During and after the Gilded Age, because of the great changes of Industrialization, the American government’s involvement in regulating the business world was a hotbed of controversial debate. Some felt that the way to achieve greater economic and social growth and to fix society’s problems was through Social Darwinism and Individualism. Social Darwinism was a theory, that what a man worked for was all he deserved to receive, and that no one should give aid to anyone, because they must’ve not worked as hard as they should have. Individualism was essentially the same idea that any man could rise from whatever origins they were born to, to as high as he wanted if he worked and utilized his capabilities and strength of will to the utmost. In contrast others felt that the government and the wealthy should be more involved in regulating the economy and helping the poor and needy out. They felt that while America had become an industrial giant with the turn of the century, her morals and human values had been left in the old century. Big business owners and government officials had abandoned all values, real or imagined for self-profit.
Walt Whitman, a poet who constantly had sung the praises of America’s democracy, culture, and strength, now wondered whether her materialistic pursuits had made her have a “hollowness of heart (R. D. Heffner, A. Heffner, 220-221).” By going through the origins of these two perspectives, and the evidence of who profited from the ideas, Social Darwinism will be shown not to have been the best road for the United States government to take in respect to the economy in specific and the citizens of the country.
The Gilded Age was an era that extended from the late 1870’s to the late 1890’s. The term Gilded Age came from a book by Mark Twain and Charles Warner, entitled The Gilded Age: A Tale of Today. The authors were subtly trying to tell the public that although the new innovations the era had brought shone and sparkled like gold, beneath the inventions, industrialization, and economic growth, poverty, crime and great class differentiation festered. During the era of the Gilded Age, the United States’ approach to the then largely lasseiz-faire economy was a topic of great debate in the nation (Appleby et al, 458).
The concentration of wealth in the United States was clustered at the very point of the social pyramid. In early 1900’s, there were approximately 30 billionaires in the United States. Rockefeller, Carnegie, Frick, Ford, and an array of railroad builders and financiers topped the list. The level of class inequality was so great that the laborers had a very, very weak bargaining point. There were not that many other places to work, and so the employers were able to set low wages and unsafe working conditions with no fear of opposition. Strikes were either broken up by force or ignored, and new workers took the place of the old rebellious ones (Heffner, 219). Many of the big businesses did not use fair business tactics. Rockefeller’s Standard Oil Trust finagled the Railroad companies into giving him rebates on shipping costs, out of consideration of his sheer freight bulk. He freighted (unfairly) for much less than the small businesses. Most of the big businesses also sought to make some sort of monopoly over their area of trade.
Whether vertical (All the fields involved with the business) or horizontal (All of a certain business) monopolies, they got the whole field under their control, forcing the other competitors out of business with below unfair prices. Other big companies used wrong or even harmful measures to increase their profit margins. The meat field for one did not hesitate at using rancid and rotting meat in their products to save money. For their ground meat they used spoiled meat they could not sell, offal and even rat meat. Unfortunate humans who fell into the gigantic grinders were mixed in too. Upton Sinclair, a journalist, wrote the fictitious book The Jungle, to bring this monstrosity into the public’s eye. Another journalist named Samuel Hopkins Adams published a series of articles describing what went into the medicines and pharmaceuticals people bought. Many of the so called medicines were merely flavored or colored water that the companies claimed would cure a variety of ills. Others were contained substances such as caffeine, alcohol, or even opium.
Consumers had no idea if the medicines would be harmful to their health or beneficial. Nor did they get any assurances that the medicine would work as claimed. No government department was in charge of making sure there was no false advertising. The American people read these literary works and rebelled against the sickening methods companies were using to make money. Many readers even became vegetarians (Appleby et al, 530). President Roosevelt and the Congress responded to the public outrage with the passing of the Meat Inspection Act and the Pure Food and Drug Act in 1906 (Axelrod, 224-225).
But inequality and the one sided power struggle did not mean that the common workers were completely exempt from the rewards of industrial progress. The growth of the United States economy meant benefits for each class. Many Americans were much better off in the Gilded Age than they had been before. Urban workers in particular, had a vast improvement in the quality of life over the course of the Gilded Age. Government was small at almost all levels, so taxes were extremely low. Most of the wealthy people for example, paid 1% of their income in taxes. Most people’s lifestyle improved as a result of electricity, plumbing, and good food were cheaper to obtain. However, for those who did not or could not work, life was very tough. There was no government intervention in the like of welfare or food stamps. Nor any type of life insurance for those who were injured in work, or who simply could never compete with other, more qualified workers (Krugman, 19-20). These were the people for whom the Gilded Age was truly merely gilt and not gold.
