Selects: Robber Barons! | STUFF YOU SHOULD KNOW

Stuff You Should Know

Introduction and Context

Josh introduces July 2020 episode selection on robber barons
Comparison between today's billionaires and Gilded Age robber barons
- Today's billionaires "terrible at philanthropy"
- Historical robber barons "far less preoccupied with outer space"
Podcast hosts: Josh Clark, Charles W "Chuck" Bryant, Jerry (producer)

Government laissez-faire approach to regulation
Active corporate welfare and political entrepreneurship
Steel revolution via Henry Bessemer process (1850s)
Railroad expansion enabled national commerce
People migration: farms to cities, immigrants from Europe, African Americans moving north
Extreme wealth inequality statistics (1890):
- Top 1% owned 51% of all wealth
- Top 12% owned 86% of all wealth
- Lower 44% owned 1.2% of wealth
- Richest 4,000 families had same wealth as 11.6 million families combined

Rhine River gorge toll collectors
1250: Emperor Frederick III death created regulation vacuum
Local nobility exploited narrow straits to tax merchants
1870 Atlantic article: compared medieval robber barons to "new aristocracy of swindling millionaires"

Born poor on Staten Island farming family
Quit school at 11, worked boat docks
Started with ferry boat at age 14
"Commodore" nickname from naval fleet command
Broke Robert Fulton's 30-year steamship monopoly in New York
Reduced ferry prices from $7 to $3 through efficiency improvements
Railroad career began at 39 after train crash
Harlem Railroad acquisition strategy:
- Stock price: $168 to $5,998 per share
- Recognized Manhattan access value
Consolidated railways between New York and Chicago
Built Grand Central Depot (now Grand Central Station)
Left $100 million to son William
William doubled fortune to $200 million in 6 years
Vanderbilt University named after $1 million donation

Born wealthy, son of successful banker/merchant
Wall Street job at 20, partnered with Anthony Drexel at 30s
Created Drexel Morgan & Company investment bank
Financed other robber barons across industries
"Morganization" process:
- Horizontal integration strategy
- Buy competitors, form larger companies
- Sell below cost to eliminate holdouts
- Create industry monopolies/trusts
Created General Electric, U.S. Steel ($1 billion company)
Basis for Monopoly game's Uncle Pennybags character
1904: Targeted by Teddy Roosevelt's antitrust action
Northern Securities Corporation broken up by Supreme Court
Tactics included wage cuts, workforce reduction, unsafe working conditions

Born poor in Scotland, immigrated to Pittsburgh at 13
Worked in cotton factory, self-educated through borrowed books
Steel industry focus in Pittsburgh
Initially "friend of the worker" reputation until 1892
Homestead Strike (1892):
- 10 people died in violent confrontation
- Pinkerton agents called as strikebreakers
- National Guard intervention favored Carnegie
- Carnegie claimed distance but correspondence proved involvement
Major philanthropist: "The man who dies thus rich dies disgraced"
Built 2,500+ libraries nationwide
Founded Carnegie Corporation, Carnegie Mellon University, Carnegie Hall
At peak: owned $1 of every $20 in U.S. circulation

Richest man in history by relative wealth measurement
Peak wealth: $900 million (1912) = $23 billion today
Relative to total economic output: equivalent to $350 billion today
Standard Oil controlled 90%+ of oil market by early 1900s
Railroad collusion tactics:
- Received rebates competitors didn't get
- Competitors paid extra 20-30 cents per barrel tax
- Rockefeller received kickbacks from competitor taxes
Religious motivation: duty to make and give away maximum money
Lifelong philanthropist (10% of early paychecks donated)
Gave away nearly all wealth: died with only $26 million of $900 million
Major beneficiaries:
- University of Chicago ($75 million)
- Spelman College (freed slave education)
- Rockefeller Sanitary Commission (hookworm eradication)

Henry Ford, John Jacob Astor, Charles Schwab, Andrew Mellon, Jay Gould
Controversial quotes:
- Carnegie: "It's not the man who does the work who gets rich, it's the man who gets other men to do the work"
- Jay Gould: Could "hire one half of workers to shoot the other half"
- Rockefeller: "Competition is a sin"

Conservative historians' rehabilitation arguments:
- Created industries that built American power
- Enabled public schooling expansion
- Major philanthropic contributions
- Presided over rising living standards despite inequality
Modern billionaires comparison:
- Better PR and marketing
- Generally poor philanthropic record (except Bill Gates)
- Presiding over declining wages and living conditions
- Similar inequality levels but opposite social trajectory

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