THE INDUSTRIALIZATION OF AMERICA

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THE INDUSTRIALIZATION OF AMERICA
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THE INDUSTRIALIZATION OF AMERICA

• With a stride that astonished statisticians, the
  conquering hosts of business enterprise swept
  over the continent.
• 25 years after Lincolns death, America had
  become, in the quantity and value of her
  products, the first mfg nation of the world.
• What England had accomplished in a hundred
  years, the USA had achieved in half the time so
  wrote historians Charles and Mary Beard in the
  1920s.
• But Americas rise to industrial supremacy was
  not as sudden as some observers and historians
  have suggested.

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THE INDUSTRIALIZATION OF AMERICA

• The nation had been building a mfg economy since
  early in the 19th century, and industry was
  established before the Civil War.
• But the accomplishments of the 19th century
  overshadowed all that came earlier.
• Those years witnessed nothing less than the
  transformation of the national economy.

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THE INDUSTRIALIZATION OF AMERICA

• The remarkable growth did much to increase the
  wealth and improve the lives of many Americans.
• But the benefits were not universal.

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THE INDUSTRIALIZATION OF AMERICA

• While the industrial titans and a growing middle
  class were enjoying a prosperity without
  precedent in the nations history, workers,
  farmers, and others were experiencing a
  disorienting and often painful transition that
  slowly edged the USA toward a great economic and
  political crisis.

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SOURCES OF INDUSTRIAL GROWTH
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SOURCES OF INDUSTRIAL GROWTH

• Many factors contributed to the growth of
  American industry
• ABUNDANT RAW MATERIALS
• A LARGE AND GROWING LABOR FORCE
• A SURGE IN TECHNOLOGICAL INNOVATION
• THE EMERGENCE OF THE ENTREPRENEURS
• LASSIEZ-FAIRE ECONOMICS/HIGH TARIFFS
• A GREAT AND EXPANDING DOMESTIC MARKET FOR
  PRODUCTS OF MFG,.

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THE INDUSTRIAL ECONOMY

• The rapid expansion of factory production,
  mining, and railroad construction in all parts of
  the country except the South signaled a
  transformation of America a country centered on
  the small farmer and artisan workshop to a
  mature industrial society.
• The nation marveled at the triumph of the new
  economy.
• Philosopher John Dewey there has never been a
  revolution in history, so rapid, so extensive, so
  complete.

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THE INDUSTRIAL ECONOMY

• 1913 The US produced 1/3 of the worlds
  industrial output more than the total of GB,
  FR, and Germany combined.
• Small-scale craft production still flourished in
  many trades, and armies of urban workers, male
  and female, toiled in their homes or in the
  households of others as outworkers or domestics.

• Half of all industrial workers labored in plants
  with over 250 employees.
• On the eve of the Civil War, the first industrial
  revolution, centered on the textile industry, had
  transformed N.E., into a center of mfg.
• But, otherwise, the US was still primarily an
  agricultural nation.

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THE INDUSTRIAL ECONOMY

• By 1880 For the first time, the Census Bureau
  found a majority of the workforce engaged in
  non-farming jobs.
• By 1890 2/3 of Americans worked for wages,
  rather than owning a farm, business, or craft
  shop.

• Drawn to factories by the promise of employment,
  a new working class emerged in these years.
• 1870-1920 Almost 11 million American moved from
  the farm to the city, and another 25 million
  immigrants arrived from overseas.

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THE INDUSTRIAL ECONOMY

• Most mfg now took place in industrial cities
  (F.R./N.B.)
• NYC With its new skycrapers and hundreds of
  thousands of workers in all sorts of mfg
  establishments, symbolized dynamic growth.
• Its population exceeded 3.4 million.
• The city financed industrialization and westward
  expansion, its banks and stock exchange funneling
  capital to railroads, mines, and factories.

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THE INDUSTRIAL ECONOMY

• But the heartland of the second industrial
  revolution was the region around the Great Lakes,
  with its factories producing iron and steel,
  machinery, chemicals, and packages food.
• Pittsburg Had become the worlds center of iron
  and steel mfg.
• Chicago By 1900 the nations second-largest
  city, with 1.7 million people, was home to
  factories producing steel and farm machinery, and
  giant stockyards where cattle were processed into
  meat products for shipment in refrigerated cars.
• Smaller industrial cities proliferated, often
  concentrating on a single industry cast-iron
  stoves in Troy, NY, silk in Paterson, NJ, and
  furniture in Grand Rapids, Michigan.

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NEW TECHNOLOGIES AND NEW INDUSTRIES

• The rapid emergence of new technologies and the
  discovery of new materials and productive
  processes were prerequisites to late 19th century
  industrial growth.
• In the entire history of the USA up to 1860, the
  govt., had granted only 36,000 patents.
• 1860-1890 The figure was 440,000.
• Americans also benefited from comparable
  technological advances in Europe.

