The Myth of the Robber Barons

Rating:
Summary: Compelling Revisionism
Review: Burton W. Folsom's "The Myth of the Robber Barons" is the ultimate apologist's essay on the early industrialists of the late nineteenth and early twentieth centuries. In fact, the title of the book suggests that Folsom intends to overturn the negative verdict handed down by Matthew Josephson in his seminal piece "The Robber Barons" (1934), although the author spends no time directly refuting Josephson's claims.

Folsom's highly revisionist tone should not detract from the fact that the he lays out an extremely concise (134 pages) but compelling argument that traditional history texts have unfairly lumped all early industrialists together as market predators and sources of political corruption and social upheaval. Folsom's thesis consists of two central points: 1) overall the early industrial captains did more good than harm because their efficiency brought a wide range of high quality, low cost goods to the average American consumer for the first time; and 2) what harm they did cause was more often than not a direct result of well-intentioned but poorly conceived and executed government market intervention.

The first two chapters of this book on the development of the steamship and railroad industries, respectively, are far and away the most interesting and convincing. Folsom uses these two industries to introduce his conception of the "good" and "bad" entrepreneur. The former he labels "market entrepreneurs" who, he argues, succeed in business through technological innovation and production efficiency. The latter he calls "political entrepreneurs," which are marked by their use of governmental subsidies and protection that ultimately retards industrial development and keeps prices artificially high. Folsom presents Cornelius Vanderbilt and James J. Hill as the paragons of "market entrepreneurship" for their track records of operating extremely efficient, innovative and successful businesses against competitors who had the "benefit" of government subsidies and protection.

Next, Folsom directly challenges this notion of federal subsidies as a benefit. He argues that federal support, particularly in the case of building the first transcontinental railroad, often motivated inefficient behavior and was accompanied by requirements that further debilitated the recipients. For example, Folsom maintains that the main form of subsidies for building the transcontinental railroad - land and loans per mile built - put a premium on speed of construction over quality. The end result was a transcontinental line that was permanently saddled with high fixed costs owing to sloppy original construction and overpaying for necessary building materials. Also, the nature of the federal support seemed to encourage graft and corruption, although Folsom concedes that the railroad executives deserve their share of culpability in events like the Credit Mobilier scandal. Finally, as recipients of federal largesse, the railroads had to agree to ship US mail at reduced rates, which lowered existing revenue, buy American construction materials even if they were of a higher price and lower quality, which increased costs, and were not allowed to build crucial feeder lines without Congressional approval, which prevented new sources of revenue. The end result, Folsom claims, was a vicious cycle: federal aid tied to miles of road constructed led to construction inefficiency and political corruption; the inefficiency and corruption led to consumer wrath; consumer wrath led to government regulatory intervention; and the regulation closed options and pushed the roads into bankruptcy.

Folsom's hypothesis is concise and neat -- perhaps too neat. Some of the data Folsom uses to support his arguments are debatable. For instance, to support his claim that uniform railroad rate regulation as laid down by the Hepburn Act seriously damaged US exports to Asia, particularly the market entrepreneur Jim Hill who never received any federal aid, Folsom cites the fact that US steel exports to Japan and China fell 40% between 1905 and 1907. Of course, during that time period the Russo-Japanese War also went from its height, when Japan was presumably importing massive amounts of foreign steel in support of its war effort, to a peaceful conclusion. Clearly then, much more influential forces than the Hepburn Act contributed to the fall in US exports over that time. Whether this oversight was an act of omission or commission on the part of Folsom is debatable.

Overall, while the scholarship of "The Myth of the Robber Barons" may leave a bit to be desired, the author's central thesis and main observations are compelling and should be considered with care. If you are interested in viewpoints on American economic and industrial development, you'll want to read this book.

Rating:
Summary: The Myth of the Robber Barons
Review: Excellent book about the greatness of the entrepeneurs who didn't have to rely on gov't subsidies to succeed! Finally, a chance to hear the other side of the story. Gov't subsidies have always resulted in failure and this finally shows who the great industrialists of the 20th century were and that true laissez faire capitalism can work! Enjoy!

Rating:
Summary: The Myth of the Robber Barons
Review: Excellent view of the way laissez-faire capitalism should be and why gov't subsidies don't work. It is so good to read the other side of the story! Now we know who the real entrepreneurs were! Thanks for a touch of reality, Mr. Folsom.
To all readers, Enjoy this refreshing volume.

Rating:
Summary: Great antidote to common history texts
Review: Folsom picks out six success stories - of Vanderbilt's success against government-chartered monopolies, of the Scranton's success in challenging English steel manufacturers, of J. J. Hill's victory over subsidized transcontinentals and subsequent undoing by anti-trust laws and rate regulation, of Rockefeller's nearly unknown struggle against foreign oil, of Charles Scwhabb's rise and fall as a steel manufacturer, and of Andrew Mellon's success as a taxcutting Treasury Secretary - and uses these to illustrate how historians lump economic entrepreneurs and political entrepreneurs together, and fail to teach us the correct lessons. Economic entrepreneurs are those whose vision, energy, talent, and willingness to take risk increase the size of the pie for all, while political entrepreneurs are those who beg for public assistance, squander it, resort to graft and influence peddling, and bring the wrath of the public down upon their ears as well as upon the economic entrepreneurs. Usually, it is the economic entrepreneurs that take the worst beating. In his effort to show the positive contributions of these individuals, Folsom fails to answer or even tell some of the infamy associated with men such as Vanderbilt ... but then, one of the points that he makes is that mainstream history books are full of this type of innuendo and rumor.

