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The New Gilded Age: First Time Arrogance, the Second Time Vengeance

Photo by Anirvan | CC BY 2.0

In his 1852 essay, “The Eighteenth Brumaire of Louis Bonaparte,” Marx recalls a saying from Hegel, “that all great world-historic facts and personages appear, so to speak, twice.”  Marx adds, “He forgot to add: the first time as tragedy, the second time as farce.”

Often forgotten, Marx follows with an equally telling observation: “Men make their own history, but they do not make it as they please; they do not make it under self-selected circumstances, but under circumstances existing already, given and transmitted from the past.”  He warns, “The tradition of all dead generations weighs like a nightmare on the brains of the living.”  That nightmare defines 21stcentury U.S. politics.

In 1873, Mark Twain and Charles Dudley Warner published The Gilded Age: A Tale of Today, a popular work that satirized the greed and political corruption of the modern era.  The term “gilded age” stuck, signifying a period lasting from the 1870s to 1910s.  It epitomized the rise of a new class of capitalists, the “robber barons,” who promoted innovation with shady business scams that fostered corporate tyranny.

Working with other corporate buccaneers and backed by unscrupulous speculators, these tycoons of old formed giant trusts that monopolized the production and distribution of essential goods.  Economic power fostered political influence.  The robber barons controlled Washington, D.C, politics as well as many state and local governments.  While they engaged in private gluttony, they imposed social and moral tyranny on the poor, workers and new immigrants.

During the 1884 election campaign, a telling political dinner-party took place at New York’s legendary Delmonico’s Steakhouse.  A couple hundred of the nation’s economic elite attended this lavish fundraising gathering for James G. Blaine, the Republican presidential candidate.  One of those in attendance was Jason “Jay” Gould, the financier who controlled the Union Pacific Railroad, Western Union and other companies.  He is remembered today, nearly a century-and-a-half later, for famously proclaiming, “I can hire one half of the working class to kill the other half.”

The media picked up on the lavish fête.  Joseph Pulitzer’s New York World carried a front-page cartoon titled, “Royal Feast of Belshazzar Blaine and the Money Kings.”  It depicted Blaine and the tycoons dining on such dishes as “lobby pudding,” “navy contract,” “monopoly soup” and “patronage cake.”  The New York Times offered a more telling assessment.  “Blaine’s political sagacity is impeached by his willingness to be seen in the company of these people and to take their money openly at Delmonico’s,” it observed.  Some say that popular disgust over the banquet may have cost Blaine the election to Grover Cleveland.

The term “robber knights” was apparently first applied to Middle Ages noblemen, feudal warlords.  The Times re-coined the term “robber barons” on February 9, 1859, referring to the unethical business practices of Cornelius “Commodore” Vanderbilt, a railroad magnet and one of the nation’s richest men.

J.P. Morgan was another robber baron.  He was a banker and financial speculator who was central to the formation of General Electric and the consolidation of US Steel.  More critical, in 1895 he “saved” the U.S. gold standard by facilitating the sale of $65 million worth of Treasury bonds.

John D. Rockefeller, nicknamed “The Octopus,” was another baron; he founded the Standard Oil Company in 1870 and, by the ‘80s, controlled about 90 percent of U.S. refineries and pipelines.  The Supreme Court broke up the company in 1911 for violation of antitrust laws.

Andrew Carnegie was still another robber baron.  He built the Carnegie Steel Company that transformed steel production through vertical integration and, by 1889, was the largest manufacturer in the world.  In 1889, workers at one of his plants, in Homestead, PA, struck; led by the Amalgamated Association of Iron and Steel Workers, they won a favorable three-year contract.  In 1892, Carnegie tore up the contract, sought to impose lower wages and to break the union.  His actions precipitating one of the major confrontation of the Gilded Age, a bitter strike in which 10 men were killed and 60 were wounded.

Class war was the ghost that haunted the Gilded Age.  It was a period of rapid industrialization and urbanization, marked by a large influx of immigrants from eastern Europe and Asia along with African-Americans migrating from the South to the North.  It was a period in which political corruption was rampant, with businessmen bribing public officials at all levels of government and political machines, like Gotham’s legendary Tweed Ring, turning elections into winner-take-all scams.

The robber-baron elite, and their well-paid accolades, whether political, theological or media puffers, proclaimed an ideology of self-reliance and primitive individualism.  Sadly, deepening despair was intensifying among those most squeezed by the new economic order.  For men, factories, mines and farms were slave pits; for women and children, many worked under torturous conditions, including laboring to 12 to 16 hours per day for pennies. In 1886, the American Federation of Labor was formed to fight for skilled laborers.

The ’92 Homestead strike was but one outbreak of the ever-deepening class war that characterized the early-modern era; during the strike, the anarchist Alexander Berkman attempted to assassinate Henry Clay Frick, the plant’s manager.

