Posted on 05/19/2006 11:42:07 AM PDT by UnklGene
Your ‘Robber Baron,’ My American Hero -
Or at least that’s true in many cases
JONAH GOLDBERG
In terms of blunders, it’s not quite launching a land war in Southeast Asia, but one would still be well-advised not to rely on Nancy Pelosi for lessons on history or economics. “We are living in a new era of robber barons,” the woman-who-would-be-Speaker proclaimed recently. “The American consumer is paying record prices, while oil companies make record profits and make record contributions to Republicans.”
Ah, the Robber Barons: those bloody-lipped ghouls preying on the downtrodden. Clearly using the Liberal Field Guide to Spotting a Robber Baron, Pelosi mentions three keys to spotting one in the wild. First, the consumer — a.k.a. “the little guy” — is having a rough time. Second, some rich people — a.k.a. “fat cats” — are making some extra coin. And third, Republicans — a.k.a. “the focus of evil” — are benefiting in the process.
Andrew Carnegie, great for the poor
So entrenched is the Robber Baron epithet, in our textbooks and our culture, that we’ve come to think of them as an objective social class, as epistemologically real as “the poor” or “the middle class.” The reality is a bit different. One cannot say that the “robber barons” of the 19th century didn’t, in fact, exist — but the term is so freighted with partisanship that it distorts more than it reveals. It’s analogous to Ronald Reagan’s use of the term “welfare queens.” Indisputably, there were “welfare queens” in the sense that there were women who gamed the system for personal gain. But few would dispute that the term is highly partisan; imagine a school textbook 20, or 200, years from now using “welfare queen” as an objective, analytical term.
There were real robber barons — in the 12th and 13th centuries. These were feudal lords who controlled access to key transportation sites, like rivers, bridges, and mountain passes. They would extract exorbitant fees from desperate travelers with no choice but to pay. Sometimes they were simply highwaymen acting under the color of authority. So here is irony number one: The original robber barons weren’t businessmen at all, but grasping state officials.
In the 19th century the term emerged as a catchall for brigands, highwaymen, and carpetbaggers. After the Civil War, it was increasingly used to describe Carnegies and the like. But it wasn’t until Matthew Josephson’s intellectually bankrupt 1934 book, The Robber Barons: The Great American Capitalists, 1861–1901, that the term stuck as a description of those leeches of the liberal imagination. Josephson was a relentless partisan for socialist economics, and his book would have to be greatly improved to be considered shabby history. He took literally Balzac’s dictum that “behind every great fortune lies a great crime,” and assumed that wealth was by its very nature felonious.
There’s no disputing that the poor often had a rough time of it during America’s race through industrialization. One need not rehearse the hardships of the meatpacking industry to know that. But acknowledging this need not require buying into all the conspiratorial nonsense written into the Left’s psyche. Populists and socialists have a well-documented tendency to see villainous human agents behind superficially unwelcome historical forces. If a worker has a grievance, it must be because a bad man in a room somewhere wants it thus. The 1892 Populist platform captured this spirit nicely when it warned that “a vast conspiracy against mankind has been organized on two continents, and it is rapidly taking over the world.” This sort of thinking is inherent to any doctrine that places “class interests” at the center of political explanation. Marx may have championed the cold impersonal forces of history, but Marxists always see string-pullers, Shylocks, and “robber barons” behind the curtain.
Andrew Carnegie: great for the poor Ernest H. Mills/Getty Hulton Archive
The irony is that, if one actually looks at them through a colder, more impersonal prism, the so-called robber barons were actually great for the poor in the long run. From 1890 to 1910, U.S. GNP grew at 6 percent a year. According to historian Burton Folsom, in 1870 America was creating 23 percent of the world’s industrial goods, while Britain and Germany produced 30 and 13 percent respectively. By 1900, America was in first place with 30 percent; Britain fell to 20 percent, and Germany rose to 20 percent. In 1870, Britain was the world’s chief steel producer; by 1900, Andrew Carnegie alone made more steel than all of Great Britain.
And this wealth did more than simply “trickle down” to the poor. The robber barons didn’t “steal” their wealth from the working classes; they took a commission, and a pretty small one at that. Cotton magnate Edward Atkinson spelled it out. “Through competition among capitalists,” he wrote, “capital itself is every year more effective in production, and tends ever to increasing abundance. Under its working the commodities that have been the luxuries of one generation become the comforts of the next and the necessities of the third. . . . The plane of what constitutes a comfortable subsistence is constantly rising, and as the years go by greater and greater numbers attain this plane.”
Addressing some workers in 1886, Atkinson tried to explain how everyone gained from a free market. Cornelius Vanderbilt, Atkinson observed, made a profit of 14 cents from every barrel of flour shipped over his railroads. His efficiency lowered the price of flour for consumers. “Did Vanderbilt keep any of you down,” challenged Atkinson, “by saving you $2.75 on a barrel of flour, while he was making 14 cents?”
The wealth created by the robber barons benefited the poor in indirect ways as well. Just drive around the country and count the number of libraries, schools, museums, and parks that would not exist but for the largess of the predatory wealthy. Without the Morgans, Gettys, Rockefellers, Goulds, and Vanderbilts, few of the truly great cultural institutions we take for granted would be standing today. Carnegie poured millions of dollars into public libraries across the country in order to provide “ladders within reach upon which the aspiring can rise.”
None of this is to say that all the robber barons earned a pass through the pearly gates. Folsom, for example, rightly distinguishes between industrialists who made their money as entrepreneurs and those who gamed the political system. The Union Pacific and Central Pacific railroads were giant pork projects, and the work ended up being shabby and overpriced. But James J. Hill’s Great Northern Railroad was a cathedral of both quality and entrepreneurialism, largely because the government stayed out of it.
A similar distinction obtains today. Oil companies are in no way “feeding off” the poor: Oil-industry profits are proportionately quite unremarkable, they just seem enormous because of the enormous investments required to create them. There are high gas prices — but these are the intentional result of liberal policies. Gas additives, restrictions on oil exploration and refining, and other environmental regulations keep prices high as, of course, do gas taxes — taxes liberals consistently seek to raise. Indeed, Pelosi and Chuck Schumer — who parrots the robber-baron argument — have repeatedly voted to raise taxes on gas and energy generally. According to Pelosi and Schumer, high gas prices are — in and of themselves — proof of predation on the little guy. What they leave out is that, except for the years 1981–83, there has never been a year in which oil-company profits exceeded the amount government has charged for gas in the form of taxes.
And that’s the biggest irony of all. People have to buy gas, and — by definition — gas companies have to sell it. The highwayman here taking advantage of the wayward traveler is the government itself. But none dare call Uncle Sam a Robber Baron.
The "Robber Barons" of today are the ones who do NOT want to REMOVE the Estate Tax.....because they have so many millions they protect their money in Foundations (and hire their friends and relatives) and, they've ALREADY GOT THEIRS....i.e. Wm. Gates, Sr....Warren Buffet.
OR....they buy out the littler guys when they're faced with Estate Taxes which would destroy their businesses....i.e. Warren Buffet....
A wonderful turn of phrase.
Only slightly less well known is "never go in against a Sicilian, when death is on the line".
ping
Excellent article, thanks for posting it.
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