Thursday, November 22, 2012
The Men Who Built America (History Channel Documentary Series)
The History Channel aired a 6-part series called "The Men Who Built America," creating a compelling narrative about the mid-1800s capitalists, emphasizing the importance of entrepreneurialism in the development of the modern United States, in addition to how those early businesses succombed to power and wealth to create destructive monopolies. Below is a summary of the show, based not on the linear chronology of episodes, but by the men the show highlights. Vanderbilt Ferries to railroads. Built the only railroad bridge into NYC. For revenge, he shut down the bridge, choking off the only way from NYC to the rest of the country. The competing RRs began to collapse, selling their stocks for almost nothing, Vanderbuilt bought them all, controlling 40% of the existing RR. He continued to build, creating 180k jobs and allowed the industrial revolution to distribute their goods. The process of buying a controlling amount of stock is Vanderbilt’s idea, called the hostile takeover. Rockefeller Paired with Vanderbilt to have the exclusive transportation of refined kerosene, calling it Standard Oil. Kerosine was the method of lighting homes, and Rockefeller refined it. Having made a deal with Vanderbilt’s competitor to create a corner on the oil transportation business, he bought out other refineries, to control 90% of US oil at 33 yrs, creating a monopoly. This also allows him to manipulate the prices he pays for transporting the oil. Vanderbilt creates alliances with the other railroads to try to force Rockefeller to pay market rates. This forces Rockefeller to innovate, developing overland oil pipelines. In 1873, this forced 1/3 of RRs into bankruptcy, the worst stock exchange crash in history, closing for 10 days, putting the US into a depression and major unemployment. Rockefeller takes advantage of this by buying the bankrupt companies. After electricity eliminates the need for kerosene, he funds the research to discover a use for a former waste product, gasoline, to produce the internal combustion engine for factories, and then for cars. After his empire is broken apart by federal anti-trust lawsuits, he became the wealthiest man in the world from being a shareholder in each of the subsequently derived companies. Carnegie His mentor, Scott, was the rival RR owner to Vanderbilt, who allied with him to bring down Rockefeller. However, Rockefeller cut off Scott’s supply of oil, bankrupting his company, and leading him to poor health, then death. Scott originally contracted Carnegie to build a bridge across the Mississippi to St. Louis, leading Scott to the discovery that steel would be the only way to do it, and pioneering ways of mass manufacturing of steel, previously limited to small items like silverware. With the success of the bridge, demand skyrocketed until the RRs failed, the main purchaser of steel. Carnegie had huge supplies, but falling demand, so found a new use for steel as unemployed flocked to cities to find work—building structures, and thus the skyscrapers were born. When JP Morgan bought his steel company, it made him the wealthiest man in the world. JP Morgan Morgan took industries that were market failures, like RR, and brokered deals between the failing competitors to buy their shares and lease them to a single RR owner-Morganization, or the restructuring of companies to eliminate waste, minimize competition and workforce, and maximize profits. He discovered Edison’s genius, and financed his research, wiring his house for electricity to use some of the first light bulbs, creating a “display house” for electricity—the first in the world. Edison becomes busy electrifying the homes of the elites, like Vanderbilt—but not Rockefeller. Morgan and Edison together form the Edison Electric Light Company, and Morgan funds the infrastructure to electrify of Manhattan using DC. Rockefeller wages an anti-electricity publicity campaign of fear. Tesla, a jr employee of Edison, invents AC and finds an investor in Westinghouse, since Edison refuses to acknowledge the innovation. Westinghouse wins the contract to power the Niagara Falls power plant, which intended to power the entire northeast. Morgan acquires Tesla’s patent rights, and buys all the stocks in Edison’s company, changing the name to General Electric, converting it to AC. Morgan twice bailed out the US government, saving it from financial collapse. Morgan bought Carnegie’s steel company for a price larger than the US federal budget, renaming it U.S. Steel, the monopoly for steel for 100 years. He later helped finance the Panama Canal. The Progressive Movement The monopolies/trusts were taking over. Public opinion and politicians, such as William Jennings Bryan, moved to legislate against the monopolies and prosecute them. The average worker earns around $1/day, 1/11 steel workers die on the job, the average family lives on <$100/mo. The threat brings Rockefeller, Carnegie and Morgan into an alliance to get McKinley, also an industrialist, elected instead of Bryan for the 1896 presidential campaign. Industrialists threaten workers with layoffs if Bryan won—90% of eligible voters turned out—McKinley won, leading to 36 years of Republican control (except for Woodrow Wilson). McKinley rolls back regulations and corporate profits again skyrocket. With the vice-presidential role historically being quite powerless, McKinley is convinced to put Teddy Roosevelt, a great enemy to big business, as VP, but the plan backfires when an anarchist assassinates McKinley shortly after he won his 2nd term. Roosevelt sued Morgan, the 1st federal anti-trust case, winning, breaking apart the RR monopoly, followed by a similarly successful anti-trust suit against Rockefeller’s Standard Oil based on the Sherman Anti-Trust Act of 1890. Ford Ford wanted to extend cars to the population, at the time under control of ALAM, the “auto cartel.” He continues produce cars, facing a lawsuit by ALAM, while positioning himself as anti-trust and pro-competition. He paid his workers a $5/day, gave them an 8-hr day, 5-days a week, in a safe working environment, as well as creating the assembly line to produce cars 8x faster than the next leading car manufacturer. As Rockefeller’s empire is broken apart by the anti-trust lawsuit, Ford wins his case against ALAM.