As far as the public knew, these
companies
were all competitors of Standard.
Lundberg - The-Rich-and-the-Super-Rich-by-Ferdinand-Lundberg
Up to 1950 external grants by income and principal were as follows: 38
Rockefeller Foundation
From income
From principal
Total
General Education Board
From income
From principal
$325,754,751. 35
$125,773,613. 93
$451,528,365. 28
$132,339,912. 86
$164,427,148. 34
Total
Laura Spelman Rockefeller Memorial
From income
From principal
Total
International Education Board
From income
From principal
Total
$296,767,061. 20
$ 27,839,809. 74
$ 27,500,000. 00
$ 55,339,809. 74
$ 6,495,807. 82
$ 11,837,482. 00
$ 18,333,289. 82
$821,968,526. 04*
Grand Total
*Here should be added $60,673,409. 45 for Rockefeller University.
The International Education Board was established by John D. Rockefeller, Jr. , in 1923 but, in a very real sense, all the Rockefeller moneys are derived from the founder because nobody in the family since him has been a fortune-builder or even a conspicuous moneymaker. The grandsons have enterprises under way that appear likely to become highly profitable but not on any scale, as far as appears to date, resembling the original Standard Oil, the real honey-pie.
What remained of these funds at the end of 1950 was as follows:
Rockefeller Foundation $158,103,332. 13 39
General Education Board $ 24,624,493. 01 40
Rockefeller Brothers Fund (as of 1955) $ 59,663,273. 62 41
Total $242,391,098. 76
Of the moneys in the Rockefeller Brothers Fund the late John D. Rockefeller, Jr. , contributed $58 million in 1951 and bequeathed to it half of his estate. Reflecting part of this bequest in the amount of $65 million, at the end of 1960 the Fund showed total assets of $116,173,369. 42 Appreciation since then, as already shown, has been great.
Since 1950, of course, these funds have been generating more income, most of which has been allocated in the form of grants.
It is clear, then, that a truly stupendous sum was directed from the fortune of a single individual into various medical, educational, scientific and general cultural projects, both in the United States and abroad. As most of these moneys consisted of dollars of much greater purchasing power than the present dollar, it is evident that in dollars of current value the disbursements were of far greater weight.
That all this was part of a far-reaching plan is denied by spokesmen for the family such as Professor Nevins and Raymond B. Fosdick. To the charge of critics that the benefactions were established as "a shield against public censure," or, as some charged, "conscience money," Fosdick, following Nevins, points out that Rockefeller in his 'teens, as a pious Baptist, was already giving to the church as much as 6 per cent of his earnings. He kept a meticulous record down through the years of all such gifts, which amounted to more than $1,000 annually by 1865 and to nearly $6,000 by 1869--goodly sums in those days. He gave $558. 42 in a lump to Denison University, for example, in the late 1860's. 43
Rockefeller, in other words, gave money all along, even as he saved and acquired it, and, as it appears in the Fosdick-Nevins accounts, merely stepped up the rate when he became very wealthy. Yet, that there was more to it than a mere continuation of charitable giving, is shown when these writers quote Gates.
Mr. Rockefeller, a prudent man, apparently showed some doubt at first about proposals of large-scale largesse, if such it was. Says Fosdick:
"Mr. Gates, who could never be anything but candid and forthright, used to thunder at the elder Rockefeller, 'Your fortune is rolling up, rolling up like an avalanche! You must keep up with it! You must distribute it faster than it grows! If you do not, it will crush you and your children and your children's children. '" 44 These remarks are taken from Gates's autobiography and one wonders, if Rockefeller was such a freehanded routine giver, why Gates had to "thunder" at him to drive home the message.
What Rockefeller really thought even Gates, who described him as "a very reserved man" who revealed "little or nothing of his own innermost thoughts," did not profess to know. 45 He may have had no thoughts to keep in reserve--a plain man.
A Domesticated Machiavelli
To me it seems a disservice to the Machiavelli of Standard Oil, whom even an apologist like Nevins shows continually embroiled with business and political opponents one after the other down through the years, to attempt to domesticate him in terms of churchly estimates of genteel benevolence. As the history of Standard Oil by any author, pro or con, clearly shows, Rockefeller was of a deeply conspiratorial, scheming nature, always planning years ahead with a clarity of vision that went far beyond anything any of his associates had to offer. It seems to me far more in keeping
with what we know of the man's character, as revealed by his business career, that he embarked on his large-scale philanthropies with at least some self-serving personal ends in view.
Until Gates took over, Rockefeller had been giving money away more or less helter- skelter, mainly to Baptist missionary societies. One gets the impression that some of this giving was merely to get rid of importunate suppliants, who, as Gates said, "beset" him. 46 When Gates joined Rockefeller, he very gradually converted the magnate to the idea of "scientific giving. " 47 This "scientific giving" slowly took the form of the great foundations.
