Buddy
The Living Force
http://www.sott.net/articles/show/190082-Profiling-CEOs-and-Their-Sociopathic-Paychecks
[quote author=Article 190082]
By changing the rules of the game of business so that sociopathic business behavior is no longer rewarded (and, indeed, is punished - as Teddy Roosevelt famously did as the "trustbuster" and FDR did when he threatened to send "war profiteers" to jail), we can create a less dysfunctional and more egalitarian society. And that's an important first step back from the thresholds to environmental and economic disaster we're now facing.[/quote]
What if the "game of business" includes business men/women whose activities could be largely separated into two distinct categories: "market entrepreneurship" (genuine capitalism) and "political entrepreneurship" (neomercantilism, or the field of sociopathic business practices).
I'm referring to a distinction some researchers seem to find in the field of economics and business. If this distinction is valid, maybe the solution lies in preventing government from interfering with business activities in any way so that the 'common-law' can fulfill its potential.
I thought I'd post this in case anyone else found it interesting or worth discussing. I wanted to make it clear that I don't have a problem with the article at all, I'm just curious as to whether this distinction would affect the author's apparantly favorable position on "trustbusting".[1]
In the absence of governmental regulation, could a monopoly harm anyone? If the prices were as low as possible, why would anyone want to begin a business to compete within a particular industry? On the other hand, if prices started rising and rising due to a monopoly, and in the absence of governmental regulation, what could prevent a person like James Hill from entering the market and using the same business-building techniques to get business by charging lower prices?
There's still a lot about this that I don't know, that's why I'm interested in seeing if anyone else has feedback on it.
[quote author=_http://mises.org/story/2317]
The late nineteenth and early twentieth centuries are often referred to as the time of the "robber barons."
It is a staple of history books to attach this derogatory phrase to such figures as John D. Rockefeller, Cornelius Vanderbilt, and the great nineteenth-century railroad operators — Grenville Dodge, Leland Stanford, Henry Villard, James J. Hill, and others. To most historians writing on this period, these entrepreneurs committed thinly veiled acts of larceny to enrich themselves at the expense of their customers. Once again we see the image of the greedy, exploitative capitalist, but in many cases this is a distortion of the truth.
The American economy has always included a mix of market and political entrepreneurs — self-made men and women as well as political connivers and manipulators. And sometimes, people who have achieved success as market entrepreneurs in one period of their lives later become political entrepreneurs. But the distinction between the two is critical to make, for market entrepreneurship is a hallmark of genuine capitalism, whereas political entrepreneurship is not — it is neomercantilism.
In some cases, of course, the entrepreneurs commonly labeled "robber barons" did indeed profit by exploiting American customers, but these were not market entrepreneurs. For example, Leland Stanford, a former governor and US senator from California, used his political connections to have the state pass laws prohibiting competition for his Central Pacific railroad, and he and his business partners profited from this monopoly scheme. Unfortunately, the resentment that this naturally generated among the public was unfairly directed at other entrepreneurs who succeeded in the railroad industry without political interference that tilted the playing field in their direction. Thanks to historians who fail to (or refuse to) make this crucial distinction, many Americans have an inaccurate view of American capitalism.
Most business historians have assumed that the transcontinental railroads would never have been built without government subsidies. The free market would have failed to provide the adequate capital, or so the theory asserts. The evidence for this theory is that the Union Pacific and Central Pacific railroads, which were completed in the years after the War Between the States, received per-mile subsidies from the federal government in the form of low-interest loans as well as massive land grants. But there need not be cause and effect here: the subsidies were not needed to cause the transcontinental railroads to be built. We know this because, just as many roads and canals were privately financed in the early nineteenth century, a market entrepreneur built his own transcontinental railroad. James J. Hill built the Great Northern Railroad "without any government aid, even the right of way, through hundreds of miles of public lands, being paid for in cash," as Hill himself stated.
Quite naturally, Hill strongly opposed government favors to his competitors: "The government should not furnish capital to these companies, in addition to their enormous land subsidies, to enable them to conduct their business in competition with enterprises that have received no aid from the public treasury," he wrote. This may sound quaint by today's standards, but it was still a hotly debated issue in the late nineteenth century.
