What is
happening
as the average citizen looks on in disbelief is that an outworn, patched politico-economic system is cracking, while no serious steps are taken to ascertain the causes and remedies.
Lundberg - The-Rich-and-the-Super-Rich-by-Ferdinand-Lundberg
Public office in the United States--and elsewhere--is full of them: quacks.
Politics, contrary to roaring democratic theory, is not something that can be readily practiced with proper success by anybody. Politics, like any other discipline, requires qualified specialists.
Here a note seems in order. There is theoretical as well as practical politics. The multi- vocal structure of theoretical politics is laid out in the works of Plato, Aristotle, Polybius, Aquinas, Hobbes, Locke, Montesquieu, Kant and many similar savants. A formal exercise in practical politics, based on actual political maneuver, is Machiavelli's The Prince. Biographies abound with additional material. Formally qualified people in career politics ought to be thoroughly acquainted with this whole literature and to be broadly grounded as well in logic, semantics, linguistics, epistemology, scientific methods, the social studies and the humanities. Simply by laying down such formal requirements I have disqualified practically every working politician on the American scene. But I have no hesitancy in saying that those who, do not have some approach to such preparation are at the very least quacks. Quackery is of the very essence of being a politician on the American scene, a leader of the booboisie into fetid blind alleys.
This quackery shows itself most blatantly in the wild abuse of language by routine career politicians. Language in routine American politics is not used to inform, or to analyze problems but to manipulate emotions and to obfuscate. Purely whimsical bandying of language, as in the case of Senator Everett Dirksen, can alone make one a national character in the eyes of the press. But the more sober use of language by politicians not given to the devious Dirksen's fanciful flights of bombinating rhetoric is equally misleading so that the nation literally, under President Johnson, fell into the position of the polity of George Orwell's 1984 where peace means war, defense means aggression, the Great Society means the Shabby Society, prosperity means recession and a "war on poverty" means befuddlement of the poor and the perpetration of financial skulduggery.
Few politicians use language warrantably. In a well-known dictum, they use it to conceal thought. The gobbledegook of endless government reports and political speeches furnishes proof without end. The Congressional Record is full of the stuff. Madison Avenue and the politicians are as one in this respect. Such use of language stamps the user an arrant quack, on a par with a healer who professes to cure disease with electric belts and charms.
The United States Senate no doubt contains the greatest concentration of professional political intelligence in the nation. Yet, leaving aside terms such as liberal, moderate and conservative and applying the loosest criteria possible, it is difficult to exempt more than a bare third of it from the rubric of quack. The House of Representatives is far more meagerly equipped, and in the state legislatures it is often a case of 100 per cent quackery among their various member lawyers, real estate and insurance brokers, loan
sharks, undertakers and small-time dealers. The executive offices are for the most part filled by similar quacks, fugitives from anything resembling culture. Ghost writers fill the breach.
Still, the average officeholder is of a capability far superior to the average of the peasantlike populace he serves. The politician is not, as often supposed, of an inferior order comparatively. There is not the slightest doubt that Senators Stennis and Eastland, for example, are people superior in ability and drive to the population average in Mississippi. And the same holds true elsewhere. Again, officeholders, whatever one may say of them, meet the criteria of the broad electorate. They have what it takes to gain acceptance by the boobs. The "pork barrel," for which the politicos are castigated, is what gains them votes out in the spiritually barren home districts.
As Professor Lane remarks:
Most of the current criticism of popular rule does not emanate from the enemies of democracy, but rather from its saddened friends. It deals in part with the capacities of the people to make wise decisions in their own interest, the strength of their desire to participate in government, and the nature of the benefits they derive therefrom. On the basis of clinical research and public opinion polls, students of democratic government have concluded that the electorate is wanting both in vital information and in rational pursuit of enduring self-interest; the tasks have exceeded the capacities of the public to perform them. Thus, Walter Lippmann, continuing a line of argument he began so brilliantly in Public Opinion some thirty-five years ago, states that a central cause for the breakdown of democratic governments in modern times has been that "the assemblies and the mass electorates have acquired the monopoly of effective powers" and do not know how to use them. . . .
Erich Fromm, although he favors widespread social participation, has cast doubt upon men's desire for the burdens which such participation implies. Freedom implies choice, participation implies responsibility, and under stress the majority of the people may find choice painful and responsibility too weighty a load. Apathy, withdrawal, conformity, "pseudo-willing," result. . . .
It is said that the masses have not gained through their new political power because the sources of their trouble are not political but economic. Democracy is a mask for plutocracy, and the plutocrats remain entrenched in power. Thus the long struggle to enfranchise the masses of men has, so far, come to no avail; the franchise is useful only as it offers leverage to attack the real citadel of power.
[Commenting here, Lane says:] This idea is curiously at the confluence of three streams of thought. The first, liberal democracy, is illustrated by [Carl L. ] Becker who says that "economic forces . . . brought about an increasing concentration of wealth and power in the hands of the fortunate few, and thereby nullified, for the majority of people, many of those essential liberties which provide both the theoretical justification and the necessary conditions for the practical success of democratic institutions. " The second element in this confluence is contributed by Mosca and Pareto, both of whom identify democracy with plutocracy. And the third element, of coarse, is the Marxian interpretation of bourgeois democracy as a complex of institutions manipulated by the capitalist class. 16
That the universal franchise and the wide open consumer market are on the basis of their experience with it, now fully acceptable to the dominate orders has been seen in the massive and costly efforts of the Johnson Administration to force them upon the Vietnamese at the point of firepower. In the Johnsonian view even people to whom the idea of voting is bewildering, contra-cultural and perhaps repugnant, are to be forced to vote. This, the American Way, it is held, will lead to their liberation. Yet neither voting
nor the open consumer market has led to the liberation of the masses in the United States; rather have they delivered them into the pincers of ignorance, poverty or near poverty and emotional deprivation. The masses are, literally, stupefied by the "opportunities" open to them.
Voting, unless there is ground-up, knowledge-based participation, cannot lead to popular deliverance. Only if the assumption were true that each participant is of fairly equal capability could the process work. But people simply are not of equal capability and motivation, contrary to the dream of the early democrats. They must lose out in the electoral game for a multitude of reasons, some of which have been cited. The shrewd manipulators--the pubpols, corp-pols, finpols, admen and scholpols--must come out on top every time just as the heavyweight champion must easily defeat every amateur who steps into the ring with him.
Democrats, liberals and radicals, have wasted millions of words and hours of their time trying to arouse the people in their own interests either to electoral or to revolutionary assault, and always without avail. Marx predicted, erroneously, that factory operatives, the workers, would take the lead in an assault on the owners; such an assault has never taken place in any industrial country. Marxist parties have taken power only under conditions of war-induced general social collapse, as in agricultural Russia and China, with only the most meager of Marxist proletarian support. Non-Marxist peasants in both cases were the revolutionary instrument. (Marx, inter alia, detested the peasantry, which he saw as reactionary. )
Nor have popular causes been more successful in the electoral arena, where splinter parties have long failed to gain even a foot-hold. For the mass does not vote for its objective interests; it always votes for some fantasy.
From Lincoln onward no more than two out of nineteen presidents are argued by anybody to have been oriented toward the popular interest and even those two are rejected by some experts as true paladins of the people. The people, very obviously, are not capable of wielding the electoral sword, thus accounting for the success of institutionalized overreaching and patronage. The rich, in plain fact, are rich because they cannot help it. They are playing marbles for big stakes against blind men, cannot help winning with little effort.
To the Marxists all these presidents were tools of the capitalist Establishment; but not to the people, to whom the Marxists look vainly as the instrument of social reconstruction. As to this, say the Marxists, the people are fooled by the mass media; but it is of the essence of politics, as of military affairs, not to be fooled. To be fooled in politics is to be conquered. In losing out so consistently by means of open elections the people, clearly, are being hoist by their own petard. They have not the least inkling what the elections are all about.
It would be difficult for any set of men, however qualified, to run so complexly ponderous a country as the United States really well. As it is, the United States is very, very poorly run, year after year, by the quacks, overreachers and patrons, as the accumulation and multiplication of social problems attest. At the same time, propagandic apologists continually bellow how well the country is run. Nothing, though, ever seems to get any better; everything gets demonstrably worse and worse, converging toward some awesome future crisis, some catastrophic reckoning. Apre`s nous, le deluge.
