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Best Business Books 2010: Biography and History

True Tales of Fortune

(originally published by Booz & Company)

Alan Brinkley
The Publisher: Henry Luce and His American Century
(Knopf, 2010)

Warren Bennis
Still Surprised: A Memoir of a Life in Leadership
(Jossey-Bass, 2010)

Daniel Okrent
Last Call: The Rise and Fall of Prohibition
(Scribner, 2010)

Sarah Rose
For All the Tea in China: How England Stole the World’s Favorite Drink and Changed History
(Viking, 2010) 

We read biography to better understand ourselves much as we read history to better understand our times. Four engaging new books admirably aid us with both those tasks. As so many things do these days, our review of the year’s best business-themed biographies and histories begins — and ends — in China.

One Man’s Life, Time, and Fortune

Editor and publisher Henry Luce (1898–1967) presided over the golden age of general-interest magazines. He was cofounder of Time in 1923 and, over the next three decades, created Life, Fortune, and Sports Illustrated. In The Publisher: Henry Luce and His American Century, celebrated and prolific historian Alan Brinkley serves up both an insightful account of the creation of those magazines and a brilliant character study of the entrepreneur who created them.

Luce was a complex character, a “striver” who sought a central role for himself on the world’s stage, a man as ego-driven as he was pathetically insecure and lonely. Brinkley suggests that the crucible for the publisher’s many successes — and his chronic unhappiness — was his early life in his native China, where he absorbed his missionary father’s “seriousness, his ceaseless search for self-improvement, his energy, his ambition, his certainty of purpose.” Indeed, the leitmotif of this masterfully crafted biography is Luce’s lifelong search for the higher purpose that would define not only his own life, but the mission (clearly, he was his father’s son) of his magazines and, ultimately, that of America itself.

While growing up in China, Luce had dreamed longingly of his Edenic homeland across the Pacific, a country he would not visit until he was 14 and ready to enroll in Connecticut’s prestigious Hotchkiss School. He turned out to be more conventionally American in his values and beliefs than most of his fellow students at Hotchkiss (and later at Yale) who had been born and raised in the United States. Throughout his life, Luce would be his nation’s quintessential booster, whose cheerleading culminated in his influential essay “The American Century” published in Life in 1941, in which the central thesis was that the United States had a sacred duty to bring democracy, capitalism, Christianity, and modernity to the world. He argued that America was, as it should be, the only world power, and with that power came the responsibility to become “the Good Samaritan of the entire world [with a duty to feed] all the people of the world who...are hungry and destitute.”

Luce wanted America to start to fulfill that mission in China. Even more than his beloved magazines, or his countless lovers, China was the true passion of his life (“Oh brave new world...Oh China!” he wrote with characteristic pomposity and enthusiasm). He, his magazines, and his nation were all required, in his cocksure mind, to help the civilized, Christian Chiang Kai-shek and his Nationalists defeat the godless Communists led by the brutish Mao Tse-tung. When the U.S. “lost” China and Chiang retreated to Taiwan in 1949, Luce went ballistic, and he and his magazines became ferocious cold warriors.

Yet the conservative Luce did not fall into lockstep with Joe McCarthy and the right wing of the Republican Party. Although a prominent and virulent critic of the progressive policies of Presidents Franklin Delano Roosevelt and Harry Truman, Luce was nonetheless a Teddy Roosevelt, Wendell Willkie, Dwight D. Eisenhower, and Nixon moderate; he was not isolationist, and he believed in an active role for government. For example, in the 1950s, he and his magazines were in the vanguard in condemning racial segregation in the South and promoting equality across the nation.

Brinkley offers fascinating details about the creation of all Luce’s magazines, but s+b readers will be most interested in the history of Fortune, which he launched on the cusp of the Great Depression. Brinkley says that Fortune was Luce’s “real love among his magazines” (quoting Peter Drucker), and “among the most elaborately and lavishly designed publications of its time.” Luce believed that “business is essentially our civilization,” and thus deserved to be celebrated in a magazine staffed by the finest writers, photographers, and graphic designers of the age. Each issue was a work of art, printed on high-quality paper and selling for a dollar at a time when magazines typically sold for a nickel or dime.

