A confession: I have never disliked the “robber barons.” Written by Matthew Josephson (1899-1978), The Robber Barons told us how the great nineteenth industrial empires were built. Emphasizing the misdeeds of Rockefeller, Carnegie, Frick, and their contemporaries, the author helped readers to perceive a cast of villains.
In an opinion article in yesterday’s Wall Street Journal, Daniel Henninger says we need more “robber barons” to reinvigorate our economy. He recommends a book by Burton W. Folsom in which the “robber barons” are categorized as market entrepreneurs or political entrepreneurs. People like Rockefeller (oil), Carnegie (steel) and J.J. Hill (railroads) who build businesses, create jobs, and compete fiercely are market entrepreneurs. By contrast, Robert Fulton who was given a monopoly on Hudson River steamship traffic for thirty years, was a political entrepreneur.
You can predict who Henninger prefers. Saying market entrepreneurs are the most productive, he asks our President and our Congress to ignore conspicuous consumption and instead establish a regulatory environment that nurtures them.
The Economic Life
We could say that the infrastructures that were built during the nineteenth century created a strong foundation from which our economy soared. Starting with the Erie Canal (1825) and culminating (perhaps) with the transcontinental railroad (1869), we built a transportation infrastructure that let us form a national market and regionally specialize. A bit later in the century, we built our financial infrastructure. With money moving across the land as the New York Stock Exchange and an investment banking world emerged, we could finance businesses and support entrepreneurial vigor. Market entrepreneurs were the people who built our transportation and financial infrastructures.