The Brilliant but Neglected Novels of Garet Garrett

Commentary

One of the best nonfiction books to appear following the onset of the Great Depression was by the financial journalist Garet Garrett (1878–1954). It is called “The Bubble that Broke the World” (1931), and it was a bestseller. His analysis was exactly right. This was not a crisis of capitalism, he wrote, but of postwar credit expansions and imbalances. The economic downturn represented the coming due of the bill, and a cry for rebalancing production, consumption, savings, and interest rates in the United States and all over the industrialized world.

If Garrett is known at all today, it is by those who are captivated by the handful of intellectuals who wrote in opposition to the New Deal planning state and the regimentation of national life that it brought about. They were a rare breed, and largely forgotten. Aside from that, there is much more to Garrett than people know.

Years ago, I read everything by him I could find, found myself amazed he is not better known, and so brought it all back into print. Garrett is a case study of a forgotten genius, which often happens in times of depression and war when even the most popular writers are forgotten by history. He began to write fiction after Warren G. Harding had called for a “return to normalcy” after World War I. But for Garrett, “normalcy” was civilization itself.

As a financial journalist, Garrett began as a featured contributor to America’s most successful periodical, The Saturday Evening Post, but his contributions were not limited to this publication. He also wrote for Collier’s, Everybody’s Magazine, and The New Republic. His topics usually centered on financial matters. Garrett was at the top of his game and became one of the most widely read writers on economics in the country.

He embarked on a new venture of novel writing, writing his three best one year after another.

“The Driver” (1922), an exciting book that heralds entrepreneurial achievement, was the first. It tells the story of a Wall Street financier, Henry Galt, a shadowy figure who stays out of the limelight as much as possible until he unleashes a plan that had been years in the making: He uses his extraordinary entrepreneurial talent to acquire control of a failing railroad. In many ways, this book is the template for Ayn Rand’s “Atlas Shrugged” but we do not know if this was intended or coincidental.

Through outstanding management sense, good pricing, excellent service, and overall business savvy, Galt outcompetes all the big names in the business, while making a fortune in the process. Garrett has a way of illustrating just what it takes to be a businessman of this sort, and how his mind alone becomes the source of a fantastic revenue stream.

But his success breeds trouble. The government conspires with envious competitors to regulate him using the Sherman Antitrust Act, calling him a monopolist and accusing him of exploiting the public. There is a courtroom scene that allows Galt to explain to the assembled legislators how investors and capitalists are helping society in ways that politicians can’t possibly imagine. What the politicians see as shady is really a form of public service that enriches the whole country.

A recurring literary motif throughout the book has people asking, “Who is Henry Galt?” The shades of Ayn Rand here are obvious and some writers have speculated that she borrowed Garrett’s literary motif, which may or may not be true.

In any case, the novel is brilliant and thrilling, one that provides an excellent lesson in how entrepreneurship works.

His next novel is his epoch story of steel. It is “The Cinder Buggy” (1923), the longest of the three books in this trilogy and his unforgettable masterpiece. With a great story, and tremendous literary passion, it chronicles the transformation of America from the age of iron to the age of steel. It covers the period between 1820 and 1870 and its march of technological progress. The plot concerns an ongoing war between two industrialists, one the hero who is beaten in the first generation, and the other who is malevolent but wins the first round in the competitive drive. The struggle continues through the second generation, which leads to a titanic battle over whether steel or iron would triumph and why.

The story is set in the iron town of New Damascus. The two men who made it happen were Aaron Breakspeare and Enoch Gib. Aaron is beloved but not a great businessman. He dreamed of the steel age but failed to make it economically viable. Enoch is a good businessman but dour and widely loathed for his miserliness and treatment of others. A feud over a banker’s daughter leads to the initial dissolution of the partnership, and the son of the resulting union, John Breakspeare, returns to New Damascus to enter the iron business.

This leads to a fascinating repeat of events that causes another dissolution, more bitter and shocking than the last. The feud continues over iron and then over steel until steel wins the victory after many fits and starts. In the course of the story, the reader discovers how it is that technology has such a dramatic effect on society, and how risk and entrepreneurship are at the very heart of it all.

Garrett employs every literary device to make commerce itself the setting for great acts of courage, heroism, sacrifice, and tragedy. And as with his other books, the central mover of events is the price system. It is the signal for and cause of the most notable changes in the plot. The reader discovers economics in a way that might not otherwise be possible, and it is hard to imagine that anyone can come away with anything but love for the whole subject of enterprise.

Garrett does not portray the market as some idealized utopia. We have here the full range of human emotion and motivation at work: arrogance, pride, malice, love, compassion, jealousy, rage, and everything else. What is striking is that all these emotions play themselves out in a setting that, despite all the metaphors involving battles and wars, is ultimately peaceful. No one can fully control price movements, and it is these that act to reward victors and punish losers. Here we have the “manly” virtues playing themselves out not on bloody battlefields but in the peaceful marketplace.

We also have here a realistic portrayal of the truth about innovation. It is not enough to come up with a good idea. That idea must be embodied in real production that takes place in a cost-reducing way, and then marketed in the service of society. The unity of technology, accounting, and marketing must all come together to make possible such things as technological revolutions.

“The Cinder Buggy” could easily be considered the best of his work in this area. It is a wonderful novel for anyone who loves, or wants to more deeply understand, American history, economic theory, and the place of technology in the molding of society.