This time period was when the idea of individualism began to gain widespread popularity. This idea was that any man could rise from whatever origins he was born into, to as high as he wanted if he worked and utilized his capabilities and strength of will to the utmost. This wholly American belief which we continue to hold until today, led to arrival of one of the theories people wanted the government to adopt towards the economy, Social Darwinism. This concept was adapted by Herbert Spencer from Charles Darwin’s book, On the Origins of Species by Means of Natural Selection, on evolution. Darwin claimed that life on earth had evolved through a process he dubbed natural selection. Species that adapt to changes in their environment become strong and live on, and species who cannot adapt, simply die out over time. Spencer took this idea and adapted it to human society. He claimed that human society developed by the same rule. So what happens if individuals or the government interferes and helps the lower, inadaptable ones? The human species will weaken. He called it, ‘Survival of the fittest’. This became the catchphrase of Spencer and his group of followers, who were called the Social Darwinists (Appleby et al, 459-461).
One of Spencer’s followers, William Graham Sumner, said that, “Society does not owe any men a living… The fact that a man is here is no demand upon other people that they shall keep him alive and sustain him… if he fights it with the same energy and enterprise and skill and industry as any other man, I cannot imagine his failing…” He felt that the government would have to help everyone if they helped only a select few. It wouldn’t be feasible. Men have to work hard to succeed and it’s no one’s responsibility but their own, because no one owes them anything. If one does his own work, and tries his hardest, he cannot fail (Appleby et al, 465).
Not surprisingly, big industrialists heartily embraced this notion, as it was very similar to the idea of laissez-faire, a government intervention free economy that they wanted to keep. John D. Rockefeller, owner of the huge Standard Oil Trust, said that the growth of enormous businesses like his own were “merely the working out of the law of nature” (Appleby et al, 459).
These ideas had basis in fact. They went back over a hundred years to Adam Smith in 1776, when he wrote The Wealth of Nations. He claimed in his book, that countries would prosper if they let their economies run with no intervention, merely operate on the natural laws of supply and demand. Business owners would try to turn out the largest amount of goods and services at the lowest prices, and competition would keep the economy moving. “The invisible hand of self-interest” would keep the businesses headed in the path of community service. This ‘hand’ was the pursuit of profits (Harris and Antel, 456). To most people in the Gilded Age, this type of economy seemed to be working, as the Social Darwinism; laissez-faire economy had clearly prospered for both employer and employee, though not proportionally. Businesses were booming and the quality and standard of life was improving. But while this was in essence true, it did not include those unlucky enough not to have a job in the booming big businesses. The majority of people lived a hand to mouth existence, in grinding poverty. The urban worker saw a rise in his earnings and his quality of life but not so for the rural population (Krugman, 19-20). The future beyond what most people could see right then was not as rosy.
The businesses were getting bigger and bigger, and while there still was a minute bit of competition soon there would not be, and there would be only monopolies. This would cause prices and quality to be at the whim of the monopolies, because the incentive to keep people as consumers would go away. There would be nowhere else for the consumers to go (R. D. Heffner, A. Heffner, 222). As Social Darwinism became more and more prominent in discussions of the government’s approach to the economy and big businesses, new theories sprang up in opposition of this concept. Andrew Carnegie, was an industrialist like Rockefeller, who ran a colossal steel company (Appleby et al, 459). However, Carnegie had a rather different view on the topic of Social Darwinism. He felt that Social Darwinism was too harsh. He advocated a concept he called the Gospel of Wealth. This philosophy held that wealthy people should not just focus on themselves and on succeeding, but should also think of the other less fortunate people.
“In bestowing charity, the main consideration should be to help those who will help themselves…” This meant that wealthy people should not just give charity, but they should use their wealth to help those in need, by making them able to help themselves. They should build schools, hospitals and museums. Rich people should provide opportunities for the poor to better themselves both culturally and educationally. He said, “The man who dies rich, dies shamed. ” Carnegie himself built libraries across the country. Others who followed his lead, also started major philanthropic works by opening the Salvation Army, the YMCA and other charity organizations (Appleby et al, 466). A bonus to his theory of Social Gospel was that Carnegie influenced many of the other so called ‘robber barons’ to do the same. Rockefeller himself, one of the greatest of the unfair business tactic users, created the Rockefeller Institute of Medical Research and established the Rockefeller Foundation (Axelrod, 213).
Another big theory about poverty was published in a book called, Progress and Poverty, by a journalist named Henry George in 1879. It mainly discusses all the points of the national debate going on throughout the country about government intervention in the economy, in the Gilded Age. In the book, George says, “The present century has been marked by a prodigious increase in wealth producing power”; this he continues should have established poverty as, “a thing of the past.” Instead it has made the “gulf between the employed and the employers growing wider; social contrasts are becoming sharper.” In contrast to what the Social Darwinists said, George explains that the laissez-faire economy is making society’s problems worse (Appleby et al, 465).
