America is a society that has grown from the roots of money. Its entire history is evidence of this fact. During the course of its existence, great concentrations of wealth have been accumulated. To criticize these billionaires, tarnish their success, labels like “robber barons” have been used. This denigration serves only as proof of their success. Contrarily, these businessmen were captains of business, industrial statesmen and pillars of society who led industrialization and are responsible for creating the enormous riches of the United States of America.
The American colonies were formed as business ventures by the British. Of course, they needed settlers, who were mostly Europeans seeking political, religious and economic freedom. The most important freedom was economic, for the British who already had it rarely worried about the religious and political. America was a society of money from day one.
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The basis of civilization is money because money makes it possible to eat and to be sheltered, the basic needs of man. In any society with a currency, it is a given that some will handle their capital more responsibly than others. This success has become the American Dream because it is possible.
Capitalism is the system that has blossomed because it a system that takes care of itself. Merit is rewarded with wealth, and with wealth comes class. So, of course, it is a class society as well as a meritocracy. What separates capitalism from feudalism is the presence of opportunity. It is this opportunity that is valued and is vital to the growth of the economy.
Opportunity is what created the wealth of the so-called robber barons. This tag has been given to a handful of men, mostly from the 19th and early 20th centuries. They have been called ruthless and immoral, but on the other hand, they were the men that led the industrial revolution. Some led to the economic success of the nation, some were embarrassing side effects, but nevertheless, they cannot all be painted with the same brush.
John D. Rockefeller was probably the most successful of the bunch. The visionary behind the Standard Oil empire, he built a horizontally integrated company, meaning it saw his oil through every stage of production – extraction, refining, etc. He believed in a harsh and ruthless business style, believing that it was the only way to survive in the Social Darwinist world of business.
He forced competitors out of business and Standard Oil was later pronounced an illegal monopoly and the trust was broken. Rockefeller became the richest man in the world by producing a product that was needed and valued. He practiced a business style that was not uncommon in his time. Despite the denigrating label of a robber baron, he was an important part of the industrial revolution. He was also a great philanthropist, giving away more than half his fortune to charity.
Andrew Carnegie was another industrialist that had a great impact on American society. He built the U.S. Steel Company with a common-sense style. He vertically integrated because using middlemen was unreliable, costly and inefficient. By buying his own iron and coal mines, he was able to undersell his competitors. Like the rest of his times’ owners, he was not a caring employer, excessively creating a competitive environment. He built his fortune by proving a needed service – cheap steel – by cutting costs and downsizing, keywords of the modern enterprise.
JP Morgan was a great power in American finance. At the turn of the century, he owned one of six of America’s railroads. Because of his position in finance, he had more control over private enterprise and government financing than any other American. He more than once helped stabilize the US economy. He was also a philanthropist who donated a great deal of money. He was an important part of America’s economic growth.
Jay Gould and Jim Fisk put together a scheme to corner the gold market which would cause another panic. Together with fellow Erie Railroad man Daniel Drew, they manufactured 50,000 in worthless Erie stocks. They were later forced to relinquish control of the railroad they fought with Vanderbilt over. They were some of the more unscrupulous businessmen.
Another American financier, Jay Cooke secured $1 million in loans for the Union during the Civil War. He became wealthy but went bankrupt while raising $100 million for the Northern Pacific Railroad, a crash that precipitated the 1873 panic. Despite the bankruptcy protection, Cooke later paid back his creditors and accumulated another fortune in just a few years.
However cruel or ruthless, these businessmen were acting in accordance with the business practices of the time. They helped build the nation’s economy into what it is today. The truth is, business is a world where the strongest survive and these men not only survived but also flourished.
The economic growth was certainly helped by the presence of these industrial statesmen. They earned their money through rigid manners, but they did act in accordance with business methods. They took opportunities offered by the system. If they had passed up their openings, others would have stepped up to take the opportunities. It is natural in business to take advantage of chances, advantages and ability; it is the essence of success.
