Today in History: Legendary American stock trader Jesse Livermore died on this day in 1940. He is considered a pioneer of day trading and was the basis for the main character of Reminiscences of a Stock Operator, a best-selling book by Edwin Lefèvre. At one time, he was one of the richest people in the world.
In a time when accurate financial statements were rarely published, getting current stock quotes required a large operation, and market manipulation was rampant, Livermore used what is now known as technical analysis as the basis for his trades. His principles, including the effects of emotion on trading, continue to be studied.
Some of Livermore's trades, such as taking short positions before the 1906 San Francisco earthquake and just before the Wall Street Crash of 1929, are legendary and have led to his being regarded as the greatest trader who ever lived.
He learned to read and write by the time he was 3 and a half. By the time he was 5, he was reading newspapers and devouring the financial pages.
He died by suicide. He shot himself with an Automatic Colt Pistol. Interestingly, his son and grandson would go on to kill themselves as well.
Today in History: The original man of steel, Andrew Carnegie, was born on this day in 1835. Carnegie led the expansion of the American steel industry in the late 19th century and became one of the richest Americans in history. He did now, not by gouging and screwing his customers, but by making his product more easily accessible. For instance, Carnegie almost single-handedly reduced the price of steel rails from $160 per ton in 1875 to $17 per ton nearly a quarter century later.
Andrew Carnegie had an interesting philosophy when it came to wealth. "Carnegie spoke of the millionaire’s duty to live a 'modest' lifestyle, shunning extravagant living and administering his wealth for the benefit of the community. To do otherwise, he warned, would encourage an age of envy and invite socialistic legislation attacking the rich through progressive taxation and other onerous anti-business regulations. Carnegie practiced what he preached, giving away over $350 million in his lifetime. One of his first acts after U.S. Steel went public was to put $5 million into a pension and benefit plan for his workers...he spent millions building 2,811 public libraries, donating 7,689 organs to churches, and establishing Carnegie Hall in New York and the Carnegie Institution in Washington. He financed technical training at the Carnegie Institute of Technology and established a pension fund for teachers through the Carnegie Foundation for the Advancement of Teaching." Mark Skousen
Carnegie's dictum was (1) To spend the first third of one's life getting all the education one can. (2) To spend the next third making all the money one can. (3) To spend the last third giving it all away for worthwhile causes.
Today in History: American disc jockey Alan Freed, who had popularized the term "rock and roll" and music of that style, was fired from WABC-AM radio over allegations he had participated in the payola scandal on this day in 1959. Payola occurs when a disc jockey is paid by record companies or music publishers to play certain recordings, and for some reason this is considered scandalous. Payola is one of those things like insider trading, gambling and the college admissions scandal that really shouldn't be illegal. A play on radio is effectively a commercial for that music or musician. And paying for commercials is, quite obviously, fairly common. Is it really so outlandish that some in the industry want to "buy" spots? Payola actually helped a lot of new artists get airplay. Without payola, we would never have heard of Chuck Berry.
