Writers of worthwhile biographies must not only research their facts carefully, they must also highlight the moral, imaginative, or philosophic significance of their subjects’ lives. Both James Grant’s Bernard Baruch and Stanley Jackson’s J.P. Morgan are well researched and clearly written, but both fail to tell us why we should care about either of these two idiosyncratic businessmen. Baruch’s transformation from a freewheeling stock market speculator in the early 1900’s to a statist advisor to Presidents between the wars could have served as a basis for a broad treatment of the relations between businessmen and government, but Grant contents himself with careful accounts of Baruch’s personal relations with his colleagues and with details of his stock market transactions. The career of J.P. Morgan, the great banker who directed many of the giant industrial mergers of the late 19th century, invites a discussion of industrial concentration and restriction of competition. Jackson looks merely at Morgan’s art acquisitions, his luxurious vacations, and his autocratic personal manner.

Baruch’s career presents the same paradox as that of many businessmen who become advisors and employees of government. In private life a beneficiary and champion of free enterprise, Baruch became in public service an advocate of the most onerous government direction and control of the economy. He seems not so much to have changed his principles as to have followed no consistent principles at all.

The philosophical metamorphosis of businessmen who begin receiving government checks has been widely observed. Almost all businessmen not on government payrolls advocate free enterprise and limited government. But hardly any interventionist excess of the last half-century, from import restrictions and farm subsidies to price and wage controls to loan guarantees to failing firms, has proceeded without the approval and support of at least some businessmen turned government advisors.

The ideological shallowness of many businessmen has several causes. In the first place, any demanding occupation tends to create a narrowness of outlook. At the same time, professional success encourages businessmen to regard themselves as authorities on every imaginable subject. But when not dealing with technical problems, businessmen typically let personal friendships and social trends—not deep convictions or broad understanding—shape their attitudes and outlook.

Nor is it likely that anyone will ever learn political constancy from the world of high finance. For a speculator or any large scale businessman, the guiding rule is not to fight the market. When an investment fails to prosper, it should be abandoned immediately and replaced with one that is rising in the market. A stock that is a good buy today may be a poor one tomorrow, and success goes to the investor most willing to abandon poor prospects rapidly and revise his opinion in response to current events. Constancy in holding unpopular investments or in holding to earlier opinions when the market is hostile is regarded in financial circles as unenterprising and foolish.

Financial dealers moving into government service naturally tend to view-political trends as they view the stock market. Perhaps alone of those who use the ghastly phrase, they believe in the “marketplace of ideas.” Like the professional stock trader, they view the underlying soundness of an idea as of far less importance than the current advantages of subscribing to it. As Grant aptly sums up Baruch’s movement from champion of free enterprise to advisor to the New Deal:

To intellectuals, political ideas lived and breathed. To Baruch, they were considerably less lifelike than power, party and friendship, and he was usually ready to sacrifice philosophical consistency to any one of those considerations.

When government intervention is popular, such businessmen view defenders of individual freedom not as principled idealists but as incompetents, like investors who miss the bull market by unwisely tying up their assets in low-yield bonds. Lamenting the captive nations of Eastern Europe may appear to these businessmen as worthwhile as lamenting the fate of the shareholders of Penn Central. (Small businessmen, who typically lack the ability to switch products quickly, are commonly less nimble in switching political commitments as well.)

One of the more durable myths of conservative politics is that government can automatically be made less intrusive and expansionist if enough businessmen can be installed in important posts. But businessmen as a class are probably unsuited by experience and attitude to challenging the intellectually committed advocates of expanding government power. Leadership for ideological change must come from thinkers, not dealers. Yet if principled conservatives impel a shift in popular views of government, businessmen can be relied on to follow in the hope of making trading profits on the change.

 

[Bernard M. Baruch: The Adventures of a Wall Street Legend, by James Grant; Simon & Schuster; New York]

[J. P. Morgan, by Stanley Jackson; Stein & Day; New York]