglomerates.
The Third Generation

After leading the brewery for nearly 40 years, William Piel died in April 1953.35
Three months later, the directors elected Henry J. Muessen, who had joined the
firm as a salesman in 1933, as the third president of Piel Bros.36 Although
Muessen was the brother-in-law of former technical director Henry Piel, he
had risen through management ranks as the protégé of a former general
manager and thus was the first non-family member to head the firm. As a ten-
year veteran of William’s management team, Muessen continued his strategy
of expansion, acquiring capacity that was never utilised and ignoring quality to
the point that the plant would soon be producing tainted beer.
During the 1950s, competition from national brands, which had the advan-
tage of bulk production and nationwide advertising, slowly squeezed the
nation’s regional breweries. And no regional market was tougher than
New York’s, with militant unions, expensive advertising, and costly transport.
A series of bad business decisions by Piels’ management compounded these
34
Piel Bros., Annual Report 1948, 4 March 1949; M&G Piel Securities, Inc. (formerly Piel Bros.),
Condensed Statements of Profit and Loss Years 1943 Through 1961, File: M.&G. Piel Securities,
Inc., 1956–1961, Gerard Piel Papers.
35
Brooklyn Daily Eagle 7 April 1953; The New York Times 14 November 1952.
36
The New York Times 14 July 1953; Brooklyn Daily Eagle 14 July 1953.
problems. In retrospect, the company’s entire expansion strategy, launched by

