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Greed and the Entrepreneurship ethic

A friend from a rural area in Tamil Nadu joined a PhD program in the USA
with me.  A thin brahmin vegetarian with strong intellectual traditions, he
had, within five years, been infected by the make-money-grow-rich-quickly
bug - he became a money-hungry creature, restlessly seeking opportunities
to open a enrepreneurial venture, joining a body-building club, and reading
all the business books he could lay his hands on.

How did this invincible commerce bug enter the American bloodstream so strongly?

Nowhere will one find a clearer answer than in this book by Baida, which
covers a series of enterpreneurs from John Jacob Astor to modern Wall Street
reprobates, focusing on the moral and ethical issues of their success, as
well as the management aspects.  The writing sparkles based on thorough
research, and makes for an excellent read, especially the chapters on the
early enterpreneurs who remind one of Chinese and Indian entrepreneurs of the
20th century.

Nineteenth century robber barons

By far the most colourful character is Cornelius Vanderbilt, whose
ruthlessness appears boundless.  In 1857, he "conquered" Nicaragua with a
mercenary force of 120 men, in order to gain control of a competing
Atlantic-to-Pacific transit route, which he shut down, to keep the monopoly
of the Panama transit line.  In 1874 in his fight for the Erie railroad, he
first purchased a judge, but when his rivals purchased another judge, he
sent an agent carrying suitcases with half a million dollars in cash to for
"influencing" the Albany legislature.  Or John D. Rockefeller, ruthlessly
establishing Standard Oil monopoly by controlling key transportation and
terminal facilities before turning to charity.  Or the advertising industry
of the late 1880s, pushing patent medicine such as Lydia Pinkham's Vegetable
Compound, "The positive cure for all Female Complaints" (p.223).

Benjamin Franklin, himself a colourful character, sets the hard-work ethic
behind much of this thinking.  Later business leaders such as Andrew
Carnegie, who pioneered steelmaking but entertained doubts about making such
a lot of money (his father was a Scottish revolutionary), or Alfred Sloan who
revolutionized GM, are less colourful, but the stories of their success still
make for absorbing reading.

Dissent and Get Rich advice

Baida also covers the voices of dissent in each period, from Thoreau to
Sinclair Lewis,  whose George Babbitt (1992) is the
epitome of American greed, constantly hustling to achieve greater wealth.
Another fable that opposes senseless greed is that of Russell Conwell's
Acres of Diamonds.

He also traces the literature of success from different eras.  As the book
progresses, one senses a move away from the wholesome injunctions of
Franklin: - the way to wealth "depends chiefly on two words: INDUSTRY and
FRUGALITY".  This is contrasted with late 20th-c. gurus like Michael Korda,
who advises a shameless cynicism - "All life is a game of power... The object
if the game is simple enough: to know what you want and get it."  In today's
world, he advises, "the puritan work ethic is dead", and success is to be
achieved by means like "Foot power" - wearing simple expensive shoes, "and
always put the ladces in straight, not crisscrossed."  337.

Of course, the culture of greed transcends America; in the end it is
this that gives us Enron and Satyam and the Sanlu milk scandal.  It's the
breeding ground for the Harshad Mehtas and the Bernard Madoffs who fuel these
crises.  But America is perhaps the most visible crucible, and our best
window into it may have been provided by Baida.

Quotations

[Franklin set up the first subscription library in Philadelphia.]  The
resistance that he encountered, he tells us, "made me soon feel the
impropriety of presenting one's self as the Proposer of any useful
Project that might be suppos'd to raise one's Reputation in the
smallest degree above that of one's Neighbors, when one has need of their
assistance to accomplish the Project. I therefore put my self as much
as I could out of sight, and stated it as a Scheme of a Number of
Friends, who had requested me to go about and propose it to such as
they thought Lovers of Reading. In this way my Affair went on more
smoothly, and I ever after practis'd it on such Occasions." -p.34

"A perfect character may be attended with the Inconvenience of being
envied and hated," so "a benevolent Man should keep a few Faults in
himself, to keep his Friends in Countenance." From Franklin, too, we
learn how to turn an enemy into a friend. Request that the enemy do you
some favor, and once the favor has been done, express your gratitude
in the strongest terms. It is an old maxim, Franklin explains, that
"He that has done you a Kindness will be more ready to do you another,
than he whom you yourself have obliged." - from Poor Richard's Almanac
				- p.34

[On humility] "I cannot boast of much Success in acquiring the {\it
Reality} of this virtue; but I had a good deal with regard to the {\it
Appearance}."  "[I] made it a Rule to forbear all direct Contradiction
to the Sentiments of others, of every Word or Expression in the
Language that imported a fix'd Opinion, such as certainly,
undoubtedly, &c. and I adopted instead of them, I conceive, I
apprehend, or {I imagine} a thing to be so or so, or it so appears to
me at present."

