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The Myth of the Robber Barons: A New Look at the Rise of Big Business in America
The Myth of the Robber Barons describes the role of key entrepreneurs in the economic growth of the United States from 1850 to 1910. The entrepreneurs studied are Cornelius Vanderbilt, John D. Rockefeller, James J. Hill, Andrew Mellon, Charles Schwab, and the Scranton family. Most historians argue that these men, and others like them, were Robber Barons. The story, however, is more complicated. The author, Burton Folsom, divides the entrepreneurs into two groups market entrepreneurs and political entrepreneurs. The market entrepreneurs, such as Hill, Vanderbilt, and Rockefeller, succeeded by producing a quality product at a competitive price. The political entrepreneurs such as Edward Collins in steamships and in railroads the leaders of the Union Pacific Railroad were men who used the power of government to succeed. They tried to gain subsidies, or in some way use government to stop competitors. The market entrepreneurs helped lead to the rise of the U. S. as a major economic power. By 1910, the U. S. dominated the world in oil, steel, and railroads led by Rockefeller, Schwab (and Carnegie), and Hill. The political entrepreneurs, by contrast, were a drain on the taxpayers and a thorn in the side of the market entrepreneurs. Interestingly, the political entrepreneurs often failed without help from government they could not produce competitive products. The author describes this clash of the market entrepreneurs and the political entrepreneurs. In the Mellon chapter, the author describes how Andrew Mellon an entrepreneur in oil and aluminum became Secretary of Treasury under Coolidge. In office, Mellon was the first American to practice supply-side economics. He supported cuts on income tax rates for all groups. The rate cut on the wealthiest Americans, from 73 percent to 25 percent, freed up investment capital and led to American economic growth during the 1920s. Also, the amount of revenue into the federal treasury increased sharply after tax rates were cut. The Myth of the Robber Barons has separate chapters on Vanderbilt, Hill, Schwab, Mellon, and the Scrantons. The author also has a conclusion, in which he looks at the textbook bias on the subject of Robber Barons and the rise of the U. S. in the late 1800s. This chapter explores three leading college texts in U. S. history and shows how they misread American history and disparage market entrepreneurs instead of the political entrepreneurs. This book is in its fifth edition, and is widely adopted in college and high school classrooms across the U. S.
356 pages, Kindle Edition
First published January 1, 1991
108 people are currently reading
1760 people want to read
About the author
Burton W. Folsom Jr.
14 books54 followersBurton W. Folsom, Jr. (born 1947 in Nebraska) is an American historian and author who holds the Charles F. Kline chair in history and management at Hillsdale College and is a senior fellow in economic education for the Mackinac Center for Public Policy.
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Displaying 1 - 30 of 105 reviews
December 29, 2022
14 Aug. 2017 - I remember reading this shortly after it came out in the late 80s or early 90s when the title was "Entrepreneurs vs. the State". I believe this newer edition has only relatively minor edit changes from the one I read. I have since referred to the book many times to show folks the real history of the famous businessmen who created some of the first great companies in America and provided massive benefits to consumers, often battling the government as well as trying to continue to serve consumers better than competitors.
Very good start at attacking the Robber Baron myth, though much more scholarship still needs to be done to dislodge that common yet very pernicious bias.
Highly recommended.
Those highlighted include:
Cornelius Vanderbuilt
John D. Rockefeller
James J. Hill
and others
Very good start at attacking the Robber Baron myth, though much more scholarship still needs to be done to dislodge that common yet very pernicious bias.
Highly recommended.
Those highlighted include:
Cornelius Vanderbuilt
John D. Rockefeller
James J. Hill
and others
August 7, 2011
I don't usually read history books, but this one was a Conservative viewpoint on history's "robber barrons." Granted, i'm not a conservative, but i really appreciate their different viewpoint on economics and govert's effects on the major businesses of the 1800's and early 1900's, mainly Railroad, Steel, and Ferry. The book discusses Vanderbilt, Hill, Rockefeller, and many other important men from that period and their struggle against gov't regulation. The final chapter discusses other history textbook's omissions and "incorrect" information. Whether you agree with the book or not, I enjoyed reading it and I recommend it to all people living in america today. It's always good to get a variety of viewpoints. And it was a pretty quicky and easy read, really easy for a non-economics, non-history, non-politics individual like myself to understand.
August 24, 2012
I'm putting this one in history and avoiding the decision as to whether to shelve it in fiction or non-fiction.
Much of what Folsom says is undeniably true, and his data do support his conclusions--but it's also undeniably true that he's cherry picking his data.
I am aware of how much he left out or misrepresented in the subjects I know something about, which made me suspicious of him on the rest.
I would love to see this work handled by an objective writer, but I doubt it will ever happen.
Whatever your political (or fiscal) leanings, go ahead and read the book; but be prepared to season it with a few grains of salt.
Much of what Folsom says is undeniably true, and his data do support his conclusions--but it's also undeniably true that he's cherry picking his data.
I am aware of how much he left out or misrepresented in the subjects I know something about, which made me suspicious of him on the rest.
I would love to see this work handled by an objective writer, but I doubt it will ever happen.
Whatever your political (or fiscal) leanings, go ahead and read the book; but be prepared to season it with a few grains of salt.
May 12, 2011
I recently read The Myth of the Robber Barons by Burton C. Folsom Jr. (non-fiction). This short book is a great overview of some of the 19th Century capitalists that built America and contributed to raising the standard of living. Contrary to popular opinion, many of them came from humble roots and worked to build their business, without climbing over the backs of the poor, oppressed common people.
The book definitely has a free-market slant that it backs up with facts and a seemingly thorough, in-depth bibliography. There are plenty of references for further investigation of specific individuals.
James J. Hill, builder of the Great Northern Railway, is covered in the book. He is supposedly the inspiration for Ayn Rand's use of railroads in her epic work Atlas Shrugged.
I enjoyed the piece on John D. Rockefeller as I had read God's gold: the story of Rockefeller and his times by John Thomas Flynn. (It's available to read free, online, as linked.) This book was written in 1932, before Rockefeller's death in 1937. It is as much a history of oil discovery and production in Pennsylvania as an examination of Rockefeller. In my proverbial spare time and for a different perspective I'd also like to read THE HISTORY OF THE STANDARD OIL COMPANY by IDA M. TARBELL (written 1904, available free, online as linked also). Wikipedia says about her "She was known as one of the leading "muckrakers" of the progressive era, work known in modern times as "investigative journalism"."
A few things I learned from Robber Barons: There were Political Entrepreneurs and Market Entrepreneurs. The Political types relied on government support and subsidies, the Market types used “free-market” business tactics. Market entrepreneurs like Cornelius Vanderbilt (steamships) and John D. Rockefeller succeeded by cutting costs. This greatly reduced consumer prices.
Andrew Mellon, of the Mellon banking family, and Secretary of the Treasury during the 1920′s, advocated and put into practice reduced federal taxes in order to increase federal revenues. What a novel idea! It’s what modern-day Republicans propose and Democrats oppose.
Myth of the Robber Barons is a excellent read. I recommend it.
The book definitely has a free-market slant that it backs up with facts and a seemingly thorough, in-depth bibliography. There are plenty of references for further investigation of specific individuals.
