Monday, August 22, 2011

Pieces of the American Puzzle

I am reading a very interesting book about Cornelius Vanderbilt ("The First Tycoon" by T.J. Stiles) the richest man in the U.S. before the rise of John D. Rockefeller  (Standard Oil).  Much of American socio-economic history revolves around fortunes generated from modes of transportation; steam ships, railroads, automobile/truck, aircraft, as well as the energy that fueled them and the corporate monopolies that rose as their by-product.  

Until the 14th Amendment (passed after the Civil War to guarantee the African American human rights and property ownership) the corporation was a State chartered entity that existed for public benefit but operated by private owners.  Many State chartered corporations were first granted to ferry operators, bridge builders and  later railroads, particularly after the New England States ran up large deficits through the construction and operation of canals (the Erie Canal was one of the more successful endeavors).  These corporate charters were geographically limited and often insured monopoly privileges  to the owners. However, the ground work of change was brought about by a pivotal Supreme Court case between Vanderbilt's first boss, Thomas Gibbons and a monopoly of rich New York State steamboat operators that controlled the Hudson River.  The decision ruled that interstate commerce fell under the jurisdiction of the Federal Government and that a State chartered monopoly could not control the interstate traffic on a river. 

This Federal over State ruling created a new geography were interstate corporations could flourish. The 14th Amendment was then sited as the constitutional guarantee granting corporations all the rights of an individual and a new economy came to life in America which still dominates today, pitting the corporation against the American individual.  (The Republican "Tea Party" is attempting to capitalizes on similar negative sentiments of big government vs individual, mimicking the rhetoric of the Democratic Party of the mid 1830's).  

American Capitalism involves a tug-of war between the chaos of free-market competition and a more stable, predictable economy existing under the limbs of monopolization and government regulation.  Big business and big government can both appear as a threat to economic freedom.  Competing with a corporation is difficult because the corporate entity has distinct advantages over a corporeal being:  it has no body, so it can not be sent to jail if it breaks the law;  nor does it die  (thus dividing assets among heirs).  It also lacks a soul with which to have remorse for corrupt activity which  destroys the environment or other mens lives'.

On the other hand, who is the government and what is its motivations?  In the early 19th century for instance, only landed gentry had the right to vote in most elections, skewing the selection of representtives toward a specific class of individuals whose interests were often mutually self-serving.  Can this be thought of as differing wildly from the agenda of today's corporate lobbyists and the political ramifications of their virtually unlimited campaign contributions?

Vanderbilt, "the Commodore," began his career as a monopoly buster.  He owned ferries, first wind driven and then steam powered, and sought to undersell his competition's fares  much as airline owner Freddy Laker tried to usurp British Airways customers during the rate wars of the late 1970's.  Although Vanderbilt's rhetoric was Jacksonian- a man of the people for the people- and starkly opposed to the political entitlements of the NewYork/New England banking and merchant class,  his goal was to create his own monopolized transportation networks, which he did successfully during a lifetime that spanned from the era of George Washington to the emergence of Standard Oil as a world player.

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