Daniel Henninger’s WSJ column today is not to be missed. He argues that if we want to get the economy moving, we need to “bring back the robber barons.”
In the column, Henninger refers to my good friend Burt Folsom’s book The Myth of the Robber Barons, in which he showed that the so-called robber barons, those supposedly terrible capitalists of the late 19th century, consisted of two groups: those who accumulated wealth through government favors and those who accumulated wealth by selling goods profitably.
Obama says he likes business and “the free market” but under his statist regime, only the first sort of “robber baron” thrives. Henninger argues that we need more of the latter, true capitalists like Rockefeller and Carnegie. They produced vast wealth, lower prices, employment for many workers at steadily rising wages. They were able to do that because they were free to invest, manage, and innovate in freedom. There were no federal czars around in the 1880s to tell Rockefeller how to run Standard Oil.
Wonder why the Soviet Union had such a moribund economy with little innovation, listless workers, and lousy quality? Because it was heavily politicized — exactly the direction Obama is taking the US.