James J. Hill, builder of the Great Northern Railway, is covered in the book. He is supposedly the inspiration for Ayn Rand's use of railroads in her epic work Atlas Shrugged.
I enjoyed the piece on John D. Rockefeller as I had read God's gold: the story of Rockefeller and his times by John Thomas Flynn. (It's available to read free, online, as linked.) This book was written in 1932, before Rockefeller's death in 1937. It is as much a history of oil discovery and production in Pennsylvania as an examination of Rockefeller. In my proverbial spare time and for a different perspective I'd also like to read THE HISTORY OF THE STANDARD OIL COMPANY by IDA M. TARBELL (written 1904, available free, online as linked also). Wikipedia says about her "She was known as one of the leading "muckrakers" of the progressive era, work known in modern times as "investigative journalism"."
A few things I learned from Robber Barons: There were Political Entrepreneurs and Market Entrepreneurs. The Political types relied on government support and subsidies, the Market types used “free-market” business tactics. Market entrepreneurs like Cornelius Vanderbilt (steamships) and John D. Rockefeller succeeded by cutting costs. This greatly reduced consumer prices.
Andrew Mellon, of the Mellon banking family, and Secretary of the Treasury during the 1920′s, advocated and put into practice reduced federal taxes in order to increase federal revenues. What a novel idea! It’s what modern-day Republicans propose and Democrats oppose.
Myth of the Robber Barons is a excellent read. I recommend it.
February 9, 2016
The Myth of the Robber Barons distinguishes between two types of entrepreneurs:
Market Entrepreneurs-a person who organizes and operates a business, taking on financial risk to do so. In order to turn a profit, the market entrepreneur must satisfy consumer demand.
Political Entrepreneurs-A political entrepreneur uses government funds in business, which greatly reduces any financial risks to the entrepreneur, and often lobbies to pass laws that hinder competitors.
Burton C. Folsom Jr. does a great job of describing some of the most notable businessmen and showing which of the above categories apply most. He persuasively argues that subsidies to political entrepreneurs were often a detriment to consumers and businessmen acting as a market entrepreneur often benefited the public substantially.
While I do agree with the author's assertions, I do recommend taking this with a grain of salt. At times he comes across as an apologist for some businessmen, who although are often unreasonably criticized, were not exactly perfect either. Regardless, it's always good to hear (or read) both sides and this is definitely a side of the story you weren't taught in school.
Market Entrepreneurs-a person who organizes and operates a business, taking on financial risk to do so. In order to turn a profit, the market entrepreneur must satisfy consumer demand.
Political Entrepreneurs-A political entrepreneur uses government funds in business, which greatly reduces any financial risks to the entrepreneur, and often lobbies to pass laws that hinder competitors.
Burton C. Folsom Jr. does a great job of describing some of the most notable businessmen and showing which of the above categories apply most. He persuasively argues that subsidies to political entrepreneurs were often a detriment to consumers and businessmen acting as a market entrepreneur often benefited the public substantially.
While I do agree with the author's assertions, I do recommend taking this with a grain of salt. At times he comes across as an apologist for some businessmen, who although are often unreasonably criticized, were not exactly perfect either. Regardless, it's always good to hear (or read) both sides and this is definitely a side of the story you weren't taught in school.
December 13, 2021
There is a perception that most of the industrialists who developed new ways of solving business problems between 1820 and 1930, enriching themselves in the process, were greedy, unethical and harmful to their customers. This perception is strongly repudiated by Burton Folsom in The Myth of the Robber Barons as he demonstrates how college textbooks and other media have irresponsibly perpetuated erroneous versions of economic history.
Dr. Folsom carefully distinguishes between political entrepreneurs, such as Robert Fulton (steamboats) and market entrepreneurs, such as Cornelius Vanderbilt (steamboats and railroads). The political entrepreneurs relied on government subsidies and other preferential treatment to develop new industries in ways that legislators thought would be beneficial, but these political entrepreneurs operated inefficiently and provided inferior quality of service at higher prices than the market entrepreneurs.
All the market entrepreneurs in the book are good examples of achieving business success through motivating employees to perform at high levels and providing customers with excellent value. And while most of them donated a lot of money to worthy charities, many of them had imperfect personal lives. Two who seem to have been excellent role models in all facets of their lives are John D. Rockefeller and Andrew Carnegie.
I cannot determine why Dr. Folsom chooses to use Charles Schwab instead of Carnegie as the primary market entrepreneur example in the steel industry. Both men seem to epitomize the book’s theme, but there is little information about Carnegie other than that he was a mentor for Schwab who liked the way Schwab took over the business at Carnegie Steel, but not the way Schwab conducted his personal life.
The John D. Rockefeller chapter contains an amazing paradox. “He put God first, his family second, and career third. This is the puzzle: how could someone put his career third and wind up with $900 million, which made him the wealthiest man in American history?” As Dr. Folsom elaborates, maybe the solution to the puzzle can be found in Malachi 3:10. And maybe this is a lesson for all of us Christians who choose not to tithe because we think resources are limited.
Rockefeller had to overcome many obstacles in order to achieve his goal of being the biggest and best refiner in the world. One of the obstacles was competition with Russian refiners, who had many natural advantages, including proximity to European and Asian markets. Another obstacle was unenlightened U.S. government policies. Rockefeller found it efficient to set up separate Standard Oil corporations in many different states directed in trust by the same board of directors. In 1911, the Supreme Court forced it to break up into separate state companies with separate boards of directors. As Dr. Folsom points out, it was hard to determine how this was a violation of the “restraint of trade” clause in the Sherman Act because of the amount of international competition from the Russians and domestic competition from Gulf Oil and others.
Andrew Mellon has been vilified for being a somewhat different type of “robber baron.” His reputation derives from his service as Secretary of the Treasury, where he implemented policies to benefit all taxpayers, but particularly those at the lower end of the income spectrum. Mr. Folsom documents that the intent and the results of the dedicated efforts of President Coolidge and Secretary Mellon were for lower income earners to receive the largest benefits proportionally. Also, even though tax rates decreased, tax revenues increased.
The author also strongly hints at another fairytale - the Myth of Benevolent Elected Officials who protect the Public from Greedy Monopolistic Entrepreneurs. Completely dispelling this myth is somewhat outside the scope of this work, but there are at least two examples of unenlightened legislation that had unfortunate unintended consequences.
1. The Sherman Anti-Trust Act of 1890 was intended to outlaw combinations that restrained trade but had the effect of punishing businesses that achieved economies of scale through consolidation that were passed along to customers in the form of lower rates and better service. This resulted in the dissolution of James J. Hill’s Northern Securities and John D. Rockefeller’s Standard Oil.
2. The Hepburn Act of 1906 that made it illegal for railroads to charge different rates to different customers had several negative consequences. One was requiring rates to be published 30 days in advance and made it impossible to change rates to keep up with changing market conditions. Secondly, James J. Hill of the Great Northern Railroad was prevented from extending special rates to Asian importers of cotton and wheat to introduce them to American exporters.
Dr. Folsom carefully distinguishes between political entrepreneurs, such as Robert Fulton (steamboats) and market entrepreneurs, such as Cornelius Vanderbilt (steamboats and railroads). The political entrepreneurs relied on government subsidies and other preferential treatment to develop new industries in ways that legislators thought would be beneficial, but these political entrepreneurs operated inefficiently and provided inferior quality of service at higher prices than the market entrepreneurs.