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NEW TECHNOLOGIES AND NEW INDUSTRIES

• Some of the most important innovations were in
  communications.
• 1866 Cyrus W. Field laid a transatlantic
  telegraph to Europe.
• During the next decade, Alexander Graham Bell
  developed the first commercially useful
  telephone.

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NEW TECHNOLOGIES AND NEW INDUSTRIES

• By the 1890s, American Telephone and Telegraph
  Company, which handled Bells interests, had
  installed nearly half a million telephones in
  American cities.
• There were other inventions that speeded the pace
  of business organization.

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NEW TECHNOLOGIES AND NEW INDUSTRIES

• 1868 Christopher L. Sholes invented the
  typewriter.

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NEW TECHNOLOGIES AND NEW INDUSTRIES

• 1879 James Ritty invented the cash register.

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NEW TECHNOLOGIES AND NEW INDUSTRIES

• 1891 William S. Burroughs invented the
  calculating or adding machine.

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NEW TECHNOLOGIES AND NEW INDUSTRIES

• Among the most revolutionary innovations in the
  1870s was electricity as a source of light and
  power.
• Two pioneers of electrical lightening were
  Charles F. Brush and Thomas A. Edison.

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NEW TECHNOLOGIES AND NEW INDUSTRIES

• Charles F. Brush devised the arc lamp for street
  illumination.

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NEW TECHNOLOGIES AND NEW INDUSTRIES

• Thomas A. Edison invented the incandescent lamp
  (or light bulb) which could be used for both
  street and home lighting.

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NEW TECHNOLOGIES AND NEW INDUSTRIES

• Edison and others designed improved generators
  and built large power plants to furnish
  electricity to whole cities.
• By the turn of the century, electric power was
  becoming commonplace in street railway systems,
  in elevators of urban skyscrapers, in factories,
  and increasingly in offices and homes.

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THE RAILROAD AND THE NATIONAL MARKET
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THE RAILROAD AND THE NATIONAL MARKET

• The railroad made possible the second industrial
  revolution.
• 1860-1880 The number of railroad track tripled
  and tripled again in 1920 creating a truly
  national market for mfg goods.
• 1869 The first continental railroad completed at
  Promontory Point, UT.
• 1890s 5 transcontinental lines transported the
  products of western mines, farms, ranches, and
  forests to eastern markets and carried mfg goods
  to the west.

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THE RAILROAD AND THE NATIONAL MARKET
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THE RAILROAD AND THE NATIONAL MARKET

• The rail lines connected every state in the Union
  ands opened up an immense new national market.
• Most important, railroad companies pioneered
  crucial aspects of large-scale corporate
  enterprise.

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THE RAILROAD AND THE NATIONAL MARKET

• These included the issuance of stock to meet
  their huge capital needs, the separation of
  ownership from management, the creation of
  national distribution and marketing systems, and
  the formation of new organizational and
  management structures.

• Railroad entrepreneurs such as Collis Huntington
  of the Central Pacific RR, Jay Gould of the Union
  Pacific RR, and James Hill of the Northern
  Pacific RR faced enormous financial and
  organizational problems.

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THE RAILROAD AND THE NATIONAL MARKET

• To raise the staggering sums necessary for laying
  track, building engines, and buying out
  competitors, railroads at first appealed for
  generous land and loan subsidies from federal,
  state, and local governments.

• Even so, larger lines had to borrow heavily by
  selling stocks and bonds to the public.
• 1883 The railroads independently of the federal
  government corrected scheduling problems by
  dividing the country into 4 time zones still in
  use today.

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THE AUTOMOBILE
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THE AUTOMOBILE

• 1903 Charles and Frank Duryea built the first
  gasoline-driven motor vehicle in America.
• 1906 Henry Ford produced the first of the famous
  cars that would bear his name.

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THE AUTOMOBILE

• 1910 The industry had become a major force in
  the economy.
• The automobile had begun to reshape the American
  landscape.
• 1895 There had been only four automobiles on the
  American highways.
• 1917 There were nearly 5 million.

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THE SCIENCE OF PRODUCTION
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THE SCIENCE OF PRODUCTION

• Central to the growth of the automobile and other
  industries were changes in the techniques of
  production.
• By the turn of the century, many industrialists
  were turning to the new principles of scientific
  management.
• Those principles were often known as Taylorism
  after their leading theoretician Frederick Taylor.

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THE SCIENCE OF PRODUCTION

• Taylors ideas were controversial during his
  lifetime and have remained controversial.
• Taylor argued that scientific management was a
  way to manage human labor to make it compatible
  with the demands of the machine age.

• But scientific management was also a way to
  increase the employers control of the workplace,
  to make working people less independent.
• He urged employers to reorganize the production
  process by subdividing tasks.

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THE SCIENCE OF PRODUCTION

• This would speed up production.
• It would make workers more interchangeable and
  thus diminish a managers dependence on any
  particular employee.
• And it would reduce the need for highly trained
  skilled workers.

