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Speaker 1: Welcome to Stuff You Missed in History Class from how

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Speaker 1: Stuff Works dot com. Hello, and welcome to the podcast.

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Speaker 1: I'm editor Katis Keener, joined by a fellow editor, Katie Lambert. Hello, Cantas,

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Speaker 1: and today we're going to talk about some very controversial men,

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Speaker 1: the robber barons, who have a legacy of being greedy,

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Speaker 1: capitalist jerks. But we're going to actually talk about the

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Speaker 1: notion of philanthropy. And to do that we should probably

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Speaker 1: start back at the origins of the idea of philanthropy. Yes,

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Speaker 1: and it has rather mythic origins. And if you'll go

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Speaker 1: with me here for a moment and accept that Ms. Drew,

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Speaker 1: we will ensure to guess that the very first phil

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Speaker 1: anthropist was the Titan Prometheists, who, according to the story,

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Speaker 1: brought fire from the gods to people on Earth who

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Speaker 1: needed it for their sustenance. Essentially, And if you look

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Speaker 1: at the Greek word from which anthropy has derived, it

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Speaker 1: means love of humanity. And there's a difference between philanthropy

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Speaker 1: and charity. And the best way I can think of

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Speaker 1: to explain that difference is that charity is about treating

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Speaker 1: the symptoms. You give money for things that you can

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Speaker 1: actually see like, oh, those people are poor, let's give

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Speaker 1: them money, while philanthropy is about treating the causes, like oh,

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Speaker 1: those people are poor, let's figure out why and let's

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Speaker 1: fix that. I think people mistakenly use the words interchangeably

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Speaker 1: charity and philanthropy. And member of the Board of Directors

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Speaker 1: of the Pew Charitable Trusts, Rebecca Rymel explains that philanthropy

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Speaker 1: is actually a gift of transformation. And whereas in the

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Speaker 1: past a lot of charity was based on Christian ideals

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Speaker 1: of obligation of alms giving, for instance, of giving food

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Speaker 1: and money to the members of society who need it,

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Speaker 1: the concept of giving back to the society that has

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Speaker 1: nurtured you has really evolved throughout the centuries. And see

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Speaker 1: a beginning of evolution right around the sixteenth century in England,

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Speaker 1: when charity had become very different. And this was due

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Speaker 1: in part to a couple of factors. For one, England

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Speaker 1: had separated from the Church of from there was some

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Speaker 1: muss going on with a tutor throne, and the middle

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Speaker 1: class was getting larger, so the idea of a feudal society,

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Speaker 1: for instance, still working was a little out of the question.

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Speaker 1: The idea of a lord taking care of his surfs

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Speaker 1: because there were too many surf now and they were

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Speaker 1: getting a little bit wealthier. They had their trades, they

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Speaker 1: were making their own livings, and so uh, the authorities

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Speaker 1: that be decided that people giving out money didn't really

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Speaker 1: know what they were doing. They were actually making things

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Speaker 1: worse because they had no perspective of the larger social

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Speaker 1: issues at work, and the funds they were giving were

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Speaker 1: often misappropriated. So in sixteen o one we had two

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Speaker 1: different types of legislation, the Poor Relief Act, which Parliament

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Speaker 1: gave power to city officials to deal with poverty relief

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Speaker 1: measures through and then the Statue of Charitable Uses, which

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Speaker 1: essentially regulated funds from private donors under the supervision of

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Speaker 1: the Lord Chancellor. So you see the beginning of charity

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Speaker 1: becoming philanthropy, being governed by some sort of central authoritative

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Speaker 1: body and dolling it out and instead of just putting

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Speaker 1: money down the drain. There was actual oversight and some

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Speaker 1: questioning about what the causes of all this was precisely,

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Speaker 1: but in the twentieth century this is when scholars say

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Speaker 1: modern philanthropy really began, and we owe this huge glut

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Speaker 1: of money in the system and the United States at

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Speaker 1: least to the Industrial Revolution, and some men who made

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Speaker 1: the most of the different types of trades that were

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Speaker 1: going on. And that's where we get the term of

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Speaker 1: robber baron, although some people say that's unfair and they

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Speaker 1: should actually be called captains of industry or industrial statesmen.

