Editorial Review:
The Myth of the Robber Barons describes the role of key entrepreneurs in the economic growth of the United States from 1850 to 1910. The entrepreneurs studied are Cornelius Vanderbilt, John D. Rockefeller, James J. Hill, Andrew Mellon, Charles Schwab, and the Scranton family. Most historians argue that these men, and others like them, were Robber Barons. The story, however, is more complicated. The author, Burton Folsom, divides the entrepreneurs into two groups market entrepreneurs and political entrepreneurs. The market entrepreneurs, such as Hill, Vanderbilt, and Rockefeller, succeeded by producing a quality product at a competitive price. The political entrepreneurs such as Edward Collins in steamships and in railroads the leaders of the Union Pacific Railroad were men who used the power of government to succeed. They tried to gain subsidies, or in some way use government to stop competitors. The market entrepreneurs helped lead to the rise of the U. S. as a major economic power. By 1910, the U. S. dominated the world in oil, steel, and railroads led by Rockefeller, Schwab (and Carnegie), and Hill. The political entrepreneurs, by contrast, were a drain on the taxpayers and a thorn in the side of the market entrepreneurs. Interestingly, the political entrepreneurs often failed without help from government they could not produce competitive products. The author describes this clash of the market entrepreneurs and the political entrepreneurs. In the Mellon chapter, the author describes how Andrew Mellon an entrepreneur in oil and aluminum became Secretary of Treasury under Coolidge. In office, Mellon was the first American to practice supply-side economics. He supported cuts on income tax rates for all groups. The rate cut on the wealthiest Americans, from 73 percent to 25 percent, freed up investment capital and led to American economic growth during the 1920s. Also, the amount of revenue into the federal treasury increased sharply after tax rates were cut. The Myth of the Robber Barons has separate chapters on Vanderbilt, Hill, Schwab, Mellon, and the Scrantons. The author also has a conclusion, in which he looks at the textbook bias on the subject of Robber Barons and the rise of the U. S. in the late 1800s. This chapter explores three leading college texts in U. S. history and shows how they misread American history and disparage market entrepreneurs instead of the political entrepreneurs. This book is in its fifth edition, and is widely adopted in college and high school classrooms across the U. S.
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Customer Reviews
Average Customer Rating: 
Fascinating and Refreshing  2008-09-11
I found this book both fascinating and instructive. Folsom's brief biographies of six great American industrialists provide a riveting read and a thought provoking revision of the perspective on entrepreneurship that is widely held by the academic establishment. I believe that his distinction between "political" and "market" entrepreneurs is essential to understanding the economic history of the US and the process by which nations and individuals become wealthy. The only complaint that I have about the book is that it is too short. The portraits of the great producers that Folsom discusses are so interesting that I wanted to know much more about each man. I suppose that I will need to start tracking down some supplementary biographies. If you are looking for a book on history or economics that is enjoyable to read, thought provoking, and relevant, you could hardly do better than this book.
"Robber Barons" Ought to be Called "Productive Geniuses" 2008-05-11
Burton Folsom's The Myth of the Robber Barons is a short, but excellent book that argues that the mislabeled "Robber Barons" of the 19th century became wealthy not because they robbed anyone but because they offered quality products/services at record low prices. These productive giants made their fortunes because so many Americans chose to do business with them.
There are several values to gain from this book. First, you will learn several inspiring stories about how great industrialists amassed their fortunes through ingenuity, extended dedication and taking great calculated risks. You will learn about how Cornelius Vanderbilt defeated the Fulton NY/NJ steamship-transport monopoly by offering lower rates, earning a reputation for his punctuality, investing in faster and larger ships and providing ancillary services such as concessions. You will also learn about how Andrew Carnegie was obsessed with cutting costs, which led to him profitably carting off tons of steel shavings discarded from a competing steel plant owned by the Scrantons. Other business heroes covered in depth in this book are James J. Hill (who built the Great Northern Railroad without a penny of Federal aid), oil tycoon John D. Rockefeller, the Scranton steel family, Carnegie's right hand man Charles Schwab and Andrew Mellon, the Secretary of the Treasury whose laissez-faire policy recommendations allowed the 1920s to roar.
Another great value of this book is that it dispels a few common myths about capitalism. For one, Folsom correctly identifies that "Robber Barons" is an invalid concept. That is, "Robber Barons" includes market entrepreneurs (i.e., those who *created* their fortunes by revolutionizing an industry) with political entrepreneurs (i.e., those who made their fortunes through government aid or with political connections.) Examples of market entrepreneurs include Carnegie, Rockefeller, Hill, and Vanderbilt. Examples of political entrepreneurs include Henry Villard and Leland Stanford. Instead of subsuming all wealthy industrialists under a single category, Folsom suggests that we instead judge these industrialists based on *how* they made their fortunes.
A final great aspect of this book is that it offers a concise, essentialized history of what made these individuals great. Thus, an avid reader may absorb a healthy amount of introductory material without committing himself to reading an 800-paged biography.
If you enjoy this book, then I also highly recommend both Burton Folsom's "Empire Builders" and Andrew Bernstein's "The Capitalist Manifesto". To a lesser extent, I also recommend H. W. Brands' "Masters of Enterprise."
