"There's a big difference between entrepreneurs who make a fortune in the market, and those who do so by gaming the government."
The Myth of the Robber Barons
Robber Barons. The very phrase speaks of mystery, intrigue, power, and deeds that no truly compassionate human being could ever commit in good conscience. Despite the negative connotations this label often brings to mind, a look at who these men really were and how they became successful reveals a different story than the one commonly perpetuated in American history today.
The "Robber Barons" were a group of entrepreneurs who furthered American industrialization and economic growth during the late-19th and early-20th centuries. Their business acumen led men such as Cornelius Vanderbilt, Andrew Carnegie, Jay Gould, J. P. Morgan, John D. Rockefeller, and James J. Hill to amass incredible fortunes for themselves, while at the same time dramatically innovating, improving efficiency, and lowering prices in the steel, oil, and railroad industries.
The great wealth, power, and connections these men accumulated naturally made them appear greedy and exploitative to the average American. The image of these men as profiting at the expense of the poor and working class prompted connections being made between their lives and those of the "old German barons who, from their eyries along the Rhine, swooped down upon the commerce of the noble river, and wrung tribute from every passenger that floated by."
Exposés such as Ida Tarbell’s The History of the Standard Oil Company and Henry Lloyd Demarest’s Wealth Against Commonwealth further advanced the idea that America’s "captains of industry" were engaged in monopolistic practices harmful to the American economy. However, it was Matthew Josephson’s work in the mid-1930s that officially branded the "great American capitalists" as Robber Barons. Emphasizing the Robber Baron’s quest for gain and control at any cost, Josephson’s picture of these men soon became commonplace in the history books.
Recent scholarship has begun to reassess this portrait, claiming that those who criticized the Robber Barons were not true historians, but "moralist[s] who cared less about the accuracy of the story than about the ideological message." According to historian Burt Folsom, for example, the Robber Barons were simply successful "market entrepreneurs" who "contributed to American prosperity, and prepared the way for future innovation." A majority of these men actually started out poor, saw a need, sought to fulfill it, and then through thrift and care, built their businesses into what we now view as massive empires. A prime example of this is John D. Rockefeller, who, as records indicate, was scrupulously careful to make his oil refining process the cheapest and most efficient.
Recent scholarship has also begun to contest the idea that the Robber Barons were greedy, obsessed with profit, and had little concern for the well-being of the masses. The actions of these men suggest that they were generous and eager to help the less fortunate through their wealth. Once again, this was demonstrated through Rockefeller's life, as he was the "first man in America to give away a billion dollars." His philanthropy seems to have been motivated by his religious values; he distributed much of his charity through a Baptist affiliated society, which in turn used his money to advance many educational institutions and charitable efforts for minorities.
Rockefeller also believed that true philanthropy was much more than simply handing out money. In his mind,
“The best philanthropy, the help that does the most good and the least harm, the help that nourishes civilization at its very root, that most widely disseminates health, righteousness, and happiness, is not what is usually called charity. It is, in my judgment, the investment of effort or time or money, carefully considered with relation to the power of employing people at a remunerative wage, to expand and develop the resources at hand, and to give opportunity for progress and healthful labour where it did not exist before. No mere money-giving is comparable to this in its lasting and beneficial results.”
Another common accusation against the Robber Barons suggests that they manipulated government for their own purposes. While it is true that some classed as Robber Barons were "political entrepreneurs" ready and willing to take advantage of government favors, others such as Cornelius Vanderbilt and James J. Hill rejected government subsidies and programs, seeking instead to build their wealth with private finances and entrepreneurial ingenuity. Indeed, as Hill once noted, "the wealth of the country, its capital, its credit, must be saved from the predatory poor as well as the predatory rich, but above all from the predatory politician."
Despite their success and contribution to American economic growth and prosperity, calls for restraining their wealth and power eventually led to the passage of the Sherman Antitrust Act. Today the idea of "Robber Barons" is still influencing policy proposals. Indeed, some individuals believe more needs to be done to prevent modern day corporations such as Microsoft, Walmart, Google, and Apple from following in the footsteps of Rockefeller, Carnegie, Hill, et al.
This topic explores the lives and actions of the 19th century Robber Barons. It includes research, commentary, the Robber Barons' personal writings, and accounts by their contemporaries in order to paint a more comprehensive picture of these men, their role in American history and relevance today.
More About This Topic...
Click thumbnails below to view links