No More Learning

Wells of Patronage
Two main areas of interest to observers and critics of the foundations are evident. In addition to their corporate holdings and investment operations, neglected by most inquirers, the second area of interest is the disposition of the funds they disburse in grants: their patronage. Not all funds disbursed by all foundations, as we have seen, go into what would be called beneficence by any standard. Some are simply paid over to other foundations for the profit of donors.
Let us attend now to what is claimed to be constructive outlay--at least by the formally reputable foundations. Here we find a somewhat larger literature, featured most recently by a briskly readable study of the Ford Foundation by Dwight Macdonald. 46
Although he presented a most perceptive guide to the fund-dispensing activities and public-relations tribulations of the Ford Foundation, Mr. Macdonald showed little or no interest in it as a financial control-center. But for information about how it conducts itself in the matter of payouts, his book is indispensable (although now in need of supplementation on later history).
On one of his generalizations about foundations, the weight of available evidence is strongly against the conclusion he sets forth. Commenting somewhat cavalierly on the late Dr. Eduard C. Lindeman's Wealth and Culture, Harcourt Brace and Company, N. Y. , 1936, Macdonald characterizes it as "a muck-raking survey, from a conventional- liberal point of view, that is now outdated as to many of its specific complaints (as, that philanthropists are arrogant and secretive) but which is still to the point in more general criticisms (as, that business types are over-represented on foundations boards and intellectuals represented hardly at all ). " 47
On this disputed point Lindeman was clearly right and Macdonald wrong, as Patman's findings subsequently showed in monumental detail. As to arrogance, perhaps it was as Macdonald said about the philanthropoids, a term for the fund-dispensing executives coined by one of them as distinct from my term of philanthropols for the financiers who establish and supervise the investment portfolios. Philanthropols are merely an ultra- sophisticated version of finpols. But Macdonald studied only one foundation in detail and he was obviously, as alert public relations would dictate, accorded the red-carpet treatment suitable under such circumstances to a sharp and frank critic with a commission from a widely read magazine. Any display of arrogance under the circumstances would have been self-defeating.
Concerning arrogance and secrecy on the part of foundations in general, Patman reports that he had difficulty getting information on almost every hand. Records provided by many foundations, when they were provided at all, were illegible, incomplete, lacking in required identifications of securities, personalities and other details, did not distinguish between income and principal, meandered from one accounting system to another and were generally obscure and misleading. 48 In many instances, repeated letters and subpoenas had to be issued to get required information. 49 The net effect of much foundation activity purporting to comply with requests for clarifying information was concealment.
Obtaining the information from the foundations has been a struggle [said the Patman report]. In many cases, it has taken four or five letters and a reminder of the committee's subpena power to obtain the information needed for this study. Many foundations have taken from 30 to 60 days to reply to a letter. We have been compelled to issue subpenas to 17 of them who failed to furnish information requested. These 17 foundations had been given ample opportunity to furnish the information voluntarily-in many instances, several months. In the case of the five members of the Ford family of Detroit, the Pew Memorial Trust of Philadelphia, and the Allen-Bradley Foundation of Milwaukee, the committee first asked for the information in October 1961. When followup letters did not produce the documents and data, we issued subpenas in February and March of 1962.
The attitudes of far too many of the foundations under study suggest an unmatched arrogance and contempt for the Congress and the people whom we represent. They appear to have adopted the attitude that tax exemption is their birthright--rather than a privilege granted to them by the people, through the Congress, for a public purpose.
The reluctance to cooperate takes many forms. Some only furnished information under subpena, demonstrating something less than a charitable attitude toward public knowledge and democratic processes. Others have sent us incomplete, or partially or wholly illegible, documents. Frequently, principal officers seemed to be in Europe when our letters arrived, leaving no one in the office with access to the records. 50
Perhaps what looks like it to the observer is not really arrogance but a genuine misunderstanding by adverse parties of the nature of political reality. Mr. Patman, like many others, appears to believe that the United States government is a supreme entity. But many persons of wealth, on the basis of their entire life experience, have developed the notion that it is they who are supreme; they believe this because of the many instances in their own experience when they have seen their will become either law or public policy. The Ford fortune and others like it will outlast Patman and other pubpols --reason enough to foster some feeling of greater durability in the possessors. Patmans come and go; Rockefellers, Fords, Du Ponts, Mellons and others roll on seemingly forever under the laws of inheritance and congressionally dispensed tax loopholes. Which is permanent and which transitory, which is substance and which shadow?
When challenged by a man like Patman the objects no doubt feel no more than the amused contempt of a French grand duke of the time of Louis XIV when accosted by a peasant or a minor official: "Is the man mad? " The challenge is something to be brushed aside, treated lightly, courteously ignored.
But although the Baronage is powerful, individually and collectively, it cannot win every encounter with the officers of the Crown. And on rare fulldress showdowns, which the Barons usually try to avoid, the Crown will always win. This will be true whether the Barons secretly control or influence the mercurial Crown or not.
The Fords, as relative latecomers to the realms of higher finpolity, apparently still need to learn the lesson long ago absorbed by the Rockefellers, Du Ponts, Mellons and a few others: No flexing of muscles in public, thus provoking invidious attention. Henry Ford II is much given to doing just this, issuing peremptory statements on public policy (usually opposing reforms) as though he were an elected official or an obscure citizen in a saloon. Although thus far he has aroused only desultory interest, he may some day find himself in hot water by touching some hidden public nerve.