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THE SCIENCE OF PRODUCTION

• If properly managed by trained experts, Taylor
  claimed, workers using modern machines could
  perform simple tasks at much greater speed,
  significantly increasing productive efficiency.

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COMPETITION AND CONSOLIDATION
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COMPETITION AND CONSOLIDATION

• The economic growth during the post-Civil War
  years was dramatic and highly volatile.
• The combination of a market flooded with goods
  and federal monetary policies that removed money
  from the national economy led to a relentless
  fall in prices.
• The world economy suffered prolonged downturns in
  the 1870s and 1890s.
• Indeed, before the 1930s, the years 1873-1897
  were known as the Great Depression.

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COMPETITION AND CONSOLIDATION

• Businesses engaged in ruthless competition.
• Railroads and other companies tried various means
  of bringing order to a chaotic marketplace.
• They formed pools that divided up markets
  between supposedly competing firms and fixed
  prices.

• They established trusts which were legal
  devices whereby the affairs of several rival
  companies were managed by a single director.
• They employed the use of interlocking
  directorates which were a means by which the
  CEOs of companies sat on the boards of other
  companies.
• They also used holding companies which was a
  central corporate body that would buy up stocks
  if various member companies and establish direct,
  formal ownership of the corporations in the trust.

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COMPETITION AND CONSOLIDATION

• To avoid cutthroat competition, more and more
  corporations battled to control entire
  industries.
• 1897-1904 Some 4,000 firms vanished into larger
  corporations that served national markets and
  exercised an unprecedented degree of control over
  the marketplace.

• By the time the wave or mergers had been
  completed, giant corporations like U.S. Steel,
  Standard Oil, and International Harvester
  dominated major parts of the economy.

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CAPTAINS OF INDUSTRY OR ROBBER BARONS
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CAPTAINS OF INDUSTRY OR ROBBER BARRONS

• In an era of no personal or corporate taxes, some
  business leaders accumulated enormous fortunes
  and economic power.
• Men, like Jay Gould and Collis Huntington, who
  reorganized and expanded the railroad and other
  industries in the 1870s and 1880s were often
  depicted by their contemporaries as villains and
  robber barons who manipulated stock markets and
  company policies to line their own pockets.

• Some used brutal and ruthless means to accumulate
  their wealth and power.
• But recent historians have pointed out that the
  great industrialists were a diverse group.
• Although some were ironfisted pirates who engaged
  in fraudulent practices, others were upstanding
  businessmen who managed their companies with
  sophistication and innovation.
• Some of their ideas were startling in their
  originality and inventiveness.

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CAPTAINS OF INDUSTRY OR ROBBER BARONS

• Andrew Carnegie
• Industrial giant
• Born in Scotland and immigrated to US in 1848
• Ambitious and hard-working, he took a job at
  1.20 a week as a bobbin boy in a Pittsburgh
  textile mill
• Although he worked a 60 hour week, he enrolled in
  a night course to learn bookkeeping.

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CAPTAINS OF INDUSTRY OR ROBBER BARONS

• He then became a Western Union messenger boy.
• Because he had to decode the messages for every
  major business in Pittsburgh, Carnegie gained an
  insiders view of their operations.
• 1852 He was hired as secretary and personal
  telegraph operator for the PA. Railroad.

• 1858 He took over as head of the lines western
  division.
• In his six years as division chief, Carnegie more
  than doubled the lines mileage and quadrupled
  its traffic.
• 1868 Having invested his earnings in the
  railroads, hew was earning more than 56,000 a
  year from his investments, a substantial fortune
  in that era.

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CAPTAINS OF INDUSTRY OR ROBBER BARONS

• Early 1870s He decided to build his own steel
  mill.
• His connections with the railroad industry, the
  countrys largest purchaser of steel, made this a
  logical choice.
• Starting with his first mill, he introduced the
  Bessemer Process.
• Combining this new technology with the
  cost-analysis learned from his railroad
  experiences, he became the first steelmaker to
  know the actual production cost of each ton of
  steel.

• Carnegies philosophy Watch the costs, and the
  profits will take care of themselves.
• From the start he priced his rails below the
  competition.
• He then, through cost accounting and limiting
  wage increases to his workers, he lowered his
  production costs even further.
• As output climbed, Carnegie discovered the
  benefits of virtual integration that is
  controlling every phase of the business from raw
  materials to transportation, mfg, and
  distribution.

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CAPTAINS OF INDUSTRY OR ROBBER BARONS

• 1890s He dominated the steel industry and had
  accumulated a fortune worth hundreds of millions
  of dollars.
• His complex steel factories in PA, were the most
  technologically advanced in the world.
• 1900 Carnegie Steel, employing 20,000 people,
  had become the worlds largest corporation.
• He ran his companies with a dictatorial hand.
• His factories operated nonstop with two 12 hour
  shifts every day except the 4th of July.

