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Citation: The New Republic Feb 15 1999, 27(1)
Author: Lears, Jackson
Title: Capitalism, corrected and uncorrected. The Lobster and
the Squid.(Review) reviewed by Jackson Lears
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COPYRIGHT 1999 The New Republic Inc.
Titan: The Life of John D. Rockefeller, Sr. by Ron Chernow (Random House,
774 pp., $30)
Atlantic Crossings: Social Politics in a Progressive Age by Daniel T.
Rodgers (Harvard University Press, 634 pp., $35)
Creating the Corporate Soul: The Rise of Public Relations and Corporate
Imagery in American Big Business by Roland Marchand (University of California
Press, 461 pp., $39.95)
I.
Good news from the frontiers of global capitalism: the magic of the market
has rendered social conflict obsolete. The scramble for profits enriches us
all. Struggles between nations or classes for scarce resources are a figment
of the fevered Marxist brain. The real challenge facing the world economy is
the removal of archaic customs that inhibit "growth." Once that is done, the
free-trading future promises utopian harmony.
Or so at any rate it seems, to judge by contemporary public discourse.
Occasionally a rupture appears: a revelation of the plight of strawberry
pickers or running-shoe fabricators. But journalistic newspeak more commonly
reduces battles over workplace power to debates about managerial techniques
(privatiz Jackson Lears teaches history at Rutgers University. He is writing a
book about chance and luck in American cultural history. ing, outsourcing,
downsizing), and dissent dissolves in clinical language. Only a crank, it is
assumed, could oppose "increased productivity."
Hobbes's war of all against all persists, but behind a fog of up-with-people
slogans and boyish technophilia. Corporate rhetoricians meld economic and
technological determinism to dissolve social tension. Thus Bill Gates's The
Road Ahead concludes with a mind-numbing vision of the cyberworld we will soon
inhabit: it features "friction-free capitalism" created by perfect Internet
communication between manufacturers and distributors, buyers and sellers. This
is the future as Disneyland, a world where no desire is evoked that cannot be
satisfied with the click of a mouse.
There was a time when some Americans had a sharper sense of how their
society worked. In The Financier, in 1912, Theodore Dreiser gave that
awareness its classic expression. His young protagonist, Frank Cowperwood,
walks daily past a fish market where a lobster and a squid have been placed in
a tank together. The two creatures begin a protracted dance of death, lasting
several days. Frank is fascinated. At first the squid escapes the lobster's
thrusts, but "by degrees small portions of his body began to disappear,
snapped off by the relentless claws of his pursuer." Finally Frank returns to
the tank to discover the squid "cut in two and partially devoured."
The boy glimpses a larger social meaning in this scene, a key to
understanding how life is organized. "Things lived on each other--that was it.
Lobsters lived on squids and other things. What lived on lobsters? Men, of
course! Sure, that was it! And what lived on men? Was it other men?" He
ponders the possibilities: Indians and cannibals, wars and street fights and
mobs, masters and slaves. "Sure, men lived on men." Cowperwood clings to this
insight throughout his career, as he manipulates money and bribes his way to
financial eminence.
Dreiser's biological analogy, for all its crudity, caught the conflict at
the core of laissez-faire capitalism. Struggle was the law of life, in the
financial markets as in the fish markets; the fittest survived and the weak
were their rightful prey. This simple-minded Social Darwinism equated wealth
with "fitness" and gave unregulated markets the spurious sanction of natural
law, but it also acknowledged the destructive underside of economic
competition--the role of raw power, the frequency of failure, the specter of
want.
That may be why this supposed justification for capitalism was so seldom
invoked by capitalists themselves. Even at the post-Civil War height of
laissez-faire, the most rapacious robber barons could rarely bring themselves
to acknowledge the amoral anarchy of the marketplace. Quite the contrary: they
sought to sanctify the pursuit of success with conventional moralism. They
invoked an ethic of hard work and providential rewards, and conflated selfish
ambitions with civic virtue, and merged private gain with public good.
By the late nineteenth century, such sleight-of-hand had become more
difficult. Lots of lobsters were devouring lots of squids. The growth of huge
monopolistic corporations created concentrations of power responsible to no
one, and eventually provoked pervasive public alarm. Journalists, academics,
and civil servants resurrected republican ideals of civic culture in a new
rhetoric of disinterested expertise. Haltingly, and then in a rush during the
New Deal, the American version of the welfare state began to emerge.
World War II gave business leaders a chance to regroup and to reclaim a
major role in policy. The result, during the postwar decades, was a triumph of
business-oriented Keynesianism. Apparently, fiscal and monetary policy could
maintain aggregate demand and soften the impact of the business cycle without
threatening a redistribution of wealth. The lobster, fed and monitored
regularly by government officials, could coexist with the squid. The old
Social Darwinist metaphors no longer seemed relevant to the managerial society
of postwar America. The beasts of the marketplace had been tamed.
But only temporarily. Since the 1970s, as American employers have found
themselves increasingly exposed to overseas rivals, they have begun to
eviscerate the social base of Keynesian policy, which is an economically
secure labor force. As "flexible" management strategies make job security
obsolete for most Americans (not to mention the rest of the world), Social
Darwinist metaphors acquire renewed relevance. Men still live on men.
Despite the blessed assurance brought by the bull market, then, the revived
mythology of laissez-faire demands scrutiny. Yet historical awareness is in
short supply; the past is a mere burden to the likes of Bill Gates. That is
why these three fine books are so welcome. Taken together, Ron Chernow, Daniel
T. Rodgers, and Roland Marchand provide a wealth of evidence detailing the
limits of laissez-faire, the necessity of government intervention in the
economy, the reasons the welfare state came into being. They also demonstrate
how few Americans, even at the heights of heroic entrepreneurship, have been
willing to let the free market operate freely. The consequences have been too
frightening. Seldom has anyone wanted to look capitalism in the face.
