As the champagne corks pop . . .

Yachtgate leaves voters with the uncomfortable feeling that the super-rich own our politicians.

At times like this, I think of Stafford Cripps. A vegetarian and teetotaller, who reputedly lunched exclusively on carrots, Cripps was Labour chancellor during the postwar austerity years. Even after he devalued the pound, the public gave him a positive approval rating of 11 per cent. Before that, despite strict rationing and income tax at nine shillings (45p), it was 33 per cent. Cripps came from a wealthy background but, to look at him, you wouldn’t have known it. For most of his time in office, he was very thin and very ill, and he died shortly after stepping down. He was described – by a diplomat, not a Labour colleague – as “the nearest thing to a saint I have ever met”.

How unlike our own dear contemporary politicians, for some of whom life seems to be one champagne reception after another, and many of whom so visibly enjoy the high life. Corfu isn’t at all exotic, or even particularly fashionable. But there’s one almost ludicrously beautiful enclave on the north-eastern coast which is much favoured by the people with the kind of cut-glass accent you normally find in Surrey and Bucks.

It was there, as most of us now know, that an extraordinary political drama unfolded this summer, involving a luxury villa, a yacht, an expensive restaurant and lots of parties and dinners. With British businesses going bust by the day, thousands being evicted from their homes and pensioners facing winter with the heating turned down, this does not sound to me like the sort of thing that will enhance the country’s admiration for its rulers.

But I’m old Labour. As, I suppose, was Cripps.

Rothschild thought it jolly bad form to leak juicy gossip exchanged between rich folk

It will perhaps be called Corfugate or Yachtgate. Here’s what we know. The villa belongs to the Rothschild family who bought the land before the Second World War along with a section of the Albanian coast opposite so as not to spoil their view. The yacht belongs to Russia’s richest man, Oleg Deripaska, who made his fortune in aluminium and also owns Leyland Daf. The restaurant is the Agni Taverna, allegedly Corfu’s best, which people like to say can only be reached by boat, though it is easily accessible by road or, for that matter, foot. Some of the partying and dining was on the yacht, some at the villa, with Nat Rothschild playing host. He will become Baron Rothschild when the present one dies and, as well as being heir to the family fortune, has his own hedge fund. He is said to spend more time sleeping in his private jet than in his five houses. The guests included Peter Mandelson, the former EU trade commissioner now restored to the cabinet as Business Secretary; George Osborne, the shadow chancellor; Andrew Feldman, the Tories’ chief fundraiser and an old Oxford friend of David Cameron’s; assorted media figures, including Rupert Murdoch; and various PR folk, such as Roland Rudd, a City publicist said to be worth £50m.

Very briefly – you will bear in mind that everybody denies what everybody else says – there are three allegations. First, Mandelson told Osborne at Agni that he thought Gordon Brown was a bit of a plonker, or words to that effect. Second, Mandelson and Deripaska have “links” (a newspaper word which means “we think something dodgy is going on, but we’re not sure what”). Mandelson signed off an EU decision to lift tariffs on aluminium imports, obviously favourable to an aluminium tycoon. In Corfu, he stayed on the Russian’s yacht.

Though he claimed never to have met Deripaska before the aluminium decision, it turned out that they dined in Moscow in January 2005, with Nat Rothschild also present. Third, Osborne and Feldman talked to Deripaska about a possible donation to Tory funds, though the law states British parties cannot take money from foreigners.

The first two allegations probably reached the press because Osborne started leaking to discredit the new Business Secretary. Rothschild spilled the beans on the Deripaska donation, in a letter to the Times, because he thought it jolly bad form for Osborne – an Oxford contemporary and fellow member of the exclusive Bullingdon Club – to leak juicy gossip exchanged between privileged folk and allow the unwashed to read it in the papers.

My mind goes back now, not only to Cripps, but also to the 1930s when politicians, aristocrats, diplomats and businessmen met at country house weekends and decided Hitler was quite a decent chap who should be allowed to have most of what he wanted; and to the early 1960s when half the ruling class seemed to be involved in weekend sex orgies, complete with specially hired prostitutes, on country estates.
Those matters concerned only the Tories, but this one now involves both government and opposition, showing, in the northern phrase, how they all piss in the same pot. The details, obscured by denials and counter-denials, will escape most voters. But there is a sense, perhaps more in the middle class than the working class, that a super-class of rich people lives on a different planet from the rest of us and most politicians have been bought by them.