[William Carlos Williams attack on Franklin's morals:]
His mighty answer to the new world's offer of a great embrace was THRIFT.
Work night and day, build up, penny by penny, a wall against that which is
threatening the terror of life, poverty.  Make a fort to be secure
in. [Franklin is] our prophet of chicanery, the great buffoon, the face on the
penny stamp. 42

[D.H. Lawrence is scathing against Franklin's "pattern" Americanism.]
... althought I still believe that honesty is the best policy, I dislike
policy altogether; ... It has taken me many years and countless smarts to get
out of that barbed wire moral enclosure that Poor Richard rigged up.  Here am
I now in tatters and scratched to ribbons, sitting in the middle of
Benjamin's America looking at the barbed wire . . . And I just utter a long
loud curse against Benjamin and the American corral.

Quotations: Cornelius Vanderbilt

   Gentlemen:
	You have undertaken to cheat me. I won't sue you, for the law is
	slow. I'll ruin you.
		Yours truly, Cornelius Vanderbilt, 1854 [p.63]

[A letter written in 1854 to erstwhile subordinates who had attempted
to take over Vanderbilt's share in the Accessory Transit Company, with
passenger service to the American West via Nicaragua. Eventually, these
two subordinates, Morgan and Garrison, financed the venture of an
American filibuster William Walker, who, with 58 adventurers, overthrew
the Govt of Nicaragua, and granted the transatlantic license (and the
assets of the company) to a new firm floated by Morgan and Garrison.
In response, having failed with the US govt, Vanderbilt financed his
own army. ]

"Late in 1856, two of his agents invaded Nicaragua from Costa Rica with
a force of 120 men. They hacked their way though miles of jungle, took
rafts and canoes down the San Carlos and San Juan rivers, and won a
series of victories that put Walker in a hopeless position. On May 1,
1857, Walker surrendered... Vanderbilt regained control of the Nicaragua
route and thus completed his revenge against Morgan and Garrison.
However, Vanderbilt did not operate the line, and charged the competing
line a fee of $56,000 a month for this "courtesy." 64

[The career of Vanderbilt is full of episodes like the buying of
judiciary, the legislature - e.g. his battle over the Erie railroad -
and his contempt for the law is well known.] - p.64-65

Irrelevance of Education

[Lord Palmerston of England declared it a pity that a man of
Vanderbilt's ability lacked the advantages of formal education.] "You
tell Lord Palmerston from me that if I had learned education I would
not have had time to learn anything else." 84

Edwin T. Freedley, doubted that more than half a dozen college graduates
could be found among the nation's business leaders. "Directly or
indirectly," Freedley declared, colleges had "ruined a greater number
of their sons than they had ever benefitted." - p.84

    In the competition with the college man, the great advantage of the
    self-made man was experience. As a method of preparing well-rounded
    men of business, what could surpass an old-fashioned apprenticeship?
		- p. 85

Society everywhere is in conspiracy against the manhood of its
members... Whoso would be a man must be a nonconformist. Emerson,
Self-Reliance, - p.  93

Dissenters: Henry David Thoreau, Walden

Men rush to California and Australia as if true gold were to be found
in that direction; but that is to go to the opposite extreme to where
it lies. They go prospecting farther and farther away from the true
lead, and are most unfortunate when they think themselves most
successful. - during the 1850's gold rush. - p. 93

A man is rich in proportion to the things he can afford to let alone.
... When I consider my neighbour [farmers] I find that for the most
part they have been toiling twenty, thirty, or forty years, that they
may become the real owners of their farms ... And when the farmer has
got his house, ... it may be the house that has got him.  - p.95