Wealth in the Gilded Age

Shift in the Definition of Wealth:
- Wealth is no longer solely based on land ownership and titles, as it was with historical figures like Washington and Jefferson.
- It is now primarily determined by the value of money, company ownership, and business practices.
Captains of Industry vs. Robber Barons:
- The super-wealthy of the Gilded Age are referred to as "captains of industry" due to their dominance in American capitalism and their know-how in accumulating wealth.
- However, they are also known as "robber barons" because their wealth was often acquired through the exploitation of labor, the environment, and unfair government influence.
Wealth Inequality:
- In 1890, the top 1% of families owned 51% of real and personal property in America.
- Approximately 12% of families controlled 86% of the total wealth.
- This extreme wealth disparity existed alongside widespread poverty, particularly among workers and immigrants.

Cornelius Vanderbilt:
- Accumulated wealth through shipping and railroads.
- Controlled a significant proportion (tens of percents) of the railroads, giving him considerable control over the country's transportation infrastructure.
JP Morgan:
- Born into a wealthy New England family.
- Reorganized the banking system.
- At one point, owned 1/6 of all stock in American rail lines.
- Acquired Carnegie Steel and created US Steel.
Andrew Carnegie:
- Rags to riches story: Started as a bobbin boy in a cotton factory earning $\$1.20$ a week and became a multimillionaire.
- Advocated for the "Gospel of Wealth," believing that the wealthy should donate their money to the community.
- Donated $\$350,000,000$ to build libraries and support various causes, including Carnegie Hall in New York.
- However, his wealth was also acquired through the exploitation of workers.
- During the Carnegie Steel strike, his foreman, John Frisk, violently suppressed the workers' strike for better pay and working conditions.
John Rockefeller:
- Started by selling candy and later entered the oil industry.
- Became one of the wealthiest men in America through the Standard Oil Company.
- When he died in 1937, his net worth was over $\$300,000,000,000$ in modern money.
- Also donated a significant portion of his wealth, but his fortune was built on exploitation.
- Contributed to the problem of building monopolies.

Monopolies:
- A single company, corporation, or trust owns the entire industry, eliminating consumer choice and controlling prices.
- Two types of monopolies:
  - Vertical Integration: Buying every stage of the production process (e.g., owning the cattle, slaughterhouses, railroad cars, and stores in the meat industry).
  - Horizontal Integration: Buying other companies to eliminate competition and become the sole provider.
Oligopolies:
- While true monopolies are less common today due to government control, oligopolies exist where a few major corporations control a significant portion of the wealth and business in America.
- Examples: P&G, Nestle, and Unilever own many consumer products; four major airlines dominate air travel; five major banks control much of the financial industry.
"Too Big to Fail" Problem:
- Oligopolies can become so large and interconnected that their failure could trigger a collapse of the entire economy.
- The US government may have to bail out these companies, even if they engage in risky behavior, creating a situation where they can gamble with money without fear of consequences.

Rise of Global Trade:
- Businesses are expanding beyond local and national levels to become international.
Free Trade:
- The belief in reducing trade barriers is emerging, but it will not fully take hold until the Progressive Era.