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CAPTAINS OF INDUSTRY OR ROBBER BARONS

• 1901 J.P. Morgan, who controlled Federal Steel
  and later finance capitalist, inquired what
  Carnegie wanted for his share of Carnegie Steel.
• Carnegie said a half a billion dollars.
• Morgan agreed to pay it.

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CAPTAINS OF INDUSTRY OR ROBBER BARONS

• Combining Carnegies companies with Federal
  Steel, Morgan set up the U.S. Steel Corporation,
  the first business capitalized at more than 1
  billion.
• The corporation, made up of 200 member companies
  employing 168,000, marked a new scale in
  industrial enterprise.

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CAPTAINS OF INDUSTRY OR ROBBER BARONS

• JOHN ROCKEFELLER
• If any name became a byword for enormous wealth,
  it was JD Rockefeller.
• He got his start as a bookkeeper.
• 1863 He opened his first oil refinery.
• Like Carnegie, he had a passion for cost cutting
  and efficiency.

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CAPTAINS OF INDUSTRY OR ROBBER BARONS

• 1873 He became head of the Standard Oil Company.
  He scrutinized every aspect of its operation.
• He drove out rival firms through cutthroat
  competition, arranging secret deals with railroad
  companies, and fixing prices and production
  quotas.

• Rockefeller began with horizontal integration
  buying out competing oil refineries.
• But, like Carnegie, he soon established a
  vertically integrated monopoly, which controlled
  the drilling, refining, storage, and distribution
  of oil.

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CAPTAINS OF INDUSTRY OR ROBBER BARONS

• 1880s His Standard Oil Company controlled 90 of
  the nations oil industry.
• Rockefeller, like Carnegie, gave away much of his
  fortune establishing foundations to promote
  education and medical research.
• Also, like Carnegie, he bitterly fought his
  employees efforts to organize unions.

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CAPTAINS OF INDUSTRY OR ROBBER BARONS

• These and other industrial leaders inspired among
  ordinary Americans a combination of awe,
  admiration, and hostility.
• Depending on ones point of view, they were
  captains of industry whose energy and vision
  pushed the economy forward, or robber barons
  who wielded power without any accountability in
  an unregulated marketplace.

• Most rose from modest backgrounds and seemed
  examples of how inventive genius and business
  sense enabled Americans to seize opportunities
  for success.
• But their dictatorial attitudes, unscrupulous
  methods, repressive labor policies, and exercise
  of power without any democratic control led to
  fears that they were undermining political and
  economic freedom.

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CAPTAINS OF INDUSTRY OR ROBBER BARONS

• 1894 Henry Demarest Lloyd, in Wealth Against
  Commonwealth, an expose of how JDRs Standard Oil
  Company made a mockery of economic competition
  and political democracy by manipulating the
  market and bribing legislators, declared
  concentrated wealth degraded the political
  process.
• Liberty and monopoly cannot live together.

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THE PROBLEMS OF INDUSTRIALIZATION
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THE PROBLEMS OF INDUSTRIALIZATION

• As the US matured into an industrial economy,
  American struggled to make sense of the new
  social order.
• Debates over political economy engaged the
  attention of millions of Americans, reaching far
  beyond the academic world into the public sphere.

• This broad discussion produced thousands of
  books, pamphlets, and articles on such technical
  issues as land taxation and currency reform, as
  well as widespread debate over the social and
  ethical implications of economic change.

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THE PROBLEMS OF INDUSTRIALIZATION

• Many Americans sensed that something had gone
  wrong in the nations social development.
• Talks of better classes, respectable classes,
  and dangerous classes, dominated public
  discussions, and bitter strife seemed to have
  become the rule.

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THE PROBLEMS OF INDUSTRIALIZATIONTHE WORKERS

• Striking as it was, the countrys economic growth
  distributed its benefits unevenly.
• For most workers, economic insecurity remained a
  basic fact of life.
• During the depressions of the 1870s and 1890s,
  millions of workers lost their jobs or were
  forced to accept reductions of pay.
• The tramp became a familiar figure on the
  social landscape as thousands of men took to the
  roads in search of work.

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THE PROBLEMS OF INDUSTRIALIZATION THE WORKERS

• Many industrial workers labored 60 hour weeks
  with no pensions, compensation for injuries, or
  protections against unemployment.
• Although American workers received higher wages
  than their counterparts in Europe, they also
  experienced more dangerous working conditions.
• 1880-1890 An average of 35,000 workers perished
  each year in factory and mine accidents, the
  highest rate in industrial world.

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THE PROBLEMS OF INDUSTRIALIZATON THE WORKERS

• Most strikes for higher wages failed, as
  employers found it easy to call on the unemployed
  to take the strikers jobs and bring in public and
  private forces to intimidate workers.
• Much of the working class remained desperately
  poor and to survive needed income from all family
  members.

