Ch 18 Writing Assignment

The Myth of the Robber Barons Response
In Professor Folsom's lecture, he explains how great business men succeed in the economy. Folsom demonstrates how each businessmen took a product or service that was available to high class citizens because of high cost and made it available to everyone at greatly reduced cost. He uncover how great me worked. Life Cornelius Vanderbilt in the steamship industry, Andrew Carnegie in the steel industry, and John Rockefeller in the oil industry. Great men like previous became extremely wealthy by increasing quality, reducing prices, and contributing to social good.
With the private sectors controlling trade rather than the government, everything works more efficiently and effectively. Folsom explains capitalism can succeed in economic matters where government cannot. The government is a nationalization of force and their major source of income is from enforcing taxation from it's citizens. The government is good at controlling a force and excel in commanding wars. This force is used to protect property and not not very good when it comes to social issues. And when governmental force is used in areas where force is not required like economics, the result will most likely always be negative and very often disastrous. This is the point that Folsom tries to make in this lecture and he succeeds.
The political entrepreneurs generally mistreated their position and government favors, providing high prices, and lower quality goods because government subsidies and privileges made it unnecessary for them to compete more effectively. The political entrepreneurs are the ones who gave capitalism a bad name by requesting these subsidies, convincing governments to grant them monopolies and in result was poor quality products and excessive prices.
In contrast, the market entrepreneurs made their money by taking on the political entrepreneurs and their government advantages and succeeding with cost control and higher quality which allowed them to reduce cost compared to their the monopolists and subsidy while supplying a superior product at a lower price. The market entrepreneurs generally reduced the prices of their products while increasing the quality of them in an attempt to eliminate their competitors. Remarkably when market entrepreneurs won the battle and drove their competitors into bankruptcy, they did not respond as by raising prices for their selfish wants. Instead they continued to cut their costs and cut their prices, while at the same time earning steady profits. Even the most successful businessman, like Rockefeller, never raised the prices of their products back to their earlier levels. Even when they were successful, market entrepreneurs always left the markets they entered with remarkably higher quality and lower prices than when they entered. Folsom's treatment towards entrepreneurs is clearly understood and his unquestionable bias in favor of capitalism does not come across as prejudice, given his clear use of factual evidence and detailed explanation.
Folsom uses Commodore Vanderbilt as an example. Vanderbilt made an enormous fortune by taking on monopolists in both the steamship and railroad industries, in the process making travel for the poor both safer and more affordable. Carnegie made fortunes in the steel industry by producing superior products at lower costs and John D. Rockefeller made one of the greatest fortunes ever by cutting costs thus making petroleum products more affordable to the poor.
Folsom's lecture put a fresh perspective on free enterprise. He uses different examples to illustrate market place innovation and government influence. Folsom points out that the negative attributes of the "robber baron" stereotype apply only to the political entrepreneur, rather than the market entrepreneur. Folsom states that market entrepreneurs should not be labeled as robber barons at all and argues that those who compete by seeking favorable government aids are considered robber barons and those who compete by producing new and better products at lower costs are entrepreneurs and add to the social good. These entrepreneurs create wealth for themselves and others, create new and different jobs, and improve the overall quality of life. Market entrepreneurs were behind the growth of America. As Folsom shows, the market entrepreneurs tended to be more successful and efficient, while political entrepreneurs were usually inefficient and corrupt and only survived by feeding on taxes and special favors from the government which gave them advantages over their market competitors. Folsom divides American businessmen into two categories, political entrepreneurs, who rely on government monopolies, favors, and subsidies in order to succeed, and market entrepreneurs, who succeed only by providing a superior product or service to the consumer at the lowest price. These two groups are very different from each other, and often battle each other.