While driving to our weekend getaway along the Columbia River, we listened to Bob Mondello’s NPR story on the 1960s heyday of the financial musical, when shows were about the trials and tribulations of the sort of business folk who worked nearby on wall street. He highlights entertaining songs such as “Capital Gains” from “Subways are for Sleeping”. He also relays the plot of a show titled “The Rothschilds” about the rise of the Jewish banking family to the point where they had enough political influence to press for a declaration of rights for European Jews in the 1800s. The play’s climax comes when the family takes revenge on a German Prince who promised political support in return for a loan and then reneged. They do so by nearly bankrupting themselves undercutting the price for German Peace Bonds, successfully preventing the state from raising needed funds and getting a capitulation from the Prince which also guarantees them a piece of all future bond business.
Later that weekend we climbed Beacon Rock, the 2nd largest freestanding rock in the world after The Rock of Gibraltar. Beacon Rock was introduced into European history by Lewis and Clark in 1805. Most of the park signage noted that Beacon Rock was purchased by Henry J. Biddle in 1915 for $1 from Charles Ladd on the condition it be protected. Biddle’s children eventually got the rock turned into a state park. According to The Lewis and Clark Columbia River Water Trail, by Keith G. Hay, Charles Ladd purchased Beacon Rock in 1904 from a Philadelphia banker and investor in the Northern Pacific Railroad, Jay Cooke. Hay does not report a purchase price; however it seems likely that it was more than $1. Charles Ladd’s wife Sara was an award winning amateur photographer, and I learn from an article about her in the Oregon Historical Quarterly (Glauber, Spring 2007) that Charles Ladd was a successful Portland banker and businessman.
Both of these stories are about situations where people have enough capital that they’ve moved beyond using it for productive value or speculative value and into purely using it for political value. Interestingly they both involve losing large sums of money, or at least being able to risk doing so. The first story is a financial negotiation where being the last financier standing gives one control over a situation which could ultimately make their money back. Charles Ladd made more of an outright donation: sacrificing the difference in prices paid in return for a guarantee of preservation – a move that also reaped large future rewards but for the public rather than for himself.
For me, the key common element here is to note how excess capital trumps multi-party decision-making. Certainly easy to applaud when it’s a triumph of righteousness, but as a general principle it leads away from democratic governance. Theoretically, this kind of power comes from commercial success, which could be a kind of endorsement for the right to wield it. Unfortunately I think this “economic permission for power” is difficult to sustain in a world where businesses operate at non-local scale so that it’s impossible for customers to understand the full impact of who they choose to give their business to, or hold those at the top accountable in a social way.