Return Of TheRobber Barons

Dateline: 7 October 2013

A political cartoon from the Gilded Age. Click Here to see several such cartoons with explanations.

Mark Twain called the late 19th century the "Gilded Age." By this, he meant that the period was glittering on the surface but corrupt underneath. In the popular view, the late 19th century was a period of greed and guile: of rapacious Robber Barons, unscrupulous speculators, and corporate buccaneers, of shady business practices, scandal-plagued politics, and vulgar display.

It is easy to caricature the Gilded Age as an era of corruption, conspicuous consumption, and unfettered capitalism. But it is more useful to think of this as modern America's formative period, when an agrarian society of small producers were transformed into an urban society dominated by industrial corporations.

The late 19th century saw the creation of a modern industrial economy. A national transportation and communication network was created, the corporation became the dominant form of business organization, and a managerial revolution transformed business operations.

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The above historical synopsis comes from This Web Page. It provides some background for the following excerpt, which I have transcribed (and edited somewhat) from a podcast I recently listened to at McAlvany Weekly Commentary. The podcast is an interview with Chris Martenson. I think Mr. Martenson has an insightful and accurate understanding about many problems we are facing today. The following excerpt is one example of that...

"People will look back at the era of the Robber Barons and generally agree that it was not an optimal sort of situation. The Robber Barons were rapacious industrialists who accumulated monopolistic power. That was detrimental so we broke them up, and that was a good thing. 

When we look back at that period of history the so-called Robber Barons were taking real things and making real wealth with them. Like Standard Oil distributing oil and petroleum products, which was a vast boom to our society.

We look back at that time and say it wasn’t good having that concentration of power in a few people’s hands.

The exact same condition exists today, except that the people, and institutions, and corporations that are the primary holders of the majority of the world’s identifiable wealth, in extraordinarily concentrated fashion.... none of them actually make anything. 

There are 147 super-companies in the world that basically control about 40% of the entire identifiable net worth of corporations out there. So it’s a pretty big chunk. And that’s just 147 companies. Of those, you look at he top 50 and 17 of those are banks. And quite a number of the rest of them are insurance companies, financial services, and brokerage houses. Places like that.

They’re just moving paper from point A to point B. That’s their job. And that’s where all the wealth is concentrated right now. More concentrated than it was at the height of the Robber Baron era, with the difference being that this time the power is concentrated in the hands of people who fundamentally don’t create value. They harvest value. 

When you think about J.P. Morgan earning 24 billion dollars in a year, you have to ask, well, what did they make? What did they do? 24 billion. That’s a huge amount of profits. That’s 30% more than General Electric is going to earn and they make a lot of identifiable things—millions of things.

So what did J.P. Morgan do? You can’t point to a single bridge that they built, or a single house that got constructed, or a single grain of food that got on a table because of what they did. They moved paper from point A to point B. 

That’s the world we live in, and I see that level of concentration of wealth as an extraordinary risk to our stability, to social stability, and potentially to worldwide or intercontinental stability.

This needs to be talked about and unfortunately it isn’t being addressed anywhere within the political sphere right now in the United States. It’s certainly not being discussed in any of the newspapers, but if you understand who owns them, and how many are held by these top 50 companies, it all makes sense."

These modern-day Robber Baron corporations, in cahoots with politicians, are now extracting the wealth of hard-working Americans using deviously-creative financial schemes. It will eventually come to an end, but don't think it is going to end well.