Yet the concealment of economic aggression in Protestant morality was not
mere hypocrisy. For centuries, Protestantism had promoted ambivalence toward
wealth: money could be a sign of God's grace, but it could be also a
temptation to idleness and extravagance. The doctrine of stewardship solved
the problem by declaring that the money was on loan from God. The rich man's
duty was to distribute as much as possible during his lifetime. From this
perspective, "he who dies rich dies disgraced," as Andrew Carnegie declared.
Stewardship could relax the tension between private gain and public good--but
only if the wealthy took the doctrine to heart.
Few rich Americans did so more fervently than John D. Rockefeller, Sr.
Cold-hearted capitalist, destroyer of rivals and disdainer of unions, he was
also the premier philanthropist of his age, perhaps of any age. "God gave me
my money," he said, and there was no arrogance in the claim. Ruthless
accumulations were sanctified through charitable benefactions; his career, he
assumed, was all of a piece. Rockefeller combined an absolutely earnest
appearance with extremely flexible ethics. Early on, he learned how to
distance himself from personal moral responsibility through a complex,
hyper-organized delegation of authority. His devious stratagems served to
promote all sorts of social evil, yet the man remained a paragon of personal
righteousness and (in the long run) philanthropic generosity. Rockefeller's
career showed how the Protestant ethic could survive the shift from an
entrepreneurial to a managerial society. He never doubted his place among the
saved.
Ron Chernow is nearly persuaded of it, too. To be sure, his conscientious
and thorough biography of Rockefeller registers many doubts. He grants equal
time to the bribing of legislatures and the funding of cancer research, and he
makes Rockefeller's moral doubleness an organizing principle. As Chernow
observes, "his good side was every bit as good as his bad side was bad. Seldom
has history produced such a contradictory figure." But ultimately the balance
tips toward an emphasis on Rockefeller's benevolence.
One reason for this is structural. The man retired at fiftysix, lived to
ninety-seven, and spent most of his autumnal years on systematic
philanthropy; small wonder that Chernow's biography tilts in that direction.
Yet Chernow himself has a tendency to ignore Rockefeller's hypocrisies, to
question his critics' credentials, even to slide into sycophancy. Like
earlier writers on the subject, he assumes that Rockefeller's chief offenses
were against his competitors rather than his employees, toward whom he was
"a model of propriety and paternalistic concern." What a ludicrous
description of this sanctimonious old snoop, whose policies systematically
broke unions and degraded craft skills, and who prowled his estates searching
for shirkers among the landscape crew.
While Chernow's book is a masterful synthesis of research and writing, its
frequently celebratory tone is just a little too well suited to its historical
moment. This is a time, after all, when CEOs pose as culture heroes, and
multinational corporations equate entrepreneurship with creativity, and the
market enjoys the status that God enjoyed in medieval theology (the Primum
Mobile, the Uncaused Cause). One imagines Titan's handsome bulk residing,
unread, on executive coffee tables throughout the land: a Rockefeller for the
1990s.
Still, Titan is more than an expression of fin-de-siecle success worship. It
is also an extraordinary achievement in biography. Chernow not only
reconstructs three generations of Rockefellers in fascinating detail; he also
illuminates fundamental changes in their social world. The connections between
biography and history are clearest in the successive patriarchs. Indeed, each
could serve as emblem of an epoch.
William "Doc" Rockefeller was a bigamist and a big shot. A smooth-talking
purveyor of trinkets, dreams, and magic elixirs, he was the sort of
shape-shifting confidence man who flourished on the margins of the mobile
mid-nineteenth-century marketplace. Moralists were alarmed by such men as
"Doc" Rockefeller; they were convinced that the excesses of enterprise could
be controlled by the Protestant ethic. Plain living and plain speaking would
counteract debauchery and deceit. Self-made men would overcome confidence men.
John D. Rockefeller, Sr. was nothing if not a self-made man. He embodied
success through system, the stabilization of market sorcery through Weberian
rationality--an increasingly common pattern in late-nineteenth-century
entrepreneurship. From childhood to senescence, he was obsessed with
control--of himself, of his environment. Even his admirers, such as the
journalist William O. Inglis, admitted there was "something bordering on the
superhuman, perhaps the inhuman" in Rockefeller's "unbroken, mechanical
perfection of schedule." There was more at work here than the Protestant
ethic. As Chernow makes clear, Rockefeller's obsession with control was rooted
in revulsion against his father's infidelities and unreliabilities--the damage
a "free spirit" could do to the people who depended on him.
The preoccupation of "Doc" Rockefeller's son with eliminating chance,
whatever its personal sources, had important public consequences. The dream of
predictable profits animated his drive to rationalize the oil industry, which
he did by means of monopoly power. The Standard Oil empire, even after its
formal dismemberment in 1911, set the pattern for the twentieth-century
economy of oligopolistic, multinational corporations.
John D. Rockefeller, Jr. came to represent the more benign face of that
corporate system, after he finally emerged from his father's shadow to manage
the family's philanthropic operations. Junior's pain at the public criticism
of his father (whom he desperately desired to please), his first faltering
steps toward fairer labor-management relations, his determination to preserve
wilderness and commemorate the pre-industrial cultures that Standard Oil
helped to destroy: all suggest a more capacious sense of commonweal than John
D. Sr. could have imagined. Junior ushered in an era in which corporate
chieftains spoke the language of social responsibility. A skeptic might wonder
how much of their well-advertised concern for the public good was merely a
more professional version of old Doc Rockefeller's confidence game, but there
was no denying that twentieth-century business leaders had to play by a new
set of rules.
Daniel Rodgers and Roland Marchand provide complementary perspectives on
those rules, who made them, and why. With copious research and compelling
anecdote, Rodgers recreates the trans-Atlantic intellectual revolution that
revived civic culture, tamed the harshest features of laissez-faire, and made
the state a guarantor of basic decencies. Atlantic Crossings is a truly
remarkable synthesis of intellectual history and political history. Historians
will depend on it for decades to come, and policy intellectuals will ignore it
at their peril.