In 1886, a strike by the Knights of Labor in Chicago led to what is known as the Haymarket Riot when an unknown person threw a dynamite bomb into a group of police officers; eight officers were killed in the explosion and the ensuing gunfight.  Eight anarchists were framed for the incident, tried for murder and four were sentenced to death, one committed suicide.  In 1894, approximately 125,000 American Railway Union (ARU) members struck the Pullman Company and Pres. Cleveland sent federal troops to Chicago to break up the strike; he claimed the strike prevented the delivery of the mail and was a threat to public safety.  In 1901, Leon Czolgosz, a self-proclaimed anarchist, assassinated Pres. William McKinley.

The first Gilded Age was driven by the arrogance of a new economic order, one based on the opportunities of industrialization and the vast millions to be garnered.  It spawned a new buccaneer class of capitalists like none-other that preceded them.  While warnings were raised by muckrakers like Ida Tarbell and Lincoln Steffens, the robber barons of the first Gilded Age could claim ignorance as to the consequences of their arrogance, their personal greed and political connivances.

Mounting reaction to robber-baron capitalism led to the passage of major antitrust laws including the Sherman Antitrust Act (1890), the Clayton Act (1914) and Federal Trade Commission Act (1914).  However, in the wake of 1929 stock market crash, the Great Depression and New Deal, ignorance is no longer an excuse. Today’s robber barons know what they are doing – whether in terms of labor relations, environment impact or social consequences, especially growing inequality.

The U.S. is now living through a second Gilded Age.  Where once the robber barons were millionaires, today they’ve added a few zeros to their wealth and became billionaires.  However, they act with no-less impunity, but a greater sense of entitlement.  The Trump administration, together with the Republican-controlled Congress, are functional shills for the current generation of robber barons.  As evident from the recently-passed tax bill, legislators jump when their big-money donors order them to deliver the goods — and they did.

The U.S. economy has rebounded from the 2007-2009 “great recession,” with the stock market hitting new highs, unemployment the lowest in a generation and home prices recovering.  But Americans still haven’t regained the wealth they lost, with incomes remaining stagnant and, on the whole, working Americans worse off than since the late-1990s.  The Federal Reserve’s most recent Survey of Consumer Finances finds that median net worth for all families (measured in 2016 dollars) dropped 8 percent since 1998.

Most sobering, the poorer you are, the worst your fate – and this is compounded by race, education level, gender and age factors.  America’s poorest, the bottom fifth, saw their net worth fall 22 percent; the broad working class, the second-lowest income tier, were the hardest hit with their net worth shrinking by more than a third (34%); and those dubbed “middle class,” with incomes from $43,501 to $69,500, were barely treading water, with their worth gaining a whopping 3.5 percent.

Since 1998, the top 10 percent saw their worth rise 146 percent.  The share of the nation’s wealth held by the top 1 percent rose to 38.6 percent while that portion controlled by the bottom 90 percent fell 22.8 percent (from 33.2 percent in ’89).  Looking at the nation’s income for the period of 2013 to 2016, the same phenomenon is evident: income going to the top 1 percent climbed to 23.8 percent (from 20.3 percent) while the share going to the bottom 90 percent slipped to about 50 percent (from 54 percent).

And then there is debt, the lubricant of the U.S. post-WW-II “consumer revolution.” During the 2013 to 2016 period, those with the lowest income (below $25,300), saw their debt rise by 57 percent; for the lower-middle class (incomes between $25,301 and $43,500), debt increased 58 percent; and for the middle class (incomes from $43,501 to $69,500), debt rose by a modest 12.5 percent.

The robber barons the first Gilded Age could easily lie to themselves and falsely claim that they did not fully grasp the consequences of their self-serving and exploitative practices; after the Homestead and Pullman strikes, even this lie must have been hard to swallow.

Surely, the robber barons of the current Gilded Age can’t really lie to themselves.  While many champion short-sighted gluttony, or play the fool like the president, the 1 percent know too much to claim ignorance, especially the consequences of their decisions regarding the state of America’s social-economy.  Digital entrepreneurs like Jobs and Gates, Bezos and Zuckerberg, Brin/Page and Musk, together with old-style hucksters like Adelson, Buffett, Bloomberg and even the Koch Brothers, must have studied the 1929 stock market crash, let alone lived through the 2007 housing-mortgage bubble.  One can only wonder what they learned?

Today’s robber barons surely must know that finance-driven capitalism is a shameless hustler’s game.  No matter how much they are celebrated by the ever-adoring media, like their forbearers a century, today’s 1 percent can’t claim ignorance.  Something else must be at play.  Are they acting out of a private vengeance that only makes the U.S., let alone the rest of the world, an increasingly worse place to call home?  Perhaps it’s time for a 21st century version of the Homestead and Pullman strikes to wake them from their self-serving slumber.

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David Rosen is the author of Sex, Sin & Subversion:  The Transformation of 1950s New York’s Forbidden into America’s New Normal (Skyhorse, 2015).  He can be reached at drosennyc@verizon.net; check out www.DavidRosenWrites.com.

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