Chapter 3 : Growth of Capitalism

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Chapter 3

Perhaps the democratic dream was unrealizable. Perhaps it was inevitable that one or another group would turn the hopes of men into a new facade behind which the naked search for wealth and power would continue. Perhaps the faith in man’s educability, in man’s capacity to grasp and solve political problems intelligently in concert with other men, was unfounded. Perhaps democracy could only be practiced, as Aristotle had claimed so long ago, in small communities of a few thousand inhabitants at most. The eighteenth century’ revolutionaries did not know whether or not their dream was possible. That was the point of the “experiment.” They asked for the indulgence and good will of spirited men for a grand collective effort to create Democracy. The task would be difficult and might take generations. Men everywhere waited anxiously for the results of the experiment. But the experiment never took place. The democratic dream became the rhetoric of a new aristocracy. The ideal which was to give suggestion and encouragement to men groping for a just society was housed in a glass cage and used by the Lawyers of an unjust society to defend injustice. The democratic experiment that was to be carried out through the concentrated effort of many generations was never even started, and in time it was forgotten by men who claimed “democracy” had been fully established in 1776, before it had ever begun. The blueprint of the palace was housed in a slum, and the slum-builders pointed proudly to the blueprint they had not made, nor even studied, while their hovel continued to deteriorate.

***

The system that emerged after the American revolution was not democracy, but capitalism. The privileged may wish to speak of America as a “Hamiltonian Democracy,” as a “democracy of the rich and well born.” Such a usage of language is one of the many privileges they derive from the American system. For the “rich and well born,” “freedom” is always synonymous with privilege. But since the “freedom” of the rich involves the abuse of the majority of men, the majority of men cannot long be content to accept the definitions of the rich; they cannot forever call their abuse “freedom.” Nor can the rich depend eternally on the poor to “check the imprudence of democracy.”

Yet the Hamiltonian community of “the few and the many” where “the first are the rich and well born, the other the mass of the people,” has maintained itself with tremendous success on the American continent. On the basis of the staying power of American capitalism, it could almost be argued that capitalism was the “progressive” force in the eighteenth century, whereas the democratic ideals were “reactionary.” And it has, in fact, been argued that the democrats were looking towards the Golden Age of the past, whereas capitalists were moving towards the future. It has, in fact, even been argued that capitalism has not yet been overthrown because it is “consistent” with “human nature.” If such an argument means that capitalism in any way fulfills the potentialities of human beings, it is absurd, since the capitalist society converts a minority of human beings into counting machines and the majority into mindless work animals. But if the argument means that “human nature” is able to put up with capitalism, it is obviously true. In some parts of the world, notably in Western Europe, human beings have put up with capitalism for centuries. But for this there’s no need to invoke “human nature”; “human endurance” would serve as well.

The argument that capitalism was more “progressive” than any other social movement in post-feudal Western Europe has been endlessly repeated by writers on the Left, Right, and Center, ever since Karl Marx expounded it with all but irrefutable logic. Marx obviously meant something radically different than did the apologists for capitalism, but he did hold that, under the conditions of the time, capitalism was the only system consistent with the new means of production. It will be contended here, although by no means “scientifically,” that the social and legal relations of capitalism preceded the technological means of production; that capitalist institutions were nothing more than streamlined versions of feudal privilege; that capitalist institutions were neither suited nor unsuited to the technological economy, but were imposed on it by force and fraud. It has also been held that every major change in knowledge, technology, or social organization constitutes “progress.” But surely if such a change does not lead to the ennoblement and completion of human beings, it cannot constitute “progress.” Something that leads to human degradation cannot be called “progressive.” (It would be absurd to speak of atomic physics or Freudian psychology as “progressive,” or as in any way constituting “progress.” The outstanding effects of both have been to annihilate human beings, the one physically, the other psychologically. The notion of “progress toward human degradation and annihilation” serves the purposes of nihilism, not of human life.)

When Don Quixote de la Mancha described the age when “No man, to gain his common sustenance, needed to make any greater effort than to reach up his hand and pluck it from the strong oaks, which literally invited him to taste their sweet and savory fruit,” he was no doubt making idyllic an age long past, and he was neglecting to mention that the men who ate the food of oak trees w ere at the mercy of storms and cold, and spent their time fleeing from animals. But the socially conscious Don Quixote did not invoke the Golden Age merely because he wanted to review his historical scholarship. He invoked the picture of paradise because his own age was befouled with “fraud, deceit ... malice”; because in his own time “those two words thine and mine” defined the potentialities of a person’s life; because in the feudal society all things were not “held in common.” Don Quixote’s invocation of the Golden Age is not a reminiscence about mankind’s childhood; it is a sharp critique of the two props of feudalism: privilege and property.

Nor did Thomas More design his Utopia as a picture of the Christian afterlife. More was quite explicit about his frame of reference: “wheresoever possessions be private, where money beareth all the stroke, it is hard and almost impossible that there the weal public may justly be governed and prosperously flourish.” Don Quixote and Thomas More did draw their model from a mythological past. But they did not draw it merely for its esthetic quality. They showed men glowing pictures of Utopia thereby to undermine a system which gave a monopoly of wealth and power to the few, and made the rest of mankind servants. The feudal aristocracy and the Church maintained their positions because they had a monopoly of the means of violence, education, and communication, not because they were especially “suited” to the agrarian economy. The researches of anthropologists have turned up many agrarian societies where the institutions of privilege and property, knight and serf, are unknown.

Gerrard Winstanley and the Diggers did not confine their activities to writing books about Utopia, and consequently cannot be accused of addressing themselves to a literary mirage. The Diggers actually tried to carry’ out their experiment by cultivating common land, and giving the produce to the poor. They were going to demonstrate through action that “the earth is free for every son and daughter of mankind to live free upon.” And it was not the new means of production that put an end to their experiment. If technology had been available to them—if they’d had tractors and chemical plants and all the other means made available to man in succeeding centuries—their experiment would have been so much more effective, especially if other men had followed their fine example. England would then truly have become a “common treasury” instead of the hothouse of factories and slums it became in the nineteenth century. It was not the means of production that put an end to the Diggers’ experiment. The historian Sabine has described what happened when a few men in seventeenth century England tilled some land in common. “This action caused a flurry among the landlords concerned but it had no lasting effects. The Diggers, who probably numbered only a few score, kept their experiment going for a year but they were finally dispersed by legal harassment and mob-violence.”[102] The Diggers’ spokesman Winstanley was lucidly aware that it was not the means of production, but the social institutions and legal structure of England that transformed this pioneering venture into a historical oddity, for he later wrote: “The poor people whom thou oppress shall be the saviors of the land.... If thou wilt find mercy ... disown this oppressing ... thievery of buying and selling of land, owning of landlords, and paying of rents, and give your free consent to make the earth a common treasury.”[103] It was not the unprogressive character of their experiment, but the “thievery of buying and selling,” that put an end to the Diggers.

When German peasants demanded a more humane dispensation than the misery entailed in supporting feudal privilege, Martin Luther was quite explicit about the agents and institutions that made short shrift of the peasants’ attempts to create a humane and just society. According to Luther:

The princes of this world are gods, the common people are Satan, through whom God sometimes does what at other times he does directly through Satan, that is, makes rebellion as a punishment for the people’s sins.

I would rather suffer a prince doing wrong than a people doing right.