Despite Rodgers's graceful style, his book is not always briskly read. The
labyrinths of public policy can be dark and chilly, and debates about urban
drainage do not set the pulse to racing. What is amazing and revealing,
though, is that those debates really did excite the earnest academics who
journeyed to Britain, France, and (especially) Germany during the late
nineteenth and early twentieth centuries, in search of fresh ideas for curbing
the excesses of the market and revitalizing visions of commonweal. Rodgers
skillfully resurrects the world of progressive social thought, a world in
which professors pursued public service and economics was a branch of moral
philosophy. For better or worse, it is a world that we have lost. Its monument
is what remains of the welfare state.
For all their naive faith in the power of planning to create a more
satisfying society, the progressives did succeed in debunking the mythology of
laissez-faire and proposing more humane alternatives. From the New Deal to the
Reagan era, a superstitious reverence for the unfettered market would remain
out of fashion. Meanwhile, corporations had to adjust to changed cultural
conditions, to demonstrate that they were not the villains targeted by
progressive polemics, but responsible citizens who used their power to enhance
the public good.
They accomplished that task, as Marchand shows in Creating the Corporate
Soul, by hiring the adepts of advertising and public relations to persuade a
developing mass audience that the emperor really did have clothes--flannel and
denim, mostly. On a grand scale, the early PR men perfected the Orwellian
strategy that characterized corporate apologetics for much of the twentieth
century: the innovator (they claimed) was really a traditionalist at heart.
The soulless corporation was really the guy next door. The man who pioneered
this inversion was Ivy Lee, whose most famous client was John D. Rockefeller,
Sr. The oil baron acquired a folksy persona late in life, after decades of
secret dealings and disregard of public opinion. In his deployment of public
relations as in his rise to monopoly power, Rockefeller epitomized the
transition from the nineteenth century to the twentieth century.
II.
American commerce, Tocqueville wrote in 1835, was "a vast lottery," and that
was precisely its appeal. Americans "love any undertaking in which chance
plays a part," and their mobile, unsettled society offered many. The promise
of risk-taking was the prospect of starting over, somewhere else; and the
reward could be a reinvented self. Rockefeller's grandparents, hangdog Godfrey
and commanding Lucy, took a chance when they moved from New England to western
New York in the early 1830s. Their son William took another chance when he
spun off from the family group, drifted into the vicinity of Richford, New
York, and began a career of perpetual self-fashioning in the patent medicine
trade.
Soon the charming salesman had talked himself into a wife, Eliza Davison,
the daughter of a substantial farmer in the region. The poor woman had no idea
what she was getting into. Big Bill dragged her to his rough-hewn homestead
and before long brought Nancy Brown, one of his old girlfriends, into the
house too, as a "housekeeper." Bill began having children alternately by wife
and mistress. As Chernow writes, "thus the fiercely moralistic John Davison
Rockefeller (appropriately named after Eliza's sober father) was sandwiched
... between two illegitimate sisters, born into a situation steeped in sin."
It was 1839.
Bill combined flamboyant charlatanry with a reasonably shrewd business
sense; this created a feast-or-famine atmosphere at home. Away for months at a
time, he arranged credit for his family at the local general store. Eliza
drilled her children in thrift, never knowing when the credit might be
canceled. Bill would return from his trips in a magnificent carriage, his
shirtfront glittering with diamonds, pay all the bills in cash and gather the
family round for food and tales of his picaresque adventures among pioneers
and Indians.
Bill's erratic success made young John's boyhood a blend of restless anxiety
and upward mobility, as the family moved to progressively more genteel and
established communities: from Richford to Moravia to Owego. John, meanwhile,
increasingly became a stand-in for his absent father. He was the oldest
legitimate child, the first son, with two younger brothers and a sister. His
character was forged by the evangelical revivals that blazed so often through
western New York that the area became known as "the burned-over district."
What gave permanent form to his fervor was the sanctity of his mother's
Baptist example and the strictness of her discipline.
He was a slow learner, but patient, persistent, and uncommonly clever with
figures. It is not surprising that he quickly became a perfect little homo
economicus, buying candy by the pound, dividing it into small portions, then
selling it at a tidy profit to his siblings. A neighbor recalled young John as
"the coldest blooded, the quietest and most deliberate chap," nearly obsessive
in his frugality and rationality. Yet he was no automaton. From time to time
he betrayed a deep stream of emotion. Like others in the evangelical fold, he
channeled a flood of strong feelings into the practice of piety. Sunday was
for psalm-singing sentiment; the rest of the week for systematic achievement.
Rockefeller's psyche was what we now like to call "compartmentalized." In
this way, it allowed space for his father's influence. While Bill provoked
John's lifelong resentment, he also impressed the boy with the magical power
of money. Flashing it constantly, perhaps to conceal the pettiness of his own
accomplishments, Bill made money seem (his son recalled) like "God's bounty,
the blessed stuff that relieved all of life's cares." From paternal example,
John also learned that business was best viewed as a struggle for survival:
when his father ran a lumber business, he used to keep his men from
"stagnating" by arbitrarily firing, then rehiring them. Insecurity was
incentive. And, despite his mother's Protestant standards of plain speech,
John would grow up with enough of his father in him to resort to a subtle
theatricality when it suited his interests.
By the time he was sixteen, however, John was sufficiently embittered
against his father to commit metaphorical patricide. Bill had become Doc
Rockefeller, a "botanic physician" who cured cancer for twenty-five dollars
and who slipped from town to town just ahead of the latest scandal he had
provoked--including a rape indictment. John, heading west to Cleveland to seek
his fortune, began to refer to his "widowed mother" in correspondence. He
would publicly deny his father's existence for thirty years. Meanwhile, Bill
reinvented himself as "Dr." William Levingston and married another woman,
becoming a bigamist and leaving Eliza "a premature widow" with (as Chernow
writes) "a lifelong suspicion of volatile people and rash actions."