Not only did many foundations, including some of those belonging to the Fords, seem arrogant by seeming to attempt evasion of the Patman inquiries but some, after field audits by the Treasury had disclosed irregularities, returned at once to the irregular practices. 51 In doing this they certainly showed overweening arrogance and contempt of
government. And, in general, I believe they are justified in feeling contempt for the pubpols, a sorry crew.
The unwilling objects of Patman's scrutiny in the upshot had this edge on him: The newspapers, even the New York Times, did not give him the opulent coverage his findings seemed to merit sociologically. A news editor could with good conscience play down and bury these reports as overly complicated for a culturally benighted readership. Again, the Patman reports were confusing to many simple-minded readers because, owing to the public-relations image developed by the foundations over the years as whited sepulchres, the Patman reports no doubt seemed to many worthy souls like aspersions upon motherhood. For many readers the Patman conclusions about such entities as the Ford and Rockefeller foundations no doubt, somehow, connoted headlines like: Motherhood Scored. Congressman Recommends Its Abolition. Indeed, Patman later was written about (as in the Luce publications) as a kooky, highly intelligent and informed, well-intentioned maverick in a china shop, perhaps not to be taken too seriously.
One need not rely on Patman and Lindeman alone, with Macdonald dissenting, for a glimpse of secrecy in foundation operations. The Foundation Directory reports difficulty in gathering data over the years from foundations, many of which in past years have failed to disclose their existence even to Russell Sage, their friend and associate. Thus the latest directory notes that the 1939 directory was able to list only 243 noteworthy foundations, whereas the 1960 directory, using data made available by the Treasury since 1950, shows that 600 noteworthy foundations had been in existence through 1939. As the Foundation Directory bleakly observes, "the records before 1950 are grossly inadequate. " 52
Foundations, although ostensibly not involved in politics or money-making, are curiously anxious about their public image. We know this because some big ones have used their tax-exempt revenues (in which the government--that is, the general populace--paid 91 per cent of the bill) to hire public relations counselors. From 1952 through 1961 the Ford Foundation had the public relations firms of Newmyer Associates, Inc. , and Carl Byoir and Associates, Inc. , on the payroll for $172,583. 80 in all. From 1955 through 1960 the Howard Hughes Medical Institute paid Carl Byoir and Associates $46,417. 55; and the Hughes Aircraft Company, reciprocally associated with the Medical Institute, paid Byoir from 1956 through 1962 a fee of $166,666. 66 and expense money of $545,773. 69. 53 As foundations professedly have nothing to sell, this is strange.
Let us say a foundation is doing 100 per cent good but the public misunderstands, believes it is really doing harm. If an investigation would show it is really doing only good by catering to the lame, the halt, the blind and the diseased, what difference does it make what the ill-informed public thinks?
Influencing public opinion with tax-free money in favor of a foundation can only have the purpose of warding off investigation. It can only have the effect of suggesting: Don't investigate that perfectly good institution. But if it is as good as it claims to be, what objection can there be to investigation?
The objection can stem only from a desire to conceal the functioning of a link in the finpolitan chain of politico-economic control. Or so I conclude. Nobody in possession of his senses can possibly object to anything the foundations do if it is truly philanthropic and charitable. Nobody can object to the disinterested scattering around of blessed money.
As to the large number of corporation-controlled foundations that have sprung up in recent years, the Foundation Directory says the following about their purposes:
"A wave of foundations of a new type has crested in the past decade. The 'company- sponsored' foundations are tax exempt, nonprofit legal entities . . . with trustee boards consisting wholly or principally of corporation officers and directors . . . their programs are likely to be confined to communities in which they have offices, and to center upon philanthropic agencies that benefit the corporation, its employees, its stockholders or its business relationships. " 54 They are, otherwise put, like other foundations.
Constituting 28 per cent of 5,050 leading foundations, the straight-out corporate foundations had total assets of $1. 177 billion in 1962. Their annual receipts were $201,444,000 and their grants $142,694,000. The flow-through of heavy annual receipts made them, in the characterization of the Directory, conduits. " 55
Foundations in their Protean potentiality have also been found to provide good "cover" for the activities of the Central Intelligence Agency, whose sensitive fingers are in many pies, long ears at many doors. Useful to the finpols in their operations, they have been found useful, too, to the pubpols in international espionage and possibly, too, in domestic surveillance of non-communist heretics and offbeat thinkers. Secret dossiers abound in the land of the free.
According to an intensive review of CIA activities by the New York Times in 1966, "The CIA is said to be behind the efforts of several foundations that sponsor the travel of social scientists in the Communist world. . . . Congressional investigation of the tax- exempt foundations in 1964 showed that the J. M. Kaplan Fund, Inc. , among others, had disbursed at least $400,000 for the CIA in a single year to a research institute. This institute, in turn, financed research centers in Latin America that drew other support from the Agency for International Development (the United States foreign aid agency), the Ford Foundation and such universities as Harvard and Brandeis.