The reviewers complaining about the oversights fail to appreciate Folsom's intended audience or purpose. He is specifically pointing out problems with history texts, not trying to write an unassailable, definitive history of each of these industries.

Rating:
Summary: Terrible
Review: Folsom's book is accessible, eye-opening, and compelling. It is, I believe, the very best short work that punctures the prevailing myth of the robber barons. As Folsom shows, many of the most reviled "robber barons" were incredible benefactors of humankind - J. D. Rockefeller included.

Folsom's chapter on Rockefeller is a special gem. In a few pages, Folsom demonstrates what a truly remarkable human being Rockefeller was. Everyone in the industrialized world today would be noticeably less-well-off had J. D. Rockefeller not lived, or if he had lived in a time and place that would have snuffed out his incredible entrepreneurial creativity.

Not all late-19th-century businessmen were admirable. Folsom capably identifies the most notable "political entrepreneurs" (Folsom's term). Political entrepreneurs made their fortunes by manipulating the political process - by persuading or cajoling government to transfer wealth from politically weak parties to themselves. Market entrepreneurs, in contrast, earned their fortunes by making consumers and workers better off.

This is a superb work of business and economic history.

Rating:
Summary: Eye-Opening and Fascinating History
Review: Folsom's book is accessible, eye-opening, and compelling. It is, I believe, the very best short work that punctures the prevailing myth of the robber barons. As Folsom shows, many of the most reviled "robber barons" were incredible benefactors of humankind - J. D. Rockefeller included.

Folsom's chapter on Rockefeller is a special gem. In a few pages, Folsom demonstrates what a truly remarkable human being Rockefeller was. Everyone in the industrialized world today would be noticeably less-well-off had J. D. Rockefeller not lived, or if he had lived in a time and place that would have snuffed out his incredible entrepreneurial creativity.

Not all late-19th-century businessmen were admirable. Folsom capably identifies the most notable "political entrepreneurs" (Folsom's term). Political entrepreneurs made their fortunes by manipulating the political process - by persuading or cajoling government to transfer wealth from politically weak parties to themselves. Market entrepreneurs, in contrast, earned their fortunes by making consumers and workers better off.

This is a superb work of business and economic history.

Rating:
Summary: Too one-sided.
Review: For the most part, I enjoyed reading the book. The charitable contributions of these men should be documented, and they were. Their contributions to society have been many, such as Vanderbilt University. However, Folsom overlooks Rockefeller's conduct in the "Ludlow Massacre" and JP Morgan's selling defective arms to the North during the Civil War. These incidents were ignored, which is why I gave this book the rating I did.

Rating:
Summary: Great Book for Introducing the Expansion of Industry
Review: I used this book as the primary text for a high school class I taught: Monopolies: Necessity, Invention, and the Corporation. It is a great springboard to learning how the major indutries of the 19th century developed and helped shape this country.
Folsom presents the major players with a conversational tone that makes this book accessible to young readers. He does a great job of presenting the people in a realistic light, rather than the classic "Captains of Industry," out to rob the little guy view presented in so many texts in this genre.
Thoroughly enjoyable and recommended. My only prooblem with it - why is it so hard to get? I have had a horrible time getting copies of this book - the publisher may be phasing it out, although I don't know. I've tried several outlets, and all seem to have difficulty getting multiple copies. Amazon claims 1-2 day availability - it's been a month and I am STILL waiting for copies.

Rating:
Summary: Compelling Revisionism
Review: If you want to learn about the Robber Barons, you should not read this book.

The stated goal of this book is to argue that government subsidies are bad. It then tries to prove this thesis by describing various Robber Barons. To take the example of the railways: he describes 3 barons who accepted subsidies and wasted them, then describes one (Jim Hill) who didn't and thrived. This is all fine and good, but doesn't prove anything at all. I could show you 3 men who can cook and a woman who can't - does that prove that women can't cook?

Neither does he make any attempt to fully describe any of the robber barons or the industries they competed in. His "thesis" gets him off the hook - he uses only those facts which help his argument, ignoring everything else. He doesn't make any attempt to illustrate their strengths and weaknesses, their mistakes and lucky breaks, etc. Instead he paints a simplistic black-and-white picture of these complex and colorful men.

This book is easy to read, but why bother? If you are interested in the robber barons, look elsewhere. And if you're interested in government subsides, no doubt you'll want more than just century-old anecdotes.

Rating:
Summary: Revealing the Truth About America's Greatest Entrepreneurs
Review: This book underscores the truth about men like Andrew Carnegie, John Rockefeller, Cornelius Vanderbilt, etc. They all had one thing in common, viz., they became fabulously wealthy by reducing prices. In each case, Folsom demonstrates how they took a product or service that was available only to the most affluent members of society because of high cost and made it available to everyone at greatly reduced cost.

As a specific example, Folsom observes that "Even after twenty years in the oil business, 'the best illuminator [kerosene] at the lowst price' was still Rockefeller's goal; his Standard Oil had already captured 90 percent of America's oil refining and had pushed the price down from 58 cents to eight cents a gallon." He did this by reducing costs and absorbing less-efficient competitors, often under terms that made the absorbed competitor's founders very wealthy. This is capitalism at its very best!

But, this doesn't seem to be good enough for liberal historians---to be politically correct, rich folks must emulate Andrew Carnegie and give away all of their wealth upon their death. Too bad John Rockefeller didn't follow this model for he would have spared us the likes of Nelson and Jay!

Even if the so-called Robber Barons were mean and nasty individuals, what difference does it make? They helped make America great, and that is a fact. But, I suppose it depends on what the meaning of "is' is.