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Economic Issues under Hayes

Economic Issues under Hayes


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A major depression occurred in the United States following the Panic of 1873. As a means of relieving the misery of many people, proposals were put forth to expand the supply of money in circulation and to generate inflation.Hayes was a social liberal in many respects, who fought to protect the recently won rights of the former slaves and worked to ease the plight of Chinese immigrants. However, on economic matters he was a conservative and offered a sympathetic ear to the nation's financial interests. His two major contributions were:

  • The veto of the Bland-Allison Act (1878), a measure designed to get silver into circulation; Congress re-passed the measure over the president's veto
  • The build-up of federal gold reserves in anticipation of the implementation of the Specie Resumption Act (1875), which was slated to go into effect on January 1, 1879; the government was so successful in preparing for this event that the greenbacks achieved parity with specie-backed notes well in advance of the deadline.

Clintonomics

Clintonomics refers to the economic philosophy and policies promulgated by President Bill Clinton, who was president of the United States from 1993 to 2001.

Clintonomics applies to the fiscal and monetary policies employed during the period, which was marked by shrinking budget deficits, low-interest rates, and globalization. The primary form of globalization was in the form of the passage of the North American Free Trade Agreement (NAFTA), and encouraging China’s accession to the World Trade Organization (WTO).

Key Takeaways

  • Clintonomics refers to the economic and fiscal policies put forth by President Bill Clinton during his two terms in office from 1993-2001.
  • Clinton's economic policy was highlighted by deficit reduction and the creation of NAFTA, a free trade agreement between the U.S., Canada, and Mexico.
  • Some have criticized Clinton's economic policy as being too lenient on deregulation, which may have led to the 2008 financial crisis, as well as free trade agreements that may not have favored American workers.

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Rutherford B. Hayes: Impact and Legacy

After finding “the country divided and distracted and every interest depressed,” Hayes was proud that, upon leaving the White House, he “left it united, harmonious, and prosperous.” He had found the Republican Party “discordant, disheartened, and weak,” and left the organization “strong, confident, and victorious.” Hayes believed he had successfully confronted many issues: "The Southern question the money question the hard times and riots the Indian question the Chinese question the reform of the civil service the partisan bitterness growing out of a disputed election a hostile Congress and a party long in power on the verge of defeat." Apart from Lincoln's administration, Hayes boasted, "it would be difficult to find one which began with so rough a situation, and few which closed with so smooth a sea."

Contemporaries were inclined to agree with Hayes. Henry Adams, a caustic critic of politicians who had dismissed Hayes in 1876 as "a third-rate nonentity" and voted for Tilden, acknowledged by 1880 that Hayes had conducted "a most successful administration." However, Mark Twain's prediction that the Hayes administration "would steadily rise into higher & higher prominence, as time & distance give it a right perspective," has not come to pass. Historians have blamed Hayes for the end of Reconstruction, for breaking the Great Strike of 1877, for championing the gold standard, for a Native American policy that aimed at acculturation, for negotiating a treaty that led to Chinese exclusion, and for being an inconsistent civil service reformer.

Yet, it remains hazardous to dismiss Hayes so summarily. Too often scholars have measured him against the ideals of a later era. Historians have not adequately understood his limited options, nor have they always interpreted his actions fully, or even fairly. He did not break the Great Strike, for example, and only sent troops to stop riots when state and local authorities legally requested.

Additionally, for all practical purposes, Reconstruction was over when Hayes took office. His only real choice was not whether but when troops had to cease protecting Republican governments in South Carolina and Louisiana. His opposition to inflation and support of the gold standard—policies supposedly against the interest of workers and farmers—were accompanied by the return of a general prosperity. His Indian policy was indeed paternalistic and did aim at acculturation, but he stopped the removal of some Native Americans to the Indian Territory. At the same time, he embraced a policy of peace, which had its beginnings under Ulysses S. Grant, and not one of annihilation.

The treaty with China accommodated the racist temper of Californians and of Congress, but its aim was restriction, not exclusion. Reformers were not entirely happy, and spoilsmen were angered by Hayes's civil service policy, but he left the party machinery sufficiently intact to win in 1880. In addition, the experiment with the New York customhouse proved the feasibility of reform and made possible the passage of the 1883 Pendleton Civil Service Reform Act.

Hayes is also significant for the strikingly modern actions he took to enhance the power of the presidency. He defeated Republican senators over the so-called "courtesy of the Senate" convention and did not let them dictate appointments in the field service. He also defeated the Democratic congressional majority's stance toward the President's legislative role by not letting it destroy his veto power. In defeating the Democrats in the "Battle of the Riders," he relied on the power of public opinion, which he aroused in his stirring veto messages. Hayes traveled more widely than any previous President and, although he did not electioneer, he used every opportunity to speak on issues close to his heart. In this manner, he bypassed Congress to appeal directly to the people.

A Successful Politician

Historians have tended to echo the views of Republican Party leaders in the House and Senate that Hayes was an ineffective politician. Anything but inept, Hayes shrewdly played presidential politics. He exploited issues and appealed to public opinion (which he viewed as the real government) by traveling widely and speaking often and briefly. Hayes knew that newspapers would pick up these talks and publicize his views. He also wrote his vetoes more for the public than for Congress, and by doing so vanquished the Democrats in the Battle of the Riders.

Hayes was far more clever than the Conklings and Blaines, who turned on him when he refused to appoint their lieutenants to his cabinet and would not let them dominate his administration. They, especially Conkling, believed that organization based on patronage was the key to political success, while Hayes relied on what Theodore Roosevelt later called the "bully pulpit."

Hayes was reform minded, but even more he was aware of what was possible and avoided the impossible. His middle-of-the-road positions on issues such as civil service reform and temperance kept the Republican Party together and strong enough to win in 1880, even as reformers grumbled that he did not do enough, and spoilsmen howled that he was destroying their organizations. In fact, Hayes introduced about all the reform that could be administered successfully without destroying Republican Party organizations. The fact that he restored integrity to the White House is itself a major achievement after the corruption and scandals of the previous Grant administration.

Hayes's attitude toward temperance is a good example of the shrewdness of his middle path. Both Hayes and Lucy believed that, rather than coerce society not to drink, the public should be persuaded that drinking to excess was disreputable, if not dangerous. But he (not Lucy) banned liquor from the White House as much to gain political advantage as to set a good example and curb boorish behavior. He realized that temperance advocates in the Republican Party would applaud his move and not flock to the Prohibitionists—a third party he disliked—and he knew that the wets would stay in the party since his symbolic act did little to hamper them.

Hayes proved to be most perceptive on this point. His successors, James A. Garfield and Chester A. Arthur, brought wine back to the White House. The advocates of temperance then deserted the Republicans for the Prohibitionists and, because of their defection, the Republicans lost New York and the election to the Democrats in 1884.

Hayes did make a serious mistake, however, in refusing to run for reelection. With the economy rebounding and the Republicans united by the Battle of the Riders, he might well have won—if he had been able to garner the nomination in a much-divided Republican Party. Presidents who serve only one term are usually written off as mediocrities, while those acclaimed as great have been reelected to a second term, especially as a second term enables Presidents to implement more fully their policy initiatives. Four more years would have allowed Hayes to widen the application of civil service reform principles beyond the important New York offices. With a Republican Congress, he might well have enforced the election laws and protected black voters in the South. He was, after all, the last President in the 19th century who was genuinely interested in preserving voting rights for blacks.

Hayes was a respectable, dignified, and decent egalitarian. He had a sensitive nature, a judicious temperament, and a pragmatic attitude. He was a patient reformer who attempted what was possible. A good friend remarked that Hayes’s best feature was “his intuitive perception of what at the moment is practicably attainable.” Ultimately, he was optimistic that education of the public would accomplish in the future the present-day impossibility. Shortly before he died, Hayes concluded "I am 'a radical in thought (and principle) and a conservative in method' (and conduct)." Hayes’s policies and politics were, ultimately, not up to preventing the coming of a new and bitter age of racial and economic inequality in late 19th-century America. That said, he deserves much more of our consideration than simply adding him to the long roll of supposedly dismal Gilded Age Presidents.


Rutherford B. Hayes: Foreign Affairs

During the Hayes administration, the United States had few problems with foreign governments and little inclination to become an imperialist power. The primary problems that the administration faced involved Mexican bandits, who ignored the border between the United States and Mexico Californians, who discriminated against Chinese residents of their state and Ferdinand de Lesseps, who ignored Hayes and plunged ahead with his plans to build a Panama Canal.

Relations with Mexico and China

Three months after his inauguration, Hayes on June 1, 1877, ordered the Army to keep "lawless bands" from invading the United States, even if it had to cross into Mexico to punish these cross-border outlaws. Porfirio Diaz, who had assumed the Mexican presidency a month earlier (and would remain dictator until overthrown in 1911), protested and sent troops to the border to protect Mexico's sovereignty. Diaz agreed to pursue bandits jointly with American troops. Order on the border, however, did not happen until three years later. With the incursions stopped, Hayes, on February 24, 1880, revoked his 1877 order permitting the army to follow outlaws into Mexico.

The 1868 Burlingame Treaty with China allowed unrestricted Chinese immigration to the United States. Chinese laborers had been migrating to California since the 1849 gold rush and had drifted from the gold fields into railroad construction (the Central Pacific Railroad employed 10,000 from 1866-1869), agriculture, and urban jobs in factories, laundries, and homes. With the completion of the transcontinental railroad and the flood of cheaper manufactured goods from the East, California manufacturers cut costs by employing Chinese labor at low wages. The hostility of white laborers toward Chinese workers intensified during the depression that followed the Panic of 1873. The Great Strike of 1877 inspired anti-Chinese riots in San Francisco and a Workingmen's Party wanting to "stop the leprous Chinamen from landing" expanded rapidly, becoming a major force in California politics by early 1878.

At the 1878 California Constitutional Convention, the anti-Chinese movement secured articles preventing the Chinese from voting and from working on local and state public works, or for any corporation operating under California law. These articles violated the federal Constitution, and federal courts struck them down, but they sent a message to Congress. The legislature responded with a bill that restricted incoming vessels to no more than fifteen Chinese passengers—thus violating the Burlingame Treaty, which allowed the immigration of Chinese and Americans to each other's country. Hayes vetoed the bill on March 1, 1878, and was bitterly denounced west of the Rocky Mountains.

Hayes, however, also responded to the pressure from the West Coast. He thought it best to discourage but not prohibit the influx of Chinese labor (which he noted was slowing down) and wanted negotiations with China to revise the Burlingame Treaty. Hayes appointed a commission to do so and by November 17, 1880, the commissioners had concluded immigration and commerce treaties with China. The immigration treaty enabled the United States to regulate, limit, and suspend, but not prohibit, the coming of Chinese laborers. The commerce treaty prohibited the export of opium to either country. Congress ratified these treaties in 1881 after Hayes had left office.

