The novels for this weeks readings are certainly critical of business, capitalism, and corporations. The Whiskey Rebels, the book I read, has an obvious agenda, and it seems likely that The Financier does too. Moreover, both seem highly critical of bankers in particular and capitalism in general. OK, as far as that goes. Two points I would like to make in this post. One involves the portrait painted in The Whiskey Rebels of the antagonists in that story. The other is more a general thought about the present attitude about corporations and capitalism.
As to the book, there is no subtleness. There is the misunderstood and virtuous (Ethan Saunders), and then there are the evil "elites" who control the levers of power (William Duer, Alexander Hamilton, et al.). The rural farmers are rich with land and poor of cash and challenge the government's taxation policy. The city dwellers are greedy, focused on money and speculation that is inherent in Hamilton's economic policies and that is fostered under the political stability offered by the Constitution. The conflict created is so one-sided that one wonders why a few guillotines were not imported from Paris, and why significant portions of the population (from many different regions and socio-economic groups) supported the Constitution at all.
As to the present attitude about corporations, I am increasingly concerned that our society is becoming unhinged about the benefits and problems inherent in the corporate form and about the nature of capitalism. A comment in our last class noted that many of our blogs had been highly critical of corporations, and that has certainly been the theme of the discussions (though not of all the books).
I come at this from a rather different perspective. I very much recognize that I am a product of a corporate culture. People I have known well (family) have found their lives better because of their employment by corporations (as conductors and engineers for the Pennsylvania Railroad, as national sales managers for Andrew Jergens in the early-20th century, as financial controllers and auditors for General Foods and other consumer food businesses in the mid- and late-20th century). People I have known somewhat less well have been corporate executives -- people who have built new businesses, grown existing businesses, and even irretrievably damaged businesses. Not only have I and others benefitted from that employment (both in financial terms and in a perspective of the world), I have absorbed a culture of success from that association, a recognition that I am part of a larger national and international economic, cultural, and political system. Moreover, I do not see the corporation as an entity, but as a collection of people -- imperfect though they are. In the Navy there is an old adage that a ship is just a bunch of steel until the officers and crew climb aboard, and that is also true with corporations, or universities, or any other group activities.
The corporate form allows people to pool money and create something in an industrial economy that could not be done through a partnership or single proprietorship. It simultaneously spreads the risk of failure to numerous investors and limits the risk of failure to other markets. We see this today in bankruptcy proceeding that spread the economic ripples caused by business failure. Of course this insulates investors personally, and that is a problem where bad things happen intentionally. But it can also have the benefit of insulating the broader market and economy from dislocations caused by business failures.
Life is imperfect and is a series of trade-offs. There is a difference between problems of the corporate form, and problems of human nature. The first can be addressed, the other is more problematic. William Duer is a sneak who preys on others less knowledgable about investments and less able to defend themselves. There is little difference between him and Ivan Bovsky in the 1980s or even the imprudent decisionmaking on Wall Street in the last decade. That is about human nature. I am beginning to wonder if our cultural willingness to see fault in the corporate form and in captialism makes us unwilling to tolerate human failings, and is blinding us to the benefits of capitalism and to the problems inherent in the alternative.
Excellent piece Jeff. Even Karl Marx could see the benefits of capitalism. If I play the devil's advocate and try to think of what you would use in place of capitalism, I come up blank. There is NO alternative. If i am wrong, someone let me know, please.
Socialism is not the opposite of capitalism. Socialism does not produce the wherewithal (money, etc.) to pay for itself. In my estimation, universities need to do a much better job of educating the public (students, etc.) about the positive side of capitalism. George Bernard Shaw pointed to this in his play 'Major Barbara', years ago.
Posted by: Dianne Foster | 11/12/2009 at 07:16 AM
Excellent piece Jeff. Even Karl Marx could see the benefits of capitalism. If I play the devil's advocate and try to think of what you would use in place of capitalism, I come up blank. There is NO alternative. If i am wrong, someone let me know, please.
Socialism is not the opposite of capitalism. Socialism does not produce the wherewithal (money, etc.) to pay for itself. In my estimation, universities need to do a much better job of educating the public (students, etc.) about the positive side of capitalism. George Bernard Shaw pointed to this in his play 'Major Barbara', years ago.
Posted by: Dianne Foster | 11/12/2009 at 07:17 AM
I think you would have enjoyed reading "The Financier" more than "Whiskey Rebels" because Dreiser doesn't judge corporations. True to his previous works, Dreiser leaves morality out and creates characters who have positive and negative attributes and allows you as the reader to decide if they should be judged - but I wager he hopes you won't judge at all. His writing style reminds me of "No Country for Old Men" in that the main character acts without remorse. This is off putting for some people and those same people would be upset that in both stories neither man is "brought to justice" so to speak. There is no lesson learned. But I like it. It is more realistic. Of course, I chose to study the Gilded Age because I love corruption and amorality... so maybe its just me.
Posted by: Lindsey Bestebreurtje | 11/12/2009 at 09:15 AM
I love 'No Country for Old Men' although the first time I saw it I was scared to death. Javier Bordeem (sp?) is as fascinating as a snake.
Posted by: Dianne Foster | 11/12/2009 at 10:33 AM