By What Authority:

April 2010

By What Authority

Myths of Property in the Robber Baron Era:

Historical Roots

By Karen Coulter

There are several foundational myths about the meaning of property that accompanied the founding of the US and its subsequent development. These need to be deconstructed in order to see the root causes of not only corporate rule but public acceptance of corporate domination over communities and ecosystems.

The "Self-Made Man"

One such myth is that of the "self-made man." Most early immigrant settlers came from European countries where they were often brutally repressed by a wealthy aristocracy. As colonists had the opportunity to make significant money in the US, much was made of the fact that some of the wealthiest were so-called "self-made men." These included Cornelius Vanderbilt, coming virtually illiterate from the rough New York waterfront, and John Jacob Astor, starting out as a fur trader in the wild frontier. This was seen as the democratization of wealth in that a humble immigrant could become the richest man in the US. Astor, for instance, was the son of a poor German butcher. So great wealth came to symbolize the so-called "New World's" opportunity. Ironically some of the Robber Barons admitted that it was not simply their own initiative but the wealth of the country that made them rich through linked monopolies. In other words, they made their money from public lands, public resources, and government subsidies (along with theft, fraud, and speculation). Yet this wealth stayed in their private hands, rather than going back to the public realm.

The legality of dealings behind the wealth was also suspect. Many of the richest men originally gained their wealth from war profiteering. War booty from the American Revolution underlay postwar wealth, political power, and social status throughout New England. Asa Cap, a privateer, became the richest man in Maine. John Langdon, New Hampshire's governor and US senator, had been New Hampshire's most successful commerce raider. Providence, Rhode Island's largest university was named for John Brown, a former privateer and slaver.

The Civil War made a few businessmen very rich through nefarious dealings. It helped that their families were already wealthy enough to avoid war service. The North and South both gave deferments to the rich. The Confederacy exempted owners of more than 50 slaves and the Union let men buy out of the fight for $300. J. Pierpont Morgan, John D. Rockefeller, Andrew Carnegie, James Mellon, Philip Armour, and Jay Gould all managed to pay their $300. Philadelphia banker, Jay Cooke got about $3 million a year in commissions as an official promoter of Union bonds. When the national debt shot up from $75 million to almost $3 billion, he became a multimillionaire and the most powerful banker in the US. J.P. Morgan bought obsolete carbine guns from the War Department for $3.50 apiece and then had his partner resell them to Fremont, the Union General, for $22 each. Philip Armour supplied the Union Army with beef. Cornelius Vanderbilt bought a rotten boat for $10,000 and sold it for a profit to the US government as an ocean-going military ship.

Carnegie, Vanderbilt, Rockefeller, and others used government railroad land grants and huge government grants for railroad construction to build their personal fortunes out of public money and land.

These Robber Barons used the Calvinist myth of a God-chosen few to justify their immense wealth at public expense. Puritanism helped in fueling the single-minded drive to amass wealth and power. The application of Charles Darwin's Theory of Evolution was misapplied to human social culture as "Social Darwinism," which claimed that those with wealth and power ruled by "natural right." Rockefeller simply said: "God gave me my money." The idolization of the wealthy persists to this day with magazines like People thriving on the commoners awe and emulation of well-heeled celebrity. There are disastrous consequences in remaining blind to the theft of public wealth, as we now see in the ever-growing loss of our social and natural commons.

The Equation of Property and Liberty

A second myth is equating property with liberty. Many early immigrants came to the continent impoverished and repressed by European rulers. The Homestead Act offered free farmland in the West, providing an escape for urban workers. They became land holders themselves, a move which was coupled with the liberty to assume a new identity, trade and social status in the new frontier.

Yet private property has also been the source of both social and economic inequality. While there has been much attention paid to social inequality through Civil Rights struggles such as the Women's Suffrage and Abolitionist movements, economic equality, fundamental to true political equality, has still to be attained. This is due in part to the institutionalized separation of property from public political involvement based on the myth of "the hidden hand of the market" which must be left alone to work its will. The message is that property rights do not involve political decision-making but relate to economics alone and, therefore, out of the public purview. Actually, property rights issues are very much controlled by corporate interests and the ruling elite as an intentional political agenda that should concern us all. Witness the modern privatization of healthcare with HMOs, efforts to privatize public water supplies, the privatization of public spaces, etc.

Innumerable injustices unto the present day have been committed in the name of "property, law, and order." Resistance against unjust property rights was met with extreme violence in the nineteenth century, from troops opening fire on workers striking against inhumane actions by factory and mine owners to the vicious assaults, torture, and lynching of slaves rising up against the obscene injustices of their treatment as property.

