Of Wealth and Virtue: The Instructive Story of Cornelius Vanderbilt

From History News Network comes this fascinating look by Edward Renehan at the culture of philanthropy in the time of Cornelius Vanderbilt. As we have Think Tanks, so in his day the strikingly named London Society for Bettering the Condition and Increasing the Comforts of the Poor promoted the belief that giving to the poor was generally bad because it encourages vice and indolence.  In America the same analysis was made by The Society for the Prevention of Pauperism:  The poor are mostly undeserving and are best served or contained in workhouses and debtor prisons. The strong survive, the weak perish, and the race is purified of its weak beings and its cultures of failure.  The article shows how this strain of Social Darwinism influenced Vanderbilt and others, reducing or squelching their commitment to giving to the poor.  And, the article traces the "tough love" philosophy down to Ayn Rand and our contemporary conservative thinkers.

When, at Hudson Institute's Bradley Center for Philanthropy and Civic Renewal, Bill Schambra calls for less welfare for the poor and more help from private philanthropy, one can only wonder.  Once welfare is dismantled, and the tax breaks given, will wealthy conservatives step up their giving to the poor? Or, will the arguments and alibis used to make welfare seem a corrupting influence on the poor be recycled and returned to their earlier context, becoming once again a critique of charitable giving to the undeserving poor? Will the rich man who disdains having his tax money go to the indigent, step in to give his money through a nonprofit intermediary, or will he simply walk off, his heart hardened, and his conscience clear, to spend the money on his own deserving self and his own deserving heirs? Sadly, that is mostly what Cornelius Vanderbilt did. His heir, though, the one to whom he gave almost all his fortune, did little to preserve it, and the family, once (in inflation adjusted terms) three times richer than Bill Gates, has seen its dynasty crumble.  Several of the heirs, it seems, contested the  patriarch's will, accusing him of being insane.  The case dragged on; the chosen son, the one who was to inherit almost all, committed suicide.

In the dialogue of Virtue and Wealth, Dame Fortune may have the final word.  Had Vanderbilt listened to the Christ of the Gospels, or to Maimonides with his ladder of giving (or justice), or to the Stoics who counsel detachment from worldly passion, rather than listening to the think tanks of his era, might Vanderbilt's family have been better and done better, not only for society, but for themselves? Unwisdom, selfishness, and sophistry are like vipers we breed in our hearts at our own peril.

Comments

[Jeremy GRegg]

On an interesting sidenote, a new report from the Internal Revenue Service shows the wealthiest 1 percent of Americans earned a record 21.2 percent of all income in 2005 — up from 19 percent in 2004. Meanwhile, the bottom 50 percent earned 12.8 percent of all income, down from 13.4 percent in 2004. According to the IRS, the median tax-filer’s income fell 2 percent between 2004 and 2005.

Charity is not the solution. It may alleviate guilt, but it will never enable the sort of systemic change that is necessary to bring more balance to the system.

[Phil]

What is the solution? Let the poor die off as in the slums of Calcutta in this flat world of ours? Charity along with hope and faith were once held to be virtues. You work closely with the poor, and your own commitment is real. Central Dallas Ministries encourages self help and the help of one poor citizen by another, as well as of the poor by the better off?

[Sa'Luk]

Charities are not polities.

[Gerry]

Charities are just a band-aid on the problem. Necessary only because there is no economic justice.

It would not be a handout to pay better wages. If the income of the top one percent is going up, you can't make the argument that this would be inflationary, and even if it is, that isn't they most important problem to address.

If we had policies that put more income in the hands of middle and lower income people, they will spend it on increasing the welfare of themselves, their families and communities. You can show this easily with the numbers, or by demonstration. That would stimulate more economic activity.

It can also be shown that the middle and lower parts of the income scale give much more in proportion to their income, so donation would go up too.