So really bad is the situation that American sociologists have gradually developed a forbidding branch of their discipline labeled, simply, Social Problems, the equivalent of pathology in medicine. To this melancholy subject scores of textbooks are devoted, dealing with crime, its causes and its steady increase; rigging of courts and elections;
poverty; racial and religious conflict; curtailments of civil rights; prison brutality; ill health and inadequate and profit-perverted medical care; mal-education, non-education and illiteracy; the prevalence of divorce and desertion; the excesses of pressure groups; faulty mass transportation; child mistreatment and abandonment; personal anomy; inadequate housing; social disorganization; widespread psychic disorder; slums, overcrowding and overpopulation in relation to available facilities; advertising and propaganda; unattended mental illness; commercialized alcoholism; gambling; drug addiction; traffic tangles; prostitution; pathological deviancies; war, etc. , etc. 17 All of this bespeaks a very sick society, a poor political system.
What is most remarkable about all these problems is that despite the reports and recommendations of one public commission after the other none ever appears to be solved or even made more tractable. Each appears to be growing greater and new ones, such as water and air pollution and air traffic, are constantly being added. As the sociologists report, many causes are discernible but a general cause seldom mentioned is simple political neglect. Forthright confrontation of the problems is prevented by the various forms of political blockage at which the pubpols are most adept. Again, as much of the brains of the country are in the service of overreaching in the market place and political arena in pursuit of the dollar there are few competent people left in circulation to deal adequately with the problems. Money for social problem-solving, of course, is kept to a minimum as the public coffers are opened wide for the purchase of multi- redundant military hardware and space rockets to the moon: Over-kill.
Lavish in the money rewards given to corp-pols and pubpols, as we have seen, the going system becomes niggardly in the pay scales adopted for supportive personnel such as teachers, social workers, scientists, counselors, aides, nurses, engineers and the like. As a way of obtaining money and forthright action with respect to these problems the proper method would appear to place them all under the jurisdiction of the Defense Department, where they seem to belong. For what is the value of keeping the nation muscular on the outer frontiers while it is eroding at the core? In view of the rising tide of unsolved, gingerly tended social problems, what is it, precisely, that is being defended?
The Final Reckoning
Where will it all end? What will be the historical outcome of the concentration of wealth and power in the United States?
Although all answers to such questions must be speculative we have recently been provided with a brilliantly suggestive study along these precise lines by Robert L. Heilbroner in The Limits of American Capitalism. 18
Heilbroner, in harmony with details laid out earlier in this text, is well aware of corporate dominance in American affairs. He notes that, out of some eleven million separate economic enterprises down to single newsstands, about a million companies do approximately 85 per cent of the business, and a half million corporations do 98 per cent of all corporate business and 75 per cent of all business. In turn, 1/10th of 1 per cent of the biggest industrial corporations, the 500 at the top, do about 33 per cent of all business in the corporate field. Furthermore, the top 50 industrial companies have sales as great as the next 450 while the profits of the top 10 are equal to those of almost half of the remaining 490. The 500th on the annual Fortune list has total sales of only $97 million, which is less than the profits of any of 26 of the 50 largest. 19
By 1975, according to Willard Mueller, chief economist of the Federal Trade Commission, 200 corporations will own two-thirds of all American manufacturing assets compared with the same proportion owned by 500 corporations in 1962. The
reason for this further concentration, it was indicated, is the renewed, Administration- sanctioned merger movement. 20
We are confronted, in short, by corporate giantism. The backbone of political support comes from this corporate world.
A single company, AT&T, holds nearly 5 per cent of all nonbank corporate assets.
If only the top 150 companies with assets or sales at $1 billion or more were suddenly to stop doing business the entire economy would collapse. These companies compromise 50 industrials, 40 banks, 20 insurance companies, 10 merchandisers, 10 transportation lines and 20 public utilities. 21
While the 100 top industrial corporations owned 25 per cent of all business assets in 1929, they owned 31 per cent in 1960. In 1963 they accounted for 53. 8 per cent of total national income compared with 55. 8 per cent in 1955.
Contrary to misleading propaganda about widespread ownership, in the 100 largest corporations the directors alone owned or controlled at least 10 per cent of the voting stock.
"Among the 150 super-corporations, there are perhaps as many as 1,500 or 2,000 operational top managers, but as few as 200 to 300 families own blocks of stock that ultimately control these corporations. " 22
Heilbroner, unlike Karl Marx, does not see the corporate system terminating in revolution although, sensitively aware of the vagaries of history, he does not absolutely rule out transitional phases of violence. Rather does he see the system very gradually and slowly changing just as the feudal manorial system was transformed gradually to the system of the open cash market, the citadel of bourgeois capitalism.
This being the probability, "Under the limits imposed by the present reach of business thought, the prospect is still for a society of narrow ambitions and small achievements, a society in which we belatedly repair old social ills and ungenerously attend to new
ones . " 23
Although the present system is one, like feudalism, of lopsided privilege, Heilbroner in a keen insight points out that the legal basis of privilege now is screened as such even from the beneficiaries, who are not aware that they are privileged. This basis consists of the laws that permit private benefit to be derived from huge-scale production and allows free and untrammeled use of the national and international market place for private enrichment.
Therefore, "privilege under capitalism is much less 'visible,' especially to the favored groups, than privilege under other systems. " 24 Under feudalism, the privileges were harshly evident and explicitly known to all participants.
Instead of resisting encroachments upon privilege forthrightly, those who are privileged unconsciously resort to ideology, befuddling all but the well informed. Thus, attempts to deal with the periodic vast malfunctionings and slumps of individualistic capitalism by means of national planning (in place of egocentric planning on the part of huge corporations) are vociferously cried down as encroachments upon an abstraction called Freedom.
Because the system is now too deeply rooted and generally accepted it could not be violently or arbitrarily uprooted without enveloping the nation in prolonged chaos, as Heilbroner fully recognizes; and no responsible thinker any longer seriously proposes that it be uprooted.
How then, will it change, as all things involved in history do change?
The long-run threat to monopolistic capitalism, as Heilbroner sees it, is similar to the original threat to feudalism in that it is subtle and seemingly harmless. The manorial economy of feudalism was undermined by what was originally a cloud no larger than a man's hand: the cash market that established itself right in the shadow of the manorial walls. This cash market brought into being a new social type: the businessman. In his first guise the businessman was looked upon by the lords of the manor much as we today look upon a pushcart peddler--as a person of no economic, social or political consequence, at worst a mere nuisance. From this tiny seed, however, were to come the future original Rockefeller, Carnegie, Vanderbilt, Du Pont, Woolworth, Mellon, Ford et al. These men in their various ways were all pushcart peddlers grown to giant size under favoring conditions and laws.
The intangible, subversive threat to capitalism, as the cash market was to feudalism, Heilbroner sees as science and technology, without which modern capitalism cannot function but with which it cannot make its peace because it is constantly thrown into deep inner turmoil and confusion by them. For one thing, the composition of the labor force is constantly radically altered by technological change, first by the introduction of new machinery that converted agricultural workers into urbanized factory workers and more recently by automation which displaces factory workers into rising service industries, dumps them on the unemployment rolls or wastes them in huge and militarily unnecessary peacetime standing armies. Technology has even displaced the traditional foot soldier and cavalryman for all but relatively small-scale anti- insurrectionary operations, brush-fire wars, and replaced them by higher functional types like aviators, astronauts, rocketmen and a horde of advanced technicians. Warfare has been transformed into a vast engineering operation by which entire populations are exterminated. There is no longer, actually, much fighting in war. It has become mass slaughter. The mass destruction is the inverse of mass production.
The alteration in the labor force shows itself most spectacularly in the emergence of new elites, rising to share influence and authority with the business elite of finpols and corp-pols.
These new elites in Heilbroner's view consist of the new military policy-makers (milpols), the professional expert from the academic world in the form particularly of specialists in the social and natural sciences, the highly trained new type of government administrator and possibly the administrators that have come into view with the emergence of the big labor unions. These labor administrators are of a type quite different from the old-line ward-boss variety of labor leader.
While few if any of these men are hostile to the existing system of monopoly capitalism, Heilbroner believes (in which belief I concur) that in the long run, over a span of 50 to 150 years, the differences in background, method and objectives of these elites from those of the business elite will generate frictions between them, as frictions were generated between the feudal lords and the rising business classes. The business elite has a single-minded objective: profit. Although the new elites are not opposed, now, to corporate profit aims, in part because they are accustomed to these aims as assumptions of the established system, what will be their reaction when, as and if the plans of the profiteers seriously conflict with their plans?
It should be pointed out that the members of the new--and indispensable--elites share a characteristic in common not shared with the business elite.
They are all problem-oriented and are, in fine, problem-solvers over a widely inclusive range of problems. Name almost any problem and one may be sure that at least one of them nurtures it as a pet project.