There are no better works than to obey and serve all those who are set over us as superiors. For this reason also disobedience is a greater sin than murder, unchastity, theft, and dishonesty, and all that these may include.[104]

In 1776, an entire nation, not just a small group of “diggers,” broke out in revolt against privilege and proclaimed that “all men are created equal” and that all men are endowed with the “unalienable rights” of “life, liberty, and the pursuit of happiness.” And the workshop for this unprecedented experiment was to be, not a plot of unenclosed common land, but an entire continent. The democratic experiment failed. Capitalism developed in America. And for its failure, apologists for capitalism have claimed that the democratic ideal could not have succeeded, because it was incompatible with the technological economy developing at that time. Those who gloat over the betrayal of democracy level at this untried experiment the same nasty epitaph: “unprogressive” and “unsuited” to the age of machines. I will try briefly to argue that it was not the machines, but the institutions of private property and privilege, institutions far older than technology, that betrayed the democratic experiment.

According to Jefferson, “An industrious farmer occupies a more dignified place in the scale of beings ... than a lazy lounger, valuing himself on his family, too proud to work, and drawing out a miserable existence by eating on that surplus of other men’s labor, which is the sacred fund of the helpless poor.”[105] And in America, he said, “We have now lands enough to employ an infinite number of people in their cultivation. Cultivators of the earth are the most valuable citizens.” John Taylor wrote, “The laws ... for dividing lands diminish the evils of a landed monopoly,”[106] and Jefferson added that one of the central functions of democratic government would be the “restriction of monopolies.”[107] Both Jefferson and Taylor were highly ambiguous in their pronouncements about the division of property among the men who work it, since neither was very eager to see his own estate divided among his laborers—at least not in his own lifetime. But whatever their personal misgivings, both of these spokesmen for the democratic wing of the American revolution envisaged the United States as a society of ongoing agrarian reform. And they were lucidly unambiguous in their condemnation of monopoly in the form of a moneyed aristocracy: “... money is a vehicle for ... conveying the most oppressive usurpations, and possesses a complete capacity for reenslaving nations indirectly, after an accession of knowledge or a division of property, has liberated them from the direct feudal slavery.... An artificial currency is subject to no ... check, and possesses an unlimited power of enslaving nations, if slavery consists an binding a great number to labor for a few. Employed, not for the useful purpose of exchanging, but for the fraudulent purpose of transferring property, currency is converted into a thief and a traitor, and begets, like an abuse of many other good things, misery instead of happiness.”[108]

Jefferson was opposed to manufacturing of the type he saw spreading in England: he was disgusted by the sweat shops, the mindlessness of the work, the unemployment, the degradation of human beings converted into “hands,” the slums in which the people who did the work were forced to live. But was Jefferson “unprogressive” for being disgusted? Was it not rather capitalism, which so degraded human beings and served no human purpose but to enlarge the wealth of wealthy men, that was “unprogressive”?

The American revolutionary program of maintaining a nation of small farmers, of giving land to the tillers, of abolishing the system of creditors and debtors, and thus of making it possible for every human being to have consideration, voice, and control in the affairs of society—such a program was no more “unprogressive” in the eighteenth than it is in the twentieth century. Even today, feudal and capitalist landlords fear democratic agrarian reform, not because it harks to the past, but precisely because it is still today a radical program.

The means of production were no less favorable to such a program in the eighteenth century than today. If Americans had not betrayed the origins of their rebellion, if they had truly created an equalitarian society by expropriating landlords and abolishing the system of creditors and debtors, they a would have undertaken a social experiment that was not to be tried again on such a scale until the twentieth century. The rise and growth of technology would have facilitated, not obstructed, the further development of this program. Machines are indifferent instruments. Their use depends on human beings. There’s nothing about a machine that makes it particularly “suited” to private ownership. In a region where the land is divided among the tillers, machinery would surely have been used in a humane manner. The farmers would have pooled their resources to acquire machinery which none could afford individually. They would, perhaps, have formed farmers’ cooperatives and taken turns in the use of machinery which is most useful over large areas and useless on small plots. Their concern would surely have been to make the machinery serve their own needs, rather than enslaving themselves to fulfill a landlord’s greed. They would surely have sought to decrease drudgery and increase their own development as human beings. Within such a context, marvelous uses might have been made of all the technological and scientific discoveries, all the land and resources, which became available to Americans in succeeding decades. Science and technology would then have been truly “progressive” forces, as they would have served to ennoble, not to debase, human beings.

Technology need not have served the greed of capitalists; it could just as well have served the ends of all human beings from its very beginnings. It was not technology that demanded the continuation of privilege and property: rather the institutions of privilege and property made the technological means of production serve their own inhuman ends. As Babeuf argued, “In a society which was really sound, there would be neither poor nor rich. There would be no such systems of property as ours. Our laws of heredity and inalienability are ‘humani- cide’ institutions. The monopoly of the land by individuals, their possession of its produce in excess of their wants, is nothing more nor less than theft; and all our civil institutions, our ordinary business transactions, are the deeds of a perpetual brigandage, authorized by barbarous law’s.”[109] It was not the shortcomings of the democratic ideal, but the coup d’etat of security-holding capitalists, that put an end to the possibility of cooperative, democratic, self governing communities on the American continent.

***

Capitalism did not develop because it was more “progressive” than other methods of social organization; its success is due largely to its very adept use of fraud and deception. Its use of fraud was similar to the deceptions of previous aristocracies, and its shrieks have not substantially changed since John Taylor described them in 1803, after Capitalism’s victory in America: “Whenever the intricate structure of the system of paper and patronage is attempted to be dissected, we modems surrender our intellects to the yells uttered by the living monster, similar to those with which its predecessors astonished, deluded, and oppressed the world for three thousand years. The aristocracy of superstition defended itself by claiming, the Gods! the temples! the sacred oracles! divine vengeance! And Elysian fields!— and that of paper and patronage exclaims, national faith! sacred charters! disorganization! and security of property!”[110] Once capitalism is in power, it quickly consolidates to itself a monopoly of the means of violence, and henceforth maintains itself as the government through the use and the threat of violence. “If wealth is accumulated in the hands of a few, either by a feudal or a stock monopoly, it carries the power also; and a government becomes as certainly aristocradcal, by a monopoly of wealth, as by monopoly of arms. A minority, obtaining a majority of wealth or arms in any mode, becomes the government.”[111] In the Constitution, the capitalists drew themselves an instrument which would be used for the protection and augmentation of the property of the rich, as well as for the creation and maintenance of an army, navy, and militia subservient to the central government. Taylor said, “The only two modes extant of enslaving nations, are those of armies and the system of paper and patronage.”[112] Availing themselves of both, the capitalists ruled out all opposition; it was then that all other possibilities of social organization became far more difficult than they had been before. Once capitalism became “the way of life” of a region, it not only consolidated the means of violence, of communication, and of production; it also converted the rest of humanity in that region into means for the maintenance and growth of private wealth. The institutions and principles of the old aristocracy were turned into more efficient means of lodging society’s wealth into the hands of the few. The morality of the old order was modified to suit the unprecedented accumulation of private wealth; parts of the old morality we re even discarded or reversed if they clashed too obviously with the practices of the acquisitive society. “Observe what happened to the seven deadly sins of Christian theology,” wrote Lewis Mumford. “All but one of these sins, sloth, were transformed into positive virtues. Greed, avarice, envy, gluttony, luxury and pride were the driving forces of the new economy: if once they were mainly vices of the rich, they now under the doctrine of expanding wants embraced every class in society. Thus unbounded power was harnessed to equally unbounded appetites.”[113] Not Don Quixote or St. Thomas More, but Malvolio and Benjamin Franklin became the heroes of the age. The transvaluation of values followed close on the heels of the transplantation of dominant human types. Greed was seen as Industry, avarice as Thrift, and envy as Competition. Gluttony was called Ambition and luxury Consumption. Pride was named Respectability—and even Dignity.