Rockefeller very early saw that he was getting some mileage from his Baptist patronage. As early as 1889 when a small Baptist publication criticized the Standard Oil Company, all of whose leading figures were Baptists, the company was stoutly defended by the Examiner, official organ of the Baptist Church. 48 Had Rockefeller and his Standard Oil colleagues all been Jews or Catholics one trembles to imagine what the anti-Rockefeller movement would have been like! It could not have escaped Rockefeller's notice that whenever his money had been bestowed he had staunch friends.
His gradual conversion by Gates, it seems to me, shows Rockefeller in a better light in terms of intelligent motivation than many of his apologists indicate. These latter show him only as a compulsive, mechanical giver from the very beginning. Actually, he was a thoroughly responsible man within the light of his own interests and his understanding of them. As the center of raging and constantly intensifying public controversy, which made him in his time "the most hated man in the world," Rockefeller might well have suspected that he was leaving a bitter inheritance to his children and grandchildren. Again, the torrent of public criticism against him, in part at least calumny, could not help but have some effect upon his wife and children however much be discounted it personally as attributable to envy. He prized his son especially, as many remarks showed, and was always deeply pained at any criticism of him. When both father and son were being publicly criticized he said: "They have no right to attack Mr. John. All my life I have been the object of assault. But they have no ground for striking at him! " 49 Possibly Mr. Rockefeller now saw some valid ground for attacks on himself.
His family was, indeed, Rockefeller's Achilles Heel and it is not at all difficult to see that he wanted to make a better public impression than the one currently dominant for the family's sake if not his own. Rockefeller, therefore, as I see him, put his mind coldly to the problem and saw that what Gates and others recommended might at least divide the forces against him, perhaps turn the tide. His first tentative ventures in large-scale philanthropy suggested that this view was valid. Rockefeller did not plunge into philanthropy. He was never a plunger, always made his moves in business, politics and philanthropy gradually and after careful thought.
Gradualism in Philanthropolity
That his large-scale entry into public philanthropy was very gradual and, after being undertaken, was spread out over a long period of time is shown by Nevins, who lists his donations for every year beginning with $2. 77 for 1855. Rockefeller kept a record of his donations, which prior to 1880, says Nevins, was incomplete. But in no year through 1877 was as much as $10,000 recorded as donations and not until 1884 was more than $100,000 donated. In 1887 the figure jumped to $284,116. 52 and in 1890 to $303,542. 78.
Up to the time when Gates joined him in 1891 his gifts had mainly been to the Baptists. In the 1890's his donations exceeded $1 million each in only five years. In 1892 his Ohio trust was dissolved by court order. Even though he had been
comparatively generous, all this up to 1900 was no more than chicken feed; the flood from the secret recesses of Standard Oil was still to come. In 1900 he put up more than $2 million and again in 1901. But in 1902, when the General Education Board and Rockefeller Institute were launched, he contributed $5,407,856. 78. Falling somewhat short of this amount for the next two years, in 1905, when public outcry against him was stupendous, he put up $13,602,820. 78. Although he was never to miss a year until death in these benefactions, the really big years were as follows:
1907
1909
1913
1914
1917
1919
1920
1928
$ 39,170,480. 52
71,453,231. 15
45,499,367. 63
67,627,095. 87
15,770,624. 48
138,624,574. 61
31,780,348. 24
19,964,455. 38
Not only did such munificence top anything else of record (and until Rockefeller and Carnegie came along, public donations were meager indeed) but the Rockefeller benefactions went nearly wholly into projects of, invariably high quality. To fault Rockefeller on the quality of his projects, one must fault the highly rated University of Chicago, Rockefeller University, the work of the Foundation in combating hookworm, yellow fever, malaria, typhus, influenza, tuberculosis, rabies, yaws, schistosomiasis and various other diseases, and the worldwide contributions to medical education, the financing of projects in experimental biology and other natural sciences, international relations and scores of other fields.
That kudos accrued to Rockefeller, particularly from the press and executive types in charge of projects in education, science and medicine, in place of the earlier brickbats, is not to be denied; but the seeking of praise for meritorious performance, if such was the case, is not in itself a fault. That Rockefeller preferred praise to adverse criticism is evident from the fact that Standard Oil early busily engaged itself in buying and surreptitiously financing newspapers. 50 The influencing of public opinion in his favor was a problem that Rockefeller long wrestled with before he found the right combination.
Prior to 1913 at least, the problem of taxes could not have influenced Rockefeller in his philanthropies because business and wealth were subject then only to piddling local taxes. Nor can it be held that the creation of the Rockefeller Foundation was a direct reflex to the advent of federal taxes in 1913 because the Foundation had long been planned, at least since 1905. The community of Big Business, it is true, was opposed to the new
taxes and Rockefeller's chief attorney, Joseph H. Choate, had been the lawyer who in 1893 convinced the Supreme Court that income taxes were unconstitutional; it was therefore necessary to amend the Constitution to enact income taxes. However, even though the advent of federal taxes did not influence the idea of the Foundation, it was gradually noticed by others that there were distinct tax advantages in making philanthropic allocations. This fact is now part of standard tax doctrine, set down in many tax treatises. Gifts to philanthropic funds pay no taxes, the income on such funds pay no taxes, and there is no inheritance tax on such funds. Furthermore, stocks placed in such endowments carry corporate voting power--a nice point. It should be recalled here that it is power really, rather than money or property, that we are concerned with.
