Titan

I recently finished reading Titan, Ron Chernow's biography of John D. Rockefeller (Sr.). I think I've now read all of his biographies other than The Warburgs. It was a really interesting and good read!

I was interested in this book specifically because it was a Chernow book; I'm definitely familiar with the name Rockefeller, but wasn't very aware of his specific story or particularly interested in him. But I have really loved all of the Chernow biographies I've read. I was especially interested in this after having read the Grant biography, which took what I thought I knew as a boring story, and revealed a lot more interesting complexity and sparked a new appreciation for the man and his times.

In Rockefeller's case, I also found some unexpected personal connections to his life. One of the earliest examples was learning of his Baptist faith. Rockefeller had a much deeper religious life than the other Chernow subjects I've read, and Chernow spends a lot of time exploring his personal faith, describing how Baptist culture and theology helped shape his thinking and personality, and particularly the interplay between work, riches and faith.

As someone who grew up in a Baptist church (not "the" Baptist church!) a lot of this really resonated with me. Chernow does a great job at explaining the denomination's theology and culture. A huge factor is the independence of local congregations: unlike a lot of denominations that have top-down hierarchies, with powerful central bodies that select pastors and help drive initiatives, Baptist churches are self-directed, with each congregation calling its own pastors and making decisions. There's also a significant emphasis on the individual person; one of the core tenants of Baptism being that you must actively choose to join the church, rather than automatically enter as the member of a family. And there's a focus on individual people reading scriptures and developing a personal relationship with God; pastors can help instruct and guide but can't substitute for that effort. I thought Chernow's description was fair, accurate and helpful in understanding the mindset Rockefeller had.

It's also an interesting contrast with the other Chernow subjects, and I mused on Chernow's treatment of religion in his other books. Alexander Hamilton had very strong religious feelings as a youth and in the last years of his life, but for most of his career he didn't: there are some really interesting religious poems from early in his life, and some really sad letters from late in his life, but his most fervent and fertile political writings are almost wholly agnostic. George Washington seems to have had a powerful religious faith throughout his life, but it was completely private, something he didn't share even with his close friends and that he took pains to keep separate from all of his public acts. Ulysses S Grant doesn't seem to have been very religious, and Chernow doesn't spend much time on the subject with him. Pierpont Morgan had a pretty fascinating love of high Anglican church that seemed completely divorced from his private philandering immorality, which is kind of the opposite of George Washington's public stoicism and private religious feeling.

Religion kind of dovetails into one of the major themes of the book, charity, which was a big part of Rockefeller's life. Modern moguls like Bill Gates and Warren Buffer focused on making money for most of their lives, then turned to charity in their later years, but for Rockefeller giving seemed to be a passion at every stage of his career. From his very first underpaid job he carefully accounted for and gave directly to his church, to a variety of causes, and directly to individuals in need. Like much of his life this behavior was infused with a religious bend: he felt he had a calling to earn as much as he could and give away as much as he could.

I was surprised that, well into his forties, he personally read all of the (thousands!) of letters he received begging for money, and made decisions on whether and how much to give them. He felt a responsibility to give, but it wasn't an onerous obligation, but rather a source of delight, something that engaged him and he felt passionately about. Like modern philanthropists (and unlike many of his fellow tycoons) he especially wanted to treat "root causes", solving the conditions that led to poverty, rather than encouraging dependence.

It wasn't until relatively late in life that he acknowledged the need to delegate his philanthropy: he had too much money to give away, too many begging letters, and not enough time. So he established basically the first philanthropic organization that was wholly devoted to giving away a fortune. In the same way that we learn about Rockefeller's lieutenants and partners who helped him build a shadowy and nefarious oil monopoly, we also learn about the professional team that sought out worthy causes and directed great financial resources to where they could do great good.

