The Gilded Age: American Capitalism, Corruption, and the Robber Barons

The Gilded Age: Capitalism, Corruption, and Tycoons

American finance fueled a series of peaks in American capitalism, characterized by intense moments of expansion and recession. This era of big business often fostered widespread corruption.

Defining the Gilded Age

The government strongly favored modernization and the rapid accumulation of wealth. This period was famously dubbed The Gilded Age by Mark Twain, who observed: “The golden gleam of the gilded surface hides the cheapness of the metal underneath.”

Economic Transformation and Rural Displacement

By the end of this golden period, ordinary farmers and veterans were increasingly displaced. This displacement was driven by financiers seeking to consolidate land and increase the size of their farms, a movement that affected many groups, not just Native Americans. The introduction of mechanical harvesters marked the beginning of agribusiness. Mortgages became essential tools for purchasing this new equipment. By the end of the 19^th century, most people migrated from East to West, primarily moving toward burgeoning cities.

Robber Barons: The New American Heroes

The New American Heroes were the American Business Tycoons, often pejoratively called Robber Barons. They achieved progress by ruthlessly defeating their competitors. Several key factors contributed significantly to their rapid development:

• Dispossession of Native Americans.
• Expansion of Railroads.
• The rise of Big Business monopolies.
• Dispossession of small farmers.

Politics, Business, and Property Protection

Politicians of that era often had a very poor reputation, frequently viewed as mere instruments in the hands of powerful businessmen. The prevailing belief was that politics should actively support business interests, and the American system was fundamentally designed to protect private property. Consequently, society largely fell under the control of industrialists.

From Gospel of Work to Gospel of Wealth

The prevailing ideology suggested that a poor immigrant, through hard work, could build an empire and achieve immense wealth. This aspiration of becoming one of those tycoons is known as the Gospel of Wealth, contrasting sharply with the Puritans’ earlier Gospel of Work. The focus of the new American hero shifted from political figures like the president to the wealthy elite. These new heroes were defined as self-reliant, self-made, and extremely competitive individuals.

Andrew Carnegie on Wealth Administration

The Gospel of Wealth by Andrew Carnegie

The problem of our age is the proper administration of wealth, that the ties of brotherhood may still bind together the rich and poor in harmonious relationship. The conditions of human life have not only been changed, but revolutionized, within the past few hundred years. […] The contrast between the palace of the millionaire and the cottage of the laborer with us today measures the change which has come with civilization. This change, however, is not to be deplored, but welcomed as highly beneficial. It is well, nay, essential, for the progress of the race that the houses of some should be homes for all that is highest and best in literature and the arts, and for all the refinements of civilization, rather than that none should be so. Much better this great irregularity than universal squalor. Without wealth there can be no Mæcenas. The "good old times" were not good old times. Neither master nor servant was as well situated then as today. A relapse to old conditions would be disastrous to both—not the least so to him who serves—and would sweep away civilization with it. […]