Transcript Emergence as an Economic Power

Emergence as an Economic
Power
Resources, Big Business, exploitation
and New Immigration
Study Guide Identifications
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Gilded Age
Social Darwinism
Gospel of Wealth
Laissez Faire
Edward Bellamy
Nativism
Bog Trotters
Jack Riis
Robber Barons
Study Guide Questions
• What Characterized the Gilded Age?
• How did government intervene in the working
of the economy? Who did it benefit?
• What Ideas or “intellectual” currents justified
Corrupt business and government practices?
• What characterized Immigration legislation
during the late 1800s? How did this benefit or
contribute to the rise of extreme and
concentrated wealth?
“Gilded Age”
• Mark Twain – satirizes
the materialistic
excesses of the day
– Shallow worship of
wealth
– Veneer of respectability
and prosperity covered
deep economic and
social divisions
New Industry
• New Industry
– transformed American
from Agrarian nation to
Industrial power
– Technology
– Steam engines
– Electricity
– Edison’s light bulb
– Modern Corporations
– Industrial labor
– Exploitation
– Unionization
20 Derricks used in the oil field of western Pennsylvania in the 1860s.
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11 The first successful powered flight by the Wright brothers in 1903
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Technology
Advancements in:
– Railroads
– Steel Mills
– Telephone
– Electricity: light & generator
– Typewriter
– Elevators and skyscrapers
– Entertainment: phonographs and
motion picture
– Household items: refrigerators,
washing machines
– Internal Combustion engine leads to
6 automobiles and first flight (Wright
Brothers)
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Thomas Alva Edison in his Menlo Park, New Jersey lab
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New Cities
• Urban Industrial core
extended from New England
to the Great Lakes
• Cities expanded
• Urban dwellers segregated by
class and ethnic group
• Middle class transformed
America into a Consumer
society
– Leisure activities,
– spectator sports,
– amusement parks
Gilded Age Cities
• Urbanization increased
– U.S. 20% urban in 1860, 40% in 1900
• Streetcars allow urban growth beyond
“walking city”
• Great disparities of wealth in cities
• Suburbs for middle class
• Public vs. private utilities and urban services
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Concentration of Economic Power
• While the workforce grew, the number of
firms or corporations shrank
– mergers
– Changes in corporate management
– Organization of the workforce
• Compliant government allowed a few
companies in control of vast segments of the
American economy
Corporate impact
• Concentration of industry in the hands of few
powerful corporations
• Generated jobs & increased Urban
populations
• Controlled working conditions
• Exploited workers
– Low salaries
– Long hours
• Transition from skilled to unskilled labor
Economic Growth
• Corporation and few businessmen grew wealthy
from the exploitation of the working class
• 15 years between 1878 – 1893: U.S. economy grew
at one of the fastest rates in history
• Manufacturing:
– Up 180% increase
• Agriculture:
– Up 26% increase
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Value Added by Economic Sector, 1869-1899 (In 1879 Prices)
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Wealth and Inequality
• Gulf between rich and poor widened
dramatically
• Conspicuous Consumption
• “Robber barons“
– Andrew Carnegie
– J. P. Morgan
– John D. Rockefeller
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Andrew Carnegie
• Founded Standard Oil
Company
– become one of the largest shippers
of oil and kerosene in the country.
– Railroads, in an attempt to create a
cartel to control freight rates,
formed the South Improvement
Company, in collusion with
Standard Oil
– received preferential treatment as a
high-volume shipper,
• steep rebates of up to 50% for
their product
Andrew Carnegie
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John D. Rockefeller
• Founder of Standard Oil,
• drove competitors out of
business with aggressive
practices and collusion with
government officials, making
him the richest man in
America
• Economic Power Broker of the
late 19th and early 20Th
Centuries
• American financier, banker
and art collector who
dominated corporate finance
and industrial consolidation .
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– In 1892 Morgan arranged the
merger of Edison General
Electric and ThomsonHouston Electric Company to
form General Electric.
– After financing the creation
of the Federal Steel Company
he merged the Carnegie Steel
Company and several other
steel and iron businesses to
form the United States Steel
Corporation in 1901.
(c) 2003 Wadsworth Group All rights reserved
J. P. Morgan
Twin Ideologies
• Social Darwinism and Gospel of Wealth
– Justified ruthless and cut throat business ethic
– Promoted concentration of wealth
• Argued that the mal distribution of wealth was
inevitable and desirable
– Broken labor movements
Gospel of Wealth
• Based on protestant work ethic that
denounced idleness and viewed success as
evidence of being among the “elect” – God’s
Chosen people
– Hard work and perseverance lead to wealth
– Implies poverty is a character flaw
– Justifies subordination and exploitation of
laboring class
Social Darwinism
• Application of Charles Darwin’s theory of
biological evolution to society
– Applied to race & class
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A pseudo-science
Argues that the fittest and wealthiest survive
The weak and the poor perish
Government action is unable to alter this
“natural” process
Social Darwinism
• Government and charitable intervention to
improve conditions for the poor interfered with
the functioning of the natural law, prolonged the
life of “defective gene pools” to the detriment of
society as a whole
• John D. Rockefeller
– Baptist Sunday School class
• The growth of large business is merely the survival of the
fittest. This is not an evil tendency in business. It is merely the
working out of a law of nature and law of God
Laissez-Faire Policy
• Prevailing economic theory lent respectability to
greed
– Government should not intervene in the economy
• Everyone acts according to self interest and as a result the
economy develops to best suit society’s need
• Rejects governments regulation
– Accepts government support in terms of aid and
subsidies
• RR 130 million acres of federal land and 51 million acres of
state land to a few families
• A government Intervention often not recognized
Laissez Faire Economy
• Business consolidation wreaked havoc upon the
very competition needed for natural regulation
of the economy
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No regulation of business
No consumer protection laws
Sale of stock to non existence companies
Unsafe and overpriced transportation services
Elimination of competition
Rise of big business and industrial supremacy
• Government intervenes on behalf of big business, not
small business or workers
Response to Disparity of Wealth
• Looking Backward, Edward Bellamy. Esq.