Her eldest son shared her mistrust. His solution was to follow the manly
Victorian path toward mastery. Money may have been magical, but like other
forms of magic it could be controlled, directed. That was what he discovered
when he first lent money at interest: the results astounded him. "The
impression was gaining ground with me that it was a good thing to let the
money be my slave and not make myself a slave to money," Rockefeller recalled.
Fine words; but the task was easier described than done. To harness money's
unpredictable power required calm, unrelenting concentration--which
Rockefeller possessed in preternatural abundance.
He arrived in Cleveland in 1855, sixteen years old and full of lofty but
vague ambition. "I did not guess what it would be, but I was after something
big." After weeks of disappointment, he landed a job with Hewitt and Tuttle,
commission merchants and produce shippers, on September 26, 1855; he honored
the date for the rest of his life as "Job Day." His "almost mystic faith in
numbers," his relentless dunning of customers, his feelings of guilt at even
receiving a raise: it all makes him sound like a parody of Horatio Alger's
virtuous clerks. But the typical Alger hero did not "gaze longingly" at a
$4,000 banknote, as Rockefeller recalled doing. His implicit admission that
the bill carried an "almost ... erotic charge," Chernow writes discerningly,
was particularly remarkable in this eerily disciplined man, who insisted "I
never had a craving for anything."
Within three years he had saved enough to open his own shipping firm, with
the help of a $1,000 loan (at 10 percent!) from Big Bill himself. Thus began a
bizarre pas de deux between the two men--a dance of acknowledgement and
denial, and ambiguous gestures of reconciliation--that lasted for nearly half
a century. At nineteen John was part owner of a prosperous business, yet he
was uncomfortable with his partners, an Englishman named Maurice Clark and a
local bon vivant named George Gardner (later mayor of Cleveland and Commodore
of the Cleveland Yacht Club). Rockefeller felt like a roundhead among
cavaliers, hostile and censorious toward their extravagant ways. Despite
tension, fresh opportunities continually presented themselves.
The Civil War made a lot of people rich, and Rockefeller was one of them.
Like other Northern Baptists, Rockefeller was an abolitionist, but he was also
a noncombatant when the war came. As chief provider for his mother and
siblings, he had a made-to-order excuse. Meanwhile he made a tidy fortune
shipping produce, flour, ham, and other commodities to the troops.
Yet the war was a piddling opportunity compared to the oil spurting from the
streambeds of northwestern Pennsylvania. The trick was refining it into
kerosene--"the poor man's light," in Rockefeller's words--and getting it to
market. When Sam Andrews, a self-taught chemist and refiner, needed
collaborators with capital, Rockefeller and Clark pooled their resources and
plunged into the wildly volatile oil business.
III.
To the fastidious Rockefeller, the oil fields presented a satanic vision, a
hell in need of harrowing. Like miners in the California gold fields,
wildcatting drillers swarmed over the slippery landscape in search of the
single lucky strike that would set them up for life. Decent enough fellows,
Rockefeller thought; but they had no system. They were little more than
gamblers, and their risk-taking tendencies did little for the moral tone of
the region. In towns such as Oil City, card sharps and prostitutes
proliferated, and the air was filled, as one visitor recalled, with "the slap
of cards on the whiskey-stained tables of groggeries." Rockefeller picked his
way through this fallen world, grimacing in distaste but following his own
aphorism: "success comes from keeping the ears open and the mouth closed."
From the outset, his circumspect attention to detail paid off. He removed
the risk from a risky business. To suspicious bankers who equated refining
with "outright gambling," Chernow writes, Rockefeller "projected the image of
a rising star whom bankers ignored at their peril." He borrowed huge sums, but
distanced himself from speculative plungers. He dumped one of his partners,
Maurice Clark's younger brother James, because (said Rockefeller) "he gambles
in oil. I don't want this business to be associated with a gambler." Though he
never had a losing year, he seldom displayed any outward satisfaction with his
feats. The single exception noted by Chernow is a revealing one: on hearing
that he had secured a cargo of oil at below market price, Rockefeller burst
into a jig. Money carried a unique frisson for this worldly ascetic. The key
to his success was his capacity to manage his secret passion.
Throughout his life, Rockefeller's sacred text was Ledger A, the book that
he used to record his personal receipts and expenditures when he was first
starting out in Cleveland. He kept it in a safe deposit box and, decades
later, nearly burst into tears when he pulled it out to display to
schoolchildren. It epitomized all his efforts to banish spontaneity and
unpredictability from life. A direct line of development stretches from Ledger
A to the Standard Oil monopoly, from inner control of the self to outer
control of an industry.
To be sure, there was nothing inevitable about that trajectory. One of the
ways that we banish conflict from our economic history is to subsume certain
developments in a broader, irreversible flow of linear, evolutionary change.
Historians and economists resort to this idiom in characterizing the growth of
corporate capitalism. It is an advantage of biography, therefore, that it
restores an element of uncertainty to the past. Focusing on idiosyncrasies of
choice and chance, it reminds us that apparently "natural" causal chains might
well have been linked in profoundly different patterns.
Still, Rockefeller's quest for control was so implacable (and so successful)
that its outcome in retrospect seems almost fated. It is one of Chernow's
achievements to have revealed the uncanny fit between Rockefeller's own
emotional needs and the larger contours of American economic history. His
obsession with minimizing chance depended on containing the carnival spirit of
the mid-nineteenth-century marketplace, the spirit embodied in his father and
other mid-nineteenth-century confidence men--the aura of exotic sensuality and
extravagant display, the willingness to lurch between scarcity and surfeit.
