The six largest companies on the planet are now technology-based. Like the industrialist of the late 19th century, they disrupted their industries and changed the way they worked. In the process, they repeated the same destructive decisions from the past.
Businessmen or Swindlers?
While it wasn’t a new term — it dates back to the Middle Ages and used to describe feudal warlords — the name stuck on business tycoons in the 19th century. Originally, they were portrayed as positive self-made men that helped build the nation. Their image changed for the worse as the century ended and critics and newspapers painted them in a different light.
There was a certain truth to the phrase thanks to some captains of industry, especially those that controlled the railroads. Leland Stanford and Charles Crocker along with other shareholders of the Central Pacific railroad company gained the rights to build the western portion of the Transcontinental Railroad. They received subsidies and land grants to help them speed up development.
Their business tactics made them controversial even then. Jim Fisk and Jay Gould attempted a total control of the gold market and committed acts of fraud on investors through the creation of counterfeit stocks. Despite their unscrupulous manipulation of stocks, men like Gould died with a worth over $100 million.
The First Tycoons
The precursor for this image was Cornelius Vanderbilt, a boatman turned railroad businessman who created the template for how businessmen would later operate. He was a master of his industry but was also ruthless in competition with others. He was heavily criticized, including through the words of Mark Twain.
J.P. Morgan came from wealth and in a sense was a proto-venture capitalist. He invested in the work of Thomas Edison and eventually created General Electric. He also created a monopoly in Wall Street by reducing the workforce, lowering their pay, and taking out his competition.
Thanks to the massive wealth divide from industry, these men chose to give away almost all their fortune. The one who made this popular was Andrew Carnegie, who believed it was their obligation to spend their fortune on others. He gave away almost 90 percent of his wealth to numerous causes, with two being the founding of Carnegie-Melon University and the construction of Carnegie Hall.
That did not take away the criticism Carnegie receive from his decision to donate his fortune. Some believed he was giving away money that was not entirely his, as it had come at the expense of the less fortunate. Historians and experts have wondered over the years if it would have made more sense for him to have used that money for higher wages and working conditions than his lofty philanthropic pursuits.
Ultimately, Carnegie was a Social Darwinist whose belief in survival of the fittest justified how the higher members of society were the stronger members of society. This was applied to business by explaining that the cream of the crop was destined to being wealthy. This was also used as an excuse for why monopolies should exist.
What Innovation Crushes
Manpower was replaced with steam and electricity. With the end of the Civil War changing the paradigm of labor in the nation, people of all races, nationalities, and gender became workers in this new industrial order. But this all came at a severe cost that formed new levels of oppression for each of them.
Nothing was more damaging than what was done to the former slaves of the South. The Republican Party at the time promised protections to their rights as workers. Instead, they granted all the power to corporations, striking down regulations and labor laws.
Still, the expansion in innovation required more workers, and it did not matter where it came from. When it came to the mills owned by men like Andrew Carnegie, they became filled with children as young as 12 working the machinery. By the turn of the century, one in five children were employed in some manner.
Infrastructure came at a heavy social cost which did not bother men like Crocker. He came up with a solution by finding an affordable option for labor through the influx of Chinese immigrants. From 1850 and 1860, over 40,000 came into the U.S., and many had already faced discrimination from laws placed in California. They were hired at a third of the price as white workers, earning lower wages and offered no housing.
The Comfort of Home?
Even when they did offer a home, they were ambitious projects designed only for the workers. Company towns were made in the early 1880s by rail car companies and steel corporations. However, they too were barely above the quality of tenements and failed as a result.
The idea revived in the 21st century in Silicon Valley as Google, Apple, and Facebook needed housing for their growing workforce. In 2015 Facebook created a huge community in the existing city of Menlo Park, California. But since they are effectively taking over a sizable part of the city, they will be making political and development changes to it that will affect the remaining population.
The New Barons
A century later, new magnates at the levels of Carnegie, Morgan, and Vanderbilt have been presented with awards for the radical changes they have made in business and industry along with their philanthropic pursuits. Jeff Bezos of Amazon has donated millions of dollars in grants for undocumented immigrants and provided educational opportunities to thousands.
But that does not take away from the hundreds of protests that have taken place outside of their headquarters and outside of multiple warehouses worldwide. There’s no denying that, like the barons before him, Bezos and Amazon has built his empire on the backs of workers. Their use of technology has fiercely controlled employees and markets pushed towards misery.
Underneath its digital appearance, much of the business tactics Amazon operates under is not that dissimilar from those of robber barons from the 19th century. According to one report by the Institute for Local Self Reliance, Amazon is driving down wages of manufacturing and delivery jobs. While their worldwide employment passed 300,000 in 2016, the company is also responsible for 149,000 lost retail jobs.
A Digital Dismantling
This new era of disruption has the potential to bring back past eras we have tried to dismantle. Facebook’s microtargeting model is not only available to advertisers, but includes options that could exclude groups from seeing the ad according to gender, race, or other factors. When one organization, as a test, successfully purchased housing ads according to those parameters, it basically flew in the face of the Fair Housing Act.
Children are even more vulnerable from the issues as well. Consumer and privacy groups have filed complaints to Google by their violation of the COPPA (Children’s Online Privacy Protection Act) by collecting the information from children watching YouTube without parental consent (Mark Zuckerberg is also pushing for the same thing on Facebook). This is major, as there are almost 180 million results when you search “kids” videos on the site.
While Apple did not require the immigration of Chinese immigrants, they still outsource thousands of China-based manufacturing through Foxconn. Their harsh working practices (overcrowding housing, extreme overtime, lack of health, etc.) led to workers completing suicide. They are continuing their overseas expansion despite requests to create factories in the U.S.
So What Can Be Done?
Historically, workers have fought back. The rapid expansion of railroads led to one of the most famous labor disputes, the Great Railroad Strike of 1877, which was the first major rail strike and general strike in American history. Workers walked off the job in West Virginia, Pittsburgh, and Baltimore, and more cities.
They were men fighting against low wages that did not cover their cost of living. Eventually, the strike turned violent, and governors called in the National Guard to stop them. Around 100 people died after the strike ended, with some not being strikers but women and children as well.
The truth is something of that level is much harder to pull off now. Union-busting and right-to-work laws have crippled attempts at strikes. They do not receive nearly the same amount of hate as the robber barons of yesteryear. Attempts at taking them down eventually become startups, which either become tech robber barons of their own or are quickly bought up by the conglomerates.
The problem is how easily we forget that the ebb and flow of wealth and inequality in America. The social and technological changes of the 19th century created enormous wealth for a select few while millions in the city scraped on the by. In 1897, around 4000 of the richest U.S. families, less than %1 of the population, had as much wealth as the remaining 11.6 million families combined — sound familiar?
We must find a way to protect ourselves from how companies like Google use their control of information to dominate our lives. They have the ability though search algorithms that can render a site virtually invisible, effectively wiping out the advertising of a business. This is similar to how Standard Oil would muscle out competition through their business practices.
As people, we can continue the push the protection of our private data. European citizens now have the "right to be forgotten" from Google and other tech companies thanks to the GDPR. This might be a small step, but until these major tech entities are put under the same regulations the captains of industry were at the beginning of the 20th century, the things will only get worse.