Guilded Age Slides 3
II. The Gilded Age and the Rise of Industrial America (1870-1914)
I. Massive Economic Change
Economic Expansion (1878-1893)
The United States economy saw a tremendous expansion during this period, significantly influenced by the growth of various industries.
Industrialization transformed the U.S. into a manufacturing economy, with factories producing goods on a larger scale than ever before.
A significant surge in population occurs, contributing to economic demand, with immigrants fueling the labor force needed for industrial growth.
Railroads:
Crucial for transporting goods and people, railroads facilitated the movement of raw materials and finished products across vast distances.
Railroad construction stimulated economic growth, leading to the establishment of new towns and the expansion of existing ones.
Industries like steel, coal, and timber experienced substantial growth due to this expansion, fundamentally altering the American economy.
New Technologies:
Revolutionized all aspects of American life and business. Advancements in technology contributed to efficiency and productivity in various sectors.
Automobiles: The introduction of the Henry Ford Model T in 1909 exemplifies technological advancements, making automobiles more accessible to the general public.
II. Development of the Railroad Network
1870:
Railway development resumes post the War Between the States, crucial for re-establishing trade routes and connectivity.
The national railroad network increased from 30,626 miles in 1860 to 52,922 miles in 1870, showcasing a commitment to modernization.
The construction of the first railroad to the Pacific Ocean facilitates nationwide rail travel for the first time, reducing travel time drastically.
Significant growth in railway developments in the Mississippi and Missouri valleys indicates the focus on regional development.
1890:
From 1880 to 1890, more than 70,300 miles of new rail lines were opened, bringing the total network to 163,597 miles.
By 1890, numerous trunk line railroads extended to the Pacific, symbolizing major infrastructural growth and connectivity.
In the thirty years from 1860 to 1890, the total mileage west of the Mississippi increased from 2,175 miles to 72,389 miles, with this area’s population increasing fourfold, reflecting the shift of economic activity westward.
III. New Corporate Structures
Major Corporations Established:
Standard Oil: Dominated the oil industry through monopolistic practices.
General Electric/Westinghouse (electric): Key players in the electricity market, revolutionizing lighting and machinery.
American Telephone and Telegraph: Established a nationwide communication network.
DuPont (munitions and chemicals): Became a leader in chemical production and innovation in America.
Carnegie Steel: A major force in steel production, emphasized efficiency and innovation in manufacturing processes.
Monopolies and Corporate Changes:
Changes in production and management led to the expansion of the factory system, often at the expense of fair labor practices.
Emphasis on mass production practices and economies of scale allowed companies to reduce costs and increase profits.
The emergence of scientific management principles exemplified by Henry Ford’s development of the assembly line from 1913-14 revolutionized manufacturing efficiency.
IV. Wealth and Inequality in the Industrial Age
Economic Growth and Social Cost:
The expansion of the American class system coincides with economic growth, creating significant disparities in wealth distribution.
Upper Class:
Defined as those earning more than $3,500/year, they lived securely and displayed immense wealth, often through extravagant spending.
Notable millionaires include:
John D. Rockefeller: Oil magnate and philanthropist.
Vanderbilt family: Pioneers in railroad and shipping industries.
Andrew Carnegie: Steel industry leader, known for philanthropy.
Henry Clay Frick, JP Morgan, Jay Gould: Influential figures in finance and industry.
Lavish lifestyles characterized these figures, who cultivated extravagant public personas.
Example: "Le Petit Chateau" - $2 million home of William K. Vanderbilt at 5th & 53rd.
Example: "Marble House" - $11 million “summer cottage” of William K. Vanderbilt in Newport, RI, featuring 50 rooms and 500,000 cubic feet of marble.
Example: "The Breakers" - Summer home of Cornelius Vanderbilt II, consisting of 70 rooms and over 125,339 square feet, showcasing the opulence of the upper class.
Middle Class:
Earnings ranged from $800-$3,500/year, with many professionals emerging as a significant social group.
Occupations included professionals such as teachers, doctors, lawyers, and clerks, contributing to a growing economy.
Emergence of conspicuous consumption as a form of marking social status, with middle class families striving to showcase their wealth.