Considerations such as these may not have occurred to Rockefeller during tax agitation prior to 1913 but it is hard to see that they could have escaped the notice of his lawyers. At any rate, the size of his philanthropic allocations increased markedly
beginning with the new tax laws. Whatever he did not allot to philanthropy was now going to incur income and estate taxes; and such taxes, he must have foreseen, would tend to increase rather than diminish.
As to the relation of taxes to philanthropolic capers the Wall Street Journal of August 2, 1967, points out that philanthropies would be sharply reduced if compensating tax reductions were reduced or repealed-an assertion made on the basis of a study by the Brookings Institution in collaboration with T. Willard Hunter, executive vice president of the Independent Colleges of Southern California. In this study there were interviewed 30 of 47 living philanthropists who in 1965 made 69 capital gifts of $1 million or more each for an aggregate of more than $93 million. The donors reported that $40 million, or 43 per cent of all, would not have been given if there was no tax reduction allowed; they also reported that had deductions been limited to the original cost of securities rather than to an inflated price, as has been proposed, the donations or allocations would have been reduced by 46 per cent. The donors themselves rated tax savings as fifth on a list of twelve considerations controlling philanthropolic maneuvers.
Actually, it can be shown that in many cases a donor can obtain for himself more indirect in-pocket income by being a generous philanthropist than by holding tightly to direct investments. Among many possible illustrations are the cases of big chemical proprietors who have donated entire schools and laboratories of chemistry to big universities, at huge but tax-deductible costs. What the chemical proprietors have now derived from the schools in the way of new discoveries and trained research chemists has given them a constant return of many hundred per cent on the original "donation. "
Peer-group esteem is gained on the finpolic circuit by such contributions that strengthen the entire finpol network. Rockefeller, finpolically speaking, was a very good neighbor, of vast benefit to all finpols.
On the basis of his own experience with legislators at the state and national level Rockefeller could not have felt reassured about what they might do with his money. He no doubt felt that he could make a more constructive disposition of it than they. With this view, if it was his, I concur. Even today one can have no rational confidence in the allocation of funds by any Congress the American people in their present low state of cultural development are likely to elect.
There were, at any rate, many advantages, perhaps foreseen and unforeseen, in the course he gradually adopted, not the least of which was wider public acceptance for himself and his family (for which he seems to me to deserve great credit), particularly at the hands of the educated and the middle classes. , The high quality of most of the Rockefeller projects particularly commended the man, and still commends him, to the cultivated, and lends strong color to the view of him as a Robin Hood who took, not from the rich for the poor but from grasping business rivals, politicians and an oafish squandering public and, now under severe public criticism, turned a substantial and possibly major portion of the loot over to institutions closely identified with high civilization--a triumph of the sardonic over the indignantly sentimental, a twisting of the knife in the philistines.
Rockefeller, thus, is a paradox. The biggest, most assiduous, most successful, sufficiently unscrupulous and most condemned acquisitor converted himself into the most munificent high-level giver. Rockefeller, late in life and possibly suiting the word to his Lord Bountiful actions, himself enunciated the elvish principle that "A man should make all he can and give all he can. " 51 If this was intended to mean (and it does not necessarily) that a man should try to make a great deal of money and give nearly all of it away, the program seems absurd to the point of the comical.
The Finpolitan Model
Although this chapter may appear, thus far, to be about the Rockefellers, it really is not. As I remarked at the beginning, the highly civilized Rockefellers: are featured here, perhaps sacrilegiously, purely for illustrative purposes. For what has become the "Rockefeller style" is in essence the finpolitan style, which copies the Rockefeller style in a general way. Many others do or pretend to do about as the Rockefellers do, perhaps not with as much earnest conviction.
"If the rich are capitalism's aristocracy," as William Manchester observes, "the Rockefellers: are its royalty. " 52 One is constrained to agree. They not only show the way in finpolitania; they invented it and appear to be deeply convinced of the constructiveness of their role, not an unusual human trait.
Various aspects of the life of the wealthy have been depicted by assorted writers. Perhaps the most popular, representing the role most of the hoi polloi see for themselves as rich people, has been the wealthy as irresponsible playboys, spendthrifts and more or less graceful idlers. This view is well conveyed in the writings of Cleveland Amory and others of the same genre. The next most compelling aspect has been the wealthy as ruthless grabbers, as shown by Gustavus Myers and Matthew Josephson. Some attempt, of less wide interest but in my view more significant, has been made to show the wealthy as contemporary social power wielders, as I and C. Wright Mills have done. On the American scene Thorstein Veblen first delved in depth into the role of the wealthy as socially irresponsible power wielders and exorbitant consumers. Individual critical biographies, as by Harvey O'Connor and John T. Flynn, have touched on all these aspects.
