Big Business in the Late 19th Century I. Intellectuals and Capitalists

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Big Business in the Late 19th Century
I. Intellectuals and Capitalists.
For a member of academia to discuss of the role of capitalists and of industrial capitalism in American life is to risk biting the hand that feeds us. Historically, American intellectuals, especially those in the humanities, have not found much to admire about the system or its leaders, especially the first generation industrial elite, or Robber Barons, as they are sometimes

This opposition is no doubt part cultural. The ideals of the intellectual are usually different from those of the businessman. And the great intellectual traditions, ancient and medieval Christianity, classic Greek thought, Marxism and socialism, literary criticism, and the entire counter-cultural tradition have all looked with disdain upon the pursuit of Mammon as a philosophy of life unworthy of humanity.

The pervasive importance of commercial, industrial, and technological forces in our society, and especially the materialistic ethic at the core of modern economic life, has tended to produce its antithesis in academia. In the German Universities that were so influential in the founding of American social science and history, the intellectuals were referred to as the "Socialists of the Chair."

Similarly, American intellectuals, while perhaps not socialists, were at one time among the most critical elements of business in American society.

To the extent that they had been anti-capitalist, they were part of a long and venerable tradition in American intellectual culture that has lamented prosperity and trade for the moral decay that seems to attend economic success. From the Puritans to Michael Jackson, this liefmotiv has harped on the idea we are victimized by a selfish kind of love, whose only antidote is community and


There have been periods in American cultural and political history when the anti-capitalist bias was dormant. Certainly, if presidential rhetoric is any guide to popular attitudes, we only recently passed through an era of celebration of capitalist values. The 19th century and the 1920s witnessed similar celebrations.

I do think the necessity exists for students to be tainted with or at least exposed to a certain amount of anti-capitalist bias during their college years, and the subject of intellectuals and capitalism today offers and opportunity for such an exposure.

What does an examination of American Capitalist behavior in the late 19th century reveal about the attitudes of intellectuals toward businessmen and capitalist values?
It reveal a persistent conflicted mind. Two distinct traditions have vied for

interpretive dominance. A anti-capitalist point of view and a pro-capitalist point of view. What is the anti-capitalist viewpoint? Businessmen as Robber Barons. Capitalists are exploiters and corruptors, a predatory class. Focus on motives and morality, the ethical behavior of businessmen. Focus on unevenness of capitalist revolution: poverty and progress. This view was rooted in the critics of their activity at the time. Farmers, small businessmen, their competitors, and some critical intellectuals: Henry Demarest Lloyd, Thorstein Veblen, and Ida Tarbell. They viewed the new capitalists as a parvenu class. (Parvenu--one who has attained wealth suddenly far beyond his worth or birth. A social corruption because station not deserved. I recommend William Dean Howell's The Rise of Silas Lampham as the paradigm of how the educated elite reacted to such dramatic mobility.) These critics saw businessmen as immoral, corrupt, vulgar. Individualistic in the egotistical and destructive sense. Selfish and cruel--to their workers, consumers, competitors. Obsessed with the single-minded pursuit of profit. Ruthless—often stop at nothing to win. Use violence. Contemptuous of the public. William Vanderbilt's comment: "The Public be damned." To critics they seemed the real life embodiments of Social Darwinian ideas. They represented ambition without restraint. Ambition gone mad.

What is the pro-capitalist viewpoint? Businessmen were visionaries and entrepreneurs. They are the industrial statesmen. Pioneers in organization, management, and enterprise. Motives are efficiency and profits. Focus on the growth, the rising standard of living made possible by big business. This view was first presented by themselves and their official biographers. Later by scholars specializing in American business history at Harvard and in editorial in Wall Street Journal and Fortune Magazine. This view appeals to the values admired by the achievement oriented middle class. They emphasize this new elites role as entrepreneurs: Entrepreneur is a creator of a new business. They are the dynamic spirit that makes the economy grow. Agents of genius, creativity, innovation, invention, and progress. They were responsible for the kinds of dynamic innovation in transport, industry, organization, and finance that started America on its way to economic greatness. Business counterparts of George Washington and Abraham Lincoln. They were the great risk takers and visionaries. They made the great breakthroughs. They developed new products. They pioneered new markets. They innovated new production methods. They developed new sources of supply. They formed new organizations needed to coordinate business on a vast new scale. They were popular cultural heros. They wrote popular books read by millions. Andrew Carnegie wrote The Gospel of Wealth and Triumphant Democracy. Their activities represented ambition at its best for they created the material improvement and opportunity Americans craved. Were they ruthless? Yes. But you had to be hard-boiled in the intensely competitive environment of the time. They were the pioneers engaged in the making of colossal enterprise, not armchair moralists or over-refined or sheltered scholars.
What explains these contrasting evaluations? Clearly different points of view are at work. The critics are obsessed with the moral behavior of the Robber Barons.

