Robber baron

See also: Gilded Age

The term robber baron refers to an American capitalist of the late 19th century who became wealthy by ruthless and unethical means. Originally, it referred to a feudal noble who robbed travelers passing through his lands.

The nature of robber barons

Historian Thomas DiLorenzo points out that most who use that term fail to make an important distinction — the distinction between what might be called a market entrepreneur and a political entrepreneur. A pure market entrepreneur, or capitalist, succeeds financially by selling a newer, better, or less expensive product on the free market without any government subsidies, direct or indirect. The key to his success as a capitalist is his ability to please the consumer, for in a capitalist society the consumer ultimately calls the economic shots. By contrast, a political entrepreneur succeeds primarily by influencing government to subsidize his business or industry, or to enact legislation or regulation that harms his competitors.

The American economy has always included a mix of market and political entrepreneurs — self-made men and women as well as political connivers and manipulators. And sometimes, people who have achieved success as market entrepreneurs in one period of their lives later become political entrepreneurs. But the distinction between the two is critical to make, for market entrepreneurship is a hallmark of genuine capitalism, whereas political entrepreneurship is not.

In some cases, of course, the entrepreneurs commonly labeled "robber barons" did indeed profit by exploiting American customers, but these were not market entrepreneurs. For example, Leland Stanford, a former governor and US senator from California, used his political connections to have the state pass laws prohibiting competition for his Central Pacific railroad, and he and his business partners profited from this monopoly scheme. Unfortunately, the resentment that this naturally generated among the public was unfairly directed at other entrepreneurs who succeeded in the railroad industry without political interference that tilted the playing field in their direction.

List of businessmen who were called robber barons

• John Jacob Astor (real estate, fur) – New York
• Andrew Carnegie (steel) – Pittsburgh and New York
• Jay Cooke (finance) – Philadelphia
• Charles Crocker (railroads) – California
• Daniel Drew (finance) – New York
• James Fisk (finance) – New York
• Henry Morrison Flagler (railroads, oil) – New York and Florida
• Henry Clay Frick (steel) – Pittsburgh and New York
• John Warne Gates (steel, barbed wire) – Texas
• Jay Gould (railroads) – New York
• James J. Hill (railroads) – Minnesota
• Andrew W. Mellon (finance) – Pittsburgh
• J. P. Morgan (finance, industrial consolidation) – New York
• John D. Rockefeller (oil) – Cleveland, New York
• Charles M. Schwab (steel) – Pittsburgh and New York
• Leland Stanford (railroads) - California
• Cornelius Vanderbilt (water transport, railroads) – New York

Links

• Articles and essays
  • "The Truth About the 'Robber Barons'" by Thomas J. DiLorenzo, (excerpt from How Capitalism Saved America)
  • "Beware Unfettered Capitalism" by Tom Woods, July 2011

• Other media
  • The Robber Barons and the Progressive Era lecture by Thomas E. Woods, Jr., July 2014 (YouTube)
  • The Myth of the Robber Barons lecture by Burt Folsom, June 2011
  • The Tom Woods Show:The Robber Barons and Monopoly, November 2014
  • The Tom Woods Show: Andrew Carnegie: Robber Baron or Hero of Capitalism, April 2016 (YouTube)
  • The Robber Baron Myth, lecture by Milton Friedman, 1978 (excerpt from Milton Friedman Speaks)
  • Myth: The Robber Barons lecture by Thomas E. Woods, Jr., November 2009 (excerpt from Applying Economics to American History)
  • The Truth about the 'Robber Barons' by Thomas J. DiLorenzo (audio excerpt from Organized Crime: The Unvarnished Truth About Government)

• Robber baron (industrialist) on Wikipedia