Capital and Labor in the Gilded Age | American History Flipped Classroom

After the American Civil War, the United States industrialized. The United States became richer, and some people became poorer. Capital was moving throughout the country, and laborers were fighting back. Welcome to Lessons in Humanities. For PowerPoints, Google Slides, lesson plans, and other teaching activities, please visit the Lessons in Humanities store. The link to the store is in the description below. Post-war America saw technological innovation. Money was moving very quickly. There was lots of investments into the railroads, which helped the economy. There was mass industrialization. There was also labor unrest. Industrialization brought labor unrest because people were working very long hours in very dangerous conditions. And with these long hours in difficult working conditions, people and workers often had a difficult time supporting their family with the meager wages. During the Gilded Age, workers would learn to organize, or they would learn to unionize. And we see unions in the United States today, and this is where it began. Now, during this time, there's something called Taylorism. Now, this was pioneered by a man named Frederick Taylor in the 1880s, and it was a scientific management idea that made production much more efficient. And here, the keyword is efficient. Tasks were subdivided, and let me give you an example of that. So, for example, before, 30 mechanics would make 30 products. But with Taylorism, 30 laborers would do 30 distinct tasks to create a product. Now, this resulted in mass production. Many Taylorism ideas are still in use today in industrial engineering and management. For example, today, there is division of tasks, analysis, logic, work ethic, elimination of waste, standardization of best practices, transfer of knowledge between others. So, this Taylorism is still seen today. The use of interchangeable parts progressed during the American Civil War. Now, evidence of this type of use of interchangeable parts goes back to ancient China and Europe as well. Now, Eli Whitney, he progressed the use of interchangeable parts in the early 1800s. But the Civil War progressed the use even more, and it would influence the Gilded Age, which happened after the Civil War. Many popular products were able to be produced very efficiently with advanced production management systems, for example, Taylorism, and the use of these interchangeable parts. For example, we have the McCormick Grain Reaper, which you see in the picture here. For decades, people would hire many different specialists to make one product. They would hire blacksmiths, or woodworkers, or machinists. Now, in the 1880s, the McCormick Grain Reaper company, they hired a production manager who worked with Colt Firearms, which had experience with interchangeable parts. In 1880, they had 20,000 reapers produced. In 1885, 40,000 produced. In 1889, they had 100,000 produced. They also had things like the Singer Sewing Machines, or the Duke Cigarette Roller, or the Chicago Packers. It's an assembly line for slaughtering and preparing meat. And then later, of course, Henry Ford had the assembly line in the early 1900s. So, in the 1860s, the U.S. was behind Britain, Germany, and France. But in 1913, the U.S. produced one-third of industrial output, which was more than Britain, Germany, and France combined. Now, corporations also came about during the Gilded Age. They had been around before that, of course. But a corporation is a company that acts like a single entity, or a single person, if you will, that is given certain legal protections. Now, some forms of corporations have been around since ancient Rome, and ancient India as well. Some of the early English charters that came to the United States, or actually came to the New World, which would become British America, used similar corporations, which were charters. Now, the corporations took off during the Gilded Age in the United States. After the Civil War, corporations used new state incorporation laws passed during the Market Revolution, which was before the Civil War. And corporations were able to obtain mass capital, lots of money, with limited liabilities to shareholders. So, hence, the United States could develop its manufacturing quite quickly. Now, during the Gilded Age, and when this was all happening, and producing, and industrializing, there was cutthroat competition, which was forcing prices to be very low. So, companies succeeded and failed. Investors earned and lost a lot of money at this time. And to avoid competition, many industries merged and formed trusts, T-R-U-S-T. And these trusts, they agreed to price-fixing schemes. So, between 1895 and 1904 is called the Great Merger Movement. And there were 4,000 company mergers. Now, some of those mergers, some of those companies that were mergers that are still around today, include GE, DuPont, and U.S. Steel. So, U.S. Steel, let's talk about that real quick. So, in 1901, financer J.P. Morgan helped form the United States Steel Company. It was formed from eight different steel companies, including Andrew Carnegie's Steel Company. So, steel was very important at that time, as everything was industrializing, and the cities were being built up. And the U.S. Steel Company was the first billion-dollar company, and it was a monopoly. Now, with all this development, and with all this industrialization, would also be inequality. So, the Gilded Age saw great advances in efficiency, and production, and manufacturing. But, you know, the big business, they attracted a lot of money. And while some of the big business people, or the