Railroads, Robber Barons, and Unbridled Capitalism: The Term "Robber Baron" Is Many Times Used in History Books to Be Synonymous with "Unrestrained Capitalist," but Such a Definition Is Overly General and Misleading

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When Matthew Josephson wrote The Robber Barons in 1934, he tipped his hand as to his personal prejudice against the capitalists of the late 19th century:

  Besides the young men who marched to [the Battle of] Bull Run, there
  were other young men of 1861 whose instinctive sense of history
  proved to be unerring. Loving not the paths of glory they slunk away
  quickly, bent upon business of their own. They were warlike enough
  and pitiless yet never risked their skin: they fought without
  military rules or codes of honor or any tactics or weapons familiar
  to men: they were the strange, new mercenary soldiers of economic
  life. The plunder and trophies of victory would go neither to the
  soldier nor the statesman, but to these other young men of '61, who
  soon figured as "massive interests moving obscurely in the
  background" of wars. Hence these, rather than the military captains
  or tribunes, are the subject of this history.

His bias against the capitalists, who were busy building the greatest industrial nation the world had ever seen, ingratiated his work with statist historians who looked favorably on government intervention to "deliver us from these evils" and made Josephson's attack required reading in high schools and colleges for decades thereafter.

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The sobriquet "Robber Baron" has hence struck a pejorative chord in generations of graduates of schools that continue to teach that individuals such as Andrew Carnegie, John D. Rockefeller, and J.P. Morgan used the capitalist system to exploit the working class, form anti-competitive trusts, and obtain the accumulation of personal wealth above all else. Muckraker Ida Tarbell, author of the History of the Standard Oil Company, reinforced the idea that these soulless, industrialist Robber Barons were a destructive force and were willing to circumvent laws to accomplish their personal selfish ends.

Some historians disagreed with this portrayal. Josephson added a foreword to his book in 1962, complaining of the rise of "revisionist historians" who were disputing his interpretation of history:

  Of late years, however, a group of academic historians have
  constituted themselves what may be called a revisionist school, which
  reacts against [my] critical spirit of the 1930's. ... To [these]
  revisionists of our history our old-time moneylords "were not robber
  barons but architects of material progress," and, in some wise,
  "saviors" of our country. They have proposed rewriting parts of
  America's history so that the image of the old-school capitalists
  should be retouched and restored, like rare pieces of antique
  furniture.

The development of the railroad industry in the 19th century provides a welcome opportunity to investigate such charges and determine if, in fact, such "revisionism" is justified and necessary.

The Birth of Railroads

During the Republic's first 50 years, commerce was limited to the use of rivers, canals, and roads. Two events, however, changed the economic scene forever: the expansion of the "general commerce" clause under Article I, Section 8 of the Constitution by the Supreme Court in 1824, and the development of steam locomotives in England.

In Gibbons v. Ogden, Chief Justice John Marshall decided that the phrase "The Congress shall have Power ... to regulate Commerce ... among the several states" meant that the federal government was allowed to regulate commerce wherever it took place, including within the borders of a state. Prior to this decision, it was accepted that the federal government had power over only interstate commerce. This decision extended the definition of interstate commerce and cemented the power of the federal government over the states when state laws conflicted. It was greeted with great enthusiasm at the time, as it clarified and simplified matters greatly for those involved in such commerce among and between the states. …