Thursday, April 26, 2018

The Tycoons, by Charles R. Morris

Today I'm looking at an economic history that focuses on four of the most famous American robber barons of the Gilded Age. This book is partly a biography of the tycoons, but also talks about the larger factors that helped turned the United States into the dominant global economic power that would dominate the twentieth century. This book is definitely interesting, although some of Morris's conclusions run counter to conventional thinking about the Gilded Age. Morris does utilize extensive data so I think it's a matter that merits more investigation and research and we may be able to come to new conclusions from existing data.

Of the many business executives of the nineteenth century, Morris focuses on four that stand head and shoulders above the rest, both in influence and wealth. Jay Gould, a stock jobber and railroad magnate; John Rockefeller, who ruthlessly crushed competition and consolidated former rivals into his sprawling Standard Oil; Andrew Carnegie, who dominated the steel industry and drove prices down through any method possible; and J.P. Morgan, the financier who personally forestalled two financial panics. Morris provides brief biographies of all four the tycoons as well as their influence on American industry. Morris actually spends time arguing that Rockefeller, Gould, and Morgan do not deserve as much opprobrium that they receive in traditional histories. He particularly focuses on Jay Gould who is largely remembered for his gutting of the troubled Erie railroad and absconding with some seven million dollars. Morris argues that Erie was the exception and Gould spent most of his career genuinely trying to consolidate railroads into profitable enterprises. He makes further arguments on Rockefeller and Morgan to much the same effect, going so far as to argue that Morgan was interested in defeating ruinous competition.

The only tycoon that Morris really attacks is Andrew Carnegie to demolish the reputation Carnegie had in the nineteenth century as a ''good tycoon'', although in the modern era I wouldn't think many people think of Andrew Carnegie as a good tycoon. Morris points to the repeated conflicts Carnegie had with labor and his constant attempts to reduce worker's wages despite growing profits while Rockefeller had fairly few issues with his own workers. Regardless, I think the exploitation of workers and consolidation of capital don't make the tycoons completely blameless.

In addition to talking about the titular tycoons, Morris talks about the larger developments of the United States that enabled it to become the economic powerhouse of the twentieth century. One of the most important is the development of the rail infrastructure which enabled mail-order industries like Sears and Roebuck to grow, something which wasn't anticipated by Morgan and Gould who originally helped build the railroads. Morris also argues that the economic conditions for the middle class actually improved during the Gilded Age, despite widespread deflation.

When the United States effectively went on the gold standard, the dollar went through a gradual deflation which resulted in falling prices as well as wages, which gave many people the impression that times were getting harder all around. Morris argues from his data, however, that despite the falling wages caused by deflation purchasing power did not decrease equally and as a result standards of living in the United States actually went up. Obviously this is a difficult issue that requires a lot of data to make a conclusion but I see no reason to at least not accept Morris's argument as possibly valid and meriting further research.

Overall I thought this book was rather interesting, although I have a personal interest in financial history and the nineteenth century. Some of Morris's arguments do run counter to existing understandings of history, but I think there's enough data that extensive research could see how accurate Morris's arguments really are. If these are topics that pique your interest then I think it's definitely worth your time.

- Kalpar

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