Friedrich Engels – The Intelligent Collector Magazine

Does America still have ‘the right stuff’ to continue this remarkable story?

This 1903 Louisiana Purchase Gold Dollar, Jefferson Design, minted to commemorate the centennial of the Louisiana Purchase, realized $37,600 at an April 2017 Heritage auction.

By Jim O’Neal

The 19th century in the United States was by any standard an unusually remarkable period. In 1800, John Adams was still president, but had lost his bid for re-election to Vice President Thomas Jefferson, the man behind the words in our precious Bill of Rights. Alexander Hamilton had used his personal New York influence to break a tie with Aaron Burr, since Jefferson was considered the least disliked of the two political enemies. (Burr would kill Hamilton in a duel in 1803 by cleverly escalating a disagreement into a matter of honor.)

There were 16 states in 1800 (Ohio would join the Union as no. 17) and the nation’s population had grown to 5.3 million. Within weeks of becoming president, Jefferson learned that Spain had receded a large portion of its North American territory to France. Napoleon now owned 530 million acres, more than what the United States controlled. Fearful that losing control of New Orleans to our new French neighbor would lead to losing control of the strategically important Mississippi River, he developed a plan without including Congress.

He dispatched Robert Livingston and James Monroe to buy greater New Orleans for $10 million. They were pleasantly surprised when the French offered to sell 100 percent of their North American territories for $15 million cash … less several million in pending claims. Concerned that the French would change their offer before they could get formal approval, an agreement in principle was agreed to (later formally approved by Congress after James Madison’s assurance of its constitutionality.)

What a prize! 828,000 square miles for 3 cents an acre, virtually doubling the size of the United States and gaining control of the mighty Mississippi and shipping into the Gulf of Mexico. With this uncertainty removed, cotton production now expanded rapidly south and soon represented over 50 percent of total exports. With the aid of the cotton gin and slave labor, the United States now controlled 70 percent of the world’s production. Ominously, seeds of a great civil war were planted with each cotton plant.

For millions of people overseas, conquest or riches were not their primary ambition. Escaping the clutches of famine trumped all other hardships of life. 1842 was the first year in America’s history that more than 100,000 immigrants arrived in a single year. Five years later, the number from Ireland alone exceeded this, with Irish coming to America to escape the scourge of the Great Famine. In the 1840s and ’50s, 20 percent of the entire population of Ireland crossed the Atlantic in search of a better life. In sharp contrast to the Pilgrims on the Mayflower – who were on a financial venture supplied with rations – the Catholic Irish left in rags to avoid starvation in a mainly Protestant nation.

Concurrently, another wave from the European mainland was fleeing revolution and counterrevolution. In Germany, half-a-million left in a three-year period (1852-55) as a spirit of revolt captured the European continent. “We are sleeping on a volcano,” warned Alexis de Tocqueville. Meanwhile, two German thinkers (Karl Marx and Friedrich Engels) penned their intellectual nonsense, The Communist Manifesto, from the safety and luxury of London.

In the United States, just before the impending boomlet of immigration in 1846, total railroad mileage was a meager 5,000 miles. Ten years later, it quintupled to 25,000 as the influx of labor to lay iron rails was a perfect match for $400 million in capital. As famine and revolution were destroying Europe, their foreign transplants were busy transforming their new homeland. Also, the transition of coal to steam to steamboats scampering around the newly dug connecting canals would inspire new communications like the telegraph and Pony Express. While the country had been busy absorbing the wave of immigrants, it had also been in the throes of a decades-long internal migration west.

Thomas Jefferson had predicted it would be 1,000 years before the frontier reached the Pacific Ocean. Only 23 years after his death in 1826, gold was discovered in California and the fever to get rich started a westward movement that expanded globally. Once under way, the richness of the soil and massive new resources of rivers, forests, fish and bison would expand the migration to include farmers and their families. Horace Greeley shouted, “Go West, young man” and they did.

With room to grow and prosper, by 1900 the population would expand by a factor of 15 times to 76 million. They resided in 45 states after the Utah territories joined the Union in 1896. Fulfilling the vision of Manifest Destiny (from sea to sea), the rural population of 95 percent evolved as urbanization grew to 40 percent as industrialization and worker immigrants staffed the factories and cities. A short war with Mexico added California, Arizona and New Mexico, and President Polk’s annexation of Texas in 1845 filled in the contiguous states.

