I’m slowly catching the idea that there is far more good news about Robber Barrons than conventional wisdom allows. Most of what I recall from school was criticism of those horrible, terrible, disgustingly evil men who used poor children as a breakfast garnish and then roasted their parents for dinner-time appetizers. They assuaged their horrendous guilt by building a couple of public libraries or something with a few spare bucks they couldn’t use up on conspicuous consumption.  That’s a mild exaggeration of what I recall the books were saying.

Actually, I’m beginning to realize we owe much of our prosperity and economic capacity to those men.

T. Kurt Jaros has a nice series on Cornelius Vanderbilt. The Men Who Built America: Cornelius Vanderbilt is the introduction.

Three sentences show the huge impact on economic development of the railroads:

He {Vanderbilt} was the person through which most of the country became connected via the railroad system. Just 15-25 years prior to his accomplishments, this notion was entirely unimaginable. This connection was critically important not only for moving individuals across great expanses, but also for the shipping of products, including oil.

Earlier he broke through the government sponsored monopoly in steamboat travel in New York during the early 1800s. His impact from getting around the monopoly?

His business brought down rates from New York City to Albany from three dollars down to one dollar. Soon, the cost moved from one dollar to ten cents, and then in time, it was free! Vanderbilt figured out that if enough people bought food on his boats, it would cover his costs.

Check out this description:

The New York Evening Post referred to him as “the greatest practical anti-monopolist in the country.”

The actual monopolists he battled were created by the government.

The next post describes how a government sponsored monopoly in steamboat travel encouraged inefficiency, wasted money, and slowed progress – The Men Who Built America: Cornelius Vanderbilt, from Steamboats to Steamships

Third post explains that government sponsored monopolies with huge subsidies fought to maintain their privileged position. The sought more funding to oppose progress.  The Men Who Built America: Cornelius Vanderbilt and Crony Capitalism.

Check out this great conclusion:

Over the last three posts we have seen how subsidized companies have led to price-fixing, technological stagnation and bribing competitors.  

On the other hand, we have seen how private companies, such as Vanderbilt’s, can lead to price-reduction, technological innovation—all without involving taxpayer dollars. In future posts, I’ll explore other entrepreneurial giants who helped make America what she is today.

A common thread across all the posts is that companies granted a government monopoly spent lots of time and money lobbying Congress to protect their position from competition. Their way to deal with competition? More federal subsidies, of course.

Read all three posts. They are a good overview of the tremendous good accomplished by Vanderbilt. This is also one simple example why there is more to the story of economic development in the US that was covered in high school and college history classes.


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