"Among the Kaplan Fund's other previous contributors there had been eight funds or foundations unknown to experts on tax-exempt charitable organizations. Five of them were not even listed on the Internal Revenue Service's list of foundations entitled to tax exemption. " 56
Publishers of the Foundation Directory informed the Times they had no knowledge of the eight associated foundations: the Gotham Foundation, the Michigan Fund of Detroit, the Andrew Hamilton Fund of Philadelphia, the Borden Trust, the Price Fund, the Edsel Fund, the Beacon Fund and the Kentfield Fund. 57 These were presumably pure cloak- and dagger outfits. Later there were more disclosures of cloak-and-dagger CIA operations by "reputable" and fraudulent foundations with respect to student and laborunion activities abroad.
Foundation Channels
To what channels do foundations allocate grants?
According to the Foundation Directory, grants of $10,000 each or more were given in 1961 and 1962 to the following broad fields: 58
Fields
Education
International
Activities
Sciences
Health
Welfare
Humanities
Religion
1961
Grants Amount Per
(millions) Cent
1962
Grants Amount Per
(millions) Cent
563 $145 46
418 52 17
320 45 14
238 32 10
268 20 6
123 16 5
614 $107
448 62
210 37
313 68
417 43
120 25
31
17 11 19 12
7
98 9 3 53 5 2
Totals 2,220 $351 100 1,983 $315 100
Total annual grants by 6,007 foundations in 1961-62 came to $779,475,000, so that the above total represents only about half the "flow of funds. " 59 It is evident, therefore, that not all disbursements are statistically accounted for in the murky world of foundation activity. More recently total annual disbursements have exceeded $1 billion.
As to breakdowns, most of these grants are to existing institutions, few to individuals. In "religion," for example, 84 per cent of the grants went for theological seminaries, church and temple support, buildings and equipment and religious welfare agencies. Buddha, Jesus or Mohammed might be hard put to find the specific religious element in the recipients of the grants. 60 In the humanities 37 per cent went to museums. 61 Grants for education and science went, as was to be expected, largely to institutions.
It has been theorized by philanthropoids that the private foundations have a special role to play in financing constructive activities to ease the travail of a society in the course of change and to provide necessary special improvements. But as Dwight Macdonald notes, they only serve at best to lubricate existing machinery. 62 He here concurs with many earlier observers.
What happens when a foundation attempts to stray from the straight and narrow path of middle-road conformity was shown when the Ford Foundation in the early 1950's emerged on the national scene under the presidency of Paul Hoffman, former president of the Studebaker Corporation and original Marshall Plan administrator. Hoffman, coaxed into the job by Henry Ford II, selected a nonstodgy team of assistants, including the sharp-witted, outspoken Robert M. Hutchins; and the foundation was charted on a course not only more extensive but somewhat more imaginative than those of the established foundations.
Almost from the beginning there was trouble, to the dismay of Henry Ford II, who merely wanted to flood the roads with millions of cars, thus contributing to the world traffic jam, and to put the foundation money to the seemingly most constructive moderate use.
The opening gun in the trouble was fired in 1951 by the anti-Ford Chicago Tribune with a pseudo-news story under the headline: LEFTIST SLANT BEGINS TO SHOW IN FORD TRUST. This bias, the Tribune argued, showed in the presence of Hoffman, who as head of the governmental Marshall Plan had "given away ten billion dollars to foreign countries"; of Dr. Reinhold Niebubr, distinguished professor of Applied Christianity at Union Theological Seminary, who had "pinko tieups"; of Supreme Court justice Owen J. Roberts, "a world government advocate"; and of Frank Altschul, "a Roosevelt Republican and retired international banker. " In the Tribune lexicon anything international borders on high treason; and "inter-national banker" has the same connotation, for those who read below the belt, as the Nazi use of the term.
Although this newspaper is hard for some people to understand, the Tribune model of patriotic uprightness is really very simple. It is Mark Hanna, who not only was William McKinley's political mentor but was related by marriage to the Tribune's McCormick family. Anything in American history that deviates in the slightest from the brass-tacks, no-nonsense, cash-on-the-barrelhead Mark Hanna model is suspect to this paper's publishers, accounting for the fact that long before Hanna appeared it waged its own McCarthyite campaign of vilification against Abraham Lincoln. It has never hesitated to replay this campaign against any morally aspiring person or movement. The bare implication, whether from the left, right or center, that there is anything about American life that can stand elevation or modification is enough to send the Tribune and its sister New York Daily News into tantrums of ecstatic editorial rage.
It was at once apparent that the Tribune by its enterprise had touched a rich vein. For instantly a coven of Hearst columnists, abetted by radio commentator Fulton Lewis, Jr. , and others, moved into the arena, which they filled with their lurid phrasomania for several years. Lewis opined that because "Many books and various studies have been financed by tax-free grants from these foundations. . . . In effect, the American people are paying more taxes to finance so-called scholars who work diligently to beat out our brains and change our traditional way of life into something more Socialistic. " George Sokolsky mused: "Henry Ford . . . made nearly all his money in this country, but Paul Hoffman, who is spending that money, seems to prefer to pour it into remote bottomless pits and to expend it for meaningless purposes, such as an investigation as to why the world is full of refugees, when, as a matter of fact, it always has been. . . . Why cannot some of the money the Ford Foundation is piddling away on trivia be used constructively for the saving of opera? "
Westbrook Pegler fulminated fantastically, calling Hoffman "a hoax without rival in the history of mankind. " He took a hard bloodshot look at the eight other trustees of the period. Four, including two Fords and the dean of the Harvard Business School, seemed "sound enough," he said, but "the best that can be said of the political wisdom of the others is that they are flighty. " These others included a former chairman of Standard Oil of New Jersey and a former president of General Electric.