But the modes of being of the more mature among the established wealthy have by no means been fully explored. These modes turn out to be distant emulations, not always convincing, of the Rockefeller style. Although academic sociologists anxiously inquire into the most minute, interstitial phases of contemporary society, it is instructive to notice that there is no systematic sociology of the wealthy. The academicians seem to sense through built-in radar that this is taboo terrain and allow unanointed non-award- winning journalists, publicists, free-lancers and miscellaneous literate and offbeat ideologists to dominate the field which, it is true, promises little in the way of academic promotion. A notable exception among the certified sociologists is the suave E. Digby Baltzell, author of The Philadelphia Gentlemen and The Protestant Establishment: Aristocracy and Caste in America, the latter a penetrating study.
"The real truth is that very few of the social scientists look very deeply into the subject [of fortunes] for fear of being thought politically radical," says Professor Floyd Hunter in The Big Rich and the Little Rich (Doubleday & Co. , N. Y. , 1965, pp. 173-74). "There has been so much moralizing about the division of power and wealth in world society that an earnest consideration of what actually takes place in modem American economic affairs, politically, is left largely to sterile theoretical conjecture. There is no serious empirical study of socio-economic logistics of the distribution of wealth. There is no forthright, open discussion of what the phenomena of personal wealth really does for the community--or doesn't do. "
It could be shown, indeed, that there is room for at least 200 interesting books, as yet unwritten, in the field of the large American wealth-holders. As it is, the subject is largely taboo, in accord with imposed canons of respectability. Who would be so foolish or reckless as to court the stigma of disrepute by inquiring into the doings of the wealthy?
As C. Wright Mills discovered, not much material has been systematically gathered on this general subject of the sociology of wealth and one must, perforce, dig into whatever random outcroppings: are left available; data are systematically hidden. Nor
do there appear to be contemporary Boswells like the late Clarence W. Barron of the Wall Street Journal to make mordant secret notes on the inner doings of the contemporary tycoons. Perhaps some enterprise like that is going forward; if so, it has not yet come to light.
Although contemporary wealth is associated with the term "capitalism," in the finpolitan model capitalism becomes something more like super-capitalism. The term "monopoly capitalism" is in any event self-contradictory because capitalism does not allow of monopoly; it is competitive and its companies can fail. The super-capitalist companies, potential claimants to public subsidies, are permanently beyond failure, occupants of a politically protected haven. In search of a better term under the tyranny of old meanings, it would perhaps be better to speak of financial syndicalism, for the big finpolitan groups are in fact syndicates of concentrated yet widely deployed private holders with governments at their beck and call.
And as to concentration of holdings, we have yet apparently seen nothing like the destiny toward which the world is heading. In Multinational Corporate Planning, edited by George A. Steiner and Warren M. Cannon (Macmillan, N. Y. , 1966), it is pointed out that the big corporations are now multinational. "In the light of present trends and future prospects," say these percipient writers, "it does not seem at all impossible that in the next twenty years, six or seven hundred large multinational companies will be doing most of the world's business. This will indeed be pan-imperialist super-concentration.
The finpolitan corporation, or cluster of corporations, is a multinational corporation. Multinationality is a hallmark of finpolity.
Style Setters of Wealth
Rockefeller set at least two of the three major widely copied styles of operation for the American wealthy, and the finpolitan style just outlined is the one that is currently dominant, with variations.
The first Rockefeller exercise in style setting was the use of the trust as an instrument of corporate integration and monopolization. In 1872 when the Standard Oil Company of Ohio, the original company, secretly provided funds to acquire companies in other states, it placed the acquired stocks in the custody of one of its directors as a trustee. (Under law as it then stood it was illegal for any company to own other companies in another state. ) But Rockefeller, like other rising tycoons, was not deterred by a detail like legality. Furthermore, the law on trusts at the time was suitably vague. By 1879 the system was devised of having three officials of Standard of Ohio act as trustees of the acquired stock. They were not, the company contended, legally trustees for Standard of Ohio but, if for anybody, for the thirty-seven underlying stockholders of Standard of Ohio. These stockholders could roundly deny, as they did even on the witness stand, that Standard of Ohio owned these companies. It was all these acquired companies, scattered in many states, that secretly composed what came to be called the Standard Oil Trust.
As far as the public knew, these companies were all competitors of Standard.
As word seeped into business and legal circles about this handy new arrangement, which long preceded the New Jersey holding-company law of 1889, other industries organized into trusts until there were soon a Sugar Trust, Whiskey Trust, Tobacco Trust, Rubber Trust, Shoe Trust, Butcher Trust, Furniture Trust, Coal Trust, Cotton- Seed Trust, Gunpowder Trust and many others. These were all actually secret cartels to regulate the market and hold up prices in the interests of the owners. Standard Oil was the first of the giant trusts.
