Rebirth of Reason

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Tuesday, March 9 - 8:42amSanction this postReply
I second this recommendation.  I was fortunate enough to know Dr. Folsom when I was at Hillsdale College, and had the opportunity to sit in on a couple of his "Economic History of the U.S." classes.  Excellent stuff.  Not only does he have a thorough and insightful grasp of American history, he also has a clear understanding of economic processes, and he sees the importance of economic science in analyzing the causes of historic events. 

This book clearly shows the difference between looters and producers - the James Taggarts and Hank Reardens of the world.

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Tuesday, March 9 - 9:49amSanction this postReply
Yes, a good book - have had a copy for years...

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Tuesday, March 9 - 10:57amSanction this postReply
It was recommended recently in WSJ:


Faced with high, painful unemployment as far as the eye can see, the government naturally is here to help.

The Senate passed a $15 billion "jobs bill." Its proudest piece is a tax credit for employers who hire a person out of work at least 60 days. The employer won't have to pay the 6.2% Social Security payroll tax for what remains of this year. If the worker stays on the job at least a year, the government will give the employer $1,000.

As to the earlier $787 billion stimulus bill, Vice President Joe Biden praised it in Orlando this week as an engine of job creation, while he stood before a pile of broken concrete and asphalt. The subject was highways.

Finally, Barack Obama's government now may force companies to raise wages and benefits by squeezing their federal contracts if they don't.

Maybe there's a better way.


Let's bring back the robber barons.

"Robber baron" became a term of derision to generations of American students after many earnest teachers made them read Matthew Josephson's long tome of the same name about the men whose enterprise drove the American industrial age from 1861 to 1901.

Josephson's cast of pillaging villains was comprehensive: Rockefeller, Carnegie, Vanderbilt, Morgan, Astor, Jay Gould, James J. Hill. His table of contents alone shaped impressions of those times: "Carnegie as 'business pirate'.'' "Henry Frick, baron of coke." "Terrorism in Oil." "The sack of California."

I say, bring 'em back, and the sooner the better. What we need, a lot more than a $1,000 tax credit, are industries no one has thought of before. We need vision, vitality and commercial moxie. This government is draining it away.

The antidote to Josephson's book is a small classic by Hillsdale College historian Burton W. Folsom called "The Myth of the Robber Barons: A New Look at the Rise of Big Business in America" (Young America's Foundation). Prof. Folsom's core insight is to divide the men of that age into market entrepreneurs and political entrepreneurs.

Market entrepreneurs like Rockefeller, Vanderbilt and Hill built businesses on product and price. Hill was the railroad magnate who finished his transcontinental line without a public land grant. Rockefeller took on and beat the world's dominant oil power at the time, Russia. Rockefeller innovated his way to energy primacy for the U.S.

Political entrepreneurs, by contrast, made money back then by gaming the political system. Steamship builder Robert Fulton acquired a 30-year monopoly on Hudson River steamship traffic from, no surprise, the New York legislature. Cornelius Vanderbilt, with the slogan "New Jersey must be free," broke Fulton's government-granted monopoly.

If the Obama model takes hold, we will enter the Golden Age of the Political Entrepreneur. The green jobs industry that sits at the center of the Obama master plan for the American future depends on public subsidies for wind and solar technologies plus taxes on carbon to suppress it as a competitor. Politically connected entrepreneurs will spend their energies running a mad labyrinth of bureaucracies, congressional committees and Beltway door openers. Our best market entrepreneurs, instead of exhausting themselves on their new ideas, will run to ground gaming Barack Obama's ideas.

If the goal is job growth, we need to admit one fact: Political entrepreneurs create fewer jobs than do market entrepreneurs. We need new mass markets, really big markets of the sort Ford, Rockefeller and Carnegie created. Great employment markets are discoverable only by people who create opportunities or see them in the cracks of what already exists—a Federal Express or Wal-Mart. Either you believe that the philosopher kings of the Obama administration can figure out this sort of thing, or you don't. I don't.

FDIC chief Sheila Bair whacked bank bonuses Tuesday. People on the East Coast spend too much time around the finance and insurance industries. If the price of rediscovering the American job machine is some people across the land getting really rich, it's a small price.

One of the richest now is Larry Ellison, the 1977 founder of Oracle Corp. (49,000 employees), whose tastes run to huge boats, bigger houses and paying Elton John to play for his friends at the Cow Palace. Someone in our politics has to find the courage to say, So what? If the next Ellison and Oracle ripples into American life as many new jobs and family incomes, I'm happy to be grossed out by parties and boats. The alternative is a nation of Pecksniffs, choking on virtue.

We live in a world of rising competitors—foreign robber barons—who don't much care about our endless quest for health-care justice. The U.S. on its current path to a stage-managed economy floating in a lake of taxes will keep down the greatest population of intellectual and managerial firepower the world has seen. The rest of the world admits that, with the recent exception of the Chinese, who think we're ready to be taken. We have young people impatient for the chance to do what Carnegie, Rockefeller and Hill did. Let them.

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Wednesday, March 10 - 6:37pmSanction this postReply
I have had this book for a few years and always enjoy leafing through it.  Thank you for posting this.

Also, I know how we feel about "political entrepreneurs" and in strictly logical terms, I must adhere to the party line.  That said, emotionally, I often wonder about the extent to which we Objectivists succumb to the Levellers.   Whether the Roman Senate or the US Senate, people make use of whatever resources are available and those who do well at resource management tend to rise.  It may be that the Union Pacific was less of an engineer's dream than the New York Cental or the Canadian Pacific, but Stanford money built a great university, as did Vanderbilt's. I grew up in a neighborhood with a Carnegie branch library (and two non-Cs).   So, I can see that those who can, do.

I do not advocate for businesses getting government favors, but I do recognize that "presentism" is a fallacy.  We cannot expect people of the past to know what we only discovered in our lifetimes.  So, while I do agree that the governmentalist Robber Barons must be judged by the best standards that we now have, I also grant them a margin of respect for what they did achieve.

 They looked to the future
and what did they see
but a iron road 
from the sea to the sea

Post 4

Wednesday, March 10 - 7:50pmSanction this postReply
>>>They looked to the future
and what did they see
but a iron road
from the sea to the sea<<

I am very nostalgic about RR travel. Wish it still existed. Here is my favorite plan to revive it (I posted it somewhere in other thread but can repeat it here).

If only I could find a Robber Baron willing to implement it.

Use the same RR network and only add special stations for car loading. Such stations could be placed outside cities where land is cheaper.

Something like that:

Technicalities could be different, but the main idea is to be able easily load and unload the car without assistance.

Load your car, stay there, or pay some more to use bedroom compartment, or go to dining car to have dinner.

Think how much you spend traveling by car (gas, hotel, car maintenance), or by plane (tickets, car rental). Modernized train travel could actually save you money and be way much more comfortable.

Unlike government high-speed trains, it also could be profitable!

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