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March 2006 --Charles R. Morris, The Tycoons: How Andrew Carnegie, John D. Rockefeller, Jay Gould, and J.P. Morgan Invented the American Supereconomy (New York: Times Books, Henry Holt and Company, 2005), 382 pp., $28.00.
“The latest volley in this war of words is about to be fired, and fired for our side.” So wrote the author of a sympathetic biography of Jay Gould, Edward J. Renehan Jr., back in October, on the Web site now called tcsdaily.com. The war he had in mind was the war over the reputation of America’s Productive Fathers—Paul Johnson’s term for those nineteenth-century U.S. industrialists and financiers too often called “the robber barons.” The forthcoming volley that Renehan heralded as being “for our side”—the side of those who honor the Productive Fathers—was Charles R. Morris's The Tycoons.
Certainly there is much to enjoy in Morris’s book, and not the least is its great-man approach to economic history. Here is Morris explaining that the key to Andrew Carnegie’s success was his reality-orientation:
Shortly after his appointment [as superintendent of the Pennsylvania Railroad’s Western division], he shocked fellow executives by burning stalled cars to clear lines. It was the classic Carnegie technique: focus on an objective [in this case, keeping traffic flowing], then cut brutally through any conventions, competitors, or ordinary people who stood in your way (p. 14).
Morris also explodes many of the muckrakers’ lies about the Productive Fathers, integrating into this popular history the results of studies that pro-capitalists have long been passing among themselves. For example, everyone has heard that John D. Rockefeller created Standard Oil through “predatory pricing,” selling below cost to drive out small competitors in one region after another, while making back his losses in the other regions of his empire. Citing a 1958 study well known to pro-capitalist historians, Morris writes: “When the historian John McGee examined every alleged case of predatory pricing, however, he could not find ‘a single instance in which the Standard used predatory price cutting’” (p. 220).
On the broad scale, too, Morris celebrates the work of the great industrialists and financiers. His book’s subtitle, which asserts that these four men “invented the American supereconomy,” obviously does so. In addition, when discussing the long “deflation” of the post–Civil War era, Morris argues that it was in large part not a monetary phenomenon but a “supply shock,” a real fall in the cost of living that resulted from the industrialists’ genius for producing goods more cheaply. “The wholesale price index fell by 25 percent from 1870 to 1880, a decline that continued through the 1880s at about half that rate, before flattening out at essentially zero inflation in the 1890s. . . . Because prices, in the main, fell faster than incomes did, real income grew strongly” (p. 103). Pro-capitalist students of economics will grasp his point immediately, but for the average reader Morris makes a comparison with the falling cost of computing power in our own day. During the post–Civil War era, he maintains, American industrialists accomplished a similar feat in field after field.
But though Morris celebrates the work of America’s Productive Fathers, his book carries a moral undertone that seems to come from a basis other than Adam Smith’s rational self-interest. For example, after discussing the mechanization of agriculture, Morris writes: “It’s no surprise that the protest movements that bloomed throughout the farm belt in the late 1870s—the Grangers are the best known—had a common theme of victimization by impersonal forces—railroads, eastern capitalists, riggers of commodity markets” (116). At that point, a reader may suspect that Morris is about to lapse into a standard narrative of “the big guys” squeezing out “the little guy.” But he does not. Instead, he writes: “The cold data bear out almost none of their complaints” (116).
Yet the term “cold data” is not a throwaway. The true problem, as Morris sees it, was that the scale of agricultural operations had moved beyond the cognitive reach of many farmers. “Overall, late nineteenth-century ‘terms of trade’ turned decisively in farmers’ favor: it took fewer and fewer bushels of wheat to buy a reaper or a bolt of cloth. But it is the lurking, poorly grasped perils that make you paranoid. Most farmers would have been terrified as their markets delocalized” (pp. 116–17).
Morris explodes the muckrakers’ lies about America’s productive fathers.
What does such a criticism suggest are the ethical and social principles that animate Morris’s account of the Productive Fathers? To begin with, one must note that Morris seems to be a practicing Catholic. He is the author of American Catholic and a frequent contributor to the lay Catholic magazine Commonweal. He is also, evidently, a liberal in the American political sense. Thus, last year, Morris not only published The Tycoons but also an article called “Just the Facts,” in which he asserted: “The first important fact about the Social Security ‘crisis’ is that there is no crisis. The second important fact is that the Bush administration’s proposals for fixing the ‘crisis,’ especially its ‘privatization’ scheme, are perversely designed to make the system’s finances much more precarious than they are now and to impose deep benefit cuts” (Commonweal, February 11, 2005).
All of this leads one to suspect that Morris’s moral slant on capitalism may be similar to that set down in John Paul II’s encyclical Centesimus Annus. To put the pope’s thesis simply: If productive activity is pursued as a self-realization of human capacities, it is virtuous and praiseworthy—sometimes even heroic and deserving celebration—and the producer’s products should reap him a just price, arrived at through free bargaining (Paragraphs 31, 32). But productive activity is not to be pursued egoistically, and the producer has no inalienable right to use his product as a means of maximizing his gains. This distinction between the Catholic justification of productive activity and the egoistic justification reflects a broader distinction (which I discussed in “Fortress Americanism,” Navigator, January/February 2004) between the Continental conception of self-realizational freedom and the Anglo-American conception of bourgeois freedom.
As confirmation of the connection between Morris’s outlook and John Paul II’s, consider that the pope, after praising the producer, wrote in his very next paragraph (33): “The fact is that many people, perhaps the majority today, do not have the means which would enable them to take their place in an effective and humanly dignified way within a productive system in which work is truly central. They have no possibility of acquiring the basic knowledge which would enable them to express their creativity and develop their potential. They have no way of entering the network of knowledge and intercommunication which would enable them to see their qualities appreciated and utilized. Thus, if not actually exploited, they are to a great extent marginalized; economic development takes place over their heads, so to speak.” This is exactly Morris’s lament for the family farmer in the age of mechanization.
In sum, then, I do not think that pro-capitalists can say The Tycoons is a volley “fired for our side” in the war over America’s Productive Fathers. But I do think that, out of Morris’s book, thorough-going pro-capitalists can fashion much effective ammunition—perhaps more ammunition and more effective ammunition than the author would wish.