Finance:Robber baron (industrialist)

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Short description: Term used for American Gilded Age businessmen accused of using unscrupulous methods to get rich
1904 depiction of an acquisitive and manipulative business enterprise (Standard Oil) as an all-powerful octopus

Robber baron is a term of social criticism originally applied to certain wealthy and powerful 19th-century American businessmen. The term appeared as early as the August 1870 issue of The Atlantic Monthly[1] magazine. By the late 19th century, the term was typically applied to businessmen who used exploitative practices to amass their wealth.[2] Those practices included unfettered consumption and destruction of natural resources, influencing high levels of government, wage slavery, squashing competition by acquiring their competitors to create monopolies and/or trusts that control the market, and schemes to sell stock at inflated prices to unsuspecting investors.[2] The term combines the sense of criminal ("robber") and illegitimate aristocracy (a baron is an illegitimate role in a republic).[3]

Usage

The term robber baron derives from the Raubritter (robber knights), the medieval German lords who charged nominally illegal tolls (unauthorized by the Holy Roman Emperor) on the primitive roads crossing their lands,[4] or larger tolls along the Rhine river.

The metaphor appeared as early as February 9, 1859, when The New York Times used it to characterize the business practices of Cornelius Vanderbilt. Historian T.J. Stiles says the metaphor "conjures up visions of titanic monopolists who crushed competitors, rigged markets, and corrupted government. In their greed and power, legend has it, they held sway over a helpless democracy."[5] Hostile cartoonists might dress the offenders in royal garb to underscore the offense against democracy.[3]

The first such usage was against Vanderbilt, for taking money from high-priced, government-subsidized shippers, in order to not compete on their routes. Political cronies had been granted special shipping routes by the state, but told legislators their costs were so high that they needed to charge high prices and still receive extra money from the taxpayers as funding. Vanderbilt's private shipping company began running the same routes, charging a fraction of the price, making a large profit without taxpayer subsidy. The state-funded shippers then began paying Vanderbilt money to not ship on their route. A critic of this tactic drew a political comic depicting Vanderbilt as a feudal robber baron extracting a toll.

In his 1934 book The Robber Barons: The Great American Capitalists 1861-1901, Matthew Josephson argued that the industrialists who were called robber barons have a complicated legacy in the history of American economic and social life. In the book's original foreword, he claims the robber barons:

"more or less knowingly played the leading roles in an age of industrial revolution. Even their quarrels, intrigues and misadventures (too often treated as merely diverting or picturesque) are part of the mechanism of our history. Under their hands the renovation of our economic life proceeded relentlessly : large-scale production replaced the scattered, decentralized mode of production ; industrial enterprises became more concentrated, more “efficient” technically, and essentially “coöperative,” where they had been purely individualistic and lamentably wasteful. But all this revolutionizing effort is branded with the motive of private gain on the part of the new captains of industry. To organize and exploit the resources of a nation upon a gigantic scale, to regiment its farmers and workers into harmonious corps of producers, and to do this only in the name of an uncontrolled appetite for private profit—here surely is the great inherent contradiction whence so much disaster, outrage and misery has flowed.[6]

Charles R. Geisst says, "in a Darwinist age, Vanderbilt developed a reputation as a plunderer who took no prisoners."[7] Hal Bridges said that the term represented the idea that "business leaders in the United States from about 1865 to 1900 were, on the whole, a set of avaricious rascals who habitually cheated and robbed investors and consumers, corrupted government, fought ruthlessly among themselves, and in general carried on predatory activities comparable to those of the robber barons of medieval Europe."[8]

Criticism

Historian Richard White argues that the builders of the transcontinental railroads have attracted a great deal of attention but the interpretations are contradictory: at first very hostile and then very favorable. At first, White says, they were depicted as:

Robber Barons, standing for a Gilded Age of corruption, monopoly, and rampant individualism. Their corporations were the Octopus, devouring all in its path. In the twentieth century and the twenty-first they became entrepreneurs, necessary business revolutionaries, ruthlessly changing existing practices and demonstrating the protean nature of American capitalism. Their new corporations also transmuted and became manifestations of the "Visible Hand," managerial rationality that eliminated waste, increased productivity and brought bourgeois values to replace those of financial buccaneers.[9]

