When I was a kid my parents once took me to the Biltmore, the enormous estate built by George W. Vanderbilt outside Asheville, NC. I didn’t know it then, but Vanderbilt’s fortune came primarily from railroads, and it began with his grandfather, Cornelius. I just finished reading a biography of Cornelius, The First Tycoon by T. J. Stiles, which won the 2010 Pulitzer Prize in biography.
What makes this book so fascinating (and long) is that it is not just the biography of one man. It is the story of the transition in the United States from a largely rural nation to a largely urban one, from a patrician social structure to an egalitarian one, and from a mercantile economy to a capitalist one that featured less state regulation. In this transition, Cornelius Vanderbilt (1794–1877) emerged as the king of the self-made capitalists. Stiles makes the connection between Vanderbilt and the changes in his country explicit: “He had always existed in curious synchronization with the republic, living the larger struggles of the day in pursuit of his selfish interests. In his youth, he had helped to throw down the culture of deference, with its aristocratic privileges and mercantilist policies. He had risen to wealth and power by battling monopolies on the primary lanes of commerce as he vocally championed competitive individualism. Now [in 1848] he was coming to embody the rise of corporations in his railroad directorships and presidency of the Stonington [Railroad]. He worked toward a kind of synthesis between competition and incorporation that reflected gradual changes in the nation’s culture” (159).
Vanderbilt started out running a ferry between his native Staten Island and Manhattan, and he spent his entire career in transportation, moving from sailboats to steamboats and finally (at age 70) to railroads. Early on, he was shaped by the populist rhetoric of President Andrew Jackson: “He envisioned his own career—his mission—in terms of a coherent philosophy: Jacksonian laissez-faire. . . . Vanderbilt had come of age in a society in which government intervention in the economy was seen as assistance for the elite” (263).
But as Vanderbilt grew more prosperous and powerful, he continued to see himself as the little guy, fighting against entrenched elites. The irony is that by the end of his career, he had made it much more difficult for people just starting out to do what he himself had done. But he never acknowledged this, and expected everyone to make their own way just like him: “The world in which he had made himself—the world that gave rise to these individualistic, laissez-faire values—was beginning to disappear, thanks in part to his own success. He helped create enterprises on a scale never seen before in the United States. Small proprietors could not compete against him” (263). He started out by railing against state monopolies, and ended by commanding huge corporations that gave him the power to rival the state: “He became the establishment against which populists armed themselves with government regulation” (6).
As a businessman, Vanderbilt created a culture in his companies that emphasized “efficiency, frugality, and diligence, as well as swift retribution for dishonesty or sloth” (404). This discipline enabled him to win wars with his competitors, but it came at a cost—or rather, it didn’t in at least one sense, since “he earned his reputation for keeping costs low in part by paying his workers as little as possible” (323).
Vanderbilt comes across as a complicated man. He wasn’t quite the “robber baron” that he was accused of being, but neither was he a particularly kind or public-spirited guy. He was a hardheaded pragmatist who said at one point, “I have always served the public to the best of my ability. Why? Because, like every other man, it is to my interest to do so, and to put them to as little inconvenience as possible” (435). He only really comes out well in comparison with his contemporaries, some of whom were (unlike Vanderbilt) regular churchgoers who didn’t hesitate to engage in unethical behavior for the sake of money or power. As far as vices go, Vanderbilt may have been proud, but it seems he wasn’t greedy as well. At least during his railroad years, he generally started out by being diplomatic with competitors, and only later would he move through progressive stages of “defensive battle, acquisition, reform, consolidation” (398). But once he got to the stage where he was willing to fight, he was determined to win, and he usually did.
The great value of this biography is not in presenting an inspiring hero; Vanderbilt was no such thing. But it does tell part of the story of how the American business world got to where it is today, and it is a worthwhile read for that alone.
Also, did you know that Vanderbilt University is named after him because he donated a boatload of money (pun INTENDED) at its founding? Or that its sports teams are called the Commodores because that was Vanderbilt’s nickname? Or that the mascot kinda sorta resembles him, at least sideburns-wise?