Fee – The widely-accepted “history” of America’s Gilded Age was grossly inaccurate, but it told a compelling story that many fell for hook, line, and sinker.
The widely-accepted “history” of America’s Gilded Age was grossly inaccurate, but it told a compelling story that many fell for hook, line, and sinker.
Culture Gilded Age Robber Barons History Marxism Myths
Note from the President: Burton W. Folsom is more than just my favorite historian. He’s also one of my very best friends. So I admit to some personal bias when I endorse his classic book, The Myth of the Robber Barons, as I’ve done on dozens of occasions. But even if I didn’t know him or didn’t like him, I would still say that it’s one of the best, most insightful books on American business and political history of the last century. The distinction he draws out between “market entrepreneurs” and “political entrepreneurs” has permanently altered historical interpretations of a crucial era in our past—for the better and with increasing effect as the years have gone by since the book’s first edition in 1991.
Now, a new edition—the eighth—makes its appearance with a new final chapter, excerpted here. What you’ll read below is about a third of that chapter, but it’s an excellent sample. Here, Dr. Folsom explores the question of how and why so many historians get the “robber baron” era precisely wrong, with a special focus on the deleterious impact of Matthew Josephson and his error-filled but influential book from the 1930s.
— Lawrence W. Reed, President, Foundation for Economic Education
Capitalism Worked, but We Were Told It Didn’t
We study history to learn from it. If we can discover what worked and what didn’t work, we can use this knowledge wisely to create a better future. Studying the triumph of American industry, for example, is important because it is the story of how the United States became the world’s leading economic power. “Free markets worked well; government intervention usually failed.
The years when this happened, from 1865 to the early 1900s, saw the U.S. encourage entrepreneurs indirectly by limiting government. Slavery was abolished and so was the income tax. Federal spending was slashed and federal budgets had surpluses almost every year in the late 1800s. In other words, the federal government created more freedom and a stable marketplace in which entrepreneurs could operate.
To some extent, during the late 1800s—a period historians call the “Gilded Age”—American politicians learned from the past. They had dabbled in federal subsidies from steamships to transcontinental railroads, and those experiments dismally failed. Politicians then turned to free markets as a better strategy for economic development. The world-dominating achievements of Cornelius Vanderbilt, James J. Hill, John D. Rockefeller, and Charles Schwab validated America’s unprecedented limited government. And when politicians sometimes veered off course later with government interventions for tariffs, high income taxes, anti-trust laws, and an effort to run a steel plant to make armor for war—the results again often hindered American economic progress. Free markets worked well; government intervention usually failed.
Why is it, then, that for so many years, most historians have been teaching the opposite lesson? They have made no distinction between political entrepreneurs, who tried to succeed through federal aid, and market entrepreneurs, who avoided subsidies and sought to create better products at lower prices. Instead, most historians have preached that many, if not all, entrepreneurs were “robber barons.” They did not enrich the U.S. with their investments; instead, they bilked the public and corrupted political and economic life in America. Therefore, government intervention in the economy was needed to save the country from these greedy businessmen. To read more click here.