Eventually, when philosophy, law and police were recruited to run the race of the new Bourgeoisie, the taking of land from those who work it became an “inviolable natural right.” The new machines and factories, the regimentation and standardization, enabled men to produce increasing amounts of food and other material goods. But the majority of men, those who produced ever more, never saw an increase. The new wealth “circulated” back to the wealthy, those who owned the machines and factories. This arrangement came to be called “free enterprise.” In time the rich no longer worked; they created an institution where their money “worked.” This bizarre institution became “Finance.”

Originally, money had been merely a convenient means of exchange. It was easier to “buy” butter in exchange for a standardized metal than it was to trade pigs for chickens and then agree on the number of chickens that would fetch the butter. The metal made a set price possible and also simplified the bookkeeping of bureaucrats. But capitalism revealed a new trait of money—it revealed that money could be abstracted from the exchange of goods, could be treated as a separate entity, and could be accumulated with no reference to the needs of the accumulator. It was found that a man can buy food cheaply from a farmer and sell it expensively to a rich man. He can repeat the process and put the difference in his pocket. In this way, the man who neither produces nor consumes the food becomes quickly rich from it. He can soon buy out the farmer’s other customers and become the only buyer, and in this not-very-subtle manner can convert an independent farmer into a hired servant, a “tenant.” After Hamilton’s introduction of the Bank into the United States, John Taylor had clearly seen the potentialities of money in the hands of capitalists. “An artificial currency is subject to no ... check, and possesses an unlimited power of enslaving nations, if slavery consists in binding a great number to labor for a few. Employed, not for the exchanging, but for the fraudulent one of transferring property, currency is converted into a thief and a traitor, and begets, like an abuse of many other good things, misery instead of happiness.

“Mankind soon discovered that money was easily converted into a medium for oppression as well as for commerce, and hence arose nearly as strong a dislike to heavy taxes in money as in kind; it being clearly seen that labor and property were transferred by money. This plain truth, awakened the exertions of avarice and ambition, to deceive the vigilance of labor and industry: the objects of pillage. The first intricacy with which they endeavored to hide their design, was woven of indirect taxes traveling in mazes; the second, of loaning obscured by the mist of futurity; and the third, of an artificial currency or banking, complicated by the crookedness of its operation, flattering to industry, and restrained by no natural check, as a medium of fraud and tyranny.”[114] Even a few medieval churchmen had seen this process taking place and had wanted to stop it. But the Organized Church needed the rich men to support its plunder and extravagance, and so the process grew like a cancer until the Church itself was thrown off the land.

When machinery came into existence, the process of producing money was highly refined. A man with money built a factory. He hired many men to produce “goods.” He then sold the goods, not on the basis of how much they cost to produce, but on the basis of how much people would pay for them. And then he paid his workers, not according to the price the goods fetched on the market, but the bare minimum which would keep the workers alive. Thus there was a large surplus at both ends: from overcharging the customers and underpaying the workers, so to speak. The surplus was used to increase and improve the machinery, so that a worker could produce, in the same period of time, three or fifteen times as much as he produced before. But the worker wasn’t paid three or fifteen times as much. His share was still no more than the minimum that kept him alive and chained to “his” factory. The increasing wealth kept returning to the same men. Men who did not produce became wealthier from production than men had ever been before. This was only possible in a society where money had become the most important characteristic of human beings, a society where money “talks” and money “works.”

The cycle of capitalist production is so outlandish that future historians will undoubtedly be hard-put to explain how men could have been made to accept it for such a long time. The whole process consists of society’s permitting a few men to gather for themselves what belongs to all mankind. This gathering is the only point of all the bother, all the seriousness, all the Bourgeois Morality. The factory owner accumulates profits. He puts the profits into the expansion of his factory. The factory then produces more. The capitalist sells more. Then he has even more profits. So he again expands his factory. Production is for profit, and profit for more production. This cycle, meaningless in the middle and at both ends, is not only taken seriously by the man engaged in it: he takes this to be the meaning and essence of life. The counting of money is life’s reward, the accumulation of money is life’s main task. According to Benjamin Franklin, inventor, politician, and Philosopher of Avarice, “The more there is of it, the more it produces at every’ turn, and profits rise quicker and quicker.” Franklin’s poetry’ of money suggests that he derived greater spiritual and sensual satisfaction from profit-making than from love or adventure or any other human pursuit.

Benjamin Franklin was the direct descendant of Malvolio, in real life. When Malvolio was asked, “Dost thou think, because thou art virtuous, there shall be no more cakes and ale?” he was unable to answer. Ben Franklin answered unequivocally a century and a half later: “there shall be no more cakes and ale.” The only Virtue is the constant accumulation of money. The primary goal of life is to make the “profits rise quicker and quicker.” Everything else is secondary. A rich man not engaged in raising profits comes to be called a “diletante.” A poor man not engaged in raising the profits of the rich becomes a “vagrant” and later on a “bohemian.” Quantity, Calculation and Measurement become the only legitimate aspects of life. The new men of money soon came to dislike philosophy and hate metaphysics, because philosophers kept asking for the human purpose of all the quantity’, calculation, and measurement, and metaphysicians kept suggesting that human life had other qualities and potentialities besides these. Since capitalism had neither aim nor life, capitalists were very uneasy in the presence of men who discussed the aim of life. Since they’ did not themselves discuss, they solved the problem in the only way that businessmen ever solve problems: with money. They subsidized the universities. This gesture accomplished many purposes with one stroke: it gave capitalists the illusion that they were humanitarian patrons of learning; it quickly put philosophers on the “right” track; and it put an abrupt end to metaphysics. The gesture worked most effectively in England. There a School of philosophers who called themselves “empiricists” developed. This School invented and embellished a doctrine whereby only that which can be measured and calculated is “real”; everything else is “secondary.” The doctrine attained its clearest exposition in the writings of David Hume. In the restrictive boundaries of this doctrine, ideals and goals, feelings and colors, became the “secondary qualities” of human experience. Since businessmen have a monopoly on measurement and calculation, that being their only concern, then businessmen become the most important members of the human community. And since measureable and calculative activity is the “primary quality” of life, then everything businessmen do is good. Although Hume did himself develop these implications of his doctrine, his followers, Jeremy Bentham and James Mill, did. These two prophets of production, even more humorless than their fictional ancestor Malvolio, held that business is not only society’s most important activity, but that all business activity is done for “the greatest good of the greatest number.” The proof of this “empirical” claim was derived, not from consulting the greatest number, but from consulting the assumptions of Hume’s doctrine.