tycoons, or the business titans, they were making fortunes, there were millions of people working long hours in dangerous working environments for barely enough money to take care of their families. So, the rise of inequality was at its greatest at this time. Now, let's talk about some of the tycoons. So, we have, well, we have J.D. Rockefeller, we have Andrew Carnegie, Cornelius Vanderbilt, and J.P. Morgan. So, Rockefeller, who's the picture right here, he was a businessman and a philanthropist. He founded Standard Oil Company, and he is the richest man in American history, adjusted for inflation. So, he is richer than Mark Zuckerberg, Jeff Bezos, and Elon Musk, if you adjust it for inflation. According to some statistics, Rockefeller was the fifth richest man in world history, behind people like Genghis Khan. Now, Andrew Carnegie, I'll go back to the pictures, the picture in the middle, he was a Scottish American industrialist, and he was also a philanthropist. He was a financier, and led the expansion of American steel. He was behind J.D. Rockefeller, the second richest man in American history. Then we have Vanderbilt. He was a businessman, and he built his wealth in railroads and shipping. He's in the lower left corner there. He's the third richest man in American history. And then there's J.P. Morgan. He was like 20-somethingth richest, but he was an American financier, and he had a lot of influence on the Gilded Age. But all these men, except for J.P. Morgan, were richer than the richest people today. Now, at this time, there was also Darwinism, Charles Darwin. Now, this has happened before the American Civil War, actually. So, in 1859, British naturalist Charles Darwin wrote on the origin of species. Now, even though it was written in 1859, it wouldn't be until the 1870s that Darwin's theories really gained traction. So, biologists, and naturalists, and scientists started to accept Darwin's theories. It included ideas like survival of the fittest. And this was a phrase used by Darwin describing natural selection. Now, this is the idea that organisms, or animals, that could adjust to their environment are fit for survival and reproduction. Now, this brings us to social Darwinism. So, social Darwinism, there's a British sociologist, his name is Herbert Spencer, and he applied Darwin's theory of survival of the fittest to society. It was the idea where the fittest have the most economic success. And he also believed that state welfare and charity leads to social degeneration, which means, according to him, survival of the weakest. Social Darwinism spread among the rich. Some felt inequality of outcome should be celebrated. For example, J.D. Rockefeller and Thomas Edison were among those who followed Herbert Spencer. Now, many people, especially laborers, were strongly against this idea of social Darwinism. Now, I'd also like to talk about the Republican Party's domination during the Gilded Age and further on. You know, they came to power as an anti-slavery party, but that was only part of it, right? They also supported American business. Abraham Lincoln himself was a lawyer that defended railroad businesses. And during the war, he didn't have opposition from the Democrats, so Lincoln pushed many pro-business agendas. The Republicans, they pushed for high protective tariffs, and they wanted to protect American businesses. Before the war, the Democrats, they would oppose the high tariffs, but after the war, they didn't have any power, so they couldn't oppose it. Now, the Republican Party dominated the Gilded Age in the first couple decades of the 20th century. Between the Civil War, when it ended in 1865, and the Great Depression, which started in 1829, there were only four Democrats that would become president. That includes FDR, who became president during the Depression. So, with the Republicans in charge, a new industrial order emerged with the justification that hardworking and talent could bring riches, minimize government interference. That's what the Republicans believed in at this time, and it kind of moves forward to today. Now, let's talk about the labor movement. So, the majority of the industrial laborers, they didn't support this idea of social Darwinism, and the working conditions were difficult. There were people working 60 plus hours a week. They were living below the poverty line. It was dangerous working conditions. They'd have extended periods of unemployment. Wives and children would have to work. Many lived in slums. The cities were overcrowded. Naturally, strikes started to erupt because of these conditions. In fact, they started to erupt before the Civil War. During the Civil War and Reconstruction, the labor movement was distracted, obviously, because of the war. But with the rise of business in the Gilded Age, the labor movement gained a lot of momentum. Strikes would occur around the countries, and many unions would be formed. I'll give you one example. Here we have the Great Railroad Strike of 1877. So, this basically was the start of an era of labor conflict. So, the Panic of 1873 would hurt workers for years to come. The railroad bubble busted, and that's why it happened. But the effects would be felt for many, many years. And four years later, in 1877, the Baltimore and Ohio Railroad cut wages. This was the first time in a year. Sorry, this was not the first time in a year. This was the third time in a year. Strikers, they would shut down railroad traffic, and the Baltimore to St. Louis line was completely shut down, and this affects the economy. Strikes popped up all across Pennsylvania, and railroads were shut down, and again, it hurt the economy. So, state