9/20/2012
By Charles Payne

More Articles by Charles Payne

Fanciful Facades?

Contradictions of Rich Socialists and the Fate of America

King Gillette is a remarkable figure whose name sounds familiar but whose story is virtually unknown.  I say virtually because I think there are some "enlightened" thinkers that know all too well.  In fact, I have no doubt that the very same architects of the current democratic platform know the King Gillette story and have embraced his ideas and theories.  We all know the "Gillette" name; in fact, as you read this, the theme song about the best a man can get must have run through your mind (I'll apologize now for the ear worm that will ruin your day). King Gillette has to be considered one of the best businessmen in American history.  King Gillette was also a Utopian Socialist whose writings are echoed from the mouths of Barack Obama, Elizabeth Warren, and Bill Clinton this week.

A traveling salesman who worked in Chicago, New York, Kansas City, and London, Gillette endeavored his entire adult life to come up with a product that would make him famous and wealthy.  This is a man that lost $19,700 ($470,000 in today's dollars) trying to invent a carbonating machine (see Soda Stream ticker: SODA).  He came from a family of thinkers and was a good salesman but still wanted more.  He got it while working for Baltimore Seal Company, which was later renamed Crown Cork & Seal.  It was the inventor of the Crown Cork, William Painter, that gave Gillette his eureka moment with the following advice:

"Try to think of something like the Crown Cork, when once used, it is thrown away, and the customer keeps coming back for more."

Gillette went through an alphabetical list of stuff that people used then one morning in 1895 while shaving - it hit him.  He immediately wrote a letter to his wife, who happened to be out of town to tell her: "I have got it; our fortune is made."

The safety razor also established the business model applied in many industries where the razor is cheap, but big profits can be made on the blades. The product was made despite huge doubt that steal could be made that thin, that cheap, and work so well.  But in 1903, the product hit Main Street, and the first year saw production of 51 razors and 168 blades.  Gillette was also a pioneer in modern advertising and marketing gimmicks like placing razors in overalls or boxes of marshmallows.  Since his face was on the cover of the products for so long, it is estimated Gillette's face was printed 96 billion times.  Gillette's determination and ingenuity is the kind of individual determination that powered America past its European contemporaries to be the greatest nation in the history of the world. 

But, Gillette hated big business and capitalism and laid out a plan for a perfect and fair Utopia.

United Intelligence vs. Competition

The Human Drift was published in 1894, right before its author had his epiphany about the safety razor and blades.  From the first chapter, it is clear the Chicago's World Fair influenced Gillette with all its great improvements on mankind from skyscrapers, to electricity, to the Ferris wheel.

When we recall the grandeur and artistic beauty of the White City, its magnificent architecture and beautiful environment, and realize how from a barren waste it sprang into existence under the magic wand of united intelligence, we are impressed with the thought, was it but a dream, or was it a revelation to humanity, to lighten the pathway to a new and perfect civilization and an environment made beautiful by United Intelligence and Material Equality.

Material equality is the backbone of the Democratic Party and 99% movement.  The idea is there would be a united company where everyone gets a single vote although an unlimited number of shares could be bought. When Bill Clinton talked about a strong middle class, he also said there would be opportunities for the poor to work into the middle class but no word on the middle class to become wealthy. Instead, he echoed the philosophy that "we're all in this together."  President Obama doesn't talk about people becoming wealthy either and cannot argue there is a united intelligence so the argument goes toward a nation united by brawn. 

For this effort, all wealth should be shared because without roads and bridges nobody could get rich.  Of course taxes paid by successful people already cover the cost of roads and bridges or their portion, but it's easier to argue this than we all had intellectual input into the latest smart phone.  Interestingly, the idea hasn't been sold to the wealthy as a carrot towards a better society but instead sold as a threat of harm.  Perhaps because he was successful and wanted to be rich, Gillette took a different tactic when promoting his utopian.

In fact, Gillette implored the wealthy to adopt his system as they would have better lives, too.  Of course, threatening physical violence was in is playbook as well.  If the wealthy couldn't see the benefits, the alternative would be dire. 

My fellow-citizens of wealth and influence, I ask you, in behalf of humanity, to heed the multiplying sounds of discontent which comes from the masses.  Like a low rumbling of distant thunder, it is the danger signal, which presages the coming storm. 

The masses would be the 99%, of which half are paying no federal taxes, yet suck up a disproportionate amount of public services from energy to manpower.  Be that as it may, The Human Drift laid on thick the notion that no material equality or freedom secured to the individual equaled slavery.  Saying "men are born unequal as to opportunity and wealth" leading to unjust relationships that held back natural abilities.  Tell this to the overwhelming majority of members of the Forbes 400 list of wealthiest in the country.

Ironically, Gillette himself would make these words ring hollow as he became enormously wealthy through his own natural abilities.

King Gillette wrote additional material as he refined his socialist utopia and pushed for the idea of a mega corporation and mega city that would be powered by Niagara Falls.  His goal was to raise enough money that the government-corporation would crush even the largest private business.  This is at the heart of current talk of public-private relationships and why this administration has entered into major sectors of the economy as direct competitor or puppet master.

* Healthcare
* Banking
* Automotive
* Energy

King Gillette hated the idea of competition and felt all brains should share in all the wealth.  As for jobs, that would be lost from all those large corporations Gillette said they would be hired to build the megalopolis.  Progressives continue to push for mega-cities and temp construction jobs are at the center of the so-called jobs bill ($447 billion to create 1.3 million jobs - terrible return on spending).  Still this was thought and is still believed to be better than individual achievement.  The transition was illustrated in The Human Drift as ships going through a channel.

