Discussion Topic

The justification for labeling late 19th-century industrialists as "Robber Barons" or "Captains of Industry."

Summary:

Late 19th-century industrialists are labeled "Robber Barons" for exploiting workers, manipulating markets, and amassing vast wealth unethically. Conversely, they are called "Captains of Industry" for driving economic growth, innovation, and philanthropy, significantly contributing to America's industrial advancement.

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How justified is it to label the industrial leaders of 1875-1910 as "robber barons" or "industrial statesmen"?

The Progressive perception that those who created the wealth stole it from those less fortunate assumes that wealth is a static quantity with a zero-sum gain -- that if Carnegie has it, it must have come at the expense of the hundreds of thousands who didn't.  However, this supposition ignores the breakthroughs in technology, banking, and business organization that improved the lives of those hundreds of thousands.  Wealth is not zero-sum -- wealth is created, and the individuals who were free to create wealth did so amazingly and benefited the whole of society by raising the standard of living. In some cases, the living standard went from non-existence to bare subsistence -- this describes the effects of rapid industrialization within the Dickensian novels from the 1830's, for example, and describes the US experience with those same issues a generation or two later.  The impact of the industrial leader's success is staggering -- between 1850 and 1900, the world population doubled.  If very few of those people had the living standard of a Carnegie, it's understandable that at least they existed -- which they would not have without the Industrial Revolution, which would not have occurred without individuals being free to invest their resources as they saw fit.

Nevertheless, where business practices affront individual rights,  those engaging in such practices should have been legally required to cease. Poor business practices eventually undermine the business -- who would work for them, or buy their goods or services? If a business evolved into a coercive monopoly, didn't government break it apart to allow other businesses to compete? If a business exploited its workers, didn't government protect them, or did labor unions evolve to address business grievances?  Where was this wealth-theft?

The people who ushered in that era of phenomenal growth are creators and innovators.

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Robber Barons or Industrial Statesmen:

Here is some information that will help you answer the question.  I will describe two ways of accumulating wealth.

1) Using bribes and other political influence to get laws and regulations passed so that you can gather in wealth that was created by other people.  An example of this is found in the history of railroad building during the years that you are considering.  Some railroad builders used bribes and gifts of stock in their railroad ventures to get U. S. Congressmen to pass laws that gave to them (the railroad builders) vast acreages of public lands.  They justified this by saying that the country needed the railroads so bad that the government should pay for them by giving the land to the builders.  But there were railroad builders who built their roads without these grants of land.  James J. Hill is one such.  Many big businesses have received subsidies from government, but government has no money of its own; in order to give money to one party, government must first take it from another party.  This is the way wealth is gathered from people who created it and given to people who did not create it.

2)  Wealth can be accumulated by creating it.  For example, if I own a small stand of timber, somebody might pay me $10,000 for it as it is.  If I invest $1,000 worth of my time and wear and tear (spelling?) on my chainsaw to cut the trees down and trim the limbs off of them, now somebody might be willing to pay me $12,000 for the same timber.  I have just created $1,000 in wealth.  (I started with $10,000, and it is now worth $12,000, but I must subtract the $1,000 that I spent, so that my profit is $1,000.)  I did this without taking anything from anybody.  Government did not give me anything that it had taken from anybody else.  I did it all myself.

Which example describes a robber baron and which describes an industrial statesman?  Was James J. Hill a robber baron or an industrial statesman?

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Part of the reason why each particular label can fit is because there were competing ideologies of the time.  The "industrial statesman" or "titan of industry" label could be appropriate because this was the time in American History where much in way of industrial growth, laisssez faire economies, and the business application of Social Darwinism was highly evident.  America was in the grip of material advancement and social wealth, and this helped to solidify the belief that the Carnegies, the Stanfords, the Morgans of America of the time were industrial statesmen.  Competing with this ideology was the perception of Progressivist ideas which stressed that America cannot be defined by the richest 1%, but rather the economically and socially marginalized 99%.  This disproportionate and large percentage of people are the results of the "industrial statesmen."  The Progressivists argued that these individuals did not possess economic wealth or material progress, and were subjugated because of it.  Due to this, they became the perceived as "robber barons."

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It is fairly easy to characterize them as robber barons, particularly if you are a progressive reformer of the time.  They weren't necessarily against people being rich, they were just against people being obscenely rich, an at the expense of the working poor and immigrants.  The top 1% of the population at the time of the late Gilded Age controlled 40% of the wealth in the country, which is a staggering figure.

As industrial statesmen, you could easily argue that they created jobs, fueled the development of a country, and gave back much of their wealth to society in philanthropy (charity).  They were the ones who took the risk, invested their money and built their companies, qualities that would qualify them as leaders in any society.