1860s–1920s

Historian John Tipple examined the writings of the 50 most influential analysts who used the robber baron model in the 1865–1914 period. He argued:

The originators of the Robber Baron concept were not the injured, the poor, the faddists, the jealous, or a dispossessed elite, but rather a frustrated group of observers led at last by protracted years of harsh depression to believe that the American dream of abundant prosperity for all was a hopeless myth. ... Thus the creation of the Robber Baron stereotype seems to have been the product of an impulsive popular attempt to explain the shift in the structure of American society in terms of the obvious. Rather than make the effort to understand the intricate processes of change, most critics appeared to slip into the easy vulgarizations of the "devil-view" of history which ingenuously assumes that all human misfortunes can be traced to the machinations of an easily located set of villains—in this case, the big businessmen of America. This assumption was clearly implicit in almost all of the criticism of the period.[10]

1930s–1970s

American historian Matthew Josephson further popularized the term during the Great Depression in his book, published in 1934.[6] Josephson's view was that, like the medieval German princes, American big businessmen had amassed huge fortunes immorally, unethically, and unjustly. This theme was popular during the Great Depression of the 1930s, when the public often expressed scorn for big business. Historian Steve Fraser notes that the mood was sharply hostile toward big business:

Biographies of Mellon, Carnegie and Rockefeller were often laced with moral censure, warning that "tories of industry" were a threat to democracy and that parasitism, aristocratic pretension and tyranny are an inevitable consequence of concentrated wealth, whether accumulated dynastically or more impersonally by faceless corporations. This scholarship, and the cultural persuasion of which it was an expression, drew on a deeply rooted feeling that was partly religious and partly egalitarian and democratic, a sensibility stretching back to William Jennings Bryan, Andrew Jackson, and Tom Paine.[11]

However, contrary opinions by academic historians began to appear as the Depression ended. Business historian Allan Nevins advanced the "Industrial Statesman" thesis in his John D. Rockefeller: The Heroic Age of American Enterprise (2 vols., 1940), arguing that while Rockefeller engaged in unethical and illegal business practices, he also helped to bring order to the industrial chaos of the day. According to Nevins, it was Gilded Age capitalists who, by imposing order and stability on competitive business, made the United States the foremost economy by the 20th century.[12]

In 1958 Bridges reported that, "The most vehement and persistent controversy in business history has been that waged by the critics and defenders of the "robber baron" concept of the American businessman."[13] Richard White, historian of the transcontinental railroads, stated in 2011 he has no use for the concept, which has been killed off by historians Robert Wiebe and Alfred Chandler. He notes that "Much of the modern history of corporations is a reaction against the Robber Barons and fictions."[14]

Recent approaches

In the popular culture the metaphor continues. In 1975 the student body of Stanford University voted to use "Robber Barons" as the nickname for their sports teams. However, school administrators disallowed it, saying it was disrespectful to the school's founder, Leland Stanford.[15]

In academia, the education division of the National Endowment for the Humanities has prepared a lesson plan for schools asking whether "robber baron" or "captain of industry" is the better term. They state:

In this lesson, you and your students will attempt to establish a distinction between robber barons and captains of industry. Students will uncover some of the less honorable deeds as well as the shrewd business moves and highly charitable acts of the great industrialists and financiers. It has been argued that only because such people were able to amass great amounts of capital could our country become the world's greatest industrial power. Some of the actions of these men, which could only happen in a period of economic laissez faire, resulted in poor conditions for workers, but in the end, may also have enabled our present day standard of living.[16]

This debate about the morality of certain business practices has continued in the popular culture, as in the performances in Europe in 2012 by Bruce Springsteen, who sang about bankers as "greedy thieves" and "robber barons".[17] During the Occupy Wall Street protests of 2011, the term was used by Vermont Senator Bernie Sanders in his attacks on Wall Street.[18]

The metaphor has also been used to characterize Russian businessmen allied to Vladimir Putin.[19]