All the market entrepreneurs in the book are good examples of achieving business success through motivating employees to perform at high levels and providing customers with excellent value. And while most of them donated a lot of money to worthy charities, many of them had imperfect personal lives. Two who seem to have been excellent role models in all facets of their lives are John D. Rockefeller and Andrew Carnegie.
I cannot determine why Dr. Folsom chooses to use Charles Schwab instead of Carnegie as the primary market entrepreneur example in the steel industry. Both men seem to epitomize the book’s theme, but there is little information about Carnegie other than that he was a mentor for Schwab who liked the way Schwab took over the business at Carnegie Steel, but not the way Schwab conducted his personal life.
The John D. Rockefeller chapter contains an amazing paradox. “He put God first, his family second, and career third. This is the puzzle: how could someone put his career third and wind up with $900 million, which made him the wealthiest man in American history?” As Dr. Folsom elaborates, maybe the solution to the puzzle can be found in Malachi 3:10. And maybe this is a lesson for all of us Christians who choose not to tithe because we think resources are limited.
Rockefeller had to overcome many obstacles in order to achieve his goal of being the biggest and best refiner in the world. One of the obstacles was competition with Russian refiners, who had many natural advantages, including proximity to European and Asian markets. Another obstacle was unenlightened U.S. government policies. Rockefeller found it efficient to set up separate Standard Oil corporations in many different states directed in trust by the same board of directors. In 1911, the Supreme Court forced it to break up into separate state companies with separate boards of directors. As Dr. Folsom points out, it was hard to determine how this was a violation of the “restraint of trade” clause in the Sherman Act because of the amount of international competition from the Russians and domestic competition from Gulf Oil and others.
Andrew Mellon has been vilified for being a somewhat different type of “robber baron.” His reputation derives from his service as Secretary of the Treasury, where he implemented policies to benefit all taxpayers, but particularly those at the lower end of the income spectrum. Mr. Folsom documents that the intent and the results of the dedicated efforts of President Coolidge and Secretary Mellon were for lower income earners to receive the largest benefits proportionally. Also, even though tax rates decreased, tax revenues increased.
The author also strongly hints at another fairytale - the Myth of Benevolent Elected Officials who protect the Public from Greedy Monopolistic Entrepreneurs. Completely dispelling this myth is somewhat outside the scope of this work, but there are at least two examples of unenlightened legislation that had unfortunate unintended consequences.
1. The Sherman Anti-Trust Act of 1890 was intended to outlaw combinations that restrained trade but had the effect of punishing businesses that achieved economies of scale through consolidation that were passed along to customers in the form of lower rates and better service. This resulted in the dissolution of James J. Hill’s Northern Securities and John D. Rockefeller’s Standard Oil.
2. The Hepburn Act of 1906 that made it illegal for railroads to charge different rates to different customers had several negative consequences. One was requiring rates to be published 30 days in advance and made it impossible to change rates to keep up with changing market conditions. Secondly, James J. Hill of the Great Northern Railroad was prevented from extending special rates to Asian importers of cotton and wheat to introduce them to American exporters.
January 17, 2019
"Those who tried to succeed... primarily through federal aid, pools, vote buying, or stock speculation we will classify as *political entrepreneurs.* Those who tried to succeed... primarily by creating and marketing a superior product at a low cost we will classify as *market entrepreneurs.* No entrepreneur fits perfectly into one category or the other, but most fall generally into one category of the other. The political entrepreneurs often fit the classic Robber Baron mold; they stifled productivity (through monopolies and pools), corrupted business and politics, and dulled America's competitive edge. Market entrepreneurs, by contrast, often made decisive and unpredictable contributions to American economic development." (pg 2)
I first encountered the myth of the robber barons in my children's history material, which came to mind when I read a review of this title (link below). I was irritated by the coverage of Gilded Age entrepreneurs as greedy oppressors who engaged in philanthropy only to assuage their guilty souls. This Marxian perspective on the nineteenth century was abundantly promoted and abundantly wrong. After learning what this title was about, I knew I wanted to read it - and soon. The work of Mr. Folsom did not disappoint.
I could summarize the accomplishments of Vanderbilt, Hill, the Scranton family, Scwab, Rockefeller and Mellon in breaking up monopolies, improving processes and getting goods to consumers at the lowest price, but it would be better for you to read these prescient accounts for yourself. I appreciated that Folsom does not idolize these subjects. They were all tremendously successful as market entrepreneurs, but that doesn’t mean they were perfect, moral or indemnified from life’s struggles. While Folsom sticks to the main topic of their wealth generation and spending, he does touch on errors of judgement, missteps in business, and the challenges of individual personalities (such as Mellon’s shyness) and situations (like Rockefeller’s isolation). Folsom also faithfully accounts how Schwab lost all his wealth and position in society because his personal life was undisciplined.
The canvas upon which these entrepreneurs painted is an extensive panoramic of the industrial age. Folsom covers steamship transportation, transcontinental railroads, iron manufacture, steel industry, oil industry, and federal economic policy. The rise of so many men from obscurity to extraordinary success is inspiring. Why is upward mobility from the lower classes seemingly so difficult today in comparison?
A welcome, though unexpected, analysis came in the chapter on the Scranton family and the building of their city in a neglected region of Pennsylvania. Folsom uses the rather limited population to analyze generational wealth growth (by all parties including Scranton family members, immigrants to the community, investors, etc) and transfer of wealth by Scranton families to future generations. His findings were intriguing.
“By 1920, the sons of Scranton’s 1880 leaders had ample opportunity to succeed their fathers as the pacesetters of Scranton’s business world. Yet they did not. Few went hungry, but most could not come close to matching their father’s achievements… In short, the fathers and sons provide a stunning contrast.” Pg. 57
In fact, his conclusion is essentially that the rich families became poorer in the sons generation as “…the role of parents, lack of business talent, the quest for leisure and problems of family continuity in general all seem to have combined to fragment the Scranton economic elite of 1880.” (pg 60). And yet, this happened even as poor immigrants and businessmen who saw potential in Scranton mined riches, the standard of living rose, and jobs were plentiful – all building upon the foundation laid by the fathers! Folsom concludes,
“And so the cycle goes – which means that if Scranton is typical, then two seemingly contradictory generalizations about the rise of big business are both true. First, a small constantly changing group of entrepreneurs consistently held a large share of the nation’s wealth. Second, the poor didn’t get poorer, and the rich didn’t get richer.” Pg. 60
Another particularly impactful topic was the philanthropy of John D. Rockefeller. I have read about Standard Oil on many occasions, but Folsom takes the additional step of examining how Rockefeller’s business principles impacted his giving.
“Some historians haven’t liked the way Rockefeller made his money, but few have quibbled with the way he spent it. Before he died, he had given away about $550,000,000, more than any other American before him had ever possessed. It wasn’t so much the amount that he gave as it was the amazing results that his giving produced.” Pg. 97
Rockefeller funded schools and churches across the country (it should be noted that he supported white and black institutions). He gave to evangelists and missionaries, and invested in scientists who found cures for yellow fever, meningitis and hookworm. He gave millions to higher education. Essentially, his giving covered people and communities around the world.