The Ford funds, Pegler held, "are in reckless hands. . . . That is the way queer international things get going. " Later, under the headline FORD FOUNDATION IS FRONT FOR DANGEROUS COMMUNISTS, he misinformed that Associate Director Milton Katz, professor at the Harvard Law School, was "a Frankfurter man of the same group that insinuated dangerous Communists into our government" and noted a "connection" between the Foundation and President Eisenhower, Henry (China Boy) Luce and "the Marshall Plan squanderbund. " "I find it beyond my ability at the moment to establish the master plan of these strange associations and activities," Pegler madly wrote. "I will continue, however, to offer you verified facts and my best efforts at interpretations. "
Later, traitors all around, he enlarged: "There is a very important and sinister political mystery concealed in the mixed activities of the Ford Foundation under Paul Hoffman and Robert Hutchins, the Time-Life propaganda empire of Henry Luce, and the political works of William Benton, the Social-Democratic Senator from Connecticut. "
No facts were offered to sustain these gaseous charges, which eventually led to a dazed Henry Ford II being shrilly accused by a distraught woman at a social gathering of being a Communist. 63 This was much like charging Andrei Gromyko with being a secret director of Standard Oil.
Nevertheless, the uproar--sustained by advertising-hungry publishers--has provided the background noise for three congressional investigations of the foundations since World War II. The first two, as Macdonald observes, were inspired by intra-party political animus. There was, too, obvious nonparty economic animus in the Patman inquiry of the 1960's. But the fact that the investigations sprang out of political animosity provides no reason to ignore whatever they produced in the way of fact and insight.
As Macdonald sees the first two investigations, correctly I believe, both were merely episodes in Republican factional politics. 64 It was disappointed Taft Republicans, disgruntled at the Eisenhower capture of the Republican nomination, who were active behind the scenes in both early investigations in their own variation and fugue on the Joe McCarthy smear tactics.
The first investigation was directed by a House committee under the chairmanship of the late Eugene Cox, Georgia Democrat who was responsive to the general McCarthyite view of extreme Taftists. However, "the strategy misfired, because the Democratic leaders, who were still in control of the House, boxed in the impeccably Americanistic chairman with less dedicated colleagues. " 65
Because the committee members went about the investigation in a matter-of-fact way, the final report cleared the foundations of being infiltrated by Communists, of recommending socialism, of weakening, undermining or discrediting the entirely laudable system of American free enterprise. It cleared them too of the suspicions that moneys they spent abroad were devoted to purposes less than praiseworthy. The hearings even led rockribbed Chairman Cox to say he had undergone "some change of heart. "
One member of the committee, however, remained discontented. This was the late Representative Brazilla Carroll Reece, of Tennessee, former chairman of the Republican National Committee, who at once demanded a new investigation. Reece has been one of Taft's campaign managers "and so was especially disappointed by the Cox Committee's failure to 'get' the Fords' and the Rockefellers' foundations. " 66 The Fords and Rockefellers, along with other leading elements of wealth, had in 1952 supported the bewildered Eisenhower, the only sure winner owing to his public standing as a war hero, the mighty conqueror no less (by grace of public relations techniques) of the baleful and infinitely resourceful German General Staff.
Reece got his investigation in 1953 and 1954, conducting it along murky McCarthyite lines. The premise, as stated by Reece, was that "there is evidence to show there is a diabolical conspiracy back of all this. Its aim is the furtherance of Socialism in the United States. " The Ford Foundation, he held, was the main offender in undermining a free market, working in concert with such subversive organizations as the Advertising Council, Republic Steel, General Motors and Standard Oil of California.
The hearings and the final report, all expertly reported by Macdonald, were a confetti of nonsense. And they were assailed as such by the corporate newspapers, ten to one. 67
Prior to the Reece investigation, a Gallup poll showed 63 per cent of sturdy grass- roots Americans had never heard of the Ford Foundation, 13 per cent were indifferent to it, 23 per cent favored it and 1 per cent were hostile. After the frenzied bearings another Gallup poll showed 60 per cent had never heard of it (the power of the press! ), 11 per cent had no opinion, 27 per cent were favorable and 2 per cent were hostile. Of Republicans queried, 46 per cent had heard of the foundation; only 35 per cent of the less literate Democrats had ever heard of it!
When Patman began his inquiry in 1961-62 he was seemingly entering a thoroughly ploughed field. The attention of his committee, however, was turned in a different direction. The Cox investigation, which ran to great length and heard from officials of most leading foundations, was largely limited to the question of ideological purity and the nature of fund grants.
The Patman inquiry concentrated on the investment maneuvers and policies of the foundations, turning up some of the strange monsters of the financial deep we have scrutinized.
Patman's inquiry was also obviously fueled by animus. As Macdonald points out, all public investigations of the foundations have been unfriendly, critical in various degrees, from different points of view. The Walsh investigation of 1915 was directed from a Populist or native-leftist, quasi-socialist point of view, and socialists, communists and leftist liberals have always been more or less critical of the foundations as instruments of an ascendant, vulpine capitalism. But the more recent investigations,
Patman's included, have been oriented from a rightist, small-business point of view, a fact that brings into focus a revelatory perspective on contemporary American politics.
