The period of invention after the Civil War set the stage for immense industrial growth (Cayton 237). This period of time in the late 1800’s is known as the Industrial Revolution. Two prominent names in big business were John D. Rockefeller and Andrew Carnegie. There is no doubt that these people left their mark on business and on history. However, there is some dispute over how these individuals should be portrayed. Some people say that they were robber barons, while others insist that they were captains of industry. A captain of industry is someone who is perceived to have helped the nation through their business skills and their philanthropy. On the other hand, a robber baron was someone who was considered a ruthless businessman. In the public’s opinion a robber baron wouldn’t let anything stop them from obtaining wealth. In my opinion Rockefeller and Carnegie were captains of industry.
John D. Rockefeller formed the Standard Oil Company in 1870. One of the first things that he had to deal with was the high cost of transporting the barrels of oil to his refineries in Cleveland, Ohio. He negotiated a deal with a railroad company that lowered his shipping costs. This allowed him to lower the cost of his oil which resulted in more sales (www.spartacus.schoolnet.com). By doing this Rockefeller could undersell his competitors.
Rockefeller wanted to expand his business even more. He figured that if he could buy out his competitor’s companies then he could create a giant oil company and lower his prices even more. His method is called horizontal consolidation, which involves the bringing together of many firms in the same business. The law stated that one company could not own the stock of another. Rockefeller got around this by creating a trust. Eventually forty companies joined the Standard Oil trust (Cayton 238). In my opinion that was a smart move, not an immoral one.
Not only was Rockefeller a savvy businessman, but he was also a philanthropist. By the end of his life he had given over $500 million to establish or improve charities. His donations also played a large part in establishing the University of Chicago. He founded the Rockefeller Foundation which gave aid to institutions working in the fields of public health, fine arts, and social research (Cayton 238). He set up the Rockefeller Institute for medical research and also founded the Rockefeller General Education Board which helped to establish many high schools (http://voteview.uh.edu/entrejdr.htm).
Andrew Carnegie came from humble beginnings in Scotland. The development of the Bessemer process convinced him that steel would soon replace iron. He established the Carnegie Steel Company in 1889. The business prospered and soon became extremely lucrative. He had enough money to buy the companies that performed all the phases of steel production, such as the mines, furnaces, and railroads. This process is called vertical consolidation. Owning all of the phases of production allowed him to drastically cut his prices. His competitors didn’t have enough wealth to purchase the phases of production so they couldn’t afford to lower their prices. This caused Carnegie to sell more and some of his competitors to go out of business (Cayton 238).
Carnegie believed in a “gospel of wealth”. He thought that people should be permitted to make as much money as they can, but after they make it they should give it away. More than eighty percent of Carnegie’s fortune went toward some type of education. He donated money for more than 3,000 free public libraries, supported artistic and research organizations, and set up a fund to study how to eliminate war. By the time of his death Carnegie had given away over $350 million (Cayton 238).
Carnegie and Rockefeller are just two examples of people who were sometimes perceived as captains of industry. Some people saw their trusts, monopolies, and labor conditions as immoral and unethical. I see them as clever. They found the loopholes in the system and used them to their advantage. Businesspeople today would do the same thing. No one doubted what their motives were. They wanted to make money, and make as much of it as possible. However, they also used their wealth to benefit the nation. They donated money to innumerable charities and organizations. That in my opinion, makes them captains of industry.