January 2011

When MCI, the company that broke the monopoly that AT&T had on long-distance telephony in the United States and Canada, was sold recently, it went for $22 billion. That’s not bad for an operation that, less than three decades ago, was having trouble borrowing $35,000. It is perhaps the greatest example of creative destruction in the modern history of capitalism.

Joseph Schumpeter, the great philosopher of capitalism, coined the phrase "creative destruction." He was referring to the never-ending restructuring that takes place in a free-market economy as new technologies replace old ones and new companies outcompete their more established rivals. This is often a very painful process on the microeconomic level, as people lose their jobs and investors lose their capital. Indeed, the phenomenon of creative destruction played no small part in the rise of the left in the late nineteenth century as means were sought to avoid the pain without losing the benefits of a technologically progressive economy.

As I sweep the leavings of the 1996 election campaign from my data bank, two antagonistic names emerge with renewed clarity: Jesse Helms and Fidel Castro. Helms is the newly re-elected senator from North Carolina and the chair of the Foreign Relations Committee. Castro, of course, is the man whom Helms passionately wishes to see ousted as Cuba’s Marxist dictator, toward which end the senator co-sponsored the Helms-Burton Law of last year. It not only continues the long U.S. embargo against the island but opens the door to lawsuits against any foreign company doing business there if the business involves formerly American property nationalized—the senator would say “stolen”—by Cuba’s government since 1959.

After 37 years, Castro is still in power. It’s our government’s poorest performance in getting rid of Caribbean revolutionaries it doesn’t like. Though I doubt it will ease their frustration, I offer to the baffled supporters of our failed “get Fidel” policies a small lesson in comparative history.

Early in the morning of April 7, Joseph (“Crazy Joe”) Gallo went to Umberto’s Clam House in New York City’s Little Italy for a late supper. With him were a pair of bodyguards and some family members, including his bride of three weeks. The veteran gangster, who was celebrating his forty-third birthday, had spent most of the night drinking champagne at the Copacabana. On arriving at Umberto’s at around four o’clock, he ordered what police later unhelpfully described as “Italian delicacies.” Gallo had just called for a second helping when a man burst in through a side door and started shooting at him with a pair of .38-caliber pistols. Customers screamed and dropped to the floor as Gallo’s bodyguards returned the fire. After about twenty shots were exchanged, the gunman fled in a waiting car as Gallo staggered out the door and collapsed in a pool of blood on Hester Street. Displaying the constabulary’s traditional gift for the obvious, the chief of detectives said, “This is a gangland operation.”

On April 16 Bernard Baruch gave a name to something that had been developing for several years but was still inchoate in the public mind: the Cold War. In a speech before the legislature of his native South Carolina, on the occasion of the unveiling of his portrait, the venerable financier, humanitarian, and presidential adviser said: “Let us not be deceived —we are today in the midst of a cold war. Our enemies are to be found abroad and at home. Let us never forget this: Our unrest is the heart of their success.”

The phrase was not original with Baruch. In his autobiography he attributed it to his longtime friend the journalist Herbert Bayard Swope. As early as October 1945 George Orwell had used the same words to refer to a hostile peace, and the following March the London Observer employed them to describe Soviet policy toward Britain. Neither one drew much attention, so commentators made do with references to “current world events” or “Russia’s actions in Europe” until Baruch crystallized the situation in a compact, convenient form.

On April 15 Jackie Robinson started at first base for the Brooklyn Dodgers in their opening-day game against the Boston Braves. In so doing, he became the first African-American to play in the major leagues since an abortive attempt at integration in 1884. Robinson’s courageous breaking of the color line would eventually have great repercussions inside baseball and out. Yet on the day of his momentous debut, fans and journalists alike were oddly blasé.

On April 7 Henry Ford died of a cerebral hemorrhage at his estate in Dearborn, Michigan. The eighty-three-year-old Ford and his wife, Clara, were just back from their winter home in Georgia, and although he had been plagued by intermittent senility since a stroke in 1938, he was unusually active and chipper on what proved to be his last day on earth. He began by downing a hearty breakfast, visited his River Rouge plant, Greenfield Village, and two cemeteries, and then inspected flood damage on his estate. Heavy rains had submerged his private power plant, and the foreman suggested that he check into a hotel for the night. Ford, perhaps remembering his rural Michigan boyhood, laughed off the suggestion with “My gracious, we have fireplaces.”

On April 15 Sen. John B. Kendrick of Wyoming introduced a resolution requesting information about “all proposed operating agreements” involving a government petroleum reserve known as Teapot Dome. The site, in Kendrick’s home state, had been set aside to provide a secure source of fuel for naval vessels, and when local oilmen heard rumors that it had secretly been leased, they asked Kendrick to investigate. He and Wyoming’s congressman, Franklin W. Mondell, had made informal inquiries at the Interior and Navy Departments and gotten a runaround. Kendrick, a Democrat, was not inclined to let charges against the Republican administration drop so easily.

The April 17 issue of Harper’s Weekly addressed a growing social problem that in some quarters had come to overshadow tariffs, the Cuban crisis, and free silver. Under the headline WHY HARVARD DOES NOT WIN , John Corbin, class of 1892, struggled to account for the Crimson’s “consistent failure in athletics.” He considered and dismissed such possible causes as inadequate coaching, poor conditioning, and “the fog on Soldiers’ Field.” Instead, he concluded, “the prime source of Harvard’s weakness is social.”

On April 10 the residents of Nebraska observed America’s first Arbor Day. Homesteaders across the state marked the occasion by breaking up the dreary plains with an assortment of fruit and forest trees. In establishing a day “especially set apart and consecrated for tree planting,” the state legislature had offered a hundred dollars to the county planting the most trees and twenty-five dollars’ worth of agricultural books to the most prolific individual. Whether motivated by profit or love of nature, the state’s two hundred thousand citizens planted a million trees before the day was over.