A Transoceanic Route

Schemes to connect the Atlantic and Pacific oceans through Mexico, Nicaragua, or Panama revived dramatically in 1879. In May of that year, the Congres International d'Etudes du Canal Interoceanique meeting in Paris was dominated by Ferdinand de Lesseps, the builder of the Suez Canal. With little thought and no research, he proposed that a sea-level Panama Canal be built by 1892 for $240 million.

Aniceto Garcia Menocal, an American naval officer attending the congress, had surveyed the route, realized that a sea level canal was impossible, and advocated a Nicaraguan canal with locks. The gathering ignored the opinions of the expert engineers who were present, got wrapped up in de Lesseps's vision, and endorsed his sea-level Panama proposal. De Lesseps immediately organized a private syndicate to build the canal, but throughout 1879 had little success in raising the necessary funds. Nevertheless, he remained optimistic, landed with an entourage at Colon, Panama (then part of Colombia), inspected the proposed route, and declared that the canal would be built.

The plans and activities of de Lesseps concerned Hayes. The President would have been uneasy about any non-American inter-oceanic canal but was doubly suspicious of a French project. Little more than a decade had elapsed since Napoleon III had tried to make Maximilian the emperor of Mexico. Hayes concluded that "The true policy of the United States as to a canal across any part of the Isthmus is either a canal under American control, or no canal." Following his inspection of Panama, de Lesseps toured the United States. He was feted in New York, and Hayes and the House Inter-oceanic Canal Committee received him courteously. He addressed crowds on a whirlwind tour all the way to San Francisco and back, stressing that his private venture no way contradicted the Monroe Doctrine. Indeed, the French government assured the Hayes administration that it had nothing to do with the de Lesseps proposal.

Hayes, however, was not reassured and in a special message to Congress on March 8, 1880, stated unequivocally that "The policy of this country is a canal under American control." A canal, Hayes proclaimed, "would be the great ocean thoroughfare between our Atlantic and our Pacific shores, and virtually a part of the coast line of the United States. Our merely commercial interest in it is greater than that of all other countries, while its relations to our power and prosperity as a nation, to our means of defense, our unity, peace, and safety, are matters of paramount concern to the people of the United States."

In addition, Hayes anticipated the corollary to the Monroe Doctrine that Theodore Roosevelt would later proclaim, warning European investors not to look to their governments for protection. The United States would deem such intervention by European power as "wholly inadmissible. If the protection of the United States is relied upon, the United States must exercise such control as will enable this country to protect its national interests and maintain the rights of those whose private capital is embarked in the work."

American capitalists were not attracted to de Lesseps venture. Hayes, no doubt, discouraged some others were surely aware of the engineering absurdity of a sea-level Panama Canal. De Lesseps nonetheless forged ahead and claimed audaciously that Hayes's version of the Roosevelt Corollary guaranteed the political security of his proposed canal. De Lesseps returned to France in April 1880 and secured support from the French people. Despite Hayes's efforts, the project went forward but ultimately failed.


E-Commerce

E-commerce has taken a huge amount of market share away from traditional brick-and-mortar businesses. The sharing economy and P2P platforms have removed the need for items like hotels, movie theaters, and taxi drivers by creating alternative marketplaces for those services or activities.

The future will only accelerate this pattern. Google and universities around the world have developed driverless cars, which will one day eliminate the need for any sort of driver or chauffeur. 3-D printing and improvements in robotics promise to revolutionize the way products are manufactured and make companies rethink the need for warehousing and managing excess inventories. This can only accelerate the existing trend of job losses in manufacturing.

While many people will lose their jobs to technology, people who have trained themselves in the relevant skills will be at an advantage. It will be those workers who are not only comfortable with using technology but who can code and understand how the technology works inside out.


Interest Rate Casualties

This is the gruesome story of the great inflation of the 1970s, which began in late 1972 and didn't end until the early 1980s.   In his book, "Stocks for the Long Run: A Guide for Long-Term Growth" (1994), Wharton professor Jeremy Siegel, called it "the greatest failure of American macroeconomic policy in the postwar period."  

The great inflation was blamed on oil prices, currency speculators, greedy businessmen, and avaricious union leaders. However, it is clear that monetary policies, which financed massive budget deficits and were supported by political leaders, were the cause. This mess was proof of what Milton Friedman said in his book, Money Mischief: Episodes in Monetary History: Inflation is always "a monetary phenomenon."   The great inflation and the recession that followed wrecked many businesses and hurt countless individuals.     Interestingly, John Connally, the Nixon-installed Treasury Secretary who did not have formal economics training, later declared personal bankruptcy.  

Yet these unusually bad economic times were preceded by a period in which the economy boomed, or appeared to boom. Many Americans were awed by the temporarily low unemployment and strong growth numbers of 1972.     Therefore, they overwhelmingly re-elected their Republican president, Richard Nixon, and their democratic Congress, in 1972 Nixon, the Congress, and the Federal Reserve eventually ended up failing them.


Contents

The term "post-Keynesian" was first used to refer to a distinct school of economic thought by Eichner and Kregel (1975) [5] and by the establishment of the Journal of Post Keynesian Economics in 1978. Prior to 1975, and occasionally in more recent work, post-Keynesian could simply mean economics carried out after 1936, the date of Keynes's General Theory. [6]

Post-Keynesian economists are united in maintaining that Keynes' theory is seriously misrepresented by the two other principal Keynesian schools: neo-Keynesian economics, which was orthodox in the 1950s and 60s, and new Keynesian economics, which together with various strands of neoclassical economics has been dominant in mainstream macroeconomics since the 1980s. Post-Keynesian economics can be seen as an attempt to rebuild economic theory in the light of Keynes' ideas and insights. However, even in the early years, post-Keynesians such as Joan Robinson sought to distance themselves from Keynes, and much current post-Keynesian thought cannot be found in Keynes. Some post-Keynesians took a more progressive view than Keynes himself, with greater emphases on worker-friendly policies and redistribution. Robinson, Paul Davidson and Hyman Minsky emphasized the effects on the economy of practical differences between different types of investments, in contrast to Keynes' more abstract treatment. [7]

The theoretical foundation of post-Keynesian economics is the principle of effective demand, that demand matters in the long as well as the short run, so that a competitive market economy has no natural or automatic tendency towards full employment. [8] Contrary to the views of new Keynesian economists working in the neoclassical tradition, post-Keynesians do not accept that the theoretical basis of the market's failure to provide full employment is rigid or sticky prices or wages. Post-Keynesians typically reject the IS–LM model of John Hicks, which is very influential in neo-Keynesian economics, because they argue endogenous bank lending to be more significant than central banks' money supply for the interest rate. [9]

The contribution of post-Keynesian economics [10] has extended beyond the theory of aggregate employment to theories of income distribution, growth, trade and development in which money demand plays a key role, whereas in neoclassical economics these are determined by the forces of technology, preferences and endowment. In the field of monetary theory, post-Keynesian economists were among the first to emphasise that money supply responds to the demand for bank credit, [11] so that a central bank cannot control the quantity of money, but only manage the interest rate by managing the quantity of monetary reserves.

This view has largely been incorporated into mainstream economics and monetary policy, which now targets the interest rate as an instrument, rather than attempting to accurately control the quantity of money. [12] In the field of finance, Hyman Minsky put forward a theory of financial crisis based on financial fragility, which has received renewed attention. [13] [14]

There are a number of strands to post-Keynesian theory with different emphases. Joan Robinson regarded Michał Kalecki’s theory of effective demand to be superior to Keynes’ theories. Kalecki's theory is based on a class division between workers and capitalists and imperfect competition. [15] Robinson also led the critique of the use of aggregate production functions based on homogeneous capital – the Cambridge capital controversy – winning the argument but not the battle. [16] The writings of Piero Sraffa were a significant influence on the post-Keynesian position in this debate, though Sraffa and his neo-Ricardian followers drew more inspiration from David Ricardo than Keynes. Much of Nicholas Kaldor’s work was based on the ideas of increasing returns to scale, path dependence, and the key differences between the primary and industrial sectors. [17]

Paul Davidson [18] follows Keynes closely in placing time and uncertainty at the centre of theory, from which flow the nature of money and of a monetary economy. Monetary circuit theory, originally developed in continental Europe, places particular emphasis on the distinctive role of money as means of payment. Each of these strands continues to see further development by later generations of economists.

Modern Monetary Theory is a relatively recent offshoot influenced by the macroeconomic modelling of Wynne Godley and Hyman Minsky's ideas on the labour market, as well as chartalism and functional finance.

Recent work in post-Keynesian economics has attempted to provide micro-foundations for capacity underutilization as a coordination failure (economics), justifying government intervention in the form of aggregate demand stimulus. [19] [20]

Journals Edit

Much post-Keynesian research is published in the Review of Keynesian Economics (ROKE), the Journal of Post Keynesian Economics (founded by Sidney Weintraub and Paul Davidson), the Cambridge Journal of Economics, the Review of Political Economy, and the Journal of Economic Issues (JEI).

United Kingdom Edit

There is also a United Kingdom academic association, the Post Keynesian Economics Society (PKES). This was previously called the Post Keynesian Economics Study Group (PKSG) but changed its name in 2018. In the UK, post-Keynesian economists can be found in:

United States Edit

In the United States, there are several universities with a post-Keynesian bent: [ further explanation needed ]

    , New York City
  • The University of Massachusetts Amherst
  • The University of Utah, Salt Lake City , Lewisburg, Pennsylvania , Granville, Ohio at Bard College, Annandale-on-Hudson, New York , Fort Collins
  • The University of Massachusetts Boston at City University of New York, New York City

Netherlands Edit

France Edit

Canada Edit

In Canada, post-Keynesians can be found at the University of Ottawa and Laurentian University.

Germany Edit

In Germany, post-Keynesianism is very strong at the Berlin School of Economics and Law [21] and its master's degree course: International Economics [M.A.]. Many German Post-Keynesians are organized in the Forum Macroeconomics and Macroeconomic Policies. [22]

Australia Edit

University of Newcastle Edit

The University of Newcastle in New South Wales, Australia, houses the post-Keynesian think-tank the Centre of Full Employment and Equity (CofFEE).