William Piel and pursued by his acolyte Henry Muessen, spent almost $6
million, equivalent to a decade of dividends, to acquire production capacity
that was never fully utilised. Not only was the expansion redundant, but it was
arguably damaging as management was distracted by brewing at three different
plants, contributing to a serious slide in the beer’s quality.
Indeed, the company’s focus on marketing and its inattention to craft soon
proved fatal. Although the firm launched phenomenally popular advertising
during the 1950s, Piel’s sales had remained stubbornly stagnant – climbing
slowly from 1,208,000 barrels for 1956 to 1,321,000 by 1959 before sliding down-
ward to 1,202,000 barrels in 1960.37 Muessen, a career salesman, had mastered
the art of promoting the product, but his corporate management failed to main-
tain the Piel family’s tradition of quality beer. As the newsletter Beer Marketer’s
Insights explained: “Because of the great ads, all kinds of people bought it for the
first time, hated it and spread the news everywhere about how awful it was. It was
a case of terrible word of mouth caused by a wonderful ad campaign” (Johnson
1988).
In 1962, after several years of declining sales and beer quality, Piels sold
their brewery to a larger Midwest firm. By then, the number of US breweries
had declined to only 225 (Maeder 2002). By then as well, the Piel family’s
second generation were moving toward retirement, and their children, the
family’s third generation, were establishing themselves in other fields.
After the Piel’s brand was sold and re-sold several more times during the next
decade, the Brooklyn brewery shut down in 1973 and was soon demolished,
leaving a field of rubble where Michael Piel’s model factory once stood. By
1976, Rheingold and Schaefer, the last companies brewing in Brooklyn, closed
their local plants, ending an important chapter in New York’s history and
leaving the city without a brewery for the first time since the seventeenth
century.38
As this trend toward consolidation within the brewing industry gathered
momentum, just two conglomerates emerged to dominate both national and
international markets. Only four years after Belgian brewer Interbrew and
Brazil’s Companhia de Bebidas das Américas (Ambev) merged to form InBev
in 2004, this Belgian-Brazilian multinational spent $52 billion to purchase Amer-
ica’s biggest brewer Anheuser-Busch, which had just acquired one of China’s
largest breweries, Harbin. The merger of these three firms created a global
brewing giant with $36 billion in annual sales that surpassed the former
number-one brewer, London-based SAB Miller. Founded in 2002 when South
37
Piel Bros. and Subsidiary Company, 1958 Annual Report to Stockholders for the Year Ended 31
December 1958, 10 March 1959; Piel Bros., 1961 Annual Report to Stockholders for the Year
Ended 31 December 1961, 14 March 1962, Gerard Piel Papers.
38
The New York Times 14 July 2008.
180 Alfred W. McCoy
African Brewery purchased the US brand Miller, SAB Miller went on to acquire
Coors in America, Foster’s in Australia, and Efes in Russia. After a decade of such
acquisitions totalling $195 billion, these two global conglomerates controlled 210
beer brands in 42 countries. By 2012, just two transnational conglomerates, the
Belgian InBev and London-based SAB Miller, controlled 80 per cent of US beer
sales (Chappell 2013a, 2013b; Kenney 2013: Pearlstein 2013). Once the servant
of industry, capital had become its master, with quality and craft suffering
accordingly.
As consolidation was transforming the US brewing industry, the Piel family’s
third generation, particularly its most prominent lineage, was building upon their
parents’ success to become respected professionals. While William was serving as
president of the brewery, his wife Loretto Scott, daughter of a distinguished
Canadian family whose uncle was twice that country’s Secretary of State, had
laboured tirelessly to win acceptance in New York society – entering the city’s
exclusive Social Register by 1938.39
From this social promontory, Loretto launched the lives of her six children by
arranging Ivy League educations for her four sons and society marriages for her
two daughters – social connections that proved helpful to those who pursued
careers in New York. During his last year at Harvard Law School in 1935,
William Piel, Jr. (1909–1998), was interviewed, through personal contacts, at
Sullivan & Cromwell where he worked for the next 35 years, becoming
partner in 1946 and the firm’s senior litigator by retirement in 1980. During
World War II, professional connections also won him appointment as chief of
the order of battle section in the Military Intelligence Service, preparing the
daily briefings on Germany and Japan for the president and secretary of war.
After representing firms such as Ford Motor Company, Phillips Petroleum,
and Goldman Sachs, William scored a major victory in 1979 by cutting a $113
million judgment against Kodak to just $7 million on appeal. Such service won
him seats on the boards of American Re-Insurance Company, Campbell Soup
Company, and Phillips Petroleum – placing him at the apex of US corporate
power (Marquis 1999: 3509; Piel and Moore 1981: 184–189).40
William’s fourth child Gerard (1915–2004) also found his New York social
connections important at a critical turning point in his career. Upon graduation
from Harvard in 1937, Gerard failed the test for an editorial post at Fortune
39
Loretto Scott was the daughter of Edward H. Scott, brother of Sir Richard William Scott who
served as Secretary of State for Canada in 1874–1878 and 1896–1908. See, W. Steward Wallace
(ed.), Macmillan Dictionary of Canadian Biography (Toronto: MacMillan, 1978), 753; The
Citizen (Ottawa), 6 November 1907; The Evening Citizen (Ottawa) 24 April 1913, 26 April 1913.
Brewer’s Journal 79, no. 1 (15 January 1938), 32; Brooklyn Daily Eagle, 16 March 1939; “Plans
$35,000 Great Neck Home,” Brooklyn Daily Eagle, n.d. (circa February 1938), clipping, Brooklyn
Public Library.
40
The New York Times 1 May 1979; 25 September 1998.
magazine but was hired as office boy in the J. Stirling Getchell advertising agency
because “Mr. Getchell had great ambitions to get the Piel brewery account” (Piel
1984: 42–44). Fortuitously, Getchell soon launched his short-lived Picture Mag-
azine, giving Gerard both his first experience as a reporter and a pretext for asking
his Connecticut neighbour, Ralph Ingersoll, then executive vice-president of
Time-Life-Fortune publications, to get him a job at Life as an office boy (Piel
1984: 71–72). There he was soon plucked from the pool of young copy editors
to become the magazine’s science editor for the next six years (Piel 1984: 58–
60).41
During a routine interview in August 1944 for Life, a scientific instruments
manufacturer told Gerard: “They’re engaged in making the most frightful
weapon.” This elderly physicist added: “They’re going to destroy mankind,
they’re going to destroy all life on earth. They can make a fine explosive, but
they’re forgetting about the aftermath of it, and the poisoning of the ground…
with radioactive elements” (Piel 1984: 66–69; Piel 1999; Dieke 1993:
450–451). From that moment, Gerard realised that the world was entering
“the Age of the Atom” with terrible weapons that must somehow be tamed
(Piel 1999). After the war, Gerard envisioned a new kind of science publication
that would engage the peril of atomic weapons by allowing scientists to dialogue
about their dangers across national boundaries (Piel 1999).
Through his New York social connections, Gerard raised an initial $450,000
by 1947 from leading venture capitalists – Lessing Rosenwald, former chair of
Sears Roebuck; John Hay Whitney, publisher of the New York Herald Tribune;
retail tycoon Marshall Field; industrialist Henry Kaiser; presidential adviser
Bernard Baruch; former GE president Gerard Swope; and “barracuda financier”
Royal Little, founder of Textron Corporation. These funds were just enough to
re-launch the venerable but moribund Scientific American magazine as the
vessel for Gerard’s vision, just as Henry Luce had once bought the old Life to
start his new photo magazine. Although Gerard paid just $40,000 for a famous
name that first appeared in 1845, he would need an additional million dollars
to bring his Scientific American into the black – funds he secured slowly
through social contacts (Piel 1984: 157–158).42
Meanwhile, the FBI was watching the loyalty of these men who knew too
much. After Gerard recruited colleagues from Life to staff Scientific American,
famed informer Whitaker Chambers, then an editor at Time, told the FBI
“that a group of three or four people left Time and became editors of Scientific
American. ‘Jerry’ Piel was the leader of this group, which included Dennis Flan-
agan”, whom the Bureau identified as the “son of Nan Brayman, well-known CP
[Communist Party] member.” Chambers reported, “the group members were
41
The New York Times 16 April 1963, 21 December 1966.
42
The New York Times 16 April 1963, 21 December 1966, 4 July 1986.
182 Alfred W. McCoy
probably Communist sympathizers,” adding, scurrilously, “a mysterious subsidy