This did not mean abandoning the confidence game itself. The game was
instead to be refashioned in new corporate forms. The emerging managerial
culture combined Protestant reassurance of respectability with corporate
diffusion of responsibility. Eventually its leaders, Rockefeller and his
contemporaries, realized the value of public approval. Dressing deceit in
decent clothing, they detached capitalism from its traditional associations
with the figure of the disreputable (and frequently Jewish) peddler.
The "subtle vein of anti-Semitism" that Chernow discerns in Rockefeller's
correspondence is telling in this connection. In 1891, when Rockefeller faced
off against the Rothschilds in a struggle to control oil shipments through the
Suez Canal, Standard Oil propaganda darkly referred to the "Hebrew influence"
on shipping through the canal. Rockefeller himself raged privately against
"the old, old, Jew method" of playing favorites with customers--which he
contrasted with Standard Oil's "fairmindedness." This was a characteristic
ritual in WASP managerial rhetoric: invidious distinction, unconscious
projection, renewed legitimacy. Jews, like gamblers, constituted a negative
identity against which Christian capitalists could reaffirm their virtue.
As Rockefeller's career demonstrates, the appearance of WASP rectitude could
conceal the diffusion of moral responsibility through the complex delegation
of authority. Secrecy and deception were central to his success, but he had to
orchestrate those skills at new levels of subtlety. In the corporate and legal
labyrinths of the late nineteenth century, one can see the notions of truth
and innocence beginning to be transformed into the notions of credibility and
deniability. Though Rockefeller and his generation remained attached to a
Protestant moral idiom, their institutional creations rendered it less
applicable to everyday economic life.
As an epitome of the emerging managerial ethos, Rockefeller was a lobster in
a world of squids: inefficient refiners, independent retailers, artisans who
wanted fair pay. Anyone who blocked his implacable will to profit was
overwhelmed through secrecy, deception, and the brutal exercise of market
power. Unlike Rockefeller's philanthropy, his business practices revealed no
sense of responsibility to a larger public good.
Consider the case of railroad rebates. By 1868 Rockefeller operated the
largest oilrefining business in the country; he also had a new partner in
Henry Flagler, a merciless competitor who would one day own much of the
Florida coast. They used their market power to cut a secret deal with the Lake
Shore railroad, receiving well below the publicly posted rates in exchange for
steady shipments of oil. Since nothing was written, Rockefeller could later
deny any knowledge of the arrangement. From a strict market perspective, it
made perfect sense. The problem was that railroads possessed a public
character. They received the right of eminent domain (the precondition for
their operation) from charters granted by state legislatures, and therefore
they could be considered common carriers with a responsibility to provide
equal rates to all. This argument depended on the republican idea of
commonweal, a concept alien to Rockefeller. He simply could not conceive a
public interest that might undermine the interests of his firm.
Throughout the decades following the Civil War, Rockefeller steadily
expanded his control over the oil business, from the pump to the pipeline to
the country store. His minions brought rival producers to their knees by
refusing them pipeline service, and bullied retailers into stocking only
Standard Oil products or else being (in Chernow's words) "starved out of
business." Since state law forbade corporations to operate in more than one
state, Rockefeller made sure that Standard Oil subsidiaries preserved a
fiction of independence, keeping dummy letterheads and puppet directors. And
ample funds were always made available to ensure the cooperation of governors
and legislators. Rarely did Rockefeller bribe or threaten anyone directly, but
Chernow concedes that there was "no doubt that he was the brains of the
operation, directing activities he professed to deplore and setting the tone
for his subordinates."
If the facade of deniability cracked, this paragon of Protestant morality
was perfectly willing to perjure himself. Chernow notes the illegality of
Rockefeller's tactics, but he refuses to condemn them. To him they are usually
mere "shenanigans," sometimes even "elegant" solutions to practical problems
posed by "antiquated" restrictions on interstate commerce. In any case, he
observes, Rockefeller's ethics were usually no worse than those of most other
entrepreneurs during that age of reckless expansion.
This is probably true, but there is another context to be considered.
Rockefeller's career demands to be judged not only by the standards of Gilded
Age business, but also by the standards of his own Protestant Christianity--a
religion that celebrated sincerity and demonized deception, that envisioned a
righteous community of plainspeaking believers who treated each other fairly
and honestly, who said what they meant and meant what they said. Yet
Rockefeller's success depended on the deceitful manipulation of appearances.
The company's attorney Samuel Dodd, Chernow writes, "was a wizard at
contriving forms that obeyed the letter but circumvented the spirit of the
law." At Standard Oil, the spirit killed, the letter gave life. It was a world
governed by Flagler's motto: "Do unto others as they would do unto you--and do
it first." This was Christianity in reverse. Rockefeller used his mother's
religiosity to cloak conduct as dishonest and self-absorbed as his father's.
And never did he betray any anxiety on this front. For him, as for many of
his contemporaries, the key to peace of mind was a divided self. He married
Laura "Cettie" Spelman, the pious daughter of a prominent Cleveland family, in
1864. She and their children came to constitute a separate domestic realm,
defined sharply against the amoral chaos of the market. When business drew him
from the hearthside, he wrote Cettie longing letters, declaring that "the
world is full of Sham, Flattery, and Deception and home is a haven of rest and
freedom." It was a standard formulation, the stuff of Sunday sermons and
domestic tracts, and it betrayed no hint of awareness that its author was
himself a master of deception.
Indeed, Rockefeller struggled to keep his family insulated from "the world"
in every way. The children were educated by private tutors. Their social life,
to the extent that they had one, centered on the Euclid Avenue Baptist Church
in Cleveland. The amount of their wealth remained a mystery to them; they were
raised in an atmosphere of obsessive frugality. Though their father loved to
tell them stories and to play with them, his rigorous morality fostered a
sober atmosphere in the household. And Cettie was even stricter. Together they
created a bleak domestic landscape where duty reigned and spontaneity was
largely absent. More completely than most businessmen of his time, Rockefeller
embodied the quintessential Victorian contrast: rigid moralism at home, Social
Darwinism at work.
