The Gilded Age
Summary & Analysis
- The Gilded Age challenged long-established American social ideals
- Vast new wealth and giant industrial corporations undermined old Jeffersonian ideas about America as an egalitarian nation of small independent farmers and artisans
- Corrupt new politics challenged the old republican ideal of civic-minded public service
- Americans from all over the social and political spectrum were dissatisfied with the state of Gilded Age society; calls for reform were pervasive but Americans disagreed strongly over what kinds of reforms should be enacted
Old Questions, Old Answers
- Gilded Age extremes of wealth and poverty challenged old Jeffersonian ideals that described America as an egalitarian nation of small farmers and craftsmen.
- Changes in American politics also challenged old understandings of the public interest
Is wealth a good thing?
Should the rich be allowed to keep all the money they earn? Or does the public have a right to a portion of that money?
Should businesses compete or cooperate? Are we better served by an economy made up of small competing businesses, or one dominated by a handful of large monopolies?
What should guide a voter when casting his or her ballot? Whose interests should an elected office holder serve?
For a long time, Americans thought they knew the answers to these questions. Informed primarily by the agrarian vision of thinkers like Thomas Jefferson, Americans valorized a nation of small, independent farmers and craftsmen. Wealth was suspect—it generated vice and it corrupted people and nations. Competition was valued as a source of innovation and efficiency. In addition, the hard-working small producers of this economic vision were thought to make ideal citizens. Uncorrupted by wealth, and rendered impervious to political pressure by their economic self-sufficiency, they were able, rationally and virtuously, to recognize and promote the communal interest that should lie at the center of public policy. Citizenship and patriotism were equated with self-sacrifice, the subordination of self-interest to the greater good of the nation.
But during the Gilded Age, this vision was challenged. The huge changes in the American economy forced a reconsideration of these long-held, but perhaps obsolete values. The emergence of much larger business enterprises, the generation of much greater individual fortunes, and the surfacing of a new type of politician forced Americans to reconsider the values defining American society and politics.
Addressing the New Dimensions of the American Economy
- Huge industrial monopolies did not fit into old American ideology of small producers, forcing Americans to develop new economic philosophies
- Social Darwinists like Herbert Spencer argued that cutthroat competition was natural and that embodied "survival of the fittest"
- John D. Rockefeller argued that the age of the individual was over and that only large monopolies could provide order
- Socialist Daniel De Leon argued that government coordination of the economy was necessary to provide stability
The challenge to traditional American ideals began with the sheer size of America's new industries. In 1900, Andrew Carnegie operated eight steel mills and produced more than 4 million tons of steel annually.39 John D. Rockefeller's Standard Oil operated dozens of refineries, controlled roughly 90% of the nation's oil, and generated $57 million in profits in 1904.40 How did an industrial empire like Carnegie's fit into the old republican vision? How could Rockefeller's monopoly on oil refining, built by driving his competitors out of business, be squared with the old republican vision of a nation of small producers?
One answer was provided by Social Darwinism. Social theorists like William Sumner and Herbert Spencer applied Charles Darwin's theories of natural selection to the economy and argued that the ascendance of these industrial giants was "natural." Competition was nature's way of achieving progress. At times the process could be harsh; there were inevitable casualties. But competition ensured that the human race marched individually and collectively toward a better future.
Another, and in many ways quite different, answer was provided by John D. Rockefeller himself. Rather than celebrate the competition in which he had prevailed, he lamented the waste that had accompanied the contest. He looked forward not to further competition, but to the end of competition and the archaic vision of economic individualism of which it was a part. He argued that the age of the individual and the era of competition were dead. This was an age of consolidation and cooperation. The capital demands of the new industrial order were too great for the individual, and competition between businesses produced wasteful chaos. And indeed, Rockefeller's own experience in the oil fields seemed to bear this out. America's oil industry passed through periods of boom and bust in its infancy. Every new oil strike inspired waves of new fortune seekers and consequently rapid over-expansion. Invariably, oil markets were soon saturated, leading to collapsing prices and business failures.
Just as Rockefeller had brought order to the oil industry by swallowing up his competitors, he argued that all of America's new industries would benefit from the responsible management provided by a handful of industry leaders. By carefully managing production and distribution, these industrial leaders would provide American consumers with a steady supply of needed goods.
It might be easy to dismiss Rockefeller's argument as a self-serving rationale for his own monopoly and the cutthroat methods he utilized in eliminating his competitors. But what is striking is that even those on the other side of the political spectrum shared a good deal of his vision. Daniel De Leon, editor of The People and a leader in the Socialist Labor Party, agreed with Rockefeller that the age of the individual was dead. The economy was too complex; the industrial order was too large. He further agreed that cutthroat competition was wasteful, and that the new economy required central management. But he believed that the government, not private industrialists like Rockefeller, should provide this direction.
