There was a time in U.S. history when the business magnates and titans of industry boasted more wealth than even today’s top technology innovators and visionaries.
Table of Contents
- Captains of Industry and Robber Barons
- John D. Rockefeller
- Andrew Carnegie
- J.P. Morgan
- The Gilded Age comparison beguiles us — and not even as much as it could
- Solutions for Gilded Age inequality won’t work for ours
During America’s Gilded Age — which spanned most of the latter half of the 19th century, from around 1870 to 1900 — the inflation-adjusted wealth and impact of America’s most towering figures far overshadowed what we see today.
The wealth of people like John D. Rockefeller, Cornelius Vanderbilt, Henry Ford, and Andrew Carnegie would by today’s standards be measured in the hundreds of billions of dollars — far more than tech giants like Elon Musk, Bill Gates, Mark Zuckerberg, and even Jeff Bezos, the wealthiest individual in the world as of 2019.
Wealth so vast can often highlight the financial inequality of an era. It’s this idea of grandeur in the face of unresolved social concerns that led Mark Twain to coin the phrase “Gilded Age” in his 1873 novel The Gilded Age: A Tale of Today. The title suggested that the thin veneer of wealth for the elite masked broader issues for many in the lower and middle classes.
But the progress made in the United States during the Gilded Age can’t be denied. As part of the Second Industrial Revolution, the country underwent an impressive economic expansion — led by the day’s larger-than-life figures of wealth and power. Much of this growth was courtesy of railroads — which now spanned from coast to coast — as well as factories, steel, and the coal mining industry.
Big business boomed, with technology such as typewriters, cash registers, and adding machines helping to transform how people worked. And the economic explosion included not only industrial growth, but also a growth in agricultural technology such as mechanical reapers.
In a time of such great expansion and fewer regulations surrounding wealth and business practices, circumstances were perfect for the rise of a class of extremely wealthy individuals who made up a very small percentage of society. They had the power and means to create opportunities and jobs for the many, though with less social prioritization on workers’ rights, issues like discrimination, exploitation, and low wages marked the era.
Still, it’s impossible to overstate the impact these individuals had on America’s development. With technology booming and immigrants flocking to the United States seeking better opportunities for themselves and their families, they left their mark on the United States — and on history.
Captains of Industry and Robber Barons
The wealthy elite of the late 19th century consisted of industrialists who amassed their fortunes as so-called robber barons and captains of industry. Both can be defined as business tycoons, but there was a significant difference in the way they made their fortunes.
The term “robber baron” dates back to the Middle Ages and carries a negative connotation. Robber barons typically employed ethically questionable methods to eliminate their competition and develop a monopoly in their industry. Often, they had little empathy for workers.
Captains of industry, however, were often philanthropists. They made their wealth — and used it — in a way that would benefit society, such as providing more jobs or increasing productivity.
John D. Rockefeller
Born in 1837, John D. Rockefeller became one of the richest men in the world as the founder of the Standard Oil Company. In 2018 dollars, Rockefeller’s net worth is said to eclipse $400 billion — nearly three times the 2018 estimated net worth of Jeff Bezos, the founder of Amazon.com and the wealthiest individual in the world.
Standard Oil dominated the oil industry, controlling roughly 90% of the refineries and pipelines in the United States by the early part of the 1880s.
While he has faced some criticism historically for how he accumulated his wealth, Rockefeller’s charitable efforts paint him as a philanthropic captain of industry. Over the course of his life, his donations to charitable causes exceeded $500 million (unadjusted for inflation).
Andrew Carnegie
Andrew Carnegie served as a great example of an American rags-to-riches story. Born to a poor Scottish family, he and his parents immigrated to the U.S. when he was 13. He built his fortune by investing in the steel industry and became the owner of Carnegie Steel Company, which by 1889 was the largest steel company in the world.
Despite some criticism of how some workers at Carnegie Steel were treated, Carnegie himself was extremely active in terms of philanthropy. In his efforts to contribute to society, he established the Carnegie Endowment for International Peace, the New York Public Library, and a college that would become part of Carnegie Mellon University.
He also wrote “The Gospel of Wealth,” an article that argued that the wealthy have a responsibility to contribute to the greater good of society.
J.P. Morgan
John Pierpont Morgan was a financier from a wealthy family and is considered by many to have been among the robber barons during America’s Gilded Age.
