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Louis D. Brandeis, George Gilder, and the Nature of Capitalism

1984; Taylor & Francis; Volume: 47; Issue: 1 Linguagem: Inglês

10.1111/j.1540-6563.1984.tb00652.x

1540-6563

Nelson L. Dawson,

Race, History, and American Society

Click to increase image sizeClick to decrease image size Notes1. Obviously it will not do to rest content only with images without making a disciplined effort to adjust them to reality; otherwise all opinions are equally true or equally false, and one is plunged into intellectual nihilism. However daunting may be the effort to discover historical reality, it is disastrous to abandon the attempt. In this essay, however, the subject is capitalism as conceived by Brandeis and Gilder and not as a Kantian thing‐in‐itself.2. Representative surveys include: Vaughn D. Bornet, “Those Robber Barons,” Western Political Quarterly 6 (June 1953): 342–46; Thomas B. Brewer, The Robber Barons: Saints or Sinners? (New York, 1979); Hal Bridges, “The Robber Baron Concept in American History,” Business History Review 32 (Spring 1958): 1–13; Thomas C. Cochran, “The Legend of the Robber Barons,” The Pennsylvania Magazine of History and Biography 74 (July 1950): 307–21; Chestnut M. Destler, “Entrepreneurial Leadership Among the ‘Robber Barons’: A Trial Balance,”The Tasks of Economic History‐ supplemental issue of The Journal of Economic History 6 (1946): 28–49; Edward C. Kirkland, “The Robber Barons Revisited,” American Historical Review 66 (October 1960): 68–73; Allen Solganick, “The Robber Baron Concept and Its Revisionists,” Science and Society 29 (October 1965): 257–69; and John Tipple, “The Anatomy of Prejudice: Origins of the Robber Baron Legend,” Business History Review 32 (Winter 1959): 510–23. Opinions vary so widely that the despairing student is tempted to train the ghostly batteries of psychohistory on the historians themselves to discover the causes of such variance.3. For a fine exposition of Brandeis's early career as a progressive attorney, see Allon Gal, Brandeis of Boston (Cambridge, 1980). His Supreme Court confirmation struggle revealed much business hostility. See Alden Todd, justice on Trial: The Case of Louis D. Brandeis (New York, 1964). Todd reprinted a 1916 cartoon which shows a stereotypical Wall Street tycoon slumped in a faint, his nerveless fingers still clutching a newspaper bearing the headline “Brandeis Confirmed.” The caption read: “The Blow that Almost Killed Father.”4. George Gilder, Wealth and Poverty (New York, 1980), 3.5. ByJuly, 1981, the book had sold 135,000 copies. See National Review, 24 July 1981, 856.6. Brandeis to Robert W. Bruere, 25 February 1922, reprinted in Brandeis, The Curse of Bigness (New York, 1934), 270–71.7. Aptheker to Nelson L. Dawson, 14 June 1973, author's files, Louisville, Ky.8. Dean Acheson recalled how he once enticed a Harvard law professor to argue the case for moral relativism in Brandeis's presence. The resultant eruption was even more spectacular than the mischievous Acheson had anticipated. Brandeis declared that morality was truth, and truth “had been revealed to men in an unbroken, continuous, and consistent flow by the great prophets and poets of all time.” Dean Acheson, Morning and Noon (Boston, 1965), 96. Brandeis's moral convictions were expressed with such vigor that Franklin Roosevelt referred to him as “Isaiah.” See Arthur M. Schlesinger, Jr., The Politics of Upheaval (Boston, 1960), 222.9. Brandeis to Bruere, 25 February 1922.10. Gilder, Wealth and Poverty, 8. Some critics express irritation at Gilder's emphasis on morality. Andrew Klauan, for example, dismisses the book as “moral hogwash” (Saturday Review, January 1981, 75).11. Ibid., 21.12. Ibid., 24.13. Ibid., 27.14. As we shall see, Gilder pauses several times to disparage the limitations urged by the “neo‐Malthusian or Doomsday Adventist.”Ibid., 255, 260.15. Ibid., 268.16. Ibid., 268–69. Martin E. Marty, in a review entitled “Greed Without Guilt,” observes that “the new theology of Gilder's capitalism is long on faith and hope and short on charity. You can't have everything.”(Christian Century, 8 April 1981, 379.) As we shall see later, the partial convergence of Gilder and Brandeis does not indicate that Wealth and Poverty has had an irenic effect in the current debates on economic policy.17. David Riesman to Felix Frankfurter, 22 May 1936, Box 27, Frankfurter Papers, Library of Congress. Melvin Urofsky observes that Brandeis “had a curious gap in his knowledge of things religious.” See Urofsky, A Mind of One Piece: Brandeis and American Reform (New York, 1971), 98.18. Brandeis, Business—A Profession (Boston, 1914), 2–3.19. Ibid., 4–5.20. Ibid., 5.21. Ibid., 12.22. This view of businessmen as public servants is, to be sure, an idealized view, and Brandeis was far too realistic to think that every flesh and blood entrepreneur embodied all the civic virtues. The Ralph Nader school, on the other hand, appears to go too far toward a view of businessmen as unrelievedly corrupt. However valuable the Nader school has been in exposing corporate abuses, its Calvinistic view