Luce had intended for the magazine to reflect his personal philosophy of enlightened corporate social responsibility. But Depression-era deprivations encouraged the magazine’s writers and editors to move far beyond Luce’s constructive boosterism and to become objective critics of business. In 1934, they were exhorting businesses to pay their employees living wages offering at least “a minimum standard of decency” for them and their families.

For nearly 30 years, the staff produced a truly outstanding magazine; in my view, the old Fortune was the finest popular magazine ever produced in this country. Its first generation of writers and editors in the 1930s included such literary luminaries as James Agee, Archibald MacLeish, and Dwight Macdonald, to be succeeded in the 1950s by the likes of John Kenneth Galbraith, William H. Whyte, Daniel Bell, and Alvin Toffler (all of whom would move on to fame in other arenas). The magazine was the first to offer scientific public-opinion polls, the first to feature photographs as works of art (Margaret Bourke-White and Walker Evans were on staff), and the first to incorporate fine art to illustrate texts (Charles Sheeler’s paintings of factories).

Brinkley’s account of the launching, marketing, and financing of Luce’s magazines gives business readers much to chew on. Luce was a fine businessman despite not caring a whit about making money for himself. He was a superb judge of talent, and rewarded his star writers and photographers handsomely. Indeed, he took great care of all Time-Life employees, famously offering the most extravagant expense accounts in journalism. He was, however, an absentee manager, off traveling for months at a time, only to suddenly and arbitrarily intrude on the work of his editors (who for the most part respected him nonetheless, thanks to his insatiable curiosity, creativity, high standards, and generosity).

Many people loved Luce despite — or perhaps because of — his insecurity and emotional vulnerability. He often turned to his employees for the friendship missing in his messy private life. His extremely public second marriage, to prominent playwright and politician Clare Boothe Luce, was a three-decade arrangement made in Hades between two “intensely self-centered and exceptionally ambitious” people who didn’t sleep with each other, but chose to remain together to enhance their respective careers. Because Henry and Clare shared an addiction to pouring their souls out in long letters to just about anyone, Brinkley is able to document even the most embarrassing details of their complex and often unattractive personalities.

The worst thing that can be said of the unpredictable, volatile, moody, and contradictory Luce was that, much like Rupert Murdoch today, he used the news for his own purposes. He sought the power to shape national and world events, and although he was seldom successful in those efforts, he never gave up trying. But unlike Murdoch, Luce was basically interested in using his power for the public good, and sought to the very end to live a virtuous life that would make his missionary father proud. He didn’t always succeed, but every week for four decades, his magazines provided Americans with a common cultural touchstone that did much to bind them together as a nation.

Brinkley argues that Luce and his magazines succeeded because they were reliable reflections of their time, mirroring the values, aspirations, and beliefs of an increasingly affluent middle class. He notes that the magazine empire that Luce built began its long decline (extending to this day) in the 1960s when the American “consensus” was broken and society fractionated as a result of the Vietnam War and the women’s and civil rights movements. Today, it is simply impossible for a single publication to speak to the interests of the countless diverse audiences served by dozens of cable channels and millions of websites.

On a personal note: While in graduate school, I worked as an apprentice correspondent for Time beginning in 1967, the year Luce passed away. I have never had a better job.

Another’s Good Fortune

If the late Peter Drucker was the father of management studies, octogenarian Warren Bennis deserves the same mantle with reference to leadership. In Still Surprised: A Memoir of a Life in Leadership, Bennis examines his own life through the same lens he has used successfully over the years to analyze the behavior of business and political leaders.

That lens is what social scientists call role, and it adds a useful perspective to this unusual memoir. Bennis notes that biographers typically “look to psychobiography, not role, to explain human behavior,” focusing great attention on the family as the crucible in which individual character is formed (as Brinkley successfully does with Luce). However, Bennis argues that “leadership is so often a function, not of one’s personality or psychological makeup, but of the role one finds oneself in.”

