Historian Burton Folsom made an important distinction, in his book The Myth of the Robber Barons, between political entrepreneurs and market entrepreneurs. The political entrepreneur succeeds by using the implicit violence of government to cripple his competitors and harm consumers. The market entrepreneur, on the other hand, makes his fortune by providing consumers with products they need at prices they can afford, and maintains and expands his market share by remaining innovative and responsive to consumer demand.
It is only the political entrepreneur who deserves our censure, but both types are indiscriminately attacked in the popular caricature that has deformed American public opinion on the subject.
Andrew Carnegie, for instance, almost single-handedly reduced the price of steel rails from $160 per ton in 1875 to $17 per ton nearly a quarter century later. John D. Rockefeller pushed the price of refined petroleum down from more than 30¢ per gallon to 5.9¢ in 1897. Cornelius Vanderbilt, operating earlier in the century, reduced fares on steamboat transit by 90, 95, and even 100 percent. (On trips for which a fare was not charged, Vanderbilt earned his money by selling concessions on board.)
These are benefactors of mankind to be praised, not villains to be condemned.
More people need to read this.
Here we have the myth of the heroic entrepreneur. But what jumps out at me is who is not mentioned, namely, the workers who contributed their lives and labor to the listed accomplishments. Indeed, the workers are nearly always specifically omitted in these heroic tributes. Note the idea that Carnegie “almost single handedly…”. No, not even close to single handedly. In fact, from day to day, over the course of years, he did very little of the actual work in comparison to the work accomplished by the workers.
Do Carnegie, Rockefeller, and Vanderbilt deserve some of the credit for putting the operations together? Yes. All the credit? No. Most of the credit? No. But of course they claim all the credit because they are members of the political class, and claiming credit for what others do is a big part of what the political class does.
Do they deserve some of the profits from the operation for their efforts? Yes. All of the profits? No. Most of the profits? No. But of course they claimed all the profits, and the political rules of property allowed them to claim all the profits, and the political rules of property allowed the workers to be considered as mere human resources, because creating rules of property to their advantage is a big part of what the political class does.
Please tell me how the “worker” would have the capital needed to make the investment, the payroll, and intelligence needed to make the improvements to improve the quality of life over all?
Of course, you completely disregard that. Do you think any “bum” could take over a factory, a business, or corporation and improve the quality of life for every individual?
The “worker”, while invaluable to the success of any entrepreneur does not “deserve” any of the profits of a corporation. The worker agrees voluntarily to work for the business owner at a given rate. Thereby selling his time to the corporation, or entrpreneur. If a share of the profits was not in their contract then the owner is entitled to all the profits, after paying all his debts including the salary and benefits of his workers