Kenneth Galbraith - The Age of Uncertainty

The Age
of Uncertainty
Books By John Kenneth CMlhraith
American Capitalism: The Concept
of Countervailing
Power
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
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
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
,
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
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
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
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
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\
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
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
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(ôis-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.
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 lîench 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
........
*^
tjliû^ >.U. iO.'-*-
iJEJ^tf^S-'îS^
,-2:
A cottage in Marie Antoinette's Le Hameau at Versailles. In France agriculture was always

both an industry and an art form.
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.
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
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
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:'
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.
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,
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
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
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
unload their dead and dying.
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 poiûlalion 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.
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
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
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
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
"^'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."
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.
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
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.
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 '"">
....
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
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
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.
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
'
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 lê 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 memlêrship

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.
^îJ^:\!^
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
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
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
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\ (ônsuelo \ anpayment of $2,500,000. More was later in\esled in
repairing Blenheim, which was run down, and in a great new lôndon 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
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
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
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
ill
change.
71
'
î.>
>'
wi.'
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
Precious Jewelry
THE GENTLEM ANS TRJCK

The best of rwo worlds combines in rhe dynomic design of the Codilloc Mirage A unique vehicle incorpororing borh luxury ond uriliry. with oil rhe expected croftsmonship of rhe Codilloc trodition The Miroge is o town ond country coupe: sleek enough to ferry possengers ro rhe Opero Doll rugged enough ro corry feed ond supplies ro rhe most remore corner of rhe ronch or form, comforroble enough for rhe mosr exrended rours. ond professionol enough for rhe serious sportsmen Our limired edition Miroge feorures cusrom enomel in rhe Neimon-Morcus signorure color os shovwi.
speciol inferior
pockoge sporrs sryle wire wheel covers, ond corpeting of mouton 'hroughour The Codilloc Miroge shown is ovoiloble only rhrough Neimon-Morcus Allow eight weeks for delivery 17A 24.500(X). For furrher informorion. coll AC 214/741-6911. ext 1225.
mm
of
High Capitahsm
A narrow and largely imaginary line divides what is admired as elegance from
what
is
condemned
as ostentatious display
conspicuous consumption.
Such change has alreaîy 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
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
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. Jêlegations

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.
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
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
.
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,
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
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
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
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
deprive another
this
propertv ?
Do
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.
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.
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
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 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
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

Its
crescendo tones
still
somid when modern

pohticians are
moved
faith.
to
proclaim their
laiiifcsto
of
tljc
Comiminist ârtji.
KARL MARX and FREDERICK ENGEL3.

SPECTRE
i
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.âinst 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.
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 soîial 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.
progressive income tax.
Abolition of inheritance.
national
bank with
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,
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|,-;
.Jl
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,
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
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,
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 effêct. 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
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\
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
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
awa\ sneh
reinarkahle colleetion
ol
odds and ends.

tiiliaico
I
lu'ii
\on entei \lar\

\
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
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
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
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
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'.'.tOUVBIERS\
^^-J^hiâ^^
IWTtHIIK'
ylWTERimARBEITEW ASSOCI'n*SSOCI'
DOPCaAl./
MEMBERS ANNUAL SUBS8ieTiON

_
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.
î<crcfitfy
<-''?/-yx
( 't>ri ''pai^îiiu.
"^"'^
for JPrance.
Germcory.
itdfy.
CiATVOîJ*^
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.

îreal
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 aîdit^"
__
._:.
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
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.
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, lût 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, lûl. 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
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
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.
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 fâstern Christians

to this
(Constantinople Irom the
Turks.
crusader
da\
is
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' insjîiing 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:
]^'^
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 ôm . 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'îiiir
'OvTxxoTie>cmonfbtt-qucnaii?i
'^nioTmniil.a'u(rfx*granrl<xtr
l^mc ijui trnir cjiicie;
';
nonxccpixrtcetrnxeqiuxnraru.
'
f\itrr(mxc
fcix ntif]fhTntr.
jmr.ctTiirftptfic cnuoiii cnjtttn

