St. Phineas

How P.T. Barnum helped invent business ethics.

The Life of P.T. Barnum: Written By Himself, Urbana: University of Illinois Press, 404 pages, $14.95 paper

The legendary impresario P.T. Barnum (1810-1891) is best known as a consummate charlatan whose perspective on life and business is summed up in the contemptuous contention, "There’s a sucker born every minute." It is testimony to the power of first impressions that this popular image persists even though it is very substantially wrong. In fact, not only did the great showman never make the statement, but it would have been wildly out of character for him to have uttered it.

Contrary to his popular image, Barnum generally conducted his business enterprises in a virtuous manner, respecting his customers and making sure they were satisfied. Indeed, he was among the first to appreciate fully -- and to articulate -- that an honest approach was the most reliable path to long-term wealth. He was, in other words, one of the pioneers of business ethics.

As A.H. Saxon points out in his superb biography, P.T. Barnum: The Legend and the Man (1989), much of the fault for the showman’s lasting reputation lies with Barnum himself. In 1854, at the strikingly early age of 44, Barnum penned the first edition of his autobiography. In it, he frankly and exuberantly exposed the various deceptions and "humbugs" of his early business life. Notorious among these was his managership of a mentally agile, if physically decrepit, 80-year-old black woman who claimed convincingly not only to be 140 years old but to have been George Washington’s nurse. Then there was his exhibition of the absurd and disgusting "Feejee Mermaid" that seemed upon examination to be the head and upper torso of a dead monkey crudely sewn to the body of an equally dead fish -- which is exactly what it was.

That early autobiography has now been reprinted by the University of Illinois Press with a lively introduction by Terence Whalen, a literary scholar at the University of Illinois-Chicago who specializes in 19th-century America. Both the reprint of the autobiography and Whalen’s introduction will probably serve to perpetuate the image of Barnum as a con man.

In his Life and other writings, Barnum attempted to defend himself from the negative image with two stratagems. First, he insisted that his book performed a public service by exposing deceptive business practices. For example, at the age of 19, he engaged in the lottery business and was shocked to discover that only a rather small percentage of the take was paid out in prizes -- about the same as in state lotteries of our own day, as it happens. He emphatically, if ineffectually, warned people against squandering their money on this "ruinous infatuation."

As Whalen observes, however, he never really apologized in this autobiography for any duplicitous business behavior, and it is easy, if not entirely fair, to join Whalen in dismissing such somewhat sanctimonious and self-conscious protestations as an effort to profit doubly from the deceptions: first by carrying them out, then by exposing them in a lucrative book.

Barnum’s more compelling defense was quantitative, again in a double sense. To begin with, the colorful "humbugs" of his early career represented only a small portion of his business efforts. He pointed out that the vast majority of his enterprises were in fact "undoubtedly legitimate." There was, in particular, his exhibition of the truly talented midget Tom Thumb (Barnum did admit to exaggerating the age of the crowd-pleasing performer) and his wildly successful management of the "Swedish Nightingale," soprano Jenny Lind, whose tours, Barnum suggested with some reason, helped elevate and refine the country’s musical tastes.

More pertinently, Barnum made an important financial discovery during the course of his business career. He observed that nearly all his deceptive schemes "ended in disaster," reducing him "to the pinching income of $4 per week," whereas his fortune derived almost wholly from the legitimate enterprises.

Barnum thus learned that, in business, virtue is considerably more than its own reward. News about this discovery can easily be lost when it is imbedded among picturesque yarns about humbugs, but it was of great significance to Barnum, and, more broadly, it was probably important to the massive economic expansion that took place in what we now call the developed world during and after his lifetime.

The first third of the autobiography is devoted to life, and particularly business life, as Barnum experienced it in Bethel, Connecticut, during his first 25 years. Judging from his description, business in general was often characterized by deception, fraud, and swindle. As a consequence, people continually had to be alert to the possibility of being cheated by confidence schemers and sharp dealers. The expression "Yankee trader" carries this cautionary connotation to the present day.

Barnum’s great discovery was not so much that such behavior is immoral but that from a business standpoint it is stupid. Toward the end of his autobiography, Barnum was already groping toward a set of business principles that developed this key insight. In the next years, he worked his ideas into a lecture, "The Art of Money-Getting," and gave it widely with great success (and financial profit), eventually incorporating it in 1869 into his second, more circumspect, autobiography, which he titled -- with typical self-effacement -- Struggles and Triumphs.

This remarkable tract is filled with the kind of wisdom that successful business people now generally take for granted. Integrity and honesty make sound business sense, argued Barnum, because "no man can be dishonest without soon being found out and when his lack of principle is discovered, nearly every avenue to success is closed against him forever." Therefore, "as a mere matter of selfishness," he concluded, "honesty is the best policy."

Similarly, Barnum argued that fair trading is the best method for carrying out business if one is pursuing long-term advantage. "Men who drive sharp bargains with their customers, acting as if they never expected to see them again, will not be mistaken," he wrote. And it is good for the bottom line to treat people well: "Politeness and civility are the best capital ever invested in business." Moreover, although charity should be "a duty and a pleasure," there is advantage to it as well. Noted Barnum, "even as a matter of policy, if you possess no higher incentive, you will find that the liberal man will command patronage, while the sordid, uncharitable miser will be avoided."

By and large, Barnum carried out his various enterprises in line with such principles. He treated his employees and performers with respect, his customers with civility and attentiveness, and his fellow deal makers with integrity and reliability. Nothing illustrates this better than Barnum’s experience with the circus, an enterprise he took on late in life, and the one that has become most associated with his name.

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