It sounds like such an ugly term, “Robber Baron.”  The phrase brings to mind thoughts of abuse and theft.  But who and what exactly did these so called Robber Barons rob?

The most famous Robber Barons were John D. Rockefeller, Andrew Carnegie, and Cornelius Vanderbilt.  Each of these men built up remarkable wealth – each would be worth hundreds of billions of dollars in today’s currency.  Remarkable feats, so they must have stolen from somebody to get there, right?

Henry Ford, founder of Ford Motor Company who also built up hundreds of billions of dollars (in today’s currency) in wealth, has a famous quote that goes something like, “The man who will use his skill and constructive imagination to see how much he can give for a dollar, instead of how little he can give for a dollar, is bound to succeed.”  This is a creed that every robber baron has followed, including Rockefeller, Carnegie, and Vanderbilt.  In a capitalistic free market, as was seen in the time of the Robber Barons, the only way to build true, long-lasting wealth is to offer a product of greater quality and/or lower price than one’s competitors to as many people as possible.  As such, a capitalist is only able to amass wealth by providing his fellow man with something that he would otherwise not be able to enjoy or afford.  Rockefeller did it primarily with oil.  He was able to drill and extract oil and sell it to his customers at lower prices than his competitors could.  This allowed people to operate machinery, grow industry, heat their homes, cook their food, and perform a number of tasks that would have otherwise been too expensive.  By offering people cheaper, more accessible energy products, Mr. Rockefeller was able to amass huge amounts of wealth.  Carnegie did the same thing with Steel and Vanderbilt provided the nation’s people with cheaper, more effective shipping and railroads.  It is impossible, in a free market, to amass the huge amounts of wealth these men did without dramatically improving the lives of a vast number of people – and that is exactly what each man did.

Not only did these Robber Barons improve the lives of their customers, but they provided countless jobs and created growth in the economy.  Carnegie not only provided jobs to his steel workers and administrators, but he also made it possible for men to have jobs laying his steel along Vanderbilt’s railways, building Rockefeller’s oil derricks, manufacturing Ford’s automobiles, or building skyscrapers in Manhattan.  Furthermore, each of the men created huge amounts of wealth for other people that either invested in their respective concerns or purchased their goods and used them to build up companies of their own.  Each Robber Baron created many times the wealth and income that he, himself, took home.

So, it seems that Robber Barons did not really rob anybody – in fact they seemed to have improved the lives of most of the people in this nation.  So why the nasty name?  It must be their unrelenting selfish greed that brought on this negative perception of these magnates.  After all, a man such as John D. Rockefeller cannot build up $320 billion in wealth without greedily hoarding everything he can get his hands on like Ebenezer Scrooge, right?  Wrong.  The Robber Barons, despite their name, were notorious for actually giving away their money.  Never has there been a series of philanthropists such as these.  Each man puts Bill Gates, Warren Buffett, and Bono of U2 to shame.

John D. Rockefeller

•    Throughout his life, he gave a minimum of ten percent of his earnings to education and public health services.
•    Rockefeller funded the University of Chicago with an $80 million grant (1900 money), making it one of the preeminent American universities today.
•    He provided much of the funding for Spelman College (named after his in-laws, who were ardent abolitionists before the Civil War), which was a college in Atlanta for black women.
•    He established what he called his General Education Board, which promoted education at all levels everywhere in the U.S. and was especially active in promoting the education of black children in the South.
•    His donations led to a revolution in medicine with the Flexner Report, which essentially established the medical profession as we know it today.
•    He gave extensively to Yale, Harvard, Columbia, Brown, Bryn Mawr, Wellesley, Vassar and other universities.
•    He became one of the greatest benefactors of medical science, founding the Rockefeller Institute for Medical Research, which later became Rockefeller University.
•    He founded the Rockefeller Sanitary Commission, which eradicated the hookworm disease, which had plagued the Southern United States.
•    He gave $250 million to his own Rockefeller Foundation, which in turn endowed the Johns Hopkins School of Hygiene and Public Health, founded the Peking Union Medical College, helped in the World War I war relief, and other great feats.
•    He founded the Laura Spelman Rockefeller Memorial foundation, which supported work in social studies.
•    Later in his life, he was known for walking around town with pockets full of money and would hand it out to children and adults as he went from place to place.

