The primary characteristic of Robber Baron Eras is the placement of a Robber Baron class above the law. It leads to extreme abuse of the People during extended periods of socio-economic stagnation and never ending wars. The Robber Baron Revival Era in the United States was commenced with the deregulation of the US financial sector. It is manifested today in the legal/banking fraud pandemic, decimation of the home-owning Middle-Class, reducing large segments of the People of the United States into poverty, widespread corruption of the US government (particularly, the courts and the legal profession), and never ending wars. It can easily last a century or more.
1. Germany: The Robber Baron Era – die Raubritter Zeit (late Middle Ages)
With the decreased power and wealth of German kings, they rewarded their loyal captains for their service to the crown by knighting them. Knighthood provided no direct financial benefits the knights belonged to the class of unlanded nobility. However, the knighthood bestowed upon the knights immunity for prosecution by commoners. Therefore, the knights were at liberty to enrich themselves by robbing and abusing the People. The period also encompassed the Hundred Years’ War.
The spirit of the period is captured in the Gothic novel Michael Kohlhaas by von Kleist. Kohlhaass, originally a well-to-do farmer is robbed of everything he owned by a local Robber Baron, but all his efforts to gain protection under the law are doomed to fail. For those into the more popular culture – the period is ridiculed in the image of the knight on the bridge in Monty Python and the Holy Grail.
2. United States: The Robber Baron Era (19th-20th centuries)
The original Robber Baron Era in the United States commenced following the Civil War, where enormous debts were incurred by the US government, and following which corporate regulation was relaxed, and transcontinental corporations were for the first time formed. Effectively, large corporation were placed above the law, in particular under the veil of corporate “shell games”.
Widespread corruption of government included stolen presidential elections, and the widespread corruption of the financial sector led to the impoverishment of the People of the United States, and eventually also to the Great Depression. The spirit of the period is best captured in the novel The Great Gatsby by Fitzgerald and a movie by the same name.
Getting out of the Robber Baron Era was no short or simple process. It involved clearing up of the US Department of Justice and the US Courts, and new legislation, pertaining to banking and corporate regulation.
- Cleaning up the US Courts, which at the time were described in the congressional record as a “farce”, was affected in part by the Salary Act (1919), which placed the clerks of the US courts under the direct authority of the US Attorney General.
- Cleaning up of the US Department of Justice is credited to then Attorney General (1924-5), later Supreme Court Justice and Chief Justice Stone.
- New frameworks for corporate/banking regulation was established through the Glass–Steagall Act (1933) and theSecurities Acts (1933, 1934), and with it Roosevelt’s New Deal and the “court-packing scheme”.
- The turn around in the US Supreme Court in the 1932-1937 terms is often credited to the “Three Musketeers” – Brandeis, Cardozo, and Stone – who construed “implied guarantees” and “the right for privacy”, and emphasized adherence to the First and Tenth Amendment (freedom of speech, restriction of government powers, respectively) and “piercing of corporate veils”.
And yet, in 1946, US veterans, returning from World War II had to take up arms against the county government in Athens, Tennessee, in order to regain the right for open, free, honest voting, after the US Department of Justice refused to enforce Equal Protection under the law.
The period encompassed the better part of a century and two world wars. Historians consider the Great Depression a central cause of World War II, and World War II as the main way that the US economy eventually emerged from the Great Depression.
Therefore, one can conclude that the US Robber Baron Era took the better part of a century, and was turned around through a combination of societal changes.
3. United States: Robber Baron Revival Era (20th-21st centuries)
The Robber Baron Revival Era was ushered in by the deliberate undermining of the regulatory framework that was established in the wake of the Great Depression. Repeal of the Glass-Steagall Act through the Gramm-Leach-Bliley Act (1999), under President Clinton, with Greenspan as Chair of the Federal Reserve Chair, and Rubin as Secretary of the Treasury. It was adamantly opposed by Federal Reserve Chair Volker (1979-1987) in prior years.
Corruption of the banking industry in synergy with widespread corruption of the state and federal courts was noted by numerous experts, particularly in respect to the foreclosure crisis, which followed, and amounted to a legal/banking fraud epidemic in the United States.
Corruption of the Supreme Court of the United States was highlighted by:
· Bush v Gore (2002) – where legal experts hold that the Supreme Court had no jurisdiction to begin with, and which affected a stolen presidential election, and
· Citizens United v Federal Election Commission (2010), which is seen by many legal experts as an open invitation for the corruption of government by large corporations.
The Robber Baron Revival Era in the United States is also characterized stagnation in socio-economic development, bigger than ever prisoners population, decimation of the home-owning Middle Class, impoverishment of the People, and never ending wars.
In conclusion:
There is no way to tell when and how the Robber Baron Revival Era in the United States would come to an end. It can easily last a century or more, and ending it would require major societal changes, in particular, cleaning up the US courts and the US legal profession.
