In Module 3, we examined the role of labor and economic expansion on immigration, politics, and social tensions. In this module, we'll delve into more detail about the economic history of the United States between the end of the Civil War and the early twentieth century. Module 5 will be a companion to this module. (In this module we'll look at the broad economic changes and the lives of some of the richest Americans--the richest Americans ever. In Module 5, we'll look more into labor and the work that was necessary to create this kind of economic change.)
Three questions will guide this module blog post:
How and why did the United States undergo a rapid and profound economic revolution between the end of the Civil War and the early twentieth century?
How did elite Americans’ accumulation of wealth and power contribute to changing cultural practices?
Should we refer to the period between the end of the Civil War and the early twentieth century as the “Gilded Age”?
Let's get started!
Part I: Economic Changes in the Late Nineteenth Century
In Part I, we’ll examine the profound economic changes the United States experienced after the Civil War. There were several reasons for this increased economic growth, and we’ll examine them in detail in both of the modules for Week 3.
Some of the reasons for the increased economic growth after this period include: Americans capitalizing on natural resources; a growing supply of labor; an expanding market for manufactured goods, the availability of capital for investment, and the federal government's promotion of industrial and agricultural development.
Remember in Module 3, we covered how the federal government provided land grants to railroad companies and dispatched the army to remove Native people from valuable land in the west. (We’ll discuss that in more detail in Module 6.) In addition, high tariffs protected American industry from foreign competition.
In this era, the US transformed from a country of primarily small farms and artisan workshops into an industrial society. By 1913, the US produced one-third of the world’s industrial output—more than Great Britain, France, and Germany combined. By 1880, the Census Bureau found that the majority of the American workforce was engaged in non-farming jobs. By 1890, 2/3rds of Americans worked for wages rather than owning their own farms, businesses, or craft shops.
Because more and more Americans worked in wage labor, the location of where people lived transformed as well. Between 1870 and 1920, almost 11 million Americans moved from farms to cities. Another 25 million immigrants arrived from overseas. The region around the Great Lakes witnessed particular growth as factories there produced iron, steel, machinery, chemicals, and packaged foods. Pittsburgh became the center for iron and steel manufacturing.
Chicago, the nation’s second-largest city by 1900, was home to factories producing steel and farm machinery and giant stockyards where cattle were processed into meat products for shipment east in refrigerated rail cars.
The meat-packing industry in Chicago illustrates some of the great changes taking place in this era. As you have more technological innovation in refrigeration and meat processing, it became possible to ship packaged meat greater distances. As historian William Cronon writes, meat-packers’ innovation had been devising “new methods for protecting meat, especially beef, from its own perishability.” [1]
More and more, companies were able to turn natural materials—such as a cow or a hog—into standardized commodities which could be reached by an increasing range of people. Refrigeration changed how meat could be shipped and sold.
This resulted in a fundamental change to American diets as well as Americans’ relationships with the animals that became their food. There became more steps between live animal to packaged meat for consumption. For example, previously, Americans had purchased meat from thousands of local butcher shops throughout the country. There was a more direct, visible relationship between the field and pasture where animals were raised, the butcher shop where they were butchered, and the dinner table where they were consumed. With the rise of the meat-packing industry, those connections changed—refrigerator cars, packing plants, and large ranches were hidden from consumer view. [2]
Thus, these technological innovations made production more efficient, but also fundamentally changed Americans’ relationships with the natural environment.
(Don't worry, we'll discuss the working conditions inside these meatpacking plants and other industries in Module 5!)
Railroads and the National Market
As was discussed in Module 3, the railroad also played a large role in connecting people across greater distances and spurring economic growth. This was made possible by both private investments and massive grants of land and money from federal and state governments.
Between 1860 and 1880, the number of miles of railroad track tripled. By 1920, the number had tripled again. The railroad connected new areas for commercial farming and created a new national market for manufactured goods.
The railroad even transformed how Americans told time. Until the 1880s, the country had a larger number of time zones. But with the rise of cross-country travel, it became imperative to have a better system. In 1883, the railroads imposed four time zones—Eastern, Central, Mountain, and Pacific, which was made law in 1918.
More national brands, like Ivory Soap and Quaker Oats, entered into a growing market based on mass production, distribution, and marketing. In addition, the country saw a growth of national chains, such as the Atlantic and Pacific Tea Company (better known as A & P grocery stores). Additionally, national mail-order firms like Montgomery Ward and Sears, Roebuck & Co., sold jewelry, farm equipment, and other goods to families throughout the country.