Andrew Carnegie

•    He established public libraries throughout the United States, United Kingdom, and other English-speaking countries.  In all, he funded approximately 3,000 libraries in 47 U.S. States, Canada, the UK, Ireland, Australia, New Zealand, the West Indies, and Fiji.
•    He helped fund the University of Birmingham.
•    He founded the Carnegie Institute of Technology in Pittsburgh, which became part of Carnegie Mellon University.
•    He founded the Carnegie Institution in Washington, DC, which was setup to support scientific research and is still advancing science today.
•    He served on the board of Cornell University.
•    He funded the construction of the Hooker telescope, which was the largest telescope in the world for three decades.
•    He founded the Carnegie Trust for the Universities of Scotland to assist education at Scottish universities.
•    He notoriously established large pension funds for his former employees and later established TIAA-CREF, a pension fund for college professors.
•    He built Carnegie Hall in New York City.
•    He was a large benefactor of the Tuskegee Institute for African-American education and he helped Booker T. Washington create the National Negro Business League.
•    He founded the Carnegie Hero Fund in many nations for the recognition of deeds of heroism.

To go on listing each of the Robber Barons’ philanthropy would be a waste; let us just say there was a lot of it.

Not only did these men provide cheap goods and services, countless jobs, and unprecedented wealth, but they also gave more to charity than anyone before or since.  The free market set the sky as the limit for these men and they capitalized on it.  By doing so, they improved this nation and the lives of its citizens.  It is time we stop referring to these men as “Robber Barons” and call them what they are: Capitalists.

I remember being told on sports teams that it was not winning that mattered, but having a good time. Well, damn it, I have a good time winning! Competition is bad. That’s what our nation is teaching children; it is also what the nation’s teachers’ unions are pushing on our public school system.

If there were one thing I would like the government to spend my money on it would be education (don’t mix my words, I’d still rather it be private, but if . . .). However, we are now spending well over $10,000 per public school student per year. Urban areas typically spend much more. Washington DC spends over $14,000 per student per year. This is more than double what we spent (adjusted for inflation) forty years ago. We constantly hear about underfunded schools being the cause for students’ poor education. “If only we could afford a new computer lab and upgraded gym, then our students would finally get the education they deserve.” Well, spending on education has gone up astronomically, while test scores have remained stagnant. How could this be?

There is one thing that rings true in every walk of life: competition improves everything. Yes, everything. The teachers’ unions of the United States disagree with this law, however. They will have you believe that children are too precious to be caught up in competition. This is why the teachers’ unions are the biggest opponents of voucher systems within public schools around the United States.

Voucher systems attach the money spent on each child’s education to that child and allows the child’s parents to choose where he or she attends school. So, you can decide to send your daughter to the school that has a 40% dropout rate or you can choose to send her to the school that sees 80% of its graduates advance to college. You can even have your daughter go to a private school that feeds directly into Harvard and the state will give your tax dollars to that school instead of the school that sees nearly half its students leave school for the local Jack in the Box. The school you decide to send your daughter to is the school that gets the money from the city/state/feds. This creates a competitive environment for schools in that they must offer your daughter the best education, most impressive facilities, and cheapest cost of attendance in an effort to solicit your bid of support. This competition then leads to every school either improving or closing. As the bad schools close the good schools will grow and new, even better schools will open. The main benefactors of this competition are your child (who will get a better education) and the tax-payers (who will save money because there will be less waste and therefore less spending on education). Seems too good to be true, doesn’t it?