If it is argued that the corp-pols, and finpols, too, are problem-solvers (which may indeed be the case), it is evident at once that they are concerned with a single overriding problem: profits. Such a single overriding aim is not to be found among any of the new elites who, although not men of the broad reach of the major philosophers or of diverse talents like Renaissance men, are nevertheless basically and incontrovertibly reflective intellectuals of some sort. They are all thoroughly infected by pervasive rationality, which in the long run seems of ill omen to the freewheeling corporation.
There is already low-grade although tolerable friction in some quarters between some of these new types and members of the business elite. Unless big business radically alters some of its characteristic orientations it seems that one may expect increasing friction, with dominance no longer guaranteed to the business elite. The inherent social irrationality of the system of production chiefly for private profit, utilizing for the short run the increasingly powerful tools of science and technology, practically guarantees the long-run end of such dominance.
Marx saw socialism as something to be soon ushered into developed capitalist societies by revolution carried out by the new class of factory workers, led by history- conscious intellectuals. Heilbroner sees something very akin to socialism, or production-for-use in a rationally aspiring society, ushered in by a new class consisting of these intellectual elites. The revolutionary potential, in sum, resides in the intellectual middle classes, not in the passive, dependent proletariat, who have no "historical task. "
I see one possible flaw in Heilbroner's reasoning, which to my somewhat skeptical eyes is tinged with historical optimism. History, contrary to the devotees of the idea of progress, rarely produces solutions in accord with ideal aims, a lamentable fact. Historical solutions are, somehow, always flawed.
The fly I discern in this particular mixture is the presence of the new military elite who, although men of a different order from the old-time military spit-and-polish drillmasters, are nevertheless military men. And the military in any instance that comes to mind have never allied themselves with a New Order as opposed to an Old Order. Military people are usually essentially conservative if not reactionary and are usually socially naive. Professor Morris Janowitz of the University of Chicago, who directed two large-scale studies, the first of 465 American generals appointed between 1898 and 1940 and the second of 761 Army, Navy and Air Force general and flag officers appointed between 1910 and 1950, found that as of 1954 only 5 per cent of the generals identified themselves as "liberals" but 68 per cent declared they were "a little on the conservative side or plain "conservatives. " "Such a finding win startle no one familiar with the published political views of retired generals," as one writer observed. 25 It may be that such characteristics do not inhere in the new computer-automation jet-propulsion type of military person, who may indeed be above and beyond the authoritarian master- servant, mentality of the traditional military personality. If so, my doubts are beside the point.
But if the new military elite is anything like the old one it would, in any great crisis, tend to side with the Old Order and defend the status quo, if necessary, by force.
In the words of the standard police bulletin known to all radio listeners, "These men are armed--they may be dangerous. "
Historically, the established military have always fought and thrown their influence against all rising new social orders, whether capitalist or socialist, and have always been strong supporters of reaction. Where they have retained influence after any revolution, peaceful or violent, they have been Bonapartists. Like all conservatives, they take a pessimistic view of the human enterprise, are partial to the heavy hand. Devotees of
applied force, habituated to organizing their entire experience around its use, they are rarely men of peaceful persuasion and evolutionary transition.
As I freely admit, I may be wrong in thus looking at the new military elite, which by reason of the experience-broadening complex technology it now commands may be of an entirely new historical stripe. If it is, and no available evidence supports such a view, then Heilbroner's vision may be more penetrating than my own tentative doubts allow me to concede.
In any event, it cannot be denied that science and technology are already injecting much uncertainty into the demonic corporate thrust for profits. Allowed unrestrained and continued free play, that thrust cannot but disrupt the entire social system to an extent greater than yet ever seen.
Yet, as Heilbroner sees it, it is not the immediate needs of science and capitalism that are in conflict so much as a basic divergence of intent--of science to impose the human will on society and of capitalism to allow society to function by happenstance as if it were not subject to the will. Whereas science is socially active capitalism is socially passive and "In the end capitalism is weighed in the scale of science and found wanting, not alone as a system but as a philosophy. " 26
Savior of the World
American politicos, swelling with fatuous misbegotten pride, have increasingly taken to presenting the United States and the American people as the major guarantors of what remains of civilization in a world torn by shabby power struggles on every band. Whatever else the foregoing pages may portend, they should suggest that anyone looking to the United States for the solution to world problems is depending on a huge but weak reed. With a thoroughly antiquated, distorted political system--formally 178 years old but with many later dubious additions such as the universal franchise--the United States is unable even to begin solving its own many very serious domestic problems. How, then, can it take on those of Asia, Africa, Europe and South America?
Not unless it underwent a considerable amount of basic politico-economic revision would the United States be in a position to play more than a palliative international role. And as its inept, intrusion into Vietnam under the guidance of a strictly backwoods politician has shown very clearly, it may be capable of playing vastly destructive roles. What reasonable ground there is for believing that American presence in laggardly developed regions and political power-vacuums is more likely to achieve human gains than English, French, Japanese, Dutch or Russian presence has certainly not been shown.
If they prove nothing else the widespread American riots, increasing and spreading from the 1940's and 1950's into the 1960's, prove that the American ruling class, given the political instrumentalities of its rule through low-grade stooges, is unable to rule at home. The general cry goes out for law and order, yet there is steadily less and less law and order, more and more crime and insurrection as Lyndon B. Johnson calls for national days of prayer. For prayer rather than science or reason is the tool of the political medicine men.
What is happening as the average citizen looks on in disbelief is that an outworn, patched politico-economic system is cracking, while no serious steps are taken to ascertain the causes and remedies. The causes of American insufficiency, at home and abroad, are political, not economic, or at least political before they are economic. Better put, they are cultural. Serious problems cannot be solved on the basis of a consensus of value-disoriented dolts.
APPENDIX A
LARGEST NET TAXABLE INCOMES SINCE 1940
(AFTER DEDUCTIONS)
1961"
$1 million plus
398
$500,000 to $1 million
985
$300,000-$500,000
$200,000-$500,000
6,104
$150,000-$300,000
$150,
5,457
$100,000-$150,000
16,786
$ 50,000-$100,000
110,476
$ 25,000-$ 50,000
496,591
626,797
1940* 1945** 1950# 1955## 1960'
$1 Million-Plus Income
1940* $ 87,746,000
1945** $105,184,000
1950# $374,670,000
1955## $452,713,000
1960' $455,501,000
1961" $589,220,000
$500,000 to $1 Million Income
$ 74,170,000
$146,657,000
$361,529,000
$335,849,000
$383,080,000
$520,171,000
49 112 252
1,066
219
623 528 1,290
2,871 6,716
267 306
628 735
4,022 4,848
71 258
3,946 4,413
1,866 5,530 11,564 12,260 14,221
10,285 33,495 62,689 77,604 101,272
36,176 120,220 220,107 190,707 441,401
49,806 162,973 303,208 289,434 557,196
In 1963 in New York State alone there were seventy-three incomes of $1 million or more ( New York Times, February 20,1965; 27: 1).
AGGREGATE NET TAXABLE INCOME OF LARGEST INCOMES
* Statistics of Income for 1940, Part I; United States Treasury Department, Bureau of Internal Revenue, p. 10.
** Statistics of Income for 1945, Part I; United States Treasury Department, Bureau of Internal Revenue, pp. 21-22.
# Statistics of Income for 1950, Part I (Preliminary); United States Treasury Department, Bureau of Internal Revenue, pp. 14-27.
## Statistics of Income: 1955; United States Treasury Department, Bureau of Internal Revenue, pp. 18- 24.
' Statistics of Income. 1960 (Preliminary); United States Treasury Department, Bureau of Internal Revenue, pp. 15-21.
" Statistics of Income: 1961 (Preliminary); United States Treasury Department, Bureau of Internal Revenue, p. 14.