When the breeding of money became the main preoccupation of an entire society, all other human activities were forced into the same narrow channel, and in time the practitioners and professors of other activities fell in line. Literature, which until the advent of capitalism had been man’s primary means of communicating intellectual and emotional experience, became for die businessmen a trivial pastime. The only function of literature was to provide “entertainment” for tired men of business after they were done with the day’s counting. Although literacy rose, the books of great writers had diminishing audiences until they were read exclusively by the “bohemians” and the “misfits” of capitalism. Meanwhile, a new crop of “writers” appeared on the literary scene, a group of men who would “produce” literature to fill the businessmen’s needs. These literary capitalists “produced” novels, poems, and plays, the same way businessmen produced commodities. And the purpose of the entertainment-commodities was the same as the purpose of all business activity: to fetch profit. Where businessmen thoroughly infiltrated the educational field, as in the United States and Nazi Germany, children were pushed through an “educational system” on a fare made up almost exclusively of entertainment- commodities and propaganda-goods. Art, which before capitalism had been an exploration of the dimensions of reality in visual terms, became so thoroughly degraded by the men blinded by profits, that even serious artists lost their vitality. When the instruments of painters came to be used for the advertisement of commodities, an irreparable death-blow was dealt to Western art. The history of European art since the Renaissance is the tragic story of a brilliant beginning followed by a ruthlessly unbroken deterioration. The painters’ open or tacit protest against the capitalist debauchery of visual reality has been carried so far that the twentieth century American painters splashing grotesque footnotes on to the nihilistic DADA have attained creative freedom only by passing into lunacy.

Along with the degradation of creative activity came the glorification of business activity. The very impersonality of the process of production gave the men of money an illusion of its spirituality. In order to produce ever increasing amounts of profit, the early businessman had to be frugal in his spending habits: “the more there is of it, the more it produces at every turn..Comparing his own miserliness and self-repression with the debauchery and extravagance of the aristocracy, the businessman thought of himself as almost a saint, and his later admirers called him “ascetic.” However, asceticism refers to a concern with intellectual or spiritual as opposed to material interests, whereas the businessman’s exclusive concern with wealth and its accumulation is the epitome of self-indulgence. The mistaken notion of a businessman’s “asceticism” grew up because there was a purely external similarity between the habits of early profit-makers and those of some ascetics, although the content of the habits had no similarity whatever. The businessman was thought “ascetic” because he devoted the same single-mindedness to the pursuit of wealth as an artist devoted to the creation of a work of art. He was thought “ascetic” because he disciplined and regimented himself as much as a monk whose life was “as regular as clockwork.” He was even thought “ascetic” because his boundless greed enabled him to visualize a great accumulation of wealth as enthusiastically as a prophet visualizes an ideal. The illusion of a businessman’s “asceticism” can only be maintained if one omits mentioning that all these admirable virtues of devotion, self-discipline, and vision, were put at the service of a very crude and sensual goal: the accumulation of wealth and privilege.

Between Malvolio and Rockefeller stands Daniel Defoe, author of Robinson Crusoe and prophet of the Profitable Life. A favorite theme of Defoe’s “practical” writings was The Great Law of Subordination. Everyone in society must know his “place” in relation to the society’s masters, the men of business. Conjugal Harmony, the prime requisite of a businessman’s ordered life, defines the master-slave relationship as it applies to husband and wife: the husband commands, the wife obeys. The wife must know that she is no more than her husband’s private property. In the early days of capitalism, when there were still “women of blood” in Western society, businessmen often paid generous sums for wives with impressive pedigrees. The Great Law of Subordination also decrees that the son’s activity shall consist exclusively of obedience, until his apprenticeship is over and he, in turn, exacts obedience. And, needless to say, obedience constitutes the morality of servants, tenants, workers.... Obedience and subordination, the morality of slaves, became the virtues of the entire working population. The feudal relations of noble over serf, Church over Sheep, became even further rigidified. Father-son, husband-wife, employer-worker, master-servant: these are the relations of the new society. Since the same man, the father-husband-employer-master, is the top half of every relation, this arrangement is for him the New Freedom. As President John Adams had said, “wealth is the great machine for governing the world.”[115] However, from the late eighteenth century on, revolutionary democrats challenged this relationship, and the businessmen became deathly afraid. They heard Gracchus Babuefs cry, “Our butchers have taught us bad manners,” and they trembled. They had so thoroughly inclucated a whole society with the master-slave morality that they feared a social uprising would turn the tables and new masters would practice the Great Law of Subordination with former businessmen as servants.

Defoe’s Robinson Crusoe was stranded on an island. He was a very practical man. He converted the island into a world made up exclusively of economic activity—a world mastered and managed by one Complete English Tradesman. He converted a “wild man” into a servant, into His Man Friday, into a subordinate who understood obedience. Robinson Crusoe converted nature’s order, which to him meant chaos, into the drab economic order of the English Tradesman. Robinson Crusoe had a big desire to dominate and a small imagination. He became the hero of the business class.

Each capitalist wants his own island—his own closed world where he has a monopoly of wealth and power. Direct intellectual domination did not, until very recently, interest capitalists, because the realm of ideas does not yield economic profits. It was the desire for a monopoly of economic activity that provided the “drive” of capitalism. C. Wright Mills has described the manner in which the Robinson Crusoes of America, the Exemplars of Our Way of Life, consolidated their economic empires. “The robber barons, as the tycoons of the post-Civil-War era came to be called, descended upon the investing public much as a swarm of women might descend into a bargain basement on Saturday morning. They exploited national resources, waged economic wars among themselves, entered into combinations, made private capital out of the public domain, and used any and every method to achieve their ends. They made agreements with railroads for rebates; they purchased newspapers and bought editors; they killed off competing and independent businesses, and employed lawyers of skill and statesmen of repute to sustain their rights and secure their privileges. There is something demonic about these lords of creation; it is not merely rhetoric to call them robber barons. Perhaps there is no straightforward economic way to accumulate $100 million for private use; although, of course, along the way the unstraightforward ways can be delegated and the appropriator’s hands kept clean. If all the big money is not easy money, all the easy money that is safe is big. It is better, so the image runs, to take one dime from each often million people at the point of a corporation than $100,000 from each often banks at the point of a gun. It is also safer.”[116] This was called “Free Competition.” Big fish eat little fish, except that in the sea the big fish die while little fish multiply very rapidly, whereas in America the big fish become consolidated into immortal corporations while the little fish are forever exterminated.

In the late nineteenth century, the English philosopher Herbert Spencer erroneously read into Darwin’s biological theories a justification of tycoons. Besides his theory of evolution, Darwin had also developed a theory of natural selection which tried to explain the survival and extinction of species on the basis of their ability to cope with their environment, that is, their “fitness.” Since proof is hard to come by in these matters, the theory remains till today a metaphysical assertion, a plausible guess. As a guess, it is one among many. Darwin’s contemporary, Prince Peter Kropotkin, argued that species survive because they cooperate, and more recently Immanuel Velikovsky has argued that “fit” as well as “unfit” species are extinguished by natural catastrophe, not natural selection. In any case, Herbert Spencer constructed an erudite Moral Science out of Darwin’s biological guess. For Spencer, Darwin had “proved” that the struggle for existence, natural selection, and the survival of the fittest, were the very essence of life. The most bloodthirsty animals, the most ruthless thieves and murderers, the Rockefellers, Carnegies, Rhodeses and Leopolds, win the struggle for existence. The role of creative intellect and imagination in the building of human culture was easily forgotten in an age when big capitalists were despoiling every countryside with ugly monuments of their ruthless lust for power. Men filled with the light of Spencer’s doctrine failed to observe that dogs rarely eat dogs, or monkeys, monkeys; they failed to notice that not one animal destroys members of its own species the way capitalists destroyed other men.

