What the Robber Barons have to Tell us about Progressivism
August 2012
If the roots of current liberalism trace themselves to the progressive movement at the beginning of the 20th century, then what began the beginning? What enemies were the progressives fighting that entailed their rise and the continual popular myth of their success? One of there most notable foes were the so-called Robber Barons. The progressives portrayed these individuals, Carnegie, Frick, Rockefeller, Drew and of course, Jay Gould, as the epitome of the need for greater government intervention as the only means of circumnavigation of the Robber Baron’s power.
Yet in two books on this subject, Matthew Josephson’s The Robber Barons, written in 1934, and in a most recent work, Edward Renehan’s Dark Genius of Wall Street, one of the little discussed facts of this time is borne out. One of the more interesting business episodes of the late 19th century was the Vanderbilt and Gould fight over the Erie railroad. To win, each used underhanded business tactics, duped partners, and bent the rules, but most of all they used the government. In those supposed times of unfettered capitalism each used a combination of judicial and legislative machinery to achieve their ends. “One magistrate had forbidden them to move and another magistrate had ordered them not to sit still.” Gould himself was a master at manipulating judges to do his bidding.
So this raises two questions. The first was why were the judges so corruptible? The answer of today’s perspective is that the judges of the time were elected as many are today. Champions of appointed judges claim that the taint of electioneering created such as level of corruption that only a panel of so called legal experts should have a hand in judge selection. Who are the experts? Why they would be lawyers of course, and not just any lawyers, but litigators preferred. The evidence that elected judges in the Gilded Age, or the information age for that matter, are less corruptible is laughable. The judges that sat in Gould and Vanderbilt pockets were not corrupt because they were elected. They were in fact greedy and most importantly of all, in a key position to affect the tides of millions of dollars.
The other question this episode raises is why Gould and Vanderbilt went the route of legal maneuvers as opposed to simply starting an alternate line or buying Erie in a more fair fashion. The answer here lies at the heart of why progressivism, in any of its versions, is a destructive force. Progressivism supposes that when the government imposes regulation either through the judiciary, the legislature, or the executive, that there are no forces who will want to see their influence on the nature of that regulation. Somehow a New York Supreme Court judge was in a position to decide who would control the railroad routes between New York and the west and Surprise! There were individuals who wanted to control who controlled the ownership of the Erie.
The more regulation imposed on how things are made, mined, purchased, produced, and sold the more there will be people like Gould and Vanderbilt to influence those who make the rules. The next conclusion is to impose a new set of regulations to watch the old set. In our times we have Sarbanes Oxley which did nothing to prevent the meltdown of the banking system in 2008. The answer of the progressives is simple, more of the same. Now we have Dodd Frank which among many, many other controls, can dictate who can sell care insurance to whom. If they were alive today Gould and Vanderbilt would not be fighting for railroads, they would be vying for control of Progressive Insurance or Geico.