“His guide for giving was a variation of the Biblical principle –“If any will not work, neither should he eat.” Those schools, cities, or scientists who weren’t anxious to produce or improve didn’t get Rockefeller money. Those who did and showed results got more. As in the parable of the talents, to him who has, more (responsibility and trust) shall be given by the Rockefeller Foundation.” Pg 99
For prospective on how innovations of the Business Barons improved the standard of living for all, see Boudreaux, Are you Richer than John D. Rockefeller?
https://fee.org/articles/you-are-rich...
Finally, Folsom closes with a masterful biography of Andrew Mellon. I understood Mellon’s business and perspective better after reading this chapter. Was it because I was building on the foundation of Shlaes The Forgotten Man or because Folsom was far more concise? I tend to think the advantage lies with Folsom.
“The key to the success of these industries, and dozens of other Mellon enterprises, was capital – high-risk, venture capital. Somebody had to have the nerve, the money and the vision to back risky ideas that had potential. Mellon had done this so ably that by 1920 he was worth close to a one billion dollars, which ranked him with John D. Rockefeller and Henry Ford as one of the three wealthiest men in America.” Pg 105
Mellon’s application of free market economic principles for his own benefit were extraordinarily successful, but his great innovation was applying these principles to government in service to his country. His ideas may sound common to us today, but they were revolutionary in his time. Additionally, they were successful, as after taxes were reduced, the economy generated wealth and government receipts increased.
“It seems difficult for some to understand,” [Mellon] wrote, “that high rates of taxation do not necessarily mean large revenue to the Government, and that more revenue may often be obtained by lower rates.” Pg. 103
Mellon’s plan of reducing taxes upon the high and low income brackets, reducing federal estate taxes, and *especially* increasing efficiency in government are like fresh water in today’s desert of Big Government, which is infective, unaffordable, and running deficits to a magnitude that would shock both Mellon and his contemporary critics.
Folsom has done a service to those who still hold to the American founding principles of free market economy and limited government. The only disappointment I had was the desire for Folsom to continue his analytics further into the twentieth century, particularly with the development of electricity as a utility. This lead me to his 2008 work New Deal or Raw Deal?
I highly recommend this title for students of all ages, particularly those interested in the entrepreneurial engine that raised the standard of living for everyday Americans and brought the world to America for international leadership. Those interested in economic policy that fosters such an innovative culture in business would also do well to study Folsom’s analysis. I can only hope that it is not too late for Americans young and old to rediscover the principles upon which our contemporary life was built. If we are able to recapture that powerful culture, it will be partly because Mr. Folsom and others retained the candle of healthy practices by previous generations. This title is a valuable contribution to the debate.
“Studying the triumph of American industry, for example, is important because it is the story of how the United States became the world’s leading economic power. The years when the happened, from 1865 to the early 1900s, saw the U.S. encourage entrepreneurs indirectly by limiting government. Slavery was abolished and so was the income tax. Federal spending was slashed and federal budgets had surpluses every year in the late 1800s. In other world, the federal government created more freedom and a stable marketplace in which entrepreneurs could operate.” Pg 121
The review that added this book to my to-reads...
https://fee.org/articles/how-the-myth...
Modern Times (Story of the World #4), Bauer, 2005
https://www.goodreads.com/review/show...
The Forgotten Man: A New History of the Great Depression, Shlaes, 2007
https://www.goodreads.com/review/show...
For more by Folsom, I would like to read…
New Deal or Raw Deal?, Folsom, 2008
https://www.goodreads.com/review/show...
Additional Quotes I found insightful….
“The share of prosperity which has fallen to my lot,” said Vanderbilt, “is the direct result of unfettered trade, and unrestrained competition. It is my wish that those who come after me shall have that same field open before them.” Pg. 7
“….we can sort out two distinct groups: political and market entrepreneurs… They are two separate groups with different attitudes toward innovation, technology, price-cutting, monopolies, and federal aid. In the steamship industry, political entrepreneurship often led to price-fixing, technological stagnation, and the bribing of competitors and politicians. The market entrepreneurs were the innovators and rate-cutters…” pg. 15
“But there is a nagging problem in this argument. While some of this rush for subsidies was still going on, James J. Hill was building a transcontinental railroad from St. Paul to Seattle with no federal aid whatsoever. Also, Hill’s road was the best built, the least corrupt, the most popular, and the only transcontinental railroad to never go bankrupt. It took longer to build than the others, but Hill used this time to get the shortest route on the best grade with the least curvature. In doing so, he attracted settlement and trade by cutting costs for passengers and freight. Could it be that, in the long run, the subsidies may have corrupted rail development and hindered economic growth?” pg. 18
“Here is the a key point: the gain in social return was only temporary, but the loss of shipping with tan inefficient railroad was permanent. The UP and NP were, as we have seen, inefficient in gradients, curvature, length, quality of construction, repair costs, and use of fuel. This meant permanently high fixed costs for all passengers and freight using the subsidized transcontinentals.” Pg. 31
“Let the good work go on. We must ever remember we are refining oil for the poor man and he must have it cheap and good.” John D. Rockefeller
“Some of the oil producers were unhappy, but American consumers were pleased that Rockefeller was selling cheap oil. Before 1870, only the rich could afford whale oil and candles. The rest had to go to bed early to save money. By the 1870s, with the drop in the price of kerosene, middle and working class people all over the nation could afford the one cent an hour that it cost to light their homes at night. Working and reading after-dark activities new to most Americans in the 1870s.” pg. 87
“A nation must believe in three things. It must believe in the past. It must believe in the future. It must, above all, believe in the capacity of its own people so to learn from the past that they can gain in judgement in creating their own future.” Franklin D. Roosevelt as quoted pg 121
I first encountered the myth of the robber barons in my children's history material, which came to mind when I read a review of this title (link below). I was irritated by the coverage of Gilded Age entrepreneurs as greedy oppressors who engaged in philanthropy only to assuage their guilty souls. This Marxian perspective on the nineteenth century was abundantly promoted and abundantly wrong. After learning what this title was about, I knew I wanted to read it - and soon. The work of Mr. Folsom did not disappoint.
I could summarize the accomplishments of Vanderbilt, Hill, the Scranton family, Scwab, Rockefeller and Mellon in breaking up monopolies, improving processes and getting goods to consumers at the lowest price, but it would be better for you to read these prescient accounts for yourself. I appreciated that Folsom does not idolize these subjects. They were all tremendously successful as market entrepreneurs, but that doesn’t mean they were perfect, moral or indemnified from life’s struggles. While Folsom sticks to the main topic of their wealth generation and spending, he does touch on errors of judgement, missteps in business, and the challenges of individual personalities (such as Mellon’s shyness) and situations (like Rockefeller’s isolation). Folsom also faithfully accounts how Schwab lost all his wealth and position in society because his personal life was undisciplined.
The canvas upon which these entrepreneurs painted is an extensive panoramic of the industrial age. Folsom covers steamship transportation, transcontinental railroads, iron manufacture, steel industry, oil industry, and federal economic policy. The rise of so many men from obscurity to extraordinary success is inspiring. Why is upward mobility from the lower classes seemingly so difficult today in comparison?