Major post-Keynesian economists of the first and second generations after Keynes include:


Ronald Reagan: Impact and Legacy

Ronald Wilson Reagan was a transformational President. His leadership and the symbiotic relationship he forged with Soviet leader Mikhail Gorbachev during their four summit meetings set the stage for a peaceful resolution of the Cold War. As the Soviet Union disappeared into the mists of history, Reagan's partisans asserted that he had "won" the Cold War. Reagan and Gorbachev more prudently declared that the entire world was a winner. Reagan had reason to believe, however, that the West had emerged victorious in the ideological struggle: as he put it, democracy had prevailed in its long "battle of values" with collectivism. British Prime Minister Margaret Thatcher, his staunch ally, wrote that Reagan had "achieved the most difficult of all political tasks: changing attitudes and perceptions about what is possible. From the strong fortress of his convictions, he set out to enlarge freedom the world over at a time when freedom was in retreat—and he succeeded." This is true as far as it goes—the number of democratic nations as well as the reach of free-market ideology expanded on Reagan's watch. But, as Russia's recent autocratic path suggests, the permanence of these advances remains in doubt.

Scholars offer a variety of explanations for why the Cold War ended as it did and for the subsequent collapse of the Soviet Union. Some historians cite the U.S. military buildup under Reagan and the pressures exerted by his pet program, the Strategic Defense Initiative. Others emphasize the increased restiveness of Eastern European nations, particularly Poland, and Soviet overreach in Afghanistan. Still others point to the implosion of the Soviet economy after 75 years of Communist rule. Although historians have reached no consensus on the weight that should be given to these various factors, it is clear that Reagan and his policies contributed to the outcome.

Reagan's economic legacy is mixed. On the one hand, tax reduction and a tightening of interest rates by the Federal Reserve led to a record period of peacetime economic growth. On the other, this growth was accompanied by record growth in the national debt, the federal budget deficit, and the trade deficit. Defenders of Reagan's economic record point out that a big chunk of the deficit was caused by increased military spending, which declined after the Soviet collapse and created the context for balanced budgets during the Clinton years. Even so, the supply-side tax cuts did not produce the increase in revenues that Reagan had predicted. The economist Robert Samuelson has suggested that Reagan's main achievement in the economic arena was his consistent support of the Federal Reserve, which under Reagan's appointee Alan Greenspan, followed monetary policies that kept inflation low. Reagan also succeeded in a principal goal of reducing the marginal income tax rate, which was 70 percent when he took office and 28 percent when he left.

Reagan also left a monumental political legacy. After he was reelected in a 49-state landslide in 1984, it became clear that Democrats would be unlikely to return to the White House under a traditional liberal banner. This paved the way for Bill Clinton's centrist capture of the Democratic nomination and the presidency in 1992. Reagan had an even greater impact within his own party. He carried Republicans into control of the Senate when he won the presidency in 1980. Although Democrats controlled the House throughout the Reagan presidency, the Republicans won control for the first time in 40 years in 1994 under the banner of Newt Gingrich's "Contract With America," a potpourri of leftover Reagan proposals. Even today, with Democrats back in control, there are more avowed Reagan Republicans in Congress than there ever were during Reagan's lifetime. In the 2008 contest for the Republican presidential nomination, virtually all the candidates proclaimed that they would follow in Reagan's footsteps.

It is an open question whether Reagan's accomplishments occurred because of his philosophy or despite it—or both. Reagan was an effective communicator of conservative ideas, but he was also an enormously practical politician who was committed to success. The welfare bill that was the signal achievement of Reagan's second term as governor of California, the reform that salvaged Social Security for a generation during his first term as President, and the tax overhaul of his second presidential term were bipartisan compromises, defying "liberal" or "conservative" labels. In the tradition of American populists, Reagan ran for office as an outsider who was determined to restore traditional values. In fact, he was a master politician who expanded the reach of his party at home and pursued his vision of a nuclear-free world abroad. He casts a long shadow.


These 5 charts prove that the economy does better under Democratic presidents

By Sean McElwee
Published December 28, 2015 10:57AM (EST)

(AP/Reuters/Yuri Gripas/Photo montage by Salon)

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As the 2016 election cycle heats up, the key question at stake for most Americans is economic growth and jobs. The debate, then, will center around what to do with the fragile recovery that overwhelmingly benefits the rich the stagnation of middle class incomes and unemployment -- which, particularly for young people of color, remains dispiritingly high.

The right likes to argue that these conditions mark a clear failure of progressive policies, and in particular of the Obama administration. In the process, they reject policies that have, however imperfect, unequivocally strengthened the economy over the past seven years, such as the stimulus packages that came in response to the economic crisis.

Meanwhile, while conservatives often claim that their policies are good for the middle class, systematic studies by economists, political scientists and sociologists suggest these claims are overblown.

At the heart of the question is economic growth: Which party is better at delivering it?

While economic growth alone is not sufficient for middle class and working class income growth, it is certainly necessary. The most systematic investigation of how parties affect economic growth was performed by economists Alan Blinder and Mark Watson. Their results are unequivocal:

“The U.S. economy has performed better when the President of the United States is a Democrat rather than a Republican, almost regardless of how one measures performance. For many measures, including real GDP growth (on which we concentrate), the performance gap is both large and statistically significant.”

The chart below shows the gaps in various indicators between Republican and Democratic presidents. Democratic presidents average 4.35 percent GDP growth, compared with 2.54 percent under Republicans. Democrats also presided over a lower unemployment rate, higher stock market returns, higher corporate profits, higher compensation growth and higher productivity increases. These results remain even after various controls are applied. Though the authors want to chalk these results up to luck, I have outlined a few reasons to suspect other factors may be at work.

The middle and working class have increasingly fallen behind as the richest Americans have seized a larger share of income and wealth. So while economic growth is certainly important, how it’s distributed is important as well.

In a 2004 paper and a further analysis earlier this year, esteemed political scientist Larry Bartels has demonstrated that income growth is faster and more equal under Democratic presidents. He cites differences in policies like the minimum wage driving this gap. As he notes, the real value of the minimum wage increased 16 cents a year under Democrats, but decreased by 6 cents a year under Republicans.

The chart below suggests this effect is driven by both market conditioning (see the gap in pre-tax income at the bottom) and redistribution (the post-tax gaps across the board).

Bartels' analysis is strengthened by a recent study from political scientists Elizabeth Rigby and Megan Hatch, who identify three major policies that states can pursue to slow growing inequality: higher taxes on the wealthy, lower taxes on the poor, and labor market policies that benefit workers (minimum wages, lack of right to work). They find that if states had adopted more liberal policies, the increase in inequality (as measured by the Gini Coefficient) would have been 60 percent smaller — and the share going to the top 1 percent would have been cut in half.

At the state level, political scientists Anne Case and Timothy Besley find that Democrats boost spending and taxes, particularly in the areas of worker’s compensation and family assistance. Studies of the Medicaid expansion have overwhelmingly shown that Republican control of government is among the most important factors in predicting whether a state will expand Medicaid. Given the positive economic and social benefits of the Medicaid expansion, this illustrates how conservative ideology can hamper good governance.

Possibly the most important question for Americans is jobs, and a study by political scientist Douglas Hibbs finds that “the unemployment rate was driven downward by Democratic and Labor administrations and upward by Republican and Conservative governments.” A recent study by political scientists Bryan Dettrey and Harvey D. Palmer finds that

“economic growth under Republican presidents has a stronger effect on stimulating stock market performance, while economic growth under Democratic presidents has a stronger effect on reducing unemployment.” (see chart)

More recently, political scientists Christopher Witko and Nathan Kelly discovered that when economic growth is low, liberal and conservative governments perform similarly with regard to unemployment. However, when growth increases, Democrats do a better job turning that growth into lower unemployment. Further, in another study, they find that state-level outcomes have played an increasingly important role in shifting the income distribution, meaning that these effects are even more meaningful.

In a new book, "Welfare for the Wealthy," political scientist Christopher Faricy shows that the rise of tax subsidies as an alternative to direct public spending -- a shift that Republicans have been eager to push for -- has had the effect of increasing inequality. (see chart)

In a recent study, Faricy finds that parties don’t use the tax code in the same way: Democrats favor tax credits, which help the poor, while Republicans favor tax deductions, which benefit the rich. The effect is powerful:

“A switch to a Democratic president produces an immediate increase of over $83 million in the level of tax credits.”

A study by economist Howard Chernick finds that at the state level, “Party control by Republicans is associated with a more regressive tax structure.” Economist Olivier Bargain and others find, “tax reforms passed by Republican governments had a positive effect on the income shares of taxpayers in the top quintile, whereas Democrats targeted the bottom 80 percent of the income distribution.”

People of color make up an increasingly large share of the middle and working class. In the past, as historian Ira Katznelson notes, government policy favored white upward mobility and left people of color behind. And a recent study by political scientists Zoltan Hajnal and Jeremy Horowitz finds that there is even now a large partisan gap in who policy benefits. They find that under Democratic presidents black poverty declined by 38.6 percent, while it grew by 3 percent under Republicans. They find that

“Across 35 years of Republican presidencies, black unemployment went up a net of 13.7 percentage points. Across 22 years with Democrats, the black unemployment rate fell 7.9 points.”

The authors also examined Latinos, though the data were available for fewer years. They write,

“For Latinos, Democratic presidencies are associated with large annual gains in income, substantial declines in poverty, and real drops in unemployment. By contrast, under Republican administrations Latinos tend to lose income, become poorer, and experience greater unemployment.”

Further, they find deep gaps in income growth between Democrats and Republicans, with all racial groups seeing far faster gains under Democrats than Republicans, though Republicans still ensure whites gain the most (see chart).

Economic policy dramatically affects presidential races. A recent study had a bombshell finding: Federal reserve policy benefitted Republicans by reducing interest rates before elections when Republicans control the White House, but hiking them when Democrats do. The authors write,

“The behavior we have observed is consistent with the possibility that the Fed seeks to aid the election and reelection of Republican presidents.”

This dynamic was noted by Bartels in "Unequal Democracy," where he found that economic growth was slower during Republican presidencies, but the gap closed in the last year before elections. Ironically, then, Democrats gain very little in terms of electoral victories because of their superior economic management.

In addition, as I’ve noted, factors like low turnout, the rise of the donor class and globalization make it harder for progressives to shift the income distribution.

Two new studies of finance show that Democrats have shifted to the right on financial deregulation, dramatically increasing inequality. (One of the studies links campaign contributions to Dodd-Frank roll call votes.) A study by political scientists Alexander Hertel-Fernandez and Theda Skocpol finds that the rise and mobilization of the small-business lobby has divided Democrats on tax issues. Further, a study by a group of political scientists notes that the strong status quo bias, exacerbated by conservative obstructionist politics, makes it increasingly difficult to implement inequality-reducing policies.