This unbalanced (and unjust) economic situation is also structurally unsound, and you don't need to look to transcendental truths to show this, a sound objective analysis will show too. And the "think tanks" continue to spout their ungrounded myths with impunity.

[Gerry]

Writing my comment in the other thread, I thought of something relevant to great accumulation of financial wealth as we have in this story.

What if having a lot of money carried a high price in terms of social stigma? Giving back to the entire community would then be a remedy for the sin of having accumulated more than your share. A great producer, who over a lifetime contributes much to the common weal doesn't end of with a big pile of financial assets that give her control, she instead has a great history of gifts. Such a person may not have control of those assets, they have been kept in motion and producing by the entire community, but they and their extended family always have a claim of ownership on the common surplus. She also has a right and responsibility to participate in the management of common assets, to encourage resources to flow to the places they are most needed, and so on.

As I said, we need new language, practices and social supports for gifts and giving.

[Phil]

In the same era as Vanderbilt, we also have the example of Carnegie. Ruthless in amassing his fortune, he also wrote "The Gospel of Wealth" in which he said, "He who dies wealthy, dies disgraced."

[Gerry]

Carnegie is quite a contradiction within himself. I wonder what it was about his character that allowed him to deal so ruthlessly with competitors and workers, and yet show tremendous compassion in his philanthropy. I've never read any extensive bio of him, but you would expect even a cursory introduction to the man to address these contradictions more than just to note them.

[Jeff]

This is reminiscent of the 'starve the beast' strategy of first cutting taxes and then arguing that we have to cut socially progressive programs because we can't afford them.

When we lived in France, I found that many French people were deeply skeptical (to the point of disapproval) of private charity because they saw it as turning a legitimate entitlement into a stigmatized handout; a first step towards weaseling away from socialism.

[Phil]

Jeff, you could make a fortune at a think tank developing these ideas. "Charity is one step closer to French-style socialism. We must nip charity in the bud, lest entitlements take root in America."

[Phil]

Jerry, the challenge I have disparaging very generous capitalists is all the equally wealthy ones who give nothing. "No good deed goes unpunished," as philanthropists say. "One of the thieves was saved." Shouldn't we praise Carnegie's giving, even as we deplore his hiring Pinkerton's to put down the Homestead strike with truncheons and bullets?

[Jeff]

No Phil, let's try: You must give generously to charity to prevent socialism from usurping your charitable prerogatives!

[matrullo]

Like HelpJet, Sovereign Deed works on a "country-club type membership fee," according to the company's vice president, retired Brig. Gen. Richard Mills. In exchange for a one-time fee of $50,000 followed by annual dues of $15,000, members receive "comprehensive catastrophe response services" should their city be hit by a manmade disaster that can "cause severe threats to public health and/or well-being" (read: a terrorist attack), a disease outbreak or a natural disaster. Basic membership includes access to medicine, water and food, while those who pay for "premium tiered services" will be eligible for VIP rescue missions. *

Charity begins at home.

*via

[Jeremy Gregg]

Phil, thanks for your comments about CDM. What I see at CDM among our poor neighbors who work together has nothing to do with charity: it has to do with community.

I am only beginning to develop my ideas around this idea, but it seems to me that charity is antithetical to the development of genuine community. "Charity" is built around a concept of otherness, and of wealth transfers from one side of a wall to another.

"Community" is about relationships.

As you've pointed out before, donors -- at least those with major giving capacity -- are not interested in charity. They are interested in developing their relationships: to their community, to their neighbor, perhaps to their idealized version of themselves (to their dreams).

They utilize "charity" merely as a tool for self-manifestation.

When I say that charity is not the solution, I mean that we need to move away from this idea that the poor are nothing but empty stomachs and that donors are nothing but baskets of food. We must move towards an understanding of our work as being fundamentally a work of building relationships between people regardless of their wealth level. We must be in the business of building genuine community.