Payola also has a long history. "The first documented instances of payola date from England in the 1860s. The publishers of sheet music paid vaudeville artists to sing and popularize their songs. Payment of these fees was a normal marketing procedure for publishers and a significant source of income for performers; payola occasioned no political scandal. Prior to the payola scandals, payola had been an accepted and legal business practice used to promote new products for many decades. In the case of rhythm and blues, the independents lacked the reputations and marketing power to place their artists through name alone, and were forced to rely on payola." Tyler Cowen
Today in History: The Mayflower Compact was signed in what is now Provincetown Harbor near Cape Cod on this day in 1620. The words in this contract that stand out to me the most was "the general Good of the Colony." As William D. Guthrie wrote in 1918:
The history of the Plymouth colony from 1620 until its absorption by the colony of Massachusetts in 1691 teaches us many lessons in political philosophy. There [is one] which I desire to recall to you: One as to the right to private property...The Pilgrims began government under the Mayflower Compact with a system of communism or common property. The experiment almost wrecked the colony. As early as 1623, they had to discard it and restore the old law of individual property with its inducement and incentive to personal effort. All who now urge communism in one form or another, often in disguise, might profitably study the experience of Plymouth, which followed a similarly unfortunate and disastrous experiment in Virginia. History often teaches men in vain. Governor Bradford's account of this early experiment in communism in his annals of “Plimoth Plantation” is extremely interesting. The book is rich in political principles, as true to-day as they were three hundred years ago. After showing that the communal system was a complete failure, and that as soon as it was abandoned and a parcel of land was assigned to each family, those who had previously refused to work became “very industrious,” even the women going “willingly into ye feild,” taking “their litle ons with them to set corne, which before would aledg weaknes, and inabilitie,” Bradford proceeds as follows: “The experience that was had in this comone course and condition, tried sundrie years, and that amongst godly and sober men, may well evince the vanitie of that conceite of Platos & other ancients, applauded by some of later times, —that ye taking away of propertie, and bringing in comunitie into a comone wealth, would make them happy and florishing; as if they were wiser then God. For this comunitie (so farr as it was) was found to breed much confusion & discontent, and retard much imploymet that would have been to their benefite and comforte. For ye yong-men that were most able and fitte for labour & service did repine that they should spend their time & strength to worke for other men's wives and children, without any recompence. The strong, or man of parts, had no more in devission of victails & cloaths then he that was weake and not able to doe a quarter ye other could; this was thought injuestice. The aged and graver men to be ranked and equalised in labours, and victails, cloaths, &c., with ye meaner & yonger sorte, thought it some indignite & disrespect unto them. Let none objecte, this is men's corruption, and nothing to ye course it selfe. I answer, seeing all men have this corruption in them, God in his wisdome saw another course fiter for them.”
Today in History: Woodrow Wilson was elected President of the United States on this day in 1912. Wilson is by any metric, the worst president on US history. He dragged America into World War I despite promising not to. He gave us the much-hated income tax. He gave us the Federal Reserve. Alcohol prohibition happened under his watch.
"Woodrow Wilson has been elevated as one of the better presidents but I think if you go back and look at it, the war was avoidable...and of course Woodrow Wilson helped bring Hitler to power by insisting on the abdication of the Kaiser after World War I - which was totally unnecessary." Ivan Eland
This Day in History: American journalist and author Rose Wilder Lane, died on this day in 1968. Rose’s mother was Laura Ingalls Wilder, author of the beloved series of Little House on the Prairie books. We now know that Rose had much more to do with the success of those books than has previously been thought. After World War I she traveled the world only to be met by starvation everywhere, so she was initially attracted to Communisn. In short time she realized that this ideology only made things worse. She embraced individualism as she found that people who were left alone and freed from government restraints fared better.
"Rose’s opposition to government intervention strengthened as the years rolled by. She became a strenuous opponent of Franklin Roosevelt’s New Deal. Before Pearl Harbor she opposed our entry into the war. During the war, she refused to apply for a ration card, relying on honey for sweetening and canning her own garden fruits and vegetables. She even refused to accept a Social Security number. When a radio commentator asked his listeners for their views on Social Security, she scribbled on a postcard: 'If [American] school teachers say to German [Nazi] children, ‘We believe in Social Security,’ the children will ask, ‘Then why did you fight Germany?’ All these ‘Social Security’ laws are German, instituted by Bismarck and expanded by Hitler. Americans believe in freedom, in not being taxed for their own good and bossed by bureaucrats.'” The local postmaster, reading the message, considered it subversive and notified the FBI which sent a state trooper to investigate. Rose’s response was a newspaper article: 'What Is This—the Gestapo?'" ~Bettina Bien Greaves
Her philosophy on life was detailed in her 1943 book The Discovery Of Freedom which you can download here.
This Day in History: French judge, and writer Étienne de La Boétie was born on this day in 1530. In his very short life La Boétie has given the world one of the earliest critiques of governmental power: Discourse of Voluntary Servitude (Discours de la Servitude Volontaire).
