Jo M. answered • 03/01/22
College Student With A Love For American History
Understanding Big Business in this time period requires a holistic understanding of the entire Progressive Era.
The Progressive Era, functionally equivalent to The Gilded Age, was an American cultural period that spanned from the 1890s to World War I. The policies and cultural practices of the era were a response to the wave of poverty that overtook the country after the clash of unregulated Big Business and the flood of “unskilled” Eastern European immigrants. The narrative of the Progressive Era/The Gilded Age goes as follows: fleeing poverty and pogroms in Europe, immigrants arrived by the millions to the East Coast, where they found a rapidly changing landscape of commerce. America was not the land of plenty they had envisioned, as the Industrial Revolution ushered in the decline of artisanal workers in favor of assembly line workers in factories and plants that were forced to work for poverty wages as wage competition was completely decimated by the proliferation of trusts, a function of horizontal integration wherein companies would come to control the other companies that shared the market, thus decreasing competition. Without artisanal skills or command of the English language, immigrants were quickly employed by the factories, paid far less than a living wage, and joined the slums that were quickly enveloping city centers. A well known response to this growing poverty and power of corporations was unions, and by 1915, 12% of all workers belonged to a union.
The Progressive Era arrived at the tail end of The Industrial Revolution, which drastically changed the landscape of American business. First, and most importantly, the development of factories and machines to create what was previously created artisanally moved workers from their homes and shops to factories, hugely decreasing their control over the means of production. In 1860, one fourth of Americans worked in factories, but by 1900, that number increased to one half. Instead of creating their own small businesses to create products from start to finish, many Americans now worked in assembly lines, creating products piece by piece and getting paid by their time rather than their product. It was this change that gave rise to the phrase, “a cog in the machine” to refer to a worker.
The products themselves also changed - much of what factories were producing was being produced to sustain other factories. Instead of just producing items for other Americans to have in their homes, factory workers were now creating machines, steel, and petroleum products to sell to other businesses, creating a self-sustaining factory economy.
What also made the transition from artisanal work to factory work through the Industrial Revolution so fast was the transition from water power to coal and steam power. In 1865, most American industries were dependent on water power, but a mere five years later the majority switched to steam power. Not only did this make production faster and cheaper, it also created yet another business for wage workers: coal mines.
The Progressive Era also coincided with the beginning of American industry as we know it, and this came with little established regulations to prevent monopolies and trusts. The “tycoons” associated with this era, most notably the ones from Standard Oil, would intimidate other smaller companies in the same business to give them shares “in trust,” until, by infiltrating each company, they managed to have control over the whole oil industry. Similarly, corporations would create monopolies over an industry by buying up all the smaller companies, which is something that is still done today. All of this was allowed in the name of laissez faire capitalism, economic success, and the gospel of wealth.
Without any competition, corporations made poverty wages and abysmal working conditions standard. This created a culture of poverty among immigrant laborers, and the wealthy came to consider the growing slums a social problem. There were various responses to this, the first being unions. The most well known unions are known today for shaping socialist and anarchist ideologies; both the Knights of Labor, founded in 1869, and the Industrial Workers of the World, founded in 1905, advocated returning the means of production to the workers. The American Federation of Labor, was one of the more popular unions at the time, with a better public image as it did not associate itself with radicalism, people of color, or women, but instead improving working conditions for “skilled” workers. It should be noted that because of the threat of unions to the power of the Gilded Age monopolies, they were smeared as “radical communists” and many were jailed by the time World War I started under suspicion of treason.
Another response to the growing poverty among laborers was social justice and charity. Following the ideas of the gospel of wealth, the rich continued to advocate for a small, aristocratic government that let the monopolies run unchecked, while donating money to provide infrastructure to the city as well as funding services for the poor. The more middle class proponents of social justice, however, also advocated the government as a solution to social ills, the biggest example of this being prohibition, which they thought would protect poor women and children from violence by targeting a “culture of alcoholism” among the poor. This same group of prohibition activists and charity workers, made up largely of women, later went on to lead the women’s suffrage movement.