A welcome, though unexpected, analysis came in the chapter on the Scranton family and the building of their city in a neglected region of Pennsylvania. Folsom uses the rather limited population to analyze generational wealth growth (by all parties including Scranton family members, immigrants to the community, investors, etc) and transfer of wealth by Scranton families to future generations. His findings were intriguing.
“By 1920, the sons of Scranton’s 1880 leaders had ample opportunity to succeed their fathers as the pacesetters of Scranton’s business world. Yet they did not. Few went hungry, but most could not come close to matching their father’s achievements… In short, the fathers and sons provide a stunning contrast.” Pg. 57
In fact, his conclusion is essentially that the rich families became poorer in the sons generation as “…the role of parents, lack of business talent, the quest for leisure and problems of family continuity in general all seem to have combined to fragment the Scranton economic elite of 1880.” (pg 60). And yet, this happened even as poor immigrants and businessmen who saw potential in Scranton mined riches, the standard of living rose, and jobs were plentiful – all building upon the foundation laid by the fathers! Folsom concludes,
“And so the cycle goes – which means that if Scranton is typical, then two seemingly contradictory generalizations about the rise of big business are both true. First, a small constantly changing group of entrepreneurs consistently held a large share of the nation’s wealth. Second, the poor didn’t get poorer, and the rich didn’t get richer.” Pg. 60
Another particularly impactful topic was the philanthropy of John D. Rockefeller. I have read about Standard Oil on many occasions, but Folsom takes the additional step of examining how Rockefeller’s business principles impacted his giving.
“Some historians haven’t liked the way Rockefeller made his money, but few have quibbled with the way he spent it. Before he died, he had given away about $550,000,000, more than any other American before him had ever possessed. It wasn’t so much the amount that he gave as it was the amazing results that his giving produced.” Pg. 97
Rockefeller funded schools and churches across the country (it should be noted that he supported white and black institutions). He gave to evangelists and missionaries, and invested in scientists who found cures for yellow fever, meningitis and hookworm. He gave millions to higher education. Essentially, his giving covered people and communities around the world.
“His guide for giving was a variation of the Biblical principle –“If any will not work, neither should he eat.” Those schools, cities, or scientists who weren’t anxious to produce or improve didn’t get Rockefeller money. Those who did and showed results got more. As in the parable of the talents, to him who has, more (responsibility and trust) shall be given by the Rockefeller Foundation.” Pg 99
For prospective on how innovations of the Business Barons improved the standard of living for all, see Boudreaux, Are you Richer than John D. Rockefeller?
https://fee.org/articles/you-are-rich...
Finally, Folsom closes with a masterful biography of Andrew Mellon. I understood Mellon’s business and perspective better after reading this chapter. Was it because I was building on the foundation of Shlaes The Forgotten Man or because Folsom was far more concise? I tend to think the advantage lies with Folsom.
“The key to the success of these industries, and dozens of other Mellon enterprises, was capital – high-risk, venture capital. Somebody had to have the nerve, the money and the vision to back risky ideas that had potential. Mellon had done this so ably that by 1920 he was worth close to a one billion dollars, which ranked him with John D. Rockefeller and Henry Ford as one of the three wealthiest men in America.” Pg 105
Mellon’s application of free market economic principles for his own benefit were extraordinarily successful, but his great innovation was applying these principles to government in service to his country. His ideas may sound common to us today, but they were revolutionary in his time. Additionally, they were successful, as after taxes were reduced, the economy generated wealth and government receipts increased.
“It seems difficult for some to understand,” [Mellon] wrote, “that high rates of taxation do not necessarily mean large revenue to the Government, and that more revenue may often be obtained by lower rates.” Pg. 103
Mellon’s plan of reducing taxes upon the high and low income brackets, reducing federal estate taxes, and *especially* increasing efficiency in government are like fresh water in today’s desert of Big Government, which is infective, unaffordable, and running deficits to a magnitude that would shock both Mellon and his contemporary critics.
Folsom has done a service to those who still hold to the American founding principles of free market economy and limited government. The only disappointment I had was the desire for Folsom to continue his analytics further into the twentieth century, particularly with the development of electricity as a utility. This lead me to his 2008 work New Deal or Raw Deal?
I highly recommend this title for students of all ages, particularly those interested in the entrepreneurial engine that raised the standard of living for everyday Americans and brought the world to America for international leadership. Those interested in economic policy that fosters such an innovative culture in business would also do well to study Folsom’s analysis. I can only hope that it is not too late for Americans young and old to rediscover the principles upon which our contemporary life was built. If we are able to recapture that powerful culture, it will be partly because Mr. Folsom and others retained the candle of healthy practices by previous generations. This title is a valuable contribution to the debate.
“Studying the triumph of American industry, for example, is important because it is the story of how the United States became the world’s leading economic power. The years when the happened, from 1865 to the early 1900s, saw the U.S. encourage entrepreneurs indirectly by limiting government. Slavery was abolished and so was the income tax. Federal spending was slashed and federal budgets had surpluses every year in the late 1800s. In other world, the federal government created more freedom and a stable marketplace in which entrepreneurs could operate.” Pg 121
The review that added this book to my to-reads...
https://fee.org/articles/how-the-myth...
Modern Times (Story of the World #4), Bauer, 2005
https://www.goodreads.com/review/show...
The Forgotten Man: A New History of the Great Depression, Shlaes, 2007
https://www.goodreads.com/review/show...
For more by Folsom, I would like to read…
New Deal or Raw Deal?, Folsom, 2008
https://www.goodreads.com/review/show...
Additional Quotes I found insightful….
“The share of prosperity which has fallen to my lot,” said Vanderbilt, “is the direct result of unfettered trade, and unrestrained competition. It is my wish that those who come after me shall have that same field open before them.” Pg. 7
“….we can sort out two distinct groups: political and market entrepreneurs… They are two separate groups with different attitudes toward innovation, technology, price-cutting, monopolies, and federal aid. In the steamship industry, political entrepreneurship often led to price-fixing, technological stagnation, and the bribing of competitors and politicians. The market entrepreneurs were the innovators and rate-cutters…” pg. 15
“But there is a nagging problem in this argument. While some of this rush for subsidies was still going on, James J. Hill was building a transcontinental railroad from St. Paul to Seattle with no federal aid whatsoever. Also, Hill’s road was the best built, the least corrupt, the most popular, and the only transcontinental railroad to never go bankrupt. It took longer to build than the others, but Hill used this time to get the shortest route on the best grade with the least curvature. In doing so, he attracted settlement and trade by cutting costs for passengers and freight. Could it be that, in the long run, the subsidies may have corrupted rail development and hindered economic growth?” pg. 18
“Here is the a key point: the gain in social return was only temporary, but the loss of shipping with tan inefficient railroad was permanent. The UP and NP were, as we have seen, inefficient in gradients, curvature, length, quality of construction, repair costs, and use of fuel. This meant permanently high fixed costs for all passengers and freight using the subsidized transcontinentals.” Pg. 31
“Let the good work go on. We must ever remember we are refining oil for the poor man and he must have it cheap and good.” John D. Rockefeller
“Some of the oil producers were unhappy, but American consumers were pleased that Rockefeller was selling cheap oil. Before 1870, only the rich could afford whale oil and candles. The rest had to go to bed early to save money. By the 1870s, with the drop in the price of kerosene, middle and working class people all over the nation could afford the one cent an hour that it cost to light their homes at night. Working and reading after-dark activities new to most Americans in the 1870s.” pg. 87
“A nation must believe in three things. It must believe in the past. It must believe in the future. It must, above all, believe in the capacity of its own people so to learn from the past that they can gain in judgement in creating their own future.” Franklin D. Roosevelt as quoted pg 121
February 19, 2022
4.5 stars
I don’t usually read economic history books. In fact, this might be my first.