I was also a bit surprised to learn that Rockefeller seemed to have a deep and genuine love for Black people. He and his family were committed abolitionists in the run-up to the Civil War. After the war, he became very involved in establishing centers for higher learning for former slaves, especially for black women: he funded and eventually endowed Spelmen College, the first college for black women in the United States. When he traveled, he loved visiting Black Baptist churches and singing in the congregation; that especially struck me since he was so loathe to socialize among his wealthy peers. Throughout his life he seemed much more at home rubbing shoulders with poor folks than with the elites.

The phrase "Rockefeller Republican" came along much later, but you can see the origin of the term in this book. Rockefeller was one of the original members of the Republican party who supported Abraham Lincoln and the Union, who championed both Black civil rights and big business. Standard Oil was overwhelmingly Republican, which generally meant pro-business (and often pro-graft), but also supporting education, immigration, and other positions that today we would consider socially progressive. (This accelerated under his son, John D. Rockefeller Jr., who more broadly embraced forward-looking and modern attitudes.)

Rockefeller was one of the primary Gilded Age plutocrats, but in lots of ways doesn't fit the mold. A cultural puritan, he avoided any hint of conspicuous consumption, was lean where his fellow barons were deliberately portly, and didn't socialize much outside of church. But I suppose that, as with most things in life, there really isn't a single template of "plutocrat" that most people follow: each individual was unique, we just created our own gestalt impression as we soak in the overall trends from the many individuals we view.

I was glad to read this so soon after House of Morgan, as the timelines and characters overlap and you get to see multiple perspectives on the same themes. Both books place a big emphasis on the ruinous competition of early capitalism: as new industries started (whether railroads or petroleum), new providers flooded into the market, creating massive over-investment and over-production, driving down prices below the break-even point, which in turn would drive those companies out of business, lead to massive unemployment and financial panics. Both Pierpont Morgan and John D. Rockefeller responded to this by driving to "increase efficiency" in eliminating redundancy, which in turn directly leads to monopolies.

I think Titan goes more into the nuts and bolts of how monopoly was achieved. It started with experiments in setting up cartels and pools, but those inevitably fell apart since the participants would invariably cheat and exceed their agreed-upon quotas. Eventually Rockefeller accomplished his goal via direct ownership, directly buying out all of his competitors, even if he was just going to shut down their operations rather than fold them into his own. Like Pierpont, Rockefeller didn't haggle and dicker over prices, and would over-pay to smooth over tensions if they advanced his goals. And also like Pierpont, you get the sense that he was driven at least as much by the sense of order, calm and purpose that came with consolidation, in contrast to the messy chaotic careening of the free market, and that may have driven them even more than the riches they earned.

I should take a moment here to step back and underline that monopoly is bad - a lot of this post, and a good deal of the book, focuses on the good and positive things Rockefeller accomplished, but the main reason that's interesting is because of how nefarious his reputation was, which was pretty fairly earned. In these early years of capitalism, the robber barons thrived in an environment with few or no laws to check their behavior, and most of what they did wasn't technically illegal at the time, but was plainly unethical. Out of all of Standard Oil's sins, its deception is probably the worst. Called "The Octopus" by contemporaries, it was a sprawling network of organizations with overlapping owners and boards, claiming to be separate while acting together to squeeze out competitors, wring concessions from vendors and pay off politicians. When Standard bought out a competitor, they would often have them retain their own name and brand, so customers would think that they had a choice when they really didn't. Die-hard Standard Oil haters would gladly pay a higher price for non-Standard kerosene, or die-hard anti-Standard oilmen would accept a lower rate when selling to a non-Standard refinery; but often times, those companies would actually be owned by Standard after all!

Rockefeller and Morgan used words like "efficiency" to describe what they were doing: making business more predictable, with consistent costs and manageable levels of growth. And, by those metrics, they did succeed: Rockefeller did achieve his goal of smoothing out the peaks and valleys in the price of oil, at both the production and the retail levels. You could go so far as to argue that he indirectly helped environmental conservation by slowing down the rate of madcap pumping, plugging everyone into a single network and keeping the faucet at a certain level rather than everyone frantically pumping as much as they could as quickly as they could. From that perspective, it's sort of managing the tragedy of the commons with the monopoly instead of the state.

