The idea that the transformation of America into the world’s most formidable industrial power was due to ‘small’ government, to letting everyone’s private individual initiative blossom and flourish, is an endearing and naive myth. The federal government always had a major role in American development. It was the largest landowner and aggressively subsidized the railways.37 Between the Civil War and the First World War the government both at federal and state levels expanded its regulatory power. The Civil War drove up government spending from 2 per cent of GNP to 15 per cent (by 2015 it was almost 40 per cent).38 The war also led to the creation of the first federal income tax, set at 3 per cent at the beginning of the war. By the end of the war it had risen to 5 per cent (10 per cent for incomes over $5,000).39
After the Civil War the American army was used increasingly for ‘internal’ colonization in a massive ethnic cleansing (the term was invented much later), in the continuing wars against the Indians, such as the Great Sioux War of 1876, now remembered principally for the Battle of the Little Bighorn, the site of Custer’s famous last stand. The country became home to the purest form of ‘naked’ capitalist ideology. Between the Civil War and the First World War, American industrialization proceeded with a greater dose of brutality than in most European countries, probably because of the peculiarly violent nature of frontier culture, a civil war of unparalleled ferocity, and slavery. There were thousands of industrial disputes, strikes, lockouts, often repressed by force.40 As the loyalty of the army could not be guaranteed against white workers on strike, so repression of such unrest was ‘privatized’. The Pinkerton National Detective Agency, founded in 1850 by Allan Pinkerton, constituted a de facto private army to be deployed by capital against labour. By the 1880s and 1890s the Pinkerton Agency outnumbered the US army.41 One should add that even in May 2016 American private security guards outnumbered the police by 1.1 million to 650,000 and that such disparity existed also in China, Russia, India, and the United Kingdom (the only Western European country today where police are outnumbered by private security guards).42
The economic organization of society in America became the envy of the world well before its consumer society. Its market was bigger than any in Europe; its productivity was higher; its marketing techniques were unequalled.43 By the end of the nineteenth century, the United States was already the capitalist country par excellence while England remained full of aristocrats pretending to despise capitalism. American capitalism had taken its own particular path, which historians such as Louis Hartz (The Liberal Tradition in America) and Richard Hofstadter (The American Political Tradition) argued might be explained by the absence of a pre-capitalist past. The importance of not having an aristocracy and being freed from the burden of the past had been recognized much earlier by aristocrats of the intellect such as Goethe, representative of the enlightened cosmopolitanism of the early nineteenth century, who wrote in ‘To the United States’ (Den Vereinigten Staaten, 1827):
America, yours is a better fate
Than that of our old continent.
You have no decaying castles
And no basalts.
You are not troubled
By useless memories
And futile strife.44
Hegel wrote along similar lines: ‘Emigrants to America have on the one hand an advantage in that they bring with them the whole treasure of European culture … without the burdens that the European states impose on individuals, without re-encountering the hardships they have left behind …’45