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THE PROBLEMS OF INDUSTRIALIZATIONTHE WORKERS

• 1888 The Chicago Tribune published a series of
  articles by reporter Nell Cusack under the title
  City Slave Girls, exposing wretched conditions
  among the growing number of women working for
  wages in the citys homes, factories, and
  sweatshops.
• The articles unleashed a flood of letters to the
  editor from women workers.

• One women singled out domestic service still
  the largest employment for women as a slaves
  life, with long hours, late and early, seven
  days in the week, bossed and ordered about as
  before the war.

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THE PROBLEMS OF INDUSTRIALIZATIONTHE WORKERS

• 1881 The MA Bureau of Labor Statistics reported
  that virtually every worker it interviewed in
  Fall River, the nations largest center of
  textile production, complained of overwork, poor
  housing, and tyrannical employers.
• For their part, mfgs claimed their workingmen
  were the scum of the English and Irish, whose
  complaints reflected nothing more than a
  hereditary feeling of discontent.

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THE PROBLEMS OF INDUSTRIALIZATION A CLASS SOCIETY
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THE PROBLEMS OF INDUSTRIALIZATION A CLASS SOCIETY

• At the other end of the economic spectrum, the
  era witnessed an unprecedented accumulation of
  wealth.
• Class divisions became more and more visible.
• The rich increasingly resided in their own
  exclusive neighborhoods and vacationed among
  their own class at exclusive resorts like
  Newport, RI.

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THE PROBLEMS OF INDUSTRIALIZATION A CLASS SOCIETY

• The growing urban middle class of professionals,
  office workers, and small businessmen moved to
  new urban and suburban neighborhoods linked to
  central business districts by streetcars and
  commuter railways.
• The literature and scholarly works of the time
  portrayed the eras class divisions.

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THE PROBLEMS OF INDUSTRIALIZATION A CLASS SOCIETY

• 1905 The House of Mirth was published by Edith
  Wharton.
• She argued that passion for money dominated
  society.
• Her book traced the difficulties of Lily Bart, a
  young woman of modest means pressured by her
  mother and NY high society to barter her beauty
  for marriage to a rich husband in a world where
  to be poor amounted to disgrace.

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THE PROBLEMS OF INDUSTRIALIZTION A CLASS SOCIETY

• 1899 Thorstein Veblen, an economist and social
  historian, published The Theory of the Leisure
  Class.
• It was a devastating critique of an upper-class
  culture focused on conspicuous consumption
  that is, spending money not on needed or even
  desired goods, but simply to demonstrate the
  possession of wealth.

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THE PROBLEMS OF INDUSTRIALIZTION A CLASS SOCIETY

• 1886 Matthew Smiths best-seller Sunshine and
  Shadow in New York, was published.
• It opened with an engraving that contrasted
  department store magnate Alexander T. Stewarts
  two-million dollar mansion with housing in the
  citys slums.

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THE PROBLEMS OF INDUSTRIALIZATION A CLASS SOCIETY

• 1890 Jacob Riis published How the Other Half
  Lives.
• It offered a shocking account of living
  conditions among the urban poor, complete with
  photographs of apartments in dark, airless,
  over-crowded tenement houses.

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SOCIAL DARWINISM IN AMERICA
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SOCIAL DARWINISM IN AMERICA

• The idea of the natural superiority of some
  groups to others, which before the Civil War had
  been invoked to justify slavery in an otherwise
  free society, now reemerged in the vocabulary of
  modern science to explain success and failure of
  individuals and social classes.
• Most tycoons liked to claim that they had
  attained their wealth and power through hard
  work, acquisitiveness, and thrift.
• Those who succeeded, they argued, deserved their
  success.
• Those who failed had earned their failure
  through their own laziness, stupidity, or
  carlessness.

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SOCIAL DARWINISM IN AMERICA

• God gave me my money, explained JDR, expressing
  the assumption that riches were a reward for
  worthiness.
• Let us remember, said a prominent Protestant
  minister, that there is not a poor person in the
  United States, who was not made poor by his own
  shortcomings.

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SOCIAL DARWINISM IN AMERICA

• Such assumptions became the basis of a popular
  social theory of the late 19th century Social
  Darwinism.
• In effect it was the application of Charles
  Darwins laws of evolution and natural selection
  among the species.
• Just as only the fittest survived in the process
  of evolution, so in human society only the
  fittest individuals survived and flourished in
  the marketplace.

• In a highly oversimplified form, language
  borrowed from Darwin, such as natural
  selection, the struggle for existence, and
  survival of the fittest, entered public
  discussion of social problems during the
  industrial era.
• According to Social Darwinism, evolution was as
  natural a process in human society as in nature,
  and govt must not interfere.
• Especially misguided, in this view were efforts
  to uplift those at the bottom of the social
  order, such as laws regulating conditions of work
  or public assistance to the poor.

