# how ppl made money in the past ## key figures and their methods ### john d. rockefeller - **oil industry**: founded standard oil, dominated the oil market. - **monopolistic practices**: used horizontal integration to control the market. - **philanthropy**: believed in giving back, but strategically. - **mental models**: - **scale economies**: expanded production to reduce costs. - **network effects**: created a vast distribution network. physical network effect - **first principles**: broke down the oil business to its core components and optimized each. ### j.p. morgan - **banking and finance**: pivotal in forming major corporations like general electric and u.s. steel. - **consolidation**: merged companies to create monopolies. - **influence**: had significant control over the u.s. financial system. - **mental models**: - **network effects**: leveraged connections in finance and industry. - **equilibrium**: balanced interests of various stakeholders. - **feedback loop**: used financial feedback to guide investments. ### andrew carnegie - **steel industry**: led the expansion of the american steel industry. - **vertical integration**: controlled every aspect of production from raw materials to distribution. - **philanthropy**: gave away most of his fortune to education and libraries. - **mental models**: - **vertical integration**: controlled supply chain to reduce costs. - **scale economies**: expanded production to achieve lower costs. - **first principles**: focused on fundamental aspects of steel production. ### the rothschilds - **banking dynasty**: established a network of banks across europe. - **political influence**: maintained close relationships with political leaders. - **diversification**: invested in various industries including railways and real estate. - **mental models**: - **network effects**: created a vast banking network. - **diversification**: spread investments across various industries. - **first principles**: focused on core principles of finance and investment. ### other notable figures - **cornelius vanderbilt**: made his fortune in railroads and shipping. - **mental models**: - **scale economies**: expanded rail and shipping networks. - **network effects**: created extensive transportation networks. - **first principles**: optimized logistics and transportation. - **henry ford**: revolutionized the automobile industry with the assembly line. - **mental models**: - **scale economies**: mass production to reduce costs. - **first principles**: broke down car manufacturing to its simplest components. - **feedback loop**: continuously improved production processes. - **jay gould**: known for his involvement in railroads and as a ruthless businessman. - **mental models**: - **network effects**: leveraged rail networks for control. - **first principles**: focused on core aspects of rail business. - **equilibrium**: balanced aggressive tactics with strategic investments. ## common themes - **monopolies and consolidation**: many of these figures created monopolies or near-monopolies in their industries. - **innovation**: they often introduced new technologies or business practices. - **political connections**: close ties with political figures helped them secure favorable conditions. - **philanthropy**: many gave away large portions of their wealth, often strategically. ## reflections - **survival of the fittest**: business practices often mirrored natural selection, with the strongest companies surviving. - **ethical considerations**: their methods raise questions about ethics and the balance between profit and social responsibility. - **legacy**: their impact is still felt today in modern business practices and philanthropy. - [[John Rockefeller - John D. Rockefeller on Making Money Advice and Words of Wisdom on Building and Sharing Wealth]] - [[Chernow, Ron - The House of Morgan An American Banking Dynasty and the Rise of Modern Finance]] - [[Niall Ferguson - The House of Rothschild . Money's Prophets - 1798-1848]] - [[Philosophy/Mind/Mental Model/Mental model cheatsheet]] - [[Business/Entrepreneurship/Network effects]] #tags: #history #wealth #business #philanthropy #mental-models #network-effects