became available for the purchase of Scientific American.”43
The months following Scientific American’s first issue in 1948 saw a succes-
sion of events that fostered a climate of fear across America – a successful Soviet
nuclear bomb test in September 1949, President Truman’s decision to build the
powerful hydrogen bomb in January 1950, Senator Joseph McCarthy’s charges of
communist infiltration of the US government in February, and legislation that the
FBI screen the loyalty of nuclear scientists in March. Throughout 1950, Gerard’s
new magazine punctured this suffocating political climate with short, critical
commentaries and then that March launched a four-part series criticising
Truman’s decision to build the hydrogen bomb (Ridenour 1950: 11–15;
Swanberg 2008: 1–15).44
The test of Gerard’s political skills came in April 1950 when the Atomic
Energy Commission (AEC) burned, on grounds of national security, the
current issue of Scientific American because it contained an article by famed
atomic physicist Dr. Hans A. Bethe arguing that “we must save humanity from
this ultimate disaster” by reconsidering the president’s decision to build the hy-
drogen super bomb (Bethe 1950: 18–23).45 After the New York Times made
this incident a cause célèbre by reporting it on page one, Gerard told the Amer-
ican Society of Newspaper Editors, “we have tolerated too much secrecy and ne-
glected too long this phase of the Government’s relation to the press.” The Times
seconded his critique with an editorial warning that “censors … run the risk of
doing great harm”.46
Gerald’s bold speech on nuclear issues won him both admiration from the
press and closer surveillance by the FBI. In the months following this censorship
incident, agents reported that Gerard and his wife Mary Bird Piel “were active in
the ‘12th Street Neighbors for Peace,’ which was connected with the Stockholm
Peace Petition,” a movement advocating an absolute ban on nuclear weapons. At
one of their meetings, Gerard reportedly “spoke on the hydrogen bomb.” In
October 1950, the FBI interviewed Gerard “concerning his association with…
Abraham BROTHMAN and Miriam MOSKOWITZ [who] were convicted in
the Federal Court…on charge of obstructing justice in connection with the
trial of Julius ROSENBERG” – who was later executed as a Soviet spy. Gerard
replied that he knew Brothman as “a chemist of distinction” whom he had
once tried to recruit for an employer, and had spoken to his colleague Moskowitz
when she “had called him after her arrest asking for financial help”, a request
43
CIA FOIA, Subject: PIEL, Gerard (aka: “Jerry” Piel), rewrite of EX-884 15 March 1967, 14
December 1967. Available at: http://www.foia.cia.gov/browse_docs_full.asp (accessed on 30
October 2008).
44
The New York Times 1 April 1950.
45
The New York Times 8 March 2005.
46
The New York Times 1 and 22 April 1950, 7 May 1950.
he had refused.47 Gerard’s daring combination of critical publications about the

