In the wake of the Civil War, the United States became a more modern industrialized country, a development that would soon see it overtake Great Britain as the richest country in the world.
Spearheading this remarkable economic transformation were the so-called robber barons, captains of industry such as Andrew Carnegie and John D. Rockefeller, who created gigantic corporate entities that ruthlessly drove their competitors out of business and virtually cornered the market in their respective industries.
Although the actions of the robber barons were hailed by many as an example of American free enterprise in action, others were extremely disquieted by what they saw as the unethical behavior of these titans of industry.
As well as using their huge size to drive smaller competitors out of business, the robber barons were notorious for engaging in ruthless cost-cutting measures, such as keeping wages as low as possible. The great captains of industry were also accused of stealing control over natural resources, which is how they got the name “robber barons.”
Yet for many years, the robber barons were able to get away with their sharp practices. This was mainly because the dominant laissez-faire economic ideology, which held that light-touch regulation was necessary to maximize the prosperity and efficiency of the economy.
Champions of laissez-faire economics firmly believed that those involved at the sharp end of business, such as industrialists, were better positioned than government bureaucrats to respond to changes in supply and demand and adjust their behavior accordingly. That being the case, governments should simply set the general legal and regulatory framework and let businesses operate freely.
In practice, this meant that the robber barons were able to concentrate enormous power and wealth into their hands, safe in the knowledge that politicians, many of whom received regular bribes from large industrial corporations, would do little or nothing to stop them.