Category: Capitalism

Early Standard Oil Executive Preserved Shakespeare First Folios

(p. 17) “The Millionaire and the Bard,” by Andrea Mays, is an American love story. It is the engaging chronicle of a sober, hard-working, respectably married industrialist of the Gilded Age who became obsessed with the object of his desire. Though generally frugal and self-­disciplined, he was willing to pay extraordinary sums in order to put his hands on his mistress, to gaze at her lovingly and longingly, to caress her. To possess her only once was not enough for him; he craved the experience again and again, without limit.
. . .
I am, as readers have probably surmised, speaking of the peculiar passion of book collecting. The lover in question was Henry Clay Folger, who made his fortune as one of the presidents and, by 1923, the chairman of the board of Standard Oil of New York. And the beloved, which he pursued with unflagging ardor, was a single book: “Mr. William Shakespeares Comedies, Histories, & Tragedies, Published according to the True Originall Copies.” Printed in London in 1623, seven years after the author’s death, it is the book known to all lovers of Shakespeare simply as the First Folio.
. . .
Andrea Mays is a professor of economics, and the great strength of her book is an unflagging interest in exactly how Folger played the game.
. . .
Rarely has a mad passion brought forth such a splendid and enduring fruit.

For the full review, see:
STEPHEN GREENBLATT. “In Love with Shakespeare.” The New York Times Book Review (Sun., MAY 24, 2015): 17.
(Note: ellipses added.)
(Note: the online version of the review has the date MAY 22, 2015, and has the title “‘The Millionaire and the Bard,’ by Andrea E. Mays.”)

The book under review, is:
Mays, Andrea E. The Millionaire and the Bard: Henry Folger’s Obsessive Hunt for Shakespeare’s First Folio. New York: Simon & Schuster, 2015.

Hamilton Fostered the Preconditions for Capitalism

(p. 345) In a nation of self-made people, Hamilton became an emblematic figure because he believed that government ought to promote self-fulfillment, self-improvement, and self-reliance. His own life offered an extraordinary object lesson in social mobility, and his unstinting energy illustrated his devout belief in the salutary power of work to develop people’s minds and bodies. As treasury secretary, he wanted to make room for entrepreneurs, whom he regarded as the motive force of the economy. Like Franklin, he intuited America’s special genius for business: “As to whatever may depend on enterprise, we need not fear to be outdone by any people on earth. It may almost be said that enterprise is our element.”
Hamilton did not create America’s market economy so much as foster the cultural and legal setting in which it flourished. A capitalist society requires certain preconditions. Among other things, it must establish a rule of law through enforceable contracts; respect private property; create a trustworthy bureaucracy to arbitrate legal disputes; and offer patents and other protections to promote invention. The abysmal failure of the Articles of Confederation to provide such an atmosphere was one of Hamilton’s principal motives for promoting the Constitution. “It is known,” he wrote, “that the relaxed conduct of the state governments in regard to property and credit was one of the most serious diseases under which the body politic laboured prior to the adoption of our present constitution and was a material cause of that state of public opinion which led to its adoption.” He converted the new Constitution into a flexible instrument for creating the legal framework necessary for economic growth. He did this by activating three still amorphous clauses–the necessary-and-proper clause, the general-welfare clause, and the commerce clause–making them the basis for government activism in economics.

Source:
Chernow, Ron. Alexander Hamilton. New York: The Penguin Press, 2004.

Moral Progress Accelerated in the 18th Century

(p. A11) For hundreds of years, people flocked to public hangings as a form of entertainment. Onlookers crowded into town squares and brought their families, reveling in the carnival atmosphere. Today most people are sickened at the idea of merriment at an execution. (Many are disturbed that executions take place at all.) We recoil from other once-common practices, too: slavery, the mistreatment of children, animal cruelty. Such shifts in attitude or belief surely constitute a form of moral progress and suggest, for once, that civilization is advancing and not receding.
. . .
Mr. Shermer defines moral progress as an “increase in the survival and flourishing of sentient beings,” which he illustrates with graphs and charts that reveal, among other things, a decline in war-related deaths, the expansion of the food supply, the reduction in major epidemics, the growth of world GDP and the spread of democracy.
Humanitarian achievements in the West, Mr. Shermer notes, began in earnest [in] the 18th century. Yet the ability to reason ethically is not a product of the Enlightenment. A moral instinct seems to be present at birth: Even infants possess innate intuitions about fairness and reciprocity, as Mr. Shermer explains. All societies punish free riders. The Golden Rule and Babylon’s Code of Hammurabi (advocating proportionate punishment) predate the ancient Greeks. So why did we need an Enlightenment to jump-start our moral progress?