James J. Hill was hardly a "baron" or aristocrat. His father died when he was fourteen, so he dropped out of school to work in a grocery store for four dollars a month to help support his widowed mother. As a young adult he worked in the farming, shipping, steamship, fur-trading, and railroad industries. He learned the ways of business in these settings, saved his money, and eventually became an investor and manager of his own enterprises. (It was much easier to accomplish such things in the days before income taxation.)[/quote]
Sources: _http://mises.org/story/2317
Entrepreneurs vs. the State, Burton W. Folsom:
_http://www.amazon.com/Entrepreneurs-Vs-State-Burton-Folsom/dp/0895265737
[quote author=_http://en.wikipedia.org/wiki/James_J._Hill]
Virtually all of this early and stunning success [by James J. Hill] was due to a few key traits—traits that would reappear again as Hill made his way through the world of business. First, he was incredibly hard-working. It takes a huge amount of diligence to tackle more than one grand project. Hill was not only undertaking to monopolize the steamboat business; he was monopolizing coal, getting friendly with bankers, and buying other businesses at the same time. All of that requires a large degree of dedication. Hill noted that the secret to success was, "Work, hard work, intelligent work, and then more work."
...
Second, he was almost maniacally competitive. He took it almost as a point of personal honor to be the best, the biggest and the most competitive of any business out there.
...
Then comes depression called the Panic of 1893. Hill's leadership became a case study in the successful management of a capital-intensive business during the economic downturn. In order to ensure that he did not lose his patronage during the crisis, Hill lowered rail tariff shipping rates for farmers and gave credit to many of the businesses he owned, so they were able to continue paying their workers. He also took strong measures to economize—in just one year, Hill cut the railway's expense of carrying a ton of freight by thirteen percent. Because of these measures, Hill not only stayed in business, but also increased the net worth of his railroad by nearly $10 million. Meanwhile, nearly every other transcontinental railroad went bankrupt. His ability to ride out the depression garnered him fame and admiration.
With 1901 and the start of the new century, James Hill now had control of both the Great Northern Railroad, and the Northern Pacific (which he had obtained with the help of his friend J. P. Morgan, when that railroad went bankrupt in the depression of the mid-1890s). Hill also wanted control of the Chicago, Burlington and Quincy railroad because of its Midwestern lines and access to Chicago. Unfortunately for Hill, Union Pacific Railroad, the biggest competitor of Great Northern and Northern Pacific, also wanted control of Chicago, Burlington, and Quincy. Although Great Northern and Northern Pacific were backed by J. P. Morgan and James J. Hill, the Union Pacific was backed not only by its president, Edward H. Harriman, but by the extremely powerful William Rockefeller.
Quietly, Harriman began buying stock in Northern Pacific with the intention of gaining control of Chicago, Burlington, and Quincy. He was within 40,000 shares of control when Hill learned of Harriman's activities and quickly contacted J. P. Morgan, who was on vacation in Europe at the time. Morgan, acting on behalf of his friend, ordered his men to buy everything they could get their hands on.
The result was chaos on Wall Street. Northern Pacific stock was forced up to $1,000 per share. Many speculators, who had sold Northern Pacific "short" in the anticipation of a drop in the railroad's price, faced ruin. The threat of a real economic panic loomed. Neither side could win a distinct advantage, and the parties soon realized that a truce would have to be called. The winners of that truce were Hill and Morgan, who immediately formed the Northern Securities Company with the aim of tying together their three major rail lines. Unfortunately for the Hill-Morgan alliance, on the same day they formed the Northern Securities Company, President William McKinley was assassinated, placing Theodore Roosevelt—the "trust-buster"—in the office of President.
The Hill Lines survive the trust-busting era
Roosevelt wasted little time in breaking apart the trust. On March 14, the Northern Securities Company was ordered to be dissolved under the Sherman Antitrust Act. However, Hill, without the benefit of a central company, managed to acquire the Colorado and Southern Railroad lines into Texas, and to build the Spokane, Portland, and Seattle Railway. By the time of his death in 1916, James J. Hill was worth more than $53 million (almost $2.5 billion (2007) dollars).
The Great Northern Railway and the Northern Pacific tried to merge four times, in 1896, 1901, 1927, and 1955. This last attempt lasted from 1955 until final United States Supreme Court approval and merger in March, 1970, which created the Burlington Northern Railroad. In 1995, Burlington Northern merged with the Atchison, Topeka and Santa Fe Railway to become Burlington Northern Santa Fe (BNSF Railway).[/quote]
_http://en.wikipedia.org/wiki/James_J._Hill
Since there were no distinctions between political entrepreneurs and market entrepreneurs, all of the successful business people (and robber barons) were lumped into the same category and all the anti-trust legislation imposed on them as a group.