Like most historians, Chernow assumes that Rockefeller's main victims were
his business rivals, and that his labor policies were basically benign. Titan
tells us next to nothing about any Standard Oil employee below the managerial
level. Yet they had histories too, as Herbert Gutman demonstrated in his
pioneering work on Rockefeller's labor policies (which Chernow ignores). In
January 1875, ordinary laborers at Standard Oil made $1 a day if they worked
full time; skilled coopers might make half again that much if they were lucky.
That same month, the officers of the corporation voted a dividend of $115 on
each $100 share. When prices rose, or when Standard Oil succeeded in cornering
another market, stockholders reaped rewards and workers received nothing. When
prices dropped, workers received less than nothing: the company cut their pay.
In 1877, the coopers' union struck to protest a series of pay cuts, and this
gave Rockefeller the opportunity to break the union. His managers introduced
barrelmaking machinery and hired a variety of strikebreakers, including some
inmates of the Pittsburgh prison (a remarkable anticipation of contemporary
management strategy). They also mobilized the Cleveland police, who waded into
a crowd of strikers wielding nightsticks and cracking heads. Eventually the
union died, and so did the workers' hopes for fair treatment. None of these
"shenanigans" makes it into Chernow's book. Here again the excuse that
"everybody did it" collides with Rockefeller's religiosity, showing how
thoroughly he subordinated his Christianity to the secular pieties of
laissez-faire.
IV.
Chernow's sympathy with his subject leads him to trivialize Rockefeller's
critics. Henry Demarest Lloyd, whose Wealth Against Commonwealth (1894) posed
a pioneering challenge to the moral pretensions of business civilization,
emerges in these pages as a foppish "millionaire socialist." Ida Tarbell,
naturally, gets more respect. Her series of muckraking articles, Chernow
admits, was "the most impressive thing ever written about Standard Oil."
Still, he insists that her criticism was marred by "nostalgia" for the era of
small producers. Her father was one, a decent driller from Rouseville,
Pennsylvania, strangled (she thought) by the Standard Oil octopus; and her
brother was a prominent figure in Pure Oil, one of Standard's last remaining
rivals. These connections compromised Tarbell's objectivity, in Chernow's
opinion. In Rockefeller's view, they invalidated her project completely.
Unable to grasp any notion of economic justice, he reduced all his critics'
motives to the envy of disappointed competitors.
Without question, Tarbell had personal motives. Yet she also drew on a rich
republican tradition. It promoted sentimental sympathy for small producers,
but also a realistic recognition of conflict between unchecked economic power
and a larger commonweal. The republican tradition pointed toward the
progressive reforms of the early twentieth century. It sanctioned the impulse
to harness private gain on behalf of the public good.
Tarbell's muckraking had significant legislative results. The series
appeared at a "fleeting transitional moment" when corporations had power but
no public relations. Public outcry against Standard Oil prompted passage of
the Hepburn Act of 1906, which gave the Interstate Commerce Commission power
to regulate railroad rates and to put interstate pipelines in the ICC's
domain. It also pushed Theodore Roosevelt toward reluctantly backing an
antitrust suit against Standard Oil, which led to the break-up of the company
in 1911--though by then, as Chernow observes, the industry had become too vast
for even Standard Oil to control it. But the point had been made: government
intervention might be necessary to keep the free market free.
Rockefeller, meanwhile, was richer in retirement than he had been on the
job. The break-up of Standard Oil coincided with the dawn of the automobile
era. Gasoline would be a bigger boon than even kerosene had been. But life was
not all beer and skittles at the Rockefeller household. Tarbell's series
troubled them deeply. Nearly all were afflicted by medical troubles or severe
nervous strain. The paterfamilias himself lost all his hair to alopecia, and
retreated into the fortress-like garrisons that he built at Forest Hill, near
Cleveland, and in the New Jersey pine barrens.
Rockefeller's visits to the Euclid Avenue church became rarer. According to
Chernow, "it never occurred to Tarbell" that she was responsible. Indeed, she
believed that his churchgoing was a hypocritical strategy to defuse criticism;
and Chernow says this charge was a sign of her "patent cruelty," a mark of her
"malice." Such defensiveness verges on sycophancy. Given what Rockefeller's
critics knew of his business practices, how could he not seem like a pious old
phony?
But Chernow's sympathy for the Rockefeller family is another matter. They
deserve it. They were sensitive enough to be pained by public criticism of the
patriarch and hurt by their own social isolation. Cettie retreated into
"nunlike religiosity." Her daughters Bessie and Edith retreated into troubled
marriages and (in Edith's case) into years of Jungian analysis. Junior
wallowed in self-doubt and prolonged dependence. His father kept him on a
short leash, an allowance disguised as a salary, until he was thirty-eight.
Meanwhile, Junior fretted about the corrupt practices he saw at Standard Oil,
naively assuming that his father had nothing to do with them. But he had
suspicions, and muckrakers like Tarbell only made them worse.
The relationship of the father and the son gradually softened during the
period of Rockefeller's retirement, as he turned more and more of his energy
to philanthropic pursuits. Here was where the old man's sense of public
good--however detached from his actual business practices--could finally
flourish. Chernow demonstrates in great detail how Rockefeller pioneered the
transformation of scattershot charity into systematic philanthropy. His
extraordinary generosity began in his early days at the Euclid Avenue church,
and spread to the African American seminary in Atlanta that was renamed
Spelman College, and then to the University of Chicago and the Rockefeller
Institute for Medical Research (later Sloan-Kettering). And this list only
scratches the surface. There is no denying Rockefeller's sincerity with
respect to stewardship, or the farsightedness of his gifts. The systemization
of giving ironically paralleled the systemization of getting that Rockefeller
had perfected in the oil business. The world of privately endowed universities
and foundations represented the kinder, gentler face of WASP managerial
culture.
