kfitz

Sounds Familiar

Continuing the Richard Powers binge, I just yesterday finished reading Gain, which traces the corporate history of Clare International, a giant conglomerate much akin to the ill-fated Beatrice Foods. Remember Beatrice? If not, you’re not alone. The corporation only advertised its existence briefly, during the 1984 Summer Olympics, the resonances of which were particularly alarming considering it turned out that Beatrice was the parent company of everything. Then there was that pesky little series of lawsuits, and the conglomerate is no more. (Or at least no more in that form, under that name.)

What struck me last night as I was wrapping up the book, however, was less the Beatrice connection than Powers’ depiction of the Clare response to the onset of the Great Depression:

By Independence Day, four fifths of the wealth traded on the New York Stock Exchange had vanished into the thinnest of atmospheres. The Jazz Age took a quick refresher course in the imaginary value of equities. Clare’s stock tracked this average drop downward with all the tenacity of a bloodhound puppy. By summer’s end, the worth of the entire, far-flung manufacturing empire was less than the book value of the Illinois factories four years before.

Alone among the corporate brass, William Clare had seen the shape of things to come. The careful financier knew all about bookkeeping by mass hypnotism. Throughout the twenties, he sold off his shares in steady, disciplined lots. By the peak, he’d gotten far more than fair market value for his portion. When all hell broke loose, he dumped the rest of his worthless paper, enjoyed a year of ship-spotting off Nantucket, and returned to business to serve briefly on the board of Gillette just before his happy death as a traitor to his family in 1931.

Douglas [Clare] II was less hurt by the plunge in his net worth than by the reception of his monograph, The Dream of the Romanesque. Scholars laughed at the work because it was written by a businessman. And businessmen by and large failed to read it because it appeared to be about old stones. Douglas retired from the firm to the Greek island of Soundetos. There, in comfortable if reduced circumstances, he took to financing his own amateur forays into classical archaeology.

Everyone else whom the company bound together went to the cleaners. And the folks in the khaki shirts got cleaned longest and hardest of all. All the sorters and sifters and gauge-tenders and packers and haulers who had been forced into buying company shares at a discount now watched helplessly as their precious nest eggs cracked into the national omelet. Workers who had built their retirements for forty years came up empty-handed, the victims of the distributed pyramiding swindle of capital. (307-308)

Bookkeeping by mass hypnotism, well-timed sell-offs, the pyramiding swindle of capital. But hey, that was then, this is now, right?

Happy Independence Day, all.

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