Robber Barons
Then and Now Robber Barons, a term used in the late 1800s and early 1900s
to describe a businessman who made an enormous amount of money, today we would
call them billionaires. It was not really the fact they made an extreme amount
of wealth, it was more the way they made it. In all the cases the acquiring of
wealth was done in what was considered a ruthless manor and unscrupulous ways. A
robber baron was more interested in acquiring wealth than the safety of his
employees, the amount of work hours performed in a week, or the amount of wage
being paid for a days work. For example Andrew Carnegie(the robber baron of the
steel industry), he was instrumental in starting the 72 hour work week, paying
out less than fair wages and having dangerous working conditions. The robber
barons were known for their business tactics that would enable them to amass a
wealth by monopolies. They would corner the market on a product or service and
make it almost impossible to get, accept through them. One such person was James
B. Duke (robber baron of the tobacco market).James Duke started marketing
tobacco from his fathers tobacco farm at an early age. He developed a market for
tobacco though advertising. When the market he developed, started growing he
started buying up other tobacco companies in order to be the only supplier of
the product. James Duke eventually formed The Great American Tobacco Co. which
became the biggest supplier of cigarettes in the world. One thing the Robber
Barons of today and yesterday have in common is monopolies. If it at all
possible, the Robber Baron or billionaires as we call them today, would try to
corner the entire market on their product or service, making it difficult for
competition in their particular industry. James Duke did it by making a market
for cigarettes and cigars and buying up his competition so he was the biggest
company to supply the product. Andrew Carnegie cornered the market on the steel
industry and made the first high rise building. He was the only business in his
field therefore he could set his prices and up his profits. Other Robber Barons
in various markets were William Vanderbilt, he monopolized the railroad business
allowing him to set his own prices for freight and passage. John D. Rockefeller
monopolized the oil industry with Standard Oil company. Today AT&T, the
phone company, before deregulation controlled the vast majority of the phone
services, thereby monopolizing the phone services. American Airlines, there
unscrupulous business tactics would drive out competitors from areas they wished
to control by having price wars until the opposition could no longer compete and
would have to close their doors for business. But the biggest and wealthiest of
them all, Bill Gates owner of Microsoft Corporation created an operating system
for computers to work with and the market to sell that system. Before Bill Gates
came along computers were only an informational source. What ever was programed
into them was retrievable but you could not add information to them. Basically
they were just a big file cabinet. Bill Gates made it to where you can talk to
the computer and add information to them. This made them more user friendly and
a very usable tool for personal and business use. But just like the Robber
Barons of yesterday Gates cornered the market for his software by orchestrating
a marketing plan that would require computer companies to pay him X amount of
dollars for every computer they sold, whether or not the computer had his
software on it or not. Now if you think about it, the computer companies had no
choice but to put his software on the computers they sold. Kind of sounds like a
monopoly to me. Philanthropy The other side to the Robber Baron coin. For some
unknown reason the Robber Barons felt it necessary to give back enormous amounts
of their wealth to the society they took if from, or maybe a better way to put
it is earned it from? It was done in a manner that for the most part
immortalized the giver. For instance James Duke or the Duke Endowment gave money
to several Universities. This in turn eventually got his name on one, Duke
University in Washington, DC. Duke also gave money to hospitals, childcare
institutions for blacks and whites and the Methodist church. Andrew Carnegie
felt so strongly about philanthropy that he was inspired to write the landmark
essay “The Gospel of Wealth”. Some would say Carnegie was only out for
self glorification because he would build and finance libraries but neglect to
supply them with the much needed books. Carnegie was quoted as saying, “The
man who dies thus rich dies disgraced”. Before it was all said and done
through Carnegie’s philanthropist donations, he would give away nearly 350
million dollars or close to 90% of his lifelong acquired wealth. Others
considered philanthropist were, J.P. Morgan, he gave away a vast amount of his
wealth to various institutions. Henry C. Frick, Andrew Carnegie’s right hand man
runner of his companies. A millionaire by his own rights also a philanthropist
who gave a lot of his money back to society. Perhaps one of the most well known
modern day philanthropist would be George Soros. Soros is accredited for giving
away 1 billion dollars over a matter of days back in 1992. Soros made his
fortune by investing, but not merely investing in the market as we know it but
investing in entire countries and their misfortunate collapse of their
economies. Soros made this billion dollars by currency speculation, betting
correctly on the collapse of the British pound. Soros devoted most of his money
back to Eastern Europe, where he has set up foundations in 25 separate
countries. Now if we were to take a look at Bill Gates who has been accredited
as being the richest man in the world today, we would not see a lot of giving
back to the community. Gates has had some bouts of giving but considering his
wealth one might say it is trivial. And if you were to take a look at the
reasoning behind his giving it would show up as still being to his favor. Such
as giving a small amount of computers to the schools so as to allow the students
access to the internet through his own proxy server, thereby realizing a profit.
Conclusion It would seem that most of the Robber Barons of yesterday and today
made their money by unscrupulous tactics, or monopolies. These monopolies were
created by the Robber Barons themselves and by what ever means possible they
made every effort to keep their strong hold in their business as long as
possible. Now there is a downside to this although they were over bearing in
their business tactics, stepping on who ever they had to make a profit there
seem to be a certain amount of guilt involved. For unknown reasons they felt it
necessary to give back a large amount of that profit to better society. Perhaps
this could be looked at as more of them feeling like they could be in control of
man kinds destiny, or by giving something back the guilt would be lifted for
being so ruthless in the business world. And as far as Bill Gates goes perhaps
one day he will wake up and realize enough is enough and be more of a
philanthropist himself.
Bibliography
http://www.biography.com/cgi-bin/biomain.cgi
James B. Duke http://www.duke.edu/web/Archives/history/jbduke.html Andrew
Carnegie http://www.worth.com/articles/M9611F04.html Andrew Carnegie http://www.worth.com/articles/Z9611C01.html
Fighting Modern Day Robber Barons http://www.amcity.com/denver/stories/1997/01/27/editorial3.html
Forward Thinking http://www.worth.com/articles/Z9611R.html Return of the Robber
Barons http://worldpolicy.org/americas/usa/fasttrack.html Bill Gates, Robber
Baron http://www.businessweek.com/1998/03/b3561030.htm Robber Barons
http://econ161.berkeley.edu/Econ_Articles/carnegie/DeLong_Moscow_paper2.html
