Robber Barons

[w4rma]

I. Introduction

"Robber Barons": that was what U.S. political and economic commentator Matthew Josephson (1934) called the economic princes of his own day. Today we call them "billionaires." Our capitalist economy--any capitalist economy--throws up such enormous concentrations of wealth: those lucky enough to be in the right place at the right time, driven and smart enough to see particular economic opportunities and seize them, foresighted enough to have gathered a large share of the equity of a highly-profitable enterprise into their hands, and well-connected enough to fend off political attempts to curb their wealth (or well-connected enough to make political favors the foundation of their wealth).

Matthew Josephson called them "Robber Barons". He wanted readers to think back to their European history classes, back to thugs with spears on horses who did nothing save fight each other and loot merchant caravans that passed under the walls of their castles. He judged that their wealth was in no sense of their own creation, but was like a tax levied upon the productive workers and craftsmen of the American economy. Many others agreed: President Theodore Roosevelt--the Republican Roosevelt, president in the first decade of this century--spoke of the "malefactors of great wealth" and embraced a public, political role for the government in "anti-trust": controlling, curbing, and breaking up large private concentrations of economic power.
…
Ironically, it was Republican president Herbert Hoover who triggered the process. Hoover thought that Wall Street speculators were prolonging the Depression and refusing to take steps to restore prosperity. He threatened investigations to persuade New York financiers to turn the corner around which he was sure prosperity waited. Thus, as Franklin D. Roosevelt put it, "the money changers were cast down from their high place in the temple of our civilization." The Depression's financial market reforms act broke the links between board membership, investment banking, and commercial banking-based management of asset portfolios that had marked American finance before 1930. Investment bankers could no longer be commercial bankers. Depositors' money could not be directly used to support the prices of newly-issued securities. Directorates could not be interlocked: that bankers could not be on the boards of directors of firms that were their clients.
…
E. The Return of the Super-Rich

The years since 1980 have seen the return of the super-rich in the United States. Some of this is due to the great stock market boom of the past decade and a half, which has carried many of those who inherited their wealth and whose ancestors had never achieved "billionaire" status into the billionaire category. These are America's first true inherited aristocracy: the first generation of those with immense social and economic power who have inherited it.

More of the return of the super-rich is due to the blurring of the lines between financiers and corporate managers as the Depression-era order of American finance has fallen apart. It is once again possible to raise large sums of money and then direct them to suit one's own interest, rather than turning them over to salaried managers interested in perpetuating organizations.
…
http://econ161.berkeley.edu/Econ_Articles/carnegie/delong_moscow_paper2.html (fixed the link)

[cosmicdot]

1. couldn't get the link to work

thanks

[TrogL]

2. Working Link

http://econ161.berkeley.edu/Econ_Articles/carnegie/delong_moscow_paper2.html

[cosmicdot]

3. thank you

[J_Q_Higgins]

4. A history lesson

People wanted to work for Ford, Rockefeller, Carnegie, etc., because they paid higher wages than most other employers paid at the time. And people wanted to buy their products because the quality was higher and the prices were lower compared to the alternatives at the time. To this very day, workers and consumers benefit tremendously from the technologies that were invented by these industries.

The term "robber baron" simply means that the person using the phrase hates the rich more than he loves the poor.

Ford, Rockefeller, Carnegie, etc., got rich because they made their products with higher quality and more efficiently compared to their competitors. This gave better wages for the workers, and better products at lower prices for the consumers.

[Aaron]

5. Libertarian? (n/t)

[J_Q_Higgins]

6. Partly.

Certainly on issues of personal freedom, I am a libertarian.

On economics, I think I am a "realist." I like to study economics as a hobby. I don't judge people based on their income. I don't have the "hatred" for the rich that some people seem to have.

And I do think that people like Ken Lay who commit theft and fraud should be in jail. In fact, given the huge immensity of such crimes, I would favor life in jail with no possibility of parole.

On the other hand, people who make money legally and honestly by provding consumers with valuable goods and services are A-OK with me.

Today's "robber barons" would be people like Paul McCartney and Stephen King and Oprah Winfrey. And also some rich Democrats like Warren Buffet and Ted Turner. I have nothing against them.

In fact, I heard that J.K. Rowling is now richer than then Queen of England. I guess she's a "robber baron" too.