While the admirers of the Industrial Statesmen focus on the way capitalists transformed American institutions and values. Critics and defenders argue from contrasting positions determined by how capitalism effected them. If it hurt, Robber Barons; if it benefited, Industrial Statesmen. Critics and defenders take contrasting philosophical positions: wealth equals corruption versus wealth equals progress. 20th century has lessened philosophical difference. An acculturation process has been at work when business and intellectuals have gotten into bed together.

II. Beyond the Robber Baron-Industrial Statesman Debate
But how do we go beyond the interpretative confrontation? My strategy: focus on three crucial aspects of problem:
1. Who were the first generation capitalists?
2. What were the determinates of their success?
3. What was the nature of the institutions they created and why did they take the form they took?
Origins of the First Industrial Elite.
The period from 1865 to 1890s was the heyday of American Entrepreneurial capitalism. Names of leading capitalists of that era are still household words today. Can you name some?
John D. Rockefeller--oil refining, banking (Chase Manhattan), numerous other investments.
Andrew Carnegie--steel, philanthropy. An immigrant.
Thomas Edison--inventor. Phonograph, lightbulb, General Electric.
Railroad empire builders: James Hill, Cornelius and William Vanderbilt, Jay Gould, Jay Cooke, Collis Huntington, Leland Stanford, Henry Villard, Jim Fisk.
New suppliers and distributors--Sears, Ward, J.C. Penny, Woolworth.
Manufacturers--Henry H. Havemeyer (Sugar), Phillip Armour (meats), James Duke (cigarettes), Henry Ford (Autos).
Towering above them all, J. P. Morgan, the financial capitalist who attempted to impose order upon them.
Let us look at the First Industrial Elite as a Cohort Group.
They have a common social profile. Most were born between 1830 and 1840. Most were Yankees: born in New England. Raised in the dominant cultural tradition of that region: Protestantism and property. Their Protestantism was specific. They tended to not be Methodists or Baptists. There tended to be Episcopalians and Presbyterians. Their Protestantism taught them to be puritanical and pious. A severe religion that taught self-control, sobriety, self-denial, abstention, and prudence. But especially it taught hard work. In the personal biographies of these men we find numerous references to their religious devotion and faith. They are Calvinists. Rockefeller gave 10 percent of his income to his church throughout his entire life. Hard work and parsimony are economic virtues for capital accumulation. One exception is Jim Fisk. One of few to combine personal and public scandalous behavior. A partier and a moral pigmy. He left his wife for a mistress. His offices were above a theater. He was eventually blackmailed and murdered by his mistress and her new lover. Property accumulation is a central cultural goal of this group. Wealth accumulation was a sign of god's approval. They all exhibit a strong pecuniary appetite. Jay Cooke, as a young man working in Philadelphia before the Civil War wrote in his diary:
through all grades of people I see the same all pervading, all

