While I agree that government intervention into these businesses didn’t save the American economy or protect us from monopolies by any means, I also disagree with the notion that these “market entrepreneurs” made their fortunes solely (or even primarily) on their own ingenuity.
DiLorezno makes the distinction between political entrepreneurs, who are the true robber barons, and market entrepreneurs, who make up the “hallmark of genuine capitalism”. But then, some of the figures he presents don’t even fit his own definition of a market entrepreneur, like James J. Hill for instance. They may have opposed government intervention into the market, but they didn’t fret over calling in the National Guard to deal with “unruly” workers.
DiLorenzo also talks of the “superior efficiency and lower costs” offered to customers by Hill, Rockefeller, and Vanderbilt, but leaves out one very important aspect of how they managed to lower costs and prices - BY EXPLOITING THEIR WORKFORCE!! This is something these market entrepreneurs certainly have in common with the “political entrepreneurs” - they were all anti-worker, vigorously driving down wages and opposing any attempts at worker organization to make demands for better pay or work conditions.
I’ll start with James J. Hill. Hill may have opposed government subsidies, cartel price-fixing, and advocated for free trade, but he had no problem calling for government intervention to break a strike. In 1894, after he had slashed wages and laid off employees, workers on his railway in Montana went on strike to protest the attacks on their livelihood. After failing to break the strike himself, Hill begged President Cleveland to send in federal troops to break the strike. Cleveland refused. Unable to bring in government force to violently crush the strike, Hill grudgingly agreed to arbitration. [ http://www.jstor.org/stable/3640376?seq=5 ]
Some of Hill’s other comments about telegraph workers who went on strike further reveal his anti-worker sentiment. Of the strikers he said, “I’ll see to it that any of those who have been active in bringing about this strike will never again enter the employ of the road.” He also said that men “who will plot to embroil a railroad and its employes just at the beginning of the season, when they know a heavy movement of traffic is expected, as at the present with the approach of the crop moving, do not deserve to be on the pay rolls of any road.” The message Hill was sending is very clear - any efforts to obtain better pay or conditions, and thus threaten his profit levels were unacceptable. [ http://query.nytimes.com/mem/archive-free/pdf?_r=2&res=9B06E2DE1F3DE633A25753C1A96E9C946497D6CF ]
Next on the list is JD Rockefeller - another great “market entrepreneur”. Rockefeller was embroiled in a number of labor battles throughout his long career as a capitalist fat cat and he commonly employed strikebreaking tactics against any attempt of workers to organize and demand better pay or better conditions. One of his most famous instances of strikebreaking occurred in 1913-1914 in Ludlow, Colorado. After tensions rose between Rockefeller’s Colorado Fuel and Iron Corporation and the miners, workers went on strike demanding better pay and conditions, as well as union recognition in 1913. Rockefeller (and his son), being the free market gurus they were, decided not to employ government troops to attempt to break the strike but instead hired private thugs from the Baldwin-Felts Detective Agency to attack them. His company even rigged up an armored car, equipped with a machine gun, called the “Death Special”, to attack unionists and striking workers. Eventually, the National Guard was brought in to help break the strike, but success of the Guardsmen was not immediate. The conflict was sporadic but finally came to a head on April 20, 1914 when Guardsmen set up a machine gun and opened fire on the strikers’ camp. Dozens were killed in the violence, including women and children (some of them infants). No Guardsmen were even convicted in this excessive use of force. Rockefeller may have passed his savings onto his customers, but he would rather kill his workers than pass the savings onto them as well. [See http://libcom.org/history/1914-the-ludlow-massacre and http://en.wikipedia.org/wiki/Ludlow_massacre ]
Now, Cornelius Vanderbilt passed away before the biggest battle against workers happened on his railways. But they had their roots in the wage cuts he had approved before he died in 1876. In July of 1877, a little over six months after his death, workers went on strike all over the country in protest to the 10% wage cuts ordered by railway owners (including Vanderbilt). This led to an extraordinary amount of violence, culminating in a two-week long insurrection raging in different parts of the country. Though Vanderbilt didn’t live to see it, the way he treated his workers created the conditions for it. And I’m 100% certain he would have supported the tactics his company used against the strikers had he lived long enough to mandate them himself. [ For a little background see http://en.wikipedia.org/wiki/Great_Railroad_Strike_of_1877 ]
What all of these men have in common is that they’d rather resort to violence to break workers’ organization than to yield to their (often modest) demands. In many instances, strikers were slaughtered by force of hired thugs or federal troops (so much for a lack of government intervention into the economy) simply for demanding to not work in conditions nearing slavery. The savings produced by Rockefeller, Hill, and others may have benefited the consumer, but they sure as hell didn’t benefit the people who worked for them and made their ridiculously high profits possible.