Boy, I'll bet the tobacco companies envied the Central Government yesterday. A Texas jury found that the Branch Davidians, though assaulted by a small army of political-police troopers equipped with armored vehicles, automatic weapons, air support, and incendiaries, actually shot and burned themselves to death. Meanwhile, a Florida jury was finding that 500,000 smokers in that state were not responsible for making themselves sick, despite the fact that year after year after year they freely purchased and used a product widely known as "coffin nails" since the 1890s whose sale and whose use by adults is perfectly legal in Florida. And not just legal. It's a product whose raw material the Central Government has long subsidized and a product that the regime actually distributed to millions of its troops during its various wars!
There's no real contradiction, of course. Both verdicts reflect the modern American legal philosophy that whoever commits the act under adjudication isn't responsible and that someone else is. What varies is the application of the philosophy. You benefit from it if you're politically favored and suffer from it if you're in the political doghouse.
While it is hard to deny that the cigarette industry is in the doghouse, it is premature to assume that the Florida verdict alone will destroy it. Attorneys for Big Tobacco are already predicting that adjudication or settlement of the individual cases will take decades, and while we would expect them to put the best face possible on the verdict, it is certain that various "officers of the court" will log millions more in fees before members of the petitioning class ever see a penny of cash money.
That's assuming the whole thing won't be thrown out on appeal. For one thing, there's a Florida law that prohibits damage awards that would force a company into bankruptcy. And apparently it's not even clear whether the senior lords of the judicial system will agree that a class action is legal in this case. (A resident of a sane planet would assume that such a crucial determination would have been made long before the case came to trial, but remember, we're living in Bizarro World.) A conspiratorialist might even argue that the award $145 billion was designed to be so astronomical that it would eventually self-destruct. However, that assumes that juries in this country can be manipulated. (I sink to the divan in shock at the mere suggestion, lace hankie fluttering.)
The Florida verdict may not, then, be the crack of doom but it's hardly good news, either. And it is just the latest defeat suffered by the cigarette industry in a long-standing, organized, persistent, all-fronts attack on it by government authorities. As executives of Big Tobacco whimpered abjectly to the Florida court, they had already "agreed to pay $246 billion to states to fight teenage smoking and help pay for the ills of injured smokers." ("Florida Award Clouds Future Tobacco Action in Suits," by Barry Meier, New York Times, July 15)
Tobacco prohibitionists warn that the companies will be able to recoup that by selling cigs to the billions of Asians who smoke like chimneys, but I expect the cigarette companies would have preferred to keep the $246 billion and also expand their Asian markets. The $5 billion in punitive damages Exxon got hit with in the Valdez case can be looked on as a mere cost of doing business; $246 billion is not a cost but a catastrophe, and one preceded by other catastrophes. As an example of an early catastrophe, the cigarette companies have long since been prohibited from advertising on TV, the principal commercial forum in our post-literate age.
When an entire industry is shoved into the doghouse, those who believe in the existence of sovereign government power may have some questions for those who believe in a ruling class external to the official political regime. An "extra-regime" ruling class is one that depends on wealth accumulated substantially through the political means but then privately held, by corporations and individuals; and one whose senior members set overall policy for the functionaries within the official regime, whom those senior Dark Suits create or buy. To those skeptical of ruling-class analysis, a long-standing, organized, persistent, all-fronts attack on an industry may suggest that government officials are sovereign after all and able to terrorize and expropriate major corporations at will.
However, as I argue at length in Dark Suits and Red Guards, it isn't the corporations that rule the ruling class; it's the senior financial institutions. While large corporations certainly have seats at what I've called the Big Table, they do not sit at the head of it. And from time to time, certain corporations or entire industries find that their chairs have been moved farther toward the foot of it. For example, American shipbuilders the few that were able to keep up with technological change well enough to survive at all have slipped a long way down the table since Commodore Vanderbilt's day or even Henry Kaiser's day. Many makers of horse-drawn carriages failed to attract sufficient capital from the financial sector to transform themselves into automakers; they're long gone from any table, big or small. And so forth.