However, it was the railroads that created the permanence. With 30,000 miles of track in 1860, America already surpassed every other nation in the world. The continual growth was phenomenal: 1870 (53k), 1880 (93k), 1890 (160k) and by 1900 almost 200,000 … a six-fold increase in a mere 40-year period. Yes, there were problems: Illinois had 11 time zones and Wisconsin 38, but this was harmonized by 1883. Most importantly, they connected virtually every city and town in America and employed 1 million people!

Throw in a few extras like electricity, oil wells, steel mills and voila! The greatest nation ever built from scratch. Today, we have 6 percent of the people on 6 percent of the land and 30 percent of the world’s economic activity … and we are celebrating the 50-year anniversary of putting a man on the moon.

Do we still have “the right stuff” to continue this remarkable story? I say definitely, if we demand that our leaders remember how we got here.

Intelligent Collector blogger JIM O’NEAL is an avid collector and history buff. He is president and CEO of Frito-Lay International [retired] and earlier served as chair and CEO of PepsiCo Restaurants International [KFC Pizza Hut and Taco Bell].

As a ‘champion’ of the working man, Marx lived the high life

A second edition of the first volume of Karl Marx’s *Das Kapital* (Hamburg: Otto Meissner, 1872) sold for $3,500 at a March 2018 Heritage auction.

By Jim O’Neal

When Ho Chi Minh lived in London, training as a pastry chef under Auguste Escoffier at the Carlson House, he used it as a pillow. Fidel Castro claimed he read 370 pages (about half) in 1953 while he was in prison after a failed revolutionary attack of the barracks of Moncada in Santiago de Cuba. President Xi Jinping of China hailed its author as “the greatest thinker of modern times.”

It’s been 200 years since Karl Marx was born on May 5, 1818, in Trier, Germany. His book Das Kapital was published in 1867, or at least that was when Volume 1 made its way into print. His friend and benefactor Friedrich Engels edited Volumes 2 and 3 after Marx’s death.

Engels (1820-1895) was born in Prussia, dropped out of high school and finally made it to England to help run his father’s textile factory in Manchester. On his trip, he met Marx for the first time, but it would be later before their friendship blossomed. Perhaps it was due to Engels’ 1845 book The Condition of the Working Class in England.

He had observed the slums of Manchester, the horrors of child labor, and the utter impoverishment of laborers in general and the environmental squalor that was so pervasive. This was not a new indictment since Thomas Robert Malthus (1766-1834) had written, albeit anonymously, about these abysmal conditions. However, he had blamed the poor for their plight and opposed the concept of relief “since it simply increases their tendency to idleness.” He was particularly harsh on the Irish, writing that a “great part of the population should be swept from the soil.”

Not surprisingly, mortality rates soared, especially for the poor, and the average life expectancy fell to an astonishing 18.5 years. These lifespan levels had not existed since the Bronze Age and even in the healthiest areas, life expectancy was in the mid-20s, and nowhere in Britain exceeded 30 years.

Life expectancy had largely been uncertain until Edmond (the Comet) Halley obtained a cache of records from an area in Poland in 1693. Ever the tireless investigator of any and all scientific data, he suddenly realized he could calculate the life expectancy of any person still alive. From these unusually complete data charts, he created the very first actuarial tables. In addition to all the many other uses, this is what enabled the creation of the life insurance industry as a viable service.

One of the few who sympathized with the poor was the aforementioned Friedrich Engels, who spent his time embezzling funds from the family business to support his collaborator Karl Marx. They both passionately blamed the industrial revolution and capitalism for the miserable conditions of the working class. While diligently writing about the evils of capitalism, both men lived comfortably from the benefits it provided them personally. To label them as hypocrites would be far too mild a rebuke.

There was a stable of fine horses, weekends spent fox hunting, slurping the finest wines, a handy mistress, and membership in the elite Albert Club. Marx was an unabashed fraud, denouncing the bourgeoisie while living in excess with his aristocratic wife and his two daughters in private schools. In a supreme act of deception, he accepted a job in 1851 as a foreign correspondent for Horace Greeley’s New-York Tribune. Due to his poor English, he had Engles write the articles and he cashed the checks.