For the full review, see:
SALLY SATEL. “BOOKSHELF; Getting Better All the Time; Crowds once flocked to watch executions. Now we recoil at the idea. What causes such transformations of ethical standards?” The Wall Street Journal (Tues., Jan. 20, 2015): A11.
(Note: ellipsis, and bracketed word, added.)
(Note: the online version of the review has the date Jan. 19, 2015.)

The book under review is:
Shermer, Michael. The Moral Arc: How Science and Reason Lead Humanity toward Truth, Justice, and Freedom. New York: Henry Holt and Co., 2015.

Economic Hope Cures Terrorism

(p. C1) As the U.S. moves into a new theater of the war on terror, it will miss its best chance to beat back Islamic State and other radical groups in the Middle East if it doesn’t deploy a crucial but little-used weapon: an aggressive agenda for economic empowerment. Right now, all we hear about are airstrikes and military maneuvers–which is to be expected when facing down thugs bent on mayhem and destruction.
But if the goal is not only to degrade what President Barack Obama rightly calls Islamic State’s “network of death” but to make it impossible for radical leaders to recruit terrorists in the first place, the West must learn a simple lesson: Economic hope is the only way to win the battle for the constituencies on which terrorist groups feed.
I know something about this. A generation ago, much of Latin America was in turmoil. By 1990, a Marxist-Leninist terrorist organization called Sendero Luminoso, or Shining Path, had seized control of most of my home country, Peru, where I served as the president’s principal adviser. Fashionable opinion held that the people rebelling were the impoverished or underemployed wage slaves of Latin America, that capitalism couldn’t work outside the West and that Latin cultures didn’t really understand market economics.
The conventional wisdom proved to be wrong, however. Reforms in Peru gave indigenous entrepreneurs and farmers control over their assets and a new, more accessible legal framework in which to run businesses, make contracts and borrow–spurring an unprecedented rise in living standards.

For the full commentary, see:
HERNANDO DE SOTO. “The Capitalist Cure for Terrorism; Military might alone won’t defeat Islamic State and its ilk. The U.S. needs to promote economic empowerment and entrepreneurship to give the Arab world another path.” The Wall Street Journal (Sat., Oct. 11, 2014): C1-C2.
(Note: italics in original.)
(Note: the online version of the commentary has the date Oct. 10, 2014, and the title “The Capitalist Cure for Terrorism; Military might alone won’t defeat Islamic State and its ilk. The U.S. needs to promote economic empowerment.”)

Soto’s masterpiece is:
Soto, Hernando de. The Other Path: The Invisible Revolution in the Third World. New York: Basic Books, 1989.

FDR Ruthlessly Manipulated Political Process

(p. D8) Michael C. Janeway, a former editor of The Boston Globe and executive editor of The Atlantic Monthly who wrote two books chronicling what he saw as the intertwined decline of democracy and journalism in the United States, died on Thursday [April 17, 2014] at his home in Lakeville, Conn.
. . .
The second book, “The Fall of the House of Roosevelt: Brokers of Ideas and Power From FDR to LBJ,” published in 2004, measured some of the ideas in his first book against the history of the New Deal. It focused on President Franklin D. Roosevelt’s inner circle of advisers, a group of political operatives and thinkers often called Roosevelt’s “brain trust,” who helped conceive ideas like the minimum wage, Social Security and federal bank deposit insurance.
Mr. Janeway’s father, Eliot Janeway, an economist, Democratic hand and columnist for Time magazine (a portfolio not unheard-of in those days), was a prominent member of that group.
Michael Janeway suggested that in undertaking the radical changes necessary to yank the “shattered American capitalist system into regulation and reform,” Roosevelt and his team manipulated the political process with a level of ruthlessness that may have been justified by the perils of the times. But in the years that followed, he wrote, the habit of guile and highhandedness devolved into the kind of arrogance that defined — and doomed — the presidency of Lyndon B. Johnson, Roosevelt’s last political heir.

For the full obituary, see:
PAUL VITELLO. “Michael Janeway, 73, Former Editor of The Boston Globe.” The New York Times (Sat., APRIL 19, 2014): D8.
(Note: ellipsis, and bracketed date, added.)
(Note: the online version of the obituary has title “Michael Janeway, Former Editor of The Boston Globe, Dies at 73.”)