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Speaker 1: And rand is actually a huge fan of the robber

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Speaker 1: barons and called them the greatest humanitarians of mankind, and

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Speaker 1: and also made the point that before anyone can rob,

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Speaker 1: there has to be something to rob. That's interesting because

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Speaker 1: one of the robber baron's own descendants said that she

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Speaker 1: was tired of hearing Andrew Carnegie talked about like a

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Speaker 1: Santa Claus, a great benevolent giver, she said, talk about

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Speaker 1: the real stuff. So I think there's two sides to

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Speaker 1: the robber barons, and most historians would agree that while

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Speaker 1: they were very greedy men who often manipulated not only

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Speaker 1: their workers and the system, but government as well to

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Speaker 1: make their billions, they gave a lot of it back.

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Speaker 1: The term robber barons actually comes from medieval Europe, and

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Speaker 1: robber barons are what they called warlords who prayed on

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Speaker 1: the people passing through their territories, and Matthew Josephson, a historian,

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Speaker 1: resurrected the term for his nineteen thirty four book about

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Speaker 1: these Gilded Age businessmen, where he painted them as ruthless,

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Speaker 1: greedy people who bribed the government, were bad to their workers,

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Speaker 1: and basically made money off the sweat of honest men's

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Speaker 1: back x. And to jump on what Josephson pointed out,

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Speaker 1: Jay Bradford DeLong, who wrote about Robert bare in Economics,

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Speaker 1: explains that in nine some economy historians think that direct

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Speaker 1: quote here, the share of national wealth held by the

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Speaker 1: richest one percent of households peaked at That's wild to

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Speaker 1: think that that tiny percentage of people could hold that

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Speaker 1: much of the national wealth. And DeLong goes on to

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Speaker 1: attribute the billionaires billions to three different factors, the first

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Speaker 1: being their inheritance and how well they did off the

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Speaker 1: stock market, the second being favors from the government, and

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Speaker 1: the third what he calls being in the right place

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Speaker 1: at the right time. And essentially this is making businesses

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Speaker 1: that mattered to the country's infrastructure and function, as well

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Speaker 1: as holding a monopoly on that particular business, an example

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Speaker 1: of which would be Carnegie getting into steal right before

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Speaker 1: the big railroad boom, before structors like the Brooklyn Bridge

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Speaker 1: and up. If you want to, you know, a monopoly

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Speaker 1: on that type of product and you can control everything,

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Speaker 1: then you're going to make billions. Well, and basically he

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Speaker 1: bought it all up before anyone wanted it, so he

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Speaker 1: had all the supply before there was ever a demand.

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Speaker 1: And you could say that having that kind of foresight,

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Speaker 1: well that's genius. He he deserved a share of that

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Speaker 1: money that he had. But then we get back into

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Speaker 1: this very difficult question that's still relevant to day, and

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Speaker 1: that is our society's wealthy as members obligated to give

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Speaker 1: their money back to society. And well, you know, venture

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Speaker 1: a couple of different answers here when we go on

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Speaker 1: to discuss whether or not the Robber Barons were in

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Speaker 1: fact history's greatest philanthropists. And in case you don't know

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Speaker 1: who the robber Barons are, we're going to throw out

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Speaker 1: some names that you've probably heard. John Jacob Astor, Andrew Carnegie,

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Speaker 1: Henry flaggler Um and Word, Henry Harriman, John d. Rockefeller,

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Speaker 1: Leland Stanford, Cornelius Vanderbilt. And if these last names sound familiar,

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Speaker 1: you can probably think of different schools and libraries and

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Speaker 1: structures and public facility is that share their last names.

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Speaker 1: That's not coincidental. One of the ways that these men

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Speaker 1: dealt with the guilt of amassing such great wealth was

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Speaker 1: giving it back to society. And Andrew Carnegie actually said

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Speaker 1: the man who dies rich dies disgraced. And later on

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Speaker 1: he gave a very telling amendment to that sort of

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Speaker 1: explanation by saying that the wealthy had to give back

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Speaker 1: to society, the society that's enabled them to amass their

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Speaker 1: wealth quote. And besides, it provides a refuge from self questioning.