engrossing anxiety to grow rich. This is the only thing for which

live here.
What reasons are suggested for their internalization of a materialist motive? Poverty is one reason. Jim Fisk was born poor. Fisk's dad was an itinerant salesman. Although Rockefeller wasn't born poor, neither was his origins very grand. Rockefeller's dad was a pot and pan salesman who also sold medicines and was known as a "herbal physician.” Most, however, came from middle and upper class backgrounds and a specific ethnicity. In an important study of the formation of the business class conducted in 1950, entitled "The Recruitment of the American Business Elite," William Miller found that in 1900, men born to poor immigrant or farm families were for the most part excluded from the business elite. So were blacks, Mexicans, Indians, and Oriental along with southern and eastern Europeans and their descendants. Those of the Jewish persuasion who attained business-elite status did so in exclusively Jewish firms. Four out of five members of the business elite were native born of parents themselves born in America. Old stock. But not old elite. They often pushed aside elites from the merchant capitalist period preceding industrialization. For example, Charles Francis Adams, Jr., was replaced by Jay Gould when the latter brought out the Erie Railroad in New York in 1868. Charles Francis Adams brother Henry Adams's revealing comment to Henry James at the turn of the century is indicative, "How few of our college mates, with all their immense advantages, seem to have got or kept their proportional share in the astounding creation of power since 1850."
My conclusion: Most came from middle class backgrounds. The view that they were parvenus is an elitist perspective drawn from earlier elites and literary intellectuals who moved in orbit of earlier elites. The combination of religious elements and materialistic ambition make for the peculiar moral tone of their activities. In the marketplace they practiced low morality, were ruthless. At the same time, in their personal lives they exemplify higher moral attitudes of industry, parsimony, and religious faith.
What were the personal and impersonal determinates of success for the Industrial Elite?
Hard to be precise about personal determinates. Family connections were very significant for many. Family is related to sponsorship. One of the most successful businessmen of the late 19th century, John D. Rockefeller, began his oil business by borrowing money from a successful uncle and father. Sponsorship was often related to fulfilling the expectations of your sponsors. You did this by being sober, punctual, efficient, having a presence of mind and honesty on the job. Such characteristics brought rewards. Gould, Cooke, and Hill all demonstrated as young men working as Wall Street clerks they were responsible. This got them access to loans. Andrew Carnegie began as a messenger boy for Western Union. He was effective. Hired by Tom Scott as his personal assistant for the Pennsylvania RR. Scott sponsored Carnegie and promoted him to a district manager. It was Carnegie's connections with the railroad sponsors that led him to decide to enter the steel industry to service the railroads need for steel.
Was schooling important? It was as not as important as you might think. Some notable first rank capitalists were not college educated. Rockefeller's father decided against sending him to college. But most members of the business elite came from fathers who were themselves business or professional men. J.P. Morgan and Henry Villard were college educated. Few of the businessmen in Miller's study went off to work at an early age. But skills were also valuable.
Business acumen was more important. Business acumen is the ability to see opportunity for profit, to recognize a strategic position within a given industry or market. Business acumen tells us what the first industrial elite did that allowed them to succeed. Consider several major examples of business acumen. First consider two examples of RR empire builders: Jay Gould and J. J. Hill.

Gould represents an empire builder who wanted above all to accumulate personal fortune, regardless of ethics. Jay Gould was mainly interested in RR promotion and the profits to be made from stock market speculation and manipulation. Look at Gould's activities with the Union Pacific. In the early 1870s, Gould began buying up UP stock. By 1875 he owned about 10 percent of UP's stock valued at about $1 million. Next Gould bought stock in two bankrupt potential competitors of the UP, the Kansas Pacific and the Denver Pacific. He went to UP to have them buy these RRs. The UP board of directors refused, telling him that such a purchase would increase their fixed costs without increasing their revenue. Why would he do this? Wouldn't such a purchase hurt this investment in UP stock? Yes. Gould's response was to make the Kansas and Denver Pacific operative. He also threatened to build them to the Pacific coast from Salt Lake City. Construction was hasty, slipshod, cosmetic, and wasteful, but the UP directors capitulated and agreed to exchange UP for Kansas and Denver stock. Gould quickly turned around and sold 200,000 shares of the UP stock for $10 million. Such actions resemble the buyouts of corporate raiders today. This practice is called greenmail. Gould's brand of entrepreneurship resembles sabotage because it compels investment without increasing productivity.

Other businessmen were more responsible. James Hill represents a good example of responsible economic leadership. Hill was a RR empire builder in the Northwest. In the 1870s Hill took over a bankrupt RR called the St Paul and Minnesota RR. He reorganized the operation and renamed it the St Paul, Minnesota and Manitoba RR. He began a construction program to build the road into Canada. This would allow him to link Canadian wheat farmers with the Mississippi river. Hill had a social vision. He saw the future of the Northwest with the arrival of the Scandinavian immigrants in the 1870s. He saw the potential for growth. He built his railroad to tie new communities to eastern and southern markets. Hill developed solid business strategy. He wanted low rates and a large volume rather than the short term monopoly program of high rates and low volume. He built more powerful locomotives capable of pulling longer freight trains. He devoted careful attention to routes. In short, he focused on building an efficient organization mainly conceived with rapid coordination and processing of goods in mind. Rockefeller saw the crucial role of oil refining as opposed to oil extraction as the strategic position in the market. In every case, what made them successful was they saw the opportunity first. Even more important, they saw competitive threats first and built organizations to meet the challenge. They organizations then operated as effective walls against newcomers.
What were the Societal determinates of success?
Big Businessmen were recipients of a New Structure of Opportunity. A structure of opportunity represents the conditions affecting rates of production, exchange, and accumulation of wealth. Elements of the New Structure of Opportunity included: An expanding labor force made up of hundreds of thousands of women and immigrants.