As competition fulfills its purpose, the “fittest” do away with all competitors and attain a monopoly on one activity after another. As each corporation consolidates all phases of a certain activity, it ceases to waste its profits ruining its peers and turns its competitive machinery against the rest of society. When the capitalist attains his dream and becomes the master and sole supplier of his “island,” he starts to “compete” against his own workers and against the consumers of his products. The vast mechanical and psychological machinery’ of the commercial society is then turned to the dehumanization of workers and the manipulation of consumers.

The capitalist corporation is a private corporation. Its only function is to increase the wealth of the rich men who own it. It is run by managers who are hired to see to it that the rich profit. The things produced are irrelevant so long as they are profitable. That is, things are not produced to benefit the people who buy them, but to profit the corporation owners. Useful things are produced if, and only if, they are profitable. Since the manager is hired to maximize the profits of his employers, he is not interested in the quality or human value of a product, but only in its profitability. He often finds that useless products of poor quality can be much more profitable, if properly advertised, than useful products of high quality. It is not that the manager is a “bad man;” it just is not his “job” to make useful products of high quality—not so long as the system of private profit survives among men. If profitability is the measure of men and things, then the vast resources and energy that could be used for human growth and development will be “invested” in advertising-men, salesmen, public relations men, and weapon making men.

The capitalist who doesn’t catch on to the fact that advertisements bring bigger profits than quality, who remains under the illusion that people will buy things so long as they are well made—if such a capitalist goes on “investing” in quality instead of public relations, he will quickly fall down the tube of Failure, he will lose the struggle for survival and become extinct.

Those who “survive” are those who can buy the best systems of advertisement, public relations, and salesmanship—those who can effectively peddle the Big Lies, pressure customers into buying what they do not want, and manipulate human beings into desiring what they do not need. The vast system of organized manipulation of human beings, where all means justify the end of big profits, is the “natural selection” by which the holders of the capitalist society maintain their dominion.

***

The squid ... was considered the rightful prey of the lobster; and the latter had no other food offered him. The lobster lay at the bottom of the clear glass tank on the yellow sand, apparently seeing nothing—you could not tell in which way his beady, black buttons of eyes were looking—but apparently they were never off the body of the squid.... The [lobster], as young Cowperwood was one day a witness, would leap like a catapult to where the squid was apparently idly dreaming, and the squid, very alert, would dart away, shooting out at the same time a cloud of ink, behind which it would disappear. It was not always completely successful, however. Some small portions of its body or its tail were frequently left in the claws of the monster below. Days passed, and, now fascinated by the drama, young Cowperwood came daily.…

He returned one night, and lo! to his grief and astonishment, his wish was granted. There was a little crowd around the tank. The lobster was in the corner. Before him was the squid cut in two and partially devoured.

“That’s the way it has to be, I guess,” he commented to himself. “That squid wasn’t quick enough. He didn’t have anything to feed on.” He figured it out. The squid couldn’t kill the lobster—he had no weapon. The lobster could kill the squid— he was heavily armed. There was nothing for the squid to feed on; the lobster had the squid as prey. What was the result to be? What else could it be?[117]

Watching the lobster destroy the squid was the central experience of Theodore Dreiser’s Financier, Frank Cowperwood. Edward Hyams has rendered such an experience as an epigram: “Capitalism turns men into economic cannibals and, having done so, mistakes economic cannibalism for human nature.”[118] And J. R. Walsh has given a historical summary of the same event. “By 1905, the Morgans had organized U.S. Steel, General Electric, International Harvester, and other giants. The Rockefellers had assembled Standard Oil. The Mellons had built aluminum, the DuPonts chemicals. Centralized control of insurance and banks had been achieved. By the panic of 1907, the competitive market of the nineteenth century had gone in finance and in many sectors of industry. World War I accelerated this trend.…

“Under Mellon, Hoover, Harding, Coolidge, the broad regulator)’ powers of the federal government became in effect police powers of private monopoly.”[119]

Dreiser’s episode treated bankers as lobsters. We may consider corporations as octopi. After the squid is “cut in two and partially devoured,” the octopus, a larger relative of the squid, enters the tank and starts to tease and train the lobster. Before long, the powerful tentacles of the octopus gain mastery of the fish tank, and the humiliated lobster functions as nothing more than a trouble-shooter for Octoporate interests.{2} Since Dreiser’s fish tank is one among many, and since each fish tank represents a region of the North American continent, the spread of the octopus and the elongation and strengthening of its tentacles is an ominous event for all other forms of life in the region. In the single area of manufacturing, for example, William A. William has described the speed with which the tentacles spread. “By 1899 ... two thirds of all manufactured goods were produced by corporations, and by 1929 the figure was more than nine-tenths. In 1904 the corporations employed seven-tenths of all wage earners in manufacturing, and by 1929 they employed nine-tenths.”[120] The vastness of the corporate spread and consolidation has been vividly described from “inside” the tank by the Corporate Lawyer A.A. Berle, Jr. “...in a considerable and growing number of industries (covering at a rough estimate 70 percent of all American industry) a pattern has emerged.... Two or three, or at most, five, corporations will have more than half the business, the remainder being divided among a greater or less number of smaller concerns who must necessarily live within the conditions made for them by the “Big Two” or “Big Three” or “Big Five” as the case may be.... Slightly more than half [of American Industry] is owned outright by not more than 200 corporations.”[121]

The Great Depression of 1929 seemed to put an end to the spread of the grasping tentacles. It looked, for a while, as if the Age of Man would replace the Era of the Octopus. Revolution became a respectable word for the second time in American history. In every city of the “world’s wealthiest country,” grumbling men who had worked all their lives stood on breadlines. They waited to receive, as “welfare handouts,” a minute fraction of the vast material wealth they had created. Humiliated men, who received as a gift what was really their own, quickly lost faith in the American Way. In a brief moment of lucidity they realized they were still at the “far side of Paradise.”