De Leon, echoing the communist theorist Karl Marx, suggested that the economy was like an orchestra which had been performing without a conductor for too long. Those who believed that the various instruments of the orchestra could be harmoniously tied together by some invisible hand were deluding themselves. Without a "central directing authority," he argued, economies collapsed into chaos.41 Or even worse, they were dominated by the self-serving ambitions of people De Leon described as industrial tyrants—men like John D. Rockefeller. What was needed, concluded De Leon, was a central directing authority committed to the welfare of the greater community—by overseeing production, by managing the allocation and distribution of resources, the government would ensure more beautiful and more equitable economic music.
Reconciling Wealth and Republicanism
- In old republican ideology, great wealth was morally suspect
- Great wealth of Gilded Age required new thinking about the morality of money
- Populist leader James Weaver demanded leveling of income inequality
- Industrialist Andrew Carnegie argued that the wealthy must live modestly and use their fortunes to elevate all civilization
While Rockefeller and De Leon debated the best way to manage the size of America's economic realties, others debated the meaning and the legitimacy of the new wealth that this economy generated. In Jefferson's vision, wealth was suspect—it bred luxury and vice, and it raised frightening visions of a European aristocracy. It softened people's moral fiber and undermined the virtue that was essential to good citizenship. But during the Gilded Age, Americans witnessed the growth of personal fortunes of unprecedented dimension. Homes of unprecedented size lined posh urban streets, and newspapers provided elaborate accounts of gaudy social events that violated traditional understandings of material moderation. Could America—a nation built on republican values of material restraint—absorb this sort of wealth and still retain its traditional virtue?
James Baird Weaver, a leader in the farmer's reform movement known as Populism, said no. He noted that Dives and Lazarus—Biblical characters representing wealth and poverty—"always make their appearance side by side in disturbing contrast just before the tragic stage of revolution is reached."42 He denounced the ostentatious displays of wealth alongside desperate urban poverty, and he summoned farmers and laborers to transform the political structures that supported this inequity.
That Weaver, a spokesman for common farmers, would find revolutionary meaning in these gaudy displays of wealth is not surprising. But Andrew Carnegie, one of the richest men in the world, was almost as severe in his criticism of contemporary uses of wealth. In his 1889 essay, "The Gospel of Wealth," Carnegie offered an interesting take—part critique, part apologetic—for America's new affluence.
Carnegie suggested, for starters, that wealth could play a useful role in America. Certain institutions like museums, colleges, and libraries required a level of capital investment that only wealthy industrialists could provide. History's great civilizations had always depended on the resources of the wealthy to promote the cultural achievements that future generations celebrated. But in order to fill this philanthropic role, America's industrial aristocracy needed to live frugal, modest lives. They must shun the ostentatious displays—the palatial houses, the indulgent amusements—and instead model moderation for all those beneath them on the social ladder. Most fundamentally, the wealthy should not view their wealth as their private possession, or even truly "their own." Instead they should view their money as "trust funds" that it was their "duty to administer" on behalf of the community.43
There was much that was self-serving in Carnegie's formulation—he had employed cutthroat tactics in building his steel empire; his workers worked twelve-hour days and their attempts at union organizing had been brutally crushed in the Homestead Strike of 1892. For many workers, there seemed to be something condescending in a philosophy that preferred libraries over a living wage—a philosophy that suggested people were better served by a museum or a park than a higher standard of living. But there may have also been a great deal of truth in Carnegie's observation that republics, like the United States, depended on wealthy industrialists to build cultural monuments. With neither a traditional aristocracy nor an established church, America lacked the institutions that had sponsored Europe's great cultural achievements.
Moreover, there was an arrow in Carnegie's gospel directed toward self-indulgent industrialists as well. He condemned those who died wealthy, and who failed to properly steward the wealth with which they had been entrusted. And he was equally critical of inherited wealth. Leaving a fortune to one's heirs was "most injudicious," he wrote. Quite often, the beneficiaries of this misguided generosity "become impoverished through their follies." To encourage the rich to dispose of their wealth judiciously during their lifetimes, he supported a much higher estate tax—that is, a higher tax on a person's wealth at the time of their death. "Of all the forms of taxation, this seems the wisest," he observed. It would ensure that the community received the share to which it was entitled. And it would enable the community to make a statement as to its values— to implicitly express what Carnegie called its "condemnation of the selfish millionaire's unworthy life."44
- Republican ideology required that politicians act as virtuous servants of the public interest
- Gilded Age politicians like Tammany Hall's George Washington Plunkitt argued for new system of "honest graft"; others called it simply corruption
Carnegie, Rockefeller, Weaver, and De Leon all challenged Americans to think about the character of their emerging economy. America's political ideology faced an equally dramatic and direct challenge during these years. No person more fully or more bluntly summed up this ideological challenge than George Washington Plunkitt.