of the business community seems exaggerated. If businessmen are personifications of Original Sin, why should we expect government regulators, in the long run, to be any better?23. In 1935 Milo Perkins of the Agriculture Department reported to Rexford Tugwell that Brandeis had spoken to him “philosophically on the horrors of bigness and the sanctity of littleness in all fields of human activity”; Brandeis's opposition to bigness “was not limited to industrial corporations!” The exclamation point is an indication of Perkins' previous unfamiliarity with Brandeis' thought. Milo Perkins to Rexford Tugwell, 5 June 1935, see Tugwell's “New Deal Diary,” Tugwell Papers, Franklin D. Roosevelt Library.24. Nelson L. Dawson, “Curbing Leviathan: The Social Philosophy of Louis D. Brandeis,” Register of the Kentucky Historical Society 77 (Winter 1979): 30–45.25. Herbert Aptheker to Louis D. Brandeis, 14 March 1934, Brandeis Papers, University of Louisville.26. Ibid.27. Brandeis, The Curse of Bigness: The Miscellaneous Papers of Louis D. Brandeis (New York, 1934): 109.28. Gilder, Wealth and Poverty, 60–62. In the midst of a hostile review George Walzer correctly notes that Gilder focuses on the “petty bourgeoisie” and is “uneasy with big business, corporate bureaucracy, old wealth.”New York Review of Books, 2 April 1981, 3. 1981, 3.29. Ibid., 76–77.30. Ibid., 71, 83.31. Ibid., 83.32. Four of the eighteen essays composing Business: A Profession have the word efficiency in their titles; the concept, in one form or other, plays a prominent part in nearly every one.33. Rexford Tugwell has pointed out that Brandeis was one of Taylor's earliest discoverers. Tupwell, “The New Deal: The Rise of Business,” Western Political Quarterly 5 (June 1952): 275.34. Brandeis, Business, 38–39. During World War I Brandeis's protege Felix Frankfurter urged Assistant Secretary of the Navy Franklin D. Roosevelt to implement the Taylor system at the Charleston Navy Yard. Roosevelt demurred. Daniel R. Fusfeld, The Economic Thought of Franklin D. Roosevelt (New York, 1956), 68.35. Brandeis, Business, 39–49.36. Ibid., 49. Workers might have been pardoned a bit of skepticism on this point; such beneficent redistributions seldom occur automatically.37. Ibid., 48–49.38. Gilder, Wealth and Poverty, 29.39. Ibid., 216. It seems naive to think that the American taxpayer will ever “gladly” surrender anything to the IRS.40. See, for example, Brandeis to Frankfurter, 14 May 1933, 17 July 1933, 25 July 1933, 14 August 1933, 30 August 1933, 5 September 1933, and 27 February 1934, Frankfurter Papers.41. In fact, the New Deal, much to the disappointment of advisers like Rexford Tugwell, never implemented a comprehensive program of economic planning. See Otis Graham, Toward A Planned Society (New York, 1962), 35–49.42. Gilder, Wealth and Poverty, 237.43. Ibid.44. Ibid., 255.45. Ibid., 268.46. Nelson L. Dawson, Louis D. Brandeis, Felix Frankfurter, and the New Deal (Hamden, Conn., 1980): 24–35, 173–76.47. Gilder, Wealth and Poverty, 98–99.48. Allon Gal, Brandeis of Boston (Cambridge, 1980), 173–81. Gal has suggested that Brandeis's rather late turn to Zionism was encouraged by his image of Jewish settlers in Palestine as hardy, latter‐day Puritans.49. Ibid., 29–65. Gal interprets Brandeis's evolution from Mugwump to Progressive as in part at least a function of his alienation from the inner ring of Boston society. This is suggestive but not entirely convincing. There are cases where outsiders adopt the manners and values of the establishment and become, as it were, more Catholic than the pope, more royalist than the king. Business: A Profession, as we have seen, expresses a hopeful view of businessmen; it is, however, an early work consisting of essays and speeches from the turn of the century era. Brandeis's anti‐business convictions grew stronger over the years.50. See Brandeis to Frankfurter, 21 January 1933; 18 April 1933; 22 April 1933; 30 April 1933; 14 July 1933; 2 January 1934, Frankfurter Papers.51. Nelson L. Dawson, “‘Everything turns on Men’: The Social Philosophy of Felix Frankfurter,”Ball State University Forum 20 (Autumn 1979): 73–78.52. Frankfurter took pleasure in repeating an observation made by Thomas K. Powell, a Harvard Law School colleague, to the effect that he was not a radical but was only trying to get capitalists to live up to their pretensions. Frankfurter to Harlan Stone, 25 March 1933, Frankfurter Papers.53. Wilson's social philosophy, inspired in considerable part by Brandeis, advocated a scaling down of both government and business. Even so, the initiative rested with an activist government strong enough to discipline the trusts and then voluntarily limit its own power. See Melvin I. Urofsky, “Wilson, Brandeis, and the Trust Issue,” Mid-America 49 (January 1967): 3–28, for the relationship of Brandeis, Wilson, and the New Freedom.54. It is, of course, true that many businessmen urged various reforms themselves, and that their concerns contributed significantly to the impetus of the Progressive movement. For a recent historiographical survey dealing with this relationship, see Richard