Use this information to judge for yourself which label better fits the wealthy men of the time.

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Should late 19th-century industrialists be called "Robber Barons" or "Captains of Industry"?

This eventually gets to a question that is often examined by American history students: Were the industrialists of the so-called "Gilded Age" in the United States "robber barons" who built their empires through fraud, graft, and above all exploiting the labor of the working people, or were they "captains of industry," whose labors helped build the United States into the world's leading industrial power by the early twentieth century? The answer to this question is a matter of perspective. Rather than providing a direct answer, it seems best to provide an analysis that looks at both sides of the question and allow you to decide.

It is absolutely beyond dispute that the Gilded Age featured widespread corruption, and that many of the actions of the wealthy industrial and financial titans were no different. Railroad tycoons (the men who were first called "robber barons" in contemporary media) conspired to raise stock prices, manipulated shipping rates, siphoned money out of government coffers, and received free land grants from the federal government, as well as many states. John D. Rockefeller, head of the Standard Oil Company, built his company into an enormous trust, pushing all competitors out of business. Leaders of many other business did the same, prevailing on politicians to pass favorable legislation. They also stood firmly against any kind of workplace regulation, and often called out state militia to crush labor disputes, as Henry Clay Frick, acting on behalf of Andrew Carnegie, did at the Homestead steel works. The gross inequalities, thorough government corruption, growth of enormous corporations, and terrible work conditions that existed across the country were the result of their actions.

At the same time, the talents of these men dramatically boosted the American economy (though it became susceptible to depressions and long recessions). Railroad magnates, corrupt or not, built the infrastructure that was largely responsible for American growth. They fostered technological innovations, developed new techniques for efficiently organizing businesses, and overall, led the American emergence as a global power. Many also donated millions to charity. Andrew Carnegie promoted what he called a "gospel of wealth," in which men like himself were obliged to spend their lives, and their money, for the betterment of society. Rockefeller also gave massive amounts of money to charities and promoted the fine arts. Economic growth led to massive inequality and an oppressed working class, but it also created a growing and affluent middle class, as new jobs were created.

So having looked at both sides of this issue, you can see that there is an abundance of arguments to be made for and against the overall impact of these men.

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Should the late 19th century industrialists be referred to as "Robber Barons" or "Captains of Industry"? What's your analysis?

"Robber barons" and "captains of industry" are both terms for the same group of people: a handful of industrialists and entrepreneurs who became extremely wealthy in the late 19th and early 20th centuries in the United States.

What you call them depends on your political orientation. "Robber baron" was the term assigned by the progressive press. This term focuses on the darker side of how these wealthy people amassed their wealth: through violently breaking up attempts of workers to unionize for higher pay and safer working conditions, by creating monopolies of goods or services and then raising prices very high, and by bribing politicians to achieve political ends. Those who focused on these aspects of the very wealthy perceived them as getting ahead by robbing the people who couldn't afford to pay. They saw them as criminal for paying low wages and charging high prices.

Captains of industry was the complimentary term assigned by the conservative, pro-business press. This group focused on the positive aspects of what the wealthy entrepreneurs did for the country: the wealthy created jobs, for example, and also gave generously to charity. Andrew Carnegie, to name just one individual, built many libraries that were open to the public. Those who saw the extremely rich in a positive light argued that they were leaders, risk takers, and role models for other Americans.

I will leave it up to you to explain to your British friend what your opinion is as to whether these entrepreneurs did more evil or good for the United States. One question you might ask yourself is whether you would want to live in the world in which they prospered or a later world in which laws and regulations curtailed some of their power?

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"Captains of Industry" and "Robber Barons" are simply two ways of viewing the major industrialists of the late-19th century and early-20th century. This period saw rapid industrialization, urbanization, and exponential developments of many first-world economies, such as the United States and Great Britain.

Additionally, the Industrial Revolution birthed many world-changing inventions, such as the automobile and airplane. Industrialists such as Henry Ford, Andrew Carnegie, and Cornelius Vanderbilt were seen as influential and powerful businessmen at the top of their respective industries.

However, there are critics—mostly those with a socialist, anarchist or communist ideology—who believed that they gained and maintained their wealth through unethical business practices. Although those who call these industrialists "robber barons" come from a certain political ideology, their criticisms had basis in truth.

For instance, Cornelius Vanderbilt, who amassed great wealth from the railroad and shipping industries, was known to receive money from government-subsidized shippers. This allowed Vanderbilt to not compete on their routes. Vanderbilt made his second fortune from the Civil War by supplying steamships, which some historians saw as war profiteering.

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