The Myth of the Robber Barons
Burton W. Folsom, Jr.
Young American Foundation, 1991 (3rd edition 1993)
Paul Johnson’s A History of the American People is a long (814 pages + notes and index, but no separate bibliography) but extremely well-structured book, so well-sustained that it is almost a page-turner. The author is openly partisan – i.e., holding to what was, by and large, the American consensus until the end of the Eisenhower era – and he opens his history by confessing its writing to have been a labour of love. There is no nonsense about starting it any earlier than the arrival of the first English-speaking settlers in 1580. Not being able to make a comparison with any other complete history of the US, I have to judge it in absolute terms.
The book is divided into eight parts, on chronological lines; there are no separate sections for the arts, sciences, social trends, or the like; all are integrated into the narrative, as are also the personalities, thumbnail biographical sketches and moral and political judgments. A painter himself, the author has much to say about US landscape painters of whom I had never even heard; perhaps significantly, Warhol, Pollock and Lichtenstein (to name those that come to my mind) are not even mentioned. Johnson’s thesis is that the US has flourished as a result of capitalist economics and minimalist government, on a strong religious substratum, combined with an integrationist policy based on the English language. All these prerequisites are now being damaged by various interests, but particularly by the media and academia. He makes the point: “All nations are born in war, conquest and crime, usually concealed by the obscurity of a distant past. The United States, from its earliest colonial times, won its title-deeds in the full blaze of recorded history …” and it has continued the practice. As Johnson believes, the judgment on the US must be regarded as favourable, and something must be put down to its starting down the right path, for which the Founding Fathers cannot take all the credit; much must go the Mother Country, England. Johnson, like practically everyone else, tends to judge in absolute terms; I can see he considers there would be no contest if comparisons were made with other colonial ventures. The whole of Latin America is bemused and exasperated by its failure and America’s success, even to the appropriation of the continental name by the United States.
A review I can’t find (I think in the Spectator) said that as Johnson’s history up to, I think, 1900 was uncontroversial, it would examine only his treatment of this century. This is certainly where he would get into trouble, with his support of Nixon and Reagan and his damning of Kennedy (whom he criticises for his handling of the Cuban crisis), Johnson, Carter and Clinton. Johnson finds Teddy Roosevelt sympathetic. Perhaps the most intriguing revelation here is that he found too little to do as President, an insight into how much Government was still a hands-off one in the early years of the century. He is also much more critical of Franklin Roosevelt than is modish (though far from damning), writing down his New Deal, his handling of foreign affairs and his gullibility towards Stalin. Truman is lauded and his origins, complicated as these were with the corrupt Pendergast machine, examined to free him from guilt by association. Bush Sr. is seen as a poor successor to Reagan (here the dangers of co-opting as running mate one’s opponent in the primaries emerges) and it is significant, and sad, that Margaret Thatcher, still present to urge him to expel the Iraqis from Kuwait, had beeen ousted before she could encourage him to finish the job and occupy Baghdad.
Johnson also tends to exonerate the great entrepreneurs, the so-called “robber barons”, having perhaps read Folsom’s book on the subject. He emphasises the endowments of the rich to the arts and other public benefactions (Carnegie virtually gave away all his money) and ascribes the Great Crash more to Government interference that made things worse than to the “failure of capitalism”. He judges favourably the two Republican Presidents of the 1920s, Harding and Coolidge, but characterises Hoover as an interventionist bungler. He is critical of “judicial activism”, which goes back to Franklin Roosevelt (though he was thwarted by contemporary feeling) but fails to tackle the Sacred Cow of the Constitution. Considering the vogue for written constitutions, perhaps more could be made of the hazards of having a document of any sort whose meaning can be interpreted in any fashion by a coterie of unelected lawyers. An excellent book.
Folsom’s The Myth of the Robber Barons is, by contrast with Johnson, quite short (134 pages + 36 of notes) and thus easy to read through off and on within one day. This is an expansion of
the author’s Entrepreneurs vs The State; the third Edition is dated 1996.
Folsom runs through the classic age of US tycoons, from Cornelius Vanderbilt (1794-1877) to Andrew Mellon (1855-1937); in theory, all could have known each other – though this is not mentioned. Folsom’s interesting thesis is that the most successful men accomplished what they did without subsidies from the Government, and often in competition with others who received them – this especially applied to the railways – something not generally acknowledged, or perhaps noticed, by historians.
Mellon seems one of the first to have realised, in his capacity of Presidential financial adviser, what governments find hard to believe and unwilling to learn or even remember: that lowering tax rates can generate them more income than raising them. He pointed out that between 1916 and 1921, after tax rates had been raised between these dates, the number of tax-filers with incomes over $300,000 fell from about 1300 to about 250 and the share of the national tax they paid fell from about one-sixth of the total to one one-hundred-and-twenty-seventh. Not only had the rich effectively disappeared and hidden their money, but had rendered it unavailable for investment. Mellon lowered tax rates for all taxpayers with the result that that the rich paid more and everyone else paid less. Though the statistics are there to prove this happened, the college text-books of a whole string of historians – Blum and Schlesinger’s, Garraty’s, Bailey and Kennedy’s, and Unger’s – all say exactly the opposite, as Folsom cites, with long quotations. Obviously the results of Mellon’s strategy are so counter-intuitive that they are simply denied.
The whole book is full of interesting personalities; almost invariably the second generation did not match up to the first (unless father and son started in partnership). Some – Carnegie, Rockefeller, Mellon – were philanthropists on a massive scale. One at least, Schwab, could be a spendthrift as well. Rockefeller seems to have been the best-adjusted to his success, though perhaps some might regard his deep religious faith as a kind of self-administered brainwashing.