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SOCIAL DARWINISM IN AMERICA

• Even the depressions of the 1870s and 1890s did
  not shake the widespread view that the poor were
  essentially responsible for their own fate.
• Charity workers and local governments spent much
  time and energy distinguishing the deserving
  poor (those, like widows and orphans, destitute
  through no fault of their own) from the
  undeserving poor, a far larger number.

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SOCIAL DARWINISM IN AMERICA

• Failure to advance in society was widely thought
  to indicate a lack of character, an absence of
  self-reliance and determination in the face of
  adversity.
• 1900s Half the nations largest cities offered
  virtually no public relief, except to persons
  living in poorhouses.
• To improve their lot, according to the philosophy
  of Social Darwinism, workers should practice
  personal economy, keep out of debt, and educate
  their children in the principles of the
  marketplace, not to look to the government for
  aid.

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SOCIAL DARWINISM IN AMERICA

• The English philosopher Herbert Spencer was the
  first and most important proponent of the theory.
• Society, he argued, benefited from the
  elimination of the unfit and the survival of the
  strong and talented.
• Spencers books were popular in America in the
  1870s and 1880s.

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SOCIAL DARWINISM IN AMERICA

• The leading American proponent of the theory was
  William Graham Sumner a Yale professor.
• For Sumner, freedom meant the security given to
  each man that he can acquire, enjoy, and dispose
  of property exclusively as he chooses, without
  interference from other persons or from
  government.
• Freedom thus defined required a frank acceptance
  of inequality.

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SOCIAL DARWINISM IN AMERICA

• Society, according to Sumner, faced two and only
  two alternatives liberty, inequality, survival
  of the fittest not liberty, equality, survival
  of the unfittest.
• 1883 Sumner published What Social Classes Owe To
  Each Other.
• His answer, essentially, was nothing.

• In a free state, no one was entitled to claim
  help from, and cannot be charged to offer help
  to another.
• Government, Sumner believed, existed to protect
  the property of men and honor of women, not to
  upset social arrangements decreed by nature.

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SOCIAL DARWINISM IN AMERICA

• Many industrialists seized on the theories of
  Spencer and Sumner to justify their own power.
• JDR The growth of a large business is merely
  the survival of the fittest. This is not an evil
  tendency in business. It is merely the working
  out of the law of nature and the law of God.
• Carnegie, who became the leading exponent of
  Social Darwinism among American industrialists,
  later described his reaction on first reading
  Spencer I remember that light came as in a
  flood and all was clear.

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SOCIAL DARWINISM IN AMERICA

• Social Darwinism appealed to businessmen because
  it seemed to legitimize their success and confirm
  their virtues.
• It appealed to them because it placed their
  activities within the context of traditional
  American ideas of freedom and individualism.
• Above all, it appealed to them because it
  justified their tactics.

• Social Darwinist insisted that all attempts by
  labor to raise wages by forming unions and all
  endeavors by govt., to regulate economic
  activities would fail, because economic life was
  controlled by natural law, the law of
  competition.
• And Social Darwinism coincided with another law
  that seemed to justify business practices and
  business dominance the law of supply and demand.

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SOCIAL DARWINISM IN AMERICA

• The law of supply and demand was defined by Adam
  Smith and the classical economists.
• The economic system, they argued, was like a
  great and delicate machine functioning by natural
  and automatic rules, by the invisible hand of
  market forces.

81
SOCIAL DARWINISM IN AMERICA

• The law of supply and demand was one of these
  rules.
• It determined all economic values prices,
  wages, rents, interest rates at a level that
  was just to all concerned.
• Supply and demand worked because human beings
  were essentially economic creatures who
  understood and pursued their own interests, and
  because they operated in a free market regulated
  only by competition.

82
SOCIAL DARWINISM IN AMERICA

• But Social Darwinism and the ideas of classical
  economists did not have very much to do with the
  realities of the corporate economy.
• At the same time that businessmen were
  celebrating the virtues of competition and the
  free market, they were actively seeking to
  protect themselves from competition and replace
  the natural workings of the marketplace with
  control by great combinations/monopolies/
• trusts

• JDRs Standard Oil monopoly was the clearest
  example of the effort to free an enterprise from
  competition.
• Many businessmen made similar attempts on a
  smaller scale.
• Vicious competitive battle something Spencer
  and Sumner celebrated and called a source of
  healthy progress was in fact the very thing
  that American businessmen most feared and tried
  to eliminate.

83
THE GOSPEL OF WEALTH
84
THE GOSPEL OF WEALTH

• Some businessmen attempted to temper the harsh
  philosophy of Social Darwinism with a more
  gentle, if in some ways equally self-serving
  idea the gospel of wealth.
• People of great wealth, advocates of this idea
  argued, had not only great power by great
  responsibilities.
• It was their duty to use their reaches to advance
  social progress.

