- Current political and economic issues succinctly explained.
The most popular historical analogy for current American troubles is the Civil War era. The second most popular is the Gilded Age. But where the 1850s do not meaningfully resemble today, the 1890s certainly do. Technological change, economic concentration, and rising inequality; political partisanship, financial corruption, and social turmoil; populism, racism, and xenophobia—the similarities are striking. Moreover, the paths the country took out of that earlier crisis offer valuable lessons for what we should do now, and what we should fear.
In the last third of the nineteenth century, the United States was a country in ferment due to three broad trends: economic growth and industrialization, demographic growth and social change, and the rise of mass political participation. These national transformations fed on one another, as did the backlashes they provoked. And the eventual result was the taming of the laissez-faire economy and the suppression of popular democracy.
From 1870 to 1900, the U.S. population doubled from 38 million to 76 million, and by the turn of the century, one in seven Americans was a new immigrant. The population spread across the continent as railroads, steamships, telegraphs, and telephones tied the country together and linked it to the world at large. In the South, meanwhile, the democratizing thrust of Reconstruction increasingly brought formerly enslaved people into the mainstream of regional life.
The combination of modern corporations, industrial research labs, and globalized markets kicked off an unprecedented surge of continuous technological innovation and economic growth. And as usual with capitalist development, all that was solid melted into air. As economic historian Brad DeLong puts it, “Before 1870, you almost certainly had a job very much like that of your father or mother. After 1870, that was no longer the case. A wild ride of Schumpeterian creative destruction gave rise to enormous wealth while destroying entire occupations, livelihoods, industries, sectors, and communities.” The historian Henry Adams claimed that “the American boy of 1854 stood nearer the year 1 than to the year 1900.”
For many of the white, male, Anglo-Saxon Protestants who had long dominated the country, these changes were deeply troubling. Independent farmers and craftsmen had once formed the base of Jeffersonian-Jacksonian democracy; now they were increasingly out of place in the new urban, industrial economy, competing with Catholics and Jews, foreigners, Black people, and women.
The rhythms of the business cycle battered the old middle classes both ways. Booms eroded traditional social structures and hierarchies, while busts left individuals stranded and bereft. Agricultural employment plummeted and the industrial workforce became proletarianized, even as economic consolidation produced huge organizations and giant fortunes at the top of the ladder. “Small shops employing artisans or skilled workers increasingly gave way to larger mechanized factories using more unskilled labor,” writes the historian Charles W. Calhoun in The Gilded Age: Perspectives on the Origins of Modern America. “American workers found their economic lives reduced from independence to dependence as the wage system of labor came to dominate the workplace.”
Throughout the turmoil, two equally strong patronage-based national parties fought each other to a draw as electoral politics became mass entertainment and a major seasonal jobs program. Historian Jon Grinspan captures the scene in The Age of Acrimony: How Americans Fought to Fix Their Democracy, 1865–1915:
Presidential elections drew the highest turnouts ever reached, were decided by the closest margins, and witnessed the most political violence.…The nation experienced one impeachment, two presidential elections “won” by the loser of the popular vote, and three presidential assassinations. Control of Congress rocketed back and forth, but neither party seemed capable of tackling the systemic issues disrupting Americans’ lives. Driving it all, a tribal partisanship captivated the public, folding racial, ethnic, and religious identities into two warring hosts….Republicans tended to support an active federal government, while Democrats denounced “centralism,” but mostly, each side just opposed what the other stood for.
As the mainstream parties let problems fester, the disaffected started taking matters into their own hands and organizing for resistance. Angry farmers and miners joined the Grange, the Greenback and Union Labor parties, and the Populists. Angry industrial workers joined the Knights of Labor, the American Federation of Labor, and the American Railway Union. And angry moralistic reformers joined the mugwumps, the Women’s Christian Temperance Union, and the progressives. By the last decade of the century, the nation was starting to boil.
From the Gilded Age to the Progressive Era
In 1892, state militias were called in to put down the Homestead strike. In 1894, federal troops had to be sent in to quell the Pullman strike. The Panic of 1893 triggered a devastating depression, with economic activity dropping 25 percent, unemployment nearing 20 percent, and millions suddenly thrust into privation. Populist Jacob Coxey led the first-ever march on Washington, mobilizing unemployed workers to demand a public jobs program by sending “a petition with boots on.” Authorities quickly dispersed his “army” when it arrived, but the protests seemed an ominous warning about troubles to come (and ultimately gave us The Wizard of Oz as a political allegory).
In the presidential election of 1892, the third-party Populist ticket won over a million votes out of twelve million cast. In the 1894 midterms, the party’s support increased by 41 percent. In 1896, the Democrats coopted the threat to their left by running William Jennings Bryan on a loose money platform. Reformers of many types backed Bryan, but corporate interests gave huge sums to William McKinley, allowing him to outspend his opponent five to one. Republicans won what is still the most expensive campaign in American history and ended up breaking the political deadlock, eventually creating a new economic and political framework.
The Gilded Age’s dynamism and instability triggered economic, communal, and political backlashes, which over time coalesced to produce a semblance of order. Economic populists started to rein in laissez-faire, slowly establishing checks on some aspects of business activity. White nativists moved to restore their waning dominance by disenfranchising Black people and restricting immigration. And progressive reformers gentrified the political system, reducing mass participation and introducing technocracy. Together, these moves led to what would become known as the Progressive Era.
