Robber BaronsThen and Now Robber Barons, a term used in the late 1800s and early 1900sto describe a businessman who made an enormous amount of money, today we wouldcall them billionaires.
It was not really the fact they made an extreme amountof wealth, it was more the way they made it. In all the cases the acquiring ofwealth was done in what was considered a ruthless manor and unscrupulous ways. Arobber baron was more interested in acquiring wealth than the safety of hisemployees, the amount of work hours performed in a week, or the amount of wagebeing paid for a days work. For example Andrew Carnegie(the robber baron of thesteel industry), he was instrumental in starting the 72 hour work week, payingout less than fair wages and having dangerous working conditions. The robberbarons were known for their business tactics that would enable them to amass awealth by monopolies. They would corner the market on a product or service andmake it almost impossible to get, accept through them.
One such person was JamesB. Duke (robber baron of the tobacco market). James Duke started marketingtobacco from his fathers tobacco farm at an early age. He developed a market fortobacco though advertising. When the market he developed, started growing hestarted buying up other tobacco companies in order to be the only supplier ofthe product.
James Duke eventually formed The Great American Tobacco Co. whichbecame the biggest supplier of cigarettes in the world. One thing the RobberBarons of today and yesterday have in common is monopolies. If it at allpossible, the Robber Baron or billionaires as we call them today, would try tocorner the entire market on their product or service, making it difficult forcompetition in their particular industry. James Duke did it by making a marketfor cigarettes and cigars and buying up his competition so he was the biggestcompany to supply the product. Andrew Carnegie cornered the market on the steelindustry and made the first high rise building.
He was the only business in hisfield therefore he could set his prices and up his profits. Other Robber Baronsin various markets were William Vanderbilt, he monopolized the railroad businessallowing him to set his own prices for freight and passage. John D. Rockefellermonopolized the oil industry with Standard Oil company.
Today AT&T, thephone company, before deregulation controlled the vast majority of the phoneservices, thereby monopolizing the phone services. American Airlines, thereunscrupulous business tactics would drive out competitors from areas they wishedto control by having price wars until the opposition could no longer compete andwould have to close their doors for business. But the biggest and wealthiest ofthem all, Bill Gates owner of Microsoft Corporation created an operating systemfor computers to work with and the market to sell that system. Before Bill Gatescame along computers were only an informational source. What ever was programedinto them was retrievable but you could not add information to them. Basicallythey were just a big file cabinet.
Bill Gates made it to where you can talk tothe computer and add information to them. This made them more user friendly anda very usable tool for personal and business use. But just like the RobberBarons of yesterday Gates cornered the market for his software by orchestratinga marketing plan that would require computer companies to pay him X amount ofdollars for every computer they sold, whether or not the computer had hissoftware on it or not. Now if you think about it, the computer companies had nochoice but to put his software on the computers they sold. Kind of sounds like amonopoly to me. Philanthropy The other side to the Robber Baron coin.
For someunknown reason the Robber Barons felt it necessary to give back enormous amountsof their wealth to the society they took if from, or maybe a better way to putit is earned it from? It was done in a manner that for the most partimmortalized the giver. For instance James Duke or the Duke Endowment gave moneyto several Universities. This in turn eventually got his name on one, DukeUniversity in Washington, DC. Duke also gave money to hospitals, childcareinstitutions for blacks and whites and the Methodist church. Andrew Carnegiefelt so strongly about philanthropy that he was inspired to write the landmarkessay “The Gospel of Wealth”. Some would say Carnegie was only out forself glorification because he would build and finance libraries but neglect tosupply them with the much needed books.
Carnegie was quoted as saying, “Theman who dies thus rich dies disgraced”. Before it was all said and donethrough Carnegie’s philanthropist donations, he would give away nearly 350million dollars or close to 90% of his lifelong acquired wealth. Othersconsidered philanthropist were, J. P. Morgan, he gave away a vast amount of hiswealth to various institutions.
Henry C. Frick, Andrew Carnegie’s right hand manrunner of his companies. A millionaire by his own rights also a philanthropistwho gave a lot of his money back to society. Perhaps one of the most well knownmodern day philanthropist would be George Soros. Soros is accredited for givingaway 1 billion dollars over a matter of days back in 1992. Soros made hisfortune by investing, but not merely investing in the market as we know it butinvesting in entire countries and their misfortunate collapse of theireconomies.
Soros made this billion dollars by currency speculation, bettingcorrectly on the collapse of the British pound. Soros devoted most of his moneyback to Eastern Europe, where he has set up foundations in 25 separatecountries. Now if we were to take a look at Bill Gates who has been accreditedas being the richest man in the world today, we would not see a lot of givingback to the community. Gates has had some bouts of giving but considering hiswealth one might say it is trivial. And if you were to take a look at thereasoning behind his giving it would show up as still being to his favor. Suchas giving a small amount of computers to the schools so as to allow the studentsaccess 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 todaymade their money by unscrupulous tactics, or monopolies. These monopolies werecreated by the Robber Barons themselves and by what ever means possible theymade every effort to keep their strong hold in their business as long aspossible. Now there is a downside to this although they were over bearing intheir business tactics, stepping on who ever they had to make a profit thereseem to be a certain amount of guilt involved. For unknown reasons they felt itnecessary to give back a large amount of that profit to better society.
Perhapsthis could be looked at as more of them feeling like they could be in control ofman kinds destiny, or by giving something back the guilt would be lifted forbeing so ruthless in the business world. And as far as Bill Gates goes perhapsone day he will wake up and realize enough is enough and be more of aphilanthropist himself. Bibliographyhttp://www. biography. com/cgi-bin/biomain.
cgiJames B. Duke http://www.duke.edu/web/Archives/history/jbduke.html AndrewCarnegie http://www.worth.com/articles/M9611F04.html Andrew Carnegie http://www.worth.com/articles/Z9611C01.htmlFighting Modern Day Robber Barons http://www.amcity.com/denver/stories/1997/01/27/editorial3.htmlForward Thinking http://www.worth.com/articles/Z9611R.html Return of the RobberBarons http://worldpolicy.org/americas/usa/fasttrack.html Bill Gates, RobberBaron http://www.businessweek.com/1998/03/b3561030.htm Robber Baronshttp://econ161.berkeley.edu/Econ_Articles/carnegie/DeLong_Moscow_paper2.html