The book mentioned in the passage quoted above is:
Janeway, Michael. The Fall of the House of Roosevelt: Brokers of Ideas and Power from FDR to LBJ, Columbia Studies in Contemporary American History. New York: Columbia University Press, 2004.

Insider Reports on Crony Journalism at CBS and ABC

You hear a lot these days about ‘crony capitalism’ which no-one, including me, much likes. (The version I like is entrepreneurial capitalism.) But we too often forget that adjective “crony” can modify other nouns besides “capitalism.” Here are a couple of examples of crony journalism.

(p. A11) . . . skip to the second part, which is mostly a memoir and almost all about journalism. It includes one of the toughest critiques of television news ever written by an insider. From 1977 to 1989, Mr. Lewis worked for ABC News and then for CBS’s news program “60 Minutes.”
. . .
The most acute of Mr. Lewis’s frustrations came when Hewitt, the executive producer of “60 Minutes,” refused to broadcast a Lewis report on former government officials profiting as U.S. lobbyists for foreign interests unless the name of Hewitt’s good friend Pete Peterson, then chairman of the Blackstone Group, was excised from the script. In the story, a photograph showed five smiling Blackstone executives, all former federal appointees, in a Japanese newspaper advertisement seeking business for their lobbying efforts. Mr. Peterson was singled out by name in the voice-over narrative. Correspondent Mike Wallace, for whom Mr. Lewis worked directly, implored him in a shouting match to remove Mr. Peterson’s name, to no avail. But Hewitt was more subtle, simply refusing to schedule the piece for airing. Mr. Lewis bitterly relented to Hewitt’s implicit demand and quit the day after the story was broadcast.
As for ABC, Mr. Lewis reports that its legendary news chief Roone Arledge killed a tough story on tobacco at the request of “the Corporate guys,” who were fearful that the network could complicate its position in a libel suit that Philip Morris had already filed against the broadcaster.

For the full review, see:
RICHARD J. TOFEL. “BOOKSHELF; Media Manipulation; At ABC News and CBS’s ’60 Minutes,’ producers would regularly kill stories critical of the powerful and connected.” The Wall Street Journal (Weds., July 16, 2014): A11.
(Note: ellipsis added.)
(Note: the online version of the review has the date July 15, 2014, and has the title “BOOKSHELF; Book Review: ‘935 Lies’ by Charles Lewis; At ABC News and CBS’s ’60 Minutes,’ producers would regularly kill stories critical of the powerful and connected.”)

The book being reviewed is:
Lewis, Charles. 935 Lies: The Future of Truth and the Decline of America’s Moral Integrity. New York: PublicAffairs, 2014.

Zionists “Risk Their Lives for an Idea”

(p. C1) . . . , without hesitation or (for the most part) complaint, proudly responding to the call-up, Israelis stand ready to defend their nation. They risk their lives for an idea.
The idea is Zionism. It is the belief that the Jewish people should have their own sovereign state in the Land of Israel. Though founded less than 150 years ago, the Zionist movement sprung from a 4,000-year-long bond between the Jewish people and its historic homeland, an attachment sustained throughout 20 centuries of exile. This is why Zionism achieved its goals and remains relevant and rigorous today. It is why citizens of Israel–the state that Zionism created–willingly take up arms. They believe their idea is worth fighting for.
Yet Zionism, arguably more than any other contemporary ideology, is demonized. “All Zionists are legitimate targets everywhere in the world!” declared a banner recently paraded by anti-Israel protesters in Denmark. “Dogs are allowed in this establishment but Zionists are not under any circumstances,” warned a sign in the window of a Belgian cafe. A Jewish demonstrator in Iceland was accosted and told, “You Zionist pig, I’m going to behead you.”
. . .
What is it about Zionism that elicits such loathing? After all, the longing of a dispersed people for a state of their own cannot possibly be so repugnant, especially after that people endured centuries of massacres and expulsions, culminating in history’s largest mass murder. Perhaps revulsion toward Zionism stems from its unusual blend of national identity, religion and loyalty to a land. Japan offers the closest parallel, but despite its rapacious past, Japanese nationalism doesn’t evoke the abhorrence aroused by Zionism.
Clearly anti-Semitism, of both the European and Muslim varieties, plays a role. Cabals, money grubbing, plots to take over the world and murder babies–all the libels historically leveled at Jews are regularly hurled at Zionists. And like the anti-Semitic capitalists who saw all Jews as communists and the communists who painted capitalism as inherently Jewish, the opponents of Zionism portray it as the abominable Other.