The main sources of aggregate incomes exceeding $1 million are as follows (all references from the Treasury Department's Statistics of Income for each year):
Partnership
Salaries
1940 $ 1,499,000
1945 $ 1,752,000
1950 $ 7,693,000
1955 $ 7,836,000
1960 $12,766,000
1961 $18,607,000
1962 $13,789,000
From Trust
Funds
1940 $27,624,000
1945 18,439,000 $ 1,940,000
1950 $94,943,000 $ 4,846,000 $ 1,031,000 $31,245,000
(profit)
1955 $ 5,005,000* $ 4,095,000 $ 3,208,000 $248,099,000*
1960 $ 3,966,000 $ 2,351,000 $ 7,345,000 $285,335,000
1961 $ 3,163,000 $ 2,371,000 $ 7,915,000 $434,272,000
1962 $ 3,431,000 $ 3,837,000 $ 3,289,000 $367,303,000
Main Sources of Incomes $500,000 to $1 Million Partnership
Salaries
1940 $ 3,110,000
1945 $ 7,545,000
Dividends
$ 45,187,000
$ 58,476,000
Interest
$ 1,994,000
(included in
Profit
$ 921,000
$ 23,720,000
Dividends Interest
Profit
$ 1,301,000
$ 8,013,000
$ 7,923,000
$11,613,000
$ 6,588,000
$10,503,000
$ 3,607,000
$ 60,561,000
$ 53,336,000
$179,203,000
$286,158,000
$274,848,000
$259,574,000
$276,946,000
Rents and
$ 1,290,000
(included in
dividends)
$ 6,148,000
$ 6,146,000
$ 9,648,000
$ 8,754,000
$ 9,490,000
Royalties
$ 115,000
Business Loss
$ 1,711,000
Capital Gain
$12,113,000
dividends)
1950 $27,827,000 $158,822,000 $ 7,035,000 $ 3,848,000
1955 $31,409,000 $187,071,000 $ 6,483,000 $ 15,393,000
1960 $31,674,000 $193,660,000 $10,620,000 $ 7,052,000
1961 $38,868,000 $216,469,000 $13,035,000 $ 21,662,000
1962 $37,378,000 $201,352,000 $13,898,000 $ 6,094,000
From Trust
Funds
1940 $20,291,000
1945 $20,983,000
1950 $64,426,000
1955 $ 4,765,000*
1960 $ 4,807,000
1961 $ 6,325,000
1962 $ 4,829,000
Rents and
Royalties
$ 1,286,000
$ 1,004,000
$ 7,546,000
$ 6,439,000
$ 5,314,000
$ 4,554,000
$ 9,460,000
Business
Profit
$ 1,958,000
$ 4,631,000
$ 3,848,000
$ 6,964,000(L)
$ 6,735,000(L)
$ 8,211,000(L)
$ 8,791,000(L)
Capital Gain
$ 12,550,000
$ 53,451,000
$132,287,000
$171,594,000*
$239,392,000
$357,066,000
$274,079,000
(Omitted: Sales of noncapital property, receipts from annuities and pensions and miscellaneous small items. )
* Between 1950 and 1955 the Treasury Department changed its method of reporting trust-fund income. While it previously reported the capital gains of trust funds as part of trust-fund income, it decided to report such capital gains in the total of capital gains, thus diminishing the reported income of large trust funds. In order to show the full participation of trust funds, the capital gains accruing to them should be specifically shown. It will be noticed that in 1950 trust-fund income was three times all capital gain income but by 1955, with the removal of trust-fund capital gains to the capital gain column, trust-fund income was only about 2 per cent of capital gain income. Most of the sudden rise in capital gain totals came about because most of these capital gains came from trust funds.
APPENDIX B
(minimum)
$ 3,462,000
$37,068,000
(profit)
COMPANIES WITH LARGEST TOTAL ASSETS
TNEC Fortune*
(1937) 1964
List source)
Dominant
Family
Groups--Fortune (by TNEC and SEC
*Fortune publishes these rankings in July and August of each year. These company names were taken from the 1965 issues reporting on 1964 performances under the categories of industrial, public utility, transportation and merchandising companies.
** Railroads and other types of public utility companies are generally dominated by small coalitions of several families, directly or through banks or other financial instrumentalities. This holds as well for many industrial companies.
1. American Telephone
& Telegraph
2. Standard Oil
Rockefeller
(New Jersey)
3. Pennsylvania RR
4. U. S. Steel
5. Southern Pacific RR
Haldane et al.
6. N. Y. Central RR
Gates, Lapham
al.
7. Consolidated Edison
Rockefeller
(N. Y.
8. General Motors
9. Commonwealth &
Southern (utility
properties distributed)
10. Baltimore & Ohio RR
Rockefeller
11. Santa Fe RR (ATSF)
et al.
12. Cities Service
Smithers
Fairchild
13. Union Pacific RR
Rockefeller
14. Socony Vacuum Oil
al.
15. Standard Gas & Gardner et al.
1. American Telephone
& Telegraph
2. Standard Oil (New
Jersey)
3. General Motors
4. Ford Motor
5. U. S. Steel
6. Texaco
7. Socony Mobil Oil
8. Gulf Oil
9. Sears, Roebuck
10. Standard Oil of
**
Du Pont
Ford
Phipps,
Hill,
et
Mellon
Rosenwald
Electric (utility prop-
erties distributed)
16. North American Co.
et al.
(utility properties
distributed)
17. Northern Pacific Ry
18. American Power &
James,
16. Pacific Gas & Electric
17. Pennsylvania RR
18. Southern Pacific
al.
Light (utility properties
California
11. General Telephone & Paine, La Croix
Electronics
12. International Business
Machines
13. Standard Oil
(Indiana)
14. Consolidated Edison
(N. Y. )
15. General Electric
Watson-
Hewitt-
Brady et White,
Crocker
Harkness, Dodge et
distributed)
19. United Gas Improve- 19. E. I. du Pont de Nemours
ment (utility properties
Du Pont
Chrysler-
Hutton-
Mellon-
Symonds,
Webster
Kirby-
et al.
(Royal
Kenan-
et al.
distributed)
20. Great Northern Ry
Bache
Hanna-Mellon
21. Standard Oil (Indiana)
Grace
22. Bethlehem Steel
Stone &
23. Ford Motor
Murchison
24. American & Foreign
Dutch) Power
25. E. I. du Pont de
Nemours
26. Electric Power & Light
Acheson
(utility properties
distributed)
27. Commonwealth Edison
(Chicago)
28. Chesapeake & Ohio Ry
29. Illinois Central RR
Phillips
30. Pacific Gas & Electric
Edison
31. Texaco
32. Standard Oil of
Goelet
California
Vanderbilt
33. Columbia Gas &
Electric
34. Anaconda
35. Southern Ry
36. Gulf Oil
McCormick-Deering
37. Niagara Hudson Power
38. Public Service
Electricity & Gas
39. National Power & Light
(Pennsylvania RR)
(utility properties
distributed)
40. Int'l Hydro-Electric
20. Chrysler
21. Bethlehem Steel
22. Tennessee Gas
Transmission
23. New York Central
RR
24. Shell Oil
25. Western Electric
26. Union Carbide
et al.
System (utility prop-
Mellon
Mellon
tion
erties distributed)
41. International Telephone 41. Cities Service
Rockefeller Founda-
& Telegraph
et al.
27. Santa Fe RR
28. Commonwealth Edison (Chicago)
29. Phillips Petroleum
30. Southern Calif
31. Southern Co.
32. Union Pacific RR
33. American Electric
Power
34. Public Service
Electric & Gas
35. International Tele
phone & Telegraph
36. International
Harvester
37. Sinclair Oil
38. Aluminum Co. of
America
39. Norfolk & Western Ry
40. Westinghouse Electric
Du Pont-
Crocker
Harriman-
42. United Light & Power
(utility properties
distributed)
43. Norfolk & Western Ry
44. Louisville & Nashville
Pitcairn et al.
RR
45. American Gas & Electric 45. El Paso Natural Gas
(utility properties
distributed)
46. International Harvester 46. Goodyear Tire & Rubber
Roebuck)
47. General Electric
Procter-Gamble
48. Empire Gas & Fuel Co.
Rochester,
(utility properties
Philipp,
distributed) Carter et al.
49. Middle West Corpora-
Gimbel,
47. Procter & Gamble
48. Eastman Kodak
49. Anaconda
(Sears,
U. of
M. I. T. ,
Clark,
Connor,
Mather Dow
Easton,
Meyer,
Nichols
Phipps-
Brown &
Payson
tion (utility properties
Guggenheim
distributed)
50. Philadelphia Electric
51. Reading
52. Shell Union Oil
53. Pacific Telephone &
Rosengarten
Telegraph
54. Republic Steel
Schoelkopf,
Machold,
Lewis et al.
55. New England Power
Association
56. American Water Works
Firestone-Rieck
& Electric (utility
50. Republic Steel
51. Dow Chemical
52. Consumers Power
53. Philadelphia Electric
54. Niagara Mohawk
Power
55. General Public
Utilities
Woodworth
properties distributed)
57. Southern California
Weber,
Edison
et al.
58. Kennecott Copper
59. Consolidated Oil
Mills
60. Koppers
Root
61. Engineers Public
Service (utility
57. Allied Chemical
properties distributed)
62. Atlantic Coast Line 62. Detroit Edison
RR
63. Philadelphia Company 63. Armco Steel et al.
42. Continental Oil
43. Monsanto
44. Columbia Gas &
Electric
56. Firestone Tire &
Rubber
58. Radio Corp. of America
59. International Paper
60. Texas Eastern
Transmission
61. Celanese
(utility properties
distributed)
64. Armour (Illinois)
65. Swift
Reynolds
66. Western Union
Hanna
Telegraph
67. Detroit Edison
68. Union Carbide
Reynolds
69. Sears, Roebuck
70. American Tobacco
?