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The West was incorporated into the political and economic landscape of the US through the active intervention of federal government. The government acquired land from Native nations by both war and treaties; administered land sales; regulated territorial policies; and distributed land and money to farmers, railroads, mining companies.
In the early twentieth century, the government financed irrigation systems and dams, which opened up the region to commercial farming.
As a result of the Homestead Act, thousands of families acquired farms, and even more purchased land from speculators and railroad companies. Small family farms became increasingly oriented to national and international markets and specialized in the production of single crops to consumers far away. Farm families also purchased factory-made goods, transported to them on the railroads.
The future of farming—large agricultural enterprises—were most apparent in nineteenth-century California. There, giant fruit and vegetable farms, owned by corporations like the Southern Pacific Railroad, were worked by migrant laborers from China, the Philippines, Japan, and Mexico, who migrated from farm to farm following the crops.
This period of time also saw immense growth in technological innovations which changed the way Americans lived. For example, in 1866, the Atlantic cable made it possible to send telegraph messages between the US and Europe.
In the forty years after the Civil War, Americans developed the electric light, typewriter, telephone, thermionic valve (which made radios possible), automobile, and airplane.
Due to the 1862 Land Grant College Act, new universities were established and existing schools received resources to teach agriculture and mechanic arts. These schools produced professional engineers, driving the US to the forefront of world technology.
These innovations changed the way people conducted business itself. Before 1860, offices were typically staffed by a few male employees who handled a wide range of tasks—with only pens. They acted as both managers and secretaries who worked their way up. By 1900, more women had entered the workforce. They performed specific tasks, like typing or filing, with the help of new tools. They didn’t have the same opportunities for moving up the corporate ladder. The new corporate structure adopted by many industries was routinized, mechanized labor. (We'll talk in much more detail about routines and increased bureaucracy in Week 7.)
Poll #1:
Thinking about what has been covered in Part I so far, consider this question: In your opinion, which of the following brought more significant change to the lives of ordinary Americans? Technological innovations (refrigeration, typewriters, electrical lights, etc.)? Railroads? or Mass marketing and production of products under national brands?
If you have trouble viewing the poll below, you can access it here.
Competition and Consolidation
Although this era is marked by significant achievements in economic growth and technological advancement, all was not perfect. The American economy suffered as a result of overproduction—industries and farms produced so much that markets were glutted and prices fell. Both farmers and laborers suffered.
As corporations adopted methods for increasing efficiency and cutting costs, competition became so fierce that many corporations were driven out of business. The result was that industries like sugar, oil, steel, and tobacco came to be dominated by one or two companies, who then banded together to fix prices. These combinations of companies were called “trusts.” To form a trust, a number of corporations would join together, giving a group of trustees the power to set prices for all of them.
This resulted in cutting out all competition and raising profits for those companies. Between 1897 and 1904, some 4,000 firms either went out of business or were consolidated into other companies. Giant corporations included US Steel (created by J.P. Morgan in 1901 by combining eight large steel companies), Standard Oil, and International Harvester (a manufacturer of agricultural machinery). These corporations dominated major parts of the economy.
At the same time as competition was vanishing, the belief in the“self-made man” flourished. Successful business tycoons like John D. Rockefeller and Andrew Carnegie popularized the idea that success came to those who "worked hard and saved their money." Popular novels also highlighted the idea that there was room at the top for those who were virtuous, self-reliant, honest, and hard-working.
This connection between success and virtue sanctified corporate practices. It led Americans to praise entrepreneurial liberty or “free enterprise,” where private businesses could operate in competition, free of state control, as one of the highest social values.
Some of these business tycoons became incredibly wealthy. Andrew Carnegie, who set out to establish a “vertically integrated” steel company—one that controlled every phase of the business from raw materials, to transportation, manufacturing, and distribution—dominated the steel industry by the 1890s and had accumulated hundreds of millions of dollars.
John D. Rockefeller began his career as a clerk and rose to dominate the oil industry. He also established a vertically integrated monopoly which controlled the drilling, refining, storage, and distribution of oil. By the 1880s, his Standard Oil Company controlled 90% of the nation’s oil industry. He is considered to be one of the wealthiest Americans of all time.