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Speaker 1: And Carnegie is actually a fascinating case study of the

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Speaker 1: robber barons. He reckoned with his billionaire status by spreading

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Speaker 1: his money around. And he was born into a Scottish

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Speaker 1: family that fell into poverty as a result of Industrial

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Speaker 1: Revolution technology supplanting hand skilled laborers. His mother was incredibly

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Speaker 1: ashamed of the poverty that met the family, and she

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Speaker 1: was a driving force all throughout Andrew Carnegie's life. She

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Speaker 1: wanted nothing more than to appear in the town in

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Speaker 1: Scotland that they were forced to leave, writing in the

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Speaker 1: carriage and being very grand. He would later go on

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Speaker 1: to fulfill that dream of his mother's. So the Carnegie

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Speaker 1: family came to the United States in settled in Slabtown,

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Speaker 1: which was a neighborhood in Pittsburgh. Andrew had a couple

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Speaker 1: of jobs when he was starting out, begetting in a

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Speaker 1: textile factory, then becoming a telegraph messenger, then working on

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Speaker 1: the Pennsylvania Railroad under Thomas Scott. Then he settled in

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Speaker 1: New York. Became more interested in this best summer converter

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Speaker 1: that he kept hearing about and its contributions to refining

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Speaker 1: steel and what exactly it could do for the steel industry,

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Speaker 1: which was yet to boom. So he got in early,

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Speaker 1: setting up a plant, then acquiring more plants, and he

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Speaker 1: became this incredibly wealthy man based on a philosophy of

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Speaker 1: never fixing things. He would start a project completely over.

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Speaker 1: He would scrap things if they weren't going well, if

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Speaker 1: workers weren't cooperating, they were out. He didn't like cooperating

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Speaker 1: with unions. It was, you know, one chance or nothing

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Speaker 1: with him, and he came off very benevolent because he

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Speaker 1: hired an operating lieutenant named Henry Clay Frick to do

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Speaker 1: his dirty work. And you may remember Frick's participation in

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Speaker 1: the homestead scandal, which I wish we had time to

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Speaker 1: get into, but unfortunately we don't. But Carnegie always portrayed

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Speaker 1: that he was a benefactor to these workers, even though

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Speaker 1: he would only give them one day off per year,

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Speaker 1: and even though their personal lives meant nothing to him,

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Speaker 1: and he was so ruthless and his business adventures and

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Speaker 1: one great illustration of this ruthlessness is and the homogeneity

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Speaker 1: rumor that he started to get steel contracts for the railroads,

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Speaker 1: he began spreading the news that other steel manufacturers lacked

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Speaker 1: homogeneity and their steel, and so no one should work

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Speaker 1: with them. And no one knew what homogeneity really meant,

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Speaker 1: and it didn't mean anything. He was making it up.

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Speaker 1: But it was the start of corporate speaking. It was

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Speaker 1: the start of corporate speak, precisely. And from there, from

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Speaker 1: his high perch and in the um ivory tower of

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Speaker 1: wealth and business brilliance, he wrote a couple of books,

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Speaker 1: one of which advocated for democracy in the workplace, and

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Speaker 1: another was The Gospel of Wealth, which professed that the

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Speaker 1: wealthy had to give money for the public good. And

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Speaker 1: in d Carnegie became the richest man in the United

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Speaker 1: States when he sold his business for four d eighty

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Speaker 1: million dollars to JP Morgan, and he went on to

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Speaker 1: use this money to establish libraries the Carnegie Endowment for

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Speaker 1: World Peace in different centers for recreation and industrial towns

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Speaker 1: where he built these factories. It was sort of his

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Speaker 1: his ride off for his really hardline business practices. At

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Speaker 1: the end of his business ventures, he really wanted to

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Speaker 1: reconcile with with Frick, with whom and how to following

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Speaker 1: out years before, and Frick's response was tell Mr Carnegie,

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Speaker 1: I'll meet him in hell where we are both going.