bomb and anti-nuclear activism risked arrest or anti-communist black listing.
By creating an independent forum for discussion of science policy during the
Cold War, Gerard Piel elevated his own status from neophyte editor to public in-
tellectual. Instead of being stigmatised, he was honoured with directorships of
the American Museum of Natural History (1955), the American Civil Liberties
Union (1957), and Harvard University (1966); awarded a dozen honorary
degrees; and given a number of prestigious prizes including the George Polk
Award (1961) (Marquis 1999: 3508–3509).48
Only two years after that issue of the magazine had been burned in 1950, Sci-
entific American was in the black with circulation above the 100,000 mark, and
Gerard was well on his way to building the world’s premier science journal. By
making the complexities of science comprehensible to the thinking citizen,
Gerard, in the words of one analyst, “virtually invented modern science journal-
ism” (Amarelo 2004). By publishing Albert Einstein, Linus Pauling, and nearly a
hundred Nobel Prize winners, the magazine built a circulation that reached
335,000 by 1963 with an enviable $4.6 million in advertising revenues.49
This success did not deter the Bureau’s surveillance. Gerard’s FBI file showed
that he was “invited to a reception on 24 September 1960 sponsored by the Fair
Play for Cuba Committee in honor of Fidel Castro in New York City.”50 But the
FBI failed to note that in April 1962 Gerard and his wife were also invited to a
White House dinner hosted by President John Kennedy for the nation’s Nobel
Prize winners (Piel pers. comm. 13 August 2002).51 Such social agility allowed
Gerard to survive the heavy Cold War repression of dissidents like himself unscathed.
Starting in 1968, Gerard launched a dozen foreign editions, including in
China and Russia, giving his magazine a global reach.52 For nearly 40 years
under Gerard’s leadership, Scientific American exercised an influence far
beyond its modest status as a science magazine – inspiring informed science
writing, contributing to critical analysis of US nuclear policy, and encouraging sci-
entific dialogue across the Iron Curtain.
As Gerard’s long tenure at Scientific American drew to a close, corporate
pressures brought changes, welcome and unwelcome, to the magazine’s distinc-
tive institutional culture. In 1984, Gerard, then 68, moved up to chairman of the
board while his eldest son Jonathan replaced him as president and also succeeded
the magazine’s long-serving editor, Dennis Flanagan.53
47
CIA FOIA, Subject: PIEL, Gerard (aka: “Jerry” Piel), rewrite of EX-884 15 March 1967.
48
The New York Times 1 May 1955, 2 October 1957, 17 September 1958, 10 May 1963, 9 Novem-
ber 1966, 21 December 1966.
49
The New York Times 16 April 1963.
50
CIA FOIA, Subject: PIEL, Gerard (aka: “Jerry” Piel), rewrite of EX-884 15 March 1967.
51
The New York Times 30 November 1965, 10 September 1999.
52
The New York Times 29 September 1968, 4 October 1976, 27 July 1979, 4 June 1984.
53
The New York Times 22 May 1984.
184 Alfred W. McCoy
Two years later, however, the magazine’s sustained success sparked take-over
bids by outside investors. Midst a bidding war among Time, The Economist, and
British press baron Robert Maxwell, Gerard found a white knight in Germany’s
second largest publisher, the von Holtzbrinck Group, then moving aggressively
into the American market. Though there were higher bids, Gerard persuaded
his board to accept a $53 million offer that came with a promise to respect
what son Jonathan called “our commitment to quality and integrity in publish-
ing.” Eight years later, however, Jonathan resigned as the magazine’s editor, ap-
parently forced out.54
Just as William had once replaced his siblings at the brewery with profes-
sional managers, so that same corporate culture, in its relentless quest for
profit, had now forced his son and grandson out of a publishing venture to
which they had devoted most of their working lives. They both moved on to
other pursuits, and Scientific American became just another magazine among
the many imitators now crowding the market for science journalism.55
CONCLUSION
There are significant similarities and differences in the history of these two fam-
ilies. From the mid-nineteenth to the mid-twentieth century, both the Lopezes
and the Piels followed parallel paths from agriculture, to food processing, and
then mass media. And among the multiple lines within both families, a single
lineage proved the most capable in making these transitions. In both cases, more-
over, migration released latent entrepreneurial talent, with Eugenio Lopez build-
ing a vast corporate conglomerate after his move to Manila, just as the Piel
brothers achieved success as brewers by crossing the Atlantic to New York. In
managing these enterprises, both families were acutely aware of the power of
the state to damage their businesses or disrupt their lives.
But here, of course, we reach the realm of contrasts, with the American state
acting more impersonally in its economic regulation or national security and the
Philippine state advantaging or disadvantaging individual entrepreneurs. The US
prohibition of alcohol was a poor policy equitably administered, while Marcos’s
anti-oligarchy campaign was questionable policy implemented in a blatantly par-
tisan manner. Reflecting and reinforcing these different political cultures,
Eugenio and Geny Lopez used their media innovation to perfect the Filipino
form of rent seeking, while Gerard Piel employed his new magazine to create
the modern field of science journalism and to campaign for global nuclear disar-
mament. While the Philippine security services often acted in a ruthlessly parti-
san manner, US national security agencies punished ideological deviation
uniformly.
54
The New York Times 29 March 1986, 7 September 1994.
55
The New York Times 19 February 1985.
On balance, therefore, this tale of two families seems a study in contrasts. In

