I’m seeing a lot of traction on posts from last week! People especially like the mixing up of mediums on Friday with a video. In that spirit, I will make a video for every Friday. For today, I’m really excited to share one of the best books I have read this year. On to the post:
The Fish That Ate The Whale is the quintessential American immigrant story – Sam Zemurray – a Russian Jew – comes to New Orleans in the early 1890s before the age of 14. Before he turned 40, “Sam the Banana Man”, was worth almost half a billion dollars today. His company, Cuyamel Fruit (the fish), made life difficult for United Fruit (the whale), the largest banana importer into the US at the time. He sold his company to United Fruit and soon after became its CEO.
Beyond being a successful businessman, Sam supported philanthropy causes, provided a livelihood to hundreds of thousands in Central America (though under questionable conditions at best), and helped stabilize the Jewish community after the Holocaust.
Naturally, his life raises interesting themes. Let’s explore them.
Ends and Means
Sam Zemurray believed that he could be both triumphant and loved. In practice, this is exceedingly rare. For all his contributions, the original sin of the Banana industry contaminated him – Central America was just a resource to be squeezed out. Because marginals were slim, trade depended on these conditions. Even the whiff of tariffs would throw banana men into chaos. In the sleepy and boozy tropics, Sam reportedly imported boa constrictors so that his men would be alert and not get too drunk.
At the same time, he had what Nassim Nicholas Taleb calls “Skin in the Game”. If his workers were in fields surrounded by boas, he was there with them. He believed in the power of physical labour and looked at executives who made decision from his Boston boardrooms with disdain. He had a saying, “Don’t trust the report.” Find out the truth yourself. If someone is growing through hell with you, it’s difficult to complain to them. No wonder his workers adored him.
But the question remains – how do you reconcile the two parts? There are his many contributions to the Jewish community and his philanthropy (specially in education). On the other hand, he ran tropical sweatshops.
I would argue that this is a false dichotomy. When you were in the banana industry with slim margins, you did what you had to do to stay in business. You can chose a different set of principles to live with, and Zemurray chose his. This idea of looking at historical figures, especially businessmen, as one-dimensional robber barons is dangerous not only because it is unfair to the businessmen, but also because it groups those who shared the risks and tribulations with their works along with those who didn’t. When you share skin in the game, you’re on much better moral ground.
Using the government for his ends
The term “Banana Republic” was coined in Zemurray’s time. It referred to the complete control that the banana industry – spearheaded by Sam’s United Fruit – had out the republics of Guatemala, Nicaragua, and pretty much all of Central America. These corporations could overthrow governments at will. This was the rise of the multi-national corporation.
How did he achieve this? Every demand, every piece of land, every transaction of the United Fruit Company was backed by the military might of the United States of America. Using the context of the Cold War, he aligned the interests of the American governments with the interest of United Fruit. Lobbyists, congressmen, senators greased the wheels of the machine to employ organizations like the CIA to overthrow Central American governments inconvenient for United Fruit.
There is so much to say here, but ultimately it serves as a reminder of how small groups of people can control the national agenda.
Perhaps out of all of Sam Zemurray’s traits, the one that is most impressive to me is his “chutzpah” or audacity. When Sam was the owner of Cuyamel fruit, he was thinking about helping to throw a Honduran government because of their intention to put up tariffs. Honduran owed the US a lot of money, so the US government did not want to risk destabilizing the country by a coup. So Secretary of State Philander Knox summoned Sam to warn him not to help the rebels. So do JP Morgan – arguably the most powerful man in the country.
What does Sam do? He goes ahead with the coup. Note that this is before he has the cocoon of wealth and myth around him – he’s a moderately successful businessman. Imagine the audacity!
Every problem could be solved. There was not a job in his business he could not do, nor a task he could not accomplish. Cohen describes it best:
He wanted to win. For every move, there was a countermove. For every disaster, there is a recovery. He never lost faith in his own agency.
Out of all the lessons we can take from his life, his complete faith in his ability to solve a problem is the one that is most important.
Some ideas in this piece will connect to my post on Thursday on the dangers of tech aggregators. But for tomorrow, there will be a really cool guest post!