And yes, to several of the other posters' comments, I believe that a genuine community is one that takes care of its people. I am not advocating for a socialist state or communist country, but for the creation of a country in which a person who works full-time can afford to eat, educate their children, provide their family with a decent home, receive the medical care that they need to sustain their life, and still have enough left over to enjoy life.

[Sa'Luk]

Entitlement is not a property of Socialism, properly.

[Gerry]

Phil, you brought up Carnegie again, not me. I'm not pretending to be any model of morality (insert Tutor's trope that we are all sinners), but I am measuring Carnegie or Gates as I would measure myself, as I have been taught. If the wealth was amassed by killing and exploiting people, it is not yours, you are obligated to give it back, and you don't get a say in how it is used.

The foundations of this dialog relate to the ownership of property in the most shallow sense of legal possession. To get to the bottom of the subject we need to deconstruct it, and examine the origins of our practices and how they are legitimated. All real estate (real property) was once part of a boundless common, heritage and home not only to all humans, but all the creatures.

When we talk of entitlements in the sense of financial transfers in a publicly run social safty-net, all of the terms are contested. If we are in effect transferring taxes levied on the middle classes to the poor, you have created an insurmountable political problem where those transfers are a visible source of resentments between the lower stratum of economic pyramid.

The target must remain the obscene accumulations of wealth. I'm not prepared to say that every large pile of money originates in criminal enterprise, but even those who play by the rules admit that once they are wealth, the rules are all in their favor. I think people like Buffet and Soros exemplify this, playing by the rules and just being very shrewd about it, taking advantage of loopholes and due diligence and then giving a large amount of it back. I like the way Soros has more of himself involved in the process of giving back.

What we need is a system where we are all supported based on our connection to community. The control of the physical assets of our communities by financial interests is destructive to these ends. If you want to talk about entitlements, lets talk about our common entitlement to the whole world. Lets not talk about legal possession backed up by state violence, lets talk about ownership in the broadest sense of personal connections to the place that you live and the people and bio-communities you share it with.

This is how you delegitimate the structures of injustice, and begin to create something new in their place.

[Phil]

"Change not charity" is a famous progressive slogan. "Community not charity" could be another. Interestingly, though, the root word for charity is caritas, which meant something like brotherly love as does philia.

[Gerry]

Like the word "cynic", the word has drifted from its original meaning. One might suspect that some intentional manipulation is involved in these movements of meaning. Think tank logic has been operating for a long time.

[Phil]

Right, the formation of commonsense, or hegemonic understandings. False consciousness is the true coin of the realm.

[Walt]

The question remains, how do we ourselves inspire the Vanderbuilts of our era to care about people - those working in their businesses, living in their communities, and receiving direct benefit from their donations). What virtue is capable of consuming greed?

What if one day we all had to give an accounting for how we handled the assets under our control? Could you stand before the judgement seat and say you could've fed a village of starving children, day in and day out, but decided instead to make another $50 mil?

While I like to fantasize about being a true philathropist like Gates or Soros, I would not like to have Vanderbuilt's legacy: a son who commits suicide while the brood of vipers argues over control the assets.

[Gerry]

Like I've been saying, you have to change their language. An accumulation of cash and assets is not wealth, wealth is a healthy community, and healthy family. We need to expose the hegemonic understandings where rich == good, poor == bad, sharing == foolish, hording == wise. There is a lot of space between those unhealthy extremes to be very happy and healthy in a great diversity of ways. Each position would represent a set of choices and possibilities, not a difference in character, in goodness or wisdom.

[Phil]

On the story of Midas, who was given one wish by Dionysus and chose the golden touch: "It is also carries a common motif in Greek folklore – the "short-sighted wish". Midas let his greed blind him to the future. Most notably, this myth has aspects characteristic of myths of Dionysus. Child sacrifice is a frequent theme in Dionysian myths. Frequently, Dionysus would punish mortals indirectly by having them kill their own children. King Midas kills his daughter by turning her to gold. He pays for his greed."
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