Teachers’ unions do not see the voucher system the way sane, rational, freedom-loving Americans do. Teachers’ unions see the voucher system as a threat to job security. As it stands today, most teachers’ unions have negotiated tenure with public school systems. Once a teacher achieves tenure they become virtually impossible to fire and their salaries are fixed to nothing more than seniority and sometimes their level of education. As such, the incentive to log long hours helping to improve the education of students becomes extremely limited. Under a voucher system teachers would be expected to provide the best education possible and would face losing their job if they do not do so. Teachers would also be thrown into a system similar to the world of business where better teaching and results will lead to higher salaries and bonuses, instead of higher pay coming only with seniority. This is scary to someone that has no interest in working hard to improve education and teach younger generations. It is the goal of a teachers’ union to make it so no teacher ever has to worry about his/her job and so they vehemently oppose any system that will create competition amongst schools and teachers (i.e. the voucher system). It takes a special type of organization to accept the duty of educating our nation’s younger generations and block systems that would dramatically improve that education.

Luckily, not all teachers have such little confidence in their ability to teach that they would prefer tenure to the prospect of better instructing students and earning larger salaries. These are the teachers that I want teaching my (eventual) child and these are the teachers that will thrive if we ever do come to our senses and stop listening to the remarkably destructive and malevolent teachers unions.

Private schools do not provide a better education for any other reason than the fact that they must compete with other private schools as well as public schools. In school systems that have instituted voucher systems, the difference in the quality of education between public and private schools becomes increasingly narrow. Competition improves everything.  It is time we make our children’s schools compete. It is time that we see teachers’ unions as the incomprehensible organizations that they are; if a teacher is not confident enough in his abilities to compete with other teachers then he should not be teaching this nation’s children.

Please post your comments slamming my harsh treatment of teachers’ unions below.

Coca-Cola | Starbucks | McDonald’s | Google | Microsoft | Intel | U.S. Department of Housing and Urban Development

Which of the listed groups do you think has the highest annual budget?  You probably guessed right because it sticks out like a sore thumb – the United States Department of Housing and Urban Development (“HUD”).  HUD has a higher budget than Coca-Cola and Google combined.  Starbucks takes care of over 5 million patrons per day (2006 stat) and sells packaged coffee beans and numerous other goods, and does it for a little over $9 billion per year in operating expenses.  Google handles more internet traffic than any other website on earth (over 4% of the internet’s entire traffic), builds software for computers and mobile phones, and does a slew of other money-making ventures and it spends a little over $16 billion per year, which comes out to about 1/3 of the amount that HUD plans to spend in 2010.  HUD spent over $40 billion in 2009 and plans to up that by a modest $3 billion to over $43.7 billion in 2010 and was rated the worst landlord in the United States in 2006.  On a per working person basis, that is over $291 that each of us will spend on HUD next year.  I can get a Playstation 3 or a laptop computer for less than that.

There is nothing special about HUD that made me choose it for my example.  They are no more inefficient than any other department of the federal government and they could have easily been replaced by one of the other countless departments and agencies that our government has developed (full list: http://en.wikipedia.org/wiki/List_of_United_States_federal_agencies).

The inherent inefficiencies in government lead to dramatically greater levels of spending.  There is no incentive for a government agency to run efficiently, in fact there is an incentive to run inefficiently.  By bloating their spending, government agencies can secure more funding for the next year.  If, however, they run efficiently and go under budget, that money will be stripped from them the next year and reallocated to an inefficient program.  Furthermore, as an agency grows and hires more people, legislators become afraid to disband the agency because they will then be “killing jobs.”  Conversely, private people and organizations have incentives to spend as little as possible while producing as much as possible.  These capitalistic efficiencies, not government spending, are what have made the United States so prosperous in its brief history.

Would you rather have Shaun Donovan (HUD Secretary most of us have never heard of and has a higher budget than the Microsoft CEO, Steve Ballmer) spend your $291 next year, or would you rather spend it yourself?  Every dollar that the government spends is one less dollar that each of us can invest or use to buy food and clothing.  If the government really wants to improve employment and housing, they would be best suited to get out of the way and let the people of this nation spend their own money in far more efficient manners than the U.S. Government will ever be able to spend our money for us.