Hence, Bennis dispenses with the expected histories of his parents and childhood and dives straight into 10 lively and focused chapters, each detailing the life and leadership lessons he learned playing various roles, including that of an NCO during World War II (he was awarded the Bronze Star when he was barely old enough to shave), a member of various research teams, a university president, and, later, a mentor, a teacher, and a father.

Throughout the book Bennis reminds us that his “has been a largely charmed life,” and he credits his manifest success to the good fortune of finding the right colleagues at critical moments in his career. His first and most significant mentor was the great Douglas McGregor, whose The Human Side of Enterprise (McGraw-Hill, 1960) stands as the most influential management book ever written. (See “Theory U and Theory T,” by Matthew Stewart, s+b, Autumn 2010.) McGregor’s insights about Theories X and Y were profound, and subsequent books by such gurus as Peter Drucker, Tom Peters, and Jim Collins can be seen as additions to, or refinements of, that masterful work. Bennis notes that there have been echoes of McGregor in everything he has written over the last 50 years. (Disclosure: Warren Bennis has played a role in my own career similar to that which McGregor played in his).

Thanks to good luck, and McGregor’s influence, Bennis found himself in Cambridge, Mass., in the 1950s at exactly the time modern social science was being created at Harvard and MIT by such luminaries as economists Paul Samuelson, Robert Modigliani, and Robert Solow; sociologists David Riesman, Talcott Parsons, and Robert Merton; anthropologists Clyde Kluckhohn and Clifford Geertz; and psychologists Gordon Allport, Abraham Maslow, Erik Erikson, Kurt Lewin, and Erving Goffman, all of whom were Bennis’s teachers, friends, and colleagues (he earned his doctorate in economics at MIT). As an aside, I can’t help noticing that Lewin died at age 47, McGregor at 58, and Maslow at 62, all at ages when today we expect scholars to be most productive. (Bennis notes that everyone smoked then.) Also different then was the relative absence of barriers between disciplines. Most of the individuals listed above knew one another, were familiar with one another’s work, and often worked together on research teams. Such experiences led Bennis to a lifetime search for “community,” to be a part of “good groups” and imbued with the desire to lead organizations in which the entire cast and crew would be “making the same movie.”

To Bennis, leadership is not a solo act, and certainly not a simple function of individual character; this is why he examines the role of leaders in the context of their organizations. Thus, he critically analyzes his own performance as executive vice president of SUNY Buffalo and, later, as president of the University of Cincinnati, in terms of his success at creating the organizational capabilities needed to meet the specific challenges those institutions were facing at the time. Bennis pulls no punches here, objectively analyzing the reasons for both his successes and his failures. With regard to the latter, he cites Alfred North Whitehead’s insightful words about meeting the challenges of change: “Every leader, to be effective, must simultaneously adhere to the symbols of change and revision and the symbols of tradition and stability.” Bennis then concludes, “We failed to master the culture of Buffalo before we tried to change it.” That’s a profound lesson Carly Fiorina could have applied profitably at Hewlett-Packard Company, where she failed to respect the depth of employees’ commitment to the culture created by the company’s founders.

In his landmark book On Becoming a Leader (Addison-Wesley, 1989), Bennis showed that one learns to become a leader by reflecting on experience. In the scant 177 pages of his memoir, he captures a lifetime of such reflection, and does so with good humor, often at his own expense. He tells one marvelous story after another; for example, about the time when he was an impoverished graduate student pinching every penny to undergo psychoanalysis (de rigueur in the 1950s for aspiring social scientists). When his mother asked him how much it all cost, Bennis explained he was paying $3 per session five times a week. After doing the math, she replied, “Son, I wish you had taken that money and spent it on yourself.” This is one book that I wish had been longer.

