“Gentleman, you have undertaken to cheat me. I won’t sue you for the law takes too long. I will ruin you.” Cornelius Vanderbilt 1890.
When Vanderbilt left America for business in South America, his business partners began exploiting his absence, they sought to gain control over his company. Not to worry, he was as good as his word.
‘Creative Destruction’ is what Joseph Schumpeter called it. For the last 75 years we in the West have forgotten the destructive power of innovation, what we sought was ‘stasis’, the false harmony of ‘having arrived’ in our pursuit of unions, tenure and other ventures that act as bulwarks against such destruction.
I think the ‘Robber Barons’ can teach us a lot if we seek the criteria of intelligibility that grounded all there endeavors. These understudied industrialists like Andrew Carnegie, John D. Rockerfeller, J.P. Morgan and the Vanderbilts all embodied the acumen required to succeed on a scale chosen by the needs of the Republic.
‘American Colossus: The Triumph of Capitalism 1865-1900’ by H.W. Brands is a revered study on two very significant themes: the nature of the ruin and success that becomes of that ‘creative destruction’ and the terrifying difficulty of remaining at the top once one has arrived.”
By examining the rough and tumble that became the impact of industrialism on frontier life is daunting for any reader. We read how Vanderbilt being a ‘water man,’ meaning that he preferred steamship to railroads cost him dearly. Indeed, American history is a contest between capitalism, which demands even exploits social inequality, and democracy, the political and social embodiment of egalitarian principles.
‘Colossus’ is simple to understand: America, by embodying both capitalism and democracy sought to accomplish its revolution by containing the threatening social and political demands of both. How? By never abandoning the precepts of natural law or Federalism. Most readers just don’t understand that prior to Teddy Roosevelt, capitalism in America threatened to eclipse the experiment that is American Democracy.
This clash was to be mitigated in the social innovations that the Robber Barons pursued in Parks, Public Baths, Railroads for transportation, Subways, Universities, and Library’s.
Joseph Schumpeter was right, but we continue in our failing to understand and mine the most significant insight regarding this time period: the best growth is spurred by the right kind of ruin.