To pursue capitalism meant to pursue wealth and money. The idea that Americans were particularly in love with money (as if Europeans despised it) was already a cliché in the early nineteenth century: the Duchess Sanseverina, in Stendhal’s La Chartreuse de Parme (1839), alerts the oh-so-innocent Fabrice to the peculiarities of American capitalist democracy, explaining to him the cult of the God Dollar and the respect one must have for street artisans who, with their votes, decide everything.46 And Tocqueville noted later in his Democracy in America, ‘I do not know another country where the love of money has such a large place in the hearts of men …’47 What became a famous adage, ‘Remember that time is money’, was first coined by Benjamin Franklin at the beginning of his ‘Advice to a Young Tradesman, Written by an Old One’ (1748).48 Charles Péguy, writing just before the First World War, but already a conservative Catholic, having been anticlerical, denounced the power of money in bitter tones: ‘Never until today has money been so much the sole master and God. Never until today have the rich been so protected against the poor and the poor so unprotected against the rich.’49
Financiers were more despised than industrialists. Decent people made money out of making things. Bankers made money out of money – they grew nothing, made nothing, sold nothing. They were the objects of contempt well before the global downturn of 2007–8, when the large bonuses bankers subtracted from their shareholders caused such scandal. European literature in the nineteenth century and beyond is replete with negative images of those involved in finance, from the Baron Nucingen (an obvious allusion to Rothschild) in Balzac’s La Maison Nucingen (1838), to Ebenezer Scrooge in Dickens’s A Christmas Carol (1843), Augustus Melmotte in Trollope’s The Way We Live Now (1875), Aristide Saccard in Zola’s L’Argent (1890), and John Gabriel Borkman in Ibsen’s eponymous play (1896). In his Cantos (Canto XLV) Ezra Pound intones a litany against ‘usura’, which, he claimed, made no contribution to the crafts or arts (listing Duccio, Botticelli’s La Calunnia, Piero della Francesca, Giovanni Bellini, and Hans Memling, and totally ignoring the contribution to the arts made, for instance, by the bank Monte dei Paschi di Siena):
Usura is a murrain, usura
blunteth the needle in the maid’s hand
and stoppeth the spinner’s cunning. Pietro Lombardo
came not by usura
Duccio came not by usura
nor Pier della Francesca; Zuan Bellin’ not by usura
nor was ‘La Calunnia’ painted.
Came not by usura Angelico …
Thomas Jefferson, as early as 1816, was denouncing bankers in no uncertain terms: ‘I believe that banking institutions are more dangerous to our liberties than standing armies.’50 Without banks, of course, as Jefferson knew well, there would be no capitalism. Without hands-on ‘universal’ banks (where the investment function is not separate from the commercial one, as in Britain), Germany, Switzerland, France, and Italy would not have industrialized as they did.51
As Noel Annan noted, ‘one common assumption’ held by many men of letters is that ‘the career of moneymaking … is a despicable life in which no sane and enlightened person should be engaged; and that indeed such people are unworthy of a novelist’s attention’.52 In ‘Economic Possibilities for our Grandchildren’ (1930), John Maynard Keynes wrote:
The love of money as a possession – as distinguished from the love of money as a means to the enjoyments and realities of life – will be recognised for what it is, a somewhat disgusting morbidity, one of those semi-criminal, semi-pathological propensities which one hands over with a shudder to the specialists in mental disease.53
Albert Hirschman opens his clever The Passions and the Interests: Political Arguments for Capitalism before its Triumph (1977) with the query (inspired by Max Weber): ‘How did commercial, banking, and similar money-making pursuits become honorable at some point in the modern age after having stood condemned or despised as greed, love of lucre, and avarice for centuries past?’54
Industry too was often despised. The Swiss economist Jean-Charles de Sismondi declared in his Études sur l’économie politique (1837): ‘I will always oppose the industrial system which ranks low human life.’55 In America as well as everywhere else, modern capitalism was both a desirable goal and an object of loathing. However, hostility towards capitalism was more widespread in the Old World than in the New, where it had a home among old reactionaries as well as new radicals.