Women increase participation in labor force 1870 to 1900 from 14 percent to 18 percent outside the home. Immigrants from abroad and from American countryside. Between 1843 and 1921, some 25 million people migrated to the U.S. Most came as sellers of labor after 1878. Between 1870 and 1920, another 11 million migrant from countryside to cities. An expanding labor force made it easier to expand operations. Expanding capital markets. The new enterprises involved a massive increase in investment of capital stock per worker. In 1869, investment in capital stock per worker equaled $2000. In 1919, investment in capital stock per worker equaled $5000. Increasing capital investment required capital. This meant capital formation must increase. This means savings must increase. Economists estimate Americans were saving on the average 24 to 28 percent of their incomes in the two decades after the Civil War. Why? Not clear. Improved capital markets (New York Stock Exchange). Aging population saves more. A deflationary period so creditors were rewarded. A fully integrated national market. Railroads knit together the entire US, making it possible to produce and distribute good nationally. Growing consumer demand. Westward expansion and urbanization throughout the northeast and west created a deep national market for business operations to exploit. Government paternalism. Tariff policy for manufacturers. Protectionist rates for iron, steel, textiles, shoes and machine tools were features of national economic policy from 1861, when the GOP took power, to 1914, when Woodrow Wilson substantially reduced rates. However, the GOP raised rates again between 1922 and 1932. The modern era in free trade came only after World Wwar Two. Government Subsidies. Railroad land grants were critical. These were rights of way to construct a line. Once granted by the Federal government or by state governments, they allowed the promoters to sell bonds to raise cash and to issue shares, ie., to raise capital. All railroads received land grants. These amounted to 223 million acres from all levels of American government. Government bonds totalling $64 million were also provided. Pre-worker, consumer, and environmental protection. This meant society was forced to absorb the social costs of business conduct. A major form of subsidy. Pre-income tax era. What you made, you kept. This made for incredible rates of accumulation of wealth.

Cornelius Vanderbilt accumulated $94 million through ownership of the New York Central RR. He left it to his son William. William took over the NY Central at age fifty. When he died in 1885, his estate was worth over $200 million. John D. Rockefeller accumulated over a billion dollars in his lifetime. In a ten year period from 1885 to 1896 his share of the dividends of the Standard Oil trust alone totalled some $40 million. He officially retired in 1897 with a

fortune of around $200 million. Over the next 16 years, while in retirement, his fortune increased to one billion. Why? Because he invested in a wide series of other businesses. By the early 1890s he had 67 major investments in other than oil. The value of these investments was $23 million: They included 16 railroads ($14 million); 9 mining companies ($3 million); $2 million in several banks; and $4 million in other enterprises. Between 1917 and 1921, he transferred to

his son John D. Rockefeller, Jr. $500 million.

My conclusions: The structure of opportunity raises the question of power. The new structure allowed an economic elite of businessmen to concentrate inordinate power in private hands. If economic power was concentrated in a few hands, had it been legitimately obtained, was it being legitimately exercised, and should society accept the results of the accumulation? What institutions did the capitalists create and why did they take the form they took?

What were the economic strategies they pursued to defend what they had?
To understand their economic strategies, you have to understand the problem of competition. The economy that the first industrial elite confronted at the beginning of the modern era was characterized by intense competition. Business units were small and entry into a market was fluid. This decentralized and competitive economy reflected a social idea. It was an ideal that assumed anyone could compete and that opportunity was real. Social power in a decentralized market system theoretically did not exist. Since any single producer's influence in the market was, relative to the other producers, infinitely small. Power was at best temporary.
Capitalists like Gould and Fisk exploited competition. Capitalists like Hill and Rockefeller dreaded it. The economic strategy they pursued contradicted and overturned the ideal of a decentralized market. From their perspective, competition was an evil. It was "ruinous" to use the most frequently used adjective they employed. The reason they found competition ruinous was they had to grapple with the changing composition of capital. They had to manage a national business based on huge capital investments. Competition threatened their vested interests or their fixed investments. The central question for these capitalists was not how to profit like Gould had from financial schemes, but how to keep their fixed capital in use. The answer they developed was by system building, coordination, and consolidation. In short, by eliminating "ruinous" competition. Competition, therefore, contributed to the continuing growth in the size of American business.
This growth produced oligopoly. Oligopoly is a form of market control in which a limited number of firms dominate. Competition is limited to non-price areas. There were two ways to achieve oligopoly Through consolidation or Horizontal integration. In this strategy you try to buy out everyone who does the same thing you do or get other producers to enter into an agreement forming a separate supervening corporation called a Holding Company. Henry Havemeyer, American Sugar Refining Company, pursued this strategy and controlled 95% of industry by 1895.

