THE INDUSTRIALIZATION OF
AMERICA
THE INDUSTRIALIZATION OF
AMERICA
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With a stride that astonished statisticians, the
conquering hosts of business enterprise swept over
the continent.
25 years after Lincoln’s 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 America’s rise to industrial supremacy was not
as sudden as some observers and historians have
suggested.
THE INDUSTRIALIZATION OF
AMERICA
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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.
THE INDUSTRIALIZATION OF
AMERICA

The remarkable growth
did much to increase
the wealth and improve
the lives of many
Americans.
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But the benefits were
not universal.
THE INDUSTRIALIZATION OF
AMERICA
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While the industrial titans and a growing
middle class were enjoying a prosperity
without precedent in the nation’s 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.
SOURCES OF INDUSTRIAL
GROWTH
SOURCES OF INDUSTRIAL
GROWTH
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Many factors contributed to the growth of
American industry:
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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,.
THE INDUSTRIAL ECONOMY
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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.
THE INDUSTRIAL ECONOMY
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1913: The US produced 1/3
of the world’s 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.
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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.
THE INDUSTRIAL ECONOMY
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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.
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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.
THE INDUSTRIAL ECONOMY
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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.
THE INDUSTRIAL ECONOMY
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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 world’s
center of iron and steel mfg.
Chicago: By 1900 the nation’s
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.
NEW TECHNOLOGIES AND NEW
INDUSTRIES
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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.
NEW TECHNOLOGIES AND NEW
INDUSTRIES
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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.
NEW TECHNOLOGIES AND NEW
INDUSTRIES
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By the 1890s, American
Telephone and
Telegraph Company,
which handled Bell’s
interests, had installed
nearly half a million
telephones in American
cities.
There were other
inventions that speeded
the pace of business
organization.
NEW TECHNOLOGIES AND NEW
INDUSTRIES
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1868: Christopher L. Sholes invented the typewriter.
NEW TECHNOLOGIES AND NEW
INDUSTRIES
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1879: James Ritty invented the cash register.
NEW TECHNOLOGIES AND NEW
INDUSTRIES
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1891: William S. Burroughs invented the calculating
or adding machine.
NEW TECHNOLOGIES AND NEW
INDUSTRIES
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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.
NEW TECHNOLOGIES AND NEW
INDUSTRIES
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Charles F. Brush devised the arc lamp for street
illumination.
NEW TECHNOLOGIES AND NEW
INDUSTRIES
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Thomas A. Edison invented the incandescent lamp
(or light bulb) which could be used for both street
and home lighting.
NEW TECHNOLOGIES AND NEW
INDUSTRIES
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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.
THE RAILROAD AND THE
NATIONAL MARKET
THE RAILROAD AND THE
NATIONAL MARKET
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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.
THE RAILROAD AND THE
NATIONAL MARKET
THE RAILROAD AND THE
NATIONAL MARKET
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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 largescale corporate
enterprise.
THE RAILROAD AND THE
NATIONAL MARKET
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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.
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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.
THE RAILROAD AND THE
NATIONAL MARKET
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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.
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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.
THE AUTOMOBILE
THE AUTOMOBILE
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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.
THE AUTOMOBILE
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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.
THE SCIENCE OF PRODUCTION
THE SCIENCE OF PRODUCTION
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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.
THE SCIENCE OF PRODUCTION
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Taylor’s 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.
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But scientific
management was also
a way to increase the
employer’s control of
the workplace, to make
working people less
independent.
He urged employers to
reorganize the
production process by
subdividing tasks.
THE SCIENCE OF PRODUCTION
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This would speed up
production.
It would make workers
more interchangeable
and thus diminish a
manager’s dependence
on any particular
employee.
And it would reduce the
need for highly trained
skilled workers.
THE SCIENCE OF PRODUCTION
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If properly managed by
trained experts, Taylor
claimed, workers using
modern machines could
perform simple tasks at
much greater speed,
significantly increasing
productive efficiency.
COMPETITION AND
CONSOLIDATION
COMPETITION AND
CONSOLIDATION
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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 18731897 were known as the Great Depression.