Insightful perspective both on specific entrepreneurs and on the reasons for inaccuracy in the history books 2008-04-20
Folsom does a masterful job of illustrating how the traditional "Robber Barons" of the 19th century actually fall into two categories, market and political entrepreneurs. The political entrepreneurs, were generally abusive of their position and government favors, providing little innovation, high prices, and lower quality because government subsidies and privileges made it unnecessary for them to compete more effectively. The market entrepreneurs, though not always angels in their personal lives, generally reduced the prices and increased the quality of the products of their industries in order to succeed by outcompeting their competitors. Even the most successful, like Rockefeller, who approached 90% market share, never raised the prices of their products back to their earlier levels. In other words, even when they were successful, these entrepreneurs always left the markets they entered with considerably higher quality and lower prices than when they entered. His treatment of his chosen entrepreneurs is well-researched and his clear bias in favor of capitalism does not come across as bigotry, given his careful use of factual evidence. I use these as supplements to my History and Civics classes, and have for years. His other books are equally well-written, but not as easy to find in print.
He includes a supplemental chapter right at the end of his book that deals directly with the reasons why traditional history textbooks come to such contradictory conclusions with respect to these entrepreneurs. That historiography aspect of this book is unique in most such business literature.
It's amazing... 2007-05-28
...that there is still so much hatred of capitalism in the world today, as evidenced by the fact that several reviewers gave this book one star. Nothing in history has even come close to elevating the material standard of living like the capitalistic system, and yet it is still villified, maligned, mocked, and hated intensely, mainly by those who despise freedom. Burton Folsom's "The Myth of the Robber Barons" is an excellent, though much too brief, discussion of several industrialists of the 19th century. In the book, Folsom argues, and undeniably proves, that free market entrepreneurs of the 19th century were far more successful, less wasteful, and much less economically corrupt than those who begged for government subsidies. This will not surprise anyone who understands free market economics versus government meddling.
Just one quick example: James Hill built the Great Northern Railroad without a dime of government money. The other four transcontinental railroads, all built with government subsidies, went bankrupt--there were massive amounts of waste, fraud, and abuse, which is, of course, exactly what you would expect when people aren't spending their own money. Those who built the transcontinental railroads on government subsidies had no reason to be careful or efficient because they were spending taxpayers' money, not their own. Hill built the best, most efficient, and most profitable line. Then he expanded into the Asian market, opening doors to further enhance American trade. Only to be stymied by government action--the Sherman Anti-Trust Act. So government built a far worse railroad on taxpayers money, and then stifled the freedom of a great entrepreneur with a useless law. Folsom proves this conclusively, and there is no way to deny it, except through vitriol and hatred.
There is a reason why capitalism can succeed in economic matters where government cannot. Government, by definition, is the nationalization of force. It can do nothing without the threat or use of force. It's major--often only--source of income is through coercive taxation, which is nothing more than forced requisitions from its citizens. Government's purpose, as so wisely noted by America's Founding Fathers and ignored by American politicians today, is the protection of property, the free use thereof that does not infringe upon the natural rights of others. Government can only use force to protect property--that's why government is so good at war and so wasteful when it comes to social issues. It's not government's purpose to be involved in charity, simply because of the nature of government--the use of force to accomplish its goals. One doesn't use a sledge hammer to break an egg--that's not the purpose of a sledge hammer. A sledge hammer WILL certainly break an egg, but it probably won't accomplish the intended purpose, unless that purpose is the total destruction of the egg. And when governmental force is used in areas where force is not required (charity, free market economics, etc.) then the result will nearly always be negative and very often catastrophic. That's the point Folsom makes in this book and he makes it well.
Lovers of freedom will enjoy this book. Those who want to control others, think they know better how to run other peoples' lives, and are government-control freaks will hate this book.
One last note: I am an instructor of history at a community college in California. And starting this fall, I'm going to require my students read Folsom's book. It's time our people started getting the other side of the story, the correct one, the one where freedom wins, rather than loses.
Who were the real robber barons 2006-11-28
Who were the real robber barons.
The entrepreneurs vs. the state. Folson cuts away the myths and tells the true story of these remarkable risk takers: Vanderbilts's steamships, Hill's Railroads, Scranton's Iron Rails, Schwab and the steel industry, Rockefeller's oil, and Mellon's tax cuts. He also hits upon the missed data and half truths in the textbooks that contributes to rewriting history.
Burton's style is a little dry, with an over emphases of each subject. He received research help from libraries, institutions, historians, and even his students.
There are two types of entrepreneur, the market entrepreneur and the political entrepreneur. Great visionaries of the private sector can do it better than the government: what we get is lower prices and a better product; innovation isn't stifled; more affordable comfort and products for the poor. Government aid tends to breed inefficiency.
Who is relative to growth? Who makes creative contributions?
"Of all tyrannies, a tyranny exercised for the good of its victims may be the most oppressive. It may be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end, for they do so with the approval of their own conscience."------------------C.S. Lewis
Wish you well
Scott
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