Junior was happier in that world, where he developed a broader vision than
his father's. The central event in his transformation was the Ludlow Massacre
in April 1914. It was a hard winter in the coal fields, and miners struck
Colorado Fuel & Iron, demanding recognition of their union. The Rockefellers
held a controlling interest in the company, and Junior was on the board. Up to
that point he had accepted his father's views on unions; they were, the old
man believed, meant to enrich workers who "spend their money on picture shows,
and whiskey and cigarettes." Workers only struck, in the opinion of the
Rockefellers, because they had been terrorized by union organizers.
When Congress launched an investigation into conditions in the mines, Junior
took the stand and defended the open shop, winning the plaudits of the
business community for his forthright defense of property rights. Two weeks
later, though, National Guardsmen set fire to the strikers' tent city, killing
several miners, two women, and eleven children. A chastened Junior began to
meet with the social gospel minister Mackenzie King, who persuaded him to make
a public mea culpa and begin investigating the prospects for labor-management
cooperation. It was a halting step toward a broader sense of social
responsibility, however paternalistic, among corporate leaders.
Maybe more significant, the Ludlow Massacre reinforced the Rockefellers'
determination to pay more attention to public relations. Since Tarbell's
series, the old man had begun to talk more openly to journalists in the hopes
of sweetening his self-presentation. He granted an unprecedented interview to
William Hoster of the New York American, who (Chernow says) was struck by
Rockefeller's "populist streak, how he was intrigued by common people but
indifferent to the highborn." Here, as early as 1906, we can see the birth of
corporate pseudo-populism: the oil baron presented as a man of the people. And
after Ludlow the old man hired Ivy Lee, who made Hoster look like an amateur.
Lee transformed the image of Rockefeller from an aloof schemer to a kindly old
gent dispensing wisdom and, eventually, dimes. (The dimes were John D.'s own
idea.) By the time he died, this resourceful innovator had remade himself as
an icon of conservative values.
V.
Meanwhile, the people who called themselves progressives were more
conservative than Rockefeller--at least in the sense that they sought to
conserve some commitment to a lived sense of commonweal, some core of
resistance to the corrosive impact of market power on social bonds. They
realized that private philanthropy, no matter how systematic or generous,
could not salve all the abrasions of economic life. Insisting that the
achievement of a true civic culture could not be left to chance, they forged a
public parallel to Rockefeller's drive for predictability in the private
sector.
A quarter-century ago, in the heady days of New Left historiography,
progressive reformers made a tempting target. Whether they were
petit-bourgeois moralists or technocratic elitists or both, they evoked the
disdain of a generation of historians for whom the corporate state had become
a hostile power. Without question, progressive social thought was marred by
soft spots: its naive faith in disinterested expertise, its class-bound and
culture-bound faith that planners could create a rewarding way of life for the
whole population. The specter of social engineering haunted the dream of the
welfare state. As Rodgers's book makes clear, however, most progressive
thinkers were neither as naive nor as arrogant as later critics claimed. For
all their limitations, they refashioned republican tradition into a more
cosmopolitan vision of social democracy. Now that public discourse has been
imprisoned by free market fundamentalism for nearly two decades, the
much-abused progressives begin to look more appealing.
Rodgers' multi-archival, multi-lingual research underscores the earnest good
will of young men willing and even eager to slog through the trenches of
European social policy in search of civilizing ideas. Consider W.F.
Willoughby, senior foreign agent of the United States Bureau of Labor
Statistics, who in 1900 translated hundreds of "murderously dull" pages of
German social insurance legislation; this led him to the first comprehensive
American book on social insurance and the beginnings of a university career.
Yet there was more than careerism animating his efforts. Like so many of his
contemporaries, he found in Germany what he missed at home: the "social idea."
As Rodgers writes, "the thread of the social seemed to ascend unbroken from
the open-air concerts through the university lecture halls up to the very
state itself."
The quest for "the social" took on, for many, a distinctly religious cast.
The economist Henry C. Adams put the motive plainly in his diary a week after
his first Christmas in Berlin. His version of Christianity differed profoundly
from Rockefeller's. "If it was right for Christ to take away the cloak which
covered the sins of men, it is right for me to do the same for that which
makes mere men think their own acts of injustice are not their acts but the
outworking of laws beyond human control," Adams wrote. "Nothing in the
economic world is beyond the control of men and men must waken up to the
controlling of these laws."
Adams's zeal emboldened him to launch a public attack on the sacredness of
property. In 1886, his forthrightness provoked his dismissal from Cornell,
where he held a half-time appointment. The other half of his job was at the
University of Michigan, where President James Angell warned him that American
professors could not expect the same range of academic freedom that Germans
enjoyed--since American university boards were dominated by businessmen.
Intimidated by a spate of heresy trials (which the trustees rarely lost),
Adams and other German-trained economists retreated from the prophetic mode.
Yet he still insisted on the power of the state to set a floor beneath
competitive practices and thus prevent the market from driving them down to
the lowest ethical denominator, as well as to intervene in such "natural
monopolies" as railroads and public utilities.
These and other progressive ideas betokened a significant intellectual
transformation. The development of "the social idea" in economic thought
marked a fundamental departure from the laissez-faire dogma that had paralyzed
policy debate for decades (despite being honored more in the breach than the
observance). The creation of the rationale for a welfare state, moreover,
involved the temporary transcendence of American provincialism; it arose from
pilgrimages to Paris, London, and Berlin, from the trans-Atlantic importation
of European theory and practice. For a brief historical moment, at least a few
Americans overcame their national narcissism and acknowledged that (as The
Arena magazine wrote in 1905) the United States was "more or less a camp
follower among the great peoples of the earth" in the effort make capitalism
humane.
