A 1% stronger owner launches a takeover bid of a seemingly irreplaceable telecom network, sparking a panic about the power of the super-rich.
the plot: No, not Elon and Twitter. We’re talking about the notorious Golden Age financier Jay Gould – who for more than a decade beginning in 1881 single-handedly controlled American telegraph wires.
why does it matter: While Gould’s episode is almost forgotten today, it has notable similarities to Elon Musk’s attempt to take control of Twitter, putting the current era of American capitalism in a stark position.
- Gould was a New York City veteran who had already made multiple fortunes — in the railroad industry and on Wall Street — when he set his sights on wresting control of Western Union. The company almost monopolized the American telegraph system, controlling 90% of the technology now referred to as the “Victorian Internet”.
Similarities strange. Both men avoided tradition, pushed legal boundaries and were not averse to trolling.
- Gould earned the title “America’s Most Hateful Man” for his willingness to appear, bribe and manipulate in order to gain control of and strengthen the railroads.
- Although more famous than ever, Musk also flouted the company’s fitness that most executives cling to, picking fights with politicians and repeatedly tangling with the Securities and Exchange Commission.
- As Richard John, Professor of History and Communications at Columbia University, put it: “Powerful characters who use their notoriety as an asset. This is a similarity between Musk and Gould.”
Both Musk and Gould used fame and notoriety to move the markets.
- Mr. Gold Newspaper – Owned by New York World – Drum The bad news helped drop some stocks, before Gould snapped up the stocks himself. Such a campaign–a crusade against Western Union’s monopoly power–helped Gould’s efforts to buy company stock on the cheap.
- In recent years, Mr. Musk’s tweets to his nearly 83 million Twitter followers have moved the prices of stocks and cryptocurrencies at will. If he tweets about something positively – Dogecoin is a prime example – it could generate huge profits.
Twitter and the Telegraph both had political influence and had an impact.
- Western Union cemented its power by partnering with another monopoly, the Associated Press. It carried AP news on its wires, giving it prime transmitting positions. Control of Western Union gave Gould an important role in the flow of information across the country – and this worried people at the time.
- Likewise, Twitter – as dumb as it often is – is the de-facto epicenter of American public debate. (President Trump has shown that being able to do so can be a powerful policy tool.)
- Musk is already one of the service’s biggest voices, and his attempts to own it outright raise some concern that he would simply be too much power over one man in a democracy.
what are they saying: “I think both Gould and Musk have a vision of money not just being money, but being power,” Ed Renehan, author of The Dark Genius of Wall Street, an autobiography of Gould, tells Axios.
Bottom line: We shouldn’t be surprised to see parallels in the modern age with the late nineteenth century era of mega-business figures – because we really live in a second gilded age.
- The similarities between Gould and Musk—not to mention Gates, Bezos, Zuckerberg, and Brin et al—highlight how the vast fortunes and inequality of the tech revolution mirror the era of the late nineteenth century, dominated by industrialists and financiers known as “thieves barons.”