The Myth of the Robber Barons
Dr. Burt Folsom, in a speech over his book The Myth of the Robber Barons, detailed some lesser-known information about the beginnings of industrialization in America. His main points focused on the entrepreneurs behind the development of transcontinental rail lines and steamships and their race for progress and profits.
The Plight of Steamships
One of the main points from Dr. Folsom’s talk, that stood out to me, was the story about the race to build steamships to take passengers from the U.S. to Europe. He used this point to start the comparison between political and market entrepreneurs. The political entrepreneur Dr. Folsom first emphasized was Edward Collins. Through his connections in the government, Collins was able to get a subsidy to help him develop his steamships that could be used for Atlantic travel. This initial “yes” to a starting amount by the government never seemed to end as the U.S. government would end up spending eleven million dollars on Edward Collins steamship business, only for it to come in second in both profits and popularity to the market entrepreneur of the steamship industry, Cornelius Vanderbilt.
What made Cornelius Vanderbilt a market entrepreneur is that while he may not have had access to the amount of start-up money and government subsidies that Collins had, he still was able to build an extremely successful business. Through cost-cutting practices like saving money on fuel by spending an extra day on the water or by advertising inexpensive travel to everyone, he was able to make more profits than Collins ever saw, even without outside help.
My Thoughts
I thought this point, and the additional example about the race to the continental divide between railroad companies was extremely informative about the potential harms of government subsidies. I personally believe that we can learn a lot from history, and it does appear—at least from the information I know now—that receiving “handouts” in the form of government subsidies can actually mask real problems that businesses are suffering from, and that is decreasing their revenue.
However, the one concern that I have is with the overall issue of the term “robber barons” and how Dr. Folsom solely focused on how they used ingenuity and hard work to build better businesses. I thought a point that should have been addressed is that the fact that the astronomical amount of profits that these captains of industry, or robber barons, gained were not only due to inventing the best version of new products but also because they condoned extremely unhealthy work environments for their employees. They made additional profits by being ruthless and by offering low wages, high hours, and banning union membership (Alchin, 2018). Therefore, while I am not opposed to spreading the word about the good things we can learn from business practices during the Gilded Age, ultimately I do not believe robber barons should be hailed as captains of industry to admire.
Work Cited
Alchin, L. (2018, September 1). Robber Barons: US History for kids. Retrieved November 10, 2021, from https://www.american-historama.org/1866-1881-reconstruction-era/robber-barons.htm
Folsom, B. (2010, August 3). Burt Folsom on Myth of the Robber Barons. C-SPAN. https://www.c-span.org/video/?294883-2/burt-folsom-myth-robber-barons