The Speculator

(Literary Masterpieces, Volume 14)

This exhaustingly researched “life and times” ably documents Bernard Baruch’s public career from the era of World War I until his death during the era of Vietnam. Never far from the limelight, Baruch was a friend, adviser, and financial patron to some of the most influential newsmakers and opinion-makers of his time. His chairmanship of the War Industries Board and the Baruch Plan for international control of atomic energy have earned him lasting praise, although a shroud of mystery has obscured the extent of his fortune, the nature of his political motives, and the historic significance of his actions.

While this book is the most definitive political biography of Baruch to date, a fuzziness about Baruch’s character remains, owing in large part to the author’s decision not to render a full-scale biography. Thus, the reader learns almost nothing about his family life and is told without much amplification that he was a Victorian, a gentleman, a man’s man, and a womanizer who liked prize fights, the racetrack, a shapely leg, and European spas. A secular, cosmopolitan Jew who neither emphasized nor denied his religious heritage, he was called the American Disraeli and was pilloried in anti-Semitic publications. Like Joseph P. Kennedy, another maverick speculator of questionable bloodline in WASP circles, he was regarded as somewhat disreputable by many Wall Street colleagues.

Although Jordan Schwarz provides a few details concerning the amassing of Baruch’s fortune and his skills as a financial investor, the reader cannot determine accurately the degree to which Baruch used his political insider’s clout for his own enrichment. Schwarz himself is ambivalent on whether he was more a selfish entrepreneur or a disinterested statesman. He presents Baruch as a broad-gauged man—conservative yet innovative, a practical idealist motivated by a desire for acclaim in the press and acceptance within the circles of the governing class. While Schwarz overuses the word “speculator” throughout the text, the word applies to Baruch’s instincts as a “hunch player” in people as well as stock portfolios. Not especially well read, he was an impresario more skilled in the art of public relations than in administrative management. As Schwarz summarizes Baruch’s thinking, the science of government was less important to him than the conviviality of men. A “kibitzer” most of his public career, Baruch wrote letters, testified before Congressional committees, entertained politicians at his South Carolina retreat, and offered advice to governmental officials and business leaders. Most of the assignments he took on were of the short-term variety and did not require a sustained commitment.

One role which Baruch assigned to himself was as a prophet-priest for economic stabilization. A capitalist who distrusted the extremes of laissez-faire and state socialism, he advocated national planning to curb inflation and prevent destructive competition. During wartime he prescribed comprehensive, cartelistic state controls, while during peacetime he favored nonstatist cooperative arrangements by trade associations and the like that organized society. Like Herbert Hoover, another Wilsonian, he believed in a modified free-enterprise system and sought ways to preserve it in the tumultuous, ravaging twentieth century. While the nation listened to him (even if it did not always follow his advice) during wartime, Baruch failed to articulate a practical postwar alternative to the Keynsian “New Economics” that he so abhorred. After both world wars, for example, he advocated permanent boards of arbitration to settle matters of wages and prices in order to combat industrial-labor strife and destructive inflationary spirals. Little came of these proposals. Even so, his story is worth examining, because, as Schwarz points out, it is part of “America’s abortive quest in the twentieth century for social justice through economic stabilization.”

Baruch made his way into politics the same way he made his fortune, by cultivating “insiders.” A political contribution resulted in an offer to be on the Board of Trustees of the City College of New York, and sponsoring the appointment of Woodrow Wilson adviser Edward M. House’s brother-in-law as CCNY’s president helped him win him a place on the Advisory Commission to the Council of National Defense. When Baruch subsequently sold steel stock short following a tip that peace talks were imminent between Great Britain and Germany, the House Rules Committee investigated charges that he profited from privileged information. Baruch vindicated his honor by convincing the committee that what prompted his action (a speech by the British Prime Minister) was public knowledge. After America became a belligerent, Baruch liquidated all his stocks except for gold, silver, and tungsten mines and bought a million dollars worth of Liberty Bonds.

Put in charge of the Raw Materials section of the War Industries Board, Baruch became its chairman in 1918, at a time when its organization was already in place. It was an ideal post which allowed him the opportunity to earn a reputation as a responsible administrator. His open mind, generalist’s flexibility, and toughness in dealing with industrial leaders impressed fellow Southerner Woodrow Wilson. Bringing up the possibility of nationalizing the United States Steel Corporation to its Chairman of the Board, Elbert H. Gary, he responded to Gary’s...

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(Literary Masterpieces, Volume 14)

Choice. XIX, September, 1981, p. 153.

The Economist. CCLXXXI, October 24, 1981, p. 93.

Library Journal. CVI, June 1, 1981, p. 1214.

The New Republic. CLXXXV, September 23, 1981, p. 29.

The New York Review of Books. XXVIII, October 8, 1981, p. 12.

The New York Times Book Review. LXXXVI, August 30, 1981, p. 1.