I am a huge advocate of scientific innovation to improve the standard of living for people - for all people.

I believe that the scientific innovations of the past few hundred years have benefitted the poor and the middle class far more than they have benefitted the rich. For example, a poor person who shops in a supermarket today has a better selection of food than what the richest person had 200 years ago. 200 years ago, the richest person in the world could die from a simple cut on his foot, whereas today, a poor person who gets the same cut can be cured with $10 worth of antibiotics. And then there's air conditioning, which the richest person in the world didn't have 200 years ago. 200 years ago, rich people could afford live entertainment every day, but today, almost anyone can afford a nice collection of CDs and DVDs for entertainment. And with the telephone, a poor person can talk in real time to his friend who lives 1,000 miles away, but 200 years ago, the richest person in the world couldn't do that. I love all this stuff.

For each and every one of these technologies, there were "robber barrons" who made huge amounts of money from them.

But no matter how much money the "robber barons" made, the benefits that went to the poor and middle class were far, far, far bigger.

Rich people always had life easy. But today's technology makes life a lot easier for the poor and the middle class. I'd rather be a poor person today than a rich person 200 years ago.

I don't like the radical libertarian ideas of abolishing all taxes, privatizing all the roads and sidewalks, repealing all environmental protection laws, etc. So I suppose I am a moderate libertarian.

None of the Democrats that I know in real life seem to have any significant hatred for rich people, but I do see a lot of such hatred on these boards. I think for every libertarian on this board, there are several Marxists.

I actually don't hate anyone. It is my opinion that hate is a wasted emotion, and I'd rather place my emotional investment in things that are more productive.

I always wonder about people who express hatred in their political opinions, whether its towards rich people, or towards blacks, or towards homosexuals, or towards abortion providers, or towards people who have abortions, or towards gun owners, or towards SUV drivers, or towards any other group of people. I can understand why a person might disagree with any group of people. But I don't understand why anyone would hate any of those groups. People should be able to disagree in a polite and civil manner.

[w4rma]

7. money = power, power corrupts, absolute power corrupts absolutely

Who is to say that the sons and daughters who inherit this wealth will be as wise and hardworking with it as their parents and ancestors possibly were? The American Revolution was fought to free Americans from British aristocrats and the King's monopolist corporations.

I have no hatred of rich folks. However, I know that a build up in concentration of power will *always* lead to oppression.

[J_Q_Higgins]

8. I have a question for you.

J.K. Rowling, the author of the Harry Potter books, is now the richest person in England.

Who has she harmed or corrupted or exploited?

As long as the money is obtained legally and honestly, there is nothing wrong or corrupting with it.

What matters is how the money was acquired, not the amount.

[w4rma]

11. Would it be okay with you if J.K. Rowling owned 3/4's of Britain? (n/t)

[J_Q_Higgins]

13. Yes, if......

Yes, if she obtained it through *voluntary* buyer/seller relationships.

In other words, the issue is how she acquired the land, not how much land she owned.

Buying land is just like prostitution - as long as the parties are all consenting adults, it should be legal.

[w4rma]

16. I must admit that I didn't expect that answer. (yes)

I bet the Tories, who were loyal to the throne of England, would have given a similar answer as you have.

King Rowling.

[Code_Name_D]

9. Certainly a strange view of "robber barrens" me thinks.

Today's "robber barons" would be people like Paul McCartney and Stephen King and Oprah Winfrey. And also some rich Democrats like Warren Buffet and Ted Turner. I have nothing against them.

In fact, I heard that J.K. Rowling is now richer than then Queen of England. I guess she's a "robber baron" too.

Excuse me here. How are these folks robber barrens? The modern-day version of robber barrens would have to be the likes of Kennith Lay. Lay steals billions, but is protected by the state from prosecution for that theft. I believe you are trying to float a straw man here by claming that being rich is all that is required to be labeled a robber barren.

I am a huge advocate of scientific innovation to improve the standard of living for people - for all people.