The results of a broad range of studies are clear, then: Progressive policies are better for economic growth, better at creating a racially equitable society, better at strengthening the middle class and better at reducing unemployment.

However, progressives must still grapple with the constraints imposed by globalized markets, the declining strength of organized labor, the rise of the donor class and low voter turnout. But the arguments that conservative policies are beneficial to the working class, or that there isn’t a dime’s worth of difference between the two parties, are difficult to square with the research.

Sean McElwee

Sean McElwee is founding executive director of Data for Progress. He tweets at @seanmcelwee.


Contents

The term Gilded Age for the period of economic boom after the American Civil War up to the turn of the century was applied to the era by historians in the 1920s, who took the term from one of Mark Twain's lesser-known novels, The Gilded Age: A Tale of Today (1873). The book (co-written with Charles Dudley Warner) satirized the promised "golden age" after the Civil War, portrayed as an era of serious social problems masked by a thin gold gilding of economic expansion. [5] In the 1920s and '30s the metaphor "Gilded Age" began to be applied to a designated period in American history. The term was adopted by literary and cultural critics as well as historians, including Van Wyck Brooks, Lewis Mumford, Charles Austin Beard, Mary Ritter Beard, Vernon Louis Parrington, and Matthew Josephson. For them, Gilded Age was a pejorative term for a time of materialistic excesses combined with extreme poverty. [6] [7]

The early half of the Gilded Age roughly coincided with the middle portion of the Victorian era in Britain and the Belle Époque in France. With respect to eras of American history, historical views vary as to when the Gilded Age began, ranging from starting right after the American Civil War (ended, 1865), or 1873, or as the Reconstruction Era ended in 1877. [4] The point noted as the end of the Gilded Age also varies. It is generally given as the beginning of the Progressive Era in the 1890s (sometimes the United States presidential election of 1896) [8] [9] [10] [11] [12] [13] but also falls in a range that includes the Spanish–American War in 1898, Theodore Roosevelt's accession to the presidency in 1901, and even the end of the Progressive Era coinciding with the U.S. entry into World War I (1917). [4]

Technical advances Edit

The Gilded Age was a period of economic growth as the United States jumped to the lead in industrialization ahead of Britain. The nation was rapidly expanding its economy into new areas, especially heavy industry like factories, railroads, and coal mining. In 1869, the First Transcontinental Railroad opened up the far-west mining and ranching regions. Travel from New York to San Francisco now took six days instead of six months. [14] Railroad track mileage tripled between 1860 and 1880, and then doubled again by 1920. The new track linked formerly isolated areas with larger markets and allowed for the rise of commercial farming, ranching, and mining, creating a truly national marketplace. American steel production rose to surpass the combined totals of Britain, Germany, and France. [15]

Investors in London and Paris poured money into the railroads through the American financial market centered in Wall Street. By 1900, the process of economic concentration had extended into most branches of industry—a few large corporations, called "trusts", dominated in steel, oil, sugar, meat, and farm machinery. Through vertical integration these trusts were able to control each aspect of the production of a specific good, ensuring that the profits made on the finished product were maximized and prices minimized, and by controlling access to the raw materials, prevented other companies from being able to compete in the marketplace. [16] Several monopolies—most famously Standard Oil—came to dominate their markets by keeping prices low when competitors appeared they grew at a rate four times faster than that of the competitive sectors. [17]

Increased mechanization of industry is a major mark of the Gilded Age's search for cheaper ways to create more product. Frederick Winslow Taylor observed that worker efficiency in steel could be improved through the use of very close observations with a stop watch to eliminate wasted effort. Mechanization made some factories an assemblage of unskilled laborers performing simple and repetitive tasks under the direction of skilled foremen and engineers. Machine shops grew rapidly, and they comprised highly skilled workers and engineers. Both the number of unskilled and skilled workers increased, as their wage rates grew. [18]

Engineering colleges were established to feed the enormous demand for expertise. Railroads invented modern management, with clear chains of command, statistical reporting, and complex bureaucratic systems. [19] They systematized the roles of middle managers and set up explicit career tracks. They hired young men ages 18–21 and promoted them internally until a man reached the status of locomotive engineer, conductor, or station agent at age 40 or so. Career tracks were invented for skilled blue-collar jobs and for white-collar managers, starting in railroads and expanding into finance, manufacturing, and trade. Together with rapid growth of small business, a new middle class was rapidly growing, especially in northern cities. [20]

The United States became a world leader in applied technology. From 1860 to 1890, 500,000 patents were issued for new inventions—over ten times the number issued in the previous seventy years. George Westinghouse invented air brakes for trains (making them both safer and faster). Theodore Vail established the American Telephone & Telegraph Company and built a great communications network. [21] Thomas Edison, in addition to inventing hundreds of devices, established the first electrical lighting utility, basing it on direct current and an efficient incandescent lamp. Electric power delivery spread rapidly across Gilded Age cities. The streets were lighted at night, and electric streetcars allowed for faster commuting to work and easier shopping. [22]

Petroleum launched a new industry beginning with the Pennsylvania oil fields in the 1860s. The United States dominated the global industry into the 1950s. Kerosene replaced whale oil and candles for lighting homes. John D. Rockefeller founded Standard Oil Company and monopolized the oil industry, which mostly produced kerosene before the automobile created a demand for gasoline in the 20th century. [23]

Railroads Edit

According to historian Henry Adams the system of railroads needed:

the energies of a generation, for it required all the new machinery to be created—capital, banks, mines, furnaces, shops, power-houses, technical knowledge, mechanical population, together with a steady remodelling of social and political habits, ideas, and institutions to fit the new scale and suit the new conditions. The generation between 1865 and 1895 was already mortgaged to the railways, and no one knew it better than the generation itself. [24]

The impact can be examined through five aspects: shipping, finance, management, careers, and popular reaction.

Shipping freight and passengers Edit

First they provided a highly efficient network for shipping freight and passengers across a large national market. The result was a transforming impact on most sectors of the economy including manufacturing, retail and wholesale, agriculture, and finance. The United States now had an integrated national market practically the size of Europe, with no internal barriers or tariffs, all supported by a common language, and financial system and a common legal system. [25]

Basis of the private financial system Edit

Railroads financing provided the basis for a dramatic expansion of the private (non-governmental) financial system. Construction of railroads was far more expensive than factories. In 1860, the combined total of railroad stocks and bonds was $1.8 billion 1897 it reached $10.6 billion (compared to a total national debt of $1.2 billion). [26] Funding came from financiers throughout the Northeast, and from Europe, especially Britain. [27] About 10 percent of the funding came from the government, especially in the form of land grants that could be realized when a certain amount of trackage was opened. [28] The emerging American financial system was based on railroad bonds. New York by 1860 was the dominant financial market. The British invested heavily in railroads around the world, but nowhere more so than the United States The total came to about $3 billion by 1914. In 1914–1917, they liquidated their American assets to pay for war supplies. [29] [30]

Inventing modern management Edit

Railroad management designed complex systems that could handle far more complicated simultaneous relationships than could be dreamed of by the local factory owner who could patrol every part of his own factory in a matter of hours. Civil engineers became the senior management of railroads. The leading innovators were the Western Railroad of Massachusetts and the Baltimore and Ohio Railroad in the 1840s, the Erie in the 1850s and the Pennsylvania in the 1860s. [31]

Career paths Edit

The railroads invented the career path in the private sector for both blue-collar workers and white-collar workers. Railroading became a lifetime career for young men women were almost never hired. A typical career path would see a young man hired at age 18 as a shop laborer, be promoted to skilled mechanic at age 24, brakemen at 25, freight conductor at 27, and passenger conductor at age 57. White-collar careers paths likewise were delineated. Educated young men started in clerical or statistical work and moved up to station agents or bureaucrats at the divisional or central headquarters. At each level they had more and more knowledge, experience, and human capital. They were very hard to replace, and were virtually guaranteed permanent jobs and provided with insurance and medical care. Hiring, firing, and wage rates were set not by foremen, but by central administrators, to minimize favoritism and personality conflicts. Everything was done by the book, whereby an increasingly complex set of rules dictated to everyone exactly what should be done in every circumstance, and exactly what their rank and pay would be. By the 1880s the career railroaders were retiring, and pension systems were invented for them. [32]

Love-hate relationship with the railroads Edit

America developed a love-hate relationship with railroads. Boosters in every city worked feverishly to make sure the railroad came through, knowing their urban dreams depended upon it. The mechanical size, scope, and efficiency of the railroads made a profound impression people dressed in their Sunday best to go down to the terminal to watch the train come in. Travel became much easier, cheaper, and more common. Shoppers from small towns could make day trips to big city stores. Hotels, resorts, and tourist attractions were built to accommodate the demand. The realization that anyone could buy a ticket for a thousand-mile trip was empowering. Historians Gary Cross and Rick Szostak argue:

with the freedom to travel came a greater sense of national identity and a reduction in regional cultural diversity. Farm children could more easily acquaint themselves with the big city, and easterners could readily visit the West. It is hard to imagine a United States of continental proportions without the railroad. [33]

The engineers became model citizens, bringing their can-do spirit and their systematic work effort to all phases of the economy as well as local and national government. [34] By 1910, major cities were building magnificent palatial railroad stations, such as the Pennsylvania Station in New York City, and the Union Station in Washington DC. [35]

But there was also a dark side. [36] By the 1870s, railroads were vilified by Western farmers who absorbed the Granger movement theme that monopolistic carriers controlled too much pricing power, and that the state legislatures had to impose maximum prices. Local merchants and shippers supported the demand and got some "Granger Laws" passed. [37] Anti-railroad complaints were loudly repeated in late 19th century political rhetoric. [38]

The most hated railroad man in the country was Collis P. Huntington (1821–1900), the president of the Southern Pacific Railroad who dominated California's economy and politics. One textbook argues: "Huntington came to symbolize the greed and corruption of late-nineteenth-century business. Business rivals and political reformers accused him of every conceivable evil. Journalists and cartoonists made their reputations by pillorying him. Historians have cast Huntington as the state's most despicable villain." [39] However Huntington defended himself: "The motives back of my actions have been honest ones and the results have redounded far more to the benefit of California than they have to my own." [40]

Impact on farming Edit

The growth of railroads from 1850s to 1880s made commercial farming much more feasible and profitable. Millions of acres were opened to settlement once the railroad was nearby, and provided a long-distance outlet for wheat, cattle and hogs that reached all the way to Europe. [41] Rural America became one giant market, as wholesalers bought the consumer products produced by the factories in the East, and shipped them to local merchants in small stores nationwide. Shipping live animals was slow and expensive. It was more efficient to slaughter them in major packing centers such as Chicago, Kansas City, St. Louis, Milwaukee, and Cincinnati, and then ship dressed meat out in refrigerated freight cars. The cars were cooled by slabs of ice that had been harvested from the northern lakes in wintertime, and stored for summer and fall usage. Chicago, the main railroad center, benefited enormously, with Kansas City a distant second. Historian William Cronon concludes:

Because of the Chicago packers, ranchers in Wyoming and feedlot farmers in Iowa regularly found a reliable market for their animals, and on average received better prices for the animals they sold there. At the same time and for the same reason, Americans of all classes found a greater variety of more and better meats on their tables, purchased on average at lower prices than ever before. Seen in this light, the packers' "rigid system of economy" seemed a very good thing indeed. [42]

Economic growth Edit

During the 1870s and 1880s, the U.S. economy rose at the fastest rate in its history, with real wages, wealth, GDP, and capital formation all increasing rapidly. [43] For example, between 1865 and 1898, the output of wheat increased by 256%, corn by 222%, coal by 800% and miles of railway track by 567%. [44] Thick national networks for transportation and communication were created. The corporation became the dominant form of business organization, and a scientific management revolution transformed business operations. [45] [46]

By the beginning of the 20th century, gross domestic product and industrial production in the United States led the world. Kennedy reports that "U.S. national income, in absolute figures in per capita, was so far above everybody else's by 1914." Per capita income in the United States was $377 in 1914 compared to Britain in second place at $244, Germany at $184, France at $153, and Italy at $108, while Russia and Japan trailed far behind at $41 and $36. [45] [46]

Europe, especially Britain, remained the financial center of the world until 1914, yet the United States' growth caused foreigners to ask, as British author W. T. Stead wrote in 1901, "What is the secret of American success?" [47] The businessmen of the Second Industrial Revolution created industrial towns and cities in the Northeast with new factories, and hired an ethnically diverse industrial working class, many of them new immigrants from Europe.

Wealthy industrialists and financiers such as John D. Rockefeller, Jay Gould, Henry Clay Frick, Andrew W. Mellon, Andrew Carnegie, Henry Flagler, Henry H. Rogers, J. P. Morgan, Leland Stanford, Meyer Guggenheim, Jacob Schiff, Charles Crocker, Cornelius Vanderbilt would sometimes be labeled "robber barons" by their critics, who argue their fortunes were made at the expense of the working class, by chicanery and a betrayal of democracy. [48] [49] Their admirers argued that they were "Captains of Industry" who built the core America industrial economy and also the non-profit sector through acts of philanthropy. [50] For instance, Andrew Carnegie donated over 90% of his wealth and said that philanthropy was their duty—the "Gospel of Wealth". Private money endowed thousands of colleges, hospitals, museums, academies, schools, opera houses, public libraries, and charities. [51] John D. Rockefeller donated over $500 million to various charities, slightly over half his entire net worth. Nevertheless, many business leaders were influenced by Herbert Spencer's theory of Social Darwinism, which justified laissez-faire capitalism, competition and social stratification. [52] [53]

This emerging industrial economy quickly expanded to meet the new market demands. From 1869 to 1879, the U.S. economy grew at a rate of 6.8% for NNP (GDP minus capital depreciation) and 4.5% for NNP per capita. The economy repeated this period of growth in the 1880s, in which the wealth of the nation grew at an annual rate of 3.8%, while the GDP was also doubled. [54] Economist Milton Friedman states that for the 1880s, "The highest decadal rate [of growth of real reproducible, tangible wealth per head from 1805 to 1950] for periods of about ten years was apparently reached in the eighties with approximately 3.8 percent." [55]

Wages Edit

The rapid expansion of industrialization led to real wage growth of 60% between 1860 and 1890, spread across the ever-increasing labor force. [56] Real wages (adjusting for inflation) rose steadily, with the exact percentage increase depending on the dates and the specific work force. The Census Bureau reported in 1892 that the average annual wage per industrial worker (including men, women, and children) rose from $380 in 1880 to $564 in 1890, a gain of 48%. [1] Economic historian Clarence D. Long estimates that (in terms of constant 1914 dollars), the average annual incomes of all American non-farm employees rose from $375 in 1870 to $395 in 1880, $519 in 1890 and $573 in 1900, a gain of 53% in 30 years. [57]

Australian historian Peter Shergold found that the standard of living for industrial workers was higher than in Europe. He compared wages and the standard of living in Pittsburgh with Birmingham, England, one of the richest industrial cities of Europe. After taking account of the cost of living (which was 65% higher in the U.S.), he found the standard of living of unskilled workers was about the same in the two cities, while skilled workers in Pittsburgh had about 50% to 100% higher standard of living as those in Birmingham, England. Warren B. Catlin proposed that the natural resources and virgin lands that were available in America acted as a safety valve for poorer workers, hence, employers had to pay higher wages to hire labor. According to Shergold the American advantage grew over time from 1890 to 1914, and the perceived higher American wage led to a heavy steady flow of skilled workers from Britain to industrial America. [58] According to historian Steve Fraser, workers generally earned less than $800 a year, which kept them mired in poverty. Workers had to put in roughly 60 hours a week to earn this much. [59]

Wage labor was widely condemned as 'wage slavery' in the working class press, and labor leaders almost always used the phrase in their speeches. [60] As the shift towards wage labor gained momentum, working class organizations became more militant in their efforts to "strike down the whole system of wages for labor." [60] In 1886, economist and New York Mayoral candidate Henry George, author of Progress and Poverty, stated "Chattel slavery is dead, but industrial slavery remains." [60]

Wealth disparity Edit

The unequal distribution of wealth remained high during this period. From 1860 to 1900, the wealthiest 2% of American households owned more than a third of the nation's wealth, while the top 10% owned roughly three-quarters of it. [61] The bottom 40% had no wealth at all. [59] In terms of property, the wealthiest 1% owned 51%, while the bottom 44% claimed 1.1%. [59] Historian Howard Zinn argues that this disparity along with precarious working and living conditions for the working classes prompted the rise of populist, anarchist, and socialist movements. [62] [63] French economist Thomas Piketty notes that economists during this time, such as Willford I. King, were concerned that the United States was becoming increasingly inegalitarian to the point of becoming like old Europe, and "further and further away from its original pioneering ideal." [64]

According to economist Richard Sutch in an alternative view of the era, the bottom 25% owned 0.32% of the wealth while the top 0.1% owned 9.4%, which would mean the period had the lowest wealth gap in recorded history. He attributes this to the lack of government interference. [65]

There was a significant human cost attached to this period of economic growth, [66] as American industry had the highest rate of accidents in the world. [67] In 1889, railroads employed 704,000 men, of whom 20,000 were injured and 1,972 were killed on the job. [68] The U.S. was also the only industrial power to have no workman's compensation program in place to support injured workers. [67]

Rise of labor unions Edit

Craft-oriented labor unions, such as carpenters, printers, shoemakers and cigar makers, grew steadily in the industrial cities after 1870. These unions used frequent short strikes as a method to attain control over the labor market, and fight off competing unions. [69] They generally blocked women, blacks and Chinese from union membership, but welcomed most European immigrants. [70]

The railroads had their own separate unions. [71] An especially large episode of unrest (estimated at eighty thousand railroad workers and several hundred thousand other Americans, both employed and unemployed) broke out during the economic depression of the 1870s and became known as the Great Railroad Strike of 1877, which was, according to historian Jack Beatty, "the largest strike anywhere in the world in the 19th century." [72] This strike did not involve labor unions, but rather uncoordinated outbursts in numerous cities. The strike and associated riots lasted 45 days and resulted in the deaths of several hundred participants (no police or soldiers were killed), several hundred more injuries, and millions in damages to railroad property. [73] [74] The unrest was deemed severe enough by the government that President Rutherford B. Hayes intervened with federal troops.

Starting in the mid-1880s a new group, the Knights of Labor, grew too rapidly, and it spun out of control and failed to handle the Great Southwest Railroad Strike of 1886. The Knights avoided violence, but their reputation collapsed in the wake of the Haymarket Square Riot in Chicago in 1886, when anarchists allegedly bombed the policemen dispersing a meeting. [75] Police then randomly fired into the crowd, killing and wounding a number of people, including other police, and arbitrarily rounded up anarchists, including leaders of the movement. Seven anarchists went on trial four were hanged even though no evidence directly linked them to the bombing. [76] One had in his possession a Knights of Labor membership card. [76] At its peak, the Knights claimed 700,000 members. By 1890, membership had plummeted to fewer than 100,000, then faded away. [77]

Strikes organized by labor unions became routine events by the 1880s as the gap between the rich and the poor widened. [78] There were 37,000 strikes between 1881 and 1905. By far the largest number were in the building trades, followed far behind by coal miners. The main goal was control of working conditions and settling which rival union was in control. Most were of very short duration. In times of depression strikes were more violent but less successful, because the company was losing money anyway. They were successful in times of prosperity when the company was losing profits and wanted to settle quickly. [79]

The largest and most dramatic strike was the 1894 Pullman Strike, a coordinated effort to shut down the national railroad system. The strike was led by the upstart American Railway Union led by Eugene V. Debs and was not supported by the established brotherhoods. The union defied federal court orders to stop blocking the mail trains, so President Cleveland used the U.S. Army to get the trains moving again. The ARU vanished and the traditional railroad brotherhoods survived, but avoided strikes. [80]

The new American Federation of Labor, headed by Samuel Gompers, found the solution. The AFL was a coalition of unions, each based on strong local chapters the AFL coordinated their work in cities and prevented jurisdictional battles. Gompers repudiated socialism and abandoned the violent nature of the earlier unions. The AFL worked to control the local labor market, thereby empowering its locals to obtain higher wages and more control over hiring. As a result, the AFL unions spread to most cities, reaching a peak membership in 1919. [81]

Severe economic recessions—called "panics"—struck the nation in the Panic of 1873 and the Panic of 1893. They lasted several years, with high urban unemployment, low incomes for farmers, low profits for business, slow overall growth, and reduced immigration. They generated political unrest. [82]

Gilded Age politics, called the Third Party System, featured intense competition between two major parties, with minor parties coming and going, especially on issues of concern to prohibitionists, to labor unions and to farmers. The Democrats and Republicans (the latter nicknamed the "Grand Old Party", GOP) fought over control of offices, which were the rewards for party activists, as well as over major economic issues. Very high voter turnout often exceeded 80% or even 90% in some states as the parties drilled their loyal members much as an army drills its soldiers. [83]