The French liberal social scientist Émile Boutm
y was quoted, not altogether approvingly, by the historian Frederick Jackson Turner, as saying of the United States:
The striking and peculiar characteristic of American society is that it is not so much a democracy as a huge commercial company for the discovery, cultivation, and capitalization of its enormous territory. The United States are primarily a commercial society, and only secondarily a nation.56
Tocqueville had noted the alienation and fragmentation so characteristic of American society:
I see a multitude of men all equal and alike, turned on themselves to obtain the petty and vulgar pleasures with which they fill their souls. Each of them, living apart, is a stranger to the fate of all the others: his children and his own friends are for him the whole of humanity; as for his other fellow citizens, he is near them, but does not see them; he touches them, but does not feel them; he exists for himself and for himself alone, and if he still has a family, we could say he no longer has a country.57
But what also impressed Tocqueville during his visit from 1831 to 1833 was the industriousness of Americans as well as the small scale of their enterprises. Starry-eyed as he often was, he declared that ‘what is most striking in the United States is not the extraordinary size of a few industrial enterprises; it’s the innumerable multitudes of small firms.’58
In the first half of the nineteenth century the United States was probably as close to being a country of independent small producers and property owners as it ever has been.59 Few wanted to become wage-earners: they wanted to be independent craftsmen, artisans, small entrepreneurs, not ‘wage slaves’.60 To be a wage labourer signified humiliation, lack of autonomy, degradation. Many Americans believed that independence could exist only in a society of small producers.61 Yet, industrial slavery was a fate open to most Americans after the Civil War. As Henry George, radical journalist and scourge of landed and corporate interests, declared: ‘We have not abolished slavery; we have only abolished one rude form of it, chattel slavery. There is a deeper and a more insidious form, a more cursed form yet before us to abolish, in this industrial slavery that makes a man a virtual slave.’62 And in his famous tract Progress and Poverty (1879), he wrote: ‘Labour has become a commodity, and the labourer a machine. There are no masters and slaves, no owners and owned, but only buyers and sellers. The higgling [haggling] of the market takes the place of every other sentiment.’63
The Civil War, terrible though it was, with tremendous human losses on both sides of about 620,000 individuals, had its compensations. The economy of the South was devastated, but in the North industry boomed, the stock market prospered, speculators speculated and became richer, agriculture flourished.64 And cotton production, which had virtually stopped during the war, recovered so rapidly that the United States exported more cotton in 1880 than it had in 1860.65
Some reformers hoped that the South would follow the North on the road to industry, but this did not happen, at least not then: the transformation of a planter society into an industrial one is exceedingly difficult. The reformers lacked a vision of what was required while the planter class, though willing to adopt new technologies and new methods of production, were quite unwilling to let their land fall into black hands. Agrarian reform was unthinkable, though Radical republicans had a plan to seize millions of acres from the wealthiest planters and redistribute or sell them to freed slaves.66 This was part of the political ferment of the Reconstruction period when not just white reformers but also many former slaves challenged the old planter class’s attempts to maintain or retake power. But the reformers failed. True, things had changed and considerably so: the slaves were freed and became sharecroppers or emigrated to the North. The former slave-owners kept their local power, and lands confiscated from the planters during the war were returned to their original owners, but the planters now mattered less in the national economy. Before the Civil War they had mattered greatly: until 1850 southerners had held the presidency for all but thirteen years, occupied half the seats in the Senate and more than half the seats in the Supreme Court. They had been the nearest America had achieved to an aristocracy, an elite that might have competed with the northern capitalists for political favours and for access to political resources. After the Civil War, there was a dramatic decline in southern power: ‘the political bloc coming to dominate the new nation state scarcely included the Southern landed elite’.67 They remained rich but, at the federal level, powerless.68 Hence their deep odium for ‘Washington’ and Big Government.
Before 1840, American society was predominantly pre-industrial; by the end of the century it had become a mature industrial society; and by 1914 it had become the world’s industrial colossus.69 American capitalism became large-scale, as the plantations had once been. In 1870, Standard Oil at Cleveland employed 2,500 people; Singer (sewing machines) employed almost as many in New York; the Cambria Iron Works near Pittsburgh, Pennsylvania, employed 6,000 people.70 Everything was increasingly linked by railways. Change was, of course, uneven: almost all of the industry was concentrated in the Northeast and the Mideastern states of Ohio, Indiana, Illinois, Wisconsin, and Michigan.71
Such advances inspired Walt Whitman, who linked the opening up to the west achieved by the railroad to the opening of the Suez Canal in 1869:
Singing my days,
Singing the great achievements of the present,
Singing the strong, light works of engineers,
Our modern wonders, (the antique ponderous Seven outvied,)
In the Old World, the east, the Suez canal,
The New by its mighty railroad spann’d,
The seas inlaid with eloquent, gentle wires,
I sound, to commence, the cry, with thee, O soul,
The Past! the Past! the Past!