How readily the unpublicized device could be used to baffle people is shown by an affidavit filed by Rockefeller in a Cleveland law suit in 1880, that read: "It is not
true . . . that the Standard Oil Company, directly or indirectly, through its officers and agents owns or controls the works of. . . . " Here followed the names in a long list of companies, the stock of which was secretly held by trustees employed by the Standard Oil Company of Ohio. 53
"Legally, this statement might be defended," says Nevins, a vacuous remark because
legally any action whatever is entitled to a defense. "The three trustees held ownership
and Rockefeller could say they acted not for the Standard but its stockholders. Actually,
to call the statement disingenuous would be putting the matter mildly; it was
equivocation. Such evasive tarradiddles were then too common in American business. " 54
What is pointedly false about this assertion is that the "trustees held ownership. " Trustees are not owners but agents. While it may be said that they were agents for the Standard stockholders, a closely knit group, they were in fact agents and employees of Standard of Ohio, whose stockholders held an interest in the acquisitions in proportion to their share of ownership of Standard of Ohio. Rockefeller's affidavit was perjury and a fraud on the court. 55
At the time, Rockefeller owned 8,984 out of 35,000 outstanding shares of Standard Oil, Henry M. Flagler 3,000, Stephen V. Harkness 2,925, Charles Pratt 2,700, Oliver H. Payne 2,637, J. A. Bostwick 1,872, William Rockefeller 1,600, J. J. Vandergrift 500, John D. Archbold 350, J. N. Camden 200, C. M. Pratt 200 and Ambrose McGregor 118. The Cleveland group, comprising Rockefeller's Baptist cronies, held 19,146 shares, a majority. 56
Each of the key Standard Oil units was duly found to be a law violator. First the Standard Oil Company of Ohio was held by the Supreme Court of Ohio in 1892 to be in violation of the law in its trust arrangement, was forbidden to continue it and ordered to pay the costs of the litigation. The assets were thereupon by an exchange of stock acquired by the Standard Oil Company (New Jersey), operating under the wide-open New Jersey holding company act of 1889, and to the Standard Oil Company of New York; these had approximately the same directors. Finally, in 1911, the U. S. Supreme Court found that the New Jersey company violated the Sherman Act and, tapping it lightly on the wrist, ordered it dissolved into its constituent corporate parts and the stock of each company distributed pro rata to each of its stockholders. Instead of owning one- quarter of one central company Rockefeller now owned one-quarter each of nearly two score companies!
Standard Oil in the foregoing was clearly guilty of noncapitalist behavior as, indeed, many of the fortune-builders have been. Critics of capitalism commonly lump together the behavior of strictly performing capitalists with that of operators outside the rules, thus making capitalism take the blame for much that is outside capitalism. This is not to say that capitalism, for its austerely stylized procedure, may not be the legitimate object of distasteful criticism; but capitalism surely should not be blamed for noncapitalist behavior. If a man robs a bank and is not caught, thus coming into the possession of a large sum of money, he has not according to the dicta of any school of economics acquired his money in a capitalist way.
Capitalism is an economist's ideal abstraction, concerned with aggregate results and average procedures. Many of the big fortunes, however, were built precisely because they departed in important respects from average procedures, precisely because their builders were anything but capitalists. Within capitalism, under the rules, one can lose; the fortune-builders never had any intention of submitting to disadvantageous rules that might land them in the bankruptcy courts. They had lawyers and legislators to assist them in avoiding the rough while benefiting from the smooth.
One learns little about the capitalism of the economists by studying the history of the big fortunes. John D. Rockefeller indeed became a capitalist, but not by practicing capitalism--at least not exclusively. Those who lost out to him, however, were often garden-variety capitalists.
A style Rockefeller neither set nor practiced, which was copied from an English innovator, was that of issuing "watered" stock in mushrooming corporate combinations. J. P. Morgan, William Rockefeller and almost the whole of the upper financial community went in for this exhilarating practice, through which patriotic investors were mulcted of billions and promoters either sold out or retained full control at no cost. This was not capitalism either. The Rockefeller companies were always closely held until the dissolution order of 1911, and Rockefeller never gypped fellow investors, In his acquisition of companies Rockefeller always tried to induce the sellers to take Standard Oil stock rather than cash, which most of them cannily refused to do and thus unwittingly threw away the chance of becoming incalculably wealthy. Sore losers, many of these later joined the accusing chorus against him.
But the successful style of how the well-tempered super-millionaire and his family should conduct themselves was definitely evolved by the hardpressed Rockefeller and Gates. This style required the creation of foundation philanthropies and the involvement of members of the family in publicly approved cultural, scientific and socially supportive projects. Although widely imitated, as were the Rockefeller trust and the English wateredstock ideas, it is a style subject to great variations.
The foundation idea, as we have already seen, has come to be a widely utilized scheme of tax evasion while maintaining tax-exempt corporate control.