Competition was intense and elections were very close. In the southern states, lingering resentment over the Civil War remained and meant that much of the South would vote Democrat. After the end of Reconstruction in 1877, competition in the South took place mainly inside the Democratic Party. Nationwide, turnout fell sharply after 1900. [84]

Metropolitan area politics Edit

The major metropolitan centers underwent rapid population growth and as a result had many lucrative contracts and jobs to award. To take advantage of the new economic opportunity, both parties built so-called "political machines" to manage elections, to reward supporters and to pay off potential opponents. Financed by the "spoils system", the winning party distributed most local, state and national government jobs, and many government contracts, to its loyal supporters. [85]

Large cities became dominated by political machines in which constituents supported a candidate in exchange for anticipated patronage. These votes would be repaid with favors back from the government once the appropriate candidate was elected and very often candidates were selected based on their willingness to play along with the spoils system. The largest and most notorious political machine was Tammany Hall in New York City, led by Boss Tweed. [85]

Scandals and corruption Edit

Political corruption was rampant, as business leaders spent significant amounts of money ensuring that government did not regulate the activities of big business – and they more often than not got what they wanted. Such corruption was so commonplace that in 1868 the New York state legislature legalized such bribery. [86] Historian Howard Zinn argues that the U.S. government was acting exactly as Karl Marx described capitalist states: "pretending neutrality to maintain order, but serving the interests of the rich". [87] Historian Mark Wahlgren Summers calls it, "The Era of Good Stealings," noting how machine politicians used "padded expenses, lucrative contracts, outright embezzlements, and illegal bond issues." He concludes:

Corruption gave the age a distinctive flavor. It marred the planning and development of the cities, infected lobbyists dealings, and disgraced even the cleanest of the Reconstructed states. For many reasons, however, its effect on policy was less overwhelming than once imagined. Corruption influenced a few substantive decisions it rarely determined one. [88]

Numerous swindlers were active, especially before the Panic of 1873 exposed the falsifications and caused a wave of bankruptcies. [89] Former President Ulysses S. Grant was the most famous victim of scoundrels and con-men, of whom he most trusted Ferdinand Ward. Grant was cheated out of all his money, although some genuine friends bought Grant's personal assets and allowed him to keep their use. [90]

Interpreting the phenomena, historian Allan Nevins deplored "The Moral Collapse in Government and Business: 1865-1873." He argued that at war's end society showed confusion and unsettlement as well as a hurried aggressive growth on the other. They:

united to give birth to an alarming public and private corruption. Obviously much of the shocking improbity was due to the heavy war-time expenditures. Speculators and jobbers waxed fat on government money, the collection of federal revenues offered large opportunities for graft. Under the stimulus of greenback inflation, business ran into excesses and lost sight of elementary cannons of prudence. Meanwhile, it became clear that thievery had found a better opportunity to grow because the conscience of the nation aroused against slavery, had neglected what seemed minor evils. The thousands who had rushed into speculations which they had no moral right to risk, the pushing, hardened men brought to the front by the turmoil, observed a courser, lower standard of conduct. Much of the trouble lay in the immense growth of national wealth unaccompanied by any corresponding growth in civic responsibility. [91]

National politics Edit

Major scandal reached into Congress with the Crédit Mobilier of America scandal of 1872, and disgraced the White House during the Grant Administration (1869–1877). This corruption divided the Republican party into two different factions: the Stalwarts led by Roscoe Conkling and the Half-Breeds led by James G. Blaine. There was a sense that government-enabled political machines intervened in the economy and that the resulting favoritism, bribery, inefficiency, waste, and corruption were having negative consequences. Accordingly, there were widespread calls for reform, such as Civil Service Reform led by the Bourbon Democrats and Republican Mugwumps. [92] In 1884, their support elected Democrat Grover Cleveland to the White House, and in doing so gave the Democrats their first national victory since 1856. [93]

The Bourbon Democrats supported a free-market policy, with low tariffs, low taxes, less spending and, in general, a laissez-faire (hands-off) government. They argued that tariffs made most goods more expensive for the consumer and subsidized "the trusts" (monopolies). They also denounced imperialism and overseas expansion. [94] By contrast, Republicans insisted that national prosperity depended on industry that paid high wages, and warned that lowering the tariff would bring disaster because goods from low-wage European factories would flood American markets. [95]

Presidential elections between the two major parties were so closely contested that a slight nudge could tip the election in the advantage of either party, and Congress was marked by political stalemate. With support from Union veterans, businessmen, professionals, craftsmen, and larger farmers, the Republicans consistently carried the North in presidential elections. [96] The Democrats, often led by Irish Catholics, had a base among Catholics, poorer farmers, and traditional party-members.

The nation elected a string of relatively weak presidents collectively referred to as the "forgettable presidents" (Johnson, Grant, Hayes, Garfield, Arthur and Harrison, with the exception of Cleveland) [97] who served in the White House during this period. [98] "What little political vitality existed in Gilded Age America was to be found in local settings or in Congress, which overshadowed the White House for most of this period." [98] [99]

Overall, Republican and Democratic political platforms remained remarkably constant during the years before 1900. Both favored business interests. Republicans called for high tariffs, while Democrats wanted hard-money and free trade. Regulation was rarely an issue. [100]

Ethnocultural politics: pietistic Republicans versus liturgical Democrats Edit

Voting behavior by religion, Northern US, late 19th century [101]
% Dem % GOP
Immigrant Groups
Irish Catholics 80 20
All Catholics 70 30
Confessional German Lutherans 65 35
German Reformed 60 40
French Canadian Catholics 50 50
Less Confessional German Lutherans 45 55
English Canadians 40 60
British Stock 35 65
German Sectarians 30 70
Norwegian Lutherans 20 80
Swedish Lutherans 15 85
Haugean Norwegians 5 95
Natives: Northern Stock
Quakers 5 95
Free Will Baptists 20 80
Congregational 25 75
Methodists 25 75
Regular Baptists 35 65
Blacks 40 60
Presbyterians 40 60
Episcopalians 45 55
Natives: Southern Stock (living in North)
Disciples 50 50
Presbyterians 70 30
Baptists 75 25
Methodists 90 10

From 1860 to the early 20th century, the Republicans took advantage of the association of the Democrats with "Rum, Romanism, and Rebellion". "Rum" stood for the liquor interests and the tavernkeepers, in contrast to the GOP, which had a strong dry element. "Romanism" meant Roman Catholics, especially Irish Americans, who ran the Democratic Party in most cities, and whom the reformers denounced for political corruption and their separate parochial-school system. "Rebellion" harked back to the Democrats of the Confederacy, who had tried to break the Union in 1861, as well as to their northern allies, called "Copperheads." [102]

Demographic trends boosted the Democratic totals, as the German and Irish Catholic immigrants became Democrats and outnumbered the English and Scandinavian Republicans. The new immigrants who arrived after 1890 seldom voted at this time. During the 1880s and 1890s, the Republicans struggled against the Democrats' efforts, winning several close elections and losing two to Grover Cleveland (in 1884 and 1892).

Religious lines were sharply drawn. [101] In the North, about 50% of the voters were pietistic Protestants (especially Methodists, Scandinavian Lutherans, Presbyterians, Congregationalists, Disciples of Christ) who believed in using the government to reduce social sins, such as drinking. They strongly supported the GOP, as the table shows. In sharp contrast, liturgical groups, especially the Catholics, Episcopalians, and German Lutherans, voted for the Democrats. They saw the Democratic party as their best protection from the moralism of the pietists, and especially from the threat of prohibition. Both parties cut across the class structure, with the Democrats more bottom-heavy and the GOP better represented among businessmen and professionals in the North. [103]

Many cultural issues, especially prohibition and foreign-language schools, became hard-fought political issues because of the deep religious divisions in the electorate. For example, in Wisconsin the Republicans tried to close down German-language Catholic and Lutheran parochial schools, and were defeated in 1890 when the Bennett Law was put to the test. [104]

Prohibition debates and referendums heated up politics in most states over a period of decades, as national prohibition was finally passed in 1919 (and repealed in 1933), serving as a major issue between the wet Democrats and the dry GOP. [105]

Prior to the Gilded Age, the time commonly referred to as the old immigration saw the first real boom of new arrivals to the United States. During the Gilded Age, approximately 20 million immigrants came to the United States in what is known as the new immigration. Some of them were prosperous farmers who had the cash to buy land and tools in the Plains states especially. Many were poor peasants looking for the American Dream in unskilled manual labor in mills, mines, and factories. Few immigrants went to the poverty-stricken South, though. To accommodate the heavy influx, the federal government in 1892 opened a reception center at Ellis Island near the Statue of Liberty. [106]

Waves of old and new immigrants Edit

These immigrants consisted of two groups: The last big waves of the "Old Immigration" from Germany, Britain, Ireland, and Scandinavia, and the rising waves of the "New Immigration", which peaked about 1910. Some men moved back and forth across the Atlantic, but most were permanent settlers. They moved into well-established communities, both urban and rural. The German American communities spoke German, but their younger generation was bilingual. [107] The Scandinavian groups generally assimilated quickly they were noted for their support of reform programs, such as prohibition. [108]

In terms of immigration, after 1880 the old immigration of Germans, British, Irish, and Scandinavians slackened off. The United States was producing large numbers of new unskilled jobs every year, and to fill them came number from Italy, Poland, Austria, Hungary, Russia, Greece, and other points in southern and central Europe, as well as French Canada. The older immigrants by the 1870s had formed highly stable communities, especially the German Americans. [109] The British immigrants tended to blend into the general population. [110]

Irish Catholics had arrived in large numbers in the 1840s and 1850s in the wake of the great famine in Ireland when starvation killed millions. Their first few decades were characterized by extreme poverty, social dislocation, crime and violence in their slums. By the late 19th century, the Irish communities had largely stabilized, with a strong new "lace curtain" middle-class of local businessmen, professionals, and political leaders typified by P. J. Kennedy (1858–1929) in Boston. In economic terms, Irish Catholics were nearly at the bottom in the 1850s. They reached the national average by 1900, and by the late 20th century they far surpassed the national average. [111]

In political terms, the Irish Catholics comprised a major element in the leadership of the urban Democratic machines across the country. [112] Although they were only a third of the total Catholic population, the Irish also dominated the Catholic Church, producing most of the bishops, college presidents, and leaders of charitable organizations. [113] The network of Catholic institutions provided high status, but low-paying lifetime careers to sisters and nuns in parochial schools, hospitals, orphanages and convents. They were part of an international Catholic network, with considerable movement back and forth from Ireland, England, France, Germany and Canada. [114]