85
THE GOSPEL OF WEALTH

• 1901 Carnegie elaborate on the creed in a book
  entitled The Gospel of Wealth.
• He wrote that the wealthy should consider all
  revenues in excess of their own needs as trust
  funds to be used for the good of the community.
• The person of wealth, he said, was the mere
  trustee and agent for his poorer brethren.

86
THE GOSPEL OF WEALTH

• Carnegie was only one of many great
  industrialists who devoted large parts of their
  fortunes to philanthropic works much of it to
  libraries and schools, institutions be believed
  would help the poor to help themselves.

87
THE GOSPEL OF WEALTH

• The notion of private wealth as a public blessing
  existed alongside another popular concept the
  notion of great wealth as something available to
  all.
• Russell Conwell, a Baptist minister, became the
  most prominent spokesman for the idea by
  delivering one lecture Acres of Diamonds more
  than 6,000 times between 1880 and 1900.

88
THE GOSPEL OF WEALTH

• Conwell told a series of stories, which he
  claimed were true, of individuals who had found
  opportunities for extraordinary wealth in their
  own backyards.
• One such story involved a modest farmer who
  discovered a vast diamond mine in his own fields
  in the course of working his land.

• I say to you, he told his rapt audiences, that
  you have acres of diamonds beneath you right
  here that the men and women sitting here have
  within their reach opportunities to get largely
  wealthy. I say that you ought to get rich, and
  that it is your duty to get rich.
• Most of the millionaires in the country, he
  claimed inaccurately, had begun on the lowest
  rung of the economic ladder and had worked their
  way to success.
• Every industrious individual had a chance to do
  likewise.

89
THE GOSPEL OF WEALTH

• Horatio Alger was the most famous promoter of the
  success story.
• Alger was originally a minister in a small town
  in MA., but was driven from his pulpit as a
  result of a sexual scandal.
• He moved to NY, where he wrote his celebrated
  novels more than 100 in all, which sold more
  than 20 million copies.

90
THE GOSPEL OF WEALTH

• The titles varied Andy Grants Pluck, Ragged
  Dick, Tom the Bootblack, Sink or Swim.
• But the story and message were the same A poor
  boy from a small town went to the big city to
  seek his fortune. By work, perseverance, and
  luck, he became rich.

91
ALTERNATIVE AMERICAS
92
ALTERNATIVE AMERICAS

• Alongside the celebrations of competition, the
  justifications for great wealth, and the
  legitimization of the existing order stood a
  group of alternative philosophies, challenging
  the corporate ethos and at times capitalism
  itself.
• Alarmed by fear of class warfare and the growing
  power of concentrated capital, social thinkers
  offered numerous plans for change.
• In the last quarter of the century, over 150
  utopian or cataclysmic novels appeared,
  predicting that social conflict would end either
  in a new harmonious social order or total
  catastrophe.

93
ALTERNATIVE AMERICAS

• One such philosophies emerged in the work of the
  sociologist Lester Frank War.
• Ward was a Darwinist but he rejected the
  application of Darwinian laws to human society.
• 1883 He published Dynamic Sociology.

94
ALTERNATIVE AMERICAS

• He agued that civilization was not governed by
  natural selection but by human intelligence,
  which was capable of shaping society as it
  wished.
• He believed that an active government engaged in
  positive planning was societys best hope.
• The people, through their government, could
  intervene in the economy and adjust it to serve
  their needs.

95
ALTERNATIVE AMERICAS

• Another social thinker was Laurence Gronlund.
• His book The Cooperative Commonwealth was the
  first to popularize socialist ideas for an
  American audience.

• Socialism the belief that private control of
  economic enterprises should be replaced by govt
  ownership in order to ensure a fairer
  distribution of the benefits of the wealth
  produced became a major political force in
  Western Europe in the late 19th century.

96
ALTERNATIVE AMERICAS

• In the USA, however, where access to private
  property was widely considered essential to
  individual freedom, socialist beliefs were
  largely confined to immigrants, whose writings,
  frequently in foreign languages, attracted little
  attention.
• Most Americans saw socialism as a European import
  irrelevant to the New World.
• Gronlund began the process of its Americanization.

• He explained in easy-to-understand prose such
  socialist concepts as the labor theory of value,
  the necessity of class conflict between workers
  and employers, the benefits of making the public
  good rather than private profit the aim of
  economic activity, and the inevitability of the
  concentration of ownership (wealth) in fewer and
  fewer hands under capitalism.

97
ALTERNATIVE AMERICAS

• But while Karl Marx had predicted that socialism
  would come into being via a working-class
  revolution, Gronlund portrayed it as an end
  result of a process of peaceful evolution, not
  violent upheaval.
• He thus made socialism seem more acceptable to
  middle-class Americans who desired an end to
  class conflict and the restoration of social
  harmony.

98
ALTERNATIVE AMERICAS

• 1879 Henry George published Progress and
  Poverty.
• Although it had no direct impact on govt.,
  policy, Progress and Poverty, commanded more
  public attention than any book on economics in
  American history.
• George was an antislavery editor in CA.
• He had witnessed firsthand the rapid
  monopolization of land in the state.