Hard Drink and Tough Lessons

The 18th Amendment to the United States Constitution was a stroke of singular national insanity. In 1919, a determined, self-righteous minority succeeded in forcing its extremist values on — and taking the liberty from — a compliant, hopelessly divided majority of their fellow citizens. In order to achieve the ends of the “great experiment” that became known as Prohibition, the federal government intruded further into the private lives of U.S. citizens than ever before in the nation’s history: Billions of dollars in private property were taken, in effect, without compensation, the federal income tax was created, and an army of (largely ineffectual) federal agents were loosed to police the behavior of millions of scofflaws and to control the unprecedented increase in organized crime that, perversely, the legislation spawned. In his beautifully told Last Call: The Rise and Fall of Prohibition, this year’s best book in the biography and history category, distinguished journalist Daniel Okrent seeks to answer the obvious question: How the hell did it happen?

Superficially, the answer is simple: Americans (actually, American men) had for a century or more been among the world’s leading lushes, and the sober minority (particularly, long-suffering wives and mothers) were willing to resort to desperate measures in order to dry their men out. But that was only half of the story. The “drys” were, in fact, an unacknowledged coalition of “racists, progressives, suffragists, populists” and, especially, white Protestant nativists who saw Prohibition as a way of lashing out at the rising number of immigrants from Ireland, Italy, and eastern Europe for whom drinking was an integral part of the culture. It didn’t hurt the nativists’ argument that almost all the beer brewers in the United States were immigrant (or first-generation) Germans, and something like half of those involved in the production and sale of hard liquor were Jews. Now, how many causes are there in which both Germans and Jews are easy targets — and in which the threat of African-American alcohol-inspired violence can be evoked, to boot? In all, Prohibition was a natural issue for the white, small-town, literalist-Protestant population that was grossly overrepresented in Congress at the turn of the 20th century, and that felt threatened by an increasing tide of “the other.”

So there they were, an oddly diverse team of drys composed of the Ku Klux Klan, the Socialist Industrial Workers of the World, Baptist and Methodist puritans, progressives such as Jane Addams and Upton Sinclair, and millionaire businessmen such as John D. Rockefeller and Henry Ford — all united in the unholy cause of denying others a right that had been historically enjoyed throughout all of Christendom. Although members of that group had little in common, they were kept masterfully united by one Wayne Wheeler, a Washington-based lobbyist for the all-powerful Anti-Saloon League (ASL).

Okrent makes the case that Wheeler may have been the most effective lobbyist ever to have stalked the halls of Congress. Although few today have heard of him, he was famous — or, to “wets,” infamous — at the time for having almost single-handedly orchestrated the passage of the 18th Amendment and dictated the terms of the Volstead Act (which authorized the federal government to enforce the amendment). Wheeler was nothing if not devoted to Prohibition. He was a one-issue man, and his day and night obsession with his noble cause doubtless contributed to his early death at age 57. For two decades, he held sway over the majority of senators and representatives, supporting the dry ones, punishing the few wets who dared to oppose his cause, and intimidating the majority of those who were wet in their private behavior into either silence or, more commonly, hypocritical support of Prohibition.

In addition to politicians on both sides of the aisle, prominent drys included circus man P.T. Barnum, suffragette Susan B. Anthony, perennial presidential candidate Williams Jennings Bryan, John Harvey Kellogg (of cornflakes fame), and such reformed dipsomaniacs as prizefighter John L. Sullivan and novelist Jack London. Reliably arrayed against that formidable lineup were the editors of most big-city papers, journalist H.L. Mencken, lawyer Clarence Darrow, Democratic presidential nominee Al Smith, and the nondrinking Theodore Roosevelt (who nonetheless called the Prohibitionist movement “egotistical lunacy”). For the better part of the decades-long struggle, these disorganized wets proved no match for the Wheeler-led drys.