Politics, contrary to roaring democratic theory, is not something that can be readily practiced with proper success by anybody. Politics, like any other discipline, requires qualified specialists.
Here a note seems in order. There is theoretical as well as practical politics. The multi- vocal structure of theoretical politics is laid out in the works of Plato, Aristotle, Polybius, Aquinas, Hobbes, Locke, Montesquieu, Kant and many similar savants. A formal exercise in practical politics, based on actual political maneuver, is Machiavelli's The Prince. Biographies abound with additional material. Formally qualified people in career politics ought to be thoroughly acquainted with this whole literature and to be broadly grounded as well in logic, semantics, linguistics, epistemology, scientific methods, the social studies and the humanities. Simply by laying down such formal requirements I have disqualified practically every working politician on the American scene. But I have no hesitancy in saying that those who, do not have some approach to such preparation are at the very least quacks. Quackery is of the very essence of being a politician on the American scene, a leader of the booboisie into fetid blind alleys.
This quackery shows itself most blatantly in the wild abuse of language by routine career politicians. Language in routine American politics is not used to inform, or to analyze problems but to manipulate emotions and to obfuscate. Purely whimsical bandying of language, as in the case of Senator Everett Dirksen, can alone make one a national character in the eyes of the press. But the more sober use of language by politicians not given to the devious Dirksen's fanciful flights of bombinating rhetoric is equally misleading so that the nation literally, under President Johnson, fell into the position of the polity of George Orwell's 1984 where peace means war, defense means aggression, the Great Society means the Shabby Society, prosperity means recession and a "war on poverty" means befuddlement of the poor and the perpetration of financial skulduggery.
Few politicians use language warrantably. In a well-known dictum, they use it to conceal thought. The gobbledegook of endless government reports and political speeches furnishes proof without end. The Congressional Record is full of the stuff. Madison Avenue and the politicians are as one in this respect. Such use of language stamps the user an arrant quack, on a par with a healer who professes to cure disease with electric belts and charms.
The United States Senate no doubt contains the greatest concentration of professional political intelligence in the nation. Yet, leaving aside terms such as liberal, moderate and conservative and applying the loosest criteria possible, it is difficult to exempt more than a bare third of it from the rubric of quack. The House of Representatives is far more meagerly equipped, and in the state legislatures it is often a case of 100 per cent quackery among their various member lawyers, real estate and insurance brokers, loan
sharks, undertakers and small-time dealers. The executive offices are for the most part filled by similar quacks, fugitives from anything resembling culture. Ghost writers fill the breach.
Still, the average officeholder is of a capability far superior to the average of the peasantlike populace he serves. The politician is not, as often supposed, of an inferior order comparatively. There is not the slightest doubt that Senators Stennis and Eastland, for example, are people superior in ability and drive to the population average in Mississippi. And the same holds true elsewhere. Again, officeholders, whatever one may say of them, meet the criteria of the broad electorate. They have what it takes to gain acceptance by the boobs. The "pork barrel," for which the politicos are castigated, is what gains them votes out in the spiritually barren home districts.
As Professor Lane remarks:
Most of the current criticism of popular rule does not emanate from the enemies of democracy, but rather from its saddened friends. It deals in part with the capacities of the people to make wise decisions in their own interest, the strength of their desire to participate in government, and the nature of the benefits they derive therefrom. On the basis of clinical research and public opinion polls, students of democratic government have concluded that the electorate is wanting both in vital information and in rational pursuit of enduring self-interest; the tasks have exceeded the capacities of the public to perform them. Thus, Walter Lippmann, continuing a line of argument he began so brilliantly in Public Opinion some thirty-five years ago, states that a central cause for the breakdown of democratic governments in modern times has been that "the assemblies and the mass electorates have acquired the monopoly of effective powers" and do not know how to use them. . . .
Erich Fromm, although he favors widespread social participation, has cast doubt upon men's desire for the burdens which such participation implies. Freedom implies choice, participation implies responsibility, and under stress the majority of the people may find choice painful and responsibility too weighty a load. Apathy, withdrawal, conformity, "pseudo-willing," result. . . .
It is said that the masses have not gained through their new political power because the sources of their trouble are not political but economic. Democracy is a mask for plutocracy, and the plutocrats remain entrenched in power. Thus the long struggle to enfranchise the masses of men has, so far, come to no avail; the franchise is useful only as it offers leverage to attack the real citadel of power.
[Commenting here, Lane says:] This idea is curiously at the confluence of three streams of thought. The first, liberal democracy, is illustrated by [Carl L. ] Becker who says that "economic forces . . . brought about an increasing concentration of wealth and power in the hands of the fortunate few, and thereby nullified, for the majority of people, many of those essential liberties which provide both the theoretical justification and the necessary conditions for the practical success of democratic institutions. " The second element in this confluence is contributed by Mosca and Pareto, both of whom identify democracy with plutocracy. And the third element, of coarse, is the Marxian interpretation of bourgeois democracy as a complex of institutions manipulated by the capitalist class. 16
That the universal franchise and the wide open consumer market are on the basis of their experience with it, now fully acceptable to the dominate orders has been seen in the massive and costly efforts of the Johnson Administration to force them upon the Vietnamese at the point of firepower. In the Johnsonian view even people to whom the idea of voting is bewildering, contra-cultural and perhaps repugnant, are to be forced to vote. This, the American Way, it is held, will lead to their liberation. Yet neither voting
nor the open consumer market has led to the liberation of the masses in the United States; rather have they delivered them into the pincers of ignorance, poverty or near poverty and emotional deprivation. The masses are, literally, stupefied by the "opportunities" open to them.
Voting, unless there is ground-up, knowledge-based participation, cannot lead to popular deliverance. Only if the assumption were true that each participant is of fairly equal capability could the process work. But people simply are not of equal capability and motivation, contrary to the dream of the early democrats. They must lose out in the electoral game for a multitude of reasons, some of which have been cited. The shrewd manipulators--the pubpols, corp-pols, finpols, admen and scholpols--must come out on top every time just as the heavyweight champion must easily defeat every amateur who steps into the ring with him.
Democrats, liberals and radicals, have wasted millions of words and hours of their time trying to arouse the people in their own interests either to electoral or to revolutionary assault, and always without avail. Marx predicted, erroneously, that factory operatives, the workers, would take the lead in an assault on the owners; such an assault has never taken place in any industrial country. Marxist parties have taken power only under conditions of war-induced general social collapse, as in agricultural Russia and China, with only the most meager of Marxist proletarian support. Non-Marxist peasants in both cases were the revolutionary instrument. (Marx, inter alia, detested the peasantry, which he saw as reactionary. )
Nor have popular causes been more successful in the electoral arena, where splinter parties have long failed to gain even a foot-hold. For the mass does not vote for its objective interests; it always votes for some fantasy.
From Lincoln onward no more than two out of nineteen presidents are argued by anybody to have been oriented toward the popular interest and even those two are rejected by some experts as true paladins of the people. The people, very obviously, are not capable of wielding the electoral sword, thus accounting for the success of institutionalized overreaching and patronage. The rich, in plain fact, are rich because they cannot help it. They are playing marbles for big stakes against blind men, cannot help winning with little effort.
To the Marxists all these presidents were tools of the capitalist Establishment; but not to the people, to whom the Marxists look vainly as the instrument of social reconstruction. As to this, say the Marxists, the people are fooled by the mass media; but it is of the essence of politics, as of military affairs, not to be fooled. To be fooled in politics is to be conquered. In losing out so consistently by means of open elections the people, clearly, are being hoist by their own petard. They have not the least inkling what the elections are all about.
It would be difficult for any set of men, however qualified, to run so complexly ponderous a country as the United States really well. As it is, the United States is very, very poorly run, year after year, by the quacks, overreachers and patrons, as the accumulation and multiplication of social problems attest. At the same time, propagandic apologists continually bellow how well the country is run. Nothing, though, ever seems to get any better; everything gets demonstrably worse and worse, converging toward some awesome future crisis, some catastrophic reckoning. Apre`s nous, le deluge.
So really bad is the situation that American sociologists have gradually developed a forbidding branch of their discipline labeled, simply, Social Problems, the equivalent of pathology in medicine. To this melancholy subject scores of textbooks are devoted, dealing with crime, its causes and its steady increase; rigging of courts and elections;
poverty; racial and religious conflict; curtailments of civil rights; prison brutality; ill health and inadequate and profit-perverted medical care; mal-education, non-education and illiteracy; the prevalence of divorce and desertion; the excesses of pressure groups; faulty mass transportation; child mistreatment and abandonment; personal anomy; inadequate housing; social disorganization; widespread psychic disorder; slums, overcrowding and overpopulation in relation to available facilities; advertising and propaganda; unattended mental illness; commercialized alcoholism; gambling; drug addiction; traffic tangles; prostitution; pathological deviancies; war, etc. , etc. 17 All of this bespeaks a very sick society, a poor political system.
