Charming....
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American Entropy
Rich Cohen
Huff
3-30-07
The great problem of the age is inherited wealth, and the great danger is the sons and grandsons of the super-rich. We have become a nation of dynasties -- political dynasties, newspaper dynasties, sports franchise dynasties, Hollywood dynasties, literary dynasties. What's more, these dynasties were often founded in the boom after the Second World War, which means they are in their second or third or fourth
generations, which are far weaker than the founding generation. You see this in financial scandals where children use money from the company as if it were their own, in institutions that buckle when first put under pressure: newspapers, military, government. The fact is, you do not know the strength of an institution until it is tested; until then it is living on its reputation. In every generation every business is a new business and every nation is a new nation. The name and flag and cities are all the same, but the people are all different. You cannot know their character until they are tested. Which is to say, if you want to understand modern America you have to understand the geometry of inherited wealth -- the way that great fortunes dissipate over time.
This is a problem I understand because I'm in the third generation of a family fortune. I was disinherited from this fortune, which means I am free from the obligations and the codes of inherited wealth. I have been kicked out of the club so am happy to teach you the secret handshake. It also means that I have been thrown back into the first generation -- forced to invent my world, to play jazz. For a man who has inherited wealth, even a man, like Trump, who inherited wealth then turned it into more wealth, it will always be Grandpa's world. That's why Trump puts his name on everything. He's a kid saying to himself in the dark, "I am here, I am here, I am here."
My grandfather was first generation all the way -- a short-order cook in Brooklyn who invented the sugar packet, then Sweet'N Low. (Perhaps the first American fortune built entirely on the vanity of its customers, on the question, "Do these pants make me look fat?") With these inventions he built Cumberland Packing, which still turns out mountains of Sweet'N Low in Fort Greene, Brooklyn. Grandpa Ben later turned the company over to his son, my Uncle Marvin, who turned it over to his son, my Cousin Jeffrey. Cumberland has remained private all the years, handed father to son like a torch, and in the process has been set upon by the typical scandals -- the scandal of the saccharin ban, the scandal of the illegal campaign contributions made to congressmen, including D'Amato, the scandal of criminals infiltrating and looting the company, followed by the FBI raid, the trial and convictions. I have watched all this with a sense of strange detachment -- as if I was seeing not the story of my family, but the story of the nation personified in a life of a business. It is the story of how a legacy corrupts over time. It is what Thomas Pynchon calls entropy.
A great family is built by the will of the patriarch. The rest is just the dissolution of this will, a dwindling of the energy that founded the nation, stocked the river, invented the sugar packet. It's why such firms usually last no more than three generations. First comes the pioneer, the old man with knowledge of the world. Then comes the son who frets and fears and lays in stores of antibiotics but always for the wrong disease. Then comes the grandson, who either wants to have fun or wants to out-perform his father. For the third generation, and this is where we are now, it seems the money will always be there because it always has been.
When I was ten, Sweet'N Low had something like an 80 percent share of the artificial sweetener market; as of last counting, they had less than twenty, run to ground by Equal, which was released in the eighties by Searle, which, in those years, was run by Donald Rumsfeld, then by Splenda, which "tastes like sugar because it's made from sugar." Here are the big questions: How can you stop this slide? How can a family firm keeps it vitality? How does a rich man raise a son who is not a rich man's son?
These are questions that apply to the country at large. If you step back and look at the problems America has had in the last several years, you will see these have often been problems of inherited wealth -- of what happens to a business in the third generation. In other words, we are led by the sons of rich men and their sons. Of course, there have always been families of great landed wealth in American business and politics. But there has also been a process whereby new blood cleans out old blood: families rise and fall. It's what Buddhists call object impermanence: everyone alive in a hundred years will be dead. But lately it seems like we've become stuck with a set of characters, in a land run by the third generation -- men who think the money and the power will always be there because it always has been. Increasingly these men find themselves facing off against members of the first generation. (Think of Hugo Chavez in Venezuela, or Mahmoud Ahmadinejad in Iran). Members of the third generation always have the advantage going into these fights, which is why, over time, they almost always lose: because they do not have confidence in themselves; because they did not build the empire; because they do not know who they really are; because they believe it is impossible for them to lose.
In the past, it has been the genius of America to reinvent itself every few decades. You turn around and the Roosevelts and the Goulds are gone and in their place are a whole new class of families. (Think of Bill Murray talking to the kids at the prep school in Rushmore: "You were born rich, and you're going to stay rich. But here's my advice to the rest of you: take dead aim on the rich boys. Get them in the crosshairs. And take them down.") We've often been led by new men with new names -- a nation of little brothers, self-invented characters who, as it says in the Tom Petty song, know how to Lose.
But things have changed. In the last few decades, because laws have allowed them to do it, the grandsons and great-grandsons of a bunch of self made men have pulled the ladder up behind them. And now we're stuck with a never-retiring third generation. It was characteristic of the old America that, when the Confederates attacked Fort Sumter, Abe Lincoln was in the White House. It is characteristic of the new America that, when the terrorists attacked the World Trade Center, George W. Bush was in the White House -- he is the ultimate third generation-er, grandson of a senator, son of a president. A male cheerleader forever looking to pull off the ultimate cheer! "I say "Weapons of mass," You say, "Destruction." "Weapons of mass . . ." If you were watching TV the day of the attacks, waiting for the president to say something, you just knew you were seeing the coronation of the third generation. I mean, the guy was scared. You could feel the fear coming off the screen in waves of heat. In those hours, America had no president - which is why Rudy Giuliani became a star. He was sucked into the vacuum created by the terror of Bush. The only hope is that the country will right itself as it always has in the past. That it will clean itself, like a fancy new oven. For now, Splenda has just come onto the market and cousin Jeffrey is in the Oval office.
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