Capitalism as a Scapegoat
The idea that capitalism is to blame for everything irrational, and that failure to face up to basic problems derives only from pro-capitalist bias, comes largely from socialists, who, in their super-heated zeal, present a vastly overdrawn indictment of capitalism. Even if we agree that capitalism--particularly unregulated, automatic capitalism of the classic variety that allows no modifications in terms of human needs-- is subject to rejection, it is not true that all social problems stem from the economic system. But according to many socialist (particularly Marxist) critiques, capitalism is to blame for all that is detestable or frightening about the contemporary world.
Actually no system, including socialism, will automatically produce good results. The contradictory is an unexamined notion that stems through the Physiocrats of the eighteenth century from the idea of a mechanical physical universe as given in Newtonian physics. Nature is automatic; whatever is automatic is natural; whatever is natural is good (itself a questionable notion). Therefore, a good economic system will be an automatic one, operating according to natural laws. Any viable socio-economic system whatever, as a matter of historical fact, needs constant modification from day to day at many points. Such being the case, any system is humanly troublesome, requiring constant revision and tinkering. Every system is bound to be far from perfect.
Without defending capitalism either in automatic or rationally modified form, one must nevertheless notice that capitalism contains within its theory no propositions directly or by implication stating support for racism, prostitution, ill treatment of criminal offenders, overpopulation, neglect of the mentally retarded, support of crime and the like. To this the socialist will reply: But capitalism, seeking only maximum profits, fosters callousness by seeing salvation only in profits; and, by directly and indirectly pressuring people through its profit-making machinery, induces much social havocalcoholism, emotional disturbance, delinquency and the like. Only infidelity
between the sexes appears to have been left out of the indictment, although Marx included even this. 57
Ills of Long Standing
Yet this long list of ills for which capitalism is blamed existed long before capitalism was ever heard of, although the ills were not as finely limned as now by modern statistical methods. The persistence of unsolved problems is cited gleefully by socialists; but the solutions of many problems, as of food supply, are not cited on the credit side for capitalism. I don't myself believe that capitalism is responsible for the improvement in food supply or the conquest of disease; credit here should properly go to modern scientific technology. But neither should capitalism be unwarrantably blamed for the persistence of old problems.
Where the blame mainly lies for failure to apply rational procedures to the solution of a legion of problems is shown, in fact, valuably and dazzlingly, by the reluctance of intelligent capitalist foundations to step into any except conventionally approved areas, even though retired foundation officials cite the need for intrusion into many neglected fields. It would not, with respect to most of the problems lying about, hurt capitalism as such to see these problems solved; indeed, capitalism might be benefited by having much sand removed from the social gears.
That the public itself offered no encouragement in basic problem-solving is shown primarily in the fact that ameliorative measures, with respect to many problems, were never adopted by Congress. Stone-faced, unsympathetic Demos barred the gate there.
The foundations, it is clear, must consider not only capitalism but the behavior of a certainly hostile public. This public opposes almost anything civilized.
Capitalism, although it thrust itself up into the world, did not create that world or its ideas. It modified that world; in some instances for good, in others for ill. The worst count against capitalists (not capitalism) is that in their insatiable drive for raw materials and markets they have fostered some of the most destructive wars and revolutions in history and seem likely to foster more. Here, as I see it, is a heavy count in an indictment, hardly requiring the critic to bring in topics like prostitution to bolster his case. 58 Beyond this capitalists. simply neglect social problems, often in deference to public opinion.
But the very fact that capitalists (and socialists) are able to enlist a large populace on their side in a warmaking capacity, merely by waving the flag, shows there is more to it all than capitalism or socialism. There is, in fact, an irrational populace, ready to be mobilized for destruction by any bugleblowing fuehrer. It is this irrational populace, as I see it, that impedes capitalists themselves, gives them pause, in advancing to the solution of many basic problems (leaving to one side the thorny question of war).
Barbarians in the Mass
The situation would be more readily understandable at a glance if the population were attired, in harmony with its basic emotional and intellectual organization, in suitable symbolic garb. Then more than 50 per cent of the people, perhaps up to 75 per cent, would be still dressed today in animal skins and sandals and would wear their hair long and unkempt. Businessmen and their assistants would be dressed, as now, in standard sack business suits. Professionals--lawyers, physicians, educators and savants--would be dressed, medieval-style, in long black robes; each might wear a distinctive hat. Many clerics, as suitable to shamans, would be outfitted in feathers, bones and bangles. Perhaps many people, politicians especially, would be garbed eclectically--part skins, part business suit, perhaps adorned with a feather or bone here and there. Some,
representing a hard core, would no doubt be dressed in no more than loin cloths. Most of this populace would carry spears.
Generally, however, the majority of this symbolically garbed populace would be dressed in skins and sandals. These are the ones most responsive to religious and political dervishes--among the religious mercurially responsive to the hard-nosed Catholic hierarchy, Billy Graham and lesser Protestant luminaries and among the politicals to the likes of George Wallace, Lester Maddox, Theodore Bilbo, Strom Thurmond, Everett Dirksen and Huey Long (to say nothing of good old Lyndon B. Johnson and Barry Goldwater).
