In my previous post I presented J.P. Morgan. Now let’s explore some of the negative thinking behind Morgan, and discuss claims of “too much wealth” and judgments passed on Morgan related to his philosophy of charity.
Morgan was the man with the money to invest heavily in electricity. He became one of the wealthiest men in the world—so much so that he bought out Andrew Carnegie’s steel empire. But is having so much money immoral? Is it immoral that Morgan live like a king while others live like paupers? This greedy robber baron was another man to lead to an increase in the wealth gap, right?
Not quite. Some think that if someone is rich, he or she must donate their money to the poor. But I submit to you that this is not the only way to take care of the poor. Consider some of the ways that Morgan used his money: He invested in businesses (specifically his own) and he bailed out organizations (governments and banks).
Morgan invested in businesses. By investing in businesses, he created jobs and provided a product that we all take for granted today. The lights you have on right now, the computer you are using, the air conditioner you are running, and the refrigerator to keep your lunch cold and the milk from souring are all because of the financial investment that Morgan made. Each and every one of these, and other things, has brought about jobs for people and products for you to buy at affordable prices. The light bulb you have may have been invented by Thomas Edison, but it was manufactured in mass product by the power and will of Morgan. Furthermore, light bulbs have to be made in a factory, built by humans and powered and managed by humans. So some of the money you pay goes toward the materials for the product itself, the workers involved in the production process, the builders of the factory, the administrative staff, etc. And some of the money also goes back to the investor plus interest for staking his or her money on the line.
Morgan bailed out governments. By bailing out governments, Morgan was able to bring societal peace where chaos was ensuing. He lived before the era of the central banking system, in functionality, served as the central bank. In 1895, he was a part of providing the U.S. Treasury with 3.5 million ounces of gold in exchange for a 30-year bond. This 30-year bond saved the federal government from bankruptcy. Additionally, Morgan was a part of a major bailout of New York banks during the Panic of 1907, which occurred during a recession. Imagine what would have happened in 1895 and 1907 had Morgan not saved the day. Quite possibly, there would have been financial ruin to our country; such an event could have brought devastating long-term effects, especially for those in the lower class. Morgan and his wealth brought stability to the fiscal atmosphere for all Americans.
By investing in businesses and bailing out organizations, Morgan played a part in taking care of the poor. He brought economic growth and in harder times, stability. Today, all people are reaping the benefits of Morgan’s heroic efforts that, even if motivated by self-interest or greed, have brought about a higher quality of life.
But what should we think of Morgan for increasing the wealth gap between the rich and poor? The often unsaid premise of this argument is that the poor are getting poorer as the rich get richer. But why think that? It very well might be the case that as the rich are getting richer, the poor are getting richer too. And thus, the wealth gap increases, even though everybody wins. In my next post, I will close my series on “The Men Who Built America.”
