SeondGildedAge 1

Are We Living in A Second Gilded Age? Part 1

“Are We Living in A Second Gilded Age?” is an ongoing examination of the parallels between the first Gilded Age (1870-1900) and what many contend is a Second Gilded Age (1980-present). A key source of these musings is my forthcoming book, Henry George and the Crisis of Inequality: Progress and Poverty in the First Gilded Age (Columbia University Press, June 2015).

Americans have long loved to celebrate centennials and sesquicentennials of major events in national history such as the signing of the Declaration of Independence, the start of the Civil War, and the March on Washington in 1963. Of course, no such commemoration occurred in 1970 to mark the 100th anniversary of the start of the Gilded Age (1870-1900). But it’s useful to imagine for a moment what such an event might have looked like. Given the context of 1970, it’s not hard to imagine the primary theme that would have dominated speeches, museum exhibitions, and documentary films: The Gilded Age was a period of extraordinary growth and innovation, but also dangerous levels of poverty and inequality that threatened the integrity of America’s cherished republican values; this threat was eventually checked by the efforts of social reformers who empowered the state to place limits on corporate power and adopt policies aimed at promoting the common good over raw individualism. Americans in 1970 were riding the greatest period of economic growth and prosperity in the nation’s history (from 1946 to 1973 the U.S. economy grew by an average rate of 3.8%). And they were living at a time of the greatest level of economic equality in the nation’s history. It seems likely that the average American in 1970 would have viewed the Gilded Age as a dark and ugly chapter in American history that few would want to repeat.

And yet, since 1970, a rising chorus of scholars, activists, and social critics has emerged to warn Americans about rising corporate power, wealth inequality, and poverty and the threats they posed to the nation’s republican values. By the 1990s some began to invoke the phrase, “Second Gilded Age,” to describe this era in an attempt to conger up images of an age of unrestrained robber baron industrialists and financiers, roiling social conflict, and a widening chasm between rich and poor.

NewGildedAgeBookThis pessimistic view of the direction in which the United States was heading really took off in the wake of the financial collapse of 2008 that triggered massive job losses and home foreclosures and a bitter debate over how the federal government should respond. Since that moment, references to the Gilded Age and invocations of a “Second Gilded Age” have become increasingly popular in public discourse. A quick search of the Lexis-Nexis database for the term Gilded Age shows 11 articles employing it in the 1970s, 76 in the 1980s, 184 in the 1990s, and 541 in the 2000s. And the trend shows no sign of abating as the period 2010-2012 already has generated 450 articles. Many books since 2008 now bear the phrase Gilded Age in their titles, such as Larry M. Bartels, Unequal Democracy: The Political Economy of the New Gilded Age (Princeton, 2010), David Grusky and Tamar Kricheli-Katz, eds., The New Gilded Age: The Critical Inequality Debates of Our Time (Stanford, 2012); Katherine S. Newman and Elisabeth S. Jacobs, Who Cares?: Public Ambivalence and Government Activism from the New Deal to the Second Gilded Age (Princeton, 2010), Susan P. Crawford, Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age (Yale, 2013); and Wendy Martin and Cecelia Tichi, eds., Best of Times, Worst of Times: Contemporary American Short Stories from the New Gilded Age (NYU Press, 2011).

one percentThis sudden return of Gilded Age to common American parlance reflects a keen awareness of the eerie similarities between the United States of today and that of the last third of the nineteenth century. The nation then and now was consumed with intense debates over wealth inequality, labor unions, immigration, terrorism, women’s rights, family values, money in politics, voter eligibility, Wall Street recklessness, political polarization and paralysis, religion vs. secularism, individualism vs. the common good, free market capitalism vs. regulation, wars of choice vs. diplomacy. If we take a closer look at just one of these issues, we learn that in 1890 the top 1% of Americans owned 51% of all wealth, while the lower 44% owned just 1.2%. Income taxes, inheritance taxes, and other measures adopted since the early 20th century reduced wealth disparity significantly by 1979 to 20.5%. But since 1980 the trend has shifted dramatically back toward increased wealth and income inequality. By 2010 the top 1% owned 35.4% of all wealth, leading to the sudden popularization of the pejorative phrase “the 1%” among progressive protesters like the Occupy Wall Street movement.

