Tuesday, November 24, 2015

Titan

John Rockefeller was the richest person in the world for quite a stretch of time. In the Charlie Munger-recommended book Titan, Ron Chernow biographs his life.

Rockefeller's business acumen was second to none. He would turn commodity businesses into oligopolies, leaving just enough competition so that it didn't seem like he was controlling the market. Unfortunately, he sometimes ran afoul of the law when doing so, and so a whole new set of laws were brought in to ensure future "Rockefellers" would be easier to stop.

The book was about his whole life, which historians would love because it's full of monumental events. But personally I would have liked to see more discussion of his business activities. Chernow goes well into the illegal stuff and the stuff bordering on illegal, like how he "co-operated" (i.e. abused market power) with the railroads to get preferential rates vs customers, how he would use these rates to bully competitors into selling out etc. But to abuse his market position, Rockefeller had to have a big market position that he could use as leverage, and not as much ink was devoted to how he did that. There were some anecdotes though about how Rockefeller was always looking to cut costs, often bringing projects (e.g. oil barrel-making) in-house using local wood because it was cheaper than buying barrels from suppliers. He was also able to find markets for by-products of his oil refineries.

Rockefeller's existence makes a pretty good case for there needing to be regulations in business, if only to ensure that there is adequate competition. It becomes clear that a free-for-all market would likely lead to monopoly in many industries, which would stagnate productivity and therefore standards of living.

So full was Chernow's description of the times that I feel like I lived through the Rockefeller years. He was a villain in the media for much of his life, but then he started giving his fortune away. Rockefeller managed to turn his media perception around by the end.

It's a long book coming in at about 1000 pages. Also, Chernow doesn't appear to be a big believer in the whole "use the most simple words you can" movement of writing. I had to look up a word on pretty much every page, as Chernow would rather use words like conflagration instead of fire. Annoying. Some words even my electronic dictionary (that's part of my e-reader) didn't know.

Enjoy!

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