While the rest of us get screwed, our rulers, enjoying parties and freebies, making deals and exchanging gossip, are too busy to care.

Peter Wilby edited the New Statesman from 1998-2005

Peter Wilby was editor of the Independent on Sunday from 1995 to 1996 and of the New Statesman from 1998 to 2005. He writes the weekly First Thoughts column for the NS.

This article first appeared in the 27 October 2008 issue of the New Statesman, The death of Gucci capitalism

Wikimedia Commons
Show Hide image

The secret anti-capitalist history of McDonald’s

As a new film focuses on the real founder of McDonald’s, his grandson reveals the unlikely story behind his family’s long-lost restaurant.

One afternoon in about the year 1988, an 11-year-old boy was eating at McDonald’s with his family in the city of Manchester, New Hampshire. During the meal, he noticed a plaque on the wall bearing a man’s face and declaring him the founder of McDonald’s. These plaques were prevalent in McDonald’s restaurants across the US at the time. The face – gleaming with pride – belonged to Ray Kroc, a businessman and former travelling salesman long hailed as the creator of the fast food franchise.

Flickr/Phillip Pessar

But this wasn’t the man the young boy munching on fries expected to see. That man was in the restaurant alongside him. “I looked at my grandfather and said, ‘But I thought you were the founder?’” he recalls. “And that’s when, in the late Eighties, early Nineties, my grandfather went back on the [McDonald’s] Corporation to set the history straight.”

Jason McDonald French, now a 40-year-old registered nurse with four children, is the grandson of Dick McDonald – the real founder of McDonald’s. When he turned to his grandfather as a confused child all those years ago, he spurred him on to correct decades of misinformation about the mysterious McDonald’s history. A story now being brought to mainstream attention by a new film, The Founder.


Jason McDonald French

“They [McDonald’s Corporation] seemed to forget where the name actually did come from,” says McDonald French, speaking on the phone from his home just outside Springfield, Massachusetts.

His grandfather Dick was one half of the McDonald brothers, an entrepreneurial duo of restaurateurs who started out with a standard drive-in hotdog stand in California, 1937.

Dick's father, an Irish immigrant, worked in a shoe factory in New Hampshire. He and his brother made their success from scratch. They founded a unique burger restaurant in San Bernardino, around 50 miles east of where they had been flogging hotdogs. It would become the first McDonald’s restaurant.

Most takeout restaurants back then were drive-ins, where you would park, order food from your car, and wait for a “carhop” server to bring you your meal on a plate, with cutlery. The McDonald brothers noticed that this was a slow, disorganised process with pointless costly overheads.

So they invented fast food.

***

In 1948, they built what came to be known as the “speedy system” for a fast food kitchen from scratch. Dick was the inventor out of the two brothers - as well as the bespoke kitchen design, he came up with both the iconic giant yellow “M” and its nickname, the “Golden Arches”.

“My grandfather was an innovator, a man ahead of his time,” McDonald French tells me. “For someone who was [only] high school-educated to come up with the ideas and have the foresight to see where the food service business was going, is pretty remarkable.”


The McDonald brothers with a milkshake machine.

McDonald French is still amazed at his grandfather’s contraptions. “He was inventing machines to do this automated system, just off-the-cuff,” he recalls. “They were using heat lamps to keep food warm beforehand, before anyone had ever thought of such a thing. They customised their grills to whip the grease away to cook the burgers more efficiently. It was six-feet-long, which was just unheard of.”

Dick even custom-made ketchup and mustard dispensers – like metal fireplace bellows – to speed up the process of garnishing each burger. The brothers’ system, which also cut out waiting staff and the cost of buying and washing crockery and cutlery, brought customers hamburgers from grill to counter in 30 seconds.


The McDonald brothers as depicted in The Founder. Photo: The Founder

McDonald French recounts a story of the McDonald brothers working late into the night, drafting and redrafting a blueprint for the perfect speedy kitchen in chalk on their tennis court for hours. By 3am, when they finally had it all mapped out, they went to bed – deciding to put it all to paper the next day. The dry, desert climate of San Bernardino meant it hadn’t rained in months.

 “And, of course, it rained that night in San Bernardino – washed it all away. And they had to redo it all over again,” chuckles McDonald French.

In another hiccup when starting out, a swarm of flies attracted by the light descended on an evening event they put on to drum up interest in their restaurant, driving customers away.


