The thesis underpinning this chapter is that sustainable wealth is created from the provision of infrastructure, products, and services that yield a social benefit. As the social benefit of an infrastructure, product, or service diminishes over time so too is its economic value. Emerging industries must construct new supply chains; an ecosystem of competitors, customers, suppliers, and support industries. This is the social infrastructure of businesses.
The industrial revolution brought people together under one roof. In doing so, workers sold their time to factory owners instead of selling their wares directly to consumers. In economic terms, the factory internalized [became] the market. Industrialization created new societies of connected workers separate from the people prepared to risk financial capital on a large scale. Specialized industrial towns emerged around local resources and people’s skills.
Industrialisation not only separated labor and capital (the worker no longer owned the machinery), industrialisation also created the role of the corporate gatekeeper. More than his peers, by 1859, the Commodore operated almost entirely through corporations. As described by the Pulitzer Prize winning biographer, T J Styles, “he [Vanderbilt] proved himself an expert at using the stock market to concentrate capital or avenge himself upon his enemies, and emerged as a master of the corporate structure.”
Today, as asserted by the author of The Seventh Sense, “no position is more important, formidable, influential, or profitable than that of the gatekeeper.” If you’re outside the network you’re “isolated, slow-growing, powerless, and finally, bankrupted or consumed.” Andrew Carnegie and J D Rockefeller who epically battled railroad proprietors also understood the role of the gatekeeper more than a century ago.
The economic importance of the railroads was that they provided faster linking of specialized industrial towns to distant centralized markets. Andrew Carnegie went so far as to commence the construction of his own railroad. J D Rockefeller entered into rebate arrangements on his competitor’s freight consignments, which contributed to the rationale for breaking up of Standard Oil as a collective trust of oil producers that he directed.
Each new cycle of economic activity shares two things in common: one, new technologies that compress time to traverse distance and, two, the harnessing more efficient energy sources. This was identified by the late economist and management professor Peter Drucker. He also identified a time lag to adoption of around twenty-five years. One of the major reasons is society’s investment in the existing ways of doing things.
When the railways were launched, stage-coach drivers lost their jobs. In England, a law of 1865 limited speeds and required a walker with a flag to warn those ahead and calm frightened horse some sixty yards ahead of a locomotive. In the US, as in other countries, the automobile replaced horse-drawn carriages and coachmen. The upside, in New York, was the elimination of animal excretions which accounted for up to two-thirds of the city’s filth and litter.
As it was with railways, automobiles, personal computing, and now the internet, each major cycle and intra-cycle wave of industrial advancement have their technical roots in the past. Each makes possible new opportunities for wealth creation that accompanies a flurry of entrants and failures described as “creative destruction” by the economist Joseph Schumpeter.
 T. J. Styles The First Tycoon: The Epic Life of Cornelius Vanderbilt. New York: Vintage Books, (2010), 330.
 J. C. Ramo, The Seventh Sense: Power, Fortune, and Survival in the Age of Networks (New York: Little Brown and Company, 2016), 235.
 J. C. Ramo, The Seventh Sense: Power, Fortune, and Survival in the Age of Networks (New York: Little Brown and Company, 2016), 246.
 David S. Landes, Dynasties: Fortunes and Misfortunes of the World’s Great Family Businesses (London: Penguin, 2008), 112.