What is most remarkable about all these problems is that despite the reports and recommendations of one public commission after the other none ever appears to be solved or even made more tractable. Each appears to be growing greater and new ones, such as water and air pollution and air traffic, are constantly being added. As the sociologists report, many causes are discernible but a general cause seldom mentioned is simple political neglect. Forthright confrontation of the problems is prevented by the various forms of political blockage at which the pubpols are most adept. Again, as much of the brains of the country are in the service of overreaching in the market place and political arena in pursuit of the dollar there are few competent people left in circulation to deal adequately with the problems. Money for social problem-solving, of course, is kept to a minimum as the public coffers are opened wide for the purchase of multi- redundant military hardware and space rockets to the moon: Over-kill.
Lavish in the money rewards given to corp-pols and pubpols, as we have seen, the going system becomes niggardly in the pay scales adopted for supportive personnel such as teachers, social workers, scientists, counselors, aides, nurses, engineers and the like. As a way of obtaining money and forthright action with respect to these problems the proper method would appear to place them all under the jurisdiction of the Defense Department, where they seem to belong. For what is the value of keeping the nation muscular on the outer frontiers while it is eroding at the core? In view of the rising tide of unsolved, gingerly tended social problems, what is it, precisely, that is being defended?
The Final Reckoning
Where will it all end? What will be the historical outcome of the concentration of wealth and power in the United States?
Although all answers to such questions must be speculative we have recently been provided with a brilliantly suggestive study along these precise lines by Robert L. Heilbroner in The Limits of American Capitalism. 18
Heilbroner, in harmony with details laid out earlier in this text, is well aware of corporate dominance in American affairs. He notes that, out of some eleven million separate economic enterprises down to single newsstands, about a million companies do approximately 85 per cent of the business, and a half million corporations do 98 per cent of all corporate business and 75 per cent of all business. In turn, 1/10th of 1 per cent of the biggest industrial corporations, the 500 at the top, do about 33 per cent of all business in the corporate field. Furthermore, the top 50 industrial companies have sales as great as the next 450 while the profits of the top 10 are equal to those of almost half of the remaining 490. The 500th on the annual Fortune list has total sales of only $97 million, which is less than the profits of any of 26 of the 50 largest. 19
By 1975, according to Willard Mueller, chief economist of the Federal Trade Commission, 200 corporations will own two-thirds of all American manufacturing assets compared with the same proportion owned by 500 corporations in 1962. The
reason for this further concentration, it was indicated, is the renewed, Administration- sanctioned merger movement. 20
We are confronted, in short, by corporate giantism. The backbone of political support comes from this corporate world.
A single company, AT&T, holds nearly 5 per cent of all nonbank corporate assets.
If only the top 150 companies with assets or sales at $1 billion or more were suddenly to stop doing business the entire economy would collapse. These companies compromise 50 industrials, 40 banks, 20 insurance companies, 10 merchandisers, 10 transportation lines and 20 public utilities. 21
While the 100 top industrial corporations owned 25 per cent of all business assets in 1929, they owned 31 per cent in 1960. In 1963 they accounted for 53. 8 per cent of total national income compared with 55. 8 per cent in 1955.
Contrary to misleading propaganda about widespread ownership, in the 100 largest corporations the directors alone owned or controlled at least 10 per cent of the voting stock.
"Among the 150 super-corporations, there are perhaps as many as 1,500 or 2,000 operational top managers, but as few as 200 to 300 families own blocks of stock that ultimately control these corporations. " 22
Heilbroner, unlike Karl Marx, does not see the corporate system terminating in revolution although, sensitively aware of the vagaries of history, he does not absolutely rule out transitional phases of violence. Rather does he see the system very gradually and slowly changing just as the feudal manorial system was transformed gradually to the system of the open cash market, the citadel of bourgeois capitalism.
This being the probability, "Under the limits imposed by the present reach of business thought, the prospect is still for a society of narrow ambitions and small achievements, a society in which we belatedly repair old social ills and ungenerously attend to new
ones . " 23
Although the present system is one, like feudalism, of lopsided privilege, Heilbroner in a keen insight points out that the legal basis of privilege now is screened as such even from the beneficiaries, who are not aware that they are privileged. This basis consists of the laws that permit private benefit to be derived from huge-scale production and allows free and untrammeled use of the national and international market place for private enrichment.
Therefore, "privilege under capitalism is much less 'visible,' especially to the favored groups, than privilege under other systems. " 24 Under feudalism, the privileges were harshly evident and explicitly known to all participants.
Instead of resisting encroachments upon privilege forthrightly, those who are privileged unconsciously resort to ideology, befuddling all but the well informed. Thus, attempts to deal with the periodic vast malfunctionings and slumps of individualistic capitalism by means of national planning (in place of egocentric planning on the part of huge corporations) are vociferously cried down as encroachments upon an abstraction called Freedom.
Because the system is now too deeply rooted and generally accepted it could not be violently or arbitrarily uprooted without enveloping the nation in prolonged chaos, as Heilbroner fully recognizes; and no responsible thinker any longer seriously proposes that it be uprooted.
How then, will it change, as all things involved in history do change?
The long-run threat to monopolistic capitalism, as Heilbroner sees it, is similar to the original threat to feudalism in that it is subtle and seemingly harmless. The manorial economy of feudalism was undermined by what was originally a cloud no larger than a man's hand: the cash market that established itself right in the shadow of the manorial walls. This cash market brought into being a new social type: the businessman. In his first guise the businessman was looked upon by the lords of the manor much as we today look upon a pushcart peddler--as a person of no economic, social or political consequence, at worst a mere nuisance. From this tiny seed, however, were to come the future original Rockefeller, Carnegie, Vanderbilt, Du Pont, Woolworth, Mellon, Ford et al. These men in their various ways were all pushcart peddlers grown to giant size under favoring conditions and laws.
The intangible, subversive threat to capitalism, as the cash market was to feudalism, Heilbroner sees as science and technology, without which modern capitalism cannot function but with which it cannot make its peace because it is constantly thrown into deep inner turmoil and confusion by them. For one thing, the composition of the labor force is constantly radically altered by technological change, first by the introduction of new machinery that converted agricultural workers into urbanized factory workers and more recently by automation which displaces factory workers into rising service industries, dumps them on the unemployment rolls or wastes them in huge and militarily unnecessary peacetime standing armies. Technology has even displaced the traditional foot soldier and cavalryman for all but relatively small-scale anti- insurrectionary operations, brush-fire wars, and replaced them by higher functional types like aviators, astronauts, rocketmen and a horde of advanced technicians. Warfare has been transformed into a vast engineering operation by which entire populations are exterminated. There is no longer, actually, much fighting in war. It has become mass slaughter. The mass destruction is the inverse of mass production.
The alteration in the labor force shows itself most spectacularly in the emergence of new elites, rising to share influence and authority with the business elite of finpols and corp-pols.
These new elites in Heilbroner's view consist of the new military policy-makers (milpols), the professional expert from the academic world in the form particularly of specialists in the social and natural sciences, the highly trained new type of government administrator and possibly the administrators that have come into view with the emergence of the big labor unions. These labor administrators are of a type quite different from the old-line ward-boss variety of labor leader.
While few if any of these men are hostile to the existing system of monopoly capitalism, Heilbroner believes (in which belief I concur) that in the long run, over a span of 50 to 150 years, the differences in background, method and objectives of these elites from those of the business elite will generate frictions between them, as frictions were generated between the feudal lords and the rising business classes. The business elite has a single-minded objective: profit. Although the new elites are not opposed, now, to corporate profit aims, in part because they are accustomed to these aims as assumptions of the established system, what will be their reaction when, as and if the plans of the profiteers seriously conflict with their plans?
It should be pointed out that the members of the new--and indispensable--elites share a characteristic in common not shared with the business elite.
They are all problem-oriented and are, in fine, problem-solvers over a widely inclusive range of problems. Name almost any problem and one may be sure that at least one of them nurtures it as a pet project.
If it is argued that the corp-pols, and finpols, too, are problem-solvers (which may indeed be the case), it is evident at once that they are concerned with a single overriding problem: profits. Such a single overriding aim is not to be found among any of the new elites who, although not men of the broad reach of the major philosophers or of diverse talents like Renaissance men, are nevertheless basically and incontrovertibly reflective intellectuals of some sort. They are all thoroughly infected by pervasive rationality, which in the long run seems of ill omen to the freewheeling corporation.