An original McDonald's restaurant, as depicted in The Founder. Photo: The Founder

***

These turned out to be the least of their setbacks. As depicted in painful detail in John Lee Hancock’s film, Ray Kroc – then a milkshake machine salesman – took interest in their restaurant after they purchased six of his “multi-mixers”. It was then that the three men drew up a fateful contract. This signed Kroc as the franchising agent for McDonald’s, who was tasked with rolling out other McDonald’s restaurants (the McDonalds already had a handful of restaurants in their franchise). 

Kroc soon became frustrated at having little influence. He was bound by the McDonalds’ inflexibility and stubborn standards (they wouldn’t allow him to cut costs by purchasing powdered milkshake, for example). The film also suggests he was fed up with the lack of money he was making from the deal. In the end, he wriggled his way around the contract by setting up the property company “McDonald’s Corporation” and buying up the land on which the franchises were built.


Ray Kroc, as depicted in The Founder. Photo: The Founder

Kroc ended up buying McDonald’s in 1961, for $2.7m. He gave the brothers $1m each and agreeing to an annual royalty of half a per cent, which the McDonald family says they never received.

“My father told us about the handshake deal [for a stake in the company] and how Kroc had gone back on his word. That was very upsetting to my grandfather, and he never publicly spoke about it,” McDonald French says. “It’s probably billions of dollars. But if my grandfather was never upset about it enough to go after the Corporation, why would we?”

They lost the rights to their own name, and had to rebrand their original restaurant “The Big M”. It was soon put out of business by a McDonald’s that sprang up close by.


An original McDonald restaurant in Arizona. Photo: Flickr/George

Soon after that meal when the 11-year-old Jason saw Kroc smiling down from the plaque for the first time, he learned the true story of what had happened to his grandfather. “It’s upsetting to hear that your family member was kind of duped,” he says. “But my grandfather always had a great respect for the McDonald’s Corporation as a whole. He never badmouthed the Corporation publicly, because he just wasn’t that type of man.”

Today, McDonalds' corporate website acknowledges the McDonalds brothers as the founders of the original restaurant, and credits Kroc with expanding the franchise. The McDonald’s Corporation was not involved with the making of The Founder, which outlines this story. I have contacted it for a response to this story, but it does not wish to comment.

***

Dick McDonald’s principles jar with the modern connotations of McDonald’s – now a garish symbol of global capitalism. The film shows Dick’s attention to the quality of the food, and commitment to ethics. In one scene, he refuses a lucrative deal to advertise Coca Cola in stores. “It’s a concept that goes beyond our core beliefs,” he rants. “It’s distasteful . . . crass commercialism.”

Kroc, enraged, curses going into business with “a beatnik”.


Photo: The Founder

Dick’s grandson agrees that McDonald’s has strayed from his family’s values. He talks of his grandfather’s generosity and desire to share his wealth – the McDonald brothers gave their restaurant to its employees, and when Dick returned to New Hampshire after the sale, he used some of the money to buy new Cadillacs with air conditioning for his old friends back home.

“[McDonald’s] is definitely a symbol of capitalism, and it definitely sometimes has a negative connotation in society,” McDonald French says. “If it was still under what my grandfather had started, I imagine it would be more like In'N'Out Burger [a fast food chain in the US known for its ethical standards] is now, where they pay their employees very well, where they stick to the simple menu and the quality.”

He adds: “I don’t think it would’ve ever blossomed into this, doing salads and everything else. It would’ve stayed simple, had quality products that were great all the time.

“I believe that he [my grandfather] wasn’t too unhappy that he wasn’t involved with it anymore.”


The McDonald’s Museum, Ray Kroc’s first franchised restaurant in the chain. Photo: Wikimedia Commons

Despite his history, Dick still took his children and grandchildren to eat at McDonald’s together – “all the time” – as does Jason McDonald French with his own children now. He’s a cheeseburger enthusiast, while his seven-year-old youngest child loves the chicken nuggets. But there was always a supersize elephant in the room.

“My grandfather never really spoke of Ray Kroc,” he says. “That was always kind of a touchy subject. It wasn’t until years later that my father told us about how Kroc was not a very nice man. And it was the only one time I ever remember my grandfather talking about Kroc, when he said: ‘Boy, that guy really got me.’”

The Founder is in UK cinemas from today.

Anoosh Chakelian is senior writer at the New Statesman.