Andrew Carnegie was once the richest man in the world. Three Presidents were said to have served under Andrew Mellon during his 10 years as U.S. Treasury Secretary (Harding, Coolidge and Hoover). Who cares? I do, because two brilliant historians have shown me a better way to understand today's crony-capitalists.
Professors David Cannadine (Andrew Mellon) and David Nasaw (Andrew Carnegie) present thorough explorations of their subjects who share a great deal more than a first name. They are both classic crony-capitalists from whom I've learned a great deal about what we must do moving forward.
How did corporations come to dominate both the economic and the political arenas? Pliant politicians doing favors for friends and funders, leading to high tariffs (one example), leading to great wealth, leading to more favors, more pliancy ... to crony-capitalism and to political and economic excess. To me, it's the classic story of the sorcerer's apprentice, with some politicians, our elected representatives, starring as the hapless apprentices.
America's Founding Fathers severely limited corporations when they wrote the U.S. Constitution. Their hard colonial experience had taught them that corporations need to be constrained, to be our servants, not our masters. They defined the very foundation of this nation's legitimacy as the American people -- not anyone's God, not a king or an elite, and certainly not corporations.
While I'm as tempted as the next person to succumb to my rage about today's crony-capitalism, history has helped me to see our situation in context. We've been here before. Professor Nasaw points out that the "golden era of free-market capitalism" is largely a myth; then, as now, the markets were regularly fixed, sometimes by those compliant politicians and occasionally by brute force. The sovereign people's well-being was undermined then as now by very private interests who got very, very rich. Now as then, no "fix" is permanent, only the need for constant vigilance is. That's the price of being free from tyranny by whatever name.
So, I lift a toast to two serious historians who've given us access into Mellon's and Carnegie's lives and times. The similarities with today's corporate moguls are brutally relevant. (Robert A.G. Monks also makes this exquisitely clear in his masterful book _Corpocracy_. It's personal for him.)
And I thank both professors for reminding me that Mellon, Carnegie and their allies viewed themselves as great patriots. Hard as I find it to give up my own stereotype of cartoonish robber barons, that temptation pales before the need to address an essential question as Professor Cannadine poses it: How do we strike a balance between capitalism's energy and the government regulation necessary to reign in its propensity to excess? First, we ask that question. Then we start requiring accountability.
You'll can listen to our Shows - including the ones with Professors David Cannadine (Mellon) and David Nasaw (Carnegie), Ron Chernow (Rockefeller) and Robert A.G. Monks - at our website http://www.PaulaGordon.com.