In 1932, one year before Hitler started his transformation of Germany into one vast weapon-manufacturing corporation, Franklin Delano Roosevelt was elected President of the United States. Owing his fortune and his fame to the American institutions of private wealth and hereditary privilege, Roosevelt did not look with favor at the prospect of a social revolution which would abolish private wealth and privilege. Being a humanitarian, he did not admire the Nazi or Fascist “solutions” to capitalist economic instability by means of brutal repression and a permanent war economy. Being a politician, he chose a middle course: to improve the condition of the working population on mildly socialist lines, and to revive the corporations on mildly fascist lines. In this way be kept away the social revolution and postponed the arrival of an indigenous fascism. Roosevelt stood at a crucial crossroads in American history. Conditions were favorable, the time was ripe, and people were willing, for a sweeping economic change. The system of unrestrained corporate capitalism could no longer function. Roosevelt stood at a watershed—he could have let the corporate system roll on down the road of destruction and demolish itself on a desolate crag without ruining any more human lives; he chose instead to patch the corporate system along familiar lines with a vast scheme of governmental machinery. And to carry on his reconstruction of corporate capitalism, he recruited precisely the bitterest left-wing critics of capitalism. Roosevelt knew that the people who best understood the flaws and absurdities of capitalism were not the rich men who ran and managed it from the inside, but the socialists and communists who watched and recorded its every move from the outside. Thus he knew that the men who could patch and restore the capitalist system as a whole were not the Corporate Boards of Directors who could not see beyond the profit, loss, and their own take, but precisely the radicals who wanted to overthrow the system. And “radicals” were eager recruits to Roosevelt’s program of reconstruction. The New Deal was designed to give a new start to a slightly more humanitarian and less blatantly brutal version of the Old Deal. Reforms and welfare measures were institutionalized and labor unions were legalized—which, within the confines of American capitalism, were tremendous achievements. However, Roosevelt’s administrations also consolidated and coordinated the vast structure of monopoly capitalism, and encouraged the corporation-men to administrate their own affairs by means of government agencies. When the United States became involved in the Nazi War, and the consequent war economy put a final Nazi-type “patch” on America’s still-ailing economy, the corporations recruited unwillingly into Roosevelt’s Recovery Program gained wealth and power they could never have reached without Roosevelt’s “reforms.” It was during the war, while Roosevelt was still alive, that the American economy took the shape of the economies of its Axis enemies, Italy, Germany and Japan. “During the New Deal the corporate chieftains joined the political directorate; as of World War II they have come to dominate it. Long interlocked with government, now they have moved into quite full direction of the economy of the war effort and of the postwar era.”[122] Roosevelt had started his presidential career as a prophet of the socialist left. When he died, he left behind an America governed by a corporate directorate and sustained by a permanent war economy—two institutions that define the fascist state. The strangest irony of all, however, is the story of some of Roosevelt’s “radicals”: they identified intensely with the program of capitalist “recovery”; they grew old and conservative carrying out the program; after the war, they emerged enamored with America’s Capitalist System, even in its semi-fascist form; and, during the great postwar Purge of the 1950s, they viciously turned on, betrayed, and denounced as many of their former comrades as they could still remember. The New Deal not only strengthened the American Right; it almost completely abolished the American Left. And probably the greatest factor in debilitating the Left was the spectacular persecution of radicals by their former friends. This display of the Informers, an exhibition of gross brutality, betrayal and inhumaneness, could not but disillusion one about the moral quality of the men in the American Left. The maliciousness of the betrayers was itself the worst blow dealt against the Left.

***

The economy that emerged from the New Deal was not a “Welfare State.” If workers were paid more wages, it was not because anyone felt that men were entitled to the fruits of their own labor, but because business psychologists found out that workers do more work if they’re well-fed and if the factories are clean. The post-New Deal economy was a corporate economy: its function was to “maximize the profits” of the wealthiest men. Even squids—independent small businessmen—were disappearing. In the land with the myth that every “little man” can be a millionaire, there were a million “little men” to every millionaire. Trusts, monopolies, cartels, had been “against the law” and “unconstitutional” for over half a century. But the Justices of the Supreme Court, the land’s highest Guardians of Law and Constitution, wore special glasses when reading Anti-Trust legislation. According to Justice Douglas, frequent dissenter from the Court’s rulings, “the economic theories which the court has read into the anti-trust laws have favored rather than discouraged monopoly. As a result of the big business philosophy underlying [cases cited], big business has become bigger and bigger. Monopoly has flourished. Cartels have increased their hold on the nation. The trusts are strong. There is less and less place for the independent.”[123] Justice Douglas’ charge is oddly reminiscent of similar charges made by Madison and Jefferson—charges which assume that the capitalists who drafted the Constitution and the Laws had intended to create, within their own documents, obstacles to their acquisition of wealth. It seems probable that the interpretation Justice Douglas criticizes is more historically accurate than his own, and that the American Constitution will legally justify and protect wealth, privilege, and monopoly, until such a time as the American People “abolish it, and, ... institute a new government, laying its foundation on such principles, and organizing its powers in such form, as to them shall seem most likely to effect their safety arid happiness.”[124] But if Americans believe in Free Competition, in the Law that the “fittest survive,” should they be surprised if only the “fittest” survive? Monopoly was only recently achieved, but monopoly was always the goal of the “Free Competition.” Capitalists didn’t “compete” to help each other out, but to do away with each other. In a society where men were allowed to compete for the control over human life and destiny, the fact that some men would win overwhelming control was built-in at the very beginning.

Among corporations, the “fittest” are the oil companies. According to Leo Huberman and Paul Sweezy, “there are ten billion-dollar oil companies with assets of $21.1 billion compared to nine billion-dollar companies with assets of $18.7 billion in all other fields of industry combined.”[125] Harvey O’Connor has described, in vivid detail, the workings of the Empire of Oil.[126] These gigantic oil companies, known in the industry as “the majors,” control every facet that has to do with oil, from drilling it in Arabia to refining it in Texas and selling it at the corner Esso station. Such a monopoly is tremendously profitable to the holders of these corporations. According to O’Connor, “A good bit of argument has raged around the exact source of the industry’s profitability. Is it in the production of crude, in the control over pipe lines, in the refineries, or at the gas station? For the integrated company, all four sections seem to be needed to assure over-all profitability. Marketing may be run at a loss but the majors feel that without control over the retail market, profitability will be affected further back in the line. Pipe line profits, while imposing, are merely a bookkeeping affair, for the companies can charge themselves as much or as little as they choose for transporting their own product. Refining is an essential bottleneck of the industry kept out of reach of overweening independents. But the real money, most oil people agree, is in the production of crude, and the rest of die apparatus merely protects that vital source from which all blessings flow. Standard of California, for example, says it costs 88 cents to produce and market a barrel of crude, sold for $2.90.... the industry is in truth monolithic and not merely an assembly of parts and divisions. The fact that consumers can be charged prices far in excess of total costs of production, refining, transport, and marketing is the real source of profit. For those companies with access to cheap foreign crude, the profits become colossal.”[127] If the Independent Enterpriser, hero of American elementary-school text books, wants to refine oil, he must have a patent. And, “Standard of Jersey is affiliated with no less than ten patent companies; some of the majors team together to control a patent. Most of these are available to the independent refiner, but at a fee which represents another toll he must pay to his competitor for the right to exist.”[128] If an Independent Enterpriser wants to drill his own oil, he must be able to transport it to a refinery; he must have access to pipe lines. But here again, “Only the majors can build such arteries for the lifeblood of the industry. Even they sometimes pool their interests in construction and operation of lines which cost as much as $50,000 to $ 100,000 a mile.…

“The majors control the great arteries—89 percent by land and 87 percent by sea. By law, the pipe lines are “common carriers” open presumably to anyone who has oil to transport from hither to yon, but little “independent” oil moves in the big lines. In the first place, it is rather pointless, for the price at the other end of the pipe line is just as controlled as the price at the beginning. The independent, if he uses the line, does so at the major’s convenience, and it may not be convenient if the capacity is all taken. Or the minimum consignment acceptable may be so large as to exceed the independent’s capacity....