The leaders of Big Tech companies have all been described as being modern-day robber barons, particularly Jeff Bezos because of his influence on his newspaper, The Washington Post .[20] Their rising wealth and power stands in contrast with the shrinking middle class.[21]

In contrast, Burton W. Folsom argues that the robber barons were either political entrepreneurs (who lobby government for subsidies and monopoly rights), or market entrepreneurs (who innovate and reduce costs to provide the best good or service at the lowest price). Political entrepreneurs do long-term harm to the economy with their monopolies and subsidies. This provides politicians with a pretext to insist that increased planning and increased regulation is the appropriate remedy.[22]

List of businessmen labelled as robber barons

1901 US cartoon from Puck depicting John D. Rockefeller as a powerful monarch.

Individuals identified in Josephson's Robber Barons (1934):

  • John Jacob Astor (real estate, fur) – New York
  • Andrew Carnegie (steel) – Pittsburgh and New York
  • Jay Cooke (finance) – Philadelphia
  • Charles Crocker (railroads) – California
  • Edward L. Doheny (oil) – California
  • Daniel Drew (finance) – New York
  • James Buchanan Duke (tobacco, electric power) – Durham, North Carolina
  • James Fisk (finance) – New York
  • Henry Morrison Flagler (Standard Oil, railroads) – New York and Florida[23]
  • Henry Clay Frick (steel) – Pittsburgh and New York
  • John Warne Gates (barbed wire, oil) – Texas[24]
  • Jay Gould (railroads) – New York[25]
  • E. H. Harriman (railroads) – New York[26]
  • James J. Hill (fuel, coal, steamboats, railroads) – St Paul, Minnesota
  • Collis Potter Huntington (railroads) – California, Virginia, West Virginia
  • Andrew Mellon (finance, oil) – Pittsburgh
  • J. P. Morgan (finance, industrial consolidation) – New York
  • John D. Rockefeller (Standard Oil) – Cleveland, Ohio
  • Henry Huttleston Rogers (Standard Oil, copper), New York[27]
  • Thomas Fortune Ryan (public transit, tobacco) – New York
  • Russell Sage (finance, railroads) – New York
  • Charles M. Schwab (steel) – Pittsburgh and New York
  • Leland Stanford (railroads) – California
  • Cornelius Vanderbilt (water transport, railroads) – New York[28]
  • Peter Widener (public transportation) – Philadelphia, Pennsylvania
  • Charles Tyson Yerkes (street railroads) – Chicago[29]

Identified as "robber barons" by other sources:

  • William A. Clark (copper) – Butte, Montana[30]
  • James Dunsmuir (coal, lumber) – Victoria, BC Canada[31]
  • Marshall Field (retail) – Chicago[32]
  • William Randolph Hearst (media mogul) – California[33][34]
  • Charles T. Hinde (railroads, water transport, shipping, hotels) – Illinois, Missouri, Kentucky, California
  • Mark Hopkins Jr. (railroads) – California
  • John C. Osgood (coal mining, iron) – Colorado[35]
  • Henry B. Plant (railroads) – Florida[36]
  • A. S. W. Rosenbach (antique bookdealer) – Philadelphia[37]
  • Joseph Seligman (banking) – New York
  • John D. Spreckels (water transport, railroads, sugar) – California