In fact, the ultimate repeal of Prohibition had far less to do with wet opposition than with the public’s growing perception that the consequences of the act were, in Okrent’s words, “hypocrisy, greed, murderous criminality, official corruption.” There was a positive side: a decrease in consumption of alcohol, particularly among the less well-to-do and small-town residents. But drinking actually increased in most big cities, mainly among the more affluent and, particularly, among middle-class women. Prior to the enactment of Prohibition, women did not drink in bars, and most did not even imbibe at home with friends and family. But making liquor illicit made it fashionable for the ladies to match their gentlemen shot for shot, glass for glass, and we can thank Prohibition for such cultural innovations as coed cocktail parties and “powder rooms” in saloons. By the end of the era, there were some 32,000 illegal hooch joints in New York City alone, almost all of them openly selling the stuff, and alcohol abuse had become as much of a problem for women as for men.

Perversely, by 1926 total sales of bootleg booze exceeded the entire dollar amount of the U.S. federal budget. For the Prohibition era as a whole, U.S. brewers and distillers actually ended up making money, most vintners survived, and a number of industries thrived — including the physicians who legally prescribed “medicinal Jack Daniels,” the “drugstores” that fulfilled those prescriptions (Walgreen Company grew from 20 to 525 stores during the era), and especially the speakeasies and distributors (aka bootleggers) that purveyed illegal stuff. Canadian distillers and the federal treasury in Ottawa were the happy beneficiaries of alcohol sales banned south of the border. The losers were the U.S. government and taxpayers. Prior to Prohibition, taxes on the bottle had amounted to 30 percent of all federal revenue.

Observing such goings-on with horror from across the Pond, Winston Churchill called Prohibition “an affront to the whole history of mankind” that was “at once comic and pathetic.” Okrent documents both of those elements evenhandedly but with the wry — I inadvertently typed rye! — touch of humor the subject calls for. What can one say with a straight face about the Christian Socialist Frances Willard, head of the Women’s Christian Temperance Union (WCTU), whose agenda included government ownership of industry (and theaters!), vegetarianism, cremation, and “alcohol-free, tobacco-free, lust-free marriages”? She must have been a barrel of laughs, but all we can do today is shake our heads at the risible, misguided surety and sincerity of her many pet causes.

But we can learn from the examples of the powerful WCTU and ASL movements just why and how today’s NRA, Tea Party, PETA, and other radical special-interest groups thrive in the United States and exert influence far beyond what their numbers seem to merit. Okrent documents how the ASL, although able to deliver only a small percentage of votes at the polls, consistently leveraged its position by tipping close elections in favor of candidates who toed its line.

Ultimately, however, the Prohibitionists’ successes depended on the predictable cravenness of Democratic Party and corporate leaders who were willing to go along with the movement rather than risk having their own ox gored by its mad bulls. America’s business leaders went into hiding when the Prohibitionists sought to destroy the nation’s fifth-largest industry, and such leading Democrats as then New York governor Franklin Roosevelt (a nonreligious, two-martini man himself) embraced Bible-thumping teetotalers as if they were soul mates. Much as is the case today, educated business leaders and sophisticated members of the nation’s ruling class entered, willy-nilly, into political alliance with undereducated populists and religious fundamentalists who had interests antithetical to their own.

Finally, in the late 1920s, two business heroes stepped forward to do battle with the forces of darkness. Pierre DuPont and John J. Raskob worked with the Association Against the Prohibition Amendment (AAPS) to take on the ASL. Students of business history will recall that they were the same powerful duo who led both the giant DuPont company and General Motors (the latter along with Alfred Sloan) during the 1920s. DuPont and Raskob recruited other top corporate leaders to the AAPS and worked side by side with society matron Pauline Morton Sabin (a Morton salt heiress) to outspend and outflank Wheeler and the ASL — even going so far as supporting Democratic presidential candidate Franklin Roosevelt (who eventually found the courage to lead the fight for repeal). And FDR’s election in 1932 was the end of the game: Prohibition died quickly and with nary a whimper the following year.

