James J Hill

In my previous article, entitled Doubting the Right Wing Libertarian Robber Baron Revisionism, I mentioned a review article by William L Lang from Portland State University. His review article directly contradicts the capitalist apologetic version of history found in Thomas J DiLorenzo’s book How Capitalism Saved America. To briefly recap the conflicting theses let me quickly cite the germane points, first DiLorenzo then Lang.

Thus, all of the railroad men of the late nineteenth century have gone down in history as “robber barons,” although this designation definitely does not apply to James J. Hill. It does apply to his subsidized competitors, who deserve all the condemnation that history has provided them. (Also deserving of condemnation are the politicians who subsidized them, enabling their monopoly and corruption). (Thomas J DiLorenzo, How Capitalism Saved America, 120-121)

And now from the review article by Lang, which I also cited in my previous article. If you follow the link to my previous article you can read all the germane quotations that I pulled out for consideration. For this article, let me focus in on the most important part of Lang’s review article:

But the equally familiar story of Hill as the only railroad tycoon who built his lines free of government aid is demolished in this revisionist treatment….In Malone’s perceptive account, we see him as clearly the beneficiary of government investment and action, a far cry from earlier depictions of Hill as the self-made man who built an empire with little more than his bare hands. (William L Lang, An Imperial Ego in the Age of Industrial Capitalism)

The good news is this: I found a copy of Michael P Malone’s James J Hill: Empire Builder of the Northwest. This allows me to check the review article by William L Lang. I mentioned in my previous article that I was a bit worried because I had not checked the originals in order to verify the Lang version of events. But, I can do that now! That is the purpose of this article, to present some of my preliminary results of looking through Malone’s book.

Just as a quick aside, DiLorenzo is aware of Malone’s book because he cites it. On page 115 of How Capitalism Saved America, DiLorenzo writes: “Hill’s Great Northern was, consequently, the ‘best constructed and most profitable of all the world’s major railroads,’ as Michael P. Malone points out.” DiLorenzo ends the sentence with “end note 15” which simply mentions that he is citing page 102 of Malone.

Observation 1: The Kolko Factor as a Source of Austrian Inconsistency

Gabriel Kolko, the New Left historian, seems to be a darling of the Austrian School when it comes to the history of the Progressive Era. In fact, I first learned about Gabriel Kolko’s existence from Thomas J DiLorenzo’s other book, Hamilton’s Curse. DiLorenzo writes the following about Kolko’s book The Triumph of Conservatism:

In the important and influential 1963 book The Triumph of Conservatism, the historian Gabriel Kolko meticulously documented how American businesses, far from resisting political control, sought such regulation because they could use it to their advantage. (Thomas J DiLorenzo, How Capitalism Saved America, 141)

DiLorenzo is not the only Austrian School Economist to appeal to Kolko’s work, in order to defend the Austrian approach to the history of economics, Hans-Hermann Hoppe cites Gabriel Kolko in Hoppe’s A Theory of Socialism and Capitalism:

G. Kolko, a left-winger and thus certainly a trustworthy witness, at least for the critics from the left, sums up his research into this question as follows… (210)

Just as I criticized DiLorenzo in my previous article for being too assertive when using the phrase “definitely does not apply to James J. Hill,” so too I will apply this same criticism to the mises.org material on Gabriel Kolko. Take, for instance, Jeff Riggenbach’s article entitled John T Flynn: Revisionist Journalist, where we are told the truth of the Progressive Era. I suppose that all other opinions on the Progressive Era must be rejected as lies, since mises.org has discovered the truth!

The truth is otherwise. The truth is that the New Deal was what the revisionist historian Gabriel Kolko called a “triumph of conservatism.” Kolko used that phrase as the title of a seminal 1963 book in which he showed that the wave of federal regulation of business that came in with the Progressive Era in the early years of the 20th century was in fact spearheaded by large corporations, which wanted the regulations in order to put smaller competitors out of business and enable the large corporations to enjoy a large, virtually guaranteed market share without having to take the trouble to compete in order to get it. In many cases, Kolko showed, the big corporations that lobbied for these new regulations actually wrote the regulations that were eventually adopted. (Jeff Riggenbach, John T Flynn: Revisionist Journalist, bold emphasis mine)

I guess I can shut down my investigation because Riggenbach has given us the truth. Unfortunately, I am not willing to take his pronouncement as the truth. All this talk about “the truth” coming from the Austrian School of Economics’s homepage,  reminds me of another interesting criticism of this school. In his humorously entitled article, Natural Law, or Don’t Put a Rubber on Your Willy, Robert Anton Wilson argues that natural law types–such as the followers of Rothbard–are just a priesthood class pretending to be “philosophers”:

All the arguments in modern Natural Law theory would immediately make some kind of sense if one inserted the word “God” in them at blurry and meaningless places in the jargon. It seems that the word is left out because the Natural Law cultists do not want it obvious that they are setting up shop as priests; they want us to consider them philosophers. (Robert Anton Wilson, Natural Law, or Don’t Put a Rubber on Your Willy, 21/51, bold emphasis mine)

I suppose I will have to play the role of “the heretic” by denying “the truth” as “revealed” to me by my priests over at mises.org. So I will not be able to tell you “the truth” of the Progressive Era. All I can offer is an argument based on some research I did that suggests to me an inconsistency in this entire Austrian school story. Let me present my basic argument in numbered points, followed by some evidence that I have collected:

  1. Paeans to James J Hill by the Austrians as this textbook “market” entrepreneur (who suffers from the vituperative abuse of the historians who mistakenly lump him in with the evil and minacious “robber barons” or “political” entrepreneurs)
  2. Panegyrics to Gabriel Kolko, the (angelic?) bringer of Progressive Era and business regulatory “truth”
  3. Thomas J DiLorenzo praising 1. Hill and 2. Kolko, while citing Malone
  4. The problem comes when we try to reconcile Hill, Kolko, and Malone. This problem arises because Malone makes a rather fascinating claim, namely, Hill contradicts Kolko! 

In other words, I think there is some tension here in the land of Austrian revealed “truth” when one tries to synthesize all of these stories. Let us now turn to what Malone has to say about James J Hill and Gabriel Kolko, and how they contradict each other:

The fact that Hill accepted the inevitability of federal regulationdid not mean, however, that he welcomed it or felt that he really benefited from it. His example fails to uphold historian Gabriel Kolko’s famous assertion that rail executives supported and then secured federal regulation and that they won from it a benevolent federal oversight of the industry, oversight running counter to the public interest. Hill’s perspective tends, rather, to affirm the interpretations of Edward Purcell, Albro Martin, and others: railroad men divided over the nascent Interstate Commerce Commission (ICC), grudgingly accepting its political necessity but sharing gains and losses with producers and other interested groups.

Hill and other railroad leaders watched approvingly during the conservative 1890s as the U. S. Supreme Court ruled that the ICC lacked the authority to set maximum rates. Similarly, the courts cut the railroads considerable slack regarding Section Four of the Interstate Commerce Act, which nebulously outlawed the notorious “long-and-short-haul,” whereby railroads charged higher rates to inland cities than to ports even when the interior city lay nearer the point of embarkation. (Michael P Malone, James J Hill: Empire Builder of the Northwest, pages 200-201 or 401-403/618 in Adobe Digital Editions, bold emphasis mine)

My suspicion at this point is simply that the Austrian version of economic history contains a serious problem: they are holding two contradictory views simultaneously. They uphold Kolko’s version of history because it lets them create a distinction between the “good clean” capitalists and the “dirty regulatory loving” capitalists. Now they can “blame the government” instead of blaming the market or the capitalist system. They also like Kolko because he let’s them say that government regulation is not the result of “market failure” but rather government regulation is the result of “crony” capitalists using government regulation to shut down competition. But they also like James J Hill because his entrepreneurial life is seen as the apotheosis of the “good” “clean” “market” entrepreneur in action. But if Malone is right–or if these other interpretations from Purcell and Martin are correct–then Hill’s life contradicts Kolko’s thesis. You can’t have it both ways, but that seems to be what the Austrian version of history is trying to do. It seems like they want the good parts of Kolko and the good parts of Hill, because those good parts seem to be consistent with the story the Austrians are trying to weave.

So maybe there is some way to reconcile this apparent contradiction between Hill and Kolko. That would help resolve the problem for the Austrian version of history. Or, maybe there is no solution to this apparent contradiction. Maybe the contradiction is real. Maybe Hill’s life is a piece of evidence contradicting Kolko’s interpretation of federal railroad regulation. Maybe the Austrian version of economic history is based on holding two contradictory views at once. This question needs to be studied in future research, because I honestly don’t know the answer at this point. I still maintain my agnosticism. This is precisely why I objected to DiLorenzo’s bold statement in my previous article when he said that Hill was “definitely” not a robber baron. My point is simply that coming to such a bold conclusion is premature, and probably incorrect. The more I look at this problem, the more problems I find in trying to interpret the life of James J Hill.