See also

References

  1. ↑ Baldwin, Lida F. (1907). "Unbound Old Atlantics". The Atlantic Monthly C (November 1907): 683. 
  2. ↑ 2.0 2.1 Dole, Charles F. (1907). "The Ethics of Speculation". The Atlantic Monthly C (December 1907): 812–818. 
  3. ↑ 3.0 3.1 Worth Robert Miller, Populist cartoons: an illustrated history of the third-party movement in the 1890s (2011) p. 13
  4. ↑ Alden, Henry Mills (November 1894). "A Romance of the New Era". Harper's New Monthly Magazine LXXXIX (DXXXIV). https://books.google.com/books?id=Y4UAAAAAYAAJ&pg=PT26. Retrieved 2009-07-10. 
  5. ↑ T. J. Stiles, "Robber Barons or Captains of Industry?" , History Now 24, June 2010
  6. ↑ 6.0 6.1 Matthew Josephson, The Robber Barons: The Great American Capitalists, 1861–1901, New York: Harcourt, Brace and Company, 1934.
  7. ↑ Charles R. Geisst (1997). Wall Street : A History. Oxford UP. p. 77. ISBN 978-0-19-511512-3. https://archive.org/details/wallstreethistor00geis. 
  8. ↑ Hal Bridges, "The robber baron concept in American history." Business History Review 32#1 (1958): 1–13, page 1.
  9. ↑ Richard White (2011). Railroaded: The Transcontinentals and the Making of Modern America. W. W. Norton. p. 230. ISBN 978-0393342376. https://archive.org/details/railroadedtransc0000whit. 
  10. ↑ John Tipple, "The anatomy of prejudice: Origins of the robber baron legend." Business History Review 33#4 (1959): 510–523, quoting pp. 510, 521.
  11. ↑ Steve Fraser,"The Misunderstood Robber Baron: On Cornelius Vanderbilt: T.J. Stiles's The First Tycoon is a gilded portrait of the robber baron Cornelius Vanderbilt," The Nation Nov. 11, 2009
  12. ↑ Allan Nevins, John D. Rockefeller: The Heroic Age of American Enterprise, 2 vols., New York, C. Scribner's Sons, 1940.
  13. ↑ Bridges, "The robber baron concept in American history." p. 1
  14. ↑ Richard White, Railroaded: The Transcontinentals and the Making of Modern America (2011) pp. xxxi, 234, 508
  15. ↑ John R. Thelin, "California and the Colleges," California Historical Quarterly (1977) 56#2 pp. 140–63 [149].
  16. ↑ "The Industrial Age in America: Robber Barons and Captains of Industry" EDSITEment! The Best of the humanities on the web."
  17. ↑ Erik Kirschbaum, "Bruce Springsteen: Bankers Are 'Greedy Thieves'" Reuters May 31, 2012
  18. ↑ Bernie Sanders (2015). Outsider in the White House. Verso Books. p. 278. ISBN 978-1784784195. https://books.google.com/books?id=mGIyCgAAQBAJ&pg=PT278. 
  19. ↑ David O. Whitten, "Russian robber barons: Moscow business, American style." European Journal of Law and Economics 13#3 (2002): 193–201.
  20. ↑ Dana Milbank, "How did tech CEOs do on Capitol Hill? Google 'robber barons.'" The Washington Post Jul. 29, 2020
  21. ↑ Brett Arends, "Why the middle class is shrinking," MarketWatch Apr. 22, 2019
  22. ↑ Burton Folsom (1991) The Myth of the Robber Barons: A New Look at the Rise of Big Business in America ISBN:978-0963020307
  23. ↑ David Leon Chandler, Henry Flagler: The Astonishing Life and Times of the Visionary Robber Baron Who Founded Florida (1986)
  24. ↑ George C. Kohn (2001). The New Encyclopedia of American Scandal. Infobase Publishing. p. 152. ISBN 9781438130224. https://books.google.com/books?id=uzdWTBytwAIC&pg=PA152. 
  25. ↑ Edward Renehan, Dark Genius of Wall Street: The Misunderstood Life of Jay Gould, King of the Robber Barons (2005)
  26. ↑ Keys, C. M. (January 1906). "The Overlords of Railroad Traffic: The Seven Men Who Reign Supreme". The World's Work: A History of Our Time XIII: 8437–8445. https://books.google.com/books?id=3IfNAAAAMAAJ&pg=PA8437. Retrieved 2009-07-10. 
  27. ↑ Martin Naparsteck; Michele Cardulla (2013). Mrs. Mark Twain: The Life of Olivia Langdon Clemens, 1845–1904. McFarland. p. 109. ISBN 9780786472611. https://books.google.com/books?id=0XQmAgAAQBAJ&pg=PA109. 
  28. ↑ T. J. Stiles, The First Tycoon: The Epic Life of Cornelius Vanderbilt (2010) p 328
  29. ↑ John Franch, Robber Baron: The Life of Charles Tyson Yerkes (2008)
  30. ↑ Charles O'Brien (2013). Death of a Robber Baron. Kensington. p. 289. ISBN 9780758286369. https://archive.org/details/deathofrobberbar0000obri. 
  31. ↑ Jepson, Tim (2004) (in en). The Rough Guide to Vancouver. Rough Guides. ISBN 9781843532453. https://books.google.com/books?id=BpE2VB3itG0C&q=dunsmuir+robber+baron&pg=PA230. 
  32. ↑ Dreiser, Theodore (2010). Mulligan, Roark. ed. The Financier: The Critical Edition. U. of Illinois Press. p. 559. ISBN 9780252035043. https://books.google.com/books?id=a9M4mXpVMecC&pg=PA559. 
  33. ↑ Denning, Michael (1996). The Cultural Front: The Laboring of American Culture in the Twentieth Century. London, New York: Verso. p. 173. ISBN 9781844674640. https://archive.org/details/culturalfrontlab0000denn/page/173. 
  34. ↑ Stone, Oliver (2012). The Untold History of the United States. New York: Gallery Books. ISBN 9780091949310. 
  35. ↑ "The Redstone Story re-lives the industrialization of the West" Redstone, Colorado website, history
  36. ↑ Encyclopedia of American Social History. Scribner. 1993. pp. 1064 vol 2. ISBN 9780684192468. https://books.google.com/books?id=WkIRAQAAMAAJ. 
  37. ↑ Dickinson, Donald C. (1998) (in en). Dictionary of American Antiquarian Bookdealers. Greenwood Publishing Group. pp. 183. ISBN 9780313266751. https://books.google.com/books?id=x-6PBX7crnQC&q=Moses+Polock. 