That Congressman Patman did not develop the whole foundation story is vouched for by The Nation of December 4, 1967. Patman, although very close politically to their sponsors, did not delve into a variety of Texas foundations, the owners of which feel rivalrous toward the "Eastern Establishment" and their foundations.
According to The Nation, the Brown Foundation, Inc. , of Houston, established by the late Herman Brown and brother George R. Brown of the big government contractors, Brown and Root, channeled money into at least one Central Intelligence Agency conduit foundation and into at least one organization partly supported by the CIA. Brown and Root, incidentally, is politically close to President Johnson.
In 1963 the Brown Foundation gave $150,000 to the Vernon Fund and in 1964 it gave $100,000, these being the latest available figures. It gave $50,000 in 1963 to the American Friends of the Middle East and $150,000 in 1964. By no kind of elastic interpretation can these donations be regarded as in the cause of sweet charity.
There are now at least seven CIA-conduit foundations known to be operating in oil- lush Texas; the others are the San Jacinto Foundation, the Marshall Foundation, the Anderson Foundation, the Hoblitzelle Foundation, the Jones-O'Donnell Foundation and the Hobby Foundation. The latter was set up by Oveta Culp Hobby, former Secretary of Health, Education and Welfare under Eisenhower, and by her son William Hobby, Jr. , executive editor of the Houston Post. Both Hobbys are close to President Johnson.
"In the eight months that have elapsed since the CIA was discovered to have polluted the world of the foundations," said The Nation, "neither the IRS nor Patman has shown any interest in discovering just how deeply the spies have penetrated the supposedly charitable organizations. Patman's investigations into charity, like charity itself, should begin at home. He might even tell us what good works have been supported lately by the Lyndon Johnson Foundation, established a few years ago by the President. "
Political Perspectives
It is customary in the public prints, as part of the lofty centrist stance, to portray rightists and leftists as crackpots of various degrees. For how could anything possibly be wrong with the ineffably beautiful status quo? McCarthy and Reece were, it is true, both crackpots in that they had a fantastic, paranoid vision of reality. Leftists succumb to the same malady when they see capitalism as the quintessence and autonomously unique source of personal and institutionalized evil. Was Stalin a capitalist?
Crackpottism is most clearly revealed in methods pursued, which in the case of both sides at the extremes boil down to inciting to riot and civil disorder. Whatever within ideological limits will bring about this eventual result is pressed into service. For neither political extreme has the least chance of success without a breakdown of order-- spontaneous or induced. Political extremism in all cases--in Russia and China, in Germany and Italy--gained the ascendancy during genuine, war-induced breakdowns. In Spain in 1936 the breakdown was induced by a contrived military uprising.
But this freehanded, irascible labeling of leftists and rightists as crackpots obscures the incontestable fact that both groups are respectively irked by something. In some way a shoe is pinching their adherents. While crackpottism often stems from or is reinforced by purely subjective disorders, objective factors must be present to make it plausible to large numbers of people. Crazy though Hitler undoubtedly was, something was patently askew in Germany and Europe when he rose to power. There may, too, behind a bland exterior (a fact often overlooked), be crackpottism at the center--a moderate, reassuring, tranquilizing crackpottism that bids man accept everything as he finds it, as though
heaven-sent. A strong argument could be developed that there is at least as much crackpottism at the center as on either the right or the left--the crackpottism of paralyzed navel-gazing inertia.
i
Patman, like his investigational predecessors left and right, was obviously deeply disturbed by something, and he plainly stated it. He was irked, on behalf of his major constituents, by the incontestable fact that Big Business with its various instrumentalities, including the foundations, was crowding small business to the wall. In standing up for historically doomed "small business," Patman was not speaking generally for what the ordinary person would consider especially small. For Patman's political underpinnings are found among Texas entrepreneurs of corporations with assets ranging up to $50 million. These latter-day economic individualists feel pressed by the bigger enterprises, in part because of the ducal tax exemptions and other political boons enjoyed by the giants. Furthermore, although the total assets of some of the so- called small corporations may seem large to the onlooker, the equity of the nominal owner is often darkly overshadowed by heavy issues of senior securities and bank loans. The nominal owner often clings to a slender stake in his enterprise.
Patman, in other words, approached the situation as a business analyst. He was a realistic even though unconscious participant in a late phase of what Karl Marx called "the class struggle," what our own James Madison termed "faction. " He didn't make charges to hear himself talk, nor did he strive to stir an uproar for political revenge or to engender turbulence. He was after facts upon which to recommend concrete limiting legislation.
Patman was entirely successful, as we have seen, in his attempt to show one aspect of how big interests squeeze smaller interests. His effort fit snugly into the Marxist concept of class struggle which, contrary to vulgar supposition, does not alone pose big capitalists against workers or the poor. In the class struggle under capitalism, Marx pointed out, the capitalists themselves contrive each other's destruction. Some become bigger as others are crushed. In the impersonal process (and Marx went astray on this prediction) everybody is proletarianized except the big capitalists. Marx's error of anticipation stemmed from the fact that he failed to see the emergence with proliferating technology of a white-collar horde of corporate technicians and administrators, many of whom were to identify themselves psychologically, purely through physical association, with the upper owning classes. Nor did he see the emergence of new interstitial enterprises, late reverberations as it were of an earlier upthrusting industrialism.
