Within Richard Whites “Introduction” from Railroaded he dives in on the evolution of the railroad system and how railroad corporation came to be hated because they had monopolized the greater areas and territories when settlers were lured into moving to places on the belief on being able to produce, yet they would be producing for these monopolized companies. Richard White argues that the transcontinental railroads of the late 19th century were political, business, and social failures that should not have been constructed when and where they were. The excerpt also discussed American and Canadian politics that fueled the reform movements of three countries, due to this in the late 19th century these railroad failures were essentially the key piece to the complicated development of modernity and the historical role of corporations. The excerpt also discusses the utter uprooting of older ways, and the formation of new technology in the hands of new men with a new form of corporate organization.
Railroaded also emphasizes on financial capitalist, the use of credit and the financial markets as the central engine of corporate growth and expansion. It was quoted in saying “It was not capital that built the railroads but credit, and that capital was ultimately the risk in the railroads for the men who controlled them.” Capitalist such as Jay Gould, Henry Villard, Thomas Scott just to name a few were entrepreneurs who bought bonds that allowed the railroads to proceed. The markets that were used and exploited were historical, they had state involvement, regulations, and military protection. Throughout the excerpt we can also depict how it is not whether governments shape markets, but how they shape them within social and cultural practices, it also establishes a kind of networking between politics and business that persists to this day. Essentially corruption is quite simple: It’s the trading of public favors for private goods, and that’s what happens repeatedly with the railroads and the federal government.”
Many entrepreneurs obtained great fortunes, but had created inefficient, costly, and dysfunctional corporations. These corporation although did create innovation in production, it became a problem because they built railroads that were better left unbuilt and flooded the market with products that had little to no need. Upon the trajectory of the time, it was shown that these investments would have been better off in other sectors of the economy, also many disbursed large amounts of capital and labor for no prosperity. The Transcontinental was built ahead of its time, railroads such as this one reshaped then sense of time and space.
A strong write-up. I see your point that you raised in class about settlers–yes, the railroads hoped to lure them West in the hopes that they would provide business by producing goods that the roads would transport; and yes, they often exploited these same customers by charging high freight rates, giving breaks to certain kinds of cargo or to those with political connections, etc. But the bigger issue he raises, I think, is that the roads were built ahead of demand–there was insufficient demand, locally or nationally, for the wheat, flour, cattle, hides, silver, etc. they produced.
In terms of the connections between politics and business, how does his point about the close, and often corrupt, connections between railroads and the government challenge dominant myths about Gilded Age entrepreneurship and individualism? Do such relationships always corrupt and inefficient, or do they sometimes lead to necessary interventions to spur innovation and demand? In terms of the distinction between capital and credit, wouldn’t a 21st century (or Gilded Age) entrepreneur argue that credit is simply a form of debt capital, or capital for investment?