these were strengthened by a process of positive
feedback, based on the virtuous circle.
By the middle of the nineteenth century, all white males,
though not women or blacks, could vote in the United
States. Economic institutions became more inclusive—for
example, with the passage of the Homestead Act in 1862
(this page), which made frontier land available to potential
settlers rather than allocating these lands to political elites.
But just as in Britain, challenges to inclusive institutions
were never entirely absent. The end of the U.S. Civil War
initiated a rapid spurt of economic growth in the North. As
railways, industry, and commerce expanded, a few people
made vast fortunes. Emboldened by their economic
success, these men and their companies became
increasingly unscrupulous. They were called the Robber
Barons because of their hard-nosed business practices
aimed at consolidating monopolies and preventing any
potential competitor from entering the market or doing
business on an equal footing. One of the most notorious of
these was Cornelius Vanderbilt, who famously remarked,
“What do I care about the Law? Hain’t I got the power?”
Another was John D. Rockefeller, who started the
Standard Oil Company in 1870. He quickly eliminated
rivals in Cleveland and attempted to monopolize the
transportation and retailing of oil and oil products. By 1882
he had created a massive monopoly—in the language of
the day, a trust. By 1890 Standard Oil controlled 88 percent
of the refined oil flows in the United States, and Rockefeller
became the world’s first billionaire in 1916. Contemporary
cartoons depict Standard Oil as an octopus wrapping itself
around not just the oil industry but also Capitol Hill.
Almost as infamous was John Pierpont Morgan, the
founder of the modern banking conglomerate J.P. Morgan,
which later, after many mergers over decades, eventually
became JPMorgan Chase. Along with Andrew Carnegie,
Morgan founded the U.S. Steel Company in 1901, the first
corporation with a capitalized value of more than $1 billion
and by far the largest steel corporation in the world. In the
1890s, large trusts began to emerge in nearly every sector
of the economy, and many of them controlled more than 70
percent of the market in their sector. These included
several household names, such as Du Pont, Eastman