99
ALTERNATIVE AMERICAS

• His book began with a famous statement of the
  problem suggested in its title the growth of
  squalor and misery along with material
  progress.
• His solution was a single tax which would
  replace other taxes with a tax on increases in
  the value of real estate.
• The single tax would be so high that it would
  prevent speculation in both urban and rural land.
• This, he argued, would make land readily
  available to aspiring businessmen and to urban
  working men seeking to become farmers.

100
ALTERNATIVE AMERICAS

• No one knows how many of Georges readers
  actually believe in this way of solving the
  nations ills.
• But millions responded to his clear explanation
  of economic relationships and his stirring
  account of how the social distress long thought
  to be confined to the Old World had made its
  appearance in the New World.

• Freedom lay at the heart of Georges analysis.
• The proper name for the political movement
  spawned by his book, he once wrote, was freedom
  men, who would do for the question industrial
  slavery what the Republican Party had done for
  the slavery of blacks.

101
ALTERNATIVE AMERICAS

• George rejected the traditional equation of
  liberty with ownership of land since the single
  tax, in effect, made land the common property
  of the entire society.
• But, in other ways, his definition of freedom was
  thoroughly in keeping with mainstream thought.
• Despite calling for a single massive public
  intervention in the economy, George saw govt., as
  a repressive power, whose functions in the
  co-operative society of the future would be
  limited to enhancing the quality of life.
• His vision rested on the familiar foundation of
  the sovereign individual.

102
ALTERNATIVE AMERICAS

• Not until the early 20th century would socialism
  become a significant presence in American life.
• 1888 Edward Bellamy published Looking Backward.
• As Gronlund noted, the most important result of
  his book was to prepare an audience for Bellamys
  book, which promoted socialist ideas while
  ignoring that name.

103
ALTERNATIVE AMERICAS

• But Bellamy wrote of nationalism, not socialism.
• He lived his entire life in the small industrial
  city of Chicopee Falls, MA.
• In Looking Backward, his main character falls
  asleep in the late 19th century only to awaken in
  the year 2000, in a world where cooperation has
  replaced class strife, excessive individualism,
  and cutthroat competition.

104
ALTERNATIVE AMERICAS

• Inequality has been banished and with it then
  idea of liberty as a condition to be achieved
  through individual striving free of govt.,
  restraint.
• Freedom, Bellamy insisted, was a social
  condition, resting on interdependence, not
  autonomy.

• From todays perspective, Bellamys utopia with
  citizens obligated to labor for years in an
  Industrial Army controlled by a single Great
  Trust seems a chilling social blueprint.
• Yet the book inspired the creation of hundreds of
  nationalists clubs devoted to bringing into
  existence the world of 2000 and left a profound
  mark on a generation of reformers and
  intellectuals.

105
ALTERNATIVE AMERICAS

• Bellamy held out the hope of retaining the
  material abundance made possible by industrial
  capitalism while eliminating inequality.
• In proposing that the state guarantee economic
  security to all, he proposed a far-reaching
  expansion of the idea of freedom.

106
THE SOCIAL GOSPEL
107
THE SOCIAL GOSPEL

• By 1888, when Looking Backward appeared, Social
  Darwinism and the laissez-faire definition of
  freedom were under attack from the labor
  movement, middle-class reformers and writers as
  well as clergymen shocked by the inequities in
  the emerging industrial order.
• Most of the eras Protestant preachers
  concentrated on attacking individual sins like
  drinking and Sabbath-breaking and saw noting
  immoral about the pursuit of riches.

108
THE SOCIAL GOSPEL

• But the outlines of what came to be called the
  Social Gospel were taking shape in the writings
  of Walter Rauschenbusch, a Baptist minister in
  NYC, and others.
• They insisted that freedom and spiritual
  development required an equalization of wealth
  and power and that unbridled competition mocked
  the Christian ideal of brotherhood.

109
THE SOCIAL GOSPEL

• The Social Gospel Movement began as an effort to
  reform Protestant churches by expanding their
  appeal in poor neighborhoods and making them more
  attentive to the eras social ills.
• The Movements adherents established missions and
  relief programs in urban areas that attempted to
  alleviate poverty, combat child labor, and
  encourage the construction of better
  working-class housing.
• They worked with labor unions in demanding health
  and safety laws in the work place.
• Some suggested that a more cooperative
  organization of the economy should replace
  competitive captialism.

110
THE SOCIAL GOSPEL

• Within American Catholicism, as well, a group of
  priests and bishops emerged who attempted to
  alter the churchs traditional hostility for
  social reform and its isolation from contemporary
  currents of social thought.
• With most of its parishioners working men and
  women, they argued, the church should lend its
  support to the emerging labor movement.
• These developments suggested the existence of
  widespread dissatisfaction with the liberty of
  contract understanding of freedom.