As Standard's story continues, it turns into a great example of how a monopoly initially comes through power through innovation (superior refining techniques, transportation on railroads via new tanker cars vs. barrels on a flatbed), but once in power a monopoly will start to stifle innovation that threatens its supremacy (like Standard's vicious battles against oil pipelines, which are clearly superior to railroad transit). These are pretty direct parallels to, say, Microsoft or Google in our lifetime, as companies that were once disruptive and unlocked efficiency and value later became gatekeepers that blocked more innovative competitors from entering the market.

Ron Chernow amusingly but aptly notices that some of Rockefeller's writings sound surprisingly familiar to Marx and Engels, specifically in the contradictions of bourgeois capitalism and how it will destroy itself due to ruinous competition. The difference is that Marx sees monopoly as a step on the road to socialism, while for Rockefeller monopoly is the logical end state. That in turn made me think of Matt Stoller's distaste for socialism in Goliath, seeing it as another flavor of the same harmful large-scale consolidation as capitalist monopoly.

Also following on some of the themes from Goliath is the insight that a company can be good for consumers and simultaneously very bad for society and the country. Chernow only briefly references the fact that Standard Oil was able to deliver a high-quality product at a much lower price than any of its competitors, and continued to drive down its price throughout its existence. This is part of why Rockefeller saw himself as a force for good: at the end of the day, he was providing heat and light for people of modest means. The immediate losers were rival refiners, but it's hard to be too sorry for them: nearly all would have wanted to do what Rockefeller did. Standard Oil caused myriad broader harms: distorting other industries and companies to serve its own needs over their missions; strangling innovation; massive political corruption. Again, looking at our own time, this feels a lot like Amazon: Amazon is broadly liked since it lets people buy cheap products; but those cheap products are the result of a host of nefarious actions: labor abuses, tax evasion (which de-funds necessary social programs), squeezing manufacturers, encouraging production to move overseas, and so on. It's a reminder that "predatory pricing" can look appealing to us as consumers while rotting out the core of our economy.

While I'm mentioning other books: I'm also reminded of Piketty's observation that, beyond a certain point, wealth breeds more wealth, such that having money is much more important than intelligence or hard work. In Capital in the Twenty-first Century, he points out that Bill Gates' fortune during his years at Microsoft grew at the same rate as the fortune of Liliane Bettencourt (the L'Oreal heiress), despite the fact that Gates was innovating and working hard while Bettencourt did no work. Rockefeller seems similar in some ways: he spent 30 years building Standard Oil up from nothing into one of the most powerful and wealthy companies in the world; then retired in his 50s, almost completely stepped away from the business, and devoted his time and energy to philanthropy. And it was only after he stopped working that his wealth soared even higher and he became the wealthiest man in the country. Again, wealth is the biggest contributor to wealth.

I associate the Rockefeller name with Manhattan, so it was interesting to learn that he didn't move to New York until he was in his forties: he started Standard Oil in Cleveland, and led the network of companies from that area for most of his working career. Even when he did move to Manhattan, he very much brought his Midwestern sensibility with him: his social life continued to be limited to his local Baptist church and his immediate family, and he never took advantage of the many theaters or clubs in the area, nor ever entered the social schmoozing world of the Vanderbilts and other elites. Near the end of the book Chernow lays out how bitter Rockefeller felt towards Cleveland and Ohio: he felt that they were always trying to take advantage of his wealth and milk him and his activities, while New York mostly left him alone; as a result, New York ended up the beneficiary of an incredible amount of Rockefeller wealth channeled into public institutions: Rockefeller University, MOMA, the Cloisters, International House, Lincoln Center, Memorial Hospital (today's Sloan-Kettering), and many other schools and public spaces. What might Cleveland look like today, Chernow muses, if the Rockefellers had comfortably remained there to disburse their fortune? (Of course, my personal inclination is to tax the wealthy to invest in democratically-selected priorities rather than trust to their charitable choices, so I have a bit more sympathy for Ohio's state leaders than Chernow does.)

