Even though Cornelius Vanderbilt funded the establishment of Vanderbilt University, my alma mater, it would be difficult to argue that he was a philanthropist or even a generous man. Unless you wanted to try to make the not unreasonable case that he gave up his whole life building transportation and financial infrastructure that enabled an accelerated rate of economic development, created hundreds of thousands of jobs, and made travel widely available through reduced prices on his steamboats and railroads. And, after all that work, he died and left it all behind for the benefit of the people.
He became an incredibly wealthy man in the process, accumulating approximately 5% of all the wealth in the United States. But it was competition and winning rather than money that drove him, and he left to his descendants the extravagant spending of the money he had accumulated. We can all be thankful that he didn’t just rest on his laurels and establish a foundation to give away his money when he first became wealthy. As Yogi Berra might have said, “Individuals with exceptional capabilities don’t show up that often.”
Had Vanderbilt retired early rather than continue to use those exceptional capabilities to the best advantage, he at least could have avoided being accused of greed by such as Mark Twain who wrote that Vanderbilt was, “the idol of only a crawling swarm of small souls.”
This new biography, The First Tycoon by T. J. Stiles, is heavily researched and offers a lot more than you probably want to know about The Commodore. But the best thing about the book is the contextual look at the history of the United States from the early 1800’s through the Civil War. Vanderbilt was born in 1794 into a world with no railroads, a very few primitive steam boats, no corporations, no stock exchange, and no industrial revolution. When he died, at age 82, the nation was crisscrossed with railroads, steamships were carrying people to Europe and, through Nicaragua, to California, and businesses and banks had learned how to generate and survive bubbles, panics, price wars, and monopolies and how to grow a dynamic economy with minimal government intervention. Vanderbilt had played a leading role in that economic development.
If you don’t have the patience to dig through the whole 587 pages (I admit I found myself skimming over some of the details of his many deals.), at least check out the nine page epilogue which is a summary of Vanderbilt’s life and the results of it.
One bit of residue of the Vanderbilt fortune is Biltmore Estate in Asheville, NC, built in the late 1800’s, the “gilded age,” by grandson George. To many it seems to have been an extravagant indulgence (Check out this recent column by Mona Charen), but he built a town to support the project, pushed the limits on technology, and employed thousands in the design and construction of it, artists and craftsmen and laborers, thereby revolutionizing the Western North Carolina economy. One hundred and forty years later, Biltmore Estate, a working farm and resort, employs 1700 people and hosts a million visitors annually from all over the world. Now that was a real jobs program! Had Vanderbilt’s grandson simply given an equivalent amount of money to be distributed among the poor citizens of Western NC, I suspect the effects would have been ephemeral. We can only wish that he had instead had the drive and ability to continue the work of his grandfather in investing in and building national infrastructure.
The Commodore lived into his eighties, rare for the time, but it’s too bad he couldn’t have had an additional productive hundred years. If he had, the United States rather than Japan would have been the leader in high speed trains and Amtrak would never have been created.
Originally Posted July 14, 2010