cc
ct mtinSU
rtfpioS^c p ifpcn
icir
/^^ll atrrrc crttrv.[iioaxirâi 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 cKirSruif
mai
Cti
merest
b:'inxc.]c/i'n>i>clpcnml
>av pciTOn'ft
c-otxîpce atJiflc-
' qxti
'
par uii
;c
pmJm 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^Jmomrliut;
Ctxtftiiiceetx
hi^
fcroicnr qu 'tr& S^ to? 'orw
jSifficfce fmre. Ixcnne'Mr
'T'ta oiici
'
tuioicnr fSn "îr if|^
îlicxxre.
rutcirconfe-TCMoeqaTpai^nft
iffi gi-nm . fx fm cfmutxnr imB acucre^gTme.ctTniiC-fcn cm 'laxnrvo a ^ parSccrrp gxxin^.
OfruT^ fiiincf>CTtr>.>t Cams tt itiufn . ôffiri "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
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
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,
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\
blood bath was promised lor
the
ing defenders,
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

()
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.
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
puriôses. 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
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^
yUê
"5
i^
f
?,^
.,
,,^j.
.,(..v..C5A....
j^^_,.g,.
.n^,
-<r#.*-
j,*.Ai^'t*'-
J.m- Jr^
HUt.ir.,
F"'U
rtfuA.-
V^.^1
+.1
-p<i'"
Ji"'"
>fii4f
4m
m(*,.^
ftirr*"
.-><n
&^/vt-
,a"^ - >"
'>~ ',' - ^->-''-
-^ f' F^
'"-f
,^^
/.;
/'
" **
-A.
colonialists
Letters
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.
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.
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
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
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.
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
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
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.
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
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
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
\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
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
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
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
\\
tîc
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
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
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 Eleât/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
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
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
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
est
rom .Vmiens.
It is
only a few lumdred acres; sheep
mo\ e across
it
as o\ cr an\ pastme.
called
Newfoundland
Park.
It
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
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
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
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, fênin
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
Again the Rotten Door

Not
e\ CT\ thinti
had iône 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
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
u ent
w
ar,
far afield, in the \ears follow

\\
in'j;.
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,
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
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
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
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,
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\
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.
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
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)\
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\
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 Cômpan\ 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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y//i I.a^^'
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//u ///<// t'r\'^VfV< )/<;/:>..

T.rL
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//
.
,/i'irrt(/r'//f////.fAi
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.-
/"
J^niuc'iit.'Hioiix^ w
/('////(/' '}(// /v/.-i ////// //^Y>ii//\ i//>rf/ //i/l' .'jn.' C>r<:7 ///>?/
./.'%. V,-n
"//,/r.ffrut-
/>/,//;// 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 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, encoinâged 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
pjFpfJipî^^^
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
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
'-'
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
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.
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.
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 Côndenied, 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
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,
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
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
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
M'V
money
or cash in circulation.
prices.
IVl is
tiie
cjuantity of ordinary
'
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.
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.
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
',
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
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\
unhapp> childhoods.
both Eton and Cambridge, Ke\nes,
liis
own
197
account and that of his contemporaries, was exceedingly happy. The point
could be important. Keynes never sought to change the world out of any sense
of personal dissatisfaction or discontent.
Marx swore
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."
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
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
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.
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.)
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
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
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."
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
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 opjôsed 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
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
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
efiôrt.
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,
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.
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
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
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.
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
obscurity by running unsuccessfully for the presidency. But his obscurit\

is
less
complete than
for most.
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.
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
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,
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:
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
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
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.
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
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.
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 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
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
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-
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.
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 McCârthy 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
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
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
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.
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.
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
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
"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
science professor for
all
the coming year.
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
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,
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
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
went
to India in
eaiK 1961.
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,
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,
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
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 Culân 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.
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."
. .
.
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 coiuâge 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.
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 Câmbodia 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
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
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
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.
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
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
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,

VVê
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
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
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.
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
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
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
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
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.
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
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;
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
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
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-
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>
283
^:
\\\
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
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,
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 lêen a greater force tor chansê

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
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
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
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.
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
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
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,
riuâl
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
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
ha\e long urged
is
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

transjôrtalion
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
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.
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 lêcause 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
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
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
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
Cît\
and unites
all
the kinds that have gone before.
might be called the poststill
Industrial Cîty;
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
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
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 aiârt.
'i'heir
318
Where
Capitalism Fails
children are
now indistinguishable from other Cahfornians. So
it
ill
lie
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
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.
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 effôrt 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.
certainly think so.