New immigrants Edit

The "New Immigration" were much poorer peasants and rural folk from southern and eastern Europe, including mostly Italians, Poles and Jews. Some men, especially the Italians and Greeks, saw themselves as temporary migrants who planned to return to their home villages with a nest egg of cash earned in long hours of unskilled labor. Others, especially the Jews, had been driven out of Eastern Europe and had no intention of returning. [115]

Historians analyze the causes of immigration in terms of push factors (pushing people out of the homeland) and pull factors (pulling them to America). The push factors included economic dislocation, shortages of land, and antisemitism. Pull factors were the economic opportunity of good inexpensive farmland or jobs in factories, mills and mines. [116]

The first generation typically lived in ethnic enclaves with a common language, food, religion, and connections through the old village. The sheer numbers caused overcrowding in tenements in the larger cities. In the small mill towns, however, management usually built company housing with cheap rents. [117]

Chinese immigrants Edit

Asian immigrants—Chinese at this time—were hired by California construction companies for temporary railroad work. The European Americans strongly disliked the Chinese for their alien life-styles and threat of low wages. The construction of the Central Pacific Railroad from California to Utah was handled largely by Chinese laborers. In the 1870 census, there were 63,000 Chinese men (with a few women) in the entire U.S. this number grew to 106,000 in 1880. [118] Labor unions, led by Samuel Gompers strongly opposed the presence of Chinese labor. Immigrants from China were not allowed to become citizens until 1950 however, as a result of the Supreme Court decision in United States v. Wong Kim Ark, their children born in the U.S. were full citizens. [119]

Congress banned further Chinese immigration through the Chinese Exclusion Act in 1882 the act prohibited Chinese laborers from entering the United States, but some students and businessmen were allowed in on a temporary basis. The Chinese population declined to only 37,000 in 1940. Although many returned to China (a greater proportion than most other immigrant groups), most of them stayed in the United States. Chinese people were unwelcome in urban neighborhoods, so they resettled in the "Chinatown" districts of large cities. The exclusion policy lasted until the 1940s. [120]

A dramatic expansion in farming took place during the Gilded Age, [121] [122] with the number of farms tripling from 2.0 million in 1860 to 6.0 million in 1905. The number of people living on farms grew from about 10 million in 1860 to 22 million in 1880 to 31 million in 1905. The value of farms soared from $8.0 billion in 1860 to $30 billion in 1906. [123]

The federal government issued 160-acre (65 ha) tracts virtually free to settlers under the Homestead Act of 1862. Even larger numbers purchased lands at very low interest from the new railroads, which were trying to create markets. The railroads advertised heavily in Europe and brought over, at low fares, hundreds of thousands of farmers from Germany, Scandinavia and Britain. [124]

Despite their remarkable progress and general prosperity, 19th-century U.S. farmers experienced recurring cycles of hardship, caused primarily by falling world prices for cotton and wheat. [125]

Along with the mechanical improvements which greatly increased yield per unit area, the amount of land under cultivation grew rapidly throughout the second half of the century, as the railroads opened up new areas of the West for settlement. The wheat farmers enjoyed abundant output and good years from 1876 to 1881 when bad European harvests kept the world price high. They then suffered from a slump in the 1880s when conditions in Europe improved. The farther west the settlers went, the more dependent they became on the monopolistic railroads to move their goods to market, and the more inclined they were to protest, as in the Populist movement of the 1890s. Wheat farmers blamed local grain elevator owners (who purchased their crop), railroads and eastern bankers for the low prices. [126] [127] This protest has now been attributed to the far increased uncertainty in farming due to its commercialisation, with monopolies, the gold standard and loans being simply visualisations of this risk. [128]

The first organized effort to address general agricultural problems was the Grange movement. Launched in 1867, by employees of the U.S. Department of Agriculture, the Granges focused initially on social activities to counter the isolation most farm families experienced. Women's participation was actively encouraged. Spurred by the Panic of 1873, the Grange soon grew to 20,000 chapters and 1.5 million members. The Granges set up their own marketing systems, stores, processing plants, factories and cooperatives. Most went bankrupt. The movement also enjoyed some political success during the 1870s. A few Midwestern states passed "Granger Laws", limiting railroad and warehouse fees. [129] The agricultural problems gained mass political attention in the Populist movement, which won 44 votes in the Electoral College in 1892. [130] Its high point came in 1896 with the candidacy of William Jennings Bryan for the Democrats, who was sympathetic to populist concerns such as the silver standard. [131] [132]

American society experienced significant changes in the period following the Civil War, most notably the rapid urbanization of the North. [133] Due to the increasing demand for unskilled workers, most European immigrants went to mill towns, mining camps, and industrial cities. New York, Philadelphia, and especially Chicago saw rapid growth. Louis Sullivan became a noted architect using steel frames to construct skyscrapers for the first time while pioneering the idea of "form follows function". Chicago became the center of the skyscraper craze, starting with the ten-story Home Insurance Building in 1884–1885 by William Le Baron Jenney. [134]

As immigration increased in cities, poverty rose as well. The poorest crowded into low-cost housing such as the Five Points and Hell's Kitchen neighborhoods in Manhattan. These areas were quickly overridden with notorious criminal gangs such as the Five Points Gang and the Bowery Boys. [135] Overcrowding spread germs the death rates in big city tenements vastly exceeded those in the countryside. [67]

Rapid outward expansion required longer journeys to work and shopping for the middle class office workers and housewives. The working-class generally did not own automobiles until after 1945 they typically walked to nearby factories and patronized small neighborhood stores. The middle class demanded a better transportation system. Slow horse-drawn streetcars and faster electric trolleys were the rage in the 1880s. [136] In the horse-drawn era, streets were unpaved and covered with dirt or gravel. However, this produced uneven wear, opened new hazards for pedestrians, and made for dangerous potholes for bicycles and for motor vehicles. Manhattan alone had 130,000 horses in 1900, pulling streetcars, delivery wagons, and private carriages, and leaving their waste behind. They were not fast, and pedestrians could dodge and scramble their way across the crowded streets. In small towns people mostly walked to their destination so they continued to rely on dirt and gravel into the 1920s. Larger cities had much more complex transportation needs. They wanted better streets, so they paved them with wood or granite blocks. [137] In 1890, a third of Chicago's 2000 miles of streets were paved, chiefly with wooden blocks, which gave better traction than mud. Brick surfacing was a good compromise, but even better was asphalt paving. With London and Paris as models, Washington laid 400,000 square yards of asphalt paving by 1882, and served as a model for Buffalo, Philadelphia, and elsewhere. By the end of the century, American cities boasted 30 million square yards of asphalt paving, followed by brick construction. [138] Street-level electric trolleys moved at 12 miles per hour, and became the main transportation service for middle class shoppers and office workers. Big-city streets became paths for faster and larger and more dangerous vehicles, the pedestrians beware. In the largest cities, street railways were elevated, which increased their speed and lessened their dangers. Boston built the first subway in the 1890s followed by New York a decade later. [139]

The South Edit

The South remained heavily rural and was much poorer than the North or West. [141] In the South, Reconstruction brought major changes in agricultural practices. The most significant of these was sharecropping, where tenant farmers "shared" up to half of their crop with the landowners, in exchange for seed and essential supplies. About 80% of the Black farmers and 40% of White ones lived under this system after the Civil War. Most sharecroppers were locked in a cycle of debt, from which the only hope of escape was increased planting. This led to the over-production of cotton and tobacco (and thus to declining prices and income), soil exhaustion, and poverty among both landowners and tenants. [142]

Agriculture's Share of the Labor Force, 1890 [143]

Northeast 15%
Middle Atlantic 17%
Midwest 43%
South Atlantic 63%
South Central 67%
West 29%

There were only a few scattered cities – small courthouse towns serviced the farm population. Local politics revolved around the politicians and lawyers based at the courthouse. Mill towns, narrowly focused on textile production or cigarette manufacture, began opening in the Piedmont region especially in the Carolinas. Racial segregation and outward signs of inequality were everywhere, and rarely were challenged. Blacks who violated the color line were liable to expulsion or lynching. [144] Cotton became even more important than before, as poor whites needed the cash that cotton would bring. Cotton prices were much lower than before the war, so everyone was poor. White southerners showed a reluctance to move north, or to move to cities, so the number of small farms proliferated, and they became smaller as the population grew. [142]

Many of the White farmers, and most of the Blacks, were tenant farmers who owned their work animals and tools, and rented the land. Others were day laborers or very poor sharecroppers, who worked under the supervision of the landowner. There was little cash in circulation, because most farmers operated on credit accounts from local merchants, and paid off their debts at cotton harvest time in the fall. Although there were small country churches everywhere, there were only a few dilapidated elementary schools. Apart from private academies, there were very few high schools until the 1920s. Conditions were marginally better in newer areas, especially in Texas and central Florida, with the deepest poverty in South Carolina, Mississippi, and Arkansas. [145]

The vast majority of African Americans lived in the South, and as the promises of emancipation and reconstruction faded, they entered the nadir of race relations. [146] Every Southern state and city passed Jim Crow laws that were in effect between the late 19th century and 1964, when they were abolished by Congress. They mandated de jure (legal) segregation in all public facilities, such as stores and street cars, with a supposedly "separate but equal" status for Blacks. In reality, this led to treatment and accommodations that were dramatically inferior to those provided for White Americans, systematizing a number of economic, educational and social disadvantages. Schools for Blacks were far fewer and poorly supported by taxpayers, although Northern philanthropies and churches kept open dozens of academies and small colleges. [147]

In the face of years of mounting violence and intimidation directed at blacks during Reconstruction, the federal government was unable to guarantee constitutional protections to freedmen. In the Compromise of 1877 President Hayes withdrew Union troops from the South "Redeemers" (White Democrats) acted quickly to reverse the groundbreaking advances of Reconstruction. Black political power was eliminated in the 1880s, and in the 1890s new laws effectively blocked over 90% of the Blacks from voting (with some exceptions in Tennessee blacks did vote in the border states). [148]

The West Edit

In 1869, the First Transcontinental Railroad—a combination of the Union Pacific from Omaha to Utah and the Central Pacific from Utah to California—opened up the far west mining and ranching regions. Travel from New York to San Francisco now took six days instead of six months. [149]

After the Civil War, many from the East Coast and Europe were lured west by reports from relatives and by extensive advertising campaigns promising "the Best Prairie Lands", "Low Prices", "Large Discounts For Cash", and "Better Terms Than Ever!". The new railroads provided the opportunity for migrants to go out and take a look, with special family tickets, the cost of which could be applied to land purchases offered by the railroads. Farming the plains was indeed more difficult than back east. [150]