militias and federal troops were called in to stop these strikes, and a hundred people would die, and $40 million in damages would occur. This convinced workers that they need to form unions. This really galvanized the country, and there would be 50 years of labor conflict that would continue. Now, one of the most famous early unions was the Knights of Labor. So, in the 1880s, unions that united skilled and unskilled labor started. Well, they welcomed all laborers. This was the Knights of Labor. They welcomed all laborers, including women. They did not include lawyers, bankers, or liquor dealers, though. By 1886, there were 700,000 members in the Knights of Labor. They originally wanted to create a cooperative, producer-centered society, but many felt that that was too radical. So, they changed their ideals. They demanded things that were more practical, for example, an eight-hour workday or safe conditions at work. Now, the Haymarket Riot would really hurt the Knights of Labor. So, in 1886, J.A. Gould's Railroad Company fired some Knights of Labor members for attending a union meeting, and the workers from all of the countries decided to strike. Gould called in the Pinkerton Detective Agency to put down the strike. After lots of property damage, the strikers were shut down, and they decided to change their goal to getting an eight-hour workday. So, on May 1st, 1886, around 400,000 strikers around the countries gathered. Police killed one striker outside the McCormick Reaper Works. Strikers called for a protest the next day at the Haymarket Square in Chicago. Peaceful protests called for that day, but that's not what would happen. Somebody would throw a bomb, and it killed seven protesters and four police. And then the sensational news made Americans very much against the unionists. There were eight anarchists that were in that crowd, and they were arrested. Four of them were hung, and one committed suicide, but it wasn't clear if they were actually guilty. Membership of the Knights of Labor dramatically dropped. The movement for an eight-hour workday had to be stopped at that time and continued later. Now, we also have another significant union. It's called the American Federation of Labor. It was more conservative than the Knights of Labor. This time in 1886, the same year as the Haymarket Riot, the members were able to distance themselves from the Knights of Labor. So, it was a union of skilled workers. They advocated for higher wages, less working hours, and more safety in the workplace. Samuel Gompers was elected as its president. AFL, or the American Federation of Labor, will go on to be the largest union in the United States at the beginning of the 20th century. Now, there's going to be some more strikes. Like I said, this is the era of strikes and protests, labor protests. This is going to be the Pullman Strike. So, a strike after workers at the Pullman car factories had their wages cut. That's what the Pullman Strike is. The workers lived in a company town, and they had their wages cut, but living in this town, their rents were not cut, and they were going to strike. Now, it wasn't actually them who started this big strike. It's going to be the American Railroad Union, ARU, led by Eugene Debs. They refused to accept any Pullman cars on the rail lines, and the national railroad traffic was stopped. You have to remember, at this time, that is a big deal. That's going to really, really hurt the economy. Actually, President Cleveland, who was president at that time, he sent thousands of American soldiers to stop the strike. So, between 1880 and 1900, there were more than 20,000 strikes. So, that shows you how severe this time period was, and how upset people were at what was happening in the United States. Now, let's move on to another movement. This is called the Populist Movement, and this is all interrelated. So, there's a coalition of agrarian reformers who were politically inclined. They advocated for a wide range of economic and political legislation in the late 1800s. They were very much against Wall Street. Now, the farmers at the turn of the century were the majority of the population. Many farmers were in debt, while bankers, railroad tycoons, and other business businessmen at that time were getting rich. Industrialization changed the agrarian society. Farmers were once only dependent on the local markets, but in the late 1800s, they were connected to the local town, the nearest city, New York, Chicago, and then London, and then the rest of the world. Hence, farmers at the turn of the century were subject to the national economy, which did not have many regulations. They wanted to change the system. So, it started as the Farmers' Alliance. So, farmers at that time, they didn't want monopolies to get rich while the farmers fed the country. Giant corporations monopolized every sector, and farmers' power was being decreased at that time. And at that time, the price of commodities was decreasing while the farmers' debt was increasing. So, naturally, they organized unions or they organized groups or parties. One was called the Farmers' Alliance. Now, the farmers could share machines, they could bargain with wholesalers, they could negotiate lower prices, and much, much more. And the Farmers' Alliance would later be called the People's Party. That's our next slide here. So, the Farmers' Alliance, it would be known as the People's Party or the Populist Party. And the idea spread throughout the South and the Midwest and the Plains. They believed in what they called a cooperative commonwealth. There were 1.5 million members and they won 21 electoral votes in the election of 