As the third in this series, there is “Satan’s Bushel” (1924), a splendid book, not just from the point of view of economics but also as a piece of literature. What is Satan’s bushel? It is the last bushel that the farmers put on the market, the one that “breaks the price”—that is, reduces it to the point where wheat farming is no longer profitable. The problem that afflicts the wheat farmers is that they sell their goods when the price is low and have no goods to sell when the price is high. Withholding goods from the market is one answer but the farmer lacks the incentive to do that.

As implausible as it may sound, the central figure in this book is the price of wheat. It is the main source of drama. The settings are the wheat pit at the Chicago exchange (circa 1915) and the Kansas wheat fields. Linking those two radically different universes, through speculative buying and selling, is the mission of this book.

The action further explores the meaning, morality, and utility of wheat speculation, which was increasing in sophistication during this period of history. The plot is centered at the turn of the century, a critical period when the agricultural economy was completely giving way to the fully industrialized one, and farmers were panicked about the alleged problem of falling prices. There is nothing lost in the passage of time: the allegory could equally apply to the computer industry today.

The book tells the story of one man’s discovery of a brilliant speculator and his relationship with an old and legendary farmer/mystic and his daughter. The mystic embodies both the highest wisdom and the greatest economic fallacies of the day. The question that must be confronted is how to make farms profitable in times of falling prices, and the novel shows that speculation, even with all its human foibles, makes a contribution to stabilizing the market.

Here is one of hundreds of brilliant passages describing the speculator: “No rule of probability contains him. To say that he acts upon impulse, without reflection, in a headlong manner, is true only so far as it goes. Many people have that weakness. With him it is not a weakness. It is a principle of conduct. The impulse in his case is not ungovernable. It does not possess him and overthrow his judgment. It is the other way around. He takes possession of the impulse, mounting it as it were the enchanted steed of the Arabian Nights, and rides it to its kingdom of consequences. What lies at the end is always a surprise; if it is something he doesn’t care for, no matter. Another steed is waiting. Meaning to do this, living for it, he has no baggage. There is nothing behind him. If he has wealth it is portable. He is at any moment ready.”

In a plot twist that foreshadows the New Deal, one person attempts to destroy the wheat crops with a poisonous fungus, thinking that he is doing the farmers a favor by reducing supply—based on logic he learned from unworkable government schemes. The reader is confronted with the challenge of coming to understand whether this is really beneficial to farmers, and if not, why not? (Keep in mind that “Satan’s Bushel” was written a full decade before FDR attempted the same tactics by force from the federal level.)

Another dramatic scene involves the arrest of an opponent of World War I. There are also plot twists that turn on romance, sorcery, criminality, mob behavior, psychological possession, the war, price controls, government interventions, and other surprises, including wholly unimaginable things like water witchery and a teak tree in Burma. The central action, however, deals with the core of economics and the place of production and speculation.

And for financial historians, there is the very special treat of observing the great drama of the early years of the Chicago commodities market—written from the vantage point of one generation later. There are scenes in the wheat trading pit that just take your breath away. This novel demonstrates yet again that no one can make the stuff of enterprise dramatic, tragic, and heroic like Garrett.

The effect is to so closely link the most outlandish and far-flung economic activities to human frailties and uncertainties that one gains not only an understanding of how commodity markets worked earlier this century—and how price movements work in all times and all places—but also a love for the craft.

Several passages provide beautiful insight into how the speculator thinks and how the speculator’s actions work to reduce destabilizing price fluctuations. But it is also a very human institution, subject to whim and learning. Also, the government comes across as nothing short of egregious and destructive.

His last novel is “Harangue (The Trees Said to the Bramble Come Reign Over Us)” (1927). It tells the true story, in fictional form, of the rise and fall of a fanatic and despotic socialist takeover of a single town, and how it led to loss of liberty and economic collapse. It is, said the New York Times in a review, “an analysis of the workings of the self-consciously radical mind and the play of direct action demagogy on the masses … a first-class study in sociology.” The socialist takeover was financed by the heir of a Wall Street fortune, and this provides Garrett an opportunity to explain why the rich are attracted to destructive ideology: it is one thing they can consume that sets them apart from the bourgeoisie.

He goes further to provide rich and detailed portrayals of all the main activists who are drawn to socialism. He shows how the experiment fails on economic and political grounds. As a novel, “Harangue” is just as competent as his others, but it takes a different angle: it explores the dangers of the intellectual and political world as a contrast to the creative world of commerce.

On the night of Jan. 18, 1930, Garrett was shot during an attempted robbery at a New York City speakeasy while having dinner. He was shot three times: in the shoulder, hip, and lung. He recovered, but his health suffered and he was left with a raspy voice (which wasn’t helped by his lifelong chain-smoking). Still, his association with the Post continued through the Great Depression, until it became impossible for anyone who opposed U.S. entry into the Second World War to work in the media.

To Garrett, there is no heroism in war or statism but only in creativity and production, and no folly greater than overthrowing the institutions that make creativity and economic progress possible. He was not just a great writer of fiction, not just a courageous opponent of the planning state and war; he was a prophet of the fate of America under government control, a brilliant intellectual force in the 20th century, and a wise and eloquent spokesman for freedom itself.

He died on his apple farm in 1954, largely a forgotten figure though he had once been a famous literary force in American life. May he be remembered and appreciated anew, and may he teach all to learn to adore peace and prosperity, and all its creative adventures, as he did. His last book is a profound lesson in American history: “The American Story,” published posthumously.

I’m proud to say that I had the major role to play in bringing most of his works back into print, which are now available on Amazon and many other places. His style alone makes for a fascinating study: crisp, evocative, to the point, with no fluff. The novels really do hold up even though nearly a century has gone by since they were written.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.

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