Overview
Robber Barons were the 19th century American industrialists and financial leaders that made a large amount of money through monopolies in ginormous industries. Most people believe the Robber Barons to be harmful, as they typically engaged in unethical business practices, exploited their workers, and did not give much care to their competition often running them out of business. However, in Burt Folsom's take, he believes that these Robber Barons were actually really useful and grew the U.S. economy.
19th Century United States Economy
Folsom would be correct in his assessment that these monopolies helped grow the United States into a super power. Not only did these monopolies control the United States markets, but they also controlled much of the world markets and helped create the valuable infrastructure for the United States to launch into the top spot in economic scale. Controlling the oil, railroads, and steel production purely from competition means that these companies had the most efficient methods to create the product while still maintaining quality. So the United States economy had all of this going for it in the Gilded Age, leading to other industries also gaining dominance during this time. For example, the automobile industry, led by Ford, had elite level steel production and oil refineries to piggyback off of. *As a result, the level of influence these companies had on the United States and the world economy genuinely helped shape the United States into the dominant economic force it is now. *
Government Intervention
Folsom listed a few examples of government intervention failing with their subsidy grants. Often times, these entrepreneurs relied purely on these grants to further their business and stay afloat. This was convinced by spreading the fear of other countries getting ahead of the United States in certain early-age industries, such as steamboats. United States did not want to get behind, so naturally they started funding some companies to start their own steamboat ventures. That's where the Harriman example comes in, because he kept begging for money from the government and Vanderbilt was slowly gaining ground on him without any government help. Essentially, the government really didn't have to encourage a steamboat venture because natural competition and entrepreneurship would have taken care of that. There are some ventures where government subsidies are helpful, such as backbone industries like farming, but in new-age modern industries, there really isn't a point to subsidize it since there's enough incentive naturally to go after it and competition will continue the innovation battle.
Robber Baron Title
Do these entrepreneurs of the Gilded Age really deserve a title as harsh as this? Though these fellas absolutely use unethical business practices, exploited workers, and take out competition like it was nothing, they did also help contribute to the United States economy becoming a powerful force. Not only that, but the improved economy would have also created better jobs, improved living standards, and overall built the foundation of the United States we know today. Folsom argues that the Robber Barons don't deserve such a bad wrap, and you know what, I think I'm inclined to agree with him as well. They are some of the earliest highly successful entrepreneurs the country has ever seen, and were able to showcase extreme examples of innovation and control in markets. However, they do still deserve some hate because if the government hadn't have broken them up I'm not too sure how innovative we would be in those industries since then due to the fact their operations just eliminated any other venture in the lane due to their size and control over efficiency. Would have been very hard for other innovative companies to jump into that lane without the breakup of monopolies.
Political Entrepreneurs vs Market Entrepreneurs
This one is likely the most non-controversial statement in this entire reflection. Political entrepreneurs tend to do worse business wise than their market entrepreneur counterparts. Political entrepreneurs that have to rely on government money are not as good as market entrepreneurs that rely on their own innovation and business concept to generate money and grow their business. In multiple shared examples, the market entrepreneurs outperform their political entrepreneur counterparts. It creates a grittier environment where the entrepreneurs have to find things out their own way, create innovation themselves, find ways around the political entrepreneurs. The main phrase that would be a great example for market entrepreneurs would be, thinkers. They think to solve solutions, find a niche, gain a lane, and don't have to rely on hand outs from an overlying source. As a result, Folsom is absolutely accurate in the fact that political entrepreneurs typically end up doing worse, because they have a fallback if their venture doesn't go as intended. Market entrepreneurs don't, which makes them go into a non-fail mode which usually leads to them being way more successful.
