"There's a big difference between entrepreneurs who make a fortune in the market, and those who do so by gaming the government."
Quotes from the Robber Barons
"LABOR IS THE CREATOR OF CAPITAL, And capital is in the nature of a stored up force. It is like the balance wheel of an engine, which has no motion that has not been imparted to it, but is a reservoir of force which will perpetuate the motion of the machinery after the propelling power has ceased. A man takes a few thousand dollars of capital, builds a workshop, buys raw material advantageously, and engages a hundred workmen to manufacture boots and shoes. This is the foundation of enterprise. The employer of labor is a benefactor. The great majority of mankind do not originate employments for themselves. They either have not the disposition, or the ability to so originate and direct their own employment."
"Capital directed by intelligent enterprise is a vast benefactor to man. The man who through others makes to grow two blades of grass where but one grew before is a benefactor to mankind in the largest sense; but suppose that each of the one hundred workmen employed produce in excess of his wages the value of one dollar a day. One dollar a day for each aggregated gives one hundred dollars per day to the employer. The profit to the employer then is one hundred dollars per day. In the aggregate the one hundred men employed, by associating their effort and their credit, and possibly their capital, could command a sufficiency of that reserve force which we call capital to build the shop and purchase the material with which to start business. If they do not possess the capital in the aggregate, I am fully persuaded that one hundred INDUSTRIOUS, SOBER, Skillful mechanics, agreeing to combine their labor, industry and intelligence, would possess sufficient credit to command the capital necessary to lay the foundation of enterprise."
"To-day the world obtains commodities of excellent quality at prices which even the generation preceding this would have deemed incredible. In the commercial world similar causes have produced similar results, and the race is benefited thereby. The poor enjoy what the rich could not before afford. What were the luxuries have become the necessaries of life. The laborer has now more comforts than the landlord had a few generations ago. The farmer has more luxuries than the landlord had, and is more richly clad and better housed. The landlord has books and pictures rarer, and appointments more artistic, than the King could then obtain."
"We start, then, with a condition of affairs under which the best interests of the race are promoted, but which inevitably gives wealth to the few. Thus far, accepting conditions as they exist, the situation can be surveyed and pronounced good. The question then arises, --and, if the foregoing be correct, it is the only question with which we have to deal, --What is the proper mode of administering wealth after the laws upon which civilization is founded have thrown it into the hands of the few? And it is of this great question that I believe I offer the true solution. It will be understood that fortunes are here spoken of, not moderate sums saved by many years of effort, the returns on which are required for the comfortable maintenance and education of families. This is not wealth, but only competence which it should be the aim of all to acquire."
"When we consider what has been accomplished by the railway companies in the past thirty years, the singularly low rate of transportation which prevails, the average cost being not to exceed one-third of what it was thirty years ago, the reduction of freight classifications from fifty or more to three, the increase by thousands of through routes and rates, the improvement of facilities for transportation in roadway, equipment and terminals, has not the country abundant reason to congratulate itself on what has been accomplished?
And I will say further that all this has been brought about by the railway companies in their efforts to serve the public and help themselves rather than by any legislative or other interference. The railways of the country are subject to the Interstate Commerce law. It is said that carriers do not observe the law; that rates are unreasonable; that the public are oppressed. ...
To remedy the evils, growing, as is claimed, out of the violation of the law, government ownership is suggested by some, and an increase of the power of the Interstate Commerce Commission by others. Government ownership means the control and operation of railways by government officials. A mere statement of the proposition arouses in the mind of almost every thoughtful man the fear that such power would end in the destruction of the government itself.
Aside from all economic questions and the increased cost to the public, either in direct advance of rates or indirect cost of increased taxation, it would mean the political appointment of an additional million of public officials and the exercise of a power sufficient to imperil, if not to destroy, free government in the United States."
"If business is to find such terms as will bring back prosperity, the universal waste by public authorities and the tendency of many corporate bodies to make both ends meet by borrowing instead of saving must come to a speedy end.
Our progress toward a centralized paternalism is so marked and has gone so far that the middle-of-the-road Socialist has little reason to complain that his party has not already secured a majority. Under laws passed at the last session of congress, most corporate business in the United States is under direct federal control. Every year sees the transaction of business made more expensive by laws prescribing multiplied and costly reports, ordering expensive improvements or additional services, laying new taxes, compelling the engagement of additional employes [sic] and the raising of the compensation of the old. This is the history of paternalism, of centralization, since ever the words or the things were known to the world. That governing method has always been the most wasteful of all, no matter whether it hid itself under the title of monarchy, aristocracy or democracy. Under the tribute it attempts to levy, business in the United States would eventually become unable to conform to the onerous conditions of the new era."
"The principal complaint against our industrial conditions of to-day is that they cause great wealth to flow into the hands of the few. Well, of the very few, indeed, is this true. It was formerly so, as I have explained, immediately after the new inventions had changed the conditions of the world. To-day it is not true. Wealth is being more and more distributed among the many. The amount of the combined profits of labour and capital which goes to labour was never so great as to-day, the amount going to capital never so small. ...
You may be sure, gentlemen, that the question of the distribution of wealth is settling itself rapidly under present conditions, and settling itself in the right direction. The few rich are getting poorer, and the toiling masses are getting richer. Nevertheless, a few exceptional men may yet make fortunes, but these will be more moderate than in the past. This may not be quite as fortunate for the masses of the people as is now believed, because great accumulations of wealth in the hands of one enterprising man who still toils on are sometimes most productive of all the forms of wealth. Take the richest man the world ever saw, who died in New York some years ago. What was found in his case? That, with the exception of a small percentage used for daily expenses, his entire fortune and all its surplus earnings were invested in enterprises which developed the railway system of our country, which gives to the people the cheapest transportation known. Whether the millionaire wishes it or not, he cannot evade the law which under present conditions, compels him to use his millions for the good of the people. All that he gets during the few years of his life is that he may live in a finer house, surround himself with finer furniture, and works of art which may be added…. But truly the modern millionaire is generally a man of very simple tastes and even miserly habits. He spends little upon himself, and is the toiling bee laying up the honey in the industrial hive, which all the inmates of that hive, the community in general, will certainly enjoy."