At face value, Morgan contributed greatly to American industry. He invested in Thomas Edison and the Edison Electricity Company; helped to create General Electric and International Harvester; formed J.P. Morgan & Company; and gained control of half of the country’s railroad mileage. He also created the first billion-dollar company, U.S. Steel. At one point in his life, he was a board member of as many as 48 corporations.
However, Morgan engaged in some unethical and anticompetitive practices to ward off competition. For example, he was believed to head a money trust that controlled the banking industry and was commonly considered a figurehead of Wall Street. He also created a monopoly by slashing the workforce and their pay to maximize profits while eliminating the competition. Workers’ wages were often as low as a dollar a day or less, and conditions for employees were poor, with increased fatalities even as wages grew.
When confronted with the possibility of regulations that could threaten his bottom line, he and other robber barons of the time contributed money to ensure that a business-friendly presidential candidate, William McKinley, was elected in 1896.
Despite the numerous negatives associated with how Morgan built his wealth, some of his actions did benefit the United States and society. For example, his wealth was so vast that he was able to help bail out the federal government twice during an economic crisis, first in 1895 and again in 1907.
Henry Ford
Automaker Henry Ford was a captain of industry who is considered to have treated his workers well. He believed that well-paid workers would be happier and more efficient. For that reason, he instituted a $5-a-day pay rate, which was twice as much as other auto manufacturers paid.
In addition, during a time when workers were required to work 10 hours a day, six days a week, Ford scheduled his workers for eight-hour days, five days a week.
Ford was known to be generous with his wealth in terms of charitable contributions. He donated personal funds to organizations that he created, such as the Henry Ford Hospital for the working poor who could afford to pay only some of the cost of their medical care. Over the course of his life, he donated approximately $14 million to this institution.
Other organizations created by Ford included the 80-acre Valley Farm for orphaned boys; a school for African American children in Georgia; and a Detroit trade school. He also paid for work camps for boys during the Great Depression.
In addition to his charitable efforts, Ford was a known pacifist. He was part of a peace ship to Europe that hoped to put an end to World War I.
Andrew Carnegie, steel magnate and one of the 19th century’s richest men, made an offhand remark while bragging about his wealth to a newspaper reporter in early 1892: “It isn’t the man who does the work that makes the money. It’s the man who gets other men to do it.”
Several months later while on vacation in Scotland, Carnegie sent a telegram approving of his deputy’s decision to unleash a private army on strikers and their families at his steel mill in Homestead, Pennsylvania, sparking a bloody gun battle that left at least 10 dead and dozens seriously wounded.
Carnegie was getting other men to do the work.
Accounts like these pepper tales of the Gilded Age, the period in US history roughly from the end of the Civil War to the start of the 20th century. They have made the term “Second Gilded Age” a convenient shorthand for affluent arrogance and economic inequity today.
The term “Second” or “New Gilded Age” has been appearing in print for nearly four decades, describing everything from the junk-bond 1980s to the internet-bubble 1990s, and the Collateralized-Debt-Obligation 2000s to the top-1-percent 2010s.
As a historian of US class relations, I understand the appeal. The comparison — though superficial — keeps working because economic inequality keeps growing, and most Americans associate the Gilded Age first and foremost with excesses and egotism of great wealth.
But those who use the phrase “Second Gilded Age” to criticize contemporary inequality are also paying unintended tribute to Carnegie’s logic. They are trying to get a previous historical era to do the work of offering critiques and solutions for this one’s problems. Our grasp of both eras suffers for it.
The Gilded Age comparison beguiles us — and not even as much as it could
The temptation of the comparison is understandable on storytelling grounds alone. Gilded Age elites cut a detestably memorable and therefore useful profile, from shipping tycoon Cornelius Vanderbilt spitting, “The public be damned!,” to financier Jay Gould boasting that he could “hire one-half the working class to shoot the other half to death.”
Railroad sleeping-car king George Pullman knew how loathed he was: he arranged to have his coffin sealed with lead and buried at night in a steel-and-concrete vault 8 feet deep, lest workers desecrate his corpse in revenge for the way he exploited them in life.
Even Gilded Age parties rankle democratic sensibilities. Amid a global depression in 1897, New York millionaires including banker J.P. Morgan and real estate heiress Caroline Astor spent several fortunes impersonating ancien régime royalty at a Waldorf Astoria costume ball while the unemployed huddled in the streets outside.
The very phrase “Gilded Age” conjures cartoon visions of such individuals. They seem an ideal historical comparison for today’s “bailout billionaires” who purchase politicians, award employees accused of sexual harassment with rich exit packages, and spend millions to hire rock stars for birthday parties.
