John D. Rockefeller, the oil magnate that’s widely considered the richest American
of all time, with an approximate net worth of around 400 billion dollars in today’s money,
even after giving a substantial amount of his fortune away.
And yet, he started from very humble beginnings. He was born into a large family,
with a father who was frequently absent and was regarded as a con-man who sold worthless
potions. So, from a young age, John need to help provide for the family,
and took on odd jobs, like looking after the neighbours turkeys, or selling potatoes and candy.
Even though these things didn’t pay a lot, John was really good at them and worked
hard, and so he was able to save enough money to start offering small loans to other people.
So even as a young boy that entrepreneurial instinct was there.
But when he turned 16 he dropped out of school and got his first real job as a book-keeper, earning
just 50 cents a day. However, after working there for around 2 years, his employers still refused to
give him a meaningful raise, and so he decided to start his own produce business, as he had
a goal to make $100,000, and knew he’d need to build something of his own to reach that target.
Luckily, that first job had already taught him a lot, and gave him the experience, connections
and reputation, to raise $4,000 for starting his own venture; a business selling goods like meat,
hay and grain. Which did well, in the first year of trading it made almost half a million
dollars - of course Rockefeller didn’t keep all of that, a lot of it went back into business expenses
and loans, but it meant when a big opportunity arose, he now had some real money to invest.
And that opportunity, was oil. In 1859, the first American oil well was discovered,
which began the Pennsylvania oil rush. However, Rockefeller realised that whilst most people
were trying to get rich from drilling oil, the bigger profits were actually in oil refinery. So,
at just 24 years old, he used the money from his first business to build an oil refinery.
Now, around this time he met a man named Henry Flagler who was interested in
investing in his business, and so together they incorporated the Standard Oil Company,
and began the process of buying out all the smaller nearby oil refineries that were in
competition with them. Whenever any of these refineries refused to sell their oil to him,
he simply started selling his oil at a loss so that their customers flocked to him instead,
which would put these smaller companies out of business.
These kind of practices allowed the Standard Oil company
to keep expanding across the entire country - they kept buying out rivals, undercutting competitors,
and cutting costs wherever possible. The more they grew, the more negotiating power they had,
so they could push for better rates and prices and discounts on everything. Rockefeller was also
known for some shady secret deals, and so with all of these factors combined, by the 1870’s,
Rockefeller's oil company owned 90% of the world's oil refinding industry.
He also hired the owners of the oil refineries he bought as a board of trustees,
which meant that all the smartest oil experts were all working within one super company,
with Rockefella at the head of it. He owned 20,000 oil wells, had over 100,000 employees, and at the
vert peak, some estimate its total value would today have been worth almost a trillion dollars.
This kind of empire was pretty unheard of, but Rockefeller wasn’t done yet.
At this point, the two biggest industries were oil and railroads, so Rockefeller set out to do
a similar thing he’d just done with oil, with railroads. However, as he begun monopolizing
another industry, he also began to become a bit of a public enemy. He was depicted as the ultimate
symbol of corporate greed and cruelty. In response to Rockefeller’s ever-growing empire, legislation
was passed to try and prevent these kind of monopolies; in particular, The Sherman Anti-trust
act was passed, which would lead to the breakup of Standard Oil into different subsidiaries.
Except, over time many of these subsidiaries would simply merge back together, and are still around
to this today - such as BP and Chevron. And, since Rockefeller kept his share in all of those
companies even after they got split up, it meant that at the time of his death, he was still the
richest person in the world, and likely the richest self-made man in all of modern history.
Now, what should we actually think about John D Rockefeller?
On the one hand, he made oil an affordable commodity, and brought it to the masses. He
went from nothing to building a business empire that may never be matched again.
He gave around $540 million to charitable courses,
which when you adjust for inflation, makes him one of the most accomplished philanthropists ever.
However, on the other hand, Rockefeller was a greedy, ruthless tyrant of business, who
sometimes bullied, extorted and exploited others on his merciless path to dominance, especially
the tactics used to crush the competition. Biographer Ron Chernow argues ‘his good side was
every bit as good as his bad side was bad. Seldom has history produced such a contradictory figure.’
However what’s undeniable, is he will always be remembered
for his insanely vast fortune and the impact he had.