Water management was more critical, lightning fires were more prevalent, the weather was more extreme, rainfall was less predictable. The fearful stayed home, while migrants were mainly motivated by a search to improve their economic life. Farmers sought larger, cheaper and more fertile land merchants and tradesman sought new customers and new leadership opportunities. Laborers wanted higher paying work and better conditions. With the Homestead Act providing free land to citizens and the railroads selling cheap lands to European farmers, the settlement of the Great Plains was swiftly accomplished, and the frontier had virtually ended by 1890. [150]

Family life Edit

In the Gilded Age West, few single men attempted to operate a farm. Farmers clearly understood the need for a hard-working wife, and numerous children, to handle the many chores, including child-rearing, feeding and clothing the family, managing the housework, and feeding the hired hands. [151] During the early years of settlement, farm women played an integral role in assuring family survival by working outdoors. After a generation or so, women increasingly left the fields, thus redefining their roles within the family. New conveniences such as sewing and washing machines encouraged women to turn to domestic roles. The scientific housekeeping movement was promoted across the land by the media and government extension agents, as well as county fairs which featured achievements in home cookery and canning, advice columns for women in the farm papers, and home economics courses in schools. [152]

Although the eastern image of farm life on the prairies emphasizes the isolation of the lonely farmer and the bleakness of farm life, in reality rural folk created a rich social life for themselves. For example, many joined a local branch of The Grange a majority had ties to local churches. It was popular to organize activities that combined practical work, abundant food, and simple entertainment such as barn raisings, corn huskings, and quilting bees. [153] One could keep busy with scheduled Grange meetings, church services, and school functions. Women organized shared meals and potluck events, as well as extended visits between families. [154]

Childhood on western farms is contested territory. One group of scholars argues the rural environment was salubrious because it allowed children to break loose from urban hierarchies of age and gender, promoted family interdependence, and produced children who were more self-reliant, mobile, adaptable, responsible, independent and more in touch with nature than their urban or eastern counterparts. [155] [156] However other historians offer a grim portrait of loneliness, privation, abuse, and demanding physical labor from an early age. [157] [158] [159]

Native assimilation Edit

Native American policy was set by the national government (the states had very little role), and after 1865 the national policy was that Native Americans either had to assimilate into the larger community or remain on reservations, where the government provided subsidies. Reservation natives were no longer allowed to roam or fight their traditional enemies. The U.S. Army was to enforce the laws. Natives of the West came in conflict with expansion by miners, ranchers and settlers. By 1880, the buffalo herds, a foundation for the hunting economy had disappeared. Violence petered out in the 1880s and practically ceased after 1890. [160]

Native Americans individually had the choice of living on reservations, with food, supplies, education and medical care provided by the federal government, or living on their own in the larger society and earning wages, typically as a cowboy on a ranch, or manual worker in town. Reformers wanted to give as many Native Americans as possible the opportunity to own and operate their own farms and ranches, so the issue was how to give individual natives land owned by the tribe. To assimilate the natives into American society, reformers set up training programs and schools, such as the Carlisle Indian Industrial School in Carlisle, Pennsylvania, that produced many prominent Native American leaders. However, anti-assimilation traditionalists on the reservations resisted integration and the resulting loss of their traditional life.

In 1887, the Dawes Act proposed to divide tribal land and parcel out 160 acres (0.65 km 2 ) of land to each head of family. Such allotments were to be held in trust by the government for 25 years, then given to owners with full title, so they could sell it or mortgage it. As individual natives sold their land, the total held by the native community shrank by almost half. The individualized system undermined the traditional communal tribal organization. Furthermore, a majority of natives responded to intense missionary activity by converting to Christianity. The long-term goal of Dawes Act was to integrate natives into the mainstream the majority accepted integration and were absorbed into American society, leaving a trace of native ancestry in millions of American families. Those who refused to assimilate remained in poverty on reservations, supported until now by Federal food, medicine and schooling. In 1934, national policy was reversed again by the Indian Reorganization Act which tried to protect tribal and communal life on reservations. [161]

The New York Art world took a major turn during the Gilded age, seeing an outgrowth of exhibitions and the establishment of major auction houses with a focus on American Art. [163] The Gilded Age was pivotal in establishing the New York Art world in the international art market. [164]

New York Art Galleries, Clubs, and Associations During the Gilded Age

Social activism Edit

During the Gilded Age, many new social movements took hold in the United States. Many women abolitionists who were disappointed that the Fifteenth Amendment did not extend voting rights to them, remained active in politics, this time focusing on issues important to them. Reviving the temperance movement from the Second Great Awakening, many women joined the Women's Christian Temperance Union (WCTU) in an attempt to bring morality back to America. Its chief leader was Frances Willard (1839–1898), who had a national and international outreach from her base in Evanston, Illinois. Often the WCTU women took up the issue of women's suffrage which had lain dormant since the Seneca Falls Convention. With leaders like Susan B. Anthony, the National American Woman Suffrage Association (NAWSA) was formed to secure the right of women to vote. [176]

Employment Edit

Many young women worked as servants or in shops and factories until marriage, then typically became full-time housewives. However, black, Irish and Swedish adult women often worked as servants. In most large Northern cities, the Irish Catholic women dominated the market for servants. [177] Heavy industry was a male domain, but in light industries such as textiles and food processing, large numbers of young women were hired. Thousands of young unmarried Irish and French Canadian women worked in Northeastern textile mills. Coming from poor families these jobs meant upward social mobility, more money, and more social prestige in their community that made them more attractive marriage partners. In Cohoes, New York, mill women went on strike in 1882 to gain union recognition. They fought off Swedish strike breakers to protect the status they had achieved. [178]

After 1860, as the larger cities opened department stores, middle-class women did most of the shopping increasingly they were served by young middle-class women clerks. [179] Typically, most young women quit their jobs when they married. In some ethnic groups, however, married women were encouraged to work, especially among African-Americans, and Irish Catholics. When the husband operated a small shop or restaurant, wives and other family members could find employment there. Widows and deserted wives often operated boarding houses. [180]

Career women were few. The teaching profession had once been heavily male, but as schooling expanded many women took on teaching careers. [181] If they remained unmarried they could have a prestigious but poorly paid lifetime career in the middle class. [182] At the end of the period nursing schools opened up new opportunities for women, but medical schools remained nearly all male. [183]

Business opportunities were rare, unless it was a matter of a widow taking over her late husband's small business. However the rapid acceptance of the sewing machine made housewives more productive and opened up new careers for women running their own small millinery and dressmaking shops. [184] When her husband died, Lydia Moss Bradley (1816–1908) inherited $500,000 shrewd investments doubled that sum and she later became president of his old bank in Peoria, Illinois. She worked from home to handle banking business. In an age when philanthropists such as Johns Hopkins, Cornell, Purdue, Vanderbilt, Stanford, Rice and Duke were perpetuating their names by founding universities, she lifted her aspirations from the original idea of an orphanage to the loftier goal and in 1897 founded Bradley University in Peoria. [185]

A leading magazine, The Nation, espoused Classical liberalism every week starting in 1865, under the influential editor E. L. Godkin (1831–1902). [186]

Science played an important part in social thought as the work of Charles Darwin became known among intellectuals. Following Darwin's idea of natural selection, English philosopher Herbert Spencer proposed the idea of social Darwinism. This new concept justified the stratification of the wealthy and poor, and it was in this proposal that Spencer coined the term "survival of the fittest".

Joining Spencer was Yale professor William Graham Sumner whose book What Social Classes Owe to Each Other (1884) argued that assistance to the poor actually weakens their ability to survive in society. Sumner argued for a laissez-faire and free-market economy. Few people, however, agreed with the social Darwinists, because they ridiculed religion and denounced philanthropy.

Henry George proposed a "single tax" in his book Progress and Poverty. The tax would be leveled on the rich and poor alike, with the excess money collected used to equalize wealth and level out society.

The Norwegian American economist Thorstein Veblen argued in The Theory of the Leisure Class (1899) that the "conspicuous consumption and conspicuous leisure" of the wealthy had become the basis of social status in America.

In Looking Backward (1887), the reformer Edward Bellamy envisioned a future America set in the year 2000 in which a socialist paradise has been established. The works of authors such as George and Bellamy became popular, and soon clubs were created across America to discuss their ideas, although these organizations rarely made any real social change. [187]

The Third Great Awakening which began before the Civil War returned and made a significant change in religious attitudes toward social progress. Followers of the new Awakening promoted the idea of the Social Gospel which gave rise to organizations such as the YMCA, the American branch of the Salvation Army, and settlement houses such as Hull House, founded by Jane Addams in Chicago in 1889. [188]

The Third Great Awakening was a period of religious activism in American history from the late 1850s to the 20th century. It affected pietistic Protestant denominations and had a strong sense of social activism. It gathered strength from the postmillennial theology that the Second Coming of Christ would come after mankind had reformed the entire earth. The Social Gospel movement gained its force from the Awakening, as did the worldwide missionary movement. New groupings emerged, such as the Holiness movement and Nazarene movements, Theosophy and Christian Science. [189]

The Protestant mainline denominations (especially the Methodist, Episcopal, Presbyterian, and Congregational churches) grew rapidly in numbers, wealth and educational levels, throwing off their frontier beginnings and becoming centered in towns and cities. Leaders such as Josiah Strong advocated a muscular Christianity with systematic outreach to the unchurched in America and around the globe. Others built colleges and universities to train the next generation. Each denomination supported active missionary societies, and made the role of missionary one of high prestige. [3] [190] The great majority of pietistic mainline Protestants (in the North) supported the Republican Party, and urged it to endorse prohibition and social reforms. [191] [192] (see Third Party System)

The Awakening in numerous cities in 1858 was interrupted by the American Civil War. In the South, on the other hand, the Civil War stimulated revivals and strengthened the Baptists, especially. [193] After the war, Dwight L. Moody made revivalism the centerpiece of his activities in Chicago by founding the Moody Bible Institute. The hymns of Ira Sankey were especially influential. [194]

Across the nation, "drys" crusaded in the name of religion for the prohibition of alcohol. The Woman's Christian Temperance Union mobilized Protestant women for social crusades against not only liquor, but also pornography and prostitution, and sparked the demand for women's suffrage. [195]

The Gilded Age plutocracy came under harsh attack from the Social Gospel preachers and reformers in the Progressive Era who became involved with issues of child labor, compulsory elementary education and the protection of women from exploitation in factories. [196]

All the major denominations sponsored growing missionary activities inside the United States and around the world. [197] [198]

Colleges associated with churches rapidly expanded in number, size and quality of curriculum. The promotion of muscular Christianity became popular among young men on campus and in urban YMCAs, as well as such denominational youth groups such as the Epworth League for Methodists and the Walther League for Lutherans. [199]