There is already low-grade although tolerable friction in some quarters between some of these new types and members of the business elite. Unless big business radically alters some of its characteristic orientations it seems that one may expect increasing friction, with dominance no longer guaranteed to the business elite. The inherent social irrationality of the system of production chiefly for private profit, utilizing for the short run the increasingly powerful tools of science and technology, practically guarantees the long-run end of such dominance.
Marx saw socialism as something to be soon ushered into developed capitalist societies by revolution carried out by the new class of factory workers, led by history- conscious intellectuals. Heilbroner sees something very akin to socialism, or production-for-use in a rationally aspiring society, ushered in by a new class consisting of these intellectual elites. The revolutionary potential, in sum, resides in the intellectual middle classes, not in the passive, dependent proletariat, who have no "historical task. "
I see one possible flaw in Heilbroner's reasoning, which to my somewhat skeptical eyes is tinged with historical optimism. History, contrary to the devotees of the idea of progress, rarely produces solutions in accord with ideal aims, a lamentable fact. Historical solutions are, somehow, always flawed.
The fly I discern in this particular mixture is the presence of the new military elite who, although men of a different order from the old-time military spit-and-polish drillmasters, are nevertheless military men. And the military in any instance that comes to mind have never allied themselves with a New Order as opposed to an Old Order. Military people are usually essentially conservative if not reactionary and are usually socially naive. Professor Morris Janowitz of the University of Chicago, who directed two large-scale studies, the first of 465 American generals appointed between 1898 and 1940 and the second of 761 Army, Navy and Air Force general and flag officers appointed between 1910 and 1950, found that as of 1954 only 5 per cent of the generals identified themselves as "liberals" but 68 per cent declared they were "a little on the conservative side or plain "conservatives. " "Such a finding win startle no one familiar with the published political views of retired generals," as one writer observed. 25 It may be that such characteristics do not inhere in the new computer-automation jet-propulsion type of military person, who may indeed be above and beyond the authoritarian master- servant, mentality of the traditional military personality. If so, my doubts are beside the point.
But if the new military elite is anything like the old one it would, in any great crisis, tend to side with the Old Order and defend the status quo, if necessary, by force.
In the words of the standard police bulletin known to all radio listeners, "These men are armed--they may be dangerous. "
Historically, the established military have always fought and thrown their influence against all rising new social orders, whether capitalist or socialist, and have always been strong supporters of reaction. Where they have retained influence after any revolution, peaceful or violent, they have been Bonapartists. Like all conservatives, they take a pessimistic view of the human enterprise, are partial to the heavy hand. Devotees of
applied force, habituated to organizing their entire experience around its use, they are rarely men of peaceful persuasion and evolutionary transition.
As I freely admit, I may be wrong in thus looking at the new military elite, which by reason of the experience-broadening complex technology it now commands may be of an entirely new historical stripe. If it is, and no available evidence supports such a view, then Heilbroner's vision may be more penetrating than my own tentative doubts allow me to concede.
In any event, it cannot be denied that science and technology are already injecting much uncertainty into the demonic corporate thrust for profits. Allowed unrestrained and continued free play, that thrust cannot but disrupt the entire social system to an extent greater than yet ever seen.
Yet, as Heilbroner sees it, it is not the immediate needs of science and capitalism that are in conflict so much as a basic divergence of intent--of science to impose the human will on society and of capitalism to allow society to function by happenstance as if it were not subject to the will. Whereas science is socially active capitalism is socially passive and "In the end capitalism is weighed in the scale of science and found wanting, not alone as a system but as a philosophy. " 26
Savior of the World
American politicos, swelling with fatuous misbegotten pride, have increasingly taken to presenting the United States and the American people as the major guarantors of what remains of civilization in a world torn by shabby power struggles on every band. Whatever else the foregoing pages may portend, they should suggest that anyone looking to the United States for the solution to world problems is depending on a huge but weak reed. With a thoroughly antiquated, distorted political system--formally 178 years old but with many later dubious additions such as the universal franchise--the United States is unable even to begin solving its own many very serious domestic problems. How, then, can it take on those of Asia, Africa, Europe and South America?
Not unless it underwent a considerable amount of basic politico-economic revision would the United States be in a position to play more than a palliative international role. And as its inept, intrusion into Vietnam under the guidance of a strictly backwoods politician has shown very clearly, it may be capable of playing vastly destructive roles. What reasonable ground there is for believing that American presence in laggardly developed regions and political power-vacuums is more likely to achieve human gains than English, French, Japanese, Dutch or Russian presence has certainly not been shown.
If they prove nothing else the widespread American riots, increasing and spreading from the 1940's and 1950's into the 1960's, prove that the American ruling class, given the political instrumentalities of its rule through low-grade stooges, is unable to rule at home. The general cry goes out for law and order, yet there is steadily less and less law and order, more and more crime and insurrection as Lyndon B. Johnson calls for national days of prayer. For prayer rather than science or reason is the tool of the political medicine men.
What is happening as the average citizen looks on in disbelief is that an outworn, patched politico-economic system is cracking, while no serious steps are taken to ascertain the causes and remedies. The causes of American insufficiency, at home and abroad, are political, not economic, or at least political before they are economic. Better put, they are cultural. Serious problems cannot be solved on the basis of a consensus of value-disoriented dolts.
APPENDIX A
LARGEST NET TAXABLE INCOMES SINCE 1940
(AFTER DEDUCTIONS)
1961"
$1 million plus
398
$500,000 to $1 million
985
$300,000-$500,000
$200,000-$500,000
6,104
$150,000-$300,000
$150,
5,457
$100,000-$150,000
16,786
$ 50,000-$100,000
110,476
$ 25,000-$ 50,000
496,591
626,797
1940* 1945** 1950# 1955## 1960'
$1 Million-Plus Income
1940* $ 87,746,000
1945** $105,184,000
1950# $374,670,000
1955## $452,713,000
1960' $455,501,000
1961" $589,220,000
$500,000 to $1 Million Income
$ 74,170,000
$146,657,000
$361,529,000
$335,849,000
$383,080,000
$520,171,000
49 112 252
1,066
219
623 528 1,290
2,871 6,716
267 306
628 735
4,022 4,848
71 258
3,946 4,413
1,866 5,530 11,564 12,260 14,221
10,285 33,495 62,689 77,604 101,272
36,176 120,220 220,107 190,707 441,401
49,806 162,973 303,208 289,434 557,196
In 1963 in New York State alone there were seventy-three incomes of $1 million or more ( New York Times, February 20,1965; 27: 1).
AGGREGATE NET TAXABLE INCOME OF LARGEST INCOMES
* Statistics of Income for 1940, Part I; United States Treasury Department, Bureau of Internal Revenue, p. 10.
** Statistics of Income for 1945, Part I; United States Treasury Department, Bureau of Internal Revenue, pp. 21-22.
# Statistics of Income for 1950, Part I (Preliminary); United States Treasury Department, Bureau of Internal Revenue, pp. 14-27.
## Statistics of Income: 1955; United States Treasury Department, Bureau of Internal Revenue, pp. 18- 24.
' Statistics of Income. 1960 (Preliminary); United States Treasury Department, Bureau of Internal Revenue, pp. 15-21.
" Statistics of Income: 1961 (Preliminary); United States Treasury Department, Bureau of Internal Revenue, p. 14.