I’d heard a Vanderbilt and Rockefeller, and maybe Hill, but that’s it. I found it all very interesting and fascinating. Seeing the difference between the men who worked at something and succeeded without the “help” of the government vs. those who got the government to “help” them was eye opening. While this book delves into all sorts of economics and such, it was written in such a way that it was easy and interesting to read.
I highly recommend this book to anyone even if you think you don't like economics and think it should be read by more people.
I don’t usually read economic history books. In fact, this might be my first.
I’d heard a Vanderbilt and Rockefeller, and maybe Hill, but that’s it. I found it all very interesting and fascinating. Seeing the difference between the men who worked at something and succeeded without the “help” of the government vs. those who got the government to “help” them was eye opening. While this book delves into all sorts of economics and such, it was written in such a way that it was easy and interesting to read.
I highly recommend this book to anyone even if you think you don't like economics and think it should be read by more people.
May 26, 2023
The same nonsense as Entrepreneurs vs. the State with an added chapter on Andrew Mellon, in which Folsom demonstrates a remarkably poor understanding of the Progressive Era—"conservatives" were those who opposed taxes and liked "free" markets, "Progressives" were those who wanted taxes increased. This simplistic definition of one of the most important and complex eras in American history, where class and political lines zigzagged and crossed wildly, is enough to make Folsom's "scholarship" cringe-worthy and laughable.
October 7, 2011
An interesting look at some of the well known "robber barons" and the circumstances surrounding their success. This book was surprisingly full of shockingly familiar federal "investments" that hampered real innovation, led to significant price fixing/gauging/padding and a slew of corruption. Folsom contrasts the consistent failures of government-backed inventiveness and market solutions with the entrepreneurs that were leaders in private success and beating out the ensuing government's mess every time. It's ironic that I finished this book right as the Solyndra debacle started (http://goo.gl/hT51N).
While I believe Folsom was successful in his attempt to criticize text-book history on the obvious negative slant of these business leaders' achievements, he didn't overly round out their personal lives and character traits outside of what contributed to their success (and in some cases, ahem Charles Schwab) their downfalls. His bibliography and chapter notes did provide some extra information. I did appreciate his evaluation of how society, associated businessmen, employees and local communities (cities, counties, states) reaped the benefits of their business pioneering.
While I believe Folsom was successful in his attempt to criticize text-book history on the obvious negative slant of these business leaders' achievements, he didn't overly round out their personal lives and character traits outside of what contributed to their success (and in some cases, ahem Charles Schwab) their downfalls. His bibliography and chapter notes did provide some extra information. I did appreciate his evaluation of how society, associated businessmen, employees and local communities (cities, counties, states) reaped the benefits of their business pioneering.
April 18, 2012
The Myth of the Robber Barons is a unique look at some of the big players in the growth of American industry and big business. Folsom points out that there were two types of people that typically fall under the label of "Robber Barons". Market entrepeneurs, who tended to use their expertise, cost-cutting, and efficiency to build up their industry, and political entrepeneurs who tended to use government subsidies, favors, and obstructionism to stall their competition. Folsom uses many examples from this era to illustrate the seen and unseen harmful effects of the tactics of political entrepeneurs. These are essential lessons that need to be learned and applied today in order to turn around today's American economy.
September 27, 2011
I had heard of this book for a while and expected it to be a larger volume; but this short book delivers as promised, outlining the lives and more importantly works of six American entrepreneurs - creative and hard-working market entrepreneurs, that is, not parasitical political entrepreneurs. A perfect counter to ignorant assertions of capitalist "robber barons" in American history, and a fascinating read too.
April 19, 2012
I found this survey of the 19th centuries tycoons to be overly-simplistic, even primitive. One interesting observation the author makes however is the distinction between "Political entrepreneurship" and "market entrepreneurship" of the period. On the whole, this is lightweight pseudo-libertarian fare lacking in compelling perspectives.
February 28, 2010
I know I have strange reading taste for a teenager, but I can pin this one down on an adult. It was lent to me by an older gentleman at our church, and I'm incredibly greatful. Amazing book. It opened my eyes to a whole world of business and history that I thoroughly enjoyed!
December 25, 2023
"If we seriously study entrepreneurs, the state, and the rise of big business in the United States we will have to sacrifice the textbook morality play of "greedy businessmen" fleecing the public until at least they are stopped by the actions of the state. But, in return, we will have a better understanding of the past and a sounder basis for building the future."
Fascinating history of American economy & entrepreneurship. Quite a page turner for such a detailed and research-heavy book. It's hard to believe how successfully the historians in America and elsewhere have created this inverted persona of heroes as oppressive robber Barons and the state as a remedy to their oppressions, despite an abundance of evidence to the contrary.
Fascinating history of American economy & entrepreneurship. Quite a page turner for such a detailed and research-heavy book. It's hard to believe how successfully the historians in America and elsewhere have created this inverted persona of heroes as oppressive robber Barons and the state as a remedy to their oppressions, despite an abundance of evidence to the contrary.
April 18, 2023
Really enjoyable, short, comprehensive history of free markets and "Robber Barons." Reading it while taking American history class made it a lot more enjoyable. Reading it right as we were covering the period, what timing! Looking forward to hearing Folsom speak this summer at YAF.
March 21, 2025
3.5 ⭐️! not as awful as i thought it was going to be
April 4, 2020
This book needed to be written in order to stand in opposition to the way liberal historians and the hire education elite have painted this time period. Any common sense business person of today can see the merits of the authors arguments and the importance of telling this story in the proper context. It is very sad that liberal historians and the hire education elite have misguided our youth on this important subject. I’ve always said, those who can do, those who can’t, teach. There is a day of reckoning coming in our society that will property expose the hire education liberal elite for what they are. My hope is that our youth can see past this and to the truth.
October 25, 2024
4 stars
Short and splendid book. Just like his heroes author gave less time answering the Critics. Apt and to the point.
Truth presented? Yes.
But, he himself couldn't follow the footsteps of Barons in making this book a best seller on the topic.
2nd review
Either he blindly followed the Rockefeller, Harriman, Hill etc. Or, knowingly he showed a blind eye to the above mentioned. Ignorance in case 1, or, misleading otherwise. Rothbard states:
"From the 1890s until World War II, much of American political history, of programs and conflicts, canbe interpreted not so much as ''Democrat'' versus ''Republican,'' but as the interaction or conflict between the Morgans and their allies on the one hand,and the Rockefeller-Harriman-Kuhn, Loeb alliance on the other. - - - - - - - while the two financial groups clashed on many issues and personalities,on some matters they agreed and were able to work in concert. Thus, both groups favored the new trend toward cartelization in the name of Progressivism and curbing alleged Big Business monopoly,and both groups, led by the Morgans, were happyto collaborate in the National Civic Federation.