Twain history rhymes copyThose who claim that the United States has entered a Second Gilded Age are not invoking the tired and thoroughly misleading notion that “history repeats itself.” Instead, they are guided (knowingly or unknowingly) by a maxim offered by Mark Twain, the man who coined the phrase, Gilded Age back in 1873: “The past does not repeat itself, but it does rhyme.” It is the ways in which our times rhyme with the late nineteenth century that many Americans who possess a sense of history find so disturbing.

In this series of articles I will explore this rhyming between the First Gilded Age and the Second Gilded Age. History does not offer a specific map, formula, or blue print for dealing effectively with contemporary social, economic, and political challenges. Yet we study history in part because we believe it allows us to understand where we as a society have come from and why things—institutions, ideas, practices, customs, and power arrangements—are as they are. We believe these insights have the capacity to guide individuals and societies as they make the choices that will shape the future. “Trying to plan for the future without knowing the past,” Daniel Boorstin once quipped, “is like trying to plant cut flowers.” In the late nineteenth century the United States faced a host of vexing challenges regarding policies related to economic opportunity, democracy, citizenship, freedom, and human rights. Likewise, the United States in the early 21st century also faces a great many problems that remind us of that past Gilded Age. What choices the American people and their political leaders make in the coming years will, as they did in the late-nineteenth and early twentieth centuries, have a profound impact on the future vitality of their nation and its cherished values.

  • Luke Abbattista

    In both the “First Guided Age” and today we see a large wealth gap between the rich and poor with the top one percent controlling over 50 percent of the wealth. There is a difference between how laborers are protected, today their are laws that protect not only workers rights but laws that require a minimum wage and a law that “maxes” out the work week at 40 hours.

  • James Norwood

    Hello again, Ed!

    I very much appreciated your detailed replies above, which really helped to clarify the questions I had raised. Thank you! Again, your presentations on the Gilded Age for the Teaching Company were outstanding!

    Since the last time we were last in touch, I have been studying the events in of November 1916 through March 1917–the critical period when America entered World War I. Author Barbara Tuchman refers to this moment as America’s “beginning of unwilled wedlock to the rest of the world.” This surely is another one of those essential turning points of our history.

    The two books that I have consulted are:

    (1) Barbara Tuchman, “The Zimmermann Telegram–America Enters the War, 1917-18” (Random House, 1958).

    (2) Thomas Boghardt, “The Zimmermann Telegram: Intelligence, Diplomacy, and America’s Entry into World War I” (Naval Institute Press, 2012).

    Tuchman overstates the importance of the Zimmermann telegram in changing popular opinion about the war. Her conclusion is that “by the middle of March, when the Zimmermann telegram had had two weeks to take effect, the American people, by and large, realized they would have to face up to war.” (p. 171). We have no data to support that conclusion, apparent in our interchanges posted above.

    Tuchman also exaggerates the singular importance of the telegram as “the gravest incitement to war in the history of America before Pearl Harbor” (p. 155) Drawing upon newly discovered documents, Boghardt demonstrates that the Zimmermann telegram did not even convince most newspaper editors that there was a genuine threat of attack from Mexico. In his book, Boghardt merely substitutes the U-Boat situation in which Germany had resumed its attack on vessels in the Atlantic in lieu of the Zimmermann telegram as the more decisive factor for America’s entry into the war.

    Both Tuchman and Boghardt downplay the fact that the decision for America to enter the war came from the change of heart of Woodrow Wilson. Specifically, on March 20, Wilson caved in to the pressure of his cabinet members, who were pressing for war. At that moment, Wilson decided to go before Congress and request a formal declaration.

    There is an especially revealing moment in the actions of Wilson in spring of 1914 when he ordered the United States occupation of Veracruz. In Tuchman’s careful description of the incident, it was clear that the peace-minded Woodrow Wilson caved in to the pressure, sending his order to Admiral Fletcher: “Take Veracruz at once!” (p. 46) He subsequently had remorse for this act when there were American casualties as a result of that military action. The lack of backbone of Woodrow Wilson to stay the course with his peace plan is apparent when he succumbed to the pressure in 1914 and in 1917, just as future presidents when they chose to exercise the muscle of American strength to fight wars on the world’s foreign stages.