Is
It
causes us to ask:
hat can
do?
"
It is
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
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.
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
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
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
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
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
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,
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
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>
know w ho the candidates w

in their
be. This
another giant step
toward democracy. The conventions,
great days, gave
power
to the
3S9
few.
to
The primaries give it to the people. As with many others, my commitment

is
democracy
an
I
article of faith,
and
is
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
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
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
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.
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
might have a different view.
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.
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
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
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 Iêrkele\

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
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,
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
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
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
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
gift. It is
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
Connecticut-New York-New Jersey-Philadelphia area

don and the
Home
Côunties.
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
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
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
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),
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 ôrk:
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.
(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
'ôrk:
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
345
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 ôrk: Random House,
''Karl
Marx
I,
in
Karl
Vhirx and
Friedrich
1963), p. 229.
Fngels. Vol.
'-'Eric Roll,
p. 52.
"Smith, Vol.
II, p.
72.
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.
Kt'rr
(S:
Charles Seribner's Sons, 1943). pp.
1.3('>-1.37.
346
Chapter 5
'Husô 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;
Cô..
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 ôrk:
.\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
'"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.
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
MontliK- Press Book,

1973), p. 42fl
Little,
Broun and
lloopes,
Cô.,
States: 1940 Population, Vol.
II,
CAuiracteris-
ticsofthe Fopuliition (Washington, D.C.: U.S.

in
p. 37.
^Reinhold Niebuhr quoted
Côvernment 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,
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
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
page
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).
15
Acre (Barnaby
(top)
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
poster appeal for
World War
White
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
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; (/joom)

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,
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
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
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)
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).
tîty,
'.
305
(lop) FatehpurSikri (lent Berry, John Hillelson Agency); (1st
row lcft)Thc P'orbidden

Canberra
\\'at
(
Pe-
king A7rr Biliouii. John Hillelson Agency);

(
1st
row
right) Civic C-entre,

left)
Peder-
.sen,
Auslrali(m
Ncics
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)
street off the
main
sijuare in Bruges (Bartmby's Pictinc Library); (bottom) the
main
street ol T'ranklorl, Kciituck\ {Picturcpoint).
310
31')
'
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
315
Leo Baetk House, Bishop

Lilnary).
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
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
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
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,
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
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
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
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
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
Maîm 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,
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
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,
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,
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
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

Kenneth Galbraith - The Age of Uncertainty

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Kenneth Galbraith - The Age of Uncertainty

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The Age

Books By John Kenneth CMlhraith

American Capitalism: The Concept

Tlieorv- of Price Control

Economics and the Art

The Great The The

Economics and the Public Pur[)ose

The Age of Uncertainty

For Adrian Malone With admiration and gratitude

Copyright in 1977 by John Kenneth Galbraith

work may be reproduced or transmitted

John Kenneth, 1908-

television series scheduled for release

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

Printed in the United States of America

A portion of this book has appeared in Horizon

Foreword On The Age

The Prophets and Promise The Manners and Morals

The Colonial Idea

Lenin and the Great Ungluing

The Rise and

The Mandarin Revolution The Fatal Competition The Big Corporation

10. 11. 12.

Land and People

Democracy, Leadership, Commitment

A Major Word of Thanks

Foreword On The Age

One summer day

the great Watergate uncover-up

was the only

thing otherwise occupying

from Adrian Malone

on some unspecified aspect of the history of economic or

social ideas. for

an exceptionally opportune moment

visibly reciprocated b\' their

minuscule classes speak feelingK' at the

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

no chance that you could

constant and truly esteemed companions in the enterprise.

settled early on the title

did not confine

would contrast the great

the last centur\

century capitalists were certain of the success of capitalism, socialists of

socialism, imperialists ot colonialism,

to rule. Little of this certainty

di.scussions continued, a further

began with the

from novel thought that ideas are important not onl\

also for explaining or interpreting social behavior.

ruling ideas of the time

believe about the

of the market or the

what thev ask of the government

forces. So our treatment

On The Age of Uncertainty

very roughly into two parts:

then their consequences.

Smith, Ricardo and Malthus, then the

impact of their systems

economic ideas, then the economic

the task as a whole. After a

consequences, from ideas to