The Gilded Age
In Paul Johnson’s excellent work, A History of the American People, he describes the function of the political system in regards to the market as “to enable [market democracy] to take place, and accelerate, by removing obstacles, natural or man-made. It [is the] case of allowing the ship of state to float downstream under the impulse of a mighty current of innovation and improvement, the government merely having to stretch out an occasional oar to prevent it drifting into the bank.”
In this instance, of course, he is describing the action of the government in the midst of the “Gilded Age” where titans like Carnegie, Rockefeller, and J. P. Morgan (and villains like Gould and Fisk) operated. It has been a long time since I last studied this period of American history and what I find most striking is how applicable it all is today! In fact, with a few minor changes to the story, it describes exactly the situation we find ourselves in today. The real question is, how will this current period end?
The time period from the Civil War to WWI seems tell-tale for today’s environment for a variety of reasons. True capitalism in America (the corporation, Wall Street) had just taken off. The government was trying to correct on overly “laissez-faire” attitude which, while it had created considerable wealth and benefits to the public good, had also proved a breeding ground for corruption and scoundrels. It saw the rise of sky scrapers, railroads, the telegraph, electric lighting, and more. It saw a debate over currency, banking, regulation, and whether “big” business was bad. It saw fear and distrust in the public, especially farmers, of business and wealth. It saw the rise of populism, socialism, and progressivism. Most importantly, it saw the panics of 1873, 1893, 1907, all touched off by similar circumstances as today.
Which makes me stop and think; with all of these similarities, what is the main difference? Johnson starts early on, just after introducing J. Pierpont Morgan, saying, “It is impossible to understand this period of American history unless you grasp that people like Morgan had absolute standards of conduct which they would die rather than repudiate. When he told the US Senate that, in Wall Street, under his aegis, ‘character determines credit’, he meant it, and it was true.”
Thinking to our leadership now, both public and private, character seems to be the commodity in least supply and unfortunately in even lower demand.
So the question comes: what will happen? After the gilded age the U.S. could have gone in many directions. One choice was to travel down the road to socialism, as many European countries did. It could also have regulated so heavily (as many wanted at the time) as to have destroyed free market capitalism—and the wealth and innovation it created—forever. We know how that story ended, but how will the current one end?
Sometimes, I’m afraid of what that answer might be.
In this instance, of course, he is describing the action of the government in the midst of the “Gilded Age” where titans like Carnegie, Rockefeller, and J. P. Morgan (and villains like Gould and Fisk) operated. It has been a long time since I last studied this period of American history and what I find most striking is how applicable it all is today! In fact, with a few minor changes to the story, it describes exactly the situation we find ourselves in today. The real question is, how will this current period end?
The time period from the Civil War to WWI seems tell-tale for today’s environment for a variety of reasons. True capitalism in America (the corporation, Wall Street) had just taken off. The government was trying to correct on overly “laissez-faire” attitude which, while it had created considerable wealth and benefits to the public good, had also proved a breeding ground for corruption and scoundrels. It saw the rise of sky scrapers, railroads, the telegraph, electric lighting, and more. It saw a debate over currency, banking, regulation, and whether “big” business was bad. It saw fear and distrust in the public, especially farmers, of business and wealth. It saw the rise of populism, socialism, and progressivism. Most importantly, it saw the panics of 1873, 1893, 1907, all touched off by similar circumstances as today.
Which makes me stop and think; with all of these similarities, what is the main difference? Johnson starts early on, just after introducing J. Pierpont Morgan, saying, “It is impossible to understand this period of American history unless you grasp that people like Morgan had absolute standards of conduct which they would die rather than repudiate. When he told the US Senate that, in Wall Street, under his aegis, ‘character determines credit’, he meant it, and it was true.”
Thinking to our leadership now, both public and private, character seems to be the commodity in least supply and unfortunately in even lower demand.
So the question comes: what will happen? After the gilded age the U.S. could have gone in many directions. One choice was to travel down the road to socialism, as many European countries did. It could also have regulated so heavily (as many wanted at the time) as to have destroyed free market capitalism—and the wealth and innovation it created—forever. We know how that story ended, but how will the current one end?
Sometimes, I’m afraid of what that answer might be.
posted by Cogito at 9:21 AM
1 comments