I believe that the scientific innovations of the past few hundred years have benefitted the poor and the middle class far more than they have benefitted the rich. For example, a poor person who shops in a supermarket today has a better selection of food than what the richest person had 200 years ago. 200 years ago, the richest person in the world could die from a simple cut on his foot, whereas today, a poor person who gets the same cut can be cured with $10 worth of antibiotics. And then there's air conditioning, which the richest person in the world didn't have 200 years ago. 200 years ago, rich people could afford live entertainment every day, but today, almost anyone can afford a nice collection of CDs and DVDs for entertainment. And with the telephone, a poor person can talk in real time to his friend who lives 1,000 miles away, but 200 years ago, the richest person in the world couldn't do that. I love all this stuff.

Apples and oranges. Such arguments are little more than attempts to explain away the current divide between the haves and the have nots. And even the fixation of technology in and of itself conceals the real issues at work here. The pertinent mater is not weather the poor man in America has an AC unit stuck in his living room window. But weather he has things like job security, a living wage, assess to health care, affordable education for his children, and freedom from theft perpetrated by modern-day robber barrens such as Kennith Lay who raids privet 401K's for his own benefit.

The question isn't weather the poor today have it better than the rich 100 years ago. The question is weather the wealthy are profiting by exploiting the poor. And where we see the stratification of society as we are seeing in America today, we know this is indeed taking place. Just as surely as we saw the Pharoses of ancient Egypt exploiting the slave, I would put it to you that a rich Pharos is still better of than the poor in the modern age. After all, who need air-conditioning, when you have slaves fanning you.

When the declaration stated that all men have the right to "life, liberty, and the pursuit of happiness," they were not talking about digital wrist watches.

For each and every one of these technologies, there were "robber barrons" who made huge amounts of money from them.

But no matter how much money the "robber barons" made, the benefits that went to the poor and middle class were far, far, far bigger.

Oh now this is just flat out wrong. The robber barons came to their height in the 1930's. They lived in extreme luxury while children as young as 8 worked in the coal mines. The robber barons lived in four story mansions while farmers were having their homes re-possessed. Homes that were originally homesteaded by grate grand parents. The poor most defiantly did NOT benefit from modern technology.

Phone and power for example did not finally reach the poor until the rural electrification act was passed, mandating an even flat rate for all customers. Before, the wealthy were cut special deals, which were passed on to other less important customers. And whole regions were not served at all, simply because their was no wealth their to serve. And these things did not come about until the new deal.

Rich people always had life easy. But today's technology makes life a lot easier for the poor and the middle class. I'd rather be a poor person today than a rich person 200 years ago.

Truly. Even if the poor today have absolutely no security, while the rich of 200 years ago had privet armies at their command? The poor today don't even have the right to date co-workers. While the wealthy of 200 years ago had slaves to fan them, and drop grapes into their mouths. You would truly wish to work slavish hours, while not even making a full living from your labor, even as the wealthy even had their shoes tied for them.

The only thing worse than baloney, is sincere baloney.

I don't like the radical libertarian ideas of abolishing all taxes, privatizing all the roads and sidewalks, repealing all environmental protection laws, etc. So I suppose I am a moderate libertarian.

None of the Democrats that I know in real life seem to have any significant hatred for rich people, but I do see a lot of such hatred on these boards. I think for every libertarian on this board, there are several Marxists.

Labels labels labels. Why stop there? I am sure that word "communist" is just dying to get out.

I actually don't hate anyone. It is my opinion that hate is a wasted emotion, and I'd rather place my emotional investment in things that are more productive.

I always wonder about people who express hatred in their political opinions, whether its towards rich people, or towards blacks, or towards homosexuals, or towards abortion providers, or towards people who have abortions, or towards gun owners, or towards SUV drivers, or towards any other group of people. I can understand why a person might disagree with any group of people. But I don't understand why anyone would hate any of those groups. People should be able to disagree in a polite and civil manner.

And at the conclusion, should retain the right to rob you blind, and persecute you while the victim is suppose take the enlightened path? Allow me to point out another emotion for you. That of greed. And I suspect that greed has a lot more economic impact than hatred dose. The problem is that our modern notions of capitalism have turned greed into a virtue. And those who dare call attention to this fact are derided of being "jealous" of the wealth. A ridiculous notion of course, especially given how you would chose to be poor today, than rich in the past, right?

[J_Q_Higgins]

10. We can agree to disagree.

I said that I would rather be a poor person today than a rich person 200 years ago. Obviously, you may prefer the other choice. And that's fine.

Apples and oranges. Such arguments are little more than attempts to explain away the current divide between the haves and the have nots.

