The Misunderstood Robber Baron: On Cornelius Vanderbilt
Gilding the image of the First Tycoon has worse consequences. Vanderbilt quite consciously constructed a family dynasty, one mainly based on his railroad holdings. Stiles knows that, but, determined to paint a picture of Vanderbilt as the architect of modernity and the modern corporation in particular, he ends up conflating dynastic capitalism with its corporate successor. Vanderbilt's New York Central did not initially exercise the rationalizing, bureaucratic management already installed on other major railroads, and even after the Commodore assumed command he practiced the kind of personal and familial control he'd favored his whole life. If he did engage in major reorganization of the road along corporate lines, turning it into a complex, impersonal hierarchy run by a cadre of managerial and technical professionals, Stiles provides the reader very little evidence of it. Besides, the modern corporation behaves quite differently, both in the marketplace and the political arena, from its dynastic predecessor. Here's what a dynasty sounds like: "The law, as I view it, goes too slow for me when I have remedy in my own hands.... Let the other parties go to the law if they want, but by God I think I know what the law is; I have had enough of it." Vanderbilt's words are not those of a faceless corporate suit sensitive to his company's intricate interactions with government bureaucrats and the courts, someone whose loyalty to and tenure at any specific corporation is a contingent one and hardly informed by the patriarchal ambitions of family lineage. Dynastic capitalism rests on an identity of interest and outlook between its owners and managers, since they are more or less the same people; the modern corporation severs that link. Stiles seems willfully blind to the distinction, so intent is he on proving Vanderbilt's surpassing historical stature.
That's because, for Stiles, associating Vanderbilt with modernity is axiomatically a good thing. He admires the tycoon's pathbreaking, visionary ventures into the new world of corporate stocks and bonds and other forms of hypothecated paper values subject to the unpredictable fluctuations of the marketplace. There's no denying that the rise of financial capitalism was a revolutionary transformation, a radical rupture with a traditional economic outlook whose measure of value remained tied to tangible manifestations of real, physical property, gold currency and the like. The new way of doing things allowed for the mobilization of liquid capital resources and their investment in all sorts of productive enterprises. Vanderbilt became a major player in this mysterious parallel economy. He faced off against rival speculators for control of various railroads, most notoriously the Erie, known far and wide as the "scarlet woman of Wall Street" because of the way it was looted and relooted by stock manipulators like Daniel Drew, Jay Gould and the Commodore. For Stiles that is the end of the story: Vanderbilt as pioneer of modern finance.
But these financial mechanisms also spawned a paper economy of fictitious value that might grossly over- or underestimate the actual value of the tangible assets they were supposed to represent, creating the conditions for periodic booms, busts and panics. Stiles dismisses the reservations of Vanderbilt's contemporaries about this strange new world as old-fashioned, parochial and near-sighted. He takes for granted that the notion of real value is a delusion, that the market is the sole and ultimate arbiter of what anything is worth. That is the modern view. But those old-time, unenlightened anxieties about "fictitious value" don't sound so retrograde in light of our recent financial meltdown and its impact on the "real economy," nor did they in the Commodore's day during the panics and depressions of 1837, 1857 and 1873 (the most devastating one of all).
East Coast Brahmins like Henry and Charles Francis Adams, Oliver Wendell Holmes and E.L. Godkin were among the many critics of Vanderbilt and the ascendancy of the giant corporation. They, along with legions of less well-known opponents of the Commodore within the nascent labor movement and among distressed and angry farmers and middling businessmen, originated the robber-baron stigma that shadowed Vanderbilt and his fellow tycoons well into the twentieth century. Even the New York Times acknowledged the existence of a "modern aristocracy of capital" and described the new breed of corporate capitalists as "the tyrants of modern society." Stiles treats this language as incoherent but without explaining why. To be sure, there is a profound historical difference between the aristocrat and the capitalist. But the political significance of the analogy made by the Times and others was clear enough.
Stiles thinks the Adamses, Godkin and other patrician critics of the First Tycoon were cynics. After all, they loathed trade unions, lamented that Anglo-Protestant America was being mongrelized by immigrants, feared and deplored mass democratic politics, considered Populists to be hayseeds and were appalled as much by the vulgarity of the new tycoonery as they were by its inordinate power. Stiles says these unsavory views discredit the Brahmins' withering critique of the robber barons' greed, corruption and exploitation. But the charge is a cheap shot and also reflects a kind of intellectual snobbery. After all, the Brahmins' criticisms were echoed in the indictments against the robber barons leveled by the Knights of Labor, farmer-labor and greenback political parties and anti-monopoly leagues, men and women untainted by the reactionary views of their social superiors. But these anonymous or less well-known political actors don't turn up in The First Tycoon. They are as invisible to Stiles as they were noxious to Godkin.