A regular reaction I had while reading this book was "Oh, I didn't know that Rockefeller started that!", and one of the biggest examples is the University of Chicago. I've been pretty well-acquainted with that school for most of my life, and I had no idea that it was (1) created whole-cloth by John D. Rockefeller, and (2) started life as a Baptist school. There's a really interesting saga there that shows a lot of Rockefeller's personality: he could be very generous, but hated feeling pressured for money, and the people who were most successful with him would be the ones who could casually mention some need, then patiently wait for years for him to respond. Rockefeller was initially leaning towards endowing a New York State seminary for Baptists, but that champion pushed him too hard, and mostly as a result he switched gears and selected Chicago instead. This kicked off another ongoing saga, where the brilliant William Rainey Harper blithely exceeded Rockefeller's frugal budgets, continually hiring the best and brightest professors from around the country and expanding the school, forcing an increasingly irritated Rockefeller to cover budgets way beyond what he envisioned. We also see how at times the Rockefeller connection could be counter-productive, as everyone would assume that a given institution had no need of further funds, harming their ability to raise money from other sources and become independent. Chernow devotes a lot of pages to the story, and it ends with what feels like an inspirational moral: ultimately, Rockefeller decides that he needs to set the institution free in order for it to thrive, and so he removes the few restrictions he had set on it and provides one (large!) last final gift. (Knowing the Rockefeller legacy does make me think that it may not be entirely coincidental that the Austrian School established a beachhead at Chicago.)

 

As with all of Ron Chernow's books that I've read, he does a great job at delving into the interior lives of his subjects, especially showing what their parents were like, how their childhoods unfolded, and how those experiences shaped their later ambitions or personalities. Rockefeller's father was known as "Big Bill": he was a charlatan and patent-medicine quack who roamed through the country swindling gullible yokels. He kind of sounds like Harold Hill, with a slightly darker streak. Big Bill was charismatic and entertaining, the sort of man who instantly made friends and who everyone liked; but he was not at all reliable. He would disappear in the middle of the night, without warning, leaving his wife Eliza to farm and raise six children. He was also unfaithful: he slept with their live-in housekeeper, fathering four children on two partners in the first two years after his marriage. Later in life he became a full-on bigamist, with an alternate identity and a second secret family, wife and kids, with each family unaware of the existence of the other.

In contrast, Eliza came from a religious family and was thrifty, hard-working, faithful and very dependable. John seems to have completely taken after his mother, modeling her ethic and stick-to-it determination; while John was completely silent about his dad in his correspondence and private writing, one can easily imagine that he actively rejected that model in favor of what he saw from his mom.

After reading so many of these late-19th/early-20th century books, I'm now able to recognize recurring secondary characters, particularly the high-profile prosecutors and congressional investigators who try to limit the immense power of monopolies. Samuel Untermyer, a common adversary, seems well-matched against Morgan in House of Morgan, but is roundly defeated by Rockefeller in Titan.

I learned a few new things while reading this book:

First, why people even cared about oil in the 19th century. I've always thought of oil as synonymous with gasoline, so why did people need it before we had cars or planes? At the time, there was a major market for illumination, and people burned kerosene in lamps to provide light, particularly at night. Whale oil (as in Moby Dick) had been favored for nearly a century; but by the time of the Civil War whales had been overhunted and were growing rare, so petroleum-based oil helped will the gap between the waning of the whales and the introduction of electric light.

Secondly, I learned the origin of using the word "trust" to describe monopolies of this period. I tend to associate "trust" with an individual grantor and small group of beneficiaries, like living trusts or trust funds in estate planning. It turns out that trusts like Standard Oil used the same legal mechanism, but wielded to a different end. At the time, corporations were much more restricted by state laws than they are today, and legally could not own property outside of the state in which they were incorporated. For big and sprawling entities like Standard Oil, that meant that they couldn't legally act as a single entity. Rockefeller's business partner Henry Flagler helped exploit a legal loophole where the state-based Standards (Standard Oil of Ohio, Standard Oil of New York, Standard Oil of Pennsylvania, etc.) were given in stock to individuals, and then those individuals selected Rockefeller and his board as trustees. So the legal fiction was that it was individuals coordinating rather than a corporation. Later on New Jersey relaxed their corporate laws, and Standard reorganized into a proper corporation, officially domiciled in New Jersey but owning property everywhere.

