Heimler's History: Controversies Over the Role of Government During the Gilded Age

Overview

• Focus on Unit 6 of the AP U.S. History curriculum.
• Discussion on the controversies related to the government's role during the Gilded Age.
• Analysis of the rise of industry in America and its impact on goods production, city demographics, and class structure.

Historical Context

• The role of government in the economy has been a long-standing debate in U.S. history.
• Historical examples:
  • Alexander Hamilton vs. Thomas Jefferson: Debate over the National Bank.
  • Henry Clay’s American System: Controversies over government-sponsored infrastructure improvements (e.g., roads, canals).

Government Regulation Debate

• Previous discussions highlighted issues advocating for government intervention: unfair labor practices, the gap between rich and poor.
• Current focus on arguments against government regulation.

Laissez-faire Economics

• Dominant economic ideology during the Gilded Age.
• "Laissez-faire" means "leave alone" or "let alone".
• Concept originates from Adam Smith's The Wealth of Nations (1776).
• Smith's argument:
  • Economies thrive under laws of supply and demand.
  • The 'invisible hand' of the market flourishes when individuals act in their own best interest.

Challenges with Laissez-faire

• Industrialists and politicians supported laissez-faire but ignored key aspects of Smith’s vision.
  • Lacked competition due to consolidation of power in industries.
• Even during economic downturns, e.g., Panic of 1893, President Cleveland avoided intervention.
• Limited government actions:
  • 1886 Supreme Court case limited state regulation of railroads.
  • Creation of the Interstate Commerce Commission (ICC), but it was underfunded and ineffective.

Government Involvement

• Government intervened when beneficial for business:
  • Collaboration with Republican politicians for market expansion overseas.

Examples

• Overthrow of the Hawaiian monarchy (1893): Led to U.S. annexation in 1898, opening new markets.
• Open Door Policy with China (1899-1900):
  • Advocated for equal trading rights in Chinese ports.
  • A response to European powers’ influence.

Conclusion

• During the Gilded Age, government intervention was primarily for economic gains.
• Regulation of business was minimal and often ineffective.

Review and Further Learning

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