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March 01, 2005
20050224 Econ 113 Lecture: Gilded Age and Progressive Era
20050224 Econ 113 Lecture: Gilded Age and Progressive Era
Two parts to this lecture:
- Progressivism
- American Industrial Dominion
What was Populism? Three things:
- A belief that farmers were being cheated by railroads through monopolistic rates
- A belief that farmers were being cheated by banks through deflation
- William Jennings Bryan, the Boy Orator of the River Platte
Was populism left or right? Neither. It was for the little guy, and against coastal elites. It could swing either left or right...
Populism ran out of steam and was superseded by Progressivism, which sold itself as a pragmatic movement that tried to tackle the problems of the Gilded Age.
Problem 1: Rural poverty, especially in the South (what seemed a good rural standard of living in 1840 no longer seemed good in 1900, when output per capita was at least four times higher). Solution: education and uplift; public health. Rockefeller and hookworm.
Problem 2: Urban poverty. Public health (The Jungle by Upton Sinclair). Wages and working conditions (Triangle Shirtwaist fire). Unionization--America's bloody labor history. Immigration and acculturation. Solution: Good government and regulation.
Problem 3: Large corporations. Not us, but them. Malefactors of great wealth. Monopoly prices. Quality of output. Solution: Good government and regulation.
Progressive-Era responses to these problems:
- ICC
- FDA
- Sherman Act (FTC)
- National Park Service
- City managers/urban good government
- The California initiative system
In general, the exaltation of technocrats (and sometimes direct democracy) over politicians.
Not a welfare state, not a social-insurance state, but a regulatory-commission state.
Progressivism "worked": there was no socialism in the United States
Progressiism was a minority current: Theodore Roosevelt's creation, first as president and then as spoiler-ally of the Democrats allowing Woodrow Wilson to gain the presidency.
American Industrial Supremacy
- U.S. has resources
- U.S. has scale (tell FDA story--Armour and Swift--if not already told)
Three "competitors" for "industrial supremacy" around 1900: Germany, Britain, U.S. Britain in 1860 is the world's industrial superpower. You would think that the world's industrial superpower has an enormous advantage in being the icebreaker for new technologies. But Britain wasn't.
The high tech industries of the late-nineteenth century went elsewhere:
- organic chemicals
- electrical machinery
- electric power
- internal combustion engine
- advanced (for their day) materials
German edges:
- an excellent system of technical education
- a labor movement focused on winning votes, not sharing industrial quasi-rents
- governments eager to 'dish the Whigs' by compromising with socialists on social-welfare legislation while insisting on industrial discipline
- enormous military demand for industrial goods
- the "marriage of iron and rye"--makes Germany poorer, makes Germany more industrial
British deficiencies:
- low infrastructure investment
- poor educational system
- lags behind in primary education
- teaches its elite not science and engineering, but how to write Latin verse
- problems with the financing of industry
- British investors would rather finance the Argentine government than domestic industry
- the 'labor aristocracy' very interested in sharing industrial quasi-rents
American additional edges, beyond resources and scale"
- the immigration filter
- the national-scale capital market
- the development of managerial hierarchies
- mass production
Leon Trotsky in 1917: the U.S. is the furnace where the future is being forged.
Posted by DeLong at March 1, 2005 12:11 PM