Corporate management have become the new slave owners. Workers and communities serve as mere functionaries within the corporate system, disposable parts in a greater machine operated by the ruling elite. William J. Ghent wrote in Our Benevolent Feudalism: "Our time, our talents, our lives, our possibilities, are all the property of other men. We are intellectual prostitutes."

William G. Roy identifies the corporation as a system of property, and social class as based on the entire system of property. In other words we are being defined and limited by the institutions our society created to serve us. Roy further explains: "Corporate capital separated the paper representation of capital from the physical objects of capital and thereby redefined the meaning of ownership... Ownership could be parceled and sold without directly affecting management and operation, creating a form of profit distinct from company revenue and expenses." With this separation of profit from the actual production or ostensible public purpose of a corporate enterprise, a breach is formed between the corporation and public welfare. This gap between public needs and corporate profits - as a result of "socializing capital in a new form of property," i.e. stocks, bonds, and securities fed by the investing segment of society - served to breed "a new segment of the capitalist class." This increased the separation of the ruling elite from the people and strengthed its power over them. Increasing manipulation was made possible through the legal fiction of the corporation and the socialized capital of public investments in stocks, bonds, securities, and loan arrangements.

People and cultures, communities and the earth were pawns in this game, and all suffered great destruction in pursuit of the corporate bottom line.

The Priority of the Individual

The stakes are now spiraling out of control. The enormous power of corporate owners and managers must be ended. Understanding how they acquired such invincible power is critical to taking the radical action that can eliminate that power rather than tinkering with cosmetic reforms. Again, Roy takes us deeper: "...the corporation came to be legally constructed in a way that conformed to the liberal doctrine of equal rights for all while maintaining many of the rights and privileges that made corporate property different from individual property. The key to the meaning of privatization is that corporate property could be legally created by the state while being protected from the state by constitutional rights." This point is key: we need to remove constitutional rights from corporations. This includes abolishing "corporate personhood" whereby corporations have acquired the constitutional rights of people without the responsibilities.

To do this we have to stop treating the corporation as an entity legally separate from the individuals forming and participating in it. This involves demystifying a basic tenet of the common law of property: the distinction between personal rights and rights in property. Traditionally, ownership involved not only the privileges of profiting from property but also the liability for any harm arising from its use. A person could sue only other people, not property. Historically, the state created corporations as legal entities, as an extension of the state and its powers. It was the state that allowed corporations to exist independent of the individuals forming them. Significantly, the state reserved the right to dissolve the corporation through charter revocation should it fail to act in the public interest or violate terms of its state charter, the operating instructions defining its permitted actions.

Later, states defined the relationship between corporations and their individual members as a property relationship, "thereby undermining accountability to the public and framing political discourse over the corporation within the language of privacy rights versus state interference," according to Roy. This was a historical wrong turn and must be set straight if we are to address the growing catastrophe of corporate domination. The people must take charge of corporations, rather than corporations being in charge of people. The corporation must be a public institution charged with serving the public welfare and run by the people as a whole - preferably on a local or bioregional scale. This can assure an appropriate, defining relationship between a cultural institution and the culture creating it. Corporations cannot be owned by a select few, nor given the rights of contract as an equal player with other parties at a negotiating table. Corporations cannot be allowed to wield constitutional rights intended for people, denying to those people the rights of democratic self-governance.

Historically, when it's come to a conflict between property and life, property has come first despite our declared right to "life, liberty, and the pursuit of happiness." In reestablishing our rights and the earth's rights as primary and superior to the rights of property, it is crucial to recognize those myths that bolster the rights of property.

The myth of individualism is fundamental to corporate domination, making the Robber Barons into heroes and the rest of us seemingly isolated and powerless. The Robber Baron owners (and their corporate counterparts now) own the oil, gold, silver, iron, copper, railroads, forests, lands, etc. "not by virtue of having produced or earned them ...but because they own them," as Veblen puts it. such ownership was gained with help from another legal fiction: ownership through expropriation by conquest or other violence.

The antidote to isolation and powerlessness is connection with one another and organization. Right now there is the opportunity to become part of a burgeoning new movement to abolish corporate personhood and claiming the constitutional rights intended for real people and not for corporations. Check out the details and background of this important issue at and join with other interested people in your community to confront the myths of property and take action toward real democracy.


Wealth and Democracy by Kevin Phillips, Broadway Books: New York, 2002.

Socializing Capital, The Rise of the Large Industrial Corporation in America by William G. Roy, Princeton University Press: New Jersey, 1997.

History of the United States by Harvey Wasserman, Harper & Row: New York. 1972.

The Robber Barons by Matthew Josephson, Harcourt Press: New York, 1934.

Progress and Poverty by Henry George, Random House: New York, 1879.

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