the Philippines, as the Lopez history demonstrates, political culture and state
policy have sustained a financial oligarchy and thus encouraged intra-familial suc-
cession within key enterprises. Instead of operating in an open market that would
allow take-overs, consolidation, and liquidation, the Lopezes secured their oper-
ating capital through consortia of kin or ritual kin, their own banking firms, or
government finance allocated preferentially to elite Filipinos. Moreover, the
fusion of political office and family firms served to militate against government
reform that might challenge the privileged position of this economic elite. Less
tangibly, there seems a shared cultural norm, among the society’s elite, that cor-
porate leadership should, quite properly, pass through family hands to the next
generation, shaping government policy for both routine loans and the economic
restructuring that followed World War II and the fall of the Marcos dictatorship.
This persistence of oligarchic firms in the Philippines comes with some
marked costs. Within the country’s large pool of entrepreneurial talent, compar-
atively few have the wealth and connections for a successful business career. And
the slower pace of growth arguably reduces employment at all levels. Among the
9.5 million Filipinos overseas as of 2010 – about eleven per cent of the country’s
population – were countless workers whose creative talents were lost to the
nation (Commission on Filipinos Overseas 2010). For the past half-century,
moreover, the country’s economic growth has suffered from recurring crises,
arising arguably from a fusion of political power and rent seeking, reducing
both opportunity and prosperity.
For the foreseeable future, it seems unlikely that the Philippines will under-
take the “broad institutional reforms and shifts in oligarchy control” that would
allow it to move beyond the “corruption, poor legal protections and perverse
state institutions” (Bennett 2014: 135) that currently preclude the development
ideal of “rapid policy adaptability to ensure entry barriers remain low” (Bennett
2014: 145). After the country’s population hit 100 million in 2014, with 54 per
cent under the age of 25, and a quarter of the country still miserably poor, it
would seem that Philippine society can ill afford this oligarchic drag on develop-
ment.56Absent of any internal pressure for reform or multi-national access to the
country’s protected capital markets, Philippine family firms, with all their
strengths and weaknesses, are likely to persist into the foreseeable future.
By contrast, in America during the late twentieth century, the rise of finance
capital and professional management eclipsed family firms in a number of eco-
nomic sectors, notably brewing and publishing. Thus, after the repeal of Prohi-
bition in the 1930s, William Piel pushed his siblings out of the brewery’s
management into a role of distant shareholders and replaced them with profes-
sional executives – a transitory reform that slowed but could not block his firm’s
56
Philippine Star 27 July 2014; The Wall Street Journal 28 July 2014.
186 Alfred W. McCoy
liquidation by the national and then transnational consolidation of the brewing

