Named after an 1873 novel by Mark Twain and Charles Dudley Warner, this era of growth and excess following the American Civil War would more than live up to the authors’ sarcasm. As American industry and agriculture began to outpace European competition, some entrepreneurs and corporate leaders became very wealthy, while the gap between rich and poor widened dramatically. Lavish public displays of self-indulgence by a small but growing number of newly rich Americans provided the “gilding” for this time of great social and political conflict.
The “Gilded” Economy
Although the late 19th century was a time of simmering worldwide economic distress that regularly erupted into panics and recessions, the United States, having overcome the single greatest challenge to its potential power, grew enormously during the years after the Civil War.
The seeds were planted during the war when Union president Abraham Lincoln and Congress encouraged western agriculture, set in motion the long-anticipated transcontinental railroad project, and awarded lucrative contracts to suppliers of war materials.
Historians call the post–Civil War era an age of “incorporation.” Previously, the industrial economy had been localized, mostly hiring nearby workers and serving local or regional customers. Now, new kinds of businesses and businessmen were creating national combinations of financial and industrial power.
The corporation was a business model designed to be a faceless entity within which individual capitalists could make products and accrue wealth without fear of personal liability. The corporate structure was the engine that propelled the enormous growth of railroads, steel, meat-packing, and petroleum.
Few of these new industrialists were “faceless” for very long. Economic uncertainty made it possible for the bravest (or most ruthless) entrepreneurs to impose order on important industries by squeezing out smaller players and creating huge new combines, or trusts.
Especially in California, railroad barons, including Leland Stanford and Collis P. Huntington, used cutthroat tactics to dominate the most favorable routes, raising shipping rates once they had achieved control.
In the 1870s midwesterner John D. Rockefeller created Standard Oil, gaining 90 percent control of the oil business and making a fortune even before the rise of the automobile. Scots-born Andrew Carnegie had successful careers in telegraphy and railroads before turning Pittsburgh into the world’s steel capital and becoming one of the world’s richest men.
Carnegie gave away all his millions before he died in 1919, and Rockefeller was also an important benefactor. But many of the new capitalist class were less modest. As the railroad Vanderbilts and others built luxurious summer homes in Newport, Rhode Island, and Carnegie’s chief lieutenant, Henry Frick, built virtual palaces in Pittsburgh and (later) on New York’s Fifth Avenue, the gilded gap between rich and poor became more obvious. The new industrialists’ gaudy parties and spending sprees were covered in breathless detail by American newspapers.
Meanwhile, the urban middle class was growing. Industrialists created large organizations staffed by middle managers and served by engineers, lawyers, accountants, and other rising professionals. But for industrial laborers, whether skilled or unskilled, prospects were bleaker.
Gilded Age Politics
Historians still disagree whether the business leaders of the Gilded Age were rapacious robber barons or admirable captains of industry. In either case, those building mighty industries took full advantage of the political and social attitudes of their era to amass enormous fortunes and wield great power.
In a time of weak federal power, with Congress closely divided between Republicans and Democrats (although Republicans dominated the presidency), there were few legal barriers to the creation of great wealth by any means necessary.
Railroad interests (already owing much of their success to huge federal land grants and other valuable concessions) were particularly known for making deals, legal and illegal, with federal, state, and local officials. There was no corporate income tax, no meaningful regulation of stock transactions, and no barriers to monopolistic vertical trusts.
Someone like Rockefeller could control every aspect of his business, from owning oil-rich properties to pumping oil out of the ground to selling Standard Oil’s distinctive red cans to retail customers. Not until 1890 did Congress pass the Sherman Antitrust Act, a weak but groundbreaking attempt to make the most blatantly brazen business practices punishable by fines and prison terms.
The era’s general lack of regulation was part of the larger ideology of laissez-faire, the idea that only an economic system free from governmental interference could build wealth, social order, and national success. Dating back to the 18th-century writings of British economist Adam Smith, laissez-faire in the Gilded Age found a strong philosophical ally in the new creed of Social Darwinism.
Social Darwinism arose in Britain, where writer Herbert Spencer, among others, developed a sociological theory based on Charles Darwin’s pathbreaking 1859 theory of evolution. Darwin’s was a biological study of the origins, development, distribution, and extinction of living organisms over many millions of years. Social Darwinism, led in the United States by William Graham Sumner, a Yale University professor, applied Darwin’s discoveries and theories to the existing social and economic order.
Sumner and others discovered that Darwin’s laws exactly validated what was happening in industrial societies like those of the United States and Britain. Inequality was a law of nature. Those who succeeded were nature’s fittest; those who failed or fell behind proved that only the strongest could or should survive.
Helping the poor was a fool’s game. “While the law may be sometimes hard for the individual, it is best for the race,” said Carnegie. “Nature’s cure for most social and political diseases is better than man’s,” declared the president of Columbia University. Survival of the fittest, wrote Rockefeller, is “a law of nature and a law of God.”