Observation 2: He Hates Politics! He Loves Politics! He’s Janus on Politics!

Another inconsistency pertaining to James J Hill is the question of whether he “loves” politics or he “hates” politics. I am not being sarcastic in my section header; this is precisely the problem we are confronted with when we compare DiLorenzo’s book to Malone’s book. Let me begin by mentioning DiLorenzo’s How Capitalism Saved America, in which DiLorenzo paints Hill as some sort of “hater” of politics. This obviously is consistent with DiLorenzo’s thesis, namely, Hill was a “good” market entrepreneur while his competitors were “bad” political entrepreneurs. DiLorenzo tells us that Hill “detested” politics:

While James J. Hill detested politicians and politics and paid little attention to them, things were very different with the UP [Union Pacific]. (Thomas J DiLorenzo, How Capitalism Saved America, 118, bold emphasis mine)

Now we find the direct opposite assertion in Malone’s book, when it comes to James J Hill’s position on politics:

Jim Hill loved politics, both the bare-knuckled manipulation offavors and patronage and the philosophical discussion of the issues. He took it as a fact of life that his sweeping economic power especially political in nature, since it entailed monopolies and near-monopolies over transportation naturally brought with it political interests and sway. Ever since the frenetic days of 1878 79, Twin Cities rumor mills had claimed that he played rough and mean, bribing or otherwise “influencing” politicians when need be. No one ever proved that Hill gave a bribe, and when a radical “Grit” politician from Manitoba made such an accusation, Jim forced him to retract it. However, Hill never hesitated to give politicians favored deals for stocks and properties. Quite naturally, he quickly became a key Democratic power in Minnesota, and that power soon transcended his home state. (Michael P Malone, James J Hill: Empire Builder of the Northwest, page 157 or 317-318/618 in Adobe Digital Editions, bold emphasis mine)

So there you go. DiLorenzo tells us one thing about Hill, but one of DiLorenzo’s source documents–Malone’s book–says the complete opposite. What are we to make of this? At this point in my research, all I want to say is that, once again, DiLorenzo should not be making such bold and “definite” claims about Hill. One of his own source documents seems to be directly contradicting his thesis.

I am going to save a deeper discussion of Hill’s activities with regard to politics–both in his immediate area in the American northwest in areas such as Minnesota and Montana and westward, and also American federal politics–for later articles. Briefly, Malone’s book does not look good for DiLorenzo’s thesis. As I looked through Malone’s book quickly, Hill’s name keeps popping up in rather suspicious places if he were truly the “market” entrepreneur in the manner suggested by DiLorenzo. If I can break from my style of citing sources for a minute and just give a personal hunch for a second, I would say that Hill seems to be involved in politics for land and gold money reasons. He seems to be making a lot of his money–or at least purchasing power of his gold money holdings–from a deflationary depression in the United States. There was a movement to change from gold to silver in the United States. So I suspect that part of his federal American activities are about making more money by protecting his gold holdings and by profiting off the deflationary depression. But this is just my hunch at the moment, and I could be wrong. The reason I mention it is because of the next obvious link to the Austrian school of economics, namely, a defense of gold money holders. In particular, I am alluding to this statement here in Malone:

When the Democratic Party, at its 1896 convention, dumped Cleveland and nominated a Populist-style orator, William Jennings Bryan, for president, Hill joined other conservative Democrats in looking toward the Republicans, who had nominated a safe, gold standpatter, William McKinley. (page 160 or 323-324/618 in Adobe Digital Editions)

Concluding Remarks

I will conclude this essay by saying that the entire DiLorenzo exercise of splitting “robber barons” of the Progressive Era into “good” market entrepreneurs and “bad” political entrepreneurs is probably a dead-end approach to economic historical research. In fact, Malone goes so far as to tell us that it is probably impossible to “classify” James J Hill in any meaningful way. In other words, trying to stick him into the “market” entrepreneur category or the “political” entrepreneur category is most likely a waste of time. Malone tells us that James J Hill–the man–is very mercurial and he defies categorization. This seems to confirm what I said in my previous article, Hill is a mixture of views:

A closer assessment of Hill’s speeches and writings, however, clearly reveals that he in fact was a serious thinker who pursued issues to a logical conclusion and who defied deft categorization. He could be, on occasion, either optimistic or pessimistic, nationalistic or cosmopolitan, materialistic or idealistic. (Michael P Malone, James J Hill: Empire Builder of the Northwest, page 194 or 389-390/618 in Adobe Digital Editions, bold emphasis mine)