“All but a negligible amount of oil, whether crude or refined, must enter the line at some time; as the majors do most of the buying, oil in excess of “market demand” cannot reach the consumer in appreciable quantity.”[129]

Nor do the big corporations compete with each other. C. Wright Mills has described their relationship, which is not the relationship of the “free competitive market” but that of the cartelized economy. “The top corporations are not a set of splendidly isolated giants. They have been knit together by explicit associations, within their respective industries and regions and in supra-associations such as the NAM. These associations organize a unity among the managerial elite and other members of the corporate rich. They translate narrow economic powers into industry wide and class-wide powers; and they use these powers, first, on the economic front, for example with reference to labor and its organizations; and, second, on the political front, for example in their large role in the political sphere. And they infuse into the ranks of smaller businessmen the views of big business.”[130] If, for example, the oil corporations competed with each other, gasoline would be very cheap in the United States, because the Free Market would be literally flooded with it. But the market isn’t flooded. Under the guise of “free competition,” there are in fact commissars who control and plan and limit the production of oil. The function of these indigenous American commissars is actually very similar to that of economic planners in the USSR, with the main difference that the theory of Soviet planning is to benefit society as a whole whereas the theory of American planning is to maximize the profits of the corporations. According to O’Connor, “The key position in the edifice of production control is held by the Texas Railroad Commission whose state accounts for nearly half the entire domestic productions This Commission’s action on the magic market demand figures, flashed from the Bureau of Mines in Washington each month, sets the pattern for the other oil state commissions …

“The Commission meets monthly in Austin, its main mission being to set allowables for the ensuing month. Before the Commission are the U.S. Bureau of Mines figures. Around the Commissioners are the representatives of the major corporations who announce their “nominations” for crude for the following month. Company A says it needs so many thousands or hundreds of thousands of barrels of oil, Company B adds its figure, and so on down the line. These figures are totaled and compared with the Bureau of Mines figures. Government agencies, such as the Petroleum Administration for Defense, may also offer their suggestions, particularly in regard to the needs of the military.

“The Commission thereupon decrees the allowables. Fields generally may be put on a 19-day production basis, with east Texas, the major field, cut several days under.”[131]

In 1940, the Department of Justice almost took action against the oil corporations. “The Department said that the American Petroleum Institute and the majors were a combination with monopolistic power, dominating each branch of the industry through size, integration, tying clauses, price-fixing, and restriction of production.”[132] However, when the United States became involved in the War, the case was postponed, since, as O’Connor points out, “there could not have been a war, much less a victory, if the indicated firms would not cooperate with the government which had indicted them. So the suit was put on the shelf for the duration. In 1946, it was dusted off, but neither Attorney General Tom C. Clark, of Texas, nor his successor, J. Howard McGrath, pressed it, and it died a lackadaisical death in 1951 under circumstances which on other times and other lands might well have excited more curiosity than was shown here.”[133] In actual fact, there is not as much government control of the corporations as government control for the corporations. For example, a field as unprofitable as the development of power from nuclear energy is left for the government to explore with public money. As soon as the sale of nuclear energy becomes a profitable affair, it must be given to “private enterprise,” that is, to the corporations. The United States Government, especially after the New Deal, has been a corporate convenience. Compared to the present shape of the American economy, Hamilton’s aristocratic regime was almost democratic. Hamilton’s program for “the rich and well born” had been designed to benefit all capitalists at the expense of the rest of the nation. But even Hamilton might gasp at the sight of the corporate regime of today, which enriches the wealthiest capitalists at the expense, not only of the entire working population, but of the majority of smaller capitalists as well.

Some of the marvels of distribution resulting from the corporate arrangement of the American “democracy” are truly striking. “At the very top of the mid-century American economy, there are some 120 people who each year receive a million dollars or more. Just below them, another 379 people appropriate between a half a million and a million. Some 1,383 people get from $250,000 to $499,999. And below all these, there is the broader base of 11,490 people who receive from $100,000 to $249,999.”[134] And below these, there is the yet broader base of millions of people who receive less than $10,000 a year, sometimes less than $1000. And below even these, there are the people in the colonies, the Good Neighbors, who receive between $300 a year and $50 a year. The bizarre nature of this distribution is hard to grasp. To understand a phenomenon, one must be familiar with it in some way, and in these matters the familiarity of millions of people extends only to the weekly payroll which covers rent, food, gadget-expenses, and little else. Yet as O’Connor points out, Standard Oil of “Jersey’s annual revenue of nearly $6 billion is greater than that of the Canadian government, and six times that of its affluent Latin American dependency, Venezuela. Its annual profit of half a billion is greater than the tax revenues of all but handful of states.”[135] And “the Temporary National Economic Committee’s figures in 1939 showed that 47 percent of the shares were held by the 100 largest shareholders, and that most of these were the descendants of the original Rockefeller and his associates.”[136] A vivid passage in C. Wright Mills’ The Power Elite captures some of the flavor of living under a social system which uses human beings as instruments for the maintenance of privilege.

“The economy of America has been largely incorporated, and within their incorporation the corporate chiefs have captured the technological innovations, accumulated the existing great fortunes as well as much lesser, scattered wealth, and capitalized the future. Within the financial and political boundaries of the corporation, the industrial revolution itself has been concentrated. Corporations command raw materials, and the patents on inventions with which to turn them into finished products. They command the most expensive, and therefore what must be the finest, legal minds in the world, to invent and to refine their defenses and their strategies. They employ man as producer and they make that which he buys as consumer. They clothe him and feed him and invest his money. They make that with which he fights the wars and they finance the ballyhoo of advertisement and the obscurantist bunk of public relations that surround him during the wars and between then.

“Their private decisions, responsibly made in the interests of the feudal-like world of private property’ and income, determine the size and shape of the national economy, the level of employment, the purchasing power of the consumer, the prices that are advertised, the investments that are channeled. Not ‘Wall Street financiers’ or bankers, but large owners and executives in their self-financing corporations hold the keys of economic power. Not the politicians of the visible government, but the chief executives who sit in the political directorate, by fact and by proxy, hold the power and the means of defending the privileges of their corporate world. If they do not reign, they do govern at many of the vital points of everyday life in America, and no powers effectively and consistently countervail against them, nor have they as corporate-made men developed any effectively restraining conscience.”[137]

Yet never were Free Enterprise, Competition, and Individual Success so greatly celebrated as in the age of corporate capitalism. Men who have never known hardship or struggle sponsor elaborate propaganda about the virtues of competitive enterprise. Images of an automatically adjusting economy made up of small competing capitalists are held up for public admiration by corporation holders who have a monopoly and never compete. Images of the isolated individual abound in the society where even Beats cannot successfully isolate themselves from the corporate world. “The image of success and its individuated psychology are the most lively aspects of popular culture and the greatest diversion from politics. Virtually all the images of popular culture are concerned with individuals, and more, with particular kinds of individuals succeeding by individual ways to individual goals. Fiction and nonfiction, movies and radio—indeed almost every aspect of contemporary mass communication—accentuate individual success. Whatever is done is done by individual effort, and if a group is involved, it strings along after the extraordinary leader. There is displayed no upward climb of and by collective action to political goals, but individuals succeeding, by strictly personal efforts in a hostile environment, to personal economic and erotic goals.”[138]