    The important point is that Wilson did not have to change course on his commitment to neutrality because of either the Zimmermann telegram or the U-Boats. Wilson had won support in Congress for the arming of American merchant ships as response to Germany’s resumption of unrestricted submarine warfare.

    In his second term as president, Thomas Jefferson faced the identical dilemma in 1807 about whether or not to go to war with Great Britain. The American ship Chesapeake had been attacked by the British vessel Leopard, resulting in American casualties. Unlike Wilson, Jefferson had to contend with a strong pro-war sentiment, especially from the major coastal cities. Jefferson had to act immediately and, instead of choosing the war option, he implemented his “peaceable coercion” plan of an embargo against Great Britain. American merchants were not pleased, but the result was that the United States avoided war during President Jefferson’s term in office. Wilson had already made the decision to arm the American merchant ships, but decided on March 20 to abandon his broader “peace among equals” plan. Germany was no longer an “equal” in the mind of Woodrow Wilson, and the decision to mobilize led America on a course that Tuchman describes as our “unwilled wedlock to the rest of the world.”

    Tuchman and Boghardt are both scholars who miss the point that wars are not started by telegrams, but by people. I really like one of your quotes from the Great Courses’ website: “History is the study of choices. It follows no predetermined script. History is determined by the choices made by people both famous and unknown.” In the case of America’s participation in World War I, a critical decision was made by Woodrow Wilson on March 20, 1917. That choice has had far-reaching implications.

  • James Norwood

    Dear Professor O’Donnell,

    In your lecture on World War I from the recent Great Courses series, you indicated that “a majority of Americans” were in favor of the war.

    What are your sources for this conclusion?

    There were no polls that provide us with precise data on how Americans felt when Congress declared war on April 6, 1917. Five months earlier on November 7, 1916, the American people had elected Wilson to a second term in office on the platform of “He Kept Us Out of War.” It is difficult to believe that the public made a complete reversal of their desire to stay out of the war solely on the basis of the Zimmerman telegram controversy that occurred between the time of the election and the war declaration.

    It is revealing to look at some data from the presidential election of 1920 in the immediate aftermath of World War I. In that election, Wilson’s Democratic Party suffered the worst defeat of any presidential election in American history, with James Cox and his running mate, Franklin Roosevelt, losing the popular vote by 26.17%. This was a greater margin of defeat than George McGovern’s legendary loss to Richard Nixon in 1972. Surely, the low tally for the Democrats in 1920 was due in large part to the war.

    Another factor to consider is the very first opinion poll on World War I that occurred in the early 1930s, as Americans looked back on the event after the passing of over a decade. These early surveys reflected only a 28% favorable rating for American participation in the war with 64% opposed to it. Even after the Fall of France in 1940, only 42% of Americans thought that entering another world conflict was a good idea with 39% opposed. It is difficult to imagine any appreciable difference in American sentiment on the eve of World War I in 1917.

    For the historian who wants to draw meaningful and well-documented conclusions about whether Americans really supported the war effort in 1917, it is important to examine any apparent popular sentiment for the war with a critical eye. The true feelings of the citizenry may be obscured to us in hindsight by the enormous propaganda effort which began immediately with George Creel’s Committee on Public Information, the massive campaign of speeches by the Four-Minute Men, and a blitz of propaganda songs, posters, and slogans designed to promote the war. The Espionage Act and its corollary amendment, the Sedition Act, would seal the deal on the suppression of anti-war sentiment. If “the majority of Americans” were in favor of the war in April, 1917 (as you suggest in your lecture series), then the positive superficial reaction must be examined carefully in context.