For the full commentary, see:
MICHAEL B. OREN. “In Defense of Zionism.” The Wall Street Journal (Sat., AUG. 2, 2014): C1-C2.
(Note: ellipses added.)
(Note: the online version of the commentary has the date AUG. 1, 2014.)

“In the Name of God and of Profit”

Writing of the period of the mid to late 1300s in the area of Florence:

(p. 114) The surviving archive of a single great merchant of this period, Francesco di Marco Datini of nearby Prato–not, by any means, the greatest of these early capitalists–contains some 150,000 letters, along with 500 account books or ledgers, 300 deeds of partnership, 400 insurance policies, several thousand bills of lading, letters of advice, bills of exchange, and checks. On the first pages of Datini’s ledgers were inscribed the words: “In the name of God and of profit.”

Source:
Greenblatt, Stephen. The Swerve: How the World Became Modern. New York: W. W. Norton & Company, 2011.

McCloskey’s “Great Fact” of “the Ice-Hockey Stick”

HockeyStick2011-08-23.jpg

Source of image: http://www.bombayharbor.com/productImage/Ice_Hockey_Stick/Ice_Hockey_Stick.jpg

(p. 2) Economic history has looked like an ice-hockey stick lying on the ground. It had a long, long horizontal handle at $3 a day extending through the two-hundred-thousand-year history of Homo sapiens to 1800, with little bumps upward on the handle in ancient Rome and the early medieval Arab world and high medieval Europe, with regressions to $3 afterward–then a wholly unexpected blade, leaping up in the last two out of the two thousand centuries, to $30 a day and in many places well beyond.
. . .
(p. 48) The heart of the matter is sixteen. Real income per head nowadays exceeds that around 1700 or 1800 in, say, Britain and in other countries that have experienced modern economic growth by such a large factor as sixteen, at least. You, oh average participant in the British economy, go through at least sixteen times more food and clothing and housing and education in a day than an ancestor of yours did two or three centuries ago. Not sixteen percent more, but sixteen multiplied by the old standard of living. You in the American or the South Korean economy, compared to the wretchedness of former Smiths in 1653 or Kims in 1953, have done even better. And if such novelties as jet travel and vitamin pills and instant messaging are accounted at their proper value, the factor of material improvement climbs even higher than sixteen–to eighteen, or thirty, or far beyond. No previous episode of enrichment for the average person approaches it, not the China of the Song Dynasty or the Egypt of the New Kingdom, not the glory of Greece or the grandeur of Rome.
No competent economist, regardless of her politics, denies the Great Fact.

Source:
McCloskey, Deirdre N. Bourgeois Dignity: Why Economics Can’t Explain the Modern World. Chicago: University of Chicago Press, 2010.
(Note: ellipsis added.)

Locke and Smith Showed How Economic Life Has Moral Value

(p. 241) Andrzej Rapaczynski discusses “The Moral Significance of Economic Life” in the most recent issue of Capitalism and Society. His abstract summarizes the argument (p. 242) compactly: “Much of the modern perception of the role of economic production in human life–whether on the Left or on the Right of the political spectrum–views it as an inferior, instrumental activity oriented toward self-preservation, self-interest, or profit, and thus as essentially distinct from the truly human action concerned with moral values, justice, and various forms of self-fulfillment. This widely shared worldview is rooted, on the one hand, in the Aristotelian tradition that sees labor as a badge of slavery, and freedom as lying in the domain of politics and pure (not technical) knowledge, and, on the other hand, in the aristocratic medieval Christian outlook, which–partly under Aristotle’s influence–sees nature as always already adapted (by divine design) to serving human bodily needs, and the purpose of life as directed toward higher, spiritual reality. . . . As against this, liberal thinkers, above all Locke, have developed an elaborate alternative to the Aristotelian worldview, reinterpreting the production process as a moral activity par excellence consisting in a gradual transformation of the alien nature into a genuinely human environment reflecting human design and providing the basis of human autonomy. Adam Smith completed Locke’s thought by explaining how production is essentially a form of cooperation among free individuals whose self-interested labor serves the best interest of all. The greatest “culture war” in history is to re-establish the moral significance of economic activity in the consciousness of modern political and cultural elites.” Capitalism and Society, December 2013, vol. 8, no. 2, http://capitalism.columbia.edu/volume-8-issue-2.

Source:
Taylor, Timothy. “Recommendations for Further Reading.” Journal of Economic Perspectives 28, no. 1 (Winter 2014): 235-42.
(Note: italics, and ellipses, in original.)