But the Individual Enterpriser, the hero of American propaganda, does not in fact exist. The picture of an economy of enterprising businessmen struggling to replace each other to supply the public with the best goods, is a “far-fetched fiction,” in the words of the economist Galbraith. “In fact, the present generation of Americans, if it survives, will buy its steel, copper, brass, automobiles, tires, soap, shortening, breakfast food, bacon, cigarettes, whiskey, cash registers and caskets from one or another of the handful of firms that now supply these staples. As a moment’s reflection will establish, there hasn’t been much change in the firms supplying these products for several decades.”[139] Competitive Free Enterprise is the ideology under which monopolies consolidated. The capitalist “competes” only to do away with his competitors: he is interested in maximizing his own profits, not in maintaining competitors. For the corporate rich, “competition” is the useful cover under which a monopoly carries on its activities away from public scrutiny. And the Little Man who has not reached the Top defends “competition” because it is the ideology of his heroes, the corporate rich. But the Little Man does not believe in competition. Mills has recorded an enlightening dialogue with the prototype of free enterprise. “When small businessmen are asked whether they think free competition is, by and large, a good thing, they answer, with authority and vehemence, ‘Yes, of course—what do you mean?’ If they are then asked, ‘Here in this, your town?’ still they say, ‘Yes.’ but now they hesitate a little. Finally: ‘How about here in this town in furniture?’—or groceries, whatever the man’s line is. Their answers are ... ‘Yes, if it’s fair competition,’ which turns out to mean: ‘if it doesn’t make me compete.’”[140]

In the society where a handful of billionaires and some hundred millionaires own most of what there is to be owned, the favorite myth says that every poor man can, through his own efforts, become a millionaire. If the myth were true, at least one hundred million hard-working Americans would be millionaires. Yet the myth is believed. Every farmer, worker and bureaucrat cherishes the dream that someday he, too, will populate the upper reaches of the American economy. And Hollywood supplies the furniture and the women that enliven the dream. If their dreams were fulfilled, there would be no upper reaches. If every man shared the facilities and the privileges of the rich, there would be no privileges, and there would be no rich. Yet every farmer, worker and bureaucrat tenaciously defends the myth, finding compensation in the dream for a drab, unprivileged reality.

I he institutions within which millions of Americans spend their lives, and the institutions through which a few Americans maintain their wealth and privilege, do not correspond. One exaggerated illustration should make this clear. A wage worker who earns as much as $100 a day seven days a week will earn a maximum of $36,500 a year. If such a worker had no expenses, saved every single penny, and paid no taxes whatever, it would take him 30 years, seven days a week with no vacations, to accumulate one million dollars. Clearly it is not by “honest labor” nor by “thrift” that a man becomes a millionaire. If such a thing were really possible, the myth that every worker can become a millionaire would not be such a popular American tale. The fact that every farmer’s son can become a farmer excites no one. This myth was not born in America. It was known to every society that sanctioned inequality and privilege. In the Middle Ages, farmers loved to hear stories about a Prince who married a farmer’s daughter, or about a serf who became Pope. It was precisely the exotic rarity of such an event that accounted for the popularity of the tale. The few instances when such an event took place became folklore: they were held up for public awe, though never for public scrutiny. When Stendhal described the fraud and deceit by which a poor boy “climbed” to the upper reaches of the feudal society, his books were not read. This aspect of the myth did not become popular until after the feudal society had collapsed.

Benjamin Franklin’s injunction to work hard and save every penny will not take one very far in the corporate society. Industry’ and thrift were “virtuous” methods at a time when there were not too many capitalists, nor too much wealth, nor too great a discrepancy between rich and poor, nor too elaborate a legal structure which facilitated a hothouse breeding of wealth. In the world of the corporation, as in the old aristocracy, it is Fortune that pushes one up to the top. Machiavelli’s “provision against [Fortune] by dykes and banks” is still erected and maintained only for the rich. Once a man reaches the top, the post is hereditary. The richest oil men are the sons and grandsons of rich oil men. But when a rancher does make a leap into the millions, it is not by thrift, work, talent, or imagination. It is literally by Fortune, by a Gift of the Gods: “If you have oil under your land, you are lucky. You may also be rich. If the deposit is lush and you are a west Texas cattle baron, you will quickly advance to front rating among the parvenus. Hollywood will be your oyster and Cannes your resort.

“So far as you are concerned, the whole thing is quite accidental. You didn’t put the oil there, you didn’t discover it there, and neither will you take it out. You will merely sign a document, sometimes a lease 88, and manna will fall from the heavens.”[141] The wealthiest investment bankers are the sons and grandsons of the wealthiest investment bankers. Yet occasionally an outsider, provided he has a small fortune to begin with, can rise to the top in one lifetime. But not through thrift or labor, if you had bought only $9,900 worth of General Motors stock in 1913, and, rather than use your judgment, had gone into a coma—allowing the proceeds to pile up in General Motors—then, in 1953, you would have about $7 million.…

“Once you have the million, advantages would accumulate—even for a man in a coma.”[142]

The exceptions, the men who reach the top from below, are becoming increasingly rare. The list of names of the very rich is much the same from one decade to the next, and most of the names are followed by Jr. or III, as were formerly the names of kings. But the exceptions do still happen, and the corporate rich see to it that the exceptions continue happening because without them the myth would lose its pretext. As soon as an exception takes place, the public relations and advertising men go to work on it. For it is the men on whom Fortune happened to shed her grace that are held up as the justification of the American Way of Life. The rare men who in one lifetime rose from drudgery to privilege provide a public relations “proof’ that every Texan can, by ranching conscientiously, become an oil magnate, that every Lower East Side soap peddler can, by peddling soap imaginatively, become an investment banker. The rancher who may have been on vacation when oil was discovered on his land, the peddler who may have gone into a coma for forty years, suddenly finds that he is a national celebrity. Every aspect of his career is exploited For Immediate Release and public consumption. The very event which demonstrates the near-impossibility for “the backwoods boy” ever to become a corporation owner, the very illustration of the rigid stratification of the American economy and of the gulf which separates those who have from those who don’t, is used to justify precisely the reverse.

The myth serves many purposes. It informs the impatient climber that he does, in fact, have a chance, but he must wait for its arrival. It tells millions of workers that they must apply themselves in their work if they, too, want to share the big wealth. And it “proves” that men only rise “on their own efforts” and that organized social “interference” would curb every man’s “freedom” to rise. Since no man wants to curb his own freedom to rise, organized social action from the bottom is avoided like a disease, whereas organized action at the top is accepted as necessary to protect every man’s “freedom.”

Once a man is on top, he is there forever. Privilege, in America, is hereditary. If a man invests a million he gets ten, if he invests 10 million he gets billions. For those already rich, the multiplication of wealth is a never ending process. But the myth of “free enterprise” effectively hides this process from public view. Once the rich are on top and have no competition, they hire the ad men to celebrate “free competition” to make it appear that the rich rose that way. Once Heredity or Chance provide a man with never-ending privileges, he cries that every man must rise through his own efforts. In the American mythology, Private Enterprise is used to justify a state of affairs where only the rich can undertake enterprises; Individuality is made synonymous with privilege and used to condone one individual’s thriving at the expense of millions; Laissez Faire is used to ensure that a government controlled by the very rich shall have no external interference or control. Underneath the labels there’s a corporate society that thrives on fraud and plunder, maintains itself on war, and promises the final annihilation of mankind.

“...the soldier pampered and petted, the democrat crushed: Voila la Republique!”[143]

From : TheAnarchistLibrary.org

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The New Freedom — Chapter 3 : Growth of Capitalism

By Fredy Perlman (1961)

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Author : Fredy Perlman

Author : Fredy Perlman

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