Anyone who has all that technology cannot accurately be labelled as a "have not." Such a person is rich!

The pertinent mater is not weather the poor man in America has an AC unit stuck in his living room window. But weather he has things like job security, a living wage, assess to health care, affordable education for his children,.....

The air conditioner is symbolic in that it represents his freedom to choose how he spends his own money.

Actually, having the air conditioner could be classified as a form of preventative of health care. 3000 people just died in France precisely because they did not own air conditioners.

And getting yourself fanned by slaves does nothing to reduce the temperature. The "wind chill" does not affect the actual temperature.

My focus is on what people have: air conditioners, refrigerators, computers, CDs, DVDs, telephones, access to supermarkets., etc.

Your focus seems to be on what people don't have. This can only cause emotional pain - because no matter how much you have, there will *always* be someone who has more.

The ultimate goal of human existence is happiness. And I'd say that focusing on what you have will help to achieve that goal, while focusing on what you don't have will not.

[Code_Name_D]

12. The response of some one who can not defend his position.

Apples and oranges. Such arguments are little more than attempts to explain away the current divide between the haves and the have nots.

Anyone who has all that technology cannot accurately be labelled as a "have not." Such a person is rich!

One, who is poor, is one who doses not have enough fiscal recourses to meet there needs. NOT weather they are in the possession of technology or not. Tell me, would a poor person in the dark ages be considered rich because they had candles, or wood cabinets? They were the technology of their day, and there for would be considered rich by your definition.

But what about those Americans who are homeless. Those who are living pay check to pay check, and are just one pink slip away from being forced out onto the street? What about those who have to chose between medications and food? Those who do NOT have walls, let alone an AC unit in them.

It is my opinion that those who deliberately attempt to redraw definitions in support of their own view point, are in fact practicing intellectual dishonesty. You fail to grasp the point of my response. I was not simply presenting my opinion, but directly challenging. Your efforts to defend your opinion have thus been less than impressive.

The air conditioner is symbolic in that it represents his freedom to choose how he spends his own money.

What a disgustingly arrogant response. Try reading Nickeled and Dimed, and you will see the type of choices Americans might have with money they do NOT have. And your commented is woefully illogically as well, given that an AC unit could have been bought years ago, with a persons problems developing far more sooner because of a layoff that he or she had NO control over.

And what about Enron? Did those workers CHOSE to be ripped off? They could have stopped working their at any time they wanted. They could have quit. But quitting comes with adverse consequences. The state doses not have to surrender unemployment compensation when you quit a job. Now dose the company have to surrender any form of compensation or severance. Are these consequences part of the decision that weighs against the CEO secretly robbing you blind?

No sir. The poor do not chose to be poor. They are poor, because they HAVE no choice. And just because you would have us believe you would choice to be poor, doesn’t mean you have the power to speak for those who have no options.

My focus is on what people have: air conditioners, refrigerators, computers, CDs, DVDs, telephones, access to supermarkets., etc.

Of course it is. And I have already pointed out what this view point chooses to ignore.

Your focus seems to be on what people don't have. This can only cause emotional pain - because no matter how much you have, there will *always* be someone who has more.

Why is it that folks like you're self always like to through out the straw man when backed into a corner? No. That is NOT my position. Your attempt to deliberately miss-represent my argument is duly noted. Attacking a straw man of your own making only makes you look like the fool.

My position is that the poor do not have LIBERTY! The type of liberty that comes with a secure job, and not be at the mercy of the whims of greedy CEO's who have no qualms about laying off 9,000 workers to give themselves more stock options. Not that they do not have A/C units.

The ultimate goal of human existence is happiness. And I'd say that focusing on what you have will help to achieve that goal, while focusing on what you don't have will not.

Ah yes. How evil it is of me to wage class warfare against the wealthy. It only brings unnecessary pain upon the poor who must suffer emotionally because of me, in addition to the misery caused by their poverty.

Quite the contrary sir. It is you who would blame the victim for a plight not of his making. No children chose to be poor? Do workers choice to be laid off? Do they chose to have health care costs far above their ability to pay? Do they chose a regressive tax structure? These are decisions made by the powerful, in order to make themselves wealthy, at the expense of the poor. But you secretly defend the powerful by claming that persons choose poverty, warring them down as a mer bully would a smaller chilled.