As a result, most of the techniques that James Hill used to build his business were now illegal. Few people would now be able to rise up on their own money, work, creativity and innovation, as Hill did, in order to build a permanently viable business that could employ many, many people and pay many, many dollars into the treasury for Federal responsibilities.
-------------------------------------------------
[1]
More info on "Anti-Trust":
Senator John Sherman from Ohio introduced legislation, the Sherman Antitrust Act, on July 2, 1890 to prevent trusts from forming. The Clayton Antitrust Act was enacted in 1914 to remedy deficiencies in the Sherman Act.
_http://en.wikipedia.org/wiki/Trust-busting
Our 26th President, Theodore Roosevelt, while promoting social and governmental reforms, revised the Sherman Anti-Trust Act by breaking apart some of the nation's largest corporations at that time (ie, the railroad, steel industry).
While Taft (the president following TR) did more to take down trusts, Roosevelt was the first president to do so, which is why he's the one with the title.
_http://wiki.answers.com/Q/Why_was_teddy_roosevelt_called_the_Trustbuster
Trust-busting is any government activity designed to break up trusts or monopolies. Theodore Roosevelt is the U.S. president most associated with dissolving trusts. However, William Howard Taft signed twice as much trust-busting legislation during his presidency.
Trusts were large business entities that largely succeeded in controlling a market, essentially becoming a monopoly. The term became common in the late 19th century, when a system of trusts controlled much of the economy of the United States. In 1898, President William McKinley launched the "saw-busting" era when he appointed the U.S. Industrial Commission on Trusts, which interrogated Andrew Carnegie, John D. Rockefeller, Charles M. Schwab, and other industrial titans. The report of the Industrial Commission was seized upon by Theodore Roosevelt, who became known as a "Trust-Regulator," dissolving 44 trusts during his two terms as president. The "Trust Buster" name is probably more suited for Roosevelt's successor, William Howard Taft, who brought an end to 90 trusts in one term. Although Taft may have done more to control the trusts while in office, Roosevelt retains the nickname because he was the pioneer of trust-busting.
[quote author=Article 190082]
By changing the rules of the game of business so that sociopathic business behavior is no longer rewarded (and, indeed, is punished - as Teddy Roosevelt famously did as the "trustbuster" and FDR did when he threatened to send "war profiteers" to jail), we can create a less dysfunctional and more egalitarian society. And that's an important first step back from the thresholds to environmental and economic disaster we're now facing.[/quote]
What if the "game of business" includes business men/women whose activities could be largely separated into two distinct categories: "market entrepreneurship" (genuine capitalism) and "political entrepreneurship" (neomercantilism, or the field of sociopathic business practices).
I'm referring to a distinction some researchers seem to find in the field of economics and business. If this distinction is valid, maybe the solution lies in preventing government from interfering with business activities in any way so that the 'common-law' can fulfill its potential.
I thought I'd post this in case anyone else found it interesting or worth discussing. I wanted to make it clear that I don't have a problem with the article at all, I'm just curious as to whether this distinction would affect the author's apparantly favorable position on "trustbusting".[1]
In the absence of governmental regulation, could a monopoly harm anyone? If the prices were as low as possible, why would anyone want to begin a business to compete within a particular industry? On the other hand, if prices started rising and rising due to a monopoly, and in the absence of governmental regulation, what could prevent a person like James Hill from entering the market and using the same business-building techniques to get business by charging lower prices?
There's still a lot about this that I don't know, that's why I'm interested in seeing if anyone else has feedback on it.
[quote author=_http://mises.org/story/2317]
The late nineteenth and early twentieth centuries are often referred to as the time of the "robber barons."
It is a staple of history books to attach this derogatory phrase to such figures as John D. Rockefeller, Cornelius Vanderbilt, and the great nineteenth-century railroad operators — Grenville Dodge, Leland Stanford, Henry Villard, James J. Hill, and others. To most historians writing on this period, these entrepreneurs committed thinly veiled acts of larceny to enrich themselves at the expense of their customers. Once again we see the image of the greedy, exploitative capitalist, but in many cases this is a distortion of the truth.
