Burton Folsom: Robber Barons

Professor Folsom makes some very important points in this YouTube video. Other free market economists make similar points.

Progressives characteristically ignore actual history. They have created imaginary bugbears, fat men in three-piece suits with white moustaches and sacks of money, rapacious villains who plunder consumers and exploit workers. In truth, the Rockefellers and Vanderbilts, as well as hundreds of others, were the heroes of the nineteenth century, contributing enormously to the wealth of the US (thereby improving the living standards of their fellow citizens). By shrewd investments and innovation they drove up production (ie wealth), which drove down prices. At the same time wages rose dramatically. If, in view of these beneficent results, you vilify these men because they became very wealthy, I have to say that your moral compass is defective. Very few, if any, of the men we are talking about were saints. Very few of us are. The miracle of the market is that we can do good without being saints.

The free market works because it allows people to do well by doing good. In other words, it is the only system which rewards ability, imagination, hard work, thrift and honesty. A businessman who succeeds by ripping people off does not succeed for long. Capital is available to those whose credit is good, ie those who have demonstrated their trustworthiness. In a free market you do well by serving your fellow man. You will only do well by offering consumers what they freely choose to purchase. Yes indeed, there have always been those who grow rich by violence, fraud, corruption and (particularly) by manipulating politics; but it is the heroes of the “golden age” who attract the opprobrium of progressives.

Why, oh why did millions of Asians and Europeans leave their poor native lands to migrate to the US? Was it because they yearned to be exploited?

The philanthropy of the “robber barons” was legendary. They built schools, universities and hospitals on a mammoth scale. They endowed the arts and sciences with billions of dollars. They took care that their money was well spent, in contrast with the way in which modern public institutions are run, where huge amounts of money are siphoned off to the inefficient and self-seeking bureaucrats in charge. American churches benefited immensely from their largesse. What’s not to love?

I hope you enjoy this video.

Burt Folsom