The opposite of economic warfare, is economic slavery.

[J_Q_Higgins]

14. I have defended it quite well.

A person who owns nothing but candles and wood cabinets is poor, not rich.

A person who is homeless is poor, not rich.

But a person who spends significant amounts of money on entertainment is able to do so because he has extra money to spend after paying for things like food and housing. So that person is rich.

So the robber baron hires people, and you say it's bad, because they are being exploited. But then when they get laid off, you say that's bad, too. So you're never happy, no matter what the robber baron does.

The robber barons have provided jobs for people - jobs that the people obviously wanted, because the robber barons had to offer a salary high enough to attract the workers.

How many jobs have you ever provided for anyone?

The robber barons made oil and steel and cars more affordable than they had been before.

What have you done to make life easier for consumers?

Ken Lay committed theft and fraud, and he should be in jail for it.

The only countries in the world that provide "secure" jobs for all the workers are dictatorships where the government chooses what kind of job everyone has, and the pay and working conditions are far worse than what robber barons provide. Those people in countries where everyone has guranteed lifetime secure jobs are slaves. They are not free.

You seem to have this idea of exactly how everyone should behave, and exactly how things should be. You have it all planned out.

My idea is very different. I want people to be free to make choices, and to be able to enter into voluntary economic transactions. I don't want a centrally planned society where some government bureaucrat gives you a "secure job for life" and you have no say in what kind of job it is.

I want the U.S. embargo agasint Cuba to be ended. One reason is because when it is ended, the U.S. robber barons will open up factories in Cuba. And the Cuban citizens will have a mass exodus from their government jobs, and they will rush to sign up for the jobs in the U.S. robber baron factories, because the jobs in the U.S. robber baron factories will have much better pay and much better working conditions.

[Code_Name_D]

15. I love it when they babble.

A person who owns nothing but candles and wood cabinets is poor, not rich.

A person who is homeless is poor, not rich.

But a person who spends significant amounts of money on entertainment is able to do so because he has extra money to spend after paying for things like food and housing. So that person is rich.

Stating the obvious is not the same thing as making a coherent argument. Merle claiming that you have successfully defended your position, douse not make it so.

So the robber baron hires people, and you say it's bad, because they are being exploited. But then when they get laid off, you say that's bad, too. So you're never happy, no matter what the robber baron does.

Oh what resigning is this? I should thank the robber baron for giving me scraps from his table, than thank him again when he throws me out in the cold? I am not sure if you are trying to be funny, or are just repeating yourself.

The robber barons have provided jobs for people - jobs that the people obviously wanted, because the robber barons had to offer a salary high enough to attract the workers.

The robber barons are Indian givers. What they "give" can just as swiftly be taken away. A strange position, especially for a country built on notions of "rugged individualism."

How many jobs have you ever provided for anyone?

How many workers have you laid off?

The robber barons made oil and steel and cars more affordable than they had been before.

Again you persist with this myth. Perhaps it is time you present some facts to back it up.

What have you done to make life easier for consumers?

What have you done to make life harder to the consumer?

And what makes you think I am fidgeting for "consumer rights" any way? A consumer is only a citizen so long as they have the money to pay for the privilege. I don't know about where you come from, but here in America, we believe in equality, and all persons being equal in the eyes of the law. Weather they are consumers or not.

Ken Lay committed theft and fraud, and he should be in jail for it.

But he isn't. Because the state is protecting him. Lay is still in business, and still in a position of some influence with this administration. He is free to steal again. If I steal 25 bucks from a gas station, I get five years. If "Kenny' boy" steals billions, he gets a sleepover at the White House.

You want Lay to go to jail, not for the theft, but becase he got caught. Pleanty of others are exploitying their workers at every turn, but they are "making their wealth honistly" as you put it in another post.

The only countries in the world that provide "secure" jobs for all the workers are dictatorships where the government chooses what kind of job everyone has, and the pay and working conditions are far worse than what robber barons provide. Those people in countries where everyone has guranteed lifetime secure jobs are slaves. They are not free.

Ah yes, I knew you would bring out communism sooner or later. A ridiculous charge of course.

You seem to have this idea of exactly how everyone should behave, and exactly how things should be. You have it all planned out.

Again, you choose to misrepresent my arguments. You are actually reading my posts, right? Or are you typing with the power of the Force?