Here in skins, for all to see, would be the crowd that responds joyfully to all calls of a holy war against whatever is rational. Here is the crowd that not only well-tempered capitalists fear. This is the presumably democratic mass, toward whom philosophic democrats look with increasing dubiety for salvation. The doctrine of democracy no doubt made sense as a political device when it was a question of appealing against the despotic authority of unprogressive kings. Unfortunately, once the kings were overthrown, many self-hypnotized democrats began to take their doctrine about the essential right-mindedness of the populace seriously. Teach the people to read and write, they said, and they will automatically--that word again--turn to the best in literature and culture and soon lift themselves into the radiance of full humanity, with malice toward none.
This did not happen, as any demographic survey will show; most of these elements refuse to be budged from their irrational ruts, long hallowed by medicine men. It would require hundreds of thousands of psychiatrists and assistants to reorient them.
Karl Marx was a little more precise than the democrats when he found an unheeding constituency for socialist revolution in the working class, specifically factory workers. These persons, brought together under harsh conditions from field and farm, Marx saw as the battering ram of glorious socialist revolution, overthrowing the overreaching, exploiting capitalists. Yet the workers in no capitalist society behaved according to this vision, any more than people in general responded to the democratic vision. The most militant workers, indeed, banded themselves together in over-reaching trade unions, separating themselves from the bulk of workers. Neo-Marxists such as Baran-Sweezy now admit they cannot get revolutionary assistance from the production workers, who are rapidly being reduced in number by automation. Even if they were not being so reduced, however, they would on the basis of past performance show no support for socialism. In no instance has any considerable segment of the working class of any capitalist country supported socialist aspirations. There is little idealism on the working- class level.
The metaphorically skin-clad majority has no more than a confused conception of either democracy or socialism and has no interest in applying itself to get an improved conception. Prayer, imprecation and incantation remain its chief short-cut instrumentalities for dealing with reality.
It is here that opportunity beckons to the dervishes, religious and political. It is here that they find they are in business, in a position to mediate, at a price, between mass irrationality, which has its own claims, and rationality.
Transition to Capitalism
Capitalism in rising to the economic surface came into a world of many surviving historical currents. Focusing our attention on Europe, it will be noticed that most of the population was literally skin-clad and wholly illiterate as the Christian church thrust itself up in the fifth century, A. D. , from the ruins of classic civilization in the
Mediterranean. Whatever of civilization came into northern Europe came via the Church. Yet the feudal system, associated in time with the Church, was not born of the Church. It was simply a local secular system of boss and followers that came into being, first in Italy, with the decay of Roman imperial institutions. Feudalism, as the dominant economic-political system, is uncritically held in retrospect responsible for whatever one cares to focus attention on in this period, just as capitalism is held responsible by socialists for whatever happens today.
In the course of time the rise of cities and inter-regional trade gave birth to a growing merchant class, embryonic capitalists or bourgeoisie (city dwellers). These people differed from churchmen, lords and village vassals; they were businessmen and businesswomen. With the slow accumulation of wealth, this merchant class increasingly held the whip hand, and it finally asserted it most strongly in the successful French Revolution.
But although economic institutions were now increasingly looked upon as capitalistic rather than feudal, wages being paid for labor rather than service and protection, all the old cultural ways persisted and still flourish.
Marx, in The Communist Manifesto, recognized the capitalists as a new class, superior historically and functionally to peasants, vassals, lords, clergy and the like, but doomed to fall before the holy onslaught of the factory proletariat. Marx, obviously, wishfully accelerated the pace of history, and wrongly anticipated a turn that never took place. Marx's lumpish proletariat, actually, was heading nowhere beyond right where it stood. As matters now appear, it is heading toward liquidation, first split, then part pushed lower into a dismal subproletariat via automation and part pushed upward into the lower middle classes or beyond, perhaps into middle-classness. What made the capitalists superior to predecessors, although not wholly acceptable to Marx, was their greater rationality. But, as Marx saw it (correctly I believe), it was a rationality largely misplaced, wholly in the narrow service of self, to the dangerous neglect of society as a whole. Only the proletariat, oppressed under wage slavery, could in the Marxian view feel the necessity for equitable social arrangements all around. Such arrangements, as Marx thought (perhaps rightly), could be supplied only by socialism. The proletariat has obviously failed Marx and his followers just as the masses have failed the democrats. They represent lost hopes.
As any casual glance around the United States will show, the country is full of mentalities more appropriate to the old Teutonic forests, the Roman arenas and the medieval countryside than to a society of capitalist institutions. One can discard socialism completely. For verification of this view one hardly needs stray as far away as Nashoba County, Mississippi; Selma, Alabama; Cicero, Illinois; or even Bronx County, New York. One need only read speeches in The Congressional Record, where the free- ranging infantile Freudian id reveals itself in full baroque regalia.