1892. So, it was a serious party. And they actually earned a lot more credit after the Panic of 1893 when the economy was destroyed. So, people started looking towards other ways, other systems, ways of doing things. Now, they ran on what was called the Omaha Platform of the People's Party. So, since the Democrats and Republicans, they didn't have, they didn't meet the needs of the farmers. They started this People's Party, which started on the Omaha Platform. The platform included a coherent political vision that some felt was too extreme later on, and they would become a little less extreme later, but this was the original platform. And number one, they wanted to counter power of monopolistic capitalism. They also wanted an expansion of federal government. They wanted to nationalize railroads and telegraphs. They wanted sub-treasuries that would extend loans to farmers. They also wanted to monetize silver. So, they thought that monetizing silver would be creating an inflationary monetary policy, which would help them. They also wanted to shift the economy toward the producing class, not the monopolies or the big tycoons. At this time, there was also the Colored Farmers Alliance. So, the Colored Farmers Alliance in the South was not always, was not accepted by the Farmers Alliance. So, the Colored Farmers, they created their own, the Colored Farmers Alliance. And these were black farmers in the South which started this alliance. It was inspired by Booker T. Washington and his call for economic self-sufficiency. In Washington, he was an author, an educator, an orator. He was the leader of the African-American economy at that time. Now, another topic of interest during this time period was called gold. In William Jennings Bryan, he advocated for silver. So, basically, this is what it is. Debates over the monetary policy in the United States, they have been ongoing since the days of Alexander Hamilton and they go on to this very day. From the days of George Washington to the Civil War, the United States was on a gold and silver standard. In other words, paper money was backed by a certain ratio of gold and silver. So, it wasn't just paper like it is today. During the Civil War, greenbacks were issued and they were just paper. They were fiat money. Lincoln was against this, but he needed money to fight the war. With the Coinage Act of 1873, the U.S. was back on the gold standard, but not everybody was happy about that. Many people argue that the United States should go back to bimetallism, which just means gold and silver backing the money. William Jennings Bryan was one of the most famous advocates for going back to the silver standard. And this is also a movement known as free silver. So, to simplify this, basically, it was argued that if the United States went back on the silver standard, then it would help the poor people or the farmers or the working class. Now, here's William Jennings Bryan. He's one of the greatest American speakers in American history. He was a Nebraska congressman at one time. He was a Democrat. He was a three-time presidential candidate. He was the Secretary of State under President Woodrow Wilson later on. He was also a lawyer during the Scopes Monkey Trial. That's not going to happen until 1925. But what he promoted was a silver standard. So, the gold standard was being attacked. People were promoting free silver. They're saying it would benefit average citizens to make the United States prosperous. In 1896, William Jennings Bryan gave the Cross of Gold speech at the Democratic National Convention. It was considered one of the greatest speeches in American history. Now, his opponent was William McKinley. And William McKinley would actually defeat him. This is in the election of 1896. And then the United States would remain on the gold standard. But a movement had started. Now, another movement were the Socialists at the time. So, the Socialist Party, it was open to all races, to all genders, social classes, and religions. There were some notable figures from that time period like Helen Keller, Upton Sinclair, Jack London, who were Socialists. Factory workers, miners, railroad builders, tenant farmers, small farmers, and more were attracted to the Socialist movement. Now, here's the Socialist Party of the And they did win some seats as congressmen, as mayors. And in 1912, Eugene Debs was the SPA candidate for president. And he actually received 1 million votes. Now, the Socialists were unable to persuade Americans that Socialism was compatible with American values. And eventually, during World War I, the government would censure the Socialists because the Socialists were anti-war, and they would slowly fade away. But the important point here is populists and the Socialists from this time period would be very influential for many, many generations to come. So, that is it for today. So, the years after the Civil War, they saw lots of great change throughout the country. Before the Restruction Era ended, the U.S. would industrialize and see great developments. With such great progress also came inequality and movements to counter those effects. And those movements can still be seen today, right? For example, in unions and progressive ideas or socialist ideas. So, that is all we have for today. Thank you so much for getting this far into my video. Please, as always, please give me a thumbs up and subscribe. But also, more importantly, please share this video with anybody that it could help, either teachers or students. And also, again, visit my store below. For teachers, lots of great materials that teachers could use in the classroom. All right. Have a great day.