The Myth of the Robber Barons Quotes

“The second point is that, in the key industries we have studied, the state failed as an economic developer. It failed first as a subsidizer of industrial growth. Vanderbilt showed this in his triumph over the Edward Collins' fleet and the Pacific Mail Steamship Company in the 1850s. James J. Hill showed this forty years later when his privately built Great Northern outdistanced the subsidized Northern Pacific and Union Pacific. The state next failed in the role of an entrepreneur when it tried to build and operate an armor plant in competition with Charles Schwab and Bethlehem Steel. The state also seems to have failed as an active regulator of trade. The evidence in this study is far from conclusive; but we can see problems with the Interstate Commerce Commission and the Sherman Anti-trust Act, both of which were used against the efficient Hill and Rockefeller.”
― Burton W. Folsom Jr., The Myth of the Robber Barons: A New Look at the Rise of Big Business in America

“As written, the Sher- man Act banned "every combination. . .in restraint of trade." This vaguely written law was an immediate problem because every act of trade potentially restrains other trade. This meant that the courts would have to decide what the law meant.”
― Burton W. Folsom Jr., The Myth of the Robber Barons: A New Look at the Rise of Big Business in America

“What Hill ultimately deplored more than tariffs and subsidies were the ICC and the Sherman Anti-trust Act. Congress passed these vague laws to protest rate hikes and monopolies. They were passed to satisfy public clamor (which was often directed at wrong-doing committed by Hill's subsidized rivals). Because they were vaguely written, they were harmless until Congress and the Supreme Court began to give them specific meaning. And here came the irony: laws that were passed to thwart monopolists, were applied to, thwart Hill.”
― Burton W. Folsom Jr., The Myth of the Robber Barons: A New Look at the Rise of Big Business in America

“Few people were willing to exert the perspiration necessary to learn the railroad business and apply these principles. Many, like Villard, Gould, and Stanford, took the easy route and chased subsidies, hiked rates, and manipulated stock; but this approach never built a winning railroad.”
― Burton W. Folsom Jr., The Myth of the Robber Barons: A New Look at the Rise of Big Business in America

“Here is a key point: the gain in social return was only temporary, but the loss of shipping with an inefficient railroad was permanent. The UP and NP were, as we have seen, inefficient in gradients, curvature, length, quality of construction, repair costs, and use of fuel. This meant permanently high fixed costs for all passengers and freight using the subsidized transcontinentals.”
― Burton W. Folsom Jr., The Myth of the Robber Barons: A New Look at the Rise of Big Business in America

“If the government had not subsidized a transcontinental, then private investors like Hill would have built them sooner and would have built them better. Subsidy promoters tried to deny this argument at the time, but Hill's achievement shows that it would have been done, only at a slower (but more efficient) pace.”
― Burton W. Folsom Jr., The Myth of the Robber Barons: A New Look at the Rise of Big Business in America

“To argue this way is to miss a key point: Scranton's founders, as entrepreneurs, created something out of nothing. They created their assets and created opportunities for others when they successfully bore the risks of making America's first iron rails. Without them, almost everybody else in the region would have been poorer. The amount of wealth in a region (or a country) is not fixed; in 1870, Scranton, Platt, and Blair got the biggest piece of the economic pie, but it was the biggest piece of a much larger pie—made so by what they cooked up when they came to Pennsylvania thirty years earlier.”
― Burton W. Folsom Jr., The Myth of the Robber Barons: A New Look at the Rise of Big Business in America

“A lot can be learned from the story of the Scrantons. The first lesson is that entrepreneurs are needed to create wealth; when they succeed, others then have the chance to build on what they started. If we look at the later history of Scranton, we can also learn a second lesson: that it is hard for those on top to stay there in the generations that follow. An inheritance can be transferred; but entrepreneurship, talent, and vision cannot be. The industrial city of Scranton saw lots of movement down the ladder of social mobility, as well as up.”
― Burton W. Folsom Jr., The Myth of the Robber Barons: A New Look at the Rise of Big Business in America

“A key to Scranton's success seems to have been the presence of aggressive entrepreneurs, who had a philosophy of openness and commitment to growth. As the spiral of growth in industries, services, and population persisted, the city of Scranton, which was founded on a hunch, officially became one of the forty largest cities in the country in 1900.44”
― Burton W. Folsom Jr., The Myth of the Robber Barons: A New Look at the Rise of Big Business in America

“Hill was sad and predicted that the ICC and the Sherman Act would ruin American railroads and threaten cheap trade throughout the nation. A 72-year-old Hill would even write a book, Highways of Progress, to argue this point. But his last days seem to have been happy. He had built the best railroad in America and had used it to beat subsidized rivals time and again. He helped open the Northwest to settlement and the Orient to American trade. He had made a difference in the way the world worked. To some viewers, he was the real hero in the drama of the American transcontinental railroads.”
― Burton W. Folsom Jr., The Myth of the Robber Barons: A New Look at the Rise of Big Business in America

“in the 1890s, American rails were inferior to some foreign rails, so Hill bought English and German rails for the Great Northern. The subsidized transcontinentals were required in their charters to buy American-made steel, so they were stuck with the lesser product. Their charters also required them to carry government mail at a discount, and this cut into their earnings. Finally, without Congressional approval, the subsidized railroads could not build spur lines off the main line. Hill's Great Northern, in contrast, looked like an octopus, and he credited spur lines as critical to his success.”
― Burton W. Folsom Jr., The Myth of the Robber Barons: A New Look at the Rise of Big Business in America