…
I see over my own continent the Pacific Railroad, surmounting every barrier;
I see continual trains of cars winding along the Platte, carrying freight and passengers;
I hear the locomotives rushing and roaring, and the shrill steam-whistle,
I hear the echoes reverberate through the grandest scenery in the world … 72
But even Whitman was perturbed. He hailed, in 1871, ‘with pride and joy’, America’s ‘unprecedented materialistic advancement’ at the end of the Civil War. Later he lamented the ‘hollowness at heart’ of his countrymen:
Genuine belief seems to have left us … We live in an atmosphere of hypocrisy throughout … A lot of churches, sects, etc., the most dismal phantasms I know, usurp the name of religion … The depravity of the business classes of our country is not less than has been supposed, but infinitely greater. The official services of America, national, state, and municipal, in all their branches and departments, except the judiciary, are saturated in corruption, bribery, falsehood, maladministration … In business … the one sole object is, by any means, pecuniary gain … The best class we show, is but a mob of fashionably dressed speculators and vulgarians …
He celebrated the material achievements of the New World democracy but bemoaned its ‘deceptive superficial popular intellectuality … everywhere, in shop, street, church, theatre, bar room, official chair, are pervading flippancy and vulgarity …’73
American anxieties about capitalism echoed those made by European intellectuals. The literary critic Charles-Augustin Sainte-Beuve, writing in 1839, complained about the development of an ‘industrial’ culture, one in which authors wanted to be paid, thought in purely commercial terms, and were overcome by the ‘demon of literary property’.74 In the 1860s Alexander Herzen, now disillusioned with France and the West, wrote in his memoirs:
the theatre, holiday-making, inns, books, pictures, clothes: everything has gone down in quality and gone up fearfully in numbers. The crowd of which I was speaking is the best proof of success, of strength, of growth; it is bursting through all the dams, flooding and overflowing everything; it is content with anything and can never have enough.75
The anthropologist Charles Letourneau (general sec
retary of the Société d’anthropologie), writing in 1897, while accepting the need for manufacturing and commerce, pointed out that commerce could be a major cause of wars and, regretfully, announced that if it invaded the whole world there would be no time left for poetry.76 Order, discipline, and precision, not poetry, were the hallmark of the new money-dominated world, along with uniformity and punctuality. As Georg Simmel wrote: ‘If all clocks and watches in Berlin would suddenly go wrong in different ways, even if only by one hour, all economic life and communication of the city would be disrupted for a long time.’77
Previously, wrote Werner Sombart, production was meant to satisfy wants and bring about happiness, but with the dawn of the new century all this changed. The lone entrepreneur has given way to collectively run corporations, capitalists have become slaves to the need to expand: ‘Speed and yet more speed … is the cry of the age. It rushes onward in one mad race.’78 This was part of the complaint by intellectuals of both left and right that the formation of a ‘mass’ society was inevitably bringing about a collapse in standards, standards that they themselves defined.
The lamentation of the intelligentsia for the bad taste of the people continues to this day. Yet even those critics who approached capitalism with disdain were unwilling to do away with the industrial system. Important trends within the American public felt vulnerable, uneasy, and angry in the face of the considerable changes that economic growth brought about.79 Such sentiments were common at the time of the so-called ‘Gilded Age’. This appellation, derived from a satirical novel by Mark Twain and Charles Dudley Warner (The Gilded Age: A Tale of Today, 1873), suggested an era of superficial ‘gilded’ splendour to be contrasted with what might have been a real Golden Age. This negative image, not undeserved, was based, above all, on the behaviour of politicians, generally described as cynical and venal opportunists, seeking office in order to get rich. Such views, of course, are far from uncommon today, nor are they confined to the United States. In fact one would be hard put to find a country in which the prevailing view is to hold politicians in high esteem for their spirited defence of the public good and the denial of self-interest. The Gilded Age was probably no worse than any other in terms of the standing or quality of politicians.
The Anxious Triumph Page 34