industry. Similarly, his son Gerard lost control of a magazine to which he had
devoted his working life when a German media conglomerate acquired his
firm and fired his son and successor. While both these US industries, brewing
and publishing, have been consolidated by the rise of transnational conglomer-
ates, Filipino family firms, protected by nationality laws and state policy, have
been insulated from such globalisation, allowing their survival well beyond that
third generation.
Looking back on the history of the Piel Bros. brewery, there were gains and
losses from the rise of capital in America’s food and beverage industry. Family
firms that once took pride in their craft and quality gave way to impersonal
corporations focused on profit and loss. Quality of food and beverages suffered
accordingly, with long-term consequences for the society’s health and nutrition.
Throughout the twentieth century, over a thousand local brewers, family firms
that once took pride in purity and flavour, gave way to two transnational conglom-
erates that sold an indifferent mass-produced alcohol through saturation advertis-
ing. So bland did their beer become that, during the 1990s, countless craft
brewers started springing up across America, winning customers with quality
and flavour. By 2012, there were 2347 craft brewers producing thirteen million
barrels, about ten per cent of the nation’s beer output.57
The Piel family’s management of their brewery, across three generations, ex-
emplifies the character of family businesses in America, both the commitment
that comes from ownership and the personal rivalries that can complicate
sound business decisions. The mixture of blood, money, and power can, in
some instances produce stable management over the span of several generations.
Often, however, this same fusion of business and family can yield deep jealousies
and bitter struggles over strategy or corporate control. Over time, there is a re-
lentless market pressure to rely on expert executives and thus push family
owners to the shareholder margins, creating an impersonal society that often
seems the sum of its corporate parts.
In the end, this tale of two families serves to highlight contrasts and similar-
ities in two societies, Filipino and American, on opposite sides of the Pacific. This
comparison allows us to see choices and their consequences for each country
somewhat more clearly – unchecked globalisation in the United States versus
protected markets for national entrepreneurs in the Philippines; and sustained
corporate growth in the United States that eclipsed once viable family firms
versus persistent oligarchies in the Philippines that serve as drag on both demo-
cratisation and development.
57
Brewers Association “Craft Brewing Facts”. Available at: http://www.brewersassociation.org/
pages/business-tools/craft-brewing-statistics/facts (accessed on 24 April 2013).
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A Tale of Two Families: Generational Succession in

KEYWORDS: Family, capitalism, state, sugar, brewing, oligarchy

Alfred W. McCoy, Department of History, University of Wisconsin–Madison; awmccoy@wisc.edu

professionalization of the managers of large industrial enterprises” (Chandler

THE LOPEZ FAMILY

First and Second Generations

The Third Generation

On 27 December 1907, two months after Lopez’s re-election, one of Jalandoni’s

The Fourth Generation

Nacionalista Party convention, and then a fusion ticket with Ferdinand

The Fifth Generation

“returning PTV-4 to the Lopezes would revive oligarchy which is inimical to

THE PIEL FAMILY

The First Generation

brewery a resort destination, selling direct to consumers through a beer garden

The Second Generation

By 1940, moreover, ﬁnance capital was becoming dominant within the US

The Third Generation

problems. In retrospect, the company’s entire expansion strategy, launched by

probably Communist sympathizers,” adding, scurrilously, “a mysterious subsidy

he had refused.47 Gerard’s daring combination of critical publications about the

On balance, therefore, this tale of two families seems a study in contrasts. In

liquidation by the national and then transnational consolidation of the brewing

Almeda-Lopez, Augusto. 1984. Memorandum on the ABS-CBN case, 14 December.

Commission on Filipinos Overseas, Republic of the Philippines. 2010. Stock Estimate of

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