On banking and on the alleged necessity for a central bank, both groups, again, were in happy agreement. "
Short and splendid book. Just like his heroes author gave less time answering the Critics. Apt and to the point.
Truth presented? Yes.
But, he himself couldn't follow the footsteps of Barons in making this book a best seller on the topic.
2nd review
Either he blindly followed the Rockefeller, Harriman, Hill etc. Or, knowingly he showed a blind eye to the above mentioned. Ignorance in case 1, or, misleading otherwise. Rothbard states:
"From the 1890s until World War II, much of American political history, of programs and conflicts, canbe interpreted not so much as ''Democrat'' versus ''Republican,'' but as the interaction or conflict between the Morgans and their allies on the one hand,and the Rockefeller-Harriman-Kuhn, Loeb alliance on the other. - - - - - - - while the two financial groups clashed on many issues and personalities,on some matters they agreed and were able to work in concert. Thus, both groups favored the new trend toward cartelization in the name of Progressivism and curbing alleged Big Business monopoly,and both groups, led by the Morgans, were happyto collaborate in the National Civic Federation.
On banking and on the alleged necessity for a central bank, both groups, again, were in happy agreement. "
June 4, 2009
Dr. Folsom analyzes the rise of the big-business entrepreneur in America from a pro-capitalist viewpoint. Each chapter is dedicated to a different figure, from Andrew Carnegie to Andrew Mellon, and details their rise to power and how free-market principles encouraged their innovation in order to create competitive advantage. The success of these entrepreneurs is contrasted with those who depended on government subsidy to succeed and could not compete because they had no market incentive to improve their processes and develop competitive advantage. Why, after all, make things more efficient when the government will still write the check? The book is an easy and fast read, and I found it to be a good introduction to an area of U.S. history which I, without much background in history, was generally unfamiliar.
September 16, 2011
I thought this was a good, unconventional look at the big businessmen who won more bad press than they deserved. (Yes, they deserved some, I won't argue that they weren't human.)
The title is a little misleading, in that the author concedes that there were "robber barons," business men who operated without ethics, without concern for law or human life. The point is that the men named as the most successful businessmen of the era were not the same as the ones that bribed, cheated and stole their way to riches. The most successful were the entrepreneurs, who played by the rules and worked hard.
The title is a little misleading, in that the author concedes that there were "robber barons," business men who operated without ethics, without concern for law or human life. The point is that the men named as the most successful businessmen of the era were not the same as the ones that bribed, cheated and stole their way to riches. The most successful were the entrepreneurs, who played by the rules and worked hard.
August 26, 2015
Folsom's work does an excellent job contrasting the tactics employed by many famous businessmen of the 1800's, "the robber barons." He contrasts political and economic entrepreneurs, the former of whom used and influenced government policies to grant them exclusive rights and advantages to force out competition, and the latter whose companies grew to dominating sizes naturally, through perseverance and providing valuable services and goods to consumers. This book is a must read for anyone interested in learning about the history of monopoly in America, and the role government plays in bringing them about.
December 10, 2014
Well researched and full of information
I read some reviews that this book was biased and cherry picked historical events; I didn't get that impression, however. I didn't check all the references, dust the ones I did supported the authors claims. Also, all the negative reviews where incredibly vague and did not give any sources for research. The impression I get is: they didn't like what they read, so they said it wasn't true. This book was insightful and a good source of information for its size. I would recommend it.
I read some reviews that this book was biased and cherry picked historical events; I didn't get that impression, however. I didn't check all the references, dust the ones I did supported the authors claims. Also, all the negative reviews where incredibly vague and did not give any sources for research. The impression I get is: they didn't like what they read, so they said it wasn't true. This book was insightful and a good source of information for its size. I would recommend it.
July 5, 2017
The Myth of the Robber Barons — A New Look at the Rise of Big Business in America, by Burton W, Folsom, Jr., Ph.D.
a short Book Report by Ron Housley
When I was a child in New Jersey, the Lehigh Valley Railroad practically ran through my back yard. Every day at suppertime a dark red passenger train, powered by one of those ALCO PA diesel locomotives, roared by and I always wondered where it came from, where it was going, and who was on it. Little did I know that Charles Schwab’s Bethlehem Steel produced the rails, that Lehigh was actually part of Pennsylvania, that the railroad in my backyard was a symbol of American industrial history — which I wouldn’t fully learn about for decades to come. Folsom’s book colored in more of the missing pieces for me.
Burt Folsom shows us that the industrialization of America was not a “pure” story of individual productivity. Rather, it was a story seriously contaminated by ongoing instances of innovation-stifling government intrusion (think: special privileges, regulations, subsidies, fines, charters, tariffs and miscellaneous obstructionism) at every turn, just a little at first but ever more as the years ticked by. And we learn in this volume to be on the lookout for those never-ending contaminations —— which prevented the story from being one of productive capitalism and turned it into a story of how government coercion always makes things worse and can damage an entire civilization’s understanding of what productivity and industrialization depends upon.
Folsom’s little book from 1987, now in its seventh printing, lays out the basic facts of notable American entrepreneurs. And woven into each story we see the same history repeating itself over and over: economic growth stifled by coercive government forcing citizens to misallocate their wealth.
The culture at large painted each of the successful industrial pioneers as an object of scorn, as if each had stolen, rather than created, his wealth.
Vanderbilt, for instance, uprooted Robert Fulton’s state-granted and state-enforced monopoly of all steamboat traffic in New York; he was instrumental in removing government force from the economic equation; he relentlessly competed against federal aid to other steamboat operators; and when he out-competed even the most heavily subsidized shipping lines, he was vilified and hated for his success.
These American producers were likened to the “Robber Barons” of medieval Germany who used force to extort wealth from innocent merchants. “Robber Baron” turned out to be an effective smear, casting paragons of virtue and productivity with the opprobrium ordinarily reserved from rapists and murderers.
Those who benefited most from the new comforts afforded by the industrial revolution were the ones who most vehemently denounced the very men who made those comforts possible.
It was these envious and vengeful regressives who ultimately rose to prominent numbers in government, in academia and in the press. These were the ones who clamored for federal subsidies and loans (think: Solyndra, today, or railroad land grants, back when); these were the ones who threw up obstacles to economic development (think: ICC, FTC, anti-trust); these were the ones infecting the American culture of freedom with the notion that protecting individual rights was, therefore, the central mistake of our country’s founding (!).
So, all during the careers of Vanderbilt, of the Scranton’s, of Rockefeller, of Carnegie and Schwab, of Mellon, there was a cultural counter-current, even as the developing industrial revolution was lifting the masses out of poverty for the first time in human history.
Each instance where an industrial hero created new wealth and opportunity where none had existed before, the counter-current grew louder.
And what was the counter-current? It was the growing chorus in support of government confiscating this newly created wealth and distributing it to non-producers; in support of disallowing inheritances; in support of throwing up obstacles to business growth; in support of coercively imposing equality of wealth —— never mind the producer who created the wealth in the first place; and never mind the impact on would-be future producers.