My idea is very different. I want people to be free to make choices, and to be able to enter into voluntary economic transactions. I don't want a centrally planned society where some government bureaucrat gives you a "secure job for life" and you have no say in what kind of job it is.

HA! And a double ha. HA HA!! Ever senses I read your first post, I knew exactly the body of thinking form which you were coming from. And I have been trying to steer you to the "freedom of contract" theory, and their you are, walking right into it. Rest assured, this isn't your idea, and it isn't vary different. In fact, it is the established status qou. You their fore must have thrown in that communist charge, just as a bonus or something.

The problem with persons "entering into a voluntary economic transaction" is that the worker doesn’t have the power to negotiate the terms. And he doesn’t even have the power to maintain those terms, permitting his employer in any way or manner as the employer sees fit. Of course, when the workers try to organize, to form a union, in order to be in a better position to negotiate this "economic transaction," this is a bad thing.

The whole argument assumes and defends the notion that the robber baron has soul authority and privilege to establish and defined the terms of the economy. And that the workers do NOT have the authority or the right to negotiate equally as to their own disposition.

I want the U.S. embargo agasint Cuba to be ended. One reason is because when it is ended, the U.S. robber barons will open up factories in Cuba. And the Cuban citizens will have a mass exodus from their government jobs, and they will rush to sign up for the jobs in the U.S. robber baron factories, because the jobs in the U.S. robber baron factories will have much better pay and much better working conditions.

Sounds more like you want to open up another avenue of cheep labor, permitting more American jobs to be shipped out of the country. You must be one of those cheep labor conservatives. Hardly a liberation at all I bet.

[eablair3]

17. agreed, ... that's a different view of "robber barons"

JQH,

I agree with much of what Code Name D stated in that you seem to have a different type of view of "robber barons." I'm not trying to be confrontational, but you might try looking up the definition of "robber".

It's not the mere fact that someone is rich that makes them a "robber baron." All rich people are not robber barons, as you seem to say. Rather, it's how they got rich. If they obtained great wealth by less than say honest means such as payoffs, stealing, force, thuggery, corruption, influence peddling, etc., then that is more in line with what one would call a "robber baron."

I don't view JK Rowling, Paul McCartney or some of the others you mention as "robber barons." Heck, I don't even think I'd put Bill Gates in that category (although I do wonder about some of Microsoft's tactics later on). The people you mention made a product or produced a service that many others got great usefulness out of, and I think they deserve what they produced. (Now, whether all their heirs can recieve it all tax free is something I take issue with, but that's another thread.)

The people that were considered "robber barons" were many of people for instance that were behind the railroads and other big businesses in the 19th Century that paid politicians off; that used less than honest means to intimidate competitors or sabotage competitors; that paid kickbacks in exchange for special privileges from state governments; etc.

The modern day "robber barons" are people like Ken Lay. People like many of the CEOs that provide for themselves huge golden parachutes after hand-picking the board members, all while the company they are in charge of goes under and the employees and the smaller shareholders are left holding the bag. They are people that are paying money to politicians to get favorable laws passed that benefit themselves to the detriment of many others. Perhaps some of the large media companies who wine and dine and payoff politicians and the FCC members to get legislation passed to consolidate media companies. Or, other companies that are on feeding at the government trough, not by the merit of what they do, but because they made big campaign contributions and are getting paid back. Companies that do not even have to do any competitive bidding for government contracts, like Halliburton and Bechtel. Mining companies that pay $5 to the government in exchange millions of dollars worth of mineral rights that exist on public lands, all because they paid off a few politicians. Ralph Nader has written extensively and exposed a lot of this "corporate welfare." The people behind these types of companies are the modern day "robber barons."

[Zuni]

19. I would much rather be

a poor person today than a rich one 200 years ago. I am always short of cash but technology and hygiene and indoor plumbing, air conditioning and medicine are so much better today.

[Brewman_Jax]

18. "Captains of Industry" series

on the History Channel give an excellent view of the men we call "robber barons" and their effect on the country. To put it simply, yes, it WAS the money.

[The Commie]

20. Good thread!

Many rich people nowdays are parasites on society, they buy luxury goods for thier own personal ammusment instead of giving it it people who realy need it. I don't mind enjoying life but thier giant mansions and private yahts is just vain, egocentric, and narsissic