Even though accelerated by two gigantic wars, developments under capitalism proceeded at a slower pace than Marx predicted. But, in a Marxian view, the phenomenon of small capitalists being squeezed by big capitalists in their adroit manipulation of the state apparatus (which is Patman's basic thesis) is an important readily verifiable facet of class struggle.
Is it morally justifiable to feel politically irked? This is obviously a foolish question. If one is irked one is irked, a psycho-physical fact. How one now behaves, rationally or otherwise, is determined by one's intellectual analysis and program for eliminating or avoiding felt difficulties. Marx in his recommended political program, visualizing the forcible overthrow of capitalism by factory workers, was far more of a visionary than in his theoretical analysis, which was an attempt to find broad intellectual sanction for remedial political action of a fundamental nature. And even in his political program calling for revolution, Marx was far less of a visionary than many subsequent self-styled Marxists, notably Lenin.
For the Marxist revolution, Marx very practically held, could take place only in a very advanced capitalist country, such as England, the United States or Germany. And when it took place, just about all of the people--now all proletarians--would favor it. The actual revolution would be a small affair, easily throwing the few surviving big owners out. All very simple. Remaining would be a smoothly running technical system with the profit motive removed, everybody happy.
What confuses many who are superficially informed is that what is represented as Marxist revolution has taken place only in backward agricultural countries such as Russia and China, in the wake of debilitating wars. Although these were indeed revolutions, and might well have recommended themselves as such to Marx, who was by temperament as well as conviction a bone-deep revolutionary, they were far from Marxist revolutions.
No Marxist revolution, violent or peaceful, has ever taken place anywhere. But certain processes within capitalism, some of which Marx first discerned, some of which he foresaw and some of which he neither discerned nor foresaw (such as the effectiveness of piecemeal reform in modifying many conditions), continued to hold sway, transforming capitalism into its many different national guises. On the basis of his premature observations Marx considered all reform a misleading hoax.
But in the concept of class struggle, even though all history is surely not (as he asserted) the history of class struggle, Marx achieved an intellectually fruitful insight. And what are seen as leftist and rightist deviations from centrism (which upholds the status quo) are clearly instances, however ineffective, of class struggle or at least class protest.
Whereas the earlier leftist movements in the United States from Populism through Socialism and on into Communism of the 1930's were ventures in class struggle or protest carried out at least nominally on behalf of lower elements of society, the more recent rightist movements are ventures in the same sort of struggle waged by and supposedly for persons who futilely (in the long run) resist being squeezed out of existence or into less lucrative positions. As Marx pointed out, when men feel cornered they often elect to fight.
While earlier Populists and other leftists waged their struggles, which produced a certain amount of mild increasingly diluted reform (though it did not arrest a large and spreading impoverishment among the unskilled), persons situated in society at the levels where contemporary rightists now find themselves did not feel stirred. This was no doubt because they still identified themselves with the Rockefellers, Carnegies, Du Ponts, Fords, Mellons et al. Soon, too, they would be ascending those blessed golden peaks! Soon, too, their address would be 1 Wall Street, their summer address Newport or Bar Harbor.
Under the impact of recent pressures, however, it has begun to dawn on many of them that their address is far more likely to be the bankruptcy court. Many have already been displaced from the middle class, sons of former corporation executives who cannot "make it," inheritors of deflated estates and others of the nouveau dispossessed.
Looking about, they have concluded that one of the causes of their difficulties is the variety of social legislation called into being in three decades under the pressure of concrete phenomena such as unemployment. This legislation has had the effect, among other things, of depriving small operators of much cheap, profitable labor. This, they conclude, is tantamount to socialism and the sponsors are in effect socialists or communists.
And the big corporations, instead of continuing to fight this rise of "socialism," have finally compromised with it. Wealthy persons such as Henry Ford II and the Rockefellers now accept the mild, often diluted New Deal reforms. The only very wealthy hereditary group that still appears to support openly rightist causes is the Pew family of Philadelphia. Many medium corporations, however, join the Pews.
The big corporations, with their greater productivity and reserves, have indeed more or less acquiesced in the process after the failure of their political struggle in the 1930's against it, when the big Du Ponts led heavy industry, the banks and the newspapers against the New Deal. The big corporations are easily able to meet the major demands of organized labor, thus avoiding trouble and a poor public image, by passing increased costs on to consumers in administered prices. Most of the state right-to-work laws, forbidding the union shop, are noticeably located in the less industrialized regions. Attempts to supersede these low-wage laws by a federal law that would facilitate unionization are desperately fought by small high-cost producers as the encroachment of soul-destroying socialism.
It isn't the big companies, by and large, or the foundations, that lead this latter-day fight against the unions. For the big entities have found it profitable to fall into step with the welfare-warfare state. It is the small, often rightist businessman who favors the anti- union laws. Many of the regulations that small-business elements find distasteful were in fact devised over the years and made into public policy by representatives of the wealthiest and most Republican interests. 68 They wanted to squelch the small, market- upsetting wildcat operators. Only big, stabilizing centrally controlled units were wanted.
