Monday, January 3, 2011

The Robber Barons

A robber baron is a corporate official (or I would add entity) that uses exploitation of workers (and I would add resources) to make their money. The term was coined in 1934 by Matthew Josephson to describe the rich men of his time. Over the years they have had many names ("captains of industry") but we call them "billionaires" or the "private sector" today. The purpose of this column is to highlight the robber barons of yesteryear and those of today and what they have done to earn that title. We will discuss the effects these entities have had on the public as well.

The Gilded Age is where the term robber baron came from and in that time there were many who were considered to fit the definition: Andrew Carnegie (Carnegie Steel), James J. Hill (Great Northern Railroad), Henry Ford (in later years), John D. Rockefeller (Standard Oil), J.P. Morgan (Wall Street/Finance) etc were considered by many to fit the bill by exploiting workers and conditions for the purpose of profit. However I don't know enough about each person to say whether they were as terrible as some say they were or not. I do know that those who don't view them as robber barons have stated that the REAL robber barons where men who used government assistance to make their empires while these men did not. You see in some circles the real robber barons are called "political entrepreneurs" and these men are called "market entrepreneurs" the difference being government assistance. So I don't know how to properly judge their character.

I do know that they helped build America and changed industry in this nation in general, although I am unsure whether that was good or not. Depending of where you sit on the topic of industry and its effects on society, there are obvious positive effects such as cars, computers, mass transportation, etc but there are it's downsides too if one believes in global warming that could be one, the ruthless culture it created where people began attempting to imitate their success by less than respectable or responsible means among others. But this was the past hell some of it over 100 years old, what about today? Well today, with globalization things are undoubtedly much worse than any one of those men ever made it. Today there are sweatshops, government corruption and violence in every corner of the globe while chasing the almighty dollar.

If the real robber barons used government assistance, then we have almost nothing but robber barons today. Just about every corporation in the U.S. is subsidized by the government. This means the government gives them tax deductions or cash payments to keep them up and running. This is supposed to benefit both the corporation and the people of the community, whom the corporation hire in their shops and factories. Sounds fair enough right? Where does the "robber" come in? It seems equal, that is until you realize that government funds come from that same community. See the community pays taxes, the taxes are then sent to the corporation to pay rent on its private land so it can operate. So it seems that you pay your job to be there. In many cases, like recently, there are subsidies going to corporations that send jobs overseas. The corporation complains about government regulations (take government's money play by their rules right?) and they complain about unions (yet their subsidized by your tax dollars) so they blackmail the government to make things even better for them. That means more tax breaks, more subsidies, government help busting up unions, and lobbying to decrease funds for competition (here in Detroit the auto industry kept us from having a subway system similar to that of Chicago or New York). This is that pesky political entrepreneurship they speak of.

But it is not always government assistance, sometimes it is lack of government that makes a robber baron. I mentioned before about getting rid of unions and keeping corporations happy with tax cuts and subsidies but nothing makes them happier than cutting wages and avoiding labor laws. NAFTA was signed (under Bill Clinton) made trade with Canada and Mexico easier and in my opinion was the beginning of globalization. Corporations could now fold plants in Chicago and move them to Mexico or Canada where they can pay the workers much less and didn't have to deal with labor unions or labor laws. This led to blackmail of state and local governments to help corporations even more because now the citizens in these situations would have to surrender benefits, wages, family time, and in some cases the opportunity for legal actions (suing for injury etc) to keep their jobs. When a country has government mandated labor unions and labor laws (like the state of Michigan) it is difficult to compete against a country without those benefits. This is what I mean by the lack of government.

The lack of government also leads to sweatshop labor. Sweatshop labor is defined by The U.S. Dept of Labor as a factory or shop that violates 2 or more labor laws. Of course that definition only fits in America, it means nothing in say India or China where there are sweatshops. Sweatshops are good for business, low running costs, high production, lower cost for consumers, and better profit margins. Its a victory for all sides except the workers in the plant. In my research I have found about 7 businesses that use sweatshop labor: Target, K-Mart, Nike, Sears, Kohl's, J.C. Penny and of course Wal-Mart. The strange thing is Target, K-Mart and Wal-Mart are competitors who sell very similar products and looking at it from their perspective if they raise their costs by not using slave..I mean sweatshop labor then they would have to raise prices and could potentially lose business. Isn't that sad? Market share is more important than people. Well in any event these countries are to blame for the poor working conditions because their governments allow it. But it isn't all that foreign governments have allowed, some have allowed nearly complete destruction of their environment for corporate benefit.

The environment and the people of a nation mean nothing to corporations. Nigeria, the oil rich west African nation has been destroyed by the oil industry. The air, land, and water have all been polluted by Mobil Exxon (America's #1 oil corporation) and their oil drilling and occasional (but not uncommon) spilling. Here in the U.S. over the summer of 2010 we suffered an oil spill in the gulf (courtesy of British Petroleum's carelessness). The oil stretched for miles and polluted everything in its path. The citizens of the polluted areas were furious and rightfully so. However Nigeria had been having oil spills for 50 years prior to our one oil spill in 2010. Why is this happening? Well because Mobil Exxon has Nigeria's government in their pocket and although their citizens are furious too, there is nothing they can do about it. Of course one can never forget the conflict diamonds of Sierra Leone, Angola and the Congo where DeBeers made millions, excuse me, billions off of warlords mutiliating the people of those nations. Coca-Cola or "killer coke" as it is now being called, have been charged with sending paramilitary groups to kill union workers in Columbia, they have also been sued by citizens in India for stealing and polluting their water!

So when I think of robber barons or corporations who make money off exploitation, I don't think of Standard Oil or Carnegie Steel. I think of Nike, Mobil Exxon, GM and all the other 937 political gangsters that took bailout money and is not because I think the world of Carnagie and Rockefeller, it is because whatever they did during their time has to pale in comparison to what corporations do today. Corporations today don't care about the difference between market entrepreneurs and political entrepreneurs only people looking to protect capitalism do. All they care about is money, and they will bribe the U.S. government, or the Nigerian government. They will blackmail, build sweatshops, and anything else that stands in their way because the bottom line is their bottom line.

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