L. Mccormick, “The Discovery that ‘Business Corrupts Politics’: A Reappraisal of the Origins of Progressivism,” American Historical Review 86 (April 1981): 247–74.55. Brandeis to Frankfurter, 13 June 1933; 8 July 1933; 16 November 1933; 24 November 1933: 25 January 1934, Frankfurter Papers.56. Even as a tactical concession, however, Brandeis's recovery program involved him in the contradiction which is inherent in any simultaneous advocacy of economic reform and weaker government. During the 1930s Brandeis continued to fear big government, but he also urged rigorous taxation, particularly of the “super rich.” Any government determined to pursue stringent taxation can not afford to become too weak. There is an unresolved paradox inherent in Brandeis's thought involving the uses of governmental power.57. One cannot, however, press this point too far without falling into the absurdity of expecting all older men to be liberal Democrats and younger men to be advocates of laissez‐faire. The difference in historical perspective has an impact without being determinative. Brandeis and Gilder (and everyone else as well) select from the environment the evidence regarded as significant; this selective process varies enormously from person to person even in similar circumstances.58. Brandeis was accused by his contemporary critics of an impractical desire to turn back the clock (see, for example, Max Lerner's review of The Curse of Bigness in the New York Times, 3 March 1935). This accusation would probably seem even more persuasive in the modern American garrison state spawned by the Cold War. Brandeis died in 1941 before he had time to reflect much on the centralizing tendencies generated by World War II. He was an enthusiastic supporter of Roosevelt's global perspective (See Dawson, Brandeis, 166–67).59. Gilder would probably admit that his case rests, essentially, on faith (certainly a major theme of Wealth and Poverty) that the entrepreneur would respond under favorable conditions. The problem with this position, however, is that the laissez‐faire system did not always work well in the 1865–1932 era, at least not without a measure of waste and callousness which is no longer politically tolerable.60. The phrase comes from Frankfurter's essay “The United States Supreme Court Molding the Constitution,” Current History 32 (May 1930): 240.61. Acting through Frankfurter and others, Brandeis devoted much attention during the New Deal period to recruiting suitable men for public service. See Dawson, Brandeis, 47–60.62. Gilder, Wealth and Poverty, 232.63. The partial convergence of Brandeis and Gilder obviously does not mean that any overall agreement has been reached on the nature of capitalism. Wealth and Poverty has hardly calmed the troubled waters of economic debate. Gilder's opponents, indeed, have employed a rhetoric as vigorous as that which characterized the polemics of the 1930s. George Walzer sums up Gilder's philosophy as “Horatio Alger and Life with Father” (New York Review of Books, 2 April 1981, 4). Leonard Silk says that “only Herbert Spencer may be in George Gilder's class in admiring the capitalist system without limit… Gilder reveres Capitalism as it has not been revered since John D. Rockefeller said that God had given him his money.” Gilder, “A Walk on the Supply Side,” Harvard Business Review 59 (November-December 1981): 46. Several reviewers manage to see “Nietzchean underpinnings” (Publisher's Weekly, 12 December 1981, 39; New Leader, 23 March 1981, 17). Robert Lekachman sees Gilder as the “rich man's Jerry Falwell” and Wealth and Poverty as a “farrago of racism, sexism, and Social Darwinism” (Commonweal, 4 December 1981, 700–701). Gilder's work has, of course, also received favorable notice, usually in conservative publications (e.g. National Review, 5 September 1980, 1067, 6 February 1981, 104–105, 17 April 1981, 412–13; Reader's Digest 119 (September 1981) 137–41; Rodney Clapp, “Where Capitalism and Christianity Meet,”Christianity Today, 4 February 1983, 22–27. The hostile critics, however, have a clear edge in polemical energy.64. Indeed the change in perspective has already reached the point that a bemused Brandeis, could he return to earth, would find himself burdened with the label proudly claimed by Gilder, that of a conservative thinker.65. Writing from an apparently anti‐capitalist perspective in 1965 Allen Solganick helps illustrate this context by “predicting” the appearance of Wealth and Poverty:“It is clear that the performance of the economy during the Gilded Age was poor. Yet, the revisionists are immune to facts. Thus, in the future we can expect to see more literature expounding the virtues of this or that capitalist as the demand for such literature increases. And as the shortcomings of capitalism become more apparent, the demand for more and more baseless apologies will undoubtedly increase.” (Solganick, “Robber Baron Concept,” 269).Additional informationNotes on contributorsNelson L. DawsonThe author holds a Ph.D. degree from the University of Kentucky and is publications editor for The Filson Club, a historical society in Louisville.