Department Stores:
E.g., John Wanamaker’s department store founded in 1876, catered to middle-class consumers, marking a shift in shopping culture.
Advertising:
Merged the concepts of wants vs. needs; magazines fueled this consumer culture, influencing public perceptions on lifestyle and consumption.
Notion of “leisure” time becomes popularized, reflecting changing attitudes towards work and play.
Working Class:
By 1900, more than half of all Americans earned less than $800/year, emphasizing the income disparity.
Unemployment emerges as a significant issue along with prevalent inequalities in wages influenced by sex, race, ethnicity, skill level, and geographic location.
In 1880, half of American workers were engaged in agriculture; this decreased to a quarter by 1920 due to industrialization's transformative impact.
The factory system proliferated in the 1880s, with the rise of mechanization and assembly lines, leading to deskilling of labor, which in turn reduced wages.
Labor Commodification:
An overwhelming labor pool resulted in unbearable working conditions, contributing to issues like child labor and dangerous factory environments.
Triangle Shirtwaist Factory Fire (1911):
A catastrophic event highlighting dire working conditions and inadequate safety measures, catalyzing labor reforms.
Living Conditions:
Many workers lived in tenements, exacerbating social problems and health issues among the urban poor.
Reference: Jacob Riis’s book "How the Other Half Lives (1890)" documents the living conditions of the urban poor, aiming to expose social injustices.
V. Individualism vs. Mutualism
Free Labor Ideals:
The notion that hard work can lead to upward mobility without assistance, a prevalent belief during this period.
Individualism:
Forms the basis for laissez-faire economic ideology, favored by big business, promoting minimal government interference in the economy.
This ideology allowed wealthy individuals to ignore systemic issues requiring political and economic reforms, emphasizing personal responsibility.
Social Darwinism:
Concept of “survival of the fittest” is applied to human society, justifying economic inequality.
Attributes 'failure to advance' to inherent inferiority, thereby justifying racist and classist ideologies and actions against marginalized communities.
Worker Perspectives on Labor:
Many workers began to critically reassess the belief in individualism and free labor, recognizing that hard work often does not lead to upward mobility due to institutional barriers such as racism, classism, and sexism.
Mutualism:
Represents coordinated efforts to improve labor conditions, advocating for the formation of labor unions as a means to combat inequality.
There are inherent limits to the ideals of mutualism, particularly when confronting established capitalist systems that resist change.
VI. Attempts at Reform
Farmers and Labor Movements:
Farmers were among the first to organize collectively, forming alliances to advocate for their rights and needs.
In 1890, the National Farmers’ Alliance emerged advocating for important economic reforms, including:
Graduated income tax
Direct election of Senators
Nationalization of railroads and other public services
Government assistance for farmers
Formation of the Populist Party, consisting of farmers, miners, and some urban workers; their notable figure was James Weaver (1892).
The decline of the Populist Party occurred as major political parties began adopting their demands, leading to a dilution of the movement's radical vision.
Civil Service Reform:
Addressed corrupt practices inherent in “machine” politics, particularly the patronage systems that dominated major cities and relied on political favors and bribery.
While characterized by bribery and corruption, some aspects responsive to public needs were evident through patronage systems that provided jobs and services.
Assassination of President James Garfield (July 2, 1881) sparked calls for reform, emphasizing the need for change in how government positions were awarded.
The Pendleton Civil Service Reform Act (1883) aimed to dismantle patron-client political systems, promoting merit-based hiring.
Regulation of Big Business:
Munn v. Illinois (1877): The U.S. Supreme Court ruled that states possess the authority to regulate businesses operating in the public interest, a pivotal case for state intervention in the economy.
Interstate Commerce Act (1887): Outlaws certain business practices and establishes the Interstate Commerce Commission to regulate railroads and ensure fair rates for farmers and consumers.
Antitrust Movement:
Emerged in response to monopolistic practices viewed as detrimental to fair business; it sought to limit corporate power.
Growing antitrust sentiments throughout the 1880s led to the Sherman Antitrust Act (1890), which declares any “combination in the form of trust or otherwise, or conspiracy in restraint of trade” illegal.
There was ambiguity in the application of the law, as it was also used against labor unions, leading to disputes about worker rights versus corporate regulation.