Monday, May 21, 2001

Are Capitalists Evil, Part II:

As we discussed earlier, the modern face of capitalism (Bill Gates, Larry Ellison, Steve Jobs) is the face of evil--in marked contrast to the beloved figures of Bill Hewlett and David Packard. Why then has such a change occurred? Were Bill and Dave exceptions to the rule, or were they simply part of a long line of humanistic capitalists?

The answer, as always, is more complicated.

History has a love-hate relationship with moguls, sometimes even in one mogul's lifetime. Andrew Carnegie was a much-admired humanitarian whose reputation was forever sullied by the bloody Homestead strike that his partner Ford Frick suppressed with Gatesian ruthlessness. John D. Rockefeller was the riches and most reviled business titan the world had ever seen, but became a gentle grandfather figure in his retirement.

Attitudes towards capitalism also tend to run in cycles. The Gilded Age celebrated capitalists, as did the Roaring Twenties. The Depression Era blamed society's problems on business, as did the Sixties and the muckrakers and trustbusters from the turn of the century. In England, the world's first industrial nation, the revered figures of Watt and Arkwright gave way to the Dickensian proprietors of child labor factories and debtor's prisons.

The general pattern has been that capitalists are lionized during booms, and despised during busts. Yet during the dot-com boom, capitalists were despised even before the bubble burst. Why?

Capitalists had behaved badly during previous booms--the dot-commers had nothing on the Vanderbilts and other New York elite when it came to conspicuous consumption.

Something different was occurring. Throughout history, capitalists had been admired and despised, but they were generally seen as a breed apart. It was hard work to become a steel, railroad, or shipping titan, and the results were tangible. The dot-com era saw a dramatic cheapening of wealth. All of a sudden, success was seen as the result of luck, rather than any special genius or burning drive. No one ever lionized prospectors who struck it rich during a Gold Rush the way that they idolized a Thomas Edison.

It may be that time and perspective will cause us to reclassify Gates and his brethren. Rather than evil puppetmasters, they will resemble nothing more than schoolyard bullies, swelled with importance by an accident of fate (or hormones), with no more lasting impact.

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