The markets had only about half an hour to react to the Florida verdict yesterday, but all market indices did post advances on the day, especially the tech-heavy NASDAQ. According to one analyst I heard, the advances were driven by tech stocks. As we would expect, tobacco stocks were off (though only a little). Just a few years ago it was hard to find a growth-oriented mutual fund that didn't hold Philip Morris stock. Nowadays, though, you get the impression that Wall Street looks on the cigarette companies not only as dogs deep in the doghouse but also as dogs that have seen their day. Big Tobacco comes off as, well, a little old-fashioned.
There was a time when tobacco growers, at least, if not manufacturers, were senior members of a regional ruling class that was attempting to stay independent from the mercantilist bankers of the Northeast. Those growers joined cotton, rice, sugar, and indigo planters around the Big Table of the ante bellum South. But after the dismantling of the Southern political economy at the hands of the Lincolnites, the planters' status became much more contingent. In fact, many planters whose fields and equipment managed to survive the ravages of Total War found their property expropriated by carpet-bagger and scalawag tax collectors.
The successful mass marketing of factory-made cigarettes in the late 19th century soon elevated manufacturers to prominence in the industry. But whether we're speaking of growers or manufacturers, the tobacco industry now sat at the Big Table only at the sufferance of Wall Street. In the political arena, the continued status of Southern agricultural interests, overall, was expressed by Bourbon pols who were permitted to rule the Democratic Party in alliance with Tammany liberals of the North. Tobacco-grower subsidies provided by the Central Government helped sustain a portion of the new, contingent Southern ruling class, and the Southerners in turn assisted the senior ruling class in New York in undermining the maverick socialist-labor forces that couldn't be roped into the Roosevelt consensus or that didn't qualify for roping.
But the ruling class keeps changing. In the wake of the 1960s, a different kind of maverick the Red Guard was successfully roped into the ruling consensus, at the same time that all types of agriculture, while still important and still profitable to corporatize, were slipping from the commanding heights of the political economy.
In Dark Suits and Red Guards I contended that a central project of the Dark Suits in our times was the demoralization and deracination of the traditional core of the American population, and its conversion into a colorless, memoryless, culturally defenseless "Outer Party" of helpless salarymen. And I contended that, in pursuit of that goal, the Dark Suits were prepared to encourage all manner of Red Guard prohibitionist campaigns aimed at stripping ordinary people of the little consolations and luxuries with which they have traditionally and freely chosen to decorate their lives. Among them were meat, alcohol, pets, circuses, zoos, fur, perfumes, that wonderful fragrance of leaves burning in the autumn and, of course, smoking.
But leave culture and psychology aside. Solely from the economic viewpoint, the Dark Suits might expect that prohibiting tobacco among their salarymen would reduce their health-benefit costs. Lowering those costs is a consideration of much more general concern than any injury to a particular corporate sector. There is historical precedent: in the early years of the 20th century, corporate Progressives sought to restrict alcohol consumption among the lower orders in an effort to discipline their factory hands, keep them sober, and rip up saloon-based political machines at the grass roots. Prohibition was imposed at the fatal expense of brewers, distillers, and vintners who were at least locally or regionally influential.
So far, so good. But something I saw on the telescreen yesterday prompts me to mention another way the ruling class may be changing that is, ethnically. What I saw was the news conference held by the Florida plaintiffs' attorneys Rosenblatts with New Yawk accents and attitude to match. Mr. Stanley Rosenblatt in particular emitted a corrosive hatred for the tobacco companies and their executives that almost liquified my TV screen. I couldn't help but wonder whether that hatred was fueled not only by "pure" Red Guard ideology but also by regional and ethnic considerations.
Red Guard trial lawyers make up a specialist segment of the ruling class; it is a segment considerably more Jewish than the tobacco industry. Unquestionably the recruitment of Red Guards as a junior wing increased the proportion of Jews in the ruling class generally. Dark Suit Jews themselves dominate the communications and entertainment industries. Even more importantly, they control a highly disproportionate share of the investment-banking sector, if they do not actually dominate it; and investment banking is very near the pinnacle of the ruling class if, indeed, it is not the very pinnacle.
One of my co-conspirators insists, flatly, that Jews now dominate the entire American ruling class. I am not willing to go that far, not yet, but with the help of the clouds of cigar smoke I habitually create, I'll certainly keep watching to see which way the wind is blowing.
July 15, 2000
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