The New Robber Barons

Whom do you think of when you hear the words “The Robber Barons?”

The easy answer: The magnates of The Gilded Age of the late 1800s, when imperial and imperious capitalists bestrode the nation: Cornelius Vanderbilt—a railroad magnate—John D. Rockefeller, Andrew Carnegie, Henry Clay Frick, J. Pierpont (J.P.) Morgan et al.

They and their cohorts, all WASP men, controlled the country, bought and sold politicians, exercised make-or-break power over commerce, ruined, suppressed and exploited workers, and wrecked people’s lives.

We started the above list with Vanderbilt to show parallels between those robber barons and the current answer: The new breed of exploitative industrialists, of whom the CEOs of the nation’s four big Class I freight railroads are prime examples. They’re not the only ones. 

Oligopolies abound, with just as much power, if not more, in industries ranging from social media (Mark Zuckerberg, Elon Musk) to food processing to retail and warehousing (Jeff Bezos, Howard Schultz, the Waltons), insurance, hospital chains and on and on and on.

We closed our short list above with Morgan, the banker, to make a second point about the robber barons: Wall Street financed those industrialists and could make or break them then, and Wall Street finances Elon Musk, the rail barons and the rest, now. 

Now, as then, Wall Street wrecks firms and lives, as the News Guild will tell you about Alden Global Capital. That private hedge fund, ruled by a yuppie czar, cut a swath of carnage among newspapers nationwide, leaving workers jobless, papers shut, families shattered. 

It’s the same story behind the rail bosses, faceless as they are now, too. The big four freight railroads—the ones that forced their 115,000 workers to the brink of striking because they refuse to even bargain over paid sick leave in an exhausting and sometimes dangerous profession—have raked in at least $146 billion in profits since they began mercilessly cutting workers in 2014. (They won the strike battle, too, thanks to Congress and President Biden.)

And where has the money gone? Stock buybacks, corporate dividends and CEO pay. In other words, Wall Street. The financiers finance the robber barons who in turn oppress workers, all in the name of corporate profits, dividends and stock options.

Regulation is necessary. So is high taxation of the culprits. So is jail for corporate law-breakers and their lackeys, such as union-busters. The catch is no law was broken, this time.

But those methods treat only the symptoms, not the disease. There is a lot wrong with a system that produces so much pain among to so many to enrich and empower so few, who then use their ill-gotten gains from workers to perpetuate their own political power to suppress and impoverish workers. 

Socialists, such as Sen. Bernie Sanders, Ind-Vt., believe cooperative consumer and popular control of the means of production, shutting the capitalists out, is the solution. But the word “socialist” has been an epithet in U.S. politics for more than a century. 

Stilted nondialogue around socialism avoids the basic question, which growing numbers of people now realize: Solving the yawning chasm between the rich and the rest of us. It’s a canyon between the new Robber Barons—including the financiers—and workers who actually produce the goods, services and wealth which the Robber Barons leech from them.

Short of an overwhelming revolution that completely dismantles an exploitative system, what’s the solution? In rail, Railroad Workers United has proposed nationalization of the freight railroads. We did that, and not just in railroads, during World Wars I and II. 

Health care is half-nationalized right now. The private half, such as hospital and nursing home chains backed by financiers and health insurers, exploits and oppresses workers and provides substandard care. The public half—Medicare, Medicaid and the VA—is another story altogether. It’s not perfect, as AFGE notes, but it betters the alternative.

A second solution might be to treat many industries as regulated public utilities. The problem there is that as long as “utilities” are privately owned, and have the ability to reap profits, however pre-set or limited by regulators, they retain the political ability to capture regulatory agencies and abuse them for their own ends, preventing protection of the public. 

After all, how frequently does a state Public Utilities Commission deny a rate increase? Or put conditions on it?

There are other possibilities, but they are not widely discussed, much less tried. But in an age of the new Robber Barons—with the railroads and the banks behind them as exhibits (A) and (B)—the time for examination, dialogue, agreement and implementation of solutions is long overdue.