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The birth of American capitalism

Iron Empires: Robber Barons, Railroads, and the Making of Modern America by Michael Hiltzik, Houghton Mifflin Harcourt, US $30.00, Pp 380, August 2020, ISBN 978-0544770317

When in 1869 the Union Pacific and Central Pacific met at Promontory Summit and created the first transcontinental railroad, nobody was ready for the economic activities it was to give birth to. The railroads gave American farmers and manufacturers access to hugely profitable new markets. Small villages grew into gorgeous towns, and towns into thriving cities, while the vacant territories attracted homesteaders. In Iron Empires, Pulitzer Prize-winning author Michael Hiltzik says that it is tempting to view the railroad as an elemental, impersonal force, driving all before it. But, of course, it was the creation of human beings. The surveyors and engineers and laborers made it possible to create railroads, but it was the business leaders who commanded others’ fates. Four of these — Cornelius Vanderbilt, Jay Gould, J. P. Morgan, and E. H. Harriman — played their parts in making it the engine of economic activities during the last decades of the 19th century and early 20th century.

Michael Hiltzik writes, “Placed end to end, so to speak, they formed a continuum that for more than four decades, from the Civil War, through the first years of the twentieth century, transformed America’s railroad from a patchwork of short lines  waging constant self-destructive war with one another into a titanic enterprise that could justly be considered America’s first big business.” He continues, as the railway companies developed into America’s first big industry, their owners became the first business leaders to social and cultural eminence. They were lionized as a new American aristocracy — more so since they held their positions not by the chance of birth but by the exercise of intelligence and will. But there were others who did not accord them that much respect. Many later historians called them robber barons. Mark Twain and Charles Dudley Warner called the period of their reign “the Gilded Age.” At the turn of the new century, they came under severe attack. President Theodore Roosevelt called the railroad magnates “malefactors of great wealth.”

As the 21st century started, the direct influence of the railroad barons started fast waning. Michael Hiltzik argues that the railroad industry had achieved maturity by then. These railroad chieftains also came under national scrutiny as well as government regulators who refused to allow the railroads to charge rates that later scholars judged not only warranted but essential to promote maintenance and upkeep. Michael Hiltzik narrated that the consequences became inescapably clear after the Unite States entered World War I in 1917. The government had to effectively nationalize the railroads in order to muster troops and equipment for transport to Europe, only to discover that the roads were so derelict and disorganized that chaos ensued at the docks.

The leaders whose careers came into the industry with divergent goals and skills. Michael Hiltzik argues that whatever the motivations of these business tycoons, efforts like theirs were necessary for the development of any innovative and disruptive technology. Pioneers of new technology contribute their inspiration, but they tend to be better at inventing than managing. They are often incapable of making the transition from creator to industrial leader. At the end of 19th century, the railroads were in unmistakable need of discipline, rationalization, and modernization. It is unlikely that the railroads could have survived the transition from the nineteenth century to the twentieth without the transformation that Vanderbilt and Gould helped to launch and Harriman and Morgan completed.

Iron Empires is a story of America’s railroads in its early decades and how railroads turned the country into America INC. Michael Hiltzik very persuasively argues that the business leaders who were behind the railroad revolution were neither selfless business leaders nor the robber barons. Hiltzik argues that the truth lies somewhere in between the two extremes. The railroads’ role in turning America in an economic powerhouse was not possible without the business leaders such as Vanderbilt, Gould, Morgan, and Harriman. Iron Empires is an authentic early history of American capitalism. Hiltzik is a scholar-journalist who has written the history of railroads as a story to make it accessible for lay readers.

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