October 30, 2006
The Robber Barons Posted by John Steele Gordon at 02:45 PM EST I wrote a review in today’s New York Times on the new biography of Andrew Carnegie by David Nasaw. As the review makes clear, I enjoyed the book immensely and recommend it all. I mentioned in the review that it is the latest in a series of biographies by such writers as Jean Strouse, Ron Chernow, Maury Klein, and David Nasaw himself (The Chief: The Life of William Randolph Hearst) that have appeared in the last 20 years on the “robber barons” of late-nineteenth-century America. These biographies differ from most earlier ones about these men, being both even-handed and scrupulous. At first, most biographies were either hagiographic and could find no faults, or agenda-driven hatchet jobs that could find no virtues. Three of the few exceptions to this rule were Frederick Lewis Allen’s The Great Pierpont Morgan (1949), Wheaton J. Lane’s Commodore Vanderbilt: an Epic of the Steam Age (1942), and Stewart Holbrook’s The Age of the Moguls (1953). All are still worth reading. Far more typical, however, was Matthew Josephson’s The Robber Barons (1934). It reminds me of Mary McCarthy’s famous description of Lillian Hellman: “Every word she writes is a lie, including and and the.” Let just one quote from The Robber Barons suffice, about Vanderbilt’s tactic of competing with other steamboat lines with lower prices and forcing them to either buy him out or be bought out by him: “In seeking quickened activity, great volume and lower prices—instead of honest but limited services at high tariffs—he gave intimations of a new personal departure from the older bourgeois order.” To Josephson, apparently, there was something inherently dishonest about economies of scale and the lower prices that result from it.
Compare that with what appeared in Harper’s Weekly in 1859, when Vanderbilt was still very much in the steamboat business: “It is hardly fair for any man to undertake to decide what are the particular motives of his neighbor in undertaking a specific work, if the work itself be legitimate and fair. He must be judged by the results; and the results in every case of the establishment of opposition lines by Vanderbilt has been the permanent reduction of fares. Wherever he ‘laid on’ an opposition line, the fares were instantly reduced; and however the contest terminated, whether he bought out his opponents, as he often did, or they bought him out, the fares were never again raised to the old standard. This great boon—cheap travel—this community owes mainly to Cornelius Vanderbilt.”
The year before, The New York Times, beginning a long tradition of editorial cluelessness with regard to economics, had used the image, if not quite the words, of the medieval robber barons in decrying Vanderbilt’s tactics. In the next decade the phrase itself would come into use, but it would be Josephson’s immensely successful book that would make the phrase a permanent part of the American lexicon.
The medieval robber barons were, supposedly, nobles who lived along the Rhine and would charge merchants for the privilege of passing their castles unmolested. It was, in modern terms, a protection racket. This, of course, bears no relationship to what Vanderbilt did, as Harper’s Weekly makes clear. Vanderbilt offered low-cost transportation and forced others to do likewise or go broke. Wal-Mart is a modern example of this tactic of using high efficiency and economies of scale to lower prices and forcing competitors to do likewise. As with Vanderbilt, many find this a dreadful thing to do. Shoppers, of course, pay no attention and flock to Wal-Mart.
I have never been able to find any reference to the “robber barons,” medieval or nineteenth-century, before the Times’s reference in the 1850s. I once asked the distinguished historian H. W. Brands if he knew of any, and he did not. I suspect the Times made it up. After all, medieval nobles behaving like modern-day Mafiosi were hardly confined to the shores of the Rhine. For the most part they all, from Ireland to Russia, acted like thugs.
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