robber baron

How large are the entrepreneurial benefits from the finance-industrial development nexus through which the truly astonishing fortunes are developed?

And at other times--between 1870 and 1929, or since 1980--there has been something about the American economy that opened roads to the accumulation of great wealth that were at other times closed.

As Californian Collis Huntington reportedly wrote in 1877, explaining why he was in Washington D.C. pouring bribe money out like water:

"Robber Barons": that was what U.S. political and economic commentator Matthew Josephson (1934) called the economic princes of his own day.

First..they were all industries in which there was the potential for enormous economies of manufacturing scale through the application of technology...

If you were white, the country was sparsely populated enough that anyone who did try to make you an "indentured servant"--essentially a serf--soon found that he had to treat you like a free laborer, or see you leave town with no possibility of return.

And whatever the causes, the period since the mid-1970s has seen wealth concentration in the United States increase more rapidly than ever before--even during the heyday of industrialization in the last decades of the nineteenth century.

They should be extremely dubious about billionaires' social utility.

Many others agreed: President Theodore Roosevelt--the Republican Roosevelt, president in the first decade of this century--spoke of the "malefactors of great wealth" and embraced a public, political role for the government in "anti-trust": controlling, curbing, and breaking up large private concentrations of economic power.

The fourth thing that stands out about the robber barons is how completely, totally corrupt they all were--or, rather, if we allow them to defend themselves, how completely and totally corrupt was the system in which they were embedded.

It is once again possible to raise large sums of money and then direct them to suit one's own interest, rather than turning them over to salaried managers interested in perpetuating organizations.

It was relatively equal because the indigenous population had not yet recovered from the wave of Eurasian diseases brought by Christopher Columbus, and they had no military technology to match that of the European settlers.

Their defenders--many bought and paid for, a few not--painted a different picture: the billionaires were examples of how America was a society of untrammeled opportunity, where people could rise to great heights of wealth and achievement on their industry and skill alone; they were public benefactors who built up their profitable enterprises out of a sense of obligation to the consumer; they were well-loved philanthropists; they were "industrial statesmen."

What can be done to curb explicit and implicit corruption without also reducing the pressure in the engine of capital accumulation and economic growth?

At what level does corruption become intolerable and undermine the legitimacy of democracy?

Economists still argue over the extent to which the severe restrictions on immigration introduced in the 1920s diminished the supply of unskilled labor and so led to diminished wealth concentration (see O'Rourke and Williamson, forthcoming).

But if so, there are no signs of it in aggregate growth data.

It was the tight integration of industry with finance that made the turn of the twentieth century fortunes possible.

More of the return of the super-rich is due to the blurring of the lines between financiers and corporate managers as the Depression-era order of American finance has fallen apart.

Our capitalist economy--any capitalist economy--throws up such enormous concentrations of wealth: those lucky enough to be in the right place at the right time, driven and smart enough to see particular economic opportunities and seize them, foresighted enough to have gathered a large share of the equity of a highly-profitable enterprise into their hands, and well-connected enough to fend off political attempts to curb their wealth (or well-connected enough to make political favors th...

What can be done to curb explicit and implicit corruption without also reducing the pressure in the engine of capital accumulation and economic growth?

Economists still argue over the extent to which the severe restrictions on immigration introduced in the 1920s diminished the supply of unskilled labor and so led to diminished wealth concentration (see O'Rourke and Williamson, forthcoming).

But if your skin was anywhere near black, the presumption was that you were somebody's slave.

Their defenders--many bought and paid for, a few not--painted a different picture: the billionaires were examples of how America was a society of untrammeled opportunity, where people could rise to great heights of wealth and achievement on their industry and skill alone; they were public benefactors who built up their profitable enterprises out of a sense of obligation to the consumer; they were well-loved philanthropists; they were "industrial statesmen."

These are America's first true inherited aristocracy: the first generation of those with immense social and economic power who have inherited it.

The Depression's financial market reforms act broke the links between board membership, investment banking, and commercial banking-based management of asset portfolios that had marked American finance before 1930.

Fortune came from profiting from a shift--either upward or downward--in investors' perceptions of the railroad's future profits.

And perhaps we can discern the rise of a new "leading sector," akin in the creation of many of America's present-day billionaires to the role played by the railroads in late nineteenth century America.

Fortune came from the ability to acquire ownership of a profitable railroad and then to capitalize those profits by selling securities to the public.

Fortune came from profiting from a shift--either upward or downward--in investors' perceptions of the railroad's future profits.

More of the return of the super-rich is due to the blurring of the lines between financiers and corporate managers as the Depression-era order of American finance has fallen apart.

The presumed link between the stock market crash and the Depression left the securities industry without political defenders...

And when the political system turns out to be corrupt--to serve as a committee for extracting wealth from the people and putting it into the pockets of the politically well-connected super-rich--what is to be done about it?

And landlords--and rent--were unknown.

How large are the entrepreneurial benefits from the finance-industrial development nexus through which the truly astonishing fortunes are developed?

Not even the richest of the pre-Civil War southern slaveholders disposed of that much property.