The end of Prohibition didn’t finish the AAPS. It turned out that the organization really hadn’t been all that concerned about gaining legal access to alcohol. (The rich never had supply troubles during Prohibition: In 1928, the bibulous Raskob ran up one liquor tab of US$1,651 — more than $21,000 today, adjusted for inflation). Instead, the most important item on the business leaders’ agenda actually was repeal of the 16th Amendment, which established the income tax. DuPont and Raskob reasoned that if the main argument for introducing income tax had been to generate revenue lost as the result of Prohibition, then there would be no need to continue to tax income once the feds got back into the business of collecting on bottles. It was a clever argument, but when their candidate became president, and FDR began to spend all the revenue from both income and liquor taxes on New Deal programs, the infuriated business leaders began to oppose him more vigorously than they had opposed the Anti-Saloon League. Roosevelt then became “that Socialist in the White House.” Sound familiar?

A Lighter Brew

Sarah Rose’s For All the Tea in China: How England Stole the World’s Favorite Drink and Changed History is a breezy account of an enterprising Scottish botanist’s daring act of industrial espionage in 19th-century China. The story begins with the opium trade. For some 200 years, the “Honourable” East India Company had sold Indian opium to China and bought Chinese tea for England with the proceeds, making a handsome profit in the process. According to journalist Rose, the opium trade turned nearly a third of all Chinese adults into addicts. The Chinese authorities understandably wanted to get that monkey off their back. They also wanted to reverse an increasingly unfavorable balance of trade that was transferring much of China’s wealth to Britain. So they tried to free themselves from this undesirable arrangement by removing Western traders from their country by force in the First Opium War (1839–42). When they failed, the victorious Brits claimed even more territory and rights in China.

In the wake of those disastrous consequences for China, the East India Company’s directors in London began to fear that the humiliated Chinese would start to grow their own opium poppies and thus imperil their income. And since something like 10 percent of British tax revenues were derived from the sale and import of tea, what was good for the East India Company was seen as good for Her Majesty’s government as well. Hence, caution was thrown to the wind and an all-out defensive effort was launched to beat the Chinese to the punch by growing tea in British India.

The problem was that China had a virtual monopoly on the technology of tea making, and the only way to transplant that knowledge to India was to steal it. The East India Company’s managers thus devised the clever scheme of recruiting Robert Fortune, an impoverished and, as they correctly assumed, foolhardily desperate horticulturist, to travel to China — undercover and alone — to make off with tea seeds, plants, and the intellectual capital required to grow and process them, and deliver all of the above to the Indian hills of Darjeeling (which were reckoned to be ripe for tea plantations).

As one can imagine, Fortune’s task was not easy to accomplish in a China closed to foreigners, with thousands of muddy miles to cross, high mountains to climb, nasty brigands to battle, and scheming servants hell-bent on exploiting a master who was dependent on them for his very survival. It’s an old-fashioned adventure-story-cum-travelogue: the incredible journey of a Victorian Marco Polo. But that isn’t why s+b readers will want to pick up this book.

The book’s value lies in its parallels to today’s contentious trade relations between China and the West. History is almost repeating itself, although today the shoe is on the other foot. In the 19th century, China ran up a tremendous trade deficit to Britain, much as the United States’ balance of payments with China is becoming insupportable now. Britain used the gold it earned in China to expand its naval fleet and enhance its role as the world’s superpower, and now China is doing much the same with its export earnings. Today, of course, it is the Chinese who engage in the occasional act of industrial espionage. But they still have a habit of dangerously adulterating products meant for export to the West; then it was a poisonous chemical to enhance the color of green tea, now it is lead in toys. And all of the above was, and still is, complicated by cultural misunderstandings, nationalism, and an unwillingness to compromise on both sides for fear of losing face. History may not repeat itself, but it often gets close enough to warrant that prudent managers sit up and take notice.

Author profile:

  • James O’Toole is the Daniels Distinguished Professor of Business Ethics at the University of Denver’s Daniels College of Business. He is coauthor, with Warren Bennis and Daniel Goleman, of Transparency: How Leaders Create a Culture of Candor (Jossey-Bass, 2008), which was chosen as one of last year’s best business books by strategy+business.
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