One other thing that struck me was the surprising scarcity and specificity of known deposits of petroleum. For a period of nearly twenty years, the only place in the entire world to have oil wells was western Pennsylvania. For much of Rockefeller's career, a cloud of uncertainty hovered over the entire endeavor: just how much of this stuff was there, and when would it run out? Was it worthwhile to invest in new and modern refining plants when the world's deposits of oil might run out in a year? They already knew that oil wells ran dry, and not every place you drilled produced oil, and nobody knew how much oil there was around the Oil Lands, or whether there was any oil at all outside of it. Decades later, new fields were discovered in Russia, then in Texas and California, but it wasn't until the mid-20th century when huge deposits were discovered under Saudi Arabia and Kuwait that the planet knew oil would last for at least a couple of generations. Chernow doesn't mention this, but I do wonder if that uncertainty was part of Rockefeller's success: people like the Morgans didn't like to invest in speculative and uncertain ventures, and a lot of smart people may have passed on competing in that space, until enough time had passed and Rockefeller had built an insurmountable lead. It also is interesting to realize that we've been aware of the limited fossil fuels for well over 150 years; I've tended to think that we're more aware of the limited supply now than we were in the past, but this book helped me realize that if anything we've become more blasé about the seemingly (but not actually) expandable supply of natural resources.

Chernow's writing style is kind of interesting. He generally moves chronologically forward through time, but frequently will call forward to some future event or (more often) consequence, and later will connect back from the reaction to the origin. A lot of Rockefeller's actions in the 1870s escaped scrutiny at the time because they were shrouded in secrecy and unknown by the public; Chernow will note now Ida Tarbell and others would later seize on some of these actions, which won't happen for several hundred more pages in this book. For example, he gives a brief glimpse at Tarbell growing up as a child in the Oil Lands, even though she hasn't been properly introduced as a character yet. Much later, Chernow focuses directly on her writing and Rockefeller's contemporary response (or lack thereof), while jumping briefly back to the actual events Tarbell was writing about. Chernow points out the facts that she got wrong or the stories she distorted, but also admires her vigor and effectiveness. Rockefeller and his cronies couldn't really challenge the specific things Tarbell and her fellow muckrakers got wrong without implicitly admitting that most of it was right. (This feels very different from today, in the age of Trump, where any mistake can be used to invalidate any and all information from the source of that mistake.)

Throughout these various biographies, I can see that Chernow generally likes his subjects, while not hesitating to show their dark sides and critique them. These books are fundamentally exercises in empathy: we're seeing where they came from, feeling what it was like to walk in their shoes, and that helps us understand why they did what they did, even if we don't think we would have done it. Chernow's Washington biography was great, among other reasons, because of how much it emphasizes Washington's slaves: not just the fact that he owned other human beings, but the book looks at the slaves as individuals, names them and tells their stories, and shows how Washington related to them: cases where he thought he was showing kindness, or his creepy obsession with hunting down runaways. Exploring that side of Washington doesn't take away from his great accomplishments, but the book also doesn't let Washington's accomplishments exonerate his slavery.

You can actually see that kind of empathy grow in the process of writing these books. President Grant makes a brief appearance in the background of the early part of this book, sketching the backdrop of the business-friendly post-Lincoln Republican party. In "Titan", Chernow breezily summarizes Grant and his administration as corrupt, echoing the conventional view of his presidency. Decades later, in Grant, Chernow will paint a much more nuanced and sympathetic view of Grant as a basically decent man with a few unfortunate blind spots, most relevantly a tendency to view successful businessmen as the equivalent of victorious generals, and a very naive trust in matters outside his expertise.

