Notes
1 In a sense, these societies can be viewed as profoundly hypocritical. The Greek ideal could not abide trade or commerce, yet the Greeks could not even feed themselves without importing vast amounts of grain. See Paul Rahe, Republics Ancient and Modern: Classical Republicanism and the American Revolution (Chapel Hill: University of North Carolina Press, 1992), especially Chapter 3, “The Political Economy of Hellas.” In the quote from the Republic, Socrates was speaking to and thinking of that tiny fraction of the Greek population who were free citizens, ignoring the fact that those citizens could avoid participating in commerce only because all their material needs were provided by slaves.
2 St. Augustine (354–430): essentially, “If no one loses, then no one gains.”
3 It was not only the Jews who practiced moneylending, however. Famous figures like Voltaire himself found ways to lend large sums of money, especially to the royal houses, through the ruse of “donations” made in return for a lifetime stream of payments.
4 Much of my argument in this section of the book follows the fascinating account of Jerry Z. Muller in The Mind and the Markets (New York: Alfred A. Knopf, 2002).
5 The notion of economists as a separate profession did not exist in the eighteenth century. Adam Smith was a professor of moral philosophy.
6 Voltaire, Philosophical Letters (1734), quoted in Muller, The Mind and the Markets, 35.
7 From Pascal's Pensées, quoted in Muller, The Mind and the Markets, 35.
8 Muller, The Mind and the Markets, 72.
9 Muller, The Mind and the Markets, 76.
10 This happens to be the formulation of the Marxist philosopher G. A. Cohen. In other words, although it may be true that everyone in a capitalist society has the opportunity to become wealthy, because we know that only a small percentage actually will become wealthy, the opportunity is illusory: It's not a freedom but an “unfreedom.” See G. A. Cohen, Self-Ownership, Freedom, and Equality (Cambridge: Cambridge University Press, 1995). The trouble with such discussions, aside from their eerie other-worldliness, is that they don't particularly distinguish capitalist societies from other kinds of societies. Because no one in a Marxist society is allowed to become wealthy, it is difficult not to view that also as an “unfreedom.”
11 Capital invested in Treasury securities supports the government's borrowing needs. Capital invested in corporate bonds supports the borrowing needs of corporate enterprises. Capital invested in equity securities supports the equity base of corporations, providing long-term growth capital and allowing them to borrow money as necessary (from banks or via the bond markets). Most important, capital provides the liquidity without which no one would buy stock or bonds.
12 As I note elsewhere, this capital might still be in private hands or it might be held in the form of a charitable foundation or a nonprofit endowment. But all these holding structures trace back to the original wealthy families who deployed their capital so creatively.
13 David Owen, Copies in Seconds (New York: Simon & Schuster, 2004), referring to the invention of the plain paper copier.
14 This isn't intended to be as elitist as it sounds. The support of thousands of small donors who are enthusiastic about the mission of the college is a good part of what justifies the campaign in the first place. In addition, of course, some smaller donations represent sacrificial gifts by donors with modest resources.
15 In 1901, Carnegie sold Carnegie Steel Company to a group led by J. P. Morgan for $250 million, forming the United States Steel Corporation.
16 The violence was supplied by an army of Pinkerton detectives hired by Carnegie Steel Company, as well as members of the Pennsylvania National Guard. The workers' strike failed and the union was virtually destroyed. On Carnegie generally, see the compelling biography by Peter Krass, Carnegie (New York: John Wiley & Sons, 2002).
17 On the subject of the early decades of St. John's College under the new program, see the superb account of Charles A. Nelson, Radical Visions: Stringfellow Barr, Scott Buchanan, and Their Efforts on Behalf of Education and Politics in the Twentieth Century (Santa Barbara: Bergin & Garvey, 2001).
18 Ironically, Greenfield is a venture capitalist himself, having cofounded Oak Investment Partners in 1978.
19 I want to emphasize that I am not endorsing the ideas of the conservative wing of the Republican Party—or of any wing of any party. I am simply pointing out what a relatively small amount of creative capital, intelligently deployed, can accomplish.
20 For those of my readers who are too young to remember the halcyon days of DOS (disk operating system), DOS commands were the language we used to communicate with our computers. DOS was, in effect, a piece of computer software that allowed us to control our computer hardware. Today, for example, if we want to backup a few files, it is the work of an instant. But in the good old days we would go to our DOS screen and type something like, “BACKUP a:[path][filename] a:[/S][/M][/A][/F:(size)] [/P][/D:date] [/T:time] [/L:[path]filename].” I'm being perfectly serious about this.
21 Alcoa is now third in the world, behind Rio Tinto Alcan and Rusal.
22 I exclude the launch of thousands of traditional small businesses that are not intended to become big businesses. Most of these local enterprises are launched by sweat equity rather than true financial capital.
23 Google and Cisco Systems got their start thanks to angel backing.
24 The remark may be apocryphal.
25 Britain, again, is something of an exception, but only since the Thatcher era (1979–1990).
26 In this discussion, I am following the argument elegantly set forth in Robert Kagan's celebrated essay, “Power and Weakness,” which appeared in June 2002 in Policy Review 113. Kagan expanded the article into his brief but powerful book, Of Paradise and Power: America and Europe in the New World Order (New York: Alfred A. Knopf, 2003). My argument differs on several points from Kagan's.
27 Kagan, “Power and Weakness.”
28 The carpet bombing of German cities like Cologne and Dresden occurred because bombing technology was too imprecise for Allied air forces to take out critical urban war plants without taking out entire cities. But it is certainly true that very little ethical hand-wringing took place over a strategy that was certain to, and did, lead to tens of thousands of civilian deaths and to painfully few military gains.
29 Paul Berman has pointed out that peaceful republics quite similar to those of modern-day Europe have existed before—Florence and the other economically powerful city-states that arose in the late Middle Ages, for example. These republics “blossomed splendidly for a few decades and then, in their defenseless condition, were invariably crushed under the heel of some marauding army.” Paul Berman, “What Lincoln Knew About War,” The New Republic (March 3, 2003).
30 Former French Foreign Minister Hubert Védrine's term for the United States. He did not intend it as a compliment.
31 Several years ago a young busboy in a Chicago hotel pointed to my copy of Built from Scratch, Bernie Marcus and Arthur Blank's story of the building of Home Depot, Inc. “Good book,” he said in an English so accented I could hardly understand him. “You've read it?” I asked incredulously. “Three times,” he replied matter-of-factly. “Some day I build such a company.”