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Speaker 1: I love that line because it paints a vastly different

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Speaker 1: picture of Carnegie than the man on who was allotting

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Speaker 1: money for world peace. It showed this type of telescopic philanthropy,

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Speaker 1: to quote Charles Dickens, the idea of thinking bigger than

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Speaker 1: the space you're in. If you can contribute money to

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Speaker 1: orphans in Africa, which was Dickens example, but your children

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Speaker 1: at home are running around in rags and they're dirty

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Speaker 1: and unfed, what good have you really done well? And

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Speaker 1: Carnegie's idea of philanthropy was rather elitist. My favorite quote

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Speaker 1: from him he discusses the duties of a man of

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Speaker 1: wealth as he sees them, and he says first to

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Speaker 1: set an example of modest, unostentatious living, shunning display or extravagance,

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Speaker 1: and after doing so, to consider all surplus revenues which

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Speaker 1: come to him simply as trust funds which he has

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Speaker 1: called upon to administer, and goes on to say that

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Speaker 1: he's the trustee for his poor brethren because he has

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Speaker 1: superior wisdom, experience, and ability to administer it for them.

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Speaker 1: So the people aren't smart enough to do things for themselves,

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Speaker 1: but these men of talent and of great wealth should

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Speaker 1: be taking care of the public funds for them. And

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Speaker 1: it's very hard to reconcile that with the idea of

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Speaker 1: a true philanthropist, because, in the broadest sense of the term,

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Speaker 1: setting up some sort of organization to dole out money

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Speaker 1: for the areas of society which needed the most, that's

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Speaker 1: what philanthropy is. It's solving the root of the problem

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Speaker 1: and sort of just trying to amuliorate it by putting

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Speaker 1: a band aid on it, you know, giving food to

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Speaker 1: a man instead of teaching him how to fish, which

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Speaker 1: would set him up for life. And he thought that

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Speaker 1: private citizens should be doing us as well, not the government.

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Speaker 1: He and his fellow robber barons did not believe that

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Speaker 1: the government was capable of doing that. They were probably

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Speaker 1: some of the original small government fans and thought that

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Speaker 1: private citizens should step in where the government was failing.

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Speaker 1: Private citizens didn't have the money, though, because the robber

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Speaker 1: barons had most of it, so they decided they would

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Speaker 1: step up. Actually, how magnanimous. My personal favorite Robert Baron

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Speaker 1: is actually John D. Rockefeller, who came from interesting beginnings.

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Speaker 1: According to one article I read from the Hoover Institution,

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Speaker 1: his father actually did sell snake oil, so snake oil

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Speaker 1: salesman actually has a real meaning there um a bit

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Speaker 1: of a con man. He married another woman while he

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Speaker 1: was still married to John's mother. Okay, you're talking about philanthropy,

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Speaker 1: nut philandering. Well, he really did achieve the American dream.

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Speaker 1: He worked from these not so auspicious beginnings to become

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Speaker 1: one of the richest men in America. And that feeds

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Speaker 1: into the idea that you owe the society in which

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Speaker 1: you're raised the money or a part of the money

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Speaker 1: that you've amasked to think that he came from nothing

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Speaker 1: and he was able to use the land and use

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Speaker 1: the institutions to create his fortune. But he was a

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Speaker 1: devout Baptist all of his life and that really influenced him.

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Speaker 1: And biographers have talked about it possibly being contradictory that

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Speaker 1: he was so religious and yet such a greedy businessman.

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Speaker 1: But one writer I was reading was saying that it's

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Speaker 1: not contradictory at all. It's more of a paradox kind

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Speaker 1: of thing, that he could be both things, that there

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Speaker 1: was great area there for him to be both quite

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Speaker 1: avaricious and also a good person. He did some great

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Speaker 1: stuff with his money. Because of him, hookworm was eradicated

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Speaker 1: in the South, So thanks for that, John, And he

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Speaker 1: also founded the University of Chicago, which even now is

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Speaker 1: one of the best universities in the nation. Well, it's

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Speaker 1: a circular argument to say that you should be less

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Speaker 1: of a greedy and hard line businessman and that you

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Speaker 1: should do great things with your wealth, because the harder

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Speaker 1: of a line that you take, perhaps the more money

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Speaker 1: you make, perhaps the more good you could do with

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Speaker 1: that greater fortune. Well, I think some of them use

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Speaker 1: that as a justification for being as hardline as they

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Speaker 1: were in their businesses. As well. The more money I

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Speaker 1: make the more I can get back, so I should

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Speaker 1: try to make as much as possible. I don't know

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Speaker 1: that sounds like Carnegie saying a reason for assuasion one's

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Speaker 1: guilt like I coorted earlier, and just for fun um.

