Nicholas von Hoffman belongs more to the tradition of the political pamphleteer than of the business analyst. Capitalist Fools began as a straightforward biography of the publisher Malcolm Forbes, but preliminary research showed that the sybarite's spending habits did not justify the cutting down of any more trees. After this unpromising beginning, it developed into a comparative study of US capitalism: comparing the generation of Malcolm's father, who founded the publishing empire, with the contemporaries of Malcolm himself.
The book's central purpose is to demonstrate how far the pygmies at the helm of modern American business fall short of the giants of yesteryear. Von Hoffman takes it as read that the likes of Carnegie, Rockefeller and JP Morgan lined their pockets with millions. He dispenses with any sentimentality about their methods. These were men who thought nothing of blackmailing whole communities, or of responding to union demands with small arms fire. The difference between then and now is that, whatever their excesses, these men built America. What can one say of today's business leaders: the Kluges, the Trumps, even the Iacoccas?
Von Hoffman has quite a lot to say about them, although few PR departments are likely to be pressing him for quotes around annual report time. He divides his characters into two camps, the rogues and the buffoons. The crooks' story has been told often enough - and in greater detail - elsewhere. The incompetent corrupt from within. These are the men who have been entrusted with great US institutions like GM, IBM and American Express, and who, through sheer ineptitude, have run them on to the rocks. Mediocrity, conformity and lack of vision are their hallmarks. Yet they pay themselves 80 times as much as their average employee.
Whole chapters of Capitalist Fools read like the anguish of a middle-aged elitist who despairs of modern times. Von Hoffman berates the trashing of children's minds by an entertainment culture which has turned them into couch potatoes. By contrast, he holds up the picture of an America straight out of The Waltons - wide-eyed kids in dungarees constructing home-made radios and pulling apart bits of machinery in order to repair them or invent something new. It's a new slant on the old Marxist critique of capitalism, that the dynamics of the system ensure the inevitability of its decline. There is a nod towards Brave New World, with its culture of consumers bombed out on drugs but with no one investing anything for the next generation.
The argument commands sympathy but it is also open to a number of objections. The period von Hoffman venerates, the 1870s to the 1920s, carried America into the modern age. There was no way in which that rate of growth could have been sustained - nor, necessarily, should it have been. The demands of consolidation are not the same as those of innovation. For sure, any MBA fresh out of Harvard pales beside those legends of the past. But how would Andrew Carnegie, for instance, have fared as a young graduate trainee in the complex corporate hierarchy of a modern multinational? The author acknowledges the achievements of people such as Bill Gates, creator of Microsoft, with the caveat that these are the exception to the rule. So, of course, are any individuals who stand out in a society.
The attack on modern youth also goes too far. The style and invective of Capitalist Fools suggests that the first draft was accidentally erased by a 10-year old von Hoffman Jr trying to plug his computer game into dad's PC. No doubt the overweight brat prefers watching MTV to doing his homework, is more developed physically than intellectually, and, thanks to advertising, has manipulated his parents into parting with $100 for a pair of trainers. Despairing of the young is as old as history itself. An equally depressing portrait can be painted of any generation. One only has to open Dickens to get an idea of the moral and intellectual fibre that accompanied industrial revolution.
Nevertheless Capitalist Fools is a thoughtful book containing many persuasive insights and startling prescriptions. The author recommends the abolition of limited corporate liability and corporation tax, for example, along with the widening of share ownership. The notion that prosperity is a precondition of social justice is both valid and worrying. Von Hoffman has the interests of Americans at heart. He asks of them nothing particularly new, merely that they return to what they showed the world how to do so well, but seem to have forgotten themselves.