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Wall Street History
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06/28/2002
Alexis de Tocqueville's America
If you took any kind of U.S. political science class in school,
there is a 100% chance you became acquainted with Alexis de
Tocqueville, the French nobleman and judge who wrote, in the
words of the great historian Jacques Barzun, “the only thorough
and reliable (report) of early America from the perspective of a
foreign visitor.”
Born in 1805, Tocqueville was commissioned to do a study of
U.S. prisons, along with another nobleman of the time, Gustave
de Beaumont. But the roughly 18-month journey through
America gave Alexis an opportunity to make some general
observations of life in this vast, new country and so “Democracy
in America” was the result. One of his first findings was that
America’s achievements could be attributed “to the superiority of
their women.” I knew that would put a smile on your face, my
dear female readers.
But why discuss Tocqueville as part of Wall Street history?
Well, I was reading an article on the whole current crisis of
confidence in our markets and the author (whose name escapes
me) made passing reference to “Democracy in America.” So,
having recently purchased a new translation of this classic, which
I hadn’t had the opportunity to crack open, I thought, “Hey, let’s
see if we can get a column out of it,” and, alas, we can even
though many of you may not find this a particularly enlightening
exercise.
In writing his book, Tocqueville initially set about the task of
discovering whether Americans would abuse and erode their
freedom and individualism, but in doing so he also found reason
to comment at length on topics such as corruption, commerce
and wealth. And it is for these reasons that a study of his
tome can offer some insight into the workings of the mess we are
in today, particularly concerning the topics of the Bubble,
greed, and corporate governance, as well as the spirit that keeps
us coming back for more.
So following are some of Tocqueville’s thoughts, as published
way back in 1835, in his own words.
-----
(Americans) speak with equal ardor about religion and material
wealth and moral satisfactions.
On Corruption
In aristocratic governments, men who arrive (at the head of)
affairs are rich people who only desire power. In democracies,
statesmen are poor and have their fortunes to make. It follows
that in aristocratic states, those who govern are hardly accessible
to corruption and have only a very moderate taste for money,
whereas the contrary happens in democratic peoples.
---
What one must fear, moreover, is not so much the sight of the
immorality of the great as that of immorality leading to
greatness. In democracy, plain citizens see a man who issues
from their ranks, and who in a few years achieves wealth and
power; the spectacle excites their surprise and their envy; they
inquire how he who was their equal yesterday is vested today
with the right to direct them. To attribute his elevation to his
talents or his virtues is inconvenient, for it is to avow that they
are less virtuous and less skillful than he. They therefore place
the principal cause of it in some of his vices, and often they are
right in doing so. Thus there is at work some sort of odious
mixing of ideas of baseness and power, of unworthiness and
success, of utility and dishonor.
On Commerce
Americans put a sort of heroism into their manner of doing
commerce.
---
The European navigator ventures on the seas only with prudence;
he departs only when the weather invites him to; if an unforeseen
accident comes upon him, he enters into port at night, he furls a
part of his sails, and when he sees the ocean whiten at the
approach of land, he slows his course and examines the sun.
The American neglects these precautions and braves these
dangers. He departs while the tempest still roars; at night as in
day he opens all his sails to the wind; while on the go, he repairs
his ship, worn down by the storm, and when he finally
approaches the end of his course, he continues to fly toward the
shore as if he already perceived the port.
The American is often shipwrecked; but there is no navigator
who crosses the seas as rapidly as he does. Doing the same
things as another in less time, he can do them at less expense.
Before reaching the end of a voyage with a long course, the
European navigator believes he ought to land several times on
his way. He loses precious time in seeking a port for relaxation
or in awaiting the occasion to leave it, and he pays each day for
the right to remain there.
The American navigator leaves Boston to go to buy tea in China.
He arrives at Canton, remains there a few days and comes back.
In less than two years he has run over the entire circumference of
the globe, and he has seen land only a single time. During a
crossing of eight to ten months, he has drunk brackish water and
lived on salted meat; he has struggled constantly against the sea,
against illness, against boredom; but on his return he can sell the
pound of tea for one penny less than the English merchant: the
goal is attained.
---
In democratic countries a man, however opulent one supposes
him, is almost always discontented with his fortune, because he
finds himself less wealthy than his father and he fears that his
sons will be less so than he. Most of the rich in democracies
therefore dream constantly of means of acquiring wealth, and
they naturally turn their eyes toward commerce and industry,
which appear to them the promptest and most powerful means of
getting it. On this point they share the instincts of one who is
poor without having his needs, or rather they are pushed by the
most imperious of all needs: that of not sinking.
---
Compressed in the narrow space that politics leaves for them, the
rich in democracies therefore throw themselves into commerce
on all sides; there they can extend themselves and use their
natural advantages; and in a way one ought to judge from the
very audacity and the greatness of their industrial undertakings
how little they would have made of industry if they had been
born within an aristocracy.
[Side note to above discussion]
Those who live amid democratic instability constantly have the
image of chance before their eyes, and in the end they love all
undertakings in which chance plays a role.
On Wealth
America presents a boundless field of human activity; it offers
inexhaustible nourishment for industry and work. Love of
wealth therefore takes the place of ambition, and well-being
extinguishes the ardor of parties.
---
(Americans have a) restiveness of spirit, the love of wealth that
constantly push an American out of his dwelling, putting him in
communication with a great number of his fellow citizens.
---
Men who live in democratic times have many passions; but most
of their passions end in love of wealth or issue from it. That
comes from the fact not that their souls are smaller, but that the
importance of money really is greater then In aristocratic
peoples, money leads only to some points on the vast
circumference of desires; in democracies, it seems to conduct
one to all.
---
In the United States, fortunes are destroyed and rebuilt without
trouble. The country is boundless and full of inexhaustible
resources. The people have all the needs and all the appetites of
a being that is growing, and whatever efforts they make, they are
always surrounded with more goods than they can seize. What is
to be feared in such a people is not the ruin of some individuals,
soon repaired; it is the inactivity and softness of all. Audacity in
industrial undertakings is the first cause of its rapid progress, its
force, its greatness. Industry is like a vast lottery for it, in which
a few men lose every day, but the state gains constantly; a people
like this must therefore see audacity with favor and honor it in
matters of industry. Now, every audacious undertaking
jeopardizes the fortune of whoever engages in it and the fortune
of all those who trust him. Americans, who make a sort of virtue
of commercial recklessness, cannot in any case stigmatize the
reckless.
--------
Back to yours truly, the editor, one sidebar from a review of
Tocqueville was that I found the source of the term “conspicuous
consumption.” Chicago sociologist Thorstein Veblen wrote of
this in his 1899 “The Theory of the Leisure Class.”
Veblen was a big time critic of U.S. capitalism and said that the
rich judged all of life in terms of price and were condemnable
from an economic point of view since they reveled in waste.
Conspicuous consumption, itself, had to do with the “buying of
expensive things to impress the neighbors,” [Barzun] which was
also the genesis of the label “status symbol,” in describing
purchases such as luxury cars or a yacht.
Sources:
“Democracy in America,” Alexis de Tocqueville, ed. by
Mansfield and Winthrop
“Growth of the American Republic,” Morison, Commager,
Leuchtenburg
“From Dawn to Decadence: 500 Years of Western Cultural
Life,” Jacques Barzun
Wall Street History returns next week.
Brian Trumbore
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