The American economy has always included a mix of market and political entrepreneurs — self-made men and women as well as political connivers and manipulators. And sometimes, people who have achieved success as market entrepreneurs in one period of their lives later become political entrepreneurs. But the distinction between the two is critical to make, for market entrepreneurship is a hallmark of genuine capitalism, whereas political entrepreneurship is not — it is neomercantilism.
In some cases, of course, the entrepreneurs commonly labeled "robber barons" did indeed profit by exploiting American customers, but these were not market entrepreneurs. For example, Leland Stanford, a former governor and US senator from California, used his political connections to have the state pass laws prohibiting competition for his Central Pacific railroad, and he and his business partners profited from this monopoly scheme. Unfortunately, the resentment that this naturally generated among the public was unfairly directed at other entrepreneurs who succeeded in the railroad industry without political interference that tilted the playing field in their direction. Thanks to historians who fail to (or refuse to) make this crucial distinction, many Americans have an inaccurate view of American capitalism.
Most business historians have assumed that the transcontinental railroads would never have been built without government subsidies. The free market would have failed to provide the adequate capital, or so the theory asserts. The evidence for this theory is that the Union Pacific and Central Pacific railroads, which were completed in the years after the War Between the States, received per-mile subsidies from the federal government in the form of low-interest loans as well as massive land grants. But there need not be cause and effect here: the subsidies were not needed to cause the transcontinental railroads to be built. We know this because, just as many roads and canals were privately financed in the early nineteenth century, a market entrepreneur built his own transcontinental railroad. James J. Hill built the Great Northern Railroad "without any government aid, even the right of way, through hundreds of miles of public lands, being paid for in cash," as Hill himself stated.
Quite naturally, Hill strongly opposed government favors to his competitors: "The government should not furnish capital to these companies, in addition to their enormous land subsidies, to enable them to conduct their business in competition with enterprises that have received no aid from the public treasury," he wrote. This may sound quaint by today's standards, but it was still a hotly debated issue in the late nineteenth century.
James J. Hill was hardly a "baron" or aristocrat. His father died when he was fourteen, so he dropped out of school to work in a grocery store for four dollars a month to help support his widowed mother. As a young adult he worked in the farming, shipping, steamship, fur-trading, and railroad industries. He learned the ways of business in these settings, saved his money, and eventually became an investor and manager of his own enterprises. (It was much easier to accomplish such things in the days before income taxation.)[/quote]
Sources: _http://mises.org/story/2317
Entrepreneurs vs. the State, Burton W. Folsom:
_http://www.amazon.com/Entrepreneurs-Vs-State-Burton-Folsom/dp/0895265737
[quote author=_http://en.wikipedia.org/wiki/James_J._Hill]
Virtually all of this early and stunning success [by James J. Hill] was due to a few key traits—traits that would reappear again as Hill made his way through the world of business. First, he was incredibly hard-working. It takes a huge amount of diligence to tackle more than one grand project. Hill was not only undertaking to monopolize the steamboat business; he was monopolizing coal, getting friendly with bankers, and buying other businesses at the same time. All of that requires a large degree of dedication. Hill noted that the secret to success was, "Work, hard work, intelligent work, and then more work."
...
Second, he was almost maniacally competitive. He took it almost as a point of personal honor to be the best, the biggest and the most competitive of any business out there.
...
Then comes depression called the Panic of 1893. Hill's leadership became a case study in the successful management of a capital-intensive business during the economic downturn. In order to ensure that he did not lose his patronage during the crisis, Hill lowered rail tariff shipping rates for farmers and gave credit to many of the businesses he owned, so they were able to continue paying their workers. He also took strong measures to economize—in just one year, Hill cut the railway's expense of carrying a ton of freight by thirteen percent. Because of these measures, Hill not only stayed in business, but also increased the net worth of his railroad by nearly $10 million. Meanwhile, nearly every other transcontinental railroad went bankrupt. His ability to ride out the depression garnered him fame and admiration.
With 1901 and the start of the new century, James Hill now had control of both the Great Northern Railroad, and the Northern Pacific (which he had obtained with the help of his friend J. P. Morgan, when that railroad went bankrupt in the depression of the mid-1890s). Hill also wanted control of the Chicago, Burlington and Quincy railroad because of its Midwestern lines and access to Chicago. Unfortunately for Hill, Union Pacific Railroad, the biggest competitor of Great Northern and Northern Pacific, also wanted control of Chicago, Burlington, and Quincy. Although Great Northern and Northern Pacific were backed by J. P. Morgan and James J. Hill, the Union Pacific was backed not only by its president, Edward H. Harriman, but by the extremely powerful William Rockefeller.