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Speaker 1: Along with right well, sometimes comes great eccentricity and and

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Speaker 1: perhaps the logic some of these men used to deal

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Speaker 1: with their businesses was related to the fact that they

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Speaker 1: were essentially alone and their fortunes. Who could they relate to,

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Speaker 1: aside from the other massively wealthy few people there were,

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Speaker 1: and J. Pierpont Morgan did his part to help out,

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Speaker 1: bailing out the federal government from bankruptcy in when their

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Speaker 1: gold reserves had gone way way down, and ultimately it

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Speaker 1: was financial turmoil that brought down the age of the

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Speaker 1: robber barons. As uh Jay Bradford along when we were

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Speaker 1: discussing earlier explained, the Depression and New Deal era legislation

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Speaker 1: made it difficult and for a while it seemed impossible

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Speaker 1: to be a billionaire in the United States. The government

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Speaker 1: was essentially putting a cap on how much money people

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Speaker 1: can make. And then along came the modern era of technology,

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Speaker 1: telecommunication and computers, and it seemed inevitable that someone was

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Speaker 1: going to figure out the intricacies of this subject first

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Speaker 1: and make billions. And someone did, and that was Bill Gates.

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Speaker 1: And if you look at the most current list of

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Speaker 1: billionaires in the United States, I found one on Forbes

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Speaker 1: published in March two thousand nine. It's people in the

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Speaker 1: financial sector and people in technology who have made the most.

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Speaker 1: Bill Gates is number one. You have Warren Buffet number two,

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Speaker 1: Bloomberg at seventeen. And what's interesting, though, is that a

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Speaker 1: big percentage still is comprised of errors and heiresses. There

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Speaker 1: are three Walton's descended from Sam Walton of Walmart on

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Speaker 1: that list, and to Coke Oil airs as well. But

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Speaker 1: going back to philanthropy, I think Bill Gates and Warren

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Speaker 1: Buffett are both very involved in philanthropic efforts, very much so.

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Speaker 1: So we still we haven't answered this debate. And maybe

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Speaker 1: it's not a replace to about how much the wealthy

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Speaker 1: are obligated to be filthropic. It seems like society certainly

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Speaker 1: expects people to be philanthropic. Even if we just turned

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Speaker 1: to Hollywood for an instant and we look at the

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Speaker 1: different movie stars and celebrities who are known further philanthropy

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Speaker 1: Angelina Jolie, I think, for instance, philanthropic very much a humanitarian.

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Speaker 1: Perhaps she has a higher public opinion of her than

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Speaker 1: someone who seems to piddle away his wealth or her wealth,

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Speaker 1: or the way companies now do corporate contributions, and people

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Speaker 1: have criticized that more as a way of branding or

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Speaker 1: social marketing as opposed to philanthropic efforts that actually are

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Speaker 1: meant to help. Right, And we could go on and

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Speaker 1: debate what does it say about a woman if she's

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Speaker 1: hosting some sort of philanthropic gala and she wears a

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Speaker 1: five thousand dollar tour gown. What does that say? But

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Speaker 1: it's a personal decision at the end of the day,

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Speaker 1: just like these robber barons who were some of history's

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Speaker 1: greatest philanthropists in terms of dollars they doled out, it

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Speaker 1: was their decision to give to the causes they believed on.

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Speaker 1: Carnegie didn't have to set up an endowment for world peace.

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Speaker 1: Did it work? I don't know, but he believed in

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Speaker 1: the cause, so he put his billions in it. The

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Speaker 1: next time you go to the Carnegie Library as a

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Speaker 1: thought and for even more about philanthropy and these historical

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Speaker 1: robber barons. Be sure to check out the website at

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Speaker 1: how stuff works dot com for more on this and

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Speaker 1: thousands of other topics. Visit how stuff works dot com

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Speaker 1: and be sure to check out the stuff you missed

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Speaker 1: in History Class blog on the how stuff works dot

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Speaker 1: com home page