“An incredible transformation of American politics took place around 1900,” Grinspan writes,
reconfiguring a public, partisan, passionate system into a more private, independent, restrained one….The well-to-do victors of the Gilded Age’s class wars…restrained the old system, decreasing violence and partisanship, but diminishing public engagement along with it….From one angle, the new model meant votes for men and women, free of domineering political machines, campaigns driven by somewhat reasoned debate, which empowered skilled executives and administrators to govern aggressively. From another, the new form of American democracy meant a passive electorate of mostly white, native-born, well-off voters, presided over by an inflated president, a distant congress, concealed parties, and busy lobbyists.
How the Second Gilded Age Compares to the First
There are clearly many parallels between then and now. Both the late nineteenth and the early twenty-first centuries saw technological change, increased globalization, economic growth, concentration of wealth, and rising inequality. Karl Marx described the way steam, railroads, and the telegraph had shrunk the world as the annihilation of space by time; in recent decades, the information revolution and digital technology have shrunk the world still further, producing similar vertigo.
Both eras, moreover, saw increased immigration, changing demography, and a decline in standing for less-educated rural whites. And both saw rising populism, racism, xenophobia, and anti-Chinese sentiment. In both periods, a conservative Supreme Court opposed government intervention and reinforced the power of the privileged while a sclerotic constitutional structure impeded reform. Both witnessed the growth of an increasingly raucous and demotic public sphere, first in the nation’s streets and now on its information superhighways. And both featured national alarms over substance abuse and terrorism (alcohol and anarchism in the nineteenth century, opioids and Islamic fundamentalist terrorism in the twenty-first).
But there are differences as well. In the first Gilded Age, there was a concentration of power at the bottom of the scale as well as at the top, with a rise in labor organization and the emergence of powerful unions acting as a counterweight to giant corporations. Today, unions are in decline and contemporary economic elites remain largely unchallenged by serious opposition from below.
And in the first Gilded Age, when the challenge was industrialization and the emergence of the wage economy, a rising country developed new tools to understand and respond appropriately. The spoils system was replaced by a professional civil service, while experts were empowered through the emergence of modern universities, investigative journalism, and the administrative state. In the second Gilded Age, a declining country, facing deindustrialization and the emergence of the gig economy, is retreating into ignorance, culture wars, and performative outrage. Both parties seek to restrict free expression and narrow the boundaries of acceptable discourse, while Republicans also seek to dismantle social protections, shrink the administrative state, and replace a professional civil service with old-fashioned partisan patronage. None of that bodes well for quick resolution of the country’s major problems.
By the turn of the twentieth century, the United States was the world’s leading power. It had the largest and most productive economy on the globe and the highest standard of living. The country had developed, in the historian Sean Adams' words, “a form of industrial capitalism …that used large corporate structures, relatively weak unions, and limited government interventions to build a dynamic, but unbalanced economic order.” Largely unfettered markets provided many upsides, including an unprecedented cornucopia of cheap consumer goods and modern conveniences. But capitalism brought downsides too, such as inequality, economic volatility, and social instability. And so, in the early twentieth century, a series of reforms gradually reduced both the precarity of the poor and the privileges of the rich.
The government took on ever-greater responsibility for creating an economic environment in which all citizens could survive and thrive, accepting the need for financial interventions and using increased taxes to pay for increased social services. This process never went as far in the United States as it did in Europe, but by the mid-twentieth century, the mixed American economy looked more like the contemporary social democracies across the Atlantic than its Gilded Age self. Some of these economic restrictions and protections were rolled back by neoliberal reforms in the late twentieth century, but even so a vast complex of state intervention and social insurance mechanisms remained. The second Gilded Age thus took off from a much higher base than the first and its victims experienced much less privation than their predecessors a century earlier.
One lesson the case teaches, therefore, is that certain kinds of reforms can make life better. The sustained economic growth that began in the late nineteenth century has continued ever since, generating astonishing material progress, but the problems of the late nineteenth century have remained as well. Free markets produce vast wealth but distribute their benefits irregularly and unevenly while causing constant social destabilization. The only way capitalism and democracy can peacefully coexist, therefore, is for policymakers in each new era to find ways to sustain economic growth while ensuring society as a whole shares in the benefits.
A second lesson, however, is that other kinds of reforms can make life worse. At the end of the Gilded Age, the United States achieved stability by suppressing social challenges rather than finding ways to accommodate them. The political scientists Robert Lieberman and Suzanne Mettler argue in Four Threats: The Recurring Crises of American Democracy that as the nineteenth century came to a close, political leaders across the country set out to stifle political competition “by creating new laws and public policies that sharply limited who could participate. In the North and West, ‘progressives’—who sought to make government more orderly—introduced registration requirements that effectively made voting more difficult for less educated people, the poor, and immigrants. Southern Democrats, meanwhile, deliberately pursued disenfranchisement, both by using legal means and by circumventing the rule of law.”
Some of the Progressive electoral reforms, such as the secret ballot, still appear worthwhile, but others now seem elitist, paternalistic, and overly restrictive. And the imposition of Jim Crow stands as one of the great tragedies of American history. “To this day,” Lieberman and Mettler observe, “the United States remains the only functioning democracy in Western history ever to have taken away voting rights from such a large number of citizens who had been exercising them previously…. From 1890 to 1910, the entire South transformed itself from a functioning democracy to a region of authoritarian enclaves.… Once in place, disenfranchisement and the system of American apartheid it promulgated would endure for seventy years.”
The most basic lesson from the Gilded Age and its aftermath is thus one about democratic agency. External or structural force can present problems for the country, but citizens choose how to respond. As the Wisconsin Progressive Robert La Follette insisted, “America is not made. It is in the making.” In the end, therefore, the question is not what kind of country we are. It is what kind of country we want to be.
This publication is part of the Diamonstein-Spielvogel Project on the Future of Democracy.