Rockefeller pursued this strategy and controlled 90% of oil refining business by 1890. Rockefeller also formed a Holding Company. This strategy continues today in industries where over-investment has occurred: oil, videos, savings and loans. It is a defensive and an expansive strategy. Maybe futile because it saddles the resulting company with operating costs of most efficient and inefficient units. In order to work must be coupled with retrenchment.

System building and coordination or Vertical Integration. Consolidate all the stages involved in the supply, production, and distribution of your product. Unite related activities into a coherent whole. This is an offensive economic strategy. The Carnegie steel manufacturing company offer the best example. Production requires access to iron and coal mines. Carnegie bought mines. How to get supplies to mill and market? Carnegie bought Railroads. Once finished product has been readied to sell? Carnegie constructed an elaborate sales force.

Hence one corporation united extraction, transport, production, and distribution. Each of these functions is a separate unit of a corporation. Their melding required coordination and supervision. That meant an increase of a managerial bureaucracy. Where supply for manufacturing couldn't be controlled, as in Carnegie's case, corporations developed extensive distribution functions. The Singer Sewing Machine Co., for example, developed an extensive sales and service force. Sales forces in these service corporations was the biggest division. These trends in business show how modern industry created a blue collar employee and a white collar employee. In short, business became bureaucratic as a result of expansion and survival. When entrepreneurial capitalism adopted bureaucracy we speak of a new kind of capitalism: managerial capitalism. The ultimate corporation to arise from this strategy: General Motors: Creates different manufacturing divisions that competed against each other; complete networks of production, distribution, services, and developed finance function as well.