Even then, Marx’s extravagant lifestyle couldn’t be maintained and he convinced Engels to pilfer money from his father’s business. They were partners in crime while denouncing capitalism at every opportunity.

In the 20th century, Eugene Victor Debs ran for U.S. president five consecutive times as the candidate of the Socialist Party of America, the last time (1920) from a prison cell in Atlanta while serving time after being found guilty of 10 counts of sedition. His 1926 obituary told of him having a copy of Das Kapital and “the prisoner Debs read it slowly, eagerly, ravenously.”

In the 21st century, Senator Bernie Sanders of Vermont ran for president in 2016, despite the overwhelming odds at a Democratic National Convention that used superdelegates to select his Democratic opponent. In a series of televised debates, he predictably promised free healthcare for all, a living wage for underpaid workers, college tuition and other “free stuff.” I suspect he will be back in 2020 due to overwhelming support from Millennials, who seem to like the idea of “free stuff,” but he may have 10 to 20 other presidential hopefuls who’ve noticed that energy and enthusiasm.

One thing: You cannot call Senator Sanders a hypocrite like Karl Marx. In 1979, Sanders produced a documentary about Eugene Debs and hung his portrait in the Burlington, Vt., City Hall, when he became its mayor after running as a Socialist.

As British Prime Minister Margaret Thatcher once said: “The problem with Socialism is that eventually you run out of other people’s money.”

JIM O’NEAL is an avid collector and history buff. He is president and CEO of Frito-Lay International [retired] and earlier served as chair and CEO of PepsiCo Restaurants International [KFC Pizza Hut and Taco Bell].

Despite numerous failed examples, socialism still fascinates some people

An 1872 presidential campaign banner for Horace Greeley sold for $40,000 at a December 2016 Heritage auction.

By Jim O’Neal

Many credit the famous 19th century motto of “Go West, young man” to newspaperman Horace Greeley for a line in a July 1865 editorial. However, there is still a debate over whether it was first penned by Greeley or the lesser-known John Soule in an 1851 edition of the Terre Haute (Ind.) Express. Either way, the dictum helped fuel the westward movement of Americans in our quest for Manifest Destiny (“From sea to shining sea”). Clearly, Greeley helped more to popularize the concept due to the great influence of his successful newspaper.

Greeley was much less successful as a politician. He was sent to Congress in 1848 in a special election to represent New York. His colleagues groused that the brief three months he spent there were primarily devoted to exposing Congressional corruption in his newspaper rather than passing legislation. He was unable to generate any meaningful support for re-election, which relegated him back to his real interest, which was reporting on news and exposing crooked politicians.

Despite this setback to his political career, Greeley remained a powerful force in American politics throughout the entire Civil War period and beyond. After exposing the corruption in the first term of the Grant presidency (1868-1872), he found himself in the curious position of being the presidential candidate for both the Democratic Party (which he had opposed on every issue for many years) and the Liberal-Republican Party (which was an offshoot that objected to the corruption).

The 1872 presidential election was especially bitter, with both sides resorting to dirty tricks and making wild allegations against each other. Grant won the Republican nomination unanimously and as the incumbent, chose not to actively campaign. Greeley was a virtual whirlwind, traveling widely and making 20 or more speeches every day. A cynic observed that the problem was it was the wrong message to the wrong audience, but fundamentally, the issue was that Greeley was simply a poor campaigner and Grant was still a very popular president/general.

Grant easily won his re-election bid for a second term with 56 percent of the popular vote and Greeley died on Nov. 29 – just 24 days after the election and before the electoral votes were cast or counted. This is the first and only time a nominee for president of a major party has died during the election process. Grant went on to snag a comfortable 56 electoral votes as the others were spread among several candidates, including three for the deceased Greeley (which were later contested).

Thus ended the life of Horace Greeley (1811-1872), who had been founder and editor of the New-York Tribune, arguably in the top tier of great American newspapers. Established in 1841, it was renamed the New-York Daily Tribune (1842-1866) as its daily circulation exploded to 200,000. Greeley was endlessly promoting utopian reforms such as vegetarianism, agrarianism, feminism and socialism. In 1852-62, the paper retained Karl Marx as its London-based European correspondent to elaborate on his basic tenets of Marxism.