COMPETITION AND
CONSOLIDATION
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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.
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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.
COMPETITION AND
CONSOLIDATION
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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.
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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.
CAPTAINS OF INDUSTRY OR
“ROBBER BARONS” – people who loot an
industry and give nothing back.
CAPTAINS OF INDUSTRY OR
“ROBBER BARRONS”
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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.
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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.
CAPTAINS OF INDUSTRY OR
“ROBBER BARONS”
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Andrew Carnegie:
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Industrial giant
Born in Scotland and
immigrated to US in 1848
Ambitious and hardworking, 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.
CAPTAINS OF INDUSTRY OR
“ROBBER BARONS”
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He then became a Western
Union messenger boy.
Because he had to decode
the messages for every
major business in
Pittsburgh, Carnegie gained
an insider’s view of their
operations.
1852: He was hired as
secretary and personal
telegraph operator for the
PA. Railroad.
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1858: He took over as head
of the line’s western
division.
In his six years as division
chief, Carnegie more than
doubled the line’s 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.
CAPTAINS OF INDUSTRY OR
“ROBBER BARONS”
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Early 1870s: He decided to
build his own steel mill.
His connections with the
railroad industry, the country’s
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 costanalysis learned from his
railroad experiences, he
became the first steelmaker to
know the actual production
cost of each ton of steel.
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Carnegie’s 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.
CAPTAINS OF INDUSTRY OR
“ROBBER BARONS”
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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 world’s 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.
CAPTAINS OF INDUSTRY OR
“ROBBER BARONS”
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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.
CAPTAINS OF INDUSTRY OR
“ROBBER BARONS”
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Combining Carnegie’s
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.
CAPTAINS OF INDUSTRY OR
“ROBBER BARONS”
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JOHN ROCKEFELLER
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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.
CAPTAINS OF INDUSTRY OR
“ROBBER BARONS”
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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.
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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.
CAPTAINS OF INDUSTRY OR
“ROBBER BARONS”
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1880s: His Standard Oil
Company controlled 90%
of the nation’s 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.
CAPTAINS OF INDUSTRY OR
“ROBBER BARONS”
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These and other industrial
leaders inspired among
ordinary Americans a
combination of awe,
admiration, and hostility.
Depending on one’s 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.
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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.
CAPTAINS OF INDUSTRY OR
“ROBBER BARONS”
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1894: Henry Demarest
Lloyd, in Wealth Against
Commonwealth, an expose
of how JDR’s 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.”
THE PROBLEMS OF
INDUSTRIALIZATION
THE PROBLEMS OF
INDUSTRIALIZATION
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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.
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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.
THE PROBLEMS OF
INDUSTRIALIZATION
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Many Americans sensed that something had
gone wrong in the nation’s social
development.
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Talks of “better classes,” “respectable
classes,” and “dangerous classes,”
dominated public discussions, and bitter strife
seemed to have become the rule.
THE PROBLEMS OF
INDUSTRIALIZATION:THE WORKERS
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Striking as it was, the country’s 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.
THE PROBLEMS OF INDUSTRIALIZATION:
THE WORKERS
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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.
THE PROBLEMS OF INDUSTRIALIZATON:
THE WORKERS
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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.
THE PROBLEMS OF INDUSTRIALIZATION:
THE WORKERS
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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 city’s homes,
factories, and sweatshops.
The articles unleashed a
flood of letters to the editor
from women workers.
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One women singled out
domestic service – still the
largest employment for
women – as “a slave’s life,”
with “long hours, late and
early, seven days in the
week, bossed and ordered
about as before the war.”
THE PROBLEMS OF INDUSTRIALIZATION:
THE WORKERS
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1881: The MA Bureau of
Labor Statistics reported
that virtually every worker it
interviewed in Fall River,
the nation’s 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.”
THE PROBLEMS OF INDUSTRIALIZATION:
A CLASS SOCIETY
THE PROBLEMS OF INDUSTRIALIZATION:
A CLASS SOCIETY
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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.
THE PROBLEMS OF INDUSTRIALIZATION:
A CLASS SOCIETY
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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 era’s class divisions.