Further reading

  • Beatty, Jack. (2008). Age of Betrayal: The Triumph of Money in America, 1865–1900 Vintage Books. ISBN:1400032423
  • Bridges, Hal. (1958) "The Robber Baron Concept in American History" Business History Review (1958) 32#1 pp. 1–13 in JSTOR
  • Burlingame, D.F. Ed. (2004). Philanthropy in America: A comprehensive historical encyclopaedia (3 vol. ABC Clio).[ISBN missing]
  • Cochran, Thomas C. (1949) "The Legend of the Robber Barons." Explorations in Economic History 1#5 (1949) online.
  • Fraser, Steve. (2015). The Age of Acquiescence: The Life and Death of American Resistance to Organized Wealth and Power Little, Brown and Company. ISBN:0316185434
  • Harvey, Charles, et al. "Andrew Carnegie and the foundations of contemporary entrepreneurial philanthropy." Business History 53.3 (2011): 425–450. online
  • Jones, Peter d'A. ed. (1968). The Robber Barons Revisited (1968) excerpts from primary and secondary sources.[ISBN missing]
  • Marinetto, M. (1999). "The historical development of business philanthropy: Social responsibility in the new corporate economy" Business History 41#4, 1–20.
  • Ostrower, F. (1995). Why the wealthy give: The culture of elite philanthropy (Princeton UP).[ISBN missing]
  • Ostrower, F. (2002). Trustees of culture: Power, wealth and status on elite arts boards (U of Chicago: Press).[ISBN missing]
  • Josephson, Matthew. (1934). The Robber Barons: The Great American Capitalists, 1861–1901 [ISBN missing]
  • Taylor, Marilyn L.; Robert J. Strom; David O. Renz (2014). Handbook of Research on Entrepreneurs: Engagement in Philanthropy: Perspectives. Edward Elgar. pp. 1–8. ISBN 978-1783471010. https://books.google.com/books?id=kQ7oAwAAQBAJ&pg=PA1. 
  • Wren, D.A. (1983) "American business philanthropy and higher education in the nineteenth century" Business History Review. 57#3 321–346.
  • Zinn, Howard. (2005). "Chapter 11: Robber Barons and Rebels" from A People's History of the United States Harper Perennial. ISBN:0060838655

External links



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