The progressives professed fealty to a common discourse of humane social
policy, flowing across national boundaries. Their faith was shaken by World
War I, but the New Deal offered American progressives a reprieve, an
opportunity to pull plans out of file drawers where they had been stuffed
twenty years before. The work of Isaac Rubinow, an intellectual godfather of
Social Security, was one example. The son of a Jewish textile merchant forced
to flee Russia, Rubinow was a "physician-turned-statistician" (and socialist)
who became the leading American authority on compulsory social insurance.
Frustrated for decades by chauvinistic opposition, he saw that the atmosphere
of crisis offered policymakers another opportunity to overcome the popular
assumptions "that we are the greatest, richest nation and people in the world,
and by implication, the wisest as well; that we are entrusted with a special
historic mission to teach the old and effete world and not to learn from it."
But World War II and the postwar period saw the return of the creed of
American uniqueness--buttressed, ironically, by one last trans-Atlantic
borrowing: Keynesian economic theory. In the ravaged postwar world, only the
United States had the material basis to support the Keynesian vision. Only the
United States was rich. Minimum income guarantees, from the postwar
perspective, were rooted in European scarcity. They were un-American.
The progressives' great achievement was to break the chauvinistic mold and
to persuade policymakers that other nations' experience might actually have
something to teach us. Like Rockefeller, progressives were offended by the
disorder of American life. The municipal reformer Frederic C. Howe disgustedly
dismissed the American city as a mere "accident, a railway, water, or
industrial accident." Urban planning promised "a new civic loyalty, a 'city
sense,' a new collective sensibility." To progressives like Brand Whitlock,
Baron Haussmann's Paris embodied a triumph over "the hideous anarchy and
accident" that characterized American cities.
This was partly an aesthetic recoil, a longing for a coherent vision of
urban life to replace the chaotic play of individual fancy. To be sure, this
desire could evoke the peril of authoritarianism: it is no secret that
Haussmann's designs were meant to contain the revolutionary rabble, and that
modernist dreams of order could produce sanitized, cheerless spaces. Yet the
concern for aesthetic coherence was a necessary counterweight to unplanned
development and an essential part of public discourse; and its absence has
helped to produce our bleak contemporary landscape of strip malls and sprawl.
The progressives' war on chance had ethical dimensions as well as aesthetic
ones. Unpredictable calamities had always been part of life, but under
industrial capitalism (Rodgers writes) they seemed "less predictable, and
their human face less easily disguised." Everyday life under capitalism was
plagued by the possibility of accident, and social insurance was a means of
counteracting it. According to its advocates, the British National Insurance
Act of 1911 (one of many European models for Social Security) was designed to
create "a new foundation of averages" that would replace "the old foundation
of chance." Thus statistical expertise could underwrite social democracy.
The progressives' humanitarian vision of the public good collided with a
combination of entrenched political power and free-market ideology. Mass
transit plans were designed to protect the interests of private investors and
their political patrons; zoning became a way of protecting property owners and
enhancing property values rather than beautifying cities; agricultural
cooperatives worked best when they coincided with farmers' marketing needs.
When progressives failed, the fault was less in their own naivete and
arrogance than in the obduracy of the economic and cultural forces arrayed
against them.
Still, they accomplished a major reorientation of our public discourse (at
least for a time), a move toward a more humane conception of political
economy. After the last twenty years of free-market jabber, their achievement
looks more impressive, their fundamental decency more apparent. Atlantic
Crossings is a worthy reconstruction of their work.
During the early decades of the twentieth century, while progressives tried
to engineer a more humane society, corporations sought to simulate their
sponsorship of one. Roland Marchand's book recounts business leaders'
discovery and elaboration of public relations strategies. By the 1920s,
largely in response to progressive political ferment, slickly marketed
earnestness became the trademark of the WASP managerial culture. Rockefeller's
makeover was a prototype process, but later PR campaigns took on an even more
daunting task: to provide a lovable folksy persona for the organization
itself.
Marchand completed Creating the Corporate Soul just before he died in 1997.
He was an indefatigable researcher who could also turn a phrase. His last book
artfully melds business history and cultural history as it recreates the
struggle of corporate executives to wrap their enterprises in the imagery of
intimacy and neighborliness. A classic instance occurred in 1923, when Bruce
Barton (co-founder of Batten, Barton, Durstine, and Osborn) undertook a
campaign for General Motors that aimed "to personalize the institution by
calling it a family." As a GM executive observed: "The word 'corporation' is
cold, impersonal and subject to misunderstanding and distrust. 'Family' is
personal, human, friendly. This is our picture of General Motors--a big
congenial household." Once again, we are present at the creation of a
contemporary cultural pattern: the attempt to fabricate a faux-familial
relation between advertisers and their audience.
The cynicism behind this exercise surfaces only occasionally and obliquely
in Marchand's book. One example will suffice. In 1928, an agency president
defended the use of esoteric historical references, even foreign words and
phrases, in institutional advertising, because such ads would allow consumers
to "enjoy a sort of illumination, as if they were learning something." There
was a world of suppressed contempt contained in that "as if," but Marchand
avoids comment on it. Though he reconstructs the vast collective effort to
create a corporate soul, he reveals little awareness of its fundamental
absurdity.
A sense of the absurd remains a useful weapon against the pretensions of the
powerful--especially in these times of hip capitalism, when irony has
supplanted earnestness as the idiom of choice for many advertisers. Whether
they are smirking at their own cleverness, urging us to find our own road, or
promising us retirement security, the contemporary creators of the corporate
soul are still sanitizing the messiness of the market, creating a symbolic
universe where conflict is absent and the only moral choice that matters is
which butt-kicking brand name to wear on your ball cap. Amid such terminal
silliness, an absurdist sensibility can be a form of social realism, a
reminder that the grand new global economy is still a tale of lobsters and
squids.
(Copyright 1999, The New Republic)
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