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Posted by adam.dada on July 5th, 2006
I’ve been doing a lot of research on entrepreneur James J. Hill. One of the first places to go to for some basic facts has always been Wikipedia.1 The James J. Hill summary at Wikipedia is one of the more startling ones because it is so well written with facts in some areas, but badly beaten up with myth and perjorative words in others.2
James J. Hill is one of those men whose face SHOULD be printed on a privately minted coin or money receipt. He was a hero for the free market, but is often called a monopolist without any proof that his control of various markets actually caused harm to the consumers and suppliers reliant on his industrial companies.
Here’s a man who ignored government help in order to build a market for himself — a market that would later help millions and millions of residents over generations after he was gone. He was similar in success to A.J. Giannini of Bank of America, a entrepreneur that I wrote about months ago. He left school at the age of 9, and built an network of businesses with nothing but his own hard work and networking with other entrepreneurs.
Yet the Wikipedia entry on Hill is overflowing with the perjoratives like the following:
. In 1870 he entered the steamboat business, and by 1872 he had monopolized it by merging (with Norman Kittson). In 1867 Hill entered the coal business, and by 1874 it had expanded five times over, giving Hill a virtual monopoly in the Anthracite coal business.
While he had major control over both industries, he was far from a monopoly. Others tried to compete, but were not as efficient, not as cheap, and did not offer the services that Hill had. He “controlled” the steamboat business by selling the best quality service for the lowest price possible. This was no monopoly because he was already giving the best price possible to the customers, and only time and hard work would bring better rates as technology expanded. The same is true of Hill in the coal business, but he also spent huge resources on researching and developing new technologies to keep his business at the peak of efficiency. This is not a monopoly, this is a success. Government-subsidized businesses tried to compete, but they never were able to work as efficiently due to government redtape and waste, as is usual in any subsidized market.
He was even handicapped, losing his eye to an Indian arrow in his teens — but no disability act was necessary to keep him competitive. He was poor, losing his father before the age of 10, but he didn’t need public education to learn; Hill proved his worth to a religious school, Rockwood Academy, that offered him his tuition at no charge in order to acquire a brilliant student.3
His competitors were all shills with government money: Union Pacific, Central Pacific, and Northern Pacific all received huge land grants and government-backed loans to build a transcontinental railroad. They all failed, repeatedly, in trying to build a worthy rail line. Hill did it with private loans, and he bought up the land he needed privately, at the market value. For those who say that only government can build roads and highways, or acquire land for railways and electric lines, Hill’s story not only proves them wrong, it also proves that government-granted companies fail the consumer every time.
Yet we don’t see these things in the Wikipedia entries, and reading up on J.J. Hill’s history at Wikipedia almost leaves you feeling as though he wasn’t a hero of industry. Just as Rockefeller is often-times condemned as a monopolist (who lowered prices and raised the level of competition in securing the best for the consumer), Wikipedia only aids in creating an atmosphere of doubt for free markets. Look at the Natural Monopoly entry for more garbage.4
Discuss this article at the anarcho-capitalism forum.