On one hand, these men are touted as “captains of industry,” whose economic contributions pushed the American economy forward. On the other hand, they are represented as “robber barons,” who wielded power without any accountability, and who were able to accumulate vast amounts of power in an unregulated marketplace.
Both were willing to be ruthless. Both were known for their dictatorial attitudes. They opposed labor unions, fixed prices, and entered into secret deals.
Some argued that their methods and power undermined American ideals of economic and political freedom. Others were willing to overlook brutal labor practices and/or illegal methods because they could receive cheap, dependable oil to light home lamps, and the cost of bread was cut due to lower transportation costs.
Andrew Carnegie said, “It will be a great mistake for the community to shoot the millionaires, for they are the bees that make the most honey, and contribute most to the hive even after they have gorged themselves full.” [3]
Word Cloud #1:
Who is a celebrity, businessperson, politician, etc. who you think might have similar wealth, power, and influence in today's society as Carnegie and Rockefeller had in the late nineteenth century? Enter in the name of the person/people you thought of in the word cloud below:
If you can't see the embedded word cloud, you can access it here.
Once you've entered in a name, do a quick Google search for the net worth of the person you thought of. Compare those results to the figures below and elaborate on what you think in the comments or annotations!
Below are just a few very wealthy and powerful individuals and their net worths (as of August 24, 2020):
Jeff Bezos: $199.3 billion
Bill Gates: $115.4 billion
Bernard Arnault (Chairman and Chief Executive of world’s largest luxury goods company, oversees brands such as Louis Vuitton and Sephora): $112.2 billion
Mark Zuckerberg: $103.1 billion
Elon Musk: $89.8 billion
Warren Buffet: $80.7 billion
(You'll note that the richest people in the world are all (white) men. At the time of my search, the wealthiest woman was Francoise Bettencourt-Meyers (granddaughter of the founder of L'Oreal) with $65.2 billion.)
In today’s money, John D. Rockefeller’s net worth was $340 billion. At its peak, Andrew Carnegie’s net worth was $310 billion. Jeff Bezos, the richest man in the world today, has just under 60% of the net worth of Rockefeller. (Although every time I do this exercise, Bezos' net worth gets closer to Rockefeller and Carnegie!)
Poll #2:
In your opinion, did the power and wealth of industrial capitalists like Carnegie and Rockefeller ultimately have a negative or positive effect on the American nation as a whole? Let me know what you think in the poll below. Or access the poll here. (I'm really interested to hear more about why you chose your answer in the comments or annotations!)
Political Corruption and Reform Efforts
New corporations seemingly had so much power that they were immune to democratic control. Political corruption was common. Lawmakers held stock in corporations and lobbyists exerted a lot of influence over politics. Both parties, Democrats and Republicans, came under control of powerful political managers with close ties to business interests.
The federal government did create agencies and passed laws to regulate the economy to promote economic and political freedom. In 1887, Congress established the Interstate Commerce Commission, which was designed to ensure that railroads charged farmers and merchants “reasonable” rates to transport their goods. However, the commission could not establish what a “reasonable” rate was on its own—it could only sue railroad companies in court.
In 1890, Congress passed the Sherman Antitrust Act, which outlawed business combinations that monopolized markets or restrained free trade. However, the language in the law was extremely vague, making it hard to enforce.
Part II: Culture and Consumption
In Part II, we’ll discuss the formation of an “upper-class identity” among those who accumulated vast amounts of power and wealth. The cultural practices and consumption habits of very wealthy Americans also impacted how ordinary Americans understood “high culture.”
The Theory of the Leisure Class
With so much power and wealth concentrated among a few people, many more faced great economic insecurity, which we’ll discuss in more detail in Module 5. Much of the working class remained desperately poor and needed all family members to contribute income to survive.
By 1890, the richest 1% of Americans received the same total income as the bottom half of the population, and owned more property than the remaining 99%. Many of the wealthiest Americans consciously pursued an aristocratic lifestyle. They built palatial homes, attended exclusive social clubs, schools, and colleges, and held fancy parties.
In 1899, historian and economist Thorstein Veblen published The Theory of the Leisure Class, critiquing this upper-class culture focused on “conspicuous consumption”—spending money not on needed or desired goods, but simply to demonstrate the possession of wealth itself.