Yet historians such as Steve Fraser and James Livingston have rightly objected to the notion that today we are in a second Gilded Age. They point to the stark economic contrasts in the two eras: industrialization, rising working-class wages, and violent class conflict in the first Gilded Age; de-industrialization, falling working-class wages, and what Fraser calls “acquiescence” to exploitation — including modern phenomenons like mass stock ownership, the gig economy, mass indebtedness, and more — today.
Recent wildcat strikes and the election of democratic socialists to Congress have made this last claim somewhat less tenable than it was before 2016, but relative to the Gilded Age’s literal class war, the upsurge in resistance remains mild.
Yet the problems with the “Second Gilded Age” idea don’t end with the flawed historical similarities. In some ways, those it omits are more telling.
It was during the Gilded Age that African-American men — who had just secured voting rights in the 15th Amendment — were disenfranchised through legal chicanery and racist, state-sanctioned violence. The Supreme Court’s 1883 gutting of the first US Civil Rights Act opened the way for the subsequent consolidation of Jim Crow law.
A hundred and thirty years later, the Supreme Court gutted the Voting Rights Act, enabling a flood of state-level Voter ID legislation targeting low-income voters of color. Meanwhile, the pairing of a wantonly violent and racist criminal justice system with laws that impede felon and ex-felon suffrage decimates the black vote.
Soon after the Civil War, the US Army accelerated long-running efforts to expel Native Americans from ancestral lands across the continent, sometimes claiming to be fighting “barbarism and terrorism” as a pretext for Gilded Age projects of occupation and natural resource extraction.
Such justifications for imperial military action echo from the 1870s to the 2000s, whether serving to target Sioux gold in the Black Hills or black gold in Iraq.
The Gilded Age also included white nationalist, anti-immigrant movements. Their legislative culmination was the Chinese Exclusion Act of 1882, which banned the immigration of Chinese laborers to the United States.
Last year, President Donald Trump succeeded in imposing restrictions on immigration from seven predominantly Muslim countries. He continues, as he has since his 2016 campaign launch, to make political hay by demonizing migrants from Mexico and Central America.
These surface historical parallels seem so obvious. Why don’t they tend to come up in columns decrying our “Second Gilded Age?”
Solutions for Gilded Age inequality won’t work for ours
It might have something to do with how the first Gilded Age ended.
In the liberal historical imagination, the economic reforms of the Progressive Era and New Deal years in the first half of the 20th century — primarily higher taxes, stricter regulations of business and finance, and greater government investment in public enterprise — vanquished Gilded Age inequality.
This happy version of the story has many heroes, most of whom tend to be middle-class intellectuals and technocratic politicians: muckraking journalists like Ida Tarbell who exposed robber barons, government appointees like Frances Perkins who fought to protect workers, and seemingly anti-laissez-faire presidents like Woodrow Wilson and the two Roosevelts.
Little wonder that the usual proposed solution for the “Second Gilded Age” is either a “second Progressive Era” or a “New New Deal.”
But this understanding distorts the history of the demise of the Gilded Age’s inequality and misleads us today.
Although middle-class philanthropists and technocratic politicians gave voice to policies that began to curtail inequality, they did not generate the conditions that made such policies either politically possible or effective. That took decades of widespread, sustained, and explicit anti-capitalist organizing from working people — in labor unions, youth groups, radical political parties, and coalitions of mass protest — from the 1870s through the 1940s. Cold War liberalism’s backlash against such radicalism was fierce and helped fuel the rise of the right.
Progressives and New Dealers also achieved their reforms by reaffirming the Gilded Age’s ideological and legal commitments to white supremacy, imperialism, and xenophobia. The mainstream labor movement marginalized radicals and underwrote imperial nationalism. Signature New Deal legislation — the Social Security Act and the National Labor Relations Act — discriminated against women and African Americans by excluding domestic and agricultural workers, valorizing the white male family wage earner.
The “solutions” that ended Gilded Age inequality, in other words, became a crucial seedbed for our own era’s historically distinct expressions of inequality.
The “Second Gilded Age” is a gilded analogy. We have not been through all this before. We won’t emerge from it by reanimating the politics of the past. New solutions are wanting.
Unlike Carnegie, we don’t have the luxury of getting others to do the work.
David Huyssen is the author of Progressive Inequality: Rich and Poor in New York, 1890-1920. He is working on a new book about the socialist who created the hedge fund, and teaches Modern American History at the University of York in the UK. Follow him on Twitter: @davidhuyssen.
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