In this writing he wonders, "how it happens that so many men, so many villages, so many cities, so many nations, sometimes suffer under a single tyrant who has no other power than the power they give him; who is able to harm them only to the extent to which they have the willingness to bear with him; who could do them absolutely no injury unless they preferred to put up with him rather than contradict him. Surely a striking situation!"
200 years later David Hume wondered the same: "Nothing appears more surprising to those who consider human affairs with a philosophical eye, than the easiness with which the many are governed by the few; and the implicit submission, with which men resign their own sentiments and passions to those of their rulers."
James Mackinnon wrote about Étienne de La Boétie in A History of Modern Liberty, Volume 2 (1906) where he summarized Étienne de La Boétie's thoughts.
"How a million of men can submit to the absolute régime of a king, especially a bad king, is what La Boëtie, like most reasonable beings, cannot understand. That men out of gratitude for some benefit should place one of themselves in a position in which he might do them untold harm, shows a lamentable want of foresight. To remain in subjection and suffer every species of wrong is worse than cowardice. If a man were to announce this voluntary servitude as hearsay, and not as a fact patent to all, nobody would believe him. The people is the author of its own slavery, for to recover its liberty it has merely to will its freedom. Liberty, it would seem, is not a blessing desired by man, for, though he has but to desire in order to attain it, he prefers to remain in an effeminate slavery. Be resolute to serve no longer, and you will be free. If this seems paradoxical, it is because, cries La Boëtie, the love of liberty, the most natural of sentiments, has been so long stifled by bondage that it has ceased to seem natural. Nevertheless, man is born in subjection only to his parents and to reason. Nature has given the same form to all, in order that all may realise their brotherhood. If there is any advantage in individual ability, it ought only the more to foster fraternal affection between man and man by enabling the strong to minister to the necessities of the weak. Nature has ordained society, companionship, for man, not the oppression of the weak by the strong. Liberty is therefore natural. Long live liberty! The kingship in any form—whether obtained by election, succession, or conquest-appears to La Boëtie, who has in his view the absolute sway of a Henry II., equally hostile to liberty. The king who has been elected strives to affirm his power at the expense of liberty; the king by succession regards the people as his natural slaves; the conqueror as his prey.
A man born unaccustomed to modern subjection would certainly instinctively prefer to obey his reason rather than any other man. Men become slaves only by constraint and deception, never by natural impulse. At first they usually deceive themselves in this matter, to discover speedily that they have been and are being duped. So apt are they to mistake for nature what they owe only to their birth, to mistake custom, which teaches servitude, for nature, which teaches freedom. Nature, unfortunately, loses her power the less she is cultivated. As a plant may be transformed by engrafting some foreign twig on its stem, so human nature may be entirely distorted by custom. Custom, then, is the first cause of this voluntary servitude, in which men seem to live so naturally. Happily, there are exceptions even to the power of custom.
Such exceptions are the men 'who, possessed of strong intelligence and insight, are not content, like the great mass, to regard what is before their eyes, but look beyond and behind them, studying the past in order to measure the present and gauge the future.' To such, slavery is not natural and its taste never sweet, however artfully it may be gilded. Education and freedom of thought are the enemies of tyrants. It is the interest of the tyrant to enervate the people rather than enlighten them, and it is the tendency of the subjects of a tyrant to lose all the masculine virtues of natural freedom. Long live the king, cry the people, in return for the spectacles, free dinners, and largesses of the tyrant. They bless Tiberius and Nero for their liberality, and forget that they are being bribed with their own substance, and will be called on to-morrow to surrender their property in order to satisfy the avarice, their children to gratify the passions, of these magnanimous emperors. Credulity grows with effeminacy, and the tyranny of kings is invested with the miraculous by the ignorance of the mass. The people themselves help to give currency to the lies they believe, for the profit of the monarch. Moreover, the tyrant finds ready adjuncts in the passions, the avarice, the egotism of many of his subjects, who find their advantage in his service and their own slavery."