He wrote, “Since the consumption of these more excellent goods is an evidence of wealth, it becomes honorific; and conversely, the failure to consume in due quantity and quality becomes a mark of inferiority and demerit.”
Poll #3
What do you think? Is "conspicuous consumption" a 21st century social/cultural issue too?
Let me know in the poll below (or access it here.)
Here is a telling example of this conspicuous consumption in the 19th century: In February 1897, at the tail end of a severe economic depression, 700 merchants, industrialists, bankers, and professionals, assembled together at the Waldorf Astoria Hotel in New York for a costume ball hosted by lawyer Bradley Martin and his wife Cornelia.
The guests were dressed as historical kings, queens, nobles, and knights. Fifty guests arrived dressed as Marie Antoinette. Cornelia Martin, the hostess, wore a necklace once owned by Marie Antoinette herself. Caroline Astor had $250,000 worth of gems sewn into her dress. The hall was decorated to look like Versailles. The ball was covered in all the papers and became the subject of much debate. Cornelia Martin was quoted as justifying the extravagance by saying it would help the country overcome the depression because it would “give an impetus to trade.”
As historian Sven Beckert writes in The Monied Metropolis, most other New Yorkers disagreed with Martin. The New York police guarded the party along with private hired detectives after bomb threats were received. Additionally, the first floor windows of the hotel were nailed shut. [4]
Formation of an Identity
Upper-class “culture” was predicated on access to resources that only the ownership of substantial amounts of capital made possible. In order to be part of the culture—to decorate your home the right way, go to the right social clubs, eat the right food, etc. In short, you had to have a lot of resources.
Andrew Carnegie expressed how this class culture regulated his behavior: “I began to pay strict attention to my language, and to the English classics, which I know read with great avidity. I began to notice how much better it was to be gentle in tone and manner, polite and courteous to all—in short, better behaved.” [5]
This represents Carnegie’s need to conform to the rules and regulations of upper-class culture, but also represents the differentiation between that culture and the working-class. You can interpret his characterization of being “better behaved” as a critique of those outside his class identity.
The creation of opulent houses set people apart from less fortunate Americans, but also from rich people of the past. For example, William Vanderbilt built a mansion on Fifth avenue in New York which had a Pompeian vestibule, a Japanese parlor, and a Renaissance dining room. His wife Alva built a castle-like structure on the next block, which supposedly cost $3 million (pictured above).
It was common in this era to have a room in your house devoted to Asian paraphernalia. Some historians have argued that consumers who utilized these decorative aspects within their homes were asserting their “cosmopolitanism.” Displaying objects in your parlor, almost as if in a museum, could signal your wealth and power—even over other cultures, whose art and objects were appropriated for display in white, upper- and middle-class homes. [6]
As the costumes at the Bradley Martin ball illustrate, elite members of American society also increasingly turned towards European aristocratic culture.
In the 1870s, Tiffany & Co. opened a department specifically to design coats of arms for wealthy patrons. Upper-class New Yorkers participated in recreational hunting, a pastime of the European aristocracy, particularly hunting buffalo in the West.
By the 1880s, elites in New York and created a set of institutions which set aesthetic standards. Institutions like the Metropolitan Museum of Art, Metropolitan Opera, and New York Philharmonic were financially dependent on the upper-class and were the focus of much philanthropy.
All these institutions defined certain sets of works as “high culture.” Their doors weren’t open to working-class people. Until 1891, the Metropolitan Museum of Art was closed on Sunday, the one day workers had off to actually visit the collections.
This was a great departure from other museums of the mid-19th century, most notably, P.T. Barnum’s showrooms, which displayed eclectic collections to a diverse audience. In 1892, the Philharmonic Society actively differentiated itself from the kinds of crowds who would attend Barnum’s exhibits, expressing its “resolute refusal to yield to the demands of an uninformed taste,” set apart from the “advertising-managers of the Barnum stamp.” [7]
Word Cloud #2:
Do you think the cultural preferences of elite members of society affected how working-class and middle-class Americans understood "culture"? Can you think of any of these cultural standards that have persisted to this day? Jot down your ideas in the word cloud below, or access it here.
Part III: Debating the "Gilded Age"
In Part III, we’ll consider how we should view this period in American history by thinking broadly about the positive and negative effects of the changes brought by economic growth and technological advancement.