The Finpolitan World Preserve
Any hut, any palace, the Kremlin itself is open to the finpolitans, who range the world in breadth and depth. These cannot, manifestly, be ordinary people. They put grand dukes comparatively into the shade.
"What we really have," said one of the Rockefellers to Morris, "is our name. That is our big asset. It opens doors and, as our money is dispersed, it is of far greater value than anything else as long as it remains a good name. Seeing that it does must be our first consideration. There is an old saying: 'Shirt sleeves to shirt sleeves in three generations. ' Well, we have to avoid a third-generation anticlimax. We have to put our time and our money to work building something new. " 59
Aptly put. The Rockefellers, as any intelligent person might have suspected, do not feel they have been called upon to preside over the dissolution of the world's largest fortune. They are, like all the finpols, at work preserving and building something new. They have long-term projects. They intend to stay even as their public relations men, imaginatively anticipating socialist intentions, suggest they are disappearing.
As Laurance put it on another occasion, they are concerned "to see to it that the well doesn't run dry. " Two of the fourth generation who have been earmarked to occupy themselves for this reason with family business affairs are Nelson's son, Rodman, and David Rockefeller, Jr. 60 "There are so many Rockefeller organizations extant that it is hard for outsiders to keep them straight. " 61
That their multi-faceted position is at times as confusing to them as it may be to outsiders is shown when Morris says elsewhere that "The Rockefellers always have their guard up against anyone who suggests that their name and wealth give them some special privilege. " 62 Here, on different pages, one can have it either way: Their name alone has great weight in the world (page 36), their name confers upon them no special privilege (page 28). What is the case is that in ordinary behavior they are like anyone else, "democratic," standing in a long line to get a wedding license, eating in a college cafeteria to save pocket money or living as a common laborer in the oilfields on the first job. But when large objectives loom, the name alone opens difficult doors. 63 They appear to be Cinderellas, of lowly station one minute, up in the clouds the next.
The name, however sinister it may sound to leftists, is a primary asset of all the finpols --Du Ponts, Mellons, Fords, Pews, Hartfords, Rosenwalds et al.
Just what the cash value of the name is in each case would be difficult to determine with any preciseness. What, one may ask, would it be worth to a syndicate if converted into the designation of The Rockefeller National Bank and Trust Company, the Rockefeller Insurance Company or Rockefeller Enterprises, Inc. ? Merely for the use of the name in some such enterprise the promoters would unquestionably be willing to assign a sizeable block of stock, the exact dimensions subject to negotiation. With the understanding that the Rockefellers would be associated with the management, bringing into the background their vast connections and holdings, the block of stock would be considerable apart from any contribution of capital by the Rockefellers. They need put up no money at all.
Beyond this, the name is of shadowy intangible value in a project-oriented world.
As to opening doors, indeed, the Rockefeller name is magic. (The names of all the American big-wealthy open doors all over the world. ) Whenever the Rockefellers--or any of the other higher finpols --travel abroad, they are instantly enmeshed in the nets of upper-level governmental protocol. As key figures in American society, they instantly galvanize governmental attention.
Thus, says Kahn in the New Yorker, when David Rockefeller at forty-eight contemplated taking a trip to Russia, he paused to reflect; for he "had heard hints that if he should get to the USSR he would probably be invited to confer with Premier Khrushchev, and there was no telling how explosively the Communist leader might react to a confrontation, on his home ground, with a notorious international banker. " 64
Rockefeller decided to go, and in Leningrad "was told Khrushchev would like to see him the following afternoon at the Kremlin, in Moscow. " There he went with his daughter Neva and for two and a half hours participated in what he later described as "the most intensive conversation I've ever had with anyone. " 65 What the upshot of it all was has not been indicated, but within two years the United States had widened its trade relations with the Soviet bloc. Was there any connection?
As Kahn pointed out in the New Yorker, the Rockefellers cannot traipse into any country anywhere without ascertaining the political climate in advance. At the wrong time their appearance could cause riots. Thus in Ghana, to which the Rockefeller Brothers Fund had contributed a million-dollar program of developing small local industries, in 1963 they came under heavy ungrateful attack by the Ghanaian Times which said truculently: "Whilst the Governor of New York concentrates on changing the political climate in Washington to open up the trade in nuclear arms, the president of Chase Manhattan is mostly concerned with commodities like copper and bananas. " The paper went on to charge that David was engaged in blocking the Organization of American States and the Alliance for Progress, trying to overthrow (apparently without success) the governments of Bolivia and Peru, providing Portugal and the Union of South Africa with arms, dominating the U. S. Congress with stooges and a kept press, and using the Central Intelligence Agency and the State Department as tools to supervise and protect his bank's ramified foreign investments. 66
While all this sounded a bit far-fetched to the conventionally skeptical, the reserved Christian Science Monitor had earlier described Rockefeller as "a businessman who is listened to all over the world. " 67 Apparently they were at least aware of this fact in Ghana.