– Described socialism
– Represented the wide spread criticism of the
American system
– Search for alternatives
• Labor Unions
• Rioting
• Anti-immigration Campaigns
October 28, 1886 President Grover Cleveland
watched the unveiling
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New Immigrants
1860 – 1890 10 million
1890 – 1920 15 million
20 -30% migrants
New Immigration
• 1870-1910
– Largest immigration in the History of the United
States
– Peak 1907
– 20 million immigrants
– Southern and Eastern Europe
– Change from northern Europe
Immigrant labor
• Dependent of work available and skills
• Local economy and local discrimination
• Chinese & Mexicans built Rail Roads but were
not allowed to work other jobs
• Chinese confined to laundry and restaurants in
China town
• Japanese – agriculture and fishing
Nativism
• 1830-1860 Irish Catholic immigrants targeted
with discrimination and violence
• New targets were:
– Catholics and Jews of Eastern & Southern Europe
– Japanese
– Chinese
– Mexicans
– Irish
Immigration
• Political turmoil and Famine brought Massive
immigration
– Irish Potato Famine 1845-1846
• 2.5 Million (30% of Ireland’s population)
– German immigration 1840-60
• 4.2 Million
• Provided Cheap/Exploitable Labor
• Used to scapegoat political, economic & social issues
1855
“The Bog Trotters”
The Poor House from Galway
The Chicago Post wrote
“The Irish fill our
prisons, our poor
houses, scratch a
convict or a pauper,
and the chances are
that you tickle the
skin of an Irish
Catholic. Putting
them on a boat and
sending them home
would end crime in
this country”
The Great Fear of the Period
That Uncle Sam is Swallowed by
Foreigners
The Problem Solved
Anti-Catholicism
• challenged Protestant
Orthodoxy
– Many Americans regarded
the Pope as the Antichrist and
Catholics as his evil minions
• It was widely believed that
the authoritarian bent of
the Catholic mind made it
incompatible with
democratic institutions
– Threatened American
freedom
Thomas Nast Cartoon, 1870
Anti-Semitism
• Native-born Americans viewed Jews with
suspicion
– Jacob Riis wrote, “Money is their God”
– Tactless, tasteless, pushy
• Excluded from many
– Social clubs, Country Clubs, Hotels, Universities
Anti-Semitism
• George Watson, Georgia politican
– “From all over the world, the Children of Israel are
flocking to this country, and plans are on foot to
move them from Europe en masse…to empty
upon our shores the very scum and dregs of the
Parasite Race”
– He urged Congress to stop the flow of immigrants
before America was flooded by them
Scientific Racism
• Argument that Anglo-Saxon, Northern
Europeans were superior
– All others inferior
– Nativist Alarm sounded: Unfettered migration
“race suicide”
• Racial Nativism
– Used criteria: complexion, size of Cranium, length
of forehead and slope of shoulders to determine
status
Popular literature & Social Theory
• Jack Riis, a Danish immigrant, became an
urban reformer and wrote How The Other Half
Lives(1890)
– Italians as “Born Gamblers” who lived destitute
and disorderly lives
– Chinese as secretive and addicted to every vice
– Jews as “enslaved” by their pursuit of gold as well
as living amidst filth.
Anti-Political Theory
• Fear that socialists, communists and
Anarchists prepared to foment revolution
– Repression of political alternatives or theories that
challenged the American Model
Economic Fears
• Assumptions about new immigrants
– They depressed wages by their willingness to
“work cheap”
• Failure to recognize powerlessness
• Failure to acknowledge power of business
– Unwilling to support union efforts to improve
working conditions in America
• Exclusivity of early unions based on notions of racism
and classism
Samuel Gompers, American
Federation of Labor leader
• An immigrant himself
• Believed immigrants from Eastern & Southern
Europe and Asia were ignorant, unskilled and
unassimilable
• Called for strong restrictive legislation
• “Some way must be found to safeguard
America”
Scientific American Magazine
• Warning to immigrants:
• Assimilate quickly or share the fate of the
native Indians and face a quiet but sure
extermination
• Generated proposals to restrict immigration
• Violence against immigrants continued to rise
Exclusion of “Undesireables”
• How to exclude immigrants except from
Northern and Western Europe?
• Literacy Testing: 1880s onward legislation
developed that excluded adults unable to read
in his own language
– Measures vetoed by Grover Cleveland, William
Howard Taft and Woodrow Wilson
– 1917 Congress passed measures over Wilson’s
veto
Immigration Legislation
• 1790 Immigration Act – limited naturalization
to white persons
• 1870 Naturalization Act – limited citizenship to
white persons and persons of African descent
• 1875 Revision of legislation that made
“whiteness” a pre-requisite for citizenship
• 1882 Chinese Exclusion Act
– Extended in 1892 and in 1902 extended
indefinitely
The Gilded Age
• Rise of Big Business
• Continued Exploitation of labor, divided by
ethnicity, race, gender, New and Old Immigrant
groups
• Increasing Disparity of wealth
• Scientific Racism and political race theory
• Anti-immigrant Theory
• Increase of Racism, prejudice and discrimination