Competition and the role of Bankers. Competition also led to the emergence of bankers as a force in the transportation and manufacturing sectors of the economy. Whether one pursued horizontal or vertical integration strategies, bankers were increasingly important because of their control of or access to capital to finance purchase or expansion. In short, dependence on outside finance created a new role for bankers. Financial capitalists emerged as the managers of large investments and as the sellers of securities for first railroads before the Civil War. They next played a crucial role in the sale of Civil War bonds. After the Civil War investment bankers play a key role in the sale of securities for the new enterprises to gather capital. In return for buying and selling corporate stock, investment bankers were allowed to place directors and advisors on corporate boards of directors. The most famous finance capitalist was J. P. Morgan, founder of the House of Morgan. He was called the Jupiter of Wall St. because of the lightning bolts he threw from there. A look at Morgan's career reveals how investment bankers came to play a key role in modern business. Morgan entered the railroad industry in 1879 when his banking house helped sell 250,000 shares of Vanderbilt Railroad stock for the New York Central. For this service Morgan received a seat on the New York Central's Board of Directors. Between 1879 and 1885, the New York Central suffered from competition and near bankruptcy. In 1885 Morgan arranged an end to competitive blackmail between the New York Central and its main competitor, the Pennsylvania Railroad. Morgan determined that what the roads needed was price fixing, but how to achieve it? He could not turn to politics because the public was wedded to competition.
In fact, in 1887 Congress would pass the Interstate Commerce Act creating the Interstate Commerce Commission. The law outlawed pools, enforced competition, and forbid rebates. In 1890, Congress passed the Sherman Anti-Trust Act which outlawed trusts and any other contracts or combinations in restraint of trade. This pointed to a basic problem for big business. They were outside the older republican political tradition based on individualism and natural law. Big Business called into question the principle of competition and equal opportunity. If the market is rigged, then achieved status is threatened. To businessmen this was retrogressive and backward looking because it meant the public had adopted a paradoxical approach of using regulation to restore a presumably free competitive market. But the new law did nothing to stop consolidation. The laws to control large corporations only succeeded in creating the illusion of democratic control. In fact, society had to find ways to accommodate to corporations, not vice versa. This pointed up the reality that modern corporations had created a dysfunctional relationship between traditional values and the modern facts of economic life.
Now consider Morgan's solution: he wanted the railroads to agree to price fixing. First he tried to get the railroad industrialists to agree not to compete against each other. In 1887 he got them to sign up to a "Gentleman's Agreement," but it was only as good as the word of each railroad presidents. This didn't work. Especially in the west, but it did bring a measure of peace to New York Central and Pennsylvania contest. Bankers like Morgan did try to control industry. They wanted to protect investments. They wanted to ensure their corporations were profitable. They attempted to influence and control corporate policies. Between 1895 and 1907 Morgan mounted a campaign of direct control over the railroads. As a fiscal agent for many railroads he became a stockholder in many. He placed directors on boards. Between 1899 and 1907 Morgan brought one-tenth of the total track of the country under his control through mergers (horizontal integration). This created an effective oligopoly in the middle Atlantic and southeast United State.
Beginning in the mid-1890s, investment bankers tried a similar strategy in manufacturing. Between 1895 and 1904, bankers played a key role in a major merger movement. Each year an average 266 firms were absorbed by their competition. The new companies differed from the old ones. Whereas before the merger movement, scores of firms competed somewhat independently in various industries; after the movement in many cases a single firm controlled a major share of the market. The most famous example was U.S. Steel. In 1901 Morgan bought out Carnegie and his competitors and established the first billion-dollar manufacturing corporation in America. The previous year he had done the same for the agricultural implements industry and created International Harvester. By 1912, investment banks held 341 directorships in 112 corporations worth approximately $22.2 billion. Led by Morgan, investment bankers also sought to increase their control through the purchase of commercial banks. Commercial banks are the principle lenders to the nation's businesses. Whereas investment banks control the sale of securities, commercial banks control the supply of loans. The combined control of investment and commercial banks was the means by which banker’s sought to establish strategic control over many major corporations. There were limits to such control. Many American corporations were self-financing. However, where bankers established control, they assumed that if they could control the production and lending institutions of the modern economy, they would be able to impose stability on the economy-which was unstable, and thereby make profits predictable. When bankers play a dominant role in the economy we speak of a new phase of capitalism: finance capitalism.
Despite these efforts at control and management of the modern economy, bankers like J.P. Morgan failed to achieve the stability and order they were seeking. As the financial panics of 1893, 1895, and 1907 reveal, the American economy had simply become too complex for a handful of banking and investment houses in New York to control. By 1912, the year that J.P. Morgan died, the banking community had become the principal advocates for reform of the banking industry. The result was the creation of a uniquely American central banking system, the Federal Reserve System in 1913. It was in this context that Louis D. Brandeis wrote Other People’s Money and How the Bankers Use It to help alert the nation to the dangers of “The Money Trust” and the need for reform.
My conclusion on economic strategy: by 1920 American capitalism is bureaucratic, capital intensive, and oligopolistic. Corporations transformed American institutions and values. There was no place for big business in 19th century America. They were an anomaly. What was the businessman's response to this dysfunction? They opted for the Gospel of Wealth. Big business creates wealth enjoyed by the masses of Americans who willingly accepted the trade off of becoming an employee and a consumer in return for giving up democratic control of the economy. Big Businesses are just doing business, unfair competition was bad for business, consolidation was inevitable and desirable, and it would serve as the basis for economy and efficiency. If monopoly appeared on the scene it arose from economies of scale, not corrupt practices. Industry wide collusion was preferable to chaos. The result is an extremely productive set of economic arrangements but a continued dysfunction between economic institutions and ideology or culture and beliefs. One historian has labeled this “a ritual clash between an "anachronistic ideal and a modern need." The result is corporations that do not have a moral or logical place in American ideology. It is interesting to note that pro-capitalists historians do not praise business for individualism, the free market, and entrepreneurship, but for its ability to create efficient organizations and bureaucracies. The implication is the views of people who continue to extol the virtues of free enterprise and free markets are anachronistic.
My Editorial: Corporations are an engine of accumulation and privilege that should never have been allowed in private hands. They exist with considerable control over nation's economy. Their existence seems to violate basic democratic values. There existence calls into question traditional ideas about free markets and individualism. We have an economy dominated by private actors. They play a central role in coordination and adaptation of economy to population, supply and demand, and technical change. Only in twentieth century did the business class have to share power with a much enlarged federal government.

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