Great Britain had just finished its decennial census, which put the population at precisely 20,959,477. This was just 1.6 percent of the world’s population, but nowhere on the planet was there a more rich or productive group of people. The empire produced 50 percent of the world’s iron and coal, controlled two-thirds of the shipping and accounted for one-third of all trade. London’s banks had more money on deposit than all other financial centers … combined! Virtually all the finished cotton in the world was produced in Great Britain on machines built in Britain by British inventors.

The famous British Empire covered 11.5 million square miles and included 25 percent of the world’s population. By whatever measurement, it was the richest, most innovative and skilled nation known to man, and in London – where he was living the good life – primarily on his friend Friedrich Engels’ money – Marx was still churning out socialist propaganda. He made no attempt to explain that for the first time in history, there was a lot of everything in most people’s lives. Victorian London was not only the largest city in the world, but the only place one could buy 500 different kinds of hammers and a dazzling array of nails to pound on.

While Marxism morphed into Bolshevism, communism and socialism – polluting the economic systems of many hopeful utopians like Greeley – capitalism and the market-based theories of Adam Smith (“the father of modern economics”) quietly crept over America almost unnoticed. Despite the numerous failed examples of socialism in the real world, there will always be a new generation of people wanting to try it.

After Napoleon and Nazi Germany, Russia Lives with Paranoia of Conflict

A 1953 Russian propaganda poster showing Karl Marx, Friedrich Engels, Vladimir Lenin and Joseph Stalin sold for $2,629 at a July 2016 Heritage auction.

By Jim O’Neal

Joseph Stalin died on March 5, 1953, after ruling the Soviet Union for 25 years and leading the country in its transformation into a major world power. Born Iosif Dzhugashvili in 1878, while in his 30s he took the name “Stalin” meaning “Man of Steel.” After studying at a theological seminary, he read the works of revolutionary socialist Karl Marx, which inspired him to join the 1917 Bolshevik Revolution.

He was a protégé of Vladimir Lenin and after Lenin’s death, Stalin earned a reputation as one of the most ruthless and brutal dictators in world history (“Ideas are more powerful than guns,” he once said. “We don’t let our people have guns. Why should we let them have ideas?”).

After an extended Cold War with the West, the Soviet Union started to unravel when its eighth and final leader, Mikhail Gorbachev, assumed control in 1988. He seemed eager to “destroy the apparat” – weaken the Stalinist structure of the Communist Party and the Soviet state. Only then could he take the bold economic steps to revamp a bankrupt system that was crumbling fast.

The West hailed Gorbachev as the tsar liberator, a political magician, or as Time magazine editorialized in January 1990: “The Copernicus, Darwin and Freud of communism all wrapped into one.” A year earlier, he was Time’s “Man of the Decade.” But in early 1990, Lithuania demanded outright independence and a crowd of 200,000 in the capital of Vilnius demonstrated to get the entire Lithuanian territory returned. This was quickly followed by an Azerbaijani Popular Front rally that escalated into a civil war along the Armenian-Azerbaijani border, with both sides clamoring for independence.

In August 1991, Latvia and Estonia declared restoration of full independence, followed by the Ukraine on Dec. 1. On Dec. 25, Christmas Day, Gorbachev resigned and the following day the Supreme Soviet voted itself and the Soviet Union out of existence.

I first met current Russian President Vladimir Putin in Saint Petersburg in 1992 when he was head of the Committee for External Relations, a group in the mayor’s office responsible for promoting international relations and foreign investment. We started shipping Lays potato chips from Warsaw and soon built a Frito-Lay plant near Moscow. I totally underestimated him and thought he was just another thug, a feeling that was reinforced when we started Pizza Hut in Moscow.

According to Henry Kissinger, Putin has always blamed Gorbachev for the dissolution of the Soviet Union due to his policies of glasnost (openness) and perestroika (reform). “The greatest geopolitical tragedy of the 20th century.” It has always been a mystery to me why they gave up so much when the United States and others were willing to negotiate a softer landing. I haven’t read Putin’s autobiography, but I suspect the Russians will never be satisfied until there is an east-west buffer zone along the Ukrainian border.

After Napoleon and then Nazi Germany, there is an inherent paranoia that will only be exacerbated if Poland ever joins NATO. As philosopher George Santayana so wisely observed, “Those who cannot remember the past are condemned to repeat it.”