Why the Gilded Age Was Golden | 5-Minute Videos

The years 1880 to 1900—coined the Gilded Age—was a period of tremendous growth for American industry and technology. Many also criticize it as a time of greed, corruption, and exploitation of the lower and middle classes by the wealthy. Are we living in a second Gilded Age? Renowned historian Amity Shlaes answers this important question.

This video was made possible through a generous donation from the Robert W. Plaster Foundation.

Script:

We are living in a second Gilded Age.

That’s the argument of many commentators, especially those who would like to increase taxes on the rich.

Or marshal squadrons of lawyers to mount an antitrust battle against monopolists like Google or Amazon.

The reason the commentators cite the Gilded Age is that that period, 1880 to 1900, had its own Elon Musk, Sergey Brin, and Jeff Bezos. These were the titans who built up big steel or the railroads.

Our textbooks tell us that those men were robber barons who captured all the wealth.

The robber barons locked in their monopolies, and barred the door to advancement for everybody else. The poor stayed poor, with no opportunity for their children. As economist Henry George wrote at the time, the tendency was for “[...]the rich to become very much richer, the poor to become more helpless and hopeless, and the middle class to be swept away.” The HAVES had everything over the HAVE NOTS. Only antitrust assaults on big companies or new taxes, could make America fairer.

Or so say those textbooks.

But the reality was different. In fact the Gilded Age was a good time for many Americans. Even poor Americans.

The claim that the rich were richer was true: Jay Gould made a fortune in railroads, John D. Rockefeller built the stunningly successful Standard Oil, and Andrew Carnegie’s steel company gave him a net worth as big as a whole country. These men did build giant mansions. And sailed around in yachts.

That the poor were poor is also accurate. But that poverty was not permanent for most. The years 1880 to 1900 were bumpy ones. But many poor Americans saw life improve. Food prices for example dropped sharply.

Meanwhile, wages rose––and dramatically. Real wages for workers in factories climbed by 45%.

In these hopeful years, illiteracy dropped by more than a third. Fewer babies died. Life expectancy rose by 21%. And the quality of life improved. In the olden days, especially before the Civil War, it was hard to get away from your home town. Now the expanding network of rails meant anyone tired of the plow could ride a train to the city. Americans enjoyed a new freedom to live where they wanted––riding on rails supplied by one robber baron in a train built by another.

Most important of all: the door of opportunity was open. The single most important tool for advancement is education. And education exploded. High schools were the engines of education. In the four decades after 1870, the number of high schools in America climbed to 10,000 from 500. Immigrants bet that if they did not escape the sweatshop, their children would. And that was a bet they won.

And what about those permanent monopolies? It turned out they were not so permanent. And that wasn’t because of antitrust action. It was because of competition. The best example was the almighty railroads. Even as Congress passed laws to try to curb big profits, the railroads’ power to dominate was already doomed. On the horizon stood the new trucking industry, ready to roll in.

Of course politicians ignored these realities. It was more fun to go after the rich with antitrust suits. President Theodore Roosevelt claimed that bringing down trusts would give the worker a “Square Deal”. Some say TR’s trustbusting caused a financial panic, the Panic of 1907. As it happened that Panic hurt the very workers Roosevelt aimed to protect, driving up joblessness to eight percent from 3 percent. Hardly a “Square Deal”.

Congress crafted a new institution to punish the rich: the income tax. This tax likewise failed to get the result its advocates advertised. Lawmakers insisted on high rates. They made the same arguments we hear today: higher rates reduce inequality and squeeze money out of the top 1%. In response however, companies simply curtailed business. At least one in ten men was unemployed. In the 1920s, Congress responded by lowering taxes for top earners. Companies grew, and workers got what mattered more to them: jobs. And along the way came new innovations, such as electricity, even better than kerosene.

Given this record, it’s surprising that we vilify the Gilded Age. One problem is that most books portray this period as a kind of anti-wealth cartoon. Another problem is our politicians. The story of HAVE and HAVE NOTS is a story that evokes envy. And politicians enjoy playing on our envy.

#history #gildedage #economy

[SabbathSOG]

With respect. What destroyed the railroad indudtry was when they tried to increase the shipping rates for oil. That's when Nelson rockefeller created the first oil pipeline. And that destroyed the railroad system . that's documented.

[TheDudefLife]

Yes, there was unregulated pollution and business practices, monopolies and robber barons, poverty, starvation, disease, shanty towns, mud roads, child labor, little or no education, poorly funded and disorganized military defense, then, the Great Depression. Expecting everyone with wealth to voluntarily "chip in" to fix those things would never happen. That's why taxation is necessary, so we're not still like a third world country. The issue is how to do it the most effectively and equitably for society.