This was part of the plan to navigate the channel of adversity.  We had to ditch individualism for progress of a united intelligence.  This is one of the early theories that gave way to the progressive movement.

Man against man works on the football field and everywhere else.  It doesn't have to be destructive except in the sense that obsolesces results in death or rebirth which benefits all of society. 

This sea of progress would enhance agriculture, art, manufacturing, science, education, invention, engineering, mining, horticulture and architecture.  Of course, America has revolutionized the world in all of the areas above (not so sure with art though - not a fan of Jeff Koon and others) because of individualism and profit motivation. 

In my opinion, poverty and crime are bi-products of neighborhoods where there is no educational competition and where the spirit of the soul has been corrupted. I'm not saying some people have advantages over others, but I am saying as intelligent beings in the greatest country in the world, we have routes to escape poverty.  Taking money from rich people and giving it to the government doesn't change the circumstance of someone born into poverty.  In fact, it amounts to stealing in the name of the poor, surely a greater sin than being born with a silver spoon in your mouth. 

You cannot make a chained-link fence strong by removing or mitigating its strongest links.  We cannot take all the money earned in this society and toss it into a pot where the government keeps the bulk, while redistributing the crumbs to others.  The "we are all in this together" campaign slogan might sound attractive to some, especially when we get that you are saying, "they work and we all spend the money."  Combining a nation into one wallet, based off efforts of a fraction is doomed to failure.

As for combined intelligence that Gillette preached about, the fact is that such a chain would have to drift from its strongest to its weakest link as a common denominator. If there is universal reward for mediocrity, the extra effort to be great would vanish and we'd all be average...the nation would be below average.

Gillette's Dream and Vulgar Businessmen

Harnessing the power of Niagara Falls to build a metropolis where everyone would live in porcelain buildings, mass produce products, and share in the profits is the current dream of many in this nation. His goal was to destroy businesses and have a single giant monopoly controlled by the people. His sights first trained on the grocery business; within that business, he sought to go after soap companies. 

Suggesting there was no difference in soaps and preference was largely influenced by advertising where advertisers had limited conscience but unlimited lies.  Once again, his examples in the end have proven he was completely incorrect.

Gillette pointed out several soap companies that controlled the market only through lies.  He pointed out there was no difference between Babbitt's, Syddall's, Brown's, Dreydopple's, and Procter and Gamble.  Of course, Babbitt's was one of particular scorn for the socialist crowd, and why Sinclair Lewis chose the name for his 1922 classic. He based the title character on what he called a vulgar and ignorant businessman.  But how ignorant could Benjamin Babbitt have been to have 100 patents that covered a breath of areas that all improved the lives of human beings including wind motors, gun barrels, armor plates, ventilators, steam engine component, canal boats, and ice makers.
 
Babbitt's greatest gift, however, may have been his marketing prowess. Asking for a fair trial, giving away samples and promotions like driving around towns with his products in a covered bandwagon (yes, that's where we get the saying) made him extraordinary rich. But it also sparked competition and clever advertising only takes you so far even back in the late 1880s. 

Babbitt's fortune ended up in a foundation to help others.  In the meantime, I don't know what became of his company nor the others singled out by Gillette save for P&G. Of course, in a story of ironies it probably had to be part of the tale that P&G would eventually buy Gillette for $57.0 billion. 

Today's King

The narrative in this election is that somehow the Bush presidency is the best example of capitalism and why we shouldn't go "backward."  But this anti-capitalism argument goes back to the late 1880s and dire warnings that were ignored didn't result in mass riots and blood in the streets.  On the contrary, the individual brilliance of Americans and the system to flesh out dreams to reality saw Gillette razors become so popular that at one point Czechoslovakia and Italy once used the blades as currency. It is interesting that just as Bill Clinton has earned over $100.0 million since leaving office and Obama will crack $200.0 million, King Gillette was the socialist that got super rich.

He built a home that stands today as a tourist attraction (King Gillette Ranch) and was said to have spent so much money gambling he singlehandedly kept the Desert Inn in the black.  The stock market crash and other dalliances whittled away most of his fortune by the time of his death in 1932 to about one million dollars or $16.7 million in today's dollars.  It must have been ten times that amount at its peak.  When I hear President Obama say he doesn't begrudge millionaires, I just can't believe his sincerity.    His philosophy is so tied into this notion that we should be a combined nation where nobody gets left behind because nobody is allowed to move ahead.

King Gillette felt the united company should be run by one person and a consul of enlightened men.  He even offered Roosevelt a million dollar annual salary to head up the operation.  That is what I'm hearing today that a giant united country would be run by these wise men that would pick our foods, knowledge, and limit notions of guilt based on religion or other morale codes.  They would produce and dictate the cars we drive and (small) homes we live in.  And more than anything else, profits would be split amongst the masses.

In my mind, American businesses are to be admired not ripped apart.  They are what will keep the nation competitive in a world where everyone else is determined to be greater.  We cannot ditch the word competition nor can we blunt innovation and determination through harsh rhetoric and tax policy.  It's time to reinvigorate the nation not buy into a socialist dream that has never worked and can never work because it goes against the basic nature of man in general and Americans in particular.  We like competition.  We like winning.  We like rewards.  And we hate being punished for going the extra mile.
To borrow a line from Gillette (current company not founder), capitalism is the only way to be the best a man (or woman, and certainly a nation) can be.

Charles Payne
Wall Street Strategies