Plunkitt was a member of Tammany Hall, the Democratic political machine that dominated New York politics through the second half of the nineteenth century. He held a few offices, but for the most part his political influence was wielded on the edges of the political system—as a party boss responsible for mobilizing the working-class voters, many of them immigrants, upon which the party relied to maintain its power.
In explaining his work to a reporter at the turn of the century, Plunkitt advanced an entirely new understanding of citizenship and political service. In his mind, self-interest and self-enrichment were legitimate parts of both roles. For example, as a member of the Tammany machine, he used insider information to grow rich. His political connections would feed him tips, such as where the new city park was to be built, and he would swoop in and buy up all the land before the city's news went public, driving up the land's value. He framed his behavior within the language of the American dream—"I seen my opportunities and I took 'em."45 But earlier generations would have summarily rejected his jaded take on this old adage as nothing more than corrupt selfishness.
Plunkitt similarly reconceived the political role of the common citizen. Just as he was unapologetic in defending his use of political power to pursue his own financial gain, he argued that the electorate had an equal right to expect government to deliver the goods—a government job, a city contract, help with a ticket or a license. In fact, he described a citizen's vote as a "marketable commodity"—something a voter sold to the highest bidder, that is, the candidate who promised him the most for his vote.46 This was a far cry from Thomas Jefferson's call to disinterested public service, the surrender of self-interest to the welfare of the community. But in Plunkitt's view, citizenship, and even patriotism, were more about personal rewards than personal sacrifice. His musings were filled with stories of "patriotic" young men whose national spirit had been crushed when they were denied a city job. In one of these tragic tales, the jilted patriot eventually died in Cuba, fighting for America's Spanish enemy.
The key to Plunkitt's power was the favor-seeking voters who did his bidding on Election Day. Plunkitt built a following from the ground up—and he offered their votes to politicians who promised him information from which he could profit and city jobs that he could distribute back to his followers. Consequently, Plunkitt's great nemesis was civil service reform. A batch of reform measures dating to the 1870s, civil service sought to remove public jobs from the control of politicians like Plunkitt. In cities where these reforms were implemented, job seekers had to take a test, and positions were awarded on the basis of performance. In effect, civil service reform was an attempt to restore the meritocratic ideal that Jefferson had introduced in somewhat different form under the guise of a "natural aristocracy." Jefferson had argued that good government found ways to elevate the most "talented and virtuous" among the public; civil service reform sought to identify those most fit for public bureaucracies through examinations. But for a politician like Plunkitt, these reforms were a curse—they threatened to undermine the entire system of entrepreneurial government that served him, and many of his followers, so well.
Plunkitt's ideas clashed sharply with traditional notion of political behavior; fortunately most Americans still find his views unsettlingly corrupt. But what is most striking, and most important, about Plunkitt's ideas is that he presented them to the public willingly. He made no attempts to hide his philosophy. He was not offering a soul-bearing confession. He was introducing a new political ideology—a new definition of citizenship and even patriotism. And his ability to succeed with this philosophy, and then lay it before the public, speaks to the dramatic transformation of America's social and political environment during the last decades of the nineteenth century.
Like Rockefeller, Carnegie, De Leon, and Weaver, Plunkitt was addressing the realities of the new order. And while Plunkitt's ideas may seem the most jarring to contemporary ears, Rockefeller's and De Leon's proclamation that the age of the individual was over was just as disturbing in their own time. And before we judge Plunkitt too harshly, we should remember that he succeeded as long as he did because a large number of New York's voters supported and benefitted from his methods. Plunkitt's pragmatic, service-exchanging approach to government, while deeply contrary to traditional notions of public service, offered something to New York's working-class immigrant population that no other public agency was willing to provide.
Eventually city, state, and federal government officials would embrace the idea that government should play a part in solving the public's small problems—that is, they would adopt that part of Plunkitt's philosophy that suggested that improving the daily lives of common people was one of government's responsibilities. Americans would similarly draw upon the ideas of Carnegie in reconciling traditional republican values with the new levels of personal wealth, just as they would borrow from the ideas of Rockefeller and De Leon in resolving the tension between the values of competition and benefits of consolidation and central management.
In other words, the Gilded Age changed both America and the ways we think about America. By the turn of the century, America looked much different than it did fifty years earlier, and Americans had begun to find new answers to old questions.