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General News    H4'ed 9/11/14

Steve Fraser: The Return of the Titans

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What makes the creation of the titan particularly confounding is that it seems as if it shouldn't be so. Inside the colorless warrens of the counting house and factory workshop, a pedestrian preoccupation with profit and loss might be expected to smother all those instincts we associate with the warrior, the statesman, and the visionary, not to mention the tyrant. As Joseph Schumpeter, the mid-twentieth century political economist, once observed, "There is surely no trace of any mystic glamour" about the sober-minded bourgeois. He is not likely to "say boo to a goose."

Yet the titan of capitalism overcomes that propensity. As Schumpeter put it, he transforms himself into the sort of man who can "bend a nation to his will," use his "extraordinary physical and nervous energy" to become "a leading man." Something happens through the experience of commercial conquest so intoxicating that it breeds a willful arrogance and a lust for absolute power of the sort for which George Baer hankered. Call it the absolutism of self-righteous money.

Sheldon Adelson, Charles and David Koch, Sam Walton, Rupert Murdoch, Linda McMahon, or hedge fund honchos like John Paulson and Steven Cohen all conform in one way or another to this historic profile. Powers to be reckoned with, they presume to know best what we should teach our kids and how we should do it; how to defend the country's borders against alien invasion, revitalize international trade, cure what ails the health-care delivery system, create jobs where there are none, rejigger the tax code, balance the national budget, put truculent labor unions in their place, and keep the country on the moral and racial straight and narrow.

All this purported wisdom and self-assurance is home bred. That is to say, these people are first of all family or dynastic capitalists, not the faceless men in suits who shimmy their way up the greased pole that configures the managerial hierarchies of corporate America. Functionaries at the highest levels of the modern corporation may be just as wealthy, but they are a fungible bunch, whose loyalty to any particular outfit may expire whenever a more attractive stock option from another firm comes their way.

In addition, in our age of mega-mergers and acquisitions, corporations go in and out of existence with remarkable frequency, morphing into a shifting array of abstract acronyms. They are carriers of great power, but without an organic attachment to distinct individuals or family lineages.

Instead dynasts of yesteryear and today have created family businesses or, as in the case of the Koch brothers and Rupert Murdoch, taken over ones launched by their fathers to which they are fiercely devoted. They guard their business sanctuaries by keeping them private, wary of becoming dependent on outside capital resources that might interfere with their freedom to do what they please with what they've amassed.

And they think of what they've built up not so much as a pile of cash, but as a patrimony to which they are bound by ties of blood, religion, region, and race. These attachments turn ordinary business into something more transcendent. They represent the tissues of a way of life, even a philosophy of life. Its moral precepts about work, individual freedom, family relations, sexual correctness, meritocracy, equality, and social responsibility are formed out of the same process of self-invention that gave birth to the family business. Habits of methodical self-discipline and the nurturing and prudential stewardship that occasionally turns a modest competency into a propertied goliath encourage the instinct to instruct and command.

There is no Tycoon Party in the U.S. imposing ideological uniformity on a group of billionaires who, by their very nature as ubermensch, march to their own drummers and differ on many matters. Some are philanthropically minded, others parsimonious; some are pietistic, others indifferent. Wall Street hedge fund creators may donate to Obama and be card-carrying social liberals on matters of love and marriage, while heartland types like the Koch brothers obviously take another tack politically. But all of them subscribe to one thing: a belief in their own omniscience and irresistible will.

There at the Creation

Business dynasts have enacted this imperial drama since the dawn of American capitalism -- indeed, especially then, before the publicly traded corporation and managerial capitalism began supplanting their family capitalist predecessors at the turn of the twentieth century. John Jacob Astor, America's first millionaire, whose offices were once located on Manhattan Island where Zucotti Park now stands, was the most literal sort of empire builder. In league with Thomas Jefferson, he attempted to extend that president's "empire for liberty" all the way to the western edge of the continent and push out the British. There, on the Oregon coast, he established the fur-trading colony of Astoria to consolidate his global control of the luxury fur trade.

In this joint venture, president and tycoon both failed. Astor, however, was perfectly ready to defy the highest authority in the land and deal with the British when it mattered most. So when Jefferson embargoed trade with that country in the run-up to the War of 1812, the founder of one of the country's most luminous dynasties simply ran the blockade. An unapologetic elitist, Astor admired Napoleon, assumed the masses were not to be left to their own devices, and believed deeply that property ought to be the prerequisite for both social position and political power.

Traits like Astor's willfulness and self-sufficiency cropped up frequently in the founding generation of America's "captains of industry." Often they were accompanied by a chest-thumping braggadocio and thumb-in-your eye irreverence. Cornelius Vanderbilt, called by his latest biographer "the first tycoon," was known in his day as "the Commodore." Supposedly, he warned someone foolish enough to challenge his supremacy in the steamboat business that "I won't sue you, I'll ruin you."

Or take "Jubilee" Jim Fisk. He fancied himself an admiral but wasn't one, and after the Civil War, when caught plundering the Erie Railroad, boasted that he was "born to be bad." Later on, when a plot he hatched to corner the nation's supply of gold left him running from the law, Jim classically summed up the scandal this way: "Nothing lost save honor."

More than a century before Mitt Romney and Bain Capital came along, Jay Gould, a champion railroad speculator and buccaneering capitalist, scoured the country for companies to buy, loot, and sell. Known by his many detractors as "the Mephistopheles of Wall Street," he once remarked, when faced with a strike against one of his railroads, that he could "hire one half of the working class to kill the other half."

George Pullman, nicknamed "the Duke" in America's world of self-made royalty, wasn't shy about dealing roughly with the rowdy "mob" either. As a rising industrialist in Chicago in the 1870s, he -- along with other young men from the city's new manufacturing elite -- actually took up arms to put down a labor insurgency and financed the building of urban armories, stocked with the latest artillery, including a new machine gun marketed as the "Tramp Terror." (This was but one instance among many of terrorism from above by the forces of "law and order.")

However, Pullman was better known for displaying his overlordship in quite a different fashion. Cultivating his sense of dynastic noblesse oblige, he erected a model town, which he aptly named Pullman, just outside Chicago. There residents not only labored to manufacture sleeping cars for the nation's trains, but were also tutored in how to live respectable lives -- no drinking, no gambling, proper dress and deportment -- while living in company-owned houses, shopping at company-owned stores, worshipping at company churches, playing in company parks, reading company-approved books in the company library, and learning the "three Rs" from company schoolmarms. Think of it as a Potemkin working class village, a commercialized idyll of feudal harmony -- until it wasn't. The dream morphed into a nightmare when "the Duke" suddenly began to slash wages and evict his "subjects" amid the worst depression of the nineteenth century. This, in turn, provoked a nationwide strike and boycott, eventually crushed by federal troops.

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Tom Engelhardt, who runs the Nation Institute's ("a regular antidote to the mainstream media"), is the co-founder of the American Empire Project and, most recently, the author of Mission Unaccomplished: Tomdispatch (more...)

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