In this book, Chernow seems to admire Rockefeller's asceticism in an age of gilded debauchery, although he also criticizes it as sterile. He admires Rockefeller's rootedness with blue-collar common folks and his friendly connections with Black people. Chernow shows Rockefeller as someone who is doggedly determined. He wasn't a brilliant original thinker like Alexander Hamilton, but he would focus on a problem and keep working it until he came to the right solution. Rockefeller was also surprisingly collegial in how he ran Standard Oil. His critics presented Rockefeller as a single animating force behind this behemoth, but we see in these pages how everything was done by committee, and the company wouldn't take any action until the large board unanimously agreed, which could take months or years of discussion. Rockefeller was the first among equals in this group as the person with a plurality of shares, but he didn't browbeat others or enforce his will: he patently worked with them and won them over. He seemed to genuinely love his wife and kids, had genuine feelings for the church, and genuinely loved giving money away. He wrote about how important it was not to be ruled by wealth, which from almost anyone would sound sanctimonious and hypocritical, but in his case actually seemed to be true.

As for his downsides: while he wasn't solely responsible for all of Standard Oil's actions, he did a lot of shady things during his career: as noted above, striking secret agreements with railroad and other companies, creating "the Octopus", secretly owning supposed competitors. Rockefeller's home life receives mixed reports from visitors' accounts: his children mostly recall it as peaceful and stable, but to friends the Rockefellers' home seemed joyless and airless. On a personal level, Rockefeller could be surprisingly open-minded, but once he made up his mind he never changed it, which led him to dig in on bad decisions that he should have let go. Rockefeller could come off as proud and haughty to strangers, although that seems like mostly a defensive mechanism: he was never a very sociable person, and by middle age most new people he met just wanted his money, so he didn't form many new relationships and, until the last decade or so of his life, he stayed comfortably cocooned with his family, church, and a very small inner circle of trusted associated.

Chernow sums it up pretty well near the end of the book:

What makes [Rockefeller] so problematic - and why he continues to inspire such ambivalent reactions - is that his good side was every bit as good as his bad side was bad. Seldom has history produced such a contradictory figure. We are almost forced to posit, in helpless confusion, at least two Rockefellers: the good, religious man and the renegade businessman, driven by baser motives.

Unlike House of Morgan, this book focuses on John D. Rockefeller Sr. and not the entire Rockefeller lineage; that said, Chernow does write about his kids and grandkids, mostly through the lens of Rockefeller himself. This leads into a kind of surprising overlap with Against the Day, the Thomas Pynchon novel I read immediately before this. Near the end of both books, they focus on the Ludlow massacre during the Colorado Fuel and Iron Corporation's labor struggle. The novel and the biography even share some specific details, like the owners' thugs creating a modified car that they name the "Death Special", with armored plates attached to the side and two machine guns mounted on top for mowing down strikers.

Both books give a harrowing description on the final assault on the strikers' tent city, a night assault with the tents lit on fire and several women and children killed. Against the Day more closely tracks the point of view of the strikers; I think Frank Traverse is delivering weapons to the union organizers. Titan focuses more on the point of view of owners and managers, and especially the disconnect between the immediate overseers in Colorado and the distant capital owners in New York, while also dipping into the perspective of the workers. I don't think that Rockefeller is mentioned at all in Against the Day while the strikers are pretty well covered in Titan. That, in turn, makes me think of the socialist argument that labor can get by without capital, but capital cannot survive without labor.

So! A big book, for a big man who built a big business that defined big monopoly for generations. Again, I don't know if I would have been interested in this if it didn't have Chernow's name on the cover, but I'm delighted to have had the chance to read it: learning more about things I didn't know that I didn't know, in addition to continuing to color in my understanding of what is increasingly the most interesting period in history for me, the start of the capitalism era. At some point I should come up with a proper ranking of Chernow's books, but that will have to wait until after I wrap up with the Warburgs. In the meantime, though, I can say that this is as well-written and engaging as Chernow's other books, which is saying a lot.