To combat the theories of Social Darwinism and its ilk, in 1883, Lester Frank Ward published the book, Dynamic Sociology. In his book, Frank argues against the concept of Social Darwinism by saying that humans do not follow the same patterns as animals, because we can plan to create the future we desire. His ideas came to be known as Reform Darwinism. He alleged that cooperation between people was the key to success and competition ruined it. Government should regulate the economy; promote education and stop poverty, rather than just letting things happen as they will (Appleby et al, 465).
Criticism of Social Darwinism appeared in literature too, in a new style called naturalism. They challenged the idea that man can change his fate by saying that sometimes circumstances and happenstance, life makes a man fail through no fault of his own. An example of an author who used naturalism in his works was Jack London. He wrote many books of man’s helplessness in the face of nature’s might, proving that man cannot really change his own fate (Appleby et al, 46). There were many Americans across the nation who were pro government intervention in business, and against big businesses monopolizing the economy. Small business owners and farmers had become especially incensed at the big business’ and railroad companies. The big businesses shipped such large amounts of goods that they were able to get unfair rebates and lower shipping costs from the railroad companies, while those smaller businesses paid much higher rates. The Federal government did not answer these concerns for a long time. Both of the political parties believed that big businesses had the same property rights as individuals. So, many state governments began passing laws regulating railroad rates in their stead. But in 1886, the Supreme Court ruled in the case of Wabash, St. Louis, and Pacific Railroad V. Illinois, that only the federal government could regulate interstate commerce and states could not regulate railroad rates between states (Appleby et al, 463).
There were many criminals during this period that the American public made heroes of urban legends, dime novels, and later movies and television. One of the lawbreakers put on a pedestal like this was Jesse James, a thief and stage coach bandit. Why did the American public not abhor these thieves and killers, but actually adored them? Because their victims were big companies like the railroad companies and big banks, who took the common man’s money to hoard in their vaults. The public saw those institutions as ones who daily robbed the public anyways. The real victims were people who were not lucky enough to have been born a Rockefeller or his equal. In the viewpoint of that time, the big companies were like the Sheriff of Nottingham, while the outlaws were Robin Hoods. The government was considered just as bad as the big businesses. It passed laws only to profit the rich, while the common man got nothing. To sum up the big business’s opinion of the general population, William H. Vanderbilt, a railroad magnate, infamously said, “The public be darned.” He was saying that we will do what we want, the common man does not matter (Axelrod, 210-211).
In 1887, public pressure forced Congress into action to try and rectify the big businesses control over the free market and their lax way of treating the individual consumer. President Cleveland signed the Interstate Commerce Act. This act created the Interstate Commerce Commission (ICC). This was the first federal law to try and regulate trade and business. It limited railroad company’s rates to “reasonable and just” prices. It forbade companies to give rebates to high volume users and made it illegal to charge higher rates for shorter hauls. It was not really effective because it had to rely on courts to enforce its rulings.
Another law passed by Congress to try and reduce the control of big businesses over the economic field was the Sherman Anti-Trust Act in 1890. It was created to try and regulate trusts in businesses. It prohibited “any combination… or conspiracy in restraint of trade or commerce among several states”. It didn’t work for a few reasons; it was too vaguely worded, it was poorly enforced and it was weakened by judicial interpretation. The Supreme Court ruled that it did not apply to manufacturing, because manufacturing was not interstate. It had very little actual impact on businesses, it was more significant for establishing a precedent (like the ICC) than it was for being effective (Appleby et al, 464).
So in 1914, President Woodrow Wilson created the Federal Trade Commission (FTC), to monitor American businesses. Unlike the ICC they could actually accomplish some of their intentions because they could investigate companies and order them to “cease and desist” if they were engaging in unfair business tactics, such as rebates. Congress also passed the Clayton Anti-Trust Act. It outlawed some practices that hurt competition. It banned restrictive sale and price discrimination. This act clarified some of the issues and wording that the Sherman Anti-Trust Act was too vague upon (Appleby et al, 539).
In today’s modern day society, Social Darwinism is very much not in effect. The government not only has strict control over big businesses in the matter of trusts, pools and the like, but it also has numerous programs to help the unfortunate and needy. Welfare, social security, and food stamps are only some of the programs that are set up to stop any one from going hungry. In a way though, it is very slightly darwinistic. If you want to get these free benefits, you have to go out there and help yourself.