THE PROBLEMS OF INDUSTRIALIZATION:
A CLASS SOCIETY
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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.”
THE PROBLEMS OF INDUSTRIALIZTION:
A CLASS SOCIETY
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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.
THE PROBLEMS OF INDUSTRIALIZTION:
A CLASS SOCIETY
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1886: Matthew Smith’s
best-seller Sunshine
and Shadow in New
York, was published.
It opened with an
engraving that
contrasted department
store magnate
Alexander T. Stewart’s
two-million dollar
mansion with housing
in the city’s slums.
THE PROBLEMS OF INDUSTRIALIZATION:
A CLASS SOCIETY
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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.
SOCIAL DARWINISM IN AMERICA
SOCIAL DARWINISM IN AMERICA
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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.
SOCIAL DARWINISM IN AMERICA
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“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.”
SOCIAL DARWINISM IN AMERICA
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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 Darwin’s 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.
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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.
SOCIAL DARWINISM IN AMERICA
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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.
SOCIAL DARWINISM IN AMERICA
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Failure to advance in society was widely thought to
indicate a lack of character, an absence of selfreliance and determination in the face of adversity.
1900s: Half the nation’s 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.
SOCIAL DARWINISM IN AMERICA
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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.
Spencer’s books were
popular in America in the
1870s and 1880s.
SOCIAL DARWINISM IN AMERICA
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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.
SOCIAL DARWINISM IN AMERICA
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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.
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“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.
SOCIAL DARWINISM IN AMERICA
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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.”
SOCIAL DARWINISM IN AMERICA
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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.
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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.
SOCIAL DARWINISM IN AMERICA
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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.
SOCIAL DARWINISM IN AMERICA
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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.
SOCIAL DARWINISM IN AMERICA
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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
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JDR’s 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.
THE GOSPEL OF WEALTH
THE GOSPEL OF WEALTH
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Some businessmen attempted to temper the
harsh philosophy of Social Darwinism with a
more gentle, if in some ways equally selfserving 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.
THE GOSPEL OF WEALTH
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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.”
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.
THE GOSPEL OF WEALTH
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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.
THE GOSPEL OF WEALTH
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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.
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“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.
THE GOSPEL OF WEALTH
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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.
THE GOSPEL OF WEALTH
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The titles varied: Andy
Grant’s 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.
ALTERNATIVE AMERICAS
ALTERNATIVE AMERICAS
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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.
ALTERNATIVE AMERICAS
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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.
ALTERNATIVE AMERICAS
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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 society’s
best hope.
The people, through their government, could
intervene in the economy and adjust it to
serve their needs.
ALTERNATIVE AMERICAS
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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.
ALTERNATIVE AMERICAS
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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-tounderstand 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.
ALTERNATIVE AMERICAS
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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.
ALTERNATIVE AMERICAS
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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.
ALTERNATIVE AMERICAS
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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.
ALTERNATIVE AMERICAS
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No one knows how many of
George’s readers actually
believe in this way of
solving the nation’s 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.
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Freedom lay at the heart of
George’s 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.
ALTERNATIVE AMERICAS
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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 “cooperative society” of the future would be limited to
enhancing the quality of life.
His vision rested on the familiar foundation of the
sovereign individual.
ALTERNATIVE AMERICAS
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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 Bellamy’s
book, which promoted
socialist ideas while
“ignoring that name.”
ALTERNATIVE AMERICAS
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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.
ALTERNATIVE AMERICAS
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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.
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From today’s perspective,
Bellamy’s 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.
ALTERNATIVE AMERICAS
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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.
THE SOCIAL GOSPEL
THE SOCIAL GOSPEL
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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 era’s Protestant preachers
concentrated on attacking individual sins like
drinking and Sabbath-breaking and saw
noting immoral about the pursuit of riches.
THE SOCIAL GOSPEL
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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.
THE SOCIAL GOSPEL
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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 era’s social ills.
The Movement’s 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.
THE SOCIAL GOSPEL
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Within American Catholicism, as well, a group of
priests and bishops emerged who attempted to alter
the church’s 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.