In modern times, such as the great bull market of the 80s, created its own business practices some saw as cruel. The great corporate raiders such as Carl Icahn bought companies just to break them up for a profit. However, this is not such a terribly selfish act, but an act of liberation. Because of the separation of ownership from management, executives continue to operate unsuccessful companies for their personal salaries. By breaking up a company not worth keeping, these businessmen can put the money into greater ventures that create more jobs and stimulate the economy.
In our society, those who are successful, including billionaires, are often targets of scandal campaigns and character assassination. It is as if people do not like the successful. “Robber barons” is just another way to disparage those who are more successful than others.
The real problem people see with such concentrations of wealth, no matter in what manner it is accumulated is that others don’t have as much. It is why liberals and socialists believe in the redistribution of wealth or welfare.
The theory behind the American version of welfare is Karl Marx’s progressive income tax, meaning the rich pay a higher percentage of taxes, for the benefit of those whose income is insufficient to maintain an adequate standard of living. However, welfare has been a target of reform because it has become a permanent subsidy to those who do not want to work for a living. The recent success of the economy as a result of Bill Clinton’s neoconservative economic policy has turned more people away from the notion of a welfare system. American liberals still voice their opinion as much as in the past, but the recent failures of communism and socialism have brought more people on the capitalist bandwagon.
America grew into the superpower it is today under a capitalist system. The basis of the system is that government regulates the economy as little as possible, allowing businesses to grow on their own. This system has worked in favour of those who are intelligent and talented enough to take advantage of opportunities. The American Dream is the dream of financial security. In this day and age, when 50 percent of American households invest in the stock market, it is a reality for many.
In our capitalist system, there is an opportunity for the entrepreneur and the workingman. There are jobs out there for those who are willing to work, and the opportunity to get rich is ever-present. Success is a dominating value. However, those who are “too successful” are sometimes unfairly vilified. It is the basic goal of our society to have financial security, freedom and success, yet when somebody earns more than the majority of others, they are labelled “robber barons.”
Today, as capitalism is growing and is establishing its dominance with globalization, again there are problems presented by the Democratic Party and the liberals. In today’s economy, many companies are exporting their factories and labour forces to countries where muscle labour is cheap, such as Thailand and Malaysia. Some say this is the decimation of the American workforce.
However, this is the essence of capitalism. Capitalism offers opportunity, and when corporations take their opportunity to create more money, the jobs lost by Americans are no longer useful, but obsolete. America offers opportunities for education, yet many are not taking advantage of this opportunity. When jobs become obsolete, it is evolution at work. It is the same as when the Morse code became obsolete. Those who are out of work must enter a new career, and there is no excuse for failure with the number of jobs available in our enormous economy.
Capitalism works because it rewards those who are willing to work. It rewards those who start successful businesses and create jobs. It is natural selection at its finest. By redistributing wealth, progressive and excessive taxes discourage the entrepreneur and therefore discourage economic growth.
In accepting capitalism, Americans must accept that some will be more successful than others. This is inequality, of course, and it is the right way. Equality of wealth would mean that every person has the same amount of money.
They would use this money to buy bread, but who would they be buying bread from if there is no longer a successful businessman selling it. They would buy homes, but who would be building them? Equality of income is communism and America obviously does not wish to go down that road of poverty, instability and inefficiency.
Capitalism is the best way to go. Therefore, it is not inequality of wealth that must be discarded. As long as the opportunity exists for the average person, the system is working, and it is the best system in existence.
Accepting inequality of wealth, it must be accepted that great concentrations of wealth will be accumulated by those capable enough to earn it. These people, the billionaires of our society, are not robber barons, not some kind of thieves, but the leaders of our society, industrial statesmen. Of course, there are differences among them: Jim Fisk and Jay Gould acted illegally, but for the most part, American businessmen are capitalist cream of the crop.
Men like Charles Schwab and JP Morgan became wealthy by being excellent entrepreneurs. They build the businesses, the industries, they create jobs and create economic growth. Discouraging these industrial statesmen would be discouraging economic growth.
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