Not only are the small operators annoyed that the big corporations pay better wages and no longer fight the unions but they are annoyed at the ease with which the big operators, with the many fringe benefits they offer, are able to hire the cream of available personnel. Left to the small employer are the misfits, the restless, the inefficient.
As the rightists generally put their case, the small businessman is being squeezed between Big Unions and Big Government (the latter imposing more and more New Dealish "socialist" rules and thereby strangling freedom to deal properly with employees and customers). All this regulation smacks of what rightists understand as regimented socialist society. In most of its versions the analysis is unrealistic because canons of middle-class respectability lead most rightists to overlook the fact that Big Corporations are implicated in the squeeze. But to say this would make them sound like old-time long-haired socialists, thus defacing their self-image of respectability.
Political realists like Patman, however, do not overlook this factor in the equation. Nor were the ill-behaved Republican rightists at the famous convention of 1964, when they hissed and booed Nelson A. Rockefeller, unaware that he represented a genuine, blandly powerful adverse interest. Rockefeller, as a "liberal" Republican--that is, one willing to accept the New Deal approach--had become anathema to Republican rightists, many of whom more recently denounced him as a socialist.
The small businessman, if he were to read the signs in a Marxist way, would see that he is being slowly expropriated. He should, according to Marxist prescription, join the Marxist ideologues in seeking the day of mass deliverance. As he is biased by his middle-class point of view, envisioning himself as a potential original Rockefeller, Du Pont, Mellon or Ford--like them finding salvation in an unregulated market and society--he will have nothing to do with the doctrinaire Marxists. He therefore, wishfully, analyzes the situation not as one of big enterprise versus small enterprise but as "New Deal socialism" versus free enterprise. He lives within an economic as well as political myth, fails to see that free enterprise itself has long since been superseded by
corporate monopoly, leaving him uncomfortably in one of the remaining dead ends. He does not see that in the impersonal, at times slow, process of economic development he is marked for eventual destruction. He is expendable.
There is, alas, no place for him at 1 Wall Street--unless, perchance, he can inflame the masses with the demonic idea that Eisenhower, Henry Ford II and Nelson Rockefeller are secret card-carrying Communists. If he could get enough people to believe this, and to exert themselves appropriately, then perhaps the strait jacket of New Deal regulations and labor union contracts could be broken. With plenty of cheap labor again available, perhaps he could make a big low-tax profit, build up cash reserves and finally rent a palatial suite of offices at 1 Wall Street. Then all the people who laughed at him when he said he was going to be rich would change their tune. Then they would all see that he was, all along, really a superior fellow, sure to be a success, as good as Rockefeller or Carnegie and maybe even better. Then his wife or mistress would be particularly impressed as he circled his yacht and private island in his own jet plane after he took off for large conferences in Washington or Hong Kong.
But this crude fantasy, although firm in its lineaments, tends to vanish under the weight of heavy unequal taxes, rising labor costs, tightening New Dealish regulations, monopoly, high prices of materials and corporate automation. The outlook becomes darker as he looks across the way and sees one of the hundreds of plants of the Super- Cosmos Corporation churning out trainloads of goods in a profitable torrent. The Super- Cosmos parking lot is filled with the cars of union workers, who denounce him as a fink, a rascal, a Goldwater crackpot and his employees as incompetent, low-paid scabs. If not incipient socialism all this is surely something just as wicked.
Because the rightists have no program upon which to base a convincing mass appeal they are reduced to bringing forward whatever emotional irrelevancy they believe will gain them mass support. Thus they represent themselves as bone-crushing super- patriots, anti-internationalists, anti-foreigners, anti-Communists, anti-Socialists, anti- Semites, anti-atheists, anti-Negroes. They are anti-fluoridation of water, anti- vaccination and, indeed, against whatever is offensive to low-level mass pockets of folklore, superstition and misinformation.
It is in consequence of this kind of electorally necessary appeal that one finds in the rightist entourage such a variegated assortment of screwballs. But all movements when they promise the excitement of combat--left, right or center--have a similar appeal for the demented and half-demented. In time of war the center, for example, draws unfastidiously to its bosom every latent or overt votary of violence--sadists, xenophobes, paranoids, the suicidal. I put all this down because I don't want to be put into the position, generally taken by the left and the center, that there is something inherently deranged about the rightist position. Rightists, like other politicians, take people as they find them and try to bend them to their purposes. And all political positions--left, right and center--leave much out of account in their neat formulas.
If they were fully logical in their prescriptions for the Good Society, the rightists would call forthwith for the dissolution into their constituent parts of United States Steel, General Motors, Standard Oil of New Jersey, AT&T and the other big holding companies. They do not make such a demand because in fact they deeply venerate these enterprises, would themselves like to possess them, only wish that their own Calabash Oil and Swampwater Steel were similarly flourishing. As it is, when Standard Oil of New Jersey breathes a little more deeply than usual, Calabash Oil is suffocated.
Barring some extremely unusual set of developments, the center, the Establishment, seems likely to continue in its triumphant balancing act despite the noisome antics of the rightists. Little more than clamor seems likely to come from the political right, less even
in the way of enforced minor adjustments than came from the reformist demands of the more numerous working masses. The center, the Establishment, with its corporations, foundations, trust funds and family holding companies, clearly rules the roost, whether under Truman, Eisenhower, Kennedy or Johnson. And there is a deep reason for this, which is that by the Law of Inertia the center is bound up in golden links with the Good, the Beautiful and the True. Truth, or at least the routine profession of truth, is solidly on the side of the status quo. All else is error. . . .