"I am sure it is a mistake to assume that the possession of money in great abundance necessarily brings happiness. The very rich are just like all the rest of us; and if they get pleasure from the possession of money, it comes from their ability to do things which give satisfaction to someone besides themselves."
"A man of business may often most properly consider that he does his share in building up a property which gives steady work for few or many people; and his contribution consists in giving to his employees good working conditions, new opportunities, and a strong stimulus to good work. Just so long as he has the welfare of his employees in his mind and follows his convictions, no one can help honouring such a man. It would be the narrowest sort of view to take, and I think the meanest, to consider that good works consist chiefly in the outright giving of money. ...
The best philanthropy, the help that does the most good and the least harm, the help that nourishes civilization at its very root, that most widely disseminates health, righteousness, and happiness, is not what is usually called charity. It is, in my judgment, the investment of effort or time or money, carefully considered with relation to the power of employing people at a remunerative wage, to expand and develop the resources at hand, and to give opportunity for progress and healthful labour where it did not exist before. No mere money-giving is comparable to this in its lasting and beneficial results.
If, as I am accustomed to think, this statement is a correct one, how vast indeed is the philanthropic field! It may be urged that the daily vocation of life is one thing, and the work of philanthropy quite another. I have no sympathy with this notion. The man who plans to do all his giving on Sunday is a poor prop for the institutions of the country."
"If I were to give advice to a young man starting out in life, I should say to him: If you aim for a large, broad-gauged success, do not begin your business career, whether you sell your labour or are an independent producer, with the idea of getting from the world by hook or crook all you can. In the choice of your profession or your business employment, let your first thought be: Where can I fit in so that I may be most effective in the work of the world? Where can I lend a hand in a way most effectively to advance the general interests? Enter life in such a spirit, choose your vocation in that way, and you have taken the first step on the highest road to a large success. Investigation will show that the great fortunes which have been made in this country, and the same is probably true of other lands, have come to men who have performed great and far-reaching economic services – men who, with great faith in the future of their country, have done most for the development of its resources. The man will be most successful who confers the greatest service on the world. Commercial enterprises that are needed by the public will pay. Commercial enterprises that are not needed fail, and ought to fail.
On the other hand, the one thing which such a business philosopher would be most careful to avoid in his investments of time and effort or money, is the unnecessary duplication of existing industries. He would regard all money spent in increasing needless competition as wasted, and worse. The man who puts up a second factory when the factory in existence will supply the public demand adequately and cheaply is wasting the national wealth and destroying the national prosperity, taking the bread from the labourer and unnecessarily introducing heartache and misery into the world."
"Just so the wealth of the country, its capital, its credit, must be saved from the predatory poor as well as the predatory rich, but above all from the predatory politician."
"For thirty-six years I have been moving among workingmen in what is now the biggest branch of American industry, the steel business. In that time it has been my good fortune to watch most of the present leaders rise from the ranks, ascend step by step to places of power. These men, I am convinced, are not natural prodigies. They won out by using normal brains to think beyond their manifest daily duty.
American industry is spilling over with men who started life even with the leaders, with brains just as big, with hands quite as capable. And yet one man emerges from the mass, rises sheer above his fellows; and the rest remain.
The men who miss success have two general alibis: ‘I’m not a genius’ is one; the other, ‘There aren’t the opportunities to-day there used to be.’
Neither excuse holds. The first is beside the point; the second is altogether wrong.
The thing that most people call ‘genius’ I do not believe in. That is, I am sure that few successful men are so-called ‘natural geniuses.’”
"With the open invitation to all men who have wealth to be relieved from taxation by the simple expedient of investing in the more than $12,000,000,000 of tax-exempt securities now available, and which would be unaffected by any Constitutional amendment, the rich need not pay taxes. We violate Adam Smith’s first maxim. Where these high surtaxes do bear, is not on the man who has acquired and holds available wealth, but on the man who, through his own initiative, is making wealth. The idle man is relieved; the producer is penalized. We violate the fourth maxim. We do not reach the people in proportion to their ability to pay and we destroy the initiative which produces the wealth in which the whole country should share, and which is the source of revenue to the Government."
"During the war many new taxes, such as Income and Excess Profits Taxes, were developed. There is a limit, however, to the amount of taxes that can be levied without absorbing the profits which should be put back into business for increased production. That limit is measured, not by the total income of the consumer, but by the surplus income which is the excess of net income over consumption. If too much of this surplus is taken in taxes, the margin available for capital investment and for support of educational, religious and philanthropic institutions is perilously reduced. If the sources of capital investment are dried up, the flow of all income may eventually cease. For these reasons the Government must judge with great care the amount of tax to be levied on wealth."
"One of the foundations of our American civilization is equality of opportunity, which presupposes the right of each man to enjoy the fruits of his labor after contributing his fair share to the support of the Government, which protects him and his property. But that is a very different matter from confiscating a part of his wealth, not because the country requires it for the prosecution of a war or some other purpose, but because he seems to have more money than he needs. Our civilization, after all, is based on accumulated capital, and that capital is no less vital to our prosperity than is the extraordinary energy which has built up in this country the greatest material civilization the world has ever seen. Any policy that deliberately destroys that accumulated capital under the spur of no necessity is striking directly at the soundness of our financial structure and is full of menace for the future."