Social Darwinism and laissez faire worked in tandem to diminish worker power and autonomy. A laborer, the era’s ideology maintained, was free to sell his (or her) services to the highest bidder, but not free to join with other workers to demand from employers or government protection and improvement of their conditions. By the 1880s the U.S. Supreme Court, in the name of economic liberty of contract, was regularly striking down efforts to raise wages, limit work hours, abolish sweatshops, and form unions.
Gilded Age Opponents
People who worked for or depended on the new industrial system did not meekly resign themselves to the insecurity and cruelty of industrial labor. The era was beset by strikes, riots, and political radicalization among workers even before unprecedented tides of new immigrants began arriving in the 1880s. Farmers and laborers in the predominantly agricultural West and South agitated against exploitative railroads and condemned currency and trade policies that kept them in debt.
The Gilded Age’s first major upheaval was the Great Railroad Strike that erupted in 1877, the fourth year of a major recession. Starting that July in Baltimore, where the Baltimore and Ohio Rail Company had imposed a 10 percent pay cut on workers, the strike spread to rail yards across the nation. It was the first coast-to-coast strike in U.S. history. At first, the strikers were hailed by other workers and local people also fed up with railroad practices.
But President Rutherford B. Hayes, provoked by some acts of worker violence, soon called out federal troops to protect railroad property. A hundred people, mostly strikers, died. Government intervention against workers on behalf of corporations became a hallmark of Gilded Age labor relations.
An 1886 strike against Chicago’s McCormick Reaper Company also resulted in bloodshed and fears of mounting social disorder blamed on anarchist ideas percolating out of Europe. At Haymarket Square, where workers were protesting police violence that had killed four McCormick strikers, a bomb exploded, killing a policeman. Police raided radical and labor organizations and arrested eight anarchists.
On little evidence, all eight, including six German and one English immigrant, were convicted of the bombing, and four were hanged. Five months later in New York, the Statue of Liberty, France’s salute to the promise of American freedom, was ceremoniously unveiled.
The upsurge in union militancy was accompanied by a rising tide of local and national political organizing. The relatively egalitarian Knights of Labor played major roles in the railroad and McCormick strikes, but lost ground to the better organized American Federation of Labor (AFL), founded in 1886 and focused on achieving the eight-hour day.
Traditional farmer organizations, like the Grange, became more outspoken. In the 1880s the Greenback-Labor Party twice fielded presidential candidates in an effort to change monetary policies unfavorable to farmers. It was a precursor to populism’s Peoples Party a few years later.
Gilded Age Critics
Even people like William Graham Sumner, America’s apostle of Social Darwinism, knew that much was amiss in his society. Although opposed to government meddling, Sumner was a moralist who distinguished between honest and productive capitalists, who used their power for greater good, and plutocrats who corruptly worked the political system to steal special privileges for themselves.
Other critics of his era were ready to go much farther. These included social observers with alternate political agendas, critics who zeroed in on specific examples of corruption and injustice, and a host of utopian writers, many of whom imagined perfected societies in which people and their marvelous machines always behaved properly.
Henry George was a California newspaper editor who lost his labor-union-backed bid to become New York City’s mayor in 1886. In a best-selling book, Progress and Poverty, first published in 1879, George laid out a plan he called the “single tax.”
This tax on land, George believed, would assure that all Americans could own some land by preventing the wealthy and powerful from buying up too much property. It was a sort of freesoil promise for urban dwellers that avoided socialistic solutions to the nation’s inequities. Single-tax societies sprang up across the nation.
In some big city churches, ministers like Baptist Walter Rauschenbusch worked with labor unions to develop programs to aid the poor and immigrants with better health care, housing, and help for the unemployed. A counterattack on the tenets of Social Darwinism, this Social Gospel movement was a predecessor of Progressivism.
Jacob Riis, a Danish immigrant newspaperman, used photography to reveal problems in Gilded Age society. His New York City photos and commentary collected in the 1890 book How the Other Half Lives showed successful middle-class urbanites what was happening to the ignored or abused “other half”—unwashed, untutored, miserable, and much to the consternation of the comfortable middle class, possibly ready to rise up in anger.
The Gilded Age brought forth a torrent of utopian fiction, foreseeing battles between rich and poor ending in social cataclysm or even America’s total destruction. The most influential and positive of the utopians was Edward Bellamy, a Massachusetts writer, whose bestselling Looking Backward: 2000–1887 came out in 1888.
Awaking in a perfectly clean, calm, and prosperous Boston, Bellamy’s hero learns how America overcame the evils it was experiencing in the 19th century by introducing marvelous new machines and assuring all citizens enough of what they need and work tailored to their abilities. Bellamy Societies sprang up across the country as people argued the merits of his vision.
Although there is some dispute about when the Gilded Age ended, the depression of 1893–97, the emergence of Progressivism, and the onset of World War I all worked to bring this historic era to an end. Some believe that the United States has experienced repetitions of the Gilded Age in the 20th century and will continue to do so in the 21st.
But these new gilded ages are unlikely to reveal the same combination of upperclass excess, ferocious industrial growth, government inertia, and worker/farmer anger that produced the era satirized by Mark Twain.