The "Gilded Age"
The late nineteenth century is often referred to as the “Gilded Age,” after the title of an 1873 novel by Mark Twain and Charles Dudley Warner. This is a derogatory name, because “gilded” means covered with a layer of gold but containing a core of little real value. Despite the nickname, this period does reflect a time of major industrial growth, agricultural development, and a transition to an industrial society. [8]
Between 1865 and 1899, thirteen million immigrants came to the US. During the first two decades of the twentieth century, another 14.5 million arrived. Part of this massive influx was the demand for labor generated by the expansion of agriculture and industry.
Economic change can be gauged by the increase in millions of acres of farm lands. For example, in 1870, there were 408 million acres. In 1920, there were 956 million.
Additionally, in 1870, 14 million people were employed. In 1920, 44.5 million people were employed.
Lastly, life expectancy rates went up over the course of the Gilded Age. In 1870, life expectancy was 42 years. In 1920, it was 54 years.
Poll #4:
Looking back at this module blog post, answer the following question: In your opinion, were things better for ordinary Americans after the Gilded Age than they were before? Answer the poll below (or access it here.)
Conclusion:
In the late nineteenth century, the United States expanded industries and agriculture, supplied by a large labor force and government promotion of such development. These economic changes had lasting effects on how Americans understood their relationships to the natural environment, to manufactured products, and to geographical distance.
Elite members of American society pursued lifestyles modeled after European aristocracy, forming an “upper-class” identity that was regulated by consumption and behavior.
Despite the vast disparity in wealth between elites like Carnegie and Rockefeller and working-class people, scholars still debate the usefulness of the term “Gilded Age,” because it undermines the massive growth the United States experienced as a whole.
Citations:
[1] William Cronon, Nature’s Metropolis: Chicago and the Great West (New York; London: W.W. Norton & Company, 1991), 248.
[2] Cronon, Nature's Metropolis, 256.
[3] From the 1907 essay "Wealth and Its Uses," quoted in Walter LaFeber, Richard Polenberg, and Nancy Woloch, The American Century: A History of the United States Since the 1890s 7th ed. (Armonk, NY: M.E. Sharpe, 2013), 8.
[4] Sven Beckert, The Monied Metropolis: New York City and the Consolidation of the American Bourgeoisie, 1850-1896 (Cambridge: Cambridge University Press, 2001), 2.
[5] Beckert, Monied Metropolis, 257.
[6] Kristin L. Hoganson, Consumer’s Imperium: The Global Production of American Domesticity, 1865-1920 (Chapel Hill: University of North Carolina Press, 2007), 54.
[7] Beckert, Monied Metropolis, 269.
In your opinion, which of the following brought more significant change to the lives of ordinary Americans? Im my opinion, technological innovations like refrigeration, typewriters, electrical lights, etc., brought more significant change to the lives of ordinary Americans. These new innovations brought new opportunities and developments. Schools and programs of learning began to expand. By this time, women began to join the work force as well, giving them more opportunities to move up.
In your opinion, is “conspicuous consumption” a 21st century social/cultural issue?
Yes I do think that conspicuous consumption is still an issue in modern times. You see many celebrities, rich people, even rich friends which expensive clothing,cars, etc. They may not even look good, but they still get it to look cool. For example, there are many watches that cost thousands of dollars and they don't look that great. You still see some people where them and get the respect they want.
While technology has brought about many improvements to the living conditions and wellbeing of Americans. It also served to empower the interests of the wealthy elites, and corporations that would emerge. As Shipping technology improved we saw how meats and other frozen foods were shipping further out, which increased demand. Much like Bezos Amazon today, back then the need for shipping and accessibility only empowered the companies furth more and pushed their values straight up. There are both positive and negative influences on Americans, so I'm hard press to say that is was only negative.
In your opinion, did the power and wealth of industrial capitalists like Carnegie and Rockefeller ultimately have a negative or positive effect on the American nation as a whole?
I believe the wealth of industrial capitalists had a negative effect over all on the American nation and more specifically on the American political system. Control of the majority of the country's wealth granted these business special access to lawmakers through lobbying and much like today allowed them to shape American policies and laws.
In your opinion, which of the following brought more significant change to the lives of ordinary Americans?
My answer was "Technological innovations". Technology has changed the world in many and for ways for the better. As it was mentioned in the module earlier, electric light, typewriter, telephone, Americans created electric light, typewriter, telephone. These inventions made things easier to use and changed the way business work.