Critics and the Foundations
In their patterns of granting funds the foundations display their power in ways that appear most fascinating to casual observers. While most citizens appear to accept dutifully the verdict of the corporate press that foundations exist in an unalloyed good cause, there are many critics of foundation patronage--insiders and outsiders, friendly, unfriendly and temperately judicious. These worthies bring into view a little noticed but wryly instructive aspect of the foundation phenomenon.
The individual critic in Foundationland, whoever he is, is much like a tourist in the Soviet Union. Upon his return home he tells what he liked, what he disliked. Here was a modern laboratory, there an advanced clinic, in another place a special school for backward children and there was, of course, the resplendent Moscow subway system-- all of this the tourist liked very much. On the other hand, what he saw of collective farms, country roads, new apartment houses, most stores and the Kremlin itself--these he disapproved. Still other things he had mixed feelings about, like the schools: too traditional and authoritarian but, on the other hand, very high standards and well equipped, teachers excellent.
And the judicious critic in Foundationland is like the tourist in the Soviet Union also in that whether or not he approves what he sees this is the way it is and this is the way it is going to be. In both cases his judgments, no matter how finely spun, count for naught. He is a cipher in a society of ciphers.
Naturally the managers of the foundations, like the managers of the Soviet Union, prefer that the observer like everything he sees. If not, it is nice that he finds something to endorse. But whether he likes everything or nothing, it is--general public-relations blarney apart--fundamentally of no concern to the managers because this just happens to be part of their plantation. And merely because one finds something on the tour that one likes does not imply, any more in Foundationland than in the Soviet Union, that the tourist and the higher-ups are enrolled in a common cause.
Visitors to big houses of the rich that have been thrown open to the public as museums show the same irrelevantly and futilely judicious attitude. They like the drawing rooms and the library--"Really magnificent, you know. " But, unfortunately, "They certainly showed poor taste in the deco? r of the bedrooms. And the solid gold bath tubs are ridiculous. " But whether the masters showed a lapse of taste in this or that matter or not, this is the way it was and no word of the visitors will change a bit of it.
Foundation Organization
Let us, in order to understand foundations better, leave off attempts to evaluate their distributive worth on a scale of zero to 100. Let us instead concede that they are perfect in their expenditures, thus bypassing an argument apparently as fruitless as the one about the Soviet Union. And let us now look to their organization.
At the top we find a board of trustees, all concededly doing only good. Among the Ford Foundation trustees we find Benson Ford and Henry Ford II and thirteen others of whom at least nine are surely from the world of finpolity and pubpolity. All of these are very able men; about this we need not dispute. But, except for the two Fords, all were
selected . . . by the Fords. The Fords, though, were neither selected, elected, co-opted or chosen by public examination. Nobody at all asked them to assume these arduous philanthropic duties, for which it might seem they chose themselves.
But neither they (nor the Rockefellers, Du Ponts, Mellons and others) did even this, although this is what the Soviet managers did. For the Soviet managers, out of the kindness of their hearts, themselves chose to lead a disbelieving world to the Promised Land of Communism, where the lion shall lie down with the lamb, the unicorn shall shed his horn, the meek shall inherit the earth and the State shall wither away.
The Fords, like their peers, were chosen before birth for their roles, which are (oddly in a democratic, republican or merely parliamentary context) purely hereditary. They are hereditary oligarchic philanthropists!
It is, then, by hereditary right that all these concededly beneficent expenditures are made. If it is not all done in the pure spirit of sacrifice it is, we are repeatedly assured by the corporate press, very close to it. It amounts, simply, to noblesse oblige.
As there are far too many foundations, even large ones, to scrutinize here in any detail, our attention will be largely confined to a few, including the Ford Foundation.
Orientation of Patronage Grants
Those foundations that regularly make substantial payouts--and as we have noticed they altogether paid out only 50 per cent of income through the 1950s--are in philanthropoid jargon said to be "discipline-oriented" or problem-oriented" or a little of both. They are also "friend-oriented," company-oriented," "profit-oriented" and "market-oriented. "
The discipline-oriented, like the Rockefeller group, mainly allocate money to institutions harnessed by intellectual disciplines--physical and social sciences, medicine and (much less so) the humanities. Except for the last, in the opinion of a leading philanthropoid (a very mentor of philanthropoids) these have been overstressed. 69 But heavily financed science (and perhaps this is pure coincidence) has thousands of profitable industrial applications of which the corporations have freely availed themselves. And medical advances are immediately available to the rich, much later if at all to the non-rich. There is little if any monetary profit in the humanities, however (perhaps only another coincidence).
The stress on science in American society has at least been reinforced if not originally invoked by the foundations, an obvious exhibition of power, and a scientist cited by Abraham Flexner believes it has been overstressed. The foundations, thus seen, are centers of self-serving hereditary power.
The Ford Foundation is problem-oriented. It is out to solve or at least make more manageable public problems of various kinds.
After the death of Henry Ford, the foundation, originally organized in 1936, began its larger operations on the basis of a Study Report.