[starjet]

If you enjoy your 8ish hour work day, lunch break, weekends off, labor day weekend, health care, sanitation, clean drinking water, safe working conditions, nutrition facts labels, food inspection, drug inspection (to name a few) please thank a Progressive.

[WaltzingAustralia]

Something else worth telling folks is that Carnegie started out dead poor and built all the wealth he had through hard work and ingenuity. Then, he used his money to build libraries (more than 2, 500) and medical facilities all over the world. And he built Carnegie Hall. And more. He wrote that the wealthy had “a moral obligation to distribute [their money] in ways that promote the welfare and happiness of the common man.” So everyone benefited from his success.

[cominatrix]

The thing that bothers me is that Amazon is able to undercut practically all competition by going into a deficit in one department funded by other departments, which the competing entity almost certainly cannot do. They are literally in just about every business at this point and taking a cut of almost every small guy that remains. (And let's not ignore the huge section of their business model driven by the sale of cheep Chinese trash to again undercut other businesses.) I don't know what the answer is, but it simply seems off to me.

[jimdavies]

This is a very good video, well worth the time to watch. The rich got richer, but so did almost everyone else - I didn't know that in this 20-year period, REAL wages grew 45%!

[scottnielsen]

I read her book on President Coolidge. Well researched.A great book, highly informative.

[MrCuttysark]

Okay I am 100% pro capitalist and defend it vigorously but even I am going to LMAO at the notion that the Guilded Age was golden.

[markmunroe-hzrf]

The term Gilded Age came from the novel The Gilded Age co-written by Mark Twain.

That period did look prosperous, but sadly underneath lay political corruption, stark inequality between races and class, monopolies and anarchy.

Ironically, African Americans many did prosper and helped each other, despite the nasty racial attitudes at the time and despite the discriminations against them, not to mention against Italians, Irish, Asians and the Jewish, they strove for equality.

Sadly, most have fallen into the mind group victim mentality and choose to ignore the true victories of their ancestors.

[DonTruman]

Great video. And her book Coolidge is highly recommended. Read it myself a few years ago.

[patrickbateman]

Conservatives need to pick. Is big tech bad or is it good and shouldnt be regulated. You cant have both.

[seanmetzer]

I agree with some of this, but I am staunchly against monopolies because they have vast reservoirs of cash to throw at politicians via lobbyists meaning they can influence policy far more than the average citizen can.

[coriklocek]

PragerU really showing how much of a propaganda channel for the rich it really is

[jadoyon]

The gilded age was an amazing time in this country's history.

Inequality is not a problem if it is because different people contribute different economic value to society.

[charlesseelye]

Many years ago I read that one of the so called 'Robber Barons' (can't remember which) stated that he had not broken any laws but that there had been many laws made because of him. The country learns as it goes and has to relearn at times but retain what was and is good.

[cleaterose]

I disagree, at least in the case of Standard Oil. You could not open a gas station in a market that they wanted. If you did, your choices were to sell SO or have them build a competing station next to yours with predatory pricing so low that both of you would lose money. Size wins in that scenario. My father recalled tales of this happening.

[Antraeon]

Meanwhile, the grammar skills of the average American have sharply declined, babies are getting aborted on a regular basis, life expectancy is falling and mental health issues are rampant, and the quality of life we once had is now impossible to maintain for most.

What a time to be alive, indeed.

[foristrothbert]

It's not that I have a problem with rich people, big businesses, or even businesses that through their own merits and cutthroat competition turn themselves into monopolies because they're the best around. My problem is that our current monopolies are far more corrupt, utterly entwined with government, often doing the government's bidding and holding the exact same beliefs so they can't even claim to be having their arms twisted by government stooges - they're happily colluding with them! And against us. I would much prefer if big businesses didn't care who I was so long as I paid money for (ideally) a good product that was reasonably priced.

[WilliamCooper-lf]

What the perpetual complainers fail to grasp, is that they have "played" no role in the creation of this nation. They "played" no role in the building of their schools, many of which are fabulously built, with beauty designed into their layouts. They "played" no role in job creation, no role in food production, no role in absolutely anything, having been totally dependent on this and every preceding generation, just for them to find no appreciation for those who suffered and sacrificed before them, to give them multitudes of blessings. In spite of this obvious reality, there are no thank yous, no days of reflection, no gratitude, nothing but anger, distrust, envy, and victimization. This is so prevalent, that it can only be explained by wide scale negative indoctrination.

[claudechase]

Thank You PragerU for using basic common sense and logic to share truth 😊💖💖💖