    In his compelling biography of Wilson, historian A. Scott Berg suggested that at the time of his decision to ask Congress to declare war, President Wilson was fully aware that the public was opposed to the venture. Berg describes the decision as “a rare moment in the nation’s history in which a President asked the people and its representatives to embrace a philosophy.” (Berg, Wilson, Putnam, 2013, p. 423) Of course, Wilson’s “philosophy” was that of a complete reversal of his campaign pledge to the American people. If Americans had been supportive of the war, it would not have been a “rare moment” in American history wherein the chief executive asked this kind of sacrifice from the citizenry.

    One of the most moving testaments to the force feeding of enthusiasm for the war effort in 1917 was given by George Seldes, who reflected in 1935 that “I now realize that we were told nothing but buncome, that we were shown nothing of the realities of war, that we were in short merely part of the great Allied propaganda machine whose purpose was to sustain morale at all costs and help draw unwilling America into the slaughter.” (quoted in Eugene Secunda and Terence P. Moran, Sellling War to America, Praeger, 2007, p. 44)

    Can you provide any primary sources that led you to the conclusion that there was genuine public support in America from “a majority” of the population for the war in 1917?


    • InThePastLane

      Thanks for your email. And thanks for purchasing my course. I cannot recall precisely what I said about US popular opinion regarding WWI. If I had to guess, I’d say I was referring to public opinion following Congress’s declaration of war. You are correct in stating that popular opinion before April 1917 was anti-war (I think I went into that issue in some detail in the lecture), but popular opinion shifted once the US entered the war. The same was true in WWII and in many US wars before and since. There’s no way to know for certain what percentage of Americans supported the war after April 1917. And the word “support,” of course, has many meanings. But there are many things that suggest a majority did (even if just 50.1%) – volunteers for military service, liberty bond sales, and the confinement of anti-war expressions to several small and specific subgroups (pacifists, socialists, Irish Americans, etc). Ultimately, there is no definitive, quantifiable answer to the question.

  • James Norwood

    Dear Professor O’Donnell,

    This is a great blog topic! Your lecture series “America in the Gilded Age and Progressive Era” was also terrific! Congratulations!

    I’m wondering if the thesis of your blog article above should be slightly modified in its attempt to identify a “Second” Gilded Age starting around 1970? In other words, did the values of the Gilded Age vanish and later reappear spontaneously, or have they been a permanent feature of our national character since the late 1800s?

    Wouldn’t it be more accurate to say that over the past century there has been a continuum and steady evolution of the values that emerged in America in the period of 1870-1900?

    In Lecture 15, you describe “the major shift” that occurred in the last decade of the nineteenth century. That dislocation was not something that later stopped, then started up again in 1970. Rather, the die was cast with no turning back in a host of changes in business, labor, foreign policy, and the role of the individual citizen in America.

    Mark Twain recognized the permanence of the dislocation of America in his lifetime. He detested Teddy Roosevelt and was a prophet of his age. You mentioned Twain’s vignette “The Story of the Bad Little Boy” as a critique of the Horatio Alger myth. But the truly harrowing work written by Twain was “The War Prayer” for which he could not even find a publisher, due to the subversive nature of the story.

    Imagine the greatest writer and celebrity of his era unable to find a publisher! In reading Twain today, it is like logging on to our own internet discussion about current events.


    • InThePastLane

      Hi James (please call me Ed!),
      You make a good point about Gilded Age values. I’d say it all comes down to a question of which set of values is dominant in a particular era. Gilded Age values of radical individualism and laissez-faire economic policy did not disappear after 1900, they just diminished in dominance in the face of an emerging progressivism that stressed the values of cooperation and using state power to uphold the common good. These values remain influential in the post-1970 period but less so in the face of a revived popularity of radical individualism and laissez-faire economic policy. That is until 2008 and the Occupy Movement (offset, of course, by the Tea Party). How it all turns out is anybody’s guess.
      Thanks again for taking the time to write.

  • dave gregoire

    HI Ed,

    I dropped in after a long hiatus, and found about the new book… I’ll be looking for it when it gets published.

    All the best to you and the family,
    Dave Gregoire

    • InThePastLane

      Hi Dave,
      I’ll keep everyone posted on the book. It’s due out in June.
      And keep checking the blog as I will be adding to my Second Gilded Age series periodically.
      I hope all is well.