The counter-current was a resurrection of the Christian morality outlined in The Sermon on the Mount; it was given new energy by 19th century German philosophers; it was smuggled into America by the country’s intellectuals, not the least of which was Woodrow Wilson who had pursued his graduate education in Germany, itself.
Never mind that millions of Americans suddenly were lifted out of century’s-old poverty; never mind the new opportunities suddenly available to anyone willing to pursue them; the culture was already under the spell of this “new” (think: old) moral philosophy insisting that our foremost moral duty is to sacrifice ourselves to others — i.e., otherism, or, altruism.
Folsom’s book gives us a glimpse into the phenomenon of wealth creation itself. We see that it depends entirely upon the focused effort of individuals.
And side by side with stories of wealth creation we see how the wealth destroyer gradually but steadily took command of the culture’s hatred for individual productivity. We see how the bias against individualism has been woven into today’s indoctrination which passes for education.
To me, Folsom’s most compelling act was to make solidly concrete the picture supporting an otherwise abstract principle: productivity requires freedom. It is a principle practically lost by today’s culture.
a short Book Report by Ron Housley
When I was a child in New Jersey, the Lehigh Valley Railroad practically ran through my back yard. Every day at suppertime a dark red passenger train, powered by one of those ALCO PA diesel locomotives, roared by and I always wondered where it came from, where it was going, and who was on it. Little did I know that Charles Schwab’s Bethlehem Steel produced the rails, that Lehigh was actually part of Pennsylvania, that the railroad in my backyard was a symbol of American industrial history — which I wouldn’t fully learn about for decades to come. Folsom’s book colored in more of the missing pieces for me.
Burt Folsom shows us that the industrialization of America was not a “pure” story of individual productivity. Rather, it was a story seriously contaminated by ongoing instances of innovation-stifling government intrusion (think: special privileges, regulations, subsidies, fines, charters, tariffs and miscellaneous obstructionism) at every turn, just a little at first but ever more as the years ticked by. And we learn in this volume to be on the lookout for those never-ending contaminations —— which prevented the story from being one of productive capitalism and turned it into a story of how government coercion always makes things worse and can damage an entire civilization’s understanding of what productivity and industrialization depends upon.
Folsom’s little book from 1987, now in its seventh printing, lays out the basic facts of notable American entrepreneurs. And woven into each story we see the same history repeating itself over and over: economic growth stifled by coercive government forcing citizens to misallocate their wealth.
The culture at large painted each of the successful industrial pioneers as an object of scorn, as if each had stolen, rather than created, his wealth.
Vanderbilt, for instance, uprooted Robert Fulton’s state-granted and state-enforced monopoly of all steamboat traffic in New York; he was instrumental in removing government force from the economic equation; he relentlessly competed against federal aid to other steamboat operators; and when he out-competed even the most heavily subsidized shipping lines, he was vilified and hated for his success.
These American producers were likened to the “Robber Barons” of medieval Germany who used force to extort wealth from innocent merchants. “Robber Baron” turned out to be an effective smear, casting paragons of virtue and productivity with the opprobrium ordinarily reserved from rapists and murderers.
Those who benefited most from the new comforts afforded by the industrial revolution were the ones who most vehemently denounced the very men who made those comforts possible.
It was these envious and vengeful regressives who ultimately rose to prominent numbers in government, in academia and in the press. These were the ones who clamored for federal subsidies and loans (think: Solyndra, today, or railroad land grants, back when); these were the ones who threw up obstacles to economic development (think: ICC, FTC, anti-trust); these were the ones infecting the American culture of freedom with the notion that protecting individual rights was, therefore, the central mistake of our country’s founding (!).
So, all during the careers of Vanderbilt, of the Scranton’s, of Rockefeller, of Carnegie and Schwab, of Mellon, there was a cultural counter-current, even as the developing industrial revolution was lifting the masses out of poverty for the first time in human history.
Each instance where an industrial hero created new wealth and opportunity where none had existed before, the counter-current grew louder.
And what was the counter-current? It was the growing chorus in support of government confiscating this newly created wealth and distributing it to non-producers; in support of disallowing inheritances; in support of throwing up obstacles to business growth; in support of coercively imposing equality of wealth —— never mind the producer who created the wealth in the first place; and never mind the impact on would-be future producers.
The counter-current was a resurrection of the Christian morality outlined in The Sermon on the Mount; it was given new energy by 19th century German philosophers; it was smuggled into America by the country’s intellectuals, not the least of which was Woodrow Wilson who had pursued his graduate education in Germany, itself.
Never mind that millions of Americans suddenly were lifted out of century’s-old poverty; never mind the new opportunities suddenly available to anyone willing to pursue them; the culture was already under the spell of this “new” (think: old) moral philosophy insisting that our foremost moral duty is to sacrifice ourselves to others — i.e., otherism, or, altruism.
Folsom’s book gives us a glimpse into the phenomenon of wealth creation itself. We see that it depends entirely upon the focused effort of individuals.
And side by side with stories of wealth creation we see how the wealth destroyer gradually but steadily took command of the culture’s hatred for individual productivity. We see how the bias against individualism has been woven into today’s indoctrination which passes for education.
To me, Folsom’s most compelling act was to make solidly concrete the picture supporting an otherwise abstract principle: productivity requires freedom. It is a principle practically lost by today’s culture.
March 8, 2019
Great book, easy to read
What a pleasure reading the life stories of these industrial titans of the 1800s, early 1900s era. The author gives just the right balance of detail to give the personages depth and also keep the reader fully engaged in the adventure of their rise to fame and business success. It was also so refreshing to have a historical narrative from a pro-market point of view.
The author brilliantly tells the bare facts of their life stories and the economic conclusions are self evident to the reader.
Highly recommend!
What a pleasure reading the life stories of these industrial titans of the 1800s, early 1900s era. The author gives just the right balance of detail to give the personages depth and also keep the reader fully engaged in the adventure of their rise to fame and business success. It was also so refreshing to have a historical narrative from a pro-market point of view.
The author brilliantly tells the bare facts of their life stories and the economic conclusions are self evident to the reader.
Highly recommend!
May 5, 2012
I give the book five stars for content and 2.5 stars for the writing. I've heard the author speak, so I know that he speaks better than he writes. However, the book has a wonderful message that is rarely contrasted in our modern world where management of monopolies by the government is considered a good thing. This book has fascinating history that's not in any standard history book. You didn't get this information in school.
August 18, 2009
A fresh look at "robber barons" and the history of industrial development in America. We cannot learn from history if its writers are not objective. Historians present a tainted, liberal (capitalism is evil) point of view. The robber barons generally divide into market entrepreneurs and political manipulators.
April 26, 2009
It was interesting to see how Folsom differentiated between what he calls "political entrepreneurs," those who compete for corporate welfare and other political favors, and "market entrepreneurs," those who compete on price and quality. Rather enlightening and well researched.
January 7, 2010
A fairly quick, good read. It was a little different than I expected. It was mainly mini biographies of the supposed robber barons. The last chapter was interesting when it picks apart some of the research regarding social mobility (i.e., do the rich stay rich and the poor stay poor).
January 21, 2018
One of the fewer non marxist histories. Sure, the proletariat had less comfort on Vanderbilt's boats, but high ticket prices and subventions paid by the many hurt the proletariat more than the capitalists.
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