Quietly, Harriman began buying stock in Northern Pacific with the intention of gaining control of Chicago, Burlington, and Quincy. He was within 40,000 shares of control when Hill learned of Harriman's activities and quickly contacted J. P. Morgan, who was on vacation in Europe at the time. Morgan, acting on behalf of his friend, ordered his men to buy everything they could get their hands on.
The result was chaos on Wall Street. Northern Pacific stock was forced up to $1,000 per share. Many speculators, who had sold Northern Pacific "short" in the anticipation of a drop in the railroad's price, faced ruin. The threat of a real economic panic loomed. Neither side could win a distinct advantage, and the parties soon realized that a truce would have to be called. The winners of that truce were Hill and Morgan, who immediately formed the Northern Securities Company with the aim of tying together their three major rail lines. Unfortunately for the Hill-Morgan alliance, on the same day they formed the Northern Securities Company, President William McKinley was assassinated, placing Theodore Roosevelt—the "trust-buster"—in the office of President.
The Hill Lines survive the trust-busting era
Roosevelt wasted little time in breaking apart the trust. On March 14, the Northern Securities Company was ordered to be dissolved under the Sherman Antitrust Act. However, Hill, without the benefit of a central company, managed to acquire the Colorado and Southern Railroad lines into Texas, and to build the Spokane, Portland, and Seattle Railway. By the time of his death in 1916, James J. Hill was worth more than $53 million (almost $2.5 billion (2007) dollars).
The Great Northern Railway and the Northern Pacific tried to merge four times, in 1896, 1901, 1927, and 1955. This last attempt lasted from 1955 until final United States Supreme Court approval and merger in March, 1970, which created the Burlington Northern Railroad. In 1995, Burlington Northern merged with the Atchison, Topeka and Santa Fe Railway to become Burlington Northern Santa Fe (BNSF Railway).[/quote]
_http://en.wikipedia.org/wiki/James_J._Hill
Since there were no distinctions between political entrepreneurs and market entrepreneurs, all of the successful business people (and robber barons) were lumped into the same category and all the anti-trust legislation imposed on them as a group.
As a result, most of the techniques that James Hill used to build his business were now illegal. Few people would now be able to rise up on their own money, work, creativity and innovation, as Hill did, in order to build a permanently viable business that could employ many, many people and pay many, many dollars into the treasury for Federal responsibilities.
-------------------------------------------------
[1]
More info on "Anti-Trust":
Senator John Sherman from Ohio introduced legislation, the Sherman Antitrust Act, on July 2, 1890 to prevent trusts from forming. The Clayton Antitrust Act was enacted in 1914 to remedy deficiencies in the Sherman Act.
_http://en.wikipedia.org/wiki/Trust-busting
Our 26th President, Theodore Roosevelt, while promoting social and governmental reforms, revised the Sherman Anti-Trust Act by breaking apart some of the nation's largest corporations at that time (ie, the railroad, steel industry).
While Taft (the president following TR) did more to take down trusts, Roosevelt was the first president to do so, which is why he's the one with the title.
_http://wiki.answers.com/Q/Why_was_teddy_roosevelt_called_the_Trustbuster
Trust-busting is any government activity designed to break up trusts or monopolies. Theodore Roosevelt is the U.S. president most associated with dissolving trusts. However, William Howard Taft signed twice as much trust-busting legislation during his presidency.
Trusts were large business entities that largely succeeded in controlling a market, essentially becoming a monopoly. The term became common in the late 19th century, when a system of trusts controlled much of the economy of the United States. In 1898, President William McKinley launched the "saw-busting" era when he appointed the U.S. Industrial Commission on Trusts, which interrogated Andrew Carnegie, John D. Rockefeller, Charles M. Schwab, and other industrial titans. The report of the Industrial Commission was seized upon by Theodore Roosevelt, who became known as a "Trust-Regulator," dissolving 44 trusts during his two terms as president. The "Trust Buster" name is probably more suited for Roosevelt's successor, William Howard Taft, who brought an end to 90 trusts in one term. Although Taft may have done more to control the trusts while in office, Roosevelt retains the nickname because he was the pioneer of trust-busting.