The main sources of aggregate incomes exceeding $1 million are as follows (all references from the Treasury Department's Statistics of Income for each year):
Partnership
Salaries
1940 $ 1,499,000
1945 $ 1,752,000
1950 $ 7,693,000
1955 $ 7,836,000
1960 $12,766,000
1961 $18,607,000
1962 $13,789,000
From Trust
Funds
1940 $27,624,000
1945 18,439,000 $ 1,940,000
1950 $94,943,000 $ 4,846,000 $ 1,031,000 $31,245,000
(profit)
1955 $ 5,005,000* $ 4,095,000 $ 3,208,000 $248,099,000*
1960 $ 3,966,000 $ 2,351,000 $ 7,345,000 $285,335,000
1961 $ 3,163,000 $ 2,371,000 $ 7,915,000 $434,272,000
1962 $ 3,431,000 $ 3,837,000 $ 3,289,000 $367,303,000
Main Sources of Incomes $500,000 to $1 Million Partnership
Salaries
1940 $ 3,110,000
1945 $ 7,545,000
Dividends
$ 45,187,000
$ 58,476,000
Interest
$ 1,994,000
(included in
Profit
$ 921,000
$ 23,720,000
Dividends Interest
Profit
$ 1,301,000
$ 8,013,000
$ 7,923,000
$11,613,000
$ 6,588,000
$10,503,000
$ 3,607,000
$ 60,561,000
$ 53,336,000
$179,203,000
$286,158,000
$274,848,000
$259,574,000
$276,946,000
Rents and
$ 1,290,000
(included in
dividends)
$ 6,148,000
$ 6,146,000
$ 9,648,000
$ 8,754,000
$ 9,490,000
Royalties
$ 115,000
Business Loss
$ 1,711,000
Capital Gain
$12,113,000
dividends)
1950 $27,827,000 $158,822,000 $ 7,035,000 $ 3,848,000
1955 $31,409,000 $187,071,000 $ 6,483,000 $ 15,393,000
1960 $31,674,000 $193,660,000 $10,620,000 $ 7,052,000
1961 $38,868,000 $216,469,000 $13,035,000 $ 21,662,000
1962 $37,378,000 $201,352,000 $13,898,000 $ 6,094,000
From Trust
Funds
1940 $20,291,000
1945 $20,983,000
1950 $64,426,000
1955 $ 4,765,000*
1960 $ 4,807,000
1961 $ 6,325,000
1962 $ 4,829,000
Rents and
Royalties
$ 1,286,000
$ 1,004,000
$ 7,546,000
$ 6,439,000
$ 5,314,000
$ 4,554,000
$ 9,460,000
Business
Profit
$ 1,958,000
$ 4,631,000
$ 3,848,000
$ 6,964,000(L)
$ 6,735,000(L)
$ 8,211,000(L)
$ 8,791,000(L)
Capital Gain
$ 12,550,000
$ 53,451,000
$132,287,000
$171,594,000*
$239,392,000
$357,066,000
$274,079,000
(Omitted: Sales of noncapital property, receipts from annuities and pensions and miscellaneous small items. )
* Between 1950 and 1955 the Treasury Department changed its method of reporting trust-fund income. While it previously reported the capital gains of trust funds as part of trust-fund income, it decided to report such capital gains in the total of capital gains, thus diminishing the reported income of large trust funds. In order to show the full participation of trust funds, the capital gains accruing to them should be specifically shown. It will be noticed that in 1950 trust-fund income was three times all capital gain income but by 1955, with the removal of trust-fund capital gains to the capital gain column, trust-fund income was only about 2 per cent of capital gain income. Most of the sudden rise in capital gain totals came about because most of these capital gains came from trust funds.
APPENDIX B
(minimum)
$ 3,462,000
$37,068,000
(profit)
COMPANIES WITH LARGEST TOTAL ASSETS
TNEC Fortune*
(1937) 1964
List source)
Dominant
Family
Groups--Fortune (by TNEC and SEC
*Fortune publishes these rankings in July and August of each year. These company names were taken from the 1965 issues reporting on 1964 performances under the categories of industrial, public utility, transportation and merchandising companies.
** Railroads and other types of public utility companies are generally dominated by small coalitions of several families, directly or through banks or other financial instrumentalities. This holds as well for many industrial companies.
1. American Telephone
& Telegraph
2. Standard Oil
Rockefeller
(New Jersey)
3. Pennsylvania RR
4. U. S. Steel
5. Southern Pacific RR
Haldane et al.
6. N. Y. Central RR
Gates, Lapham
al.
7. Consolidated Edison
Rockefeller
(N. Y.
8. General Motors
9. Commonwealth &
Southern (utility
properties distributed)
10. Baltimore & Ohio RR
Rockefeller
11. Santa Fe RR (ATSF)
et al.
12. Cities Service
Smithers
Fairchild
13. Union Pacific RR
Rockefeller
14. Socony Vacuum Oil
al.
15. Standard Gas & Gardner et al.
1. American Telephone
& Telegraph
2. Standard Oil (New
Jersey)
3. General Motors
4. Ford Motor
5. U. S. Steel
6. Texaco
7. Socony Mobil Oil
8. Gulf Oil
9. Sears, Roebuck
10. Standard Oil of
**
Du Pont
Ford
Phipps,
Hill,
et
Mellon
Rosenwald
Electric (utility prop-
erties distributed)
16. North American Co.
et al.
(utility properties
distributed)
17. Northern Pacific Ry
18. American Power &
James,
16. Pacific Gas & Electric
17. Pennsylvania RR
18. Southern Pacific
al.
Light (utility properties
California
11. General Telephone & Paine, La Croix
Electronics
12. International Business
Machines
13. Standard Oil
(Indiana)
14. Consolidated Edison
(N. Y. )
15. General Electric
Watson-
Hewitt-
Brady et White,
Crocker
Harkness, Dodge et
distributed)
19. United Gas Improve- 19. E. I. du Pont de Nemours
ment (utility properties
Du Pont
Chrysler-
Hutton-
Mellon-
Symonds,
Webster
Kirby-
et al.
(Royal
Kenan-
et al.
distributed)
20. Great Northern Ry
Bache
Hanna-Mellon
21. Standard Oil (Indiana)
Grace
22. Bethlehem Steel
Stone &
23. Ford Motor
Murchison
24. American & Foreign
Dutch) Power
25. E. I. du Pont de
Nemours
26. Electric Power & Light
Acheson
(utility properties
distributed)
27. Commonwealth Edison
(Chicago)
28. Chesapeake & Ohio Ry
29. Illinois Central RR
Phillips
30. Pacific Gas & Electric
Edison
31. Texaco
32. Standard Oil of
Goelet
California
Vanderbilt
33. Columbia Gas &
Electric
34. Anaconda
35. Southern Ry
36. Gulf Oil
McCormick-Deering
37. Niagara Hudson Power
38. Public Service
Electricity & Gas
39. National Power & Light
(Pennsylvania RR)
(utility properties
distributed)
40. Int'l Hydro-Electric
20. Chrysler
21. Bethlehem Steel
22. Tennessee Gas
Transmission
23. New York Central
RR
24. Shell Oil
25. Western Electric
26. Union Carbide
et al.
System (utility prop-
Mellon
Mellon
tion
erties distributed)
41. International Telephone 41. Cities Service
Rockefeller Founda-
& Telegraph
et al.
27. Santa Fe RR
28. Commonwealth Edison (Chicago)
29. Phillips Petroleum
30. Southern Calif
31. Southern Co.
32. Union Pacific RR
33. American Electric
Power
34. Public Service
Electric & Gas
35. International Tele
phone & Telegraph
36. International
Harvester
37. Sinclair Oil
38. Aluminum Co. of
America
39. Norfolk & Western Ry
40. Westinghouse Electric
Du Pont-
Crocker
Harriman-
42. United Light & Power
(utility properties
distributed)
43. Norfolk & Western Ry
44. Louisville & Nashville
Pitcairn et al.
RR
45. American Gas & Electric 45. El Paso Natural Gas
(utility properties
distributed)
46. International Harvester 46. Goodyear Tire & Rubber
Roebuck)
47. General Electric
Procter-Gamble
48. Empire Gas & Fuel Co.
Rochester,
(utility properties
Philipp,
distributed) Carter et al.
49. Middle West Corpora-
Gimbel,
47. Procter & Gamble
48. Eastman Kodak
49. Anaconda
(Sears,
U. of
M. I. T. ,
Clark,
Connor,
Mather Dow
Easton,
Meyer,
Nichols
Phipps-
Brown &
Payson
tion (utility properties
Guggenheim
distributed)
50. Philadelphia Electric
51. Reading
52. Shell Union Oil
53. Pacific Telephone &
Rosengarten
Telegraph
54. Republic Steel
Schoelkopf,
Machold,
Lewis et al.
55. New England Power
Association
56. American Water Works
Firestone-Rieck
& Electric (utility
50. Republic Steel
51. Dow Chemical
52. Consumers Power
53. Philadelphia Electric
54. Niagara Mohawk
Power
55. General Public
Utilities
Woodworth
properties distributed)
57. Southern California
Weber,
Edison
et al.
58. Kennecott Copper
59. Consolidated Oil
Mills
60. Koppers
Root
61. Engineers Public
Service (utility
57. Allied Chemical
properties distributed)
62. Atlantic Coast Line 62. Detroit Edison
RR
63. Philadelphia Company 63. Armco Steel et al.
42. Continental Oil
43. Monsanto
44. Columbia Gas &
Electric
56. Firestone Tire &
Rubber
58. Radio Corp. of America
59. International Paper
60. Texas Eastern
Transmission
61. Celanese
(utility properties
distributed)
64. Armour (Illinois)
65. Swift
Reynolds
66. Western Union
Hanna
Telegraph
67. Detroit Edison
68. Union Carbide
Reynolds
69. Sears, Roebuck
70. American Tobacco
?
