Capitalist Heroes


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When I mention that my family used kerosene lamps when I was a small child in the South during the 1930s, that is usually taken as a sign of our poverty, though I never thought of us as poor at the time.

What is ironic is that kerosene lamps were a luxury of the rich in the 19th century, before John D. Rockefeller came along. At the high price of kerosene at that time, an ordinary working man could not afford to stay up at night, burning this expensive fuel for hours at a time.

Rockefeller did not begin his life as rich, by any means. He made a fortune by revolutionizing the petroleum industry. Although we still measure petroleum in barrels, it is actually shipped in railroad tank cars, in ocean-going tankers and in tanker trucks.

That is a legacy of John D. Rockefeller, who saw that shipping oil in barrels was not as economical as shipping whole railroad tank cars full of oil, eliminating all the labor that had to go into shipping the same amount of oil in numerous individual barrels.

That was just one of his cost-cutting innovations. If there was a better way to extract, process and ship petroleum products— or more products that could be made from petroleum— Rockefeller was on top of it.

Before he came along, gasoline was considered a useless by-product that petroleum refineries often simply dumped into the nearest river. But Rockefeller decided to use it as a fuel in the refining process, which made it valuable, even before automobilescame along.

Today, we tend to think of John D. Rockefeller as just one of those famous rich people. But Rockefeller didn’t just “happen to have money.” How he got rich is the real story— and it is a story whose implications reach far beyond that one particular individual.

Before Rockefeller’s innovations reduced the price of kerosene to a fraction of what it had once been, there wasn’t a lot for poor people to do when nightfall came, other than go to bed. But the advent of cheap kerosene added hours of light and activity to each day for people with low or moderate incomes.

It was much the same story with the advent of the automobile, which gave millions of people more range in space, as kerosene (and, later, electricity) gave them more range in terms of hours of daily activity.

Here again, automobiles and electric lights were truly luxuries of the rich when they began.

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  • USMCSniper

    Government regulation, by contrast, operates by thwarting the businessman's thinking, subordinating his judgment to the decrees of government officials. These officials do not have to consider the long-term results—only what is politically expedient. They do not have to back their decisions with their own money or effort—they dispose of the lives and property of others. And most important, they do not have to persuade their victims—they impose their will, not by reason, but by physical force. The government regulator does not merely show contempt for the minds of his victims; he also shows contempt for their personal goals and values. In a free-market economy, everyone is driven by his own ambitions for wealth and success. That's what "free trade" means: that no one may demand the work, effort, or money of another without offering to trade something of value in return. If both partners to the trade don't expect to gain, they are free to go elsewhere. In Adam Smith's famous formulation, the rule of capitalism is that every trade occurs "by mutual consent and to mutual advantage

  • Alex Kovnat

    As soon as Mr. Sowell's book about economics appears in my local library, I'm going to read it. Let's here more from this great man. Last year btw Mr. S. turned 80. SIr, if you can read this: I hope you're feeling no older than 60! :)

  • http://wwwtwosetsofbooks.blogspot.com/ patti

    The problem is it is the captains of industry — with a few exceptions — who fund our enemies and are on the wrong side of many important issues. The Rockefellers make it their business to oppress small business!
    http://wwwtwosetsofbooks.blogspot.com/2011/01/dav

  • Questions

    Professor Sowell is still doing a lot of heavy lifting, even though he turns 81 this year. He needs more reinforcements before going into the sweet hereafter.

  • clay northwood

    I have read Thomas Sowell's "Basic Economics". It should be required reading for every
    university student. His is the greatest black or negro mind ever.