Well hey there and welcome back to Heimler’s History. So we’ve been going through Unit 6 of the AP U.S. History curriculum and in this video it’s time to talk about the controversies over the role of government during the Gilded Age, and that means it’s about to get saucy. So if you’re ready to get them brain cows milked, then let's get to it. So all through this unit we’ve been talking about the rise of industry in America and how that changed the production of goods and the demographics of cities and the structure of classes. Long story short, the rise of industry was a big deal during the Gilded Age. And one of the most pointed and fierce debates that occurred in this time was with respect to the role government should take in relationship to all these changing realities. And the truth is, this debate about the role of the federal government in the economy is one that stretches back to the founding of the country. That was one of the main fights between Alexander Hamilton and Thomas Jefferson with respect to the National Bank. It reared its head again when debates over Henry Clay’s American System erupted in Congress, and they argued fiercely about whether the government ought to sponsor infrastructure improvements like roads and canals. And I could name many other examples, but the point is, controversies over the role of government in the economy is not a new thing in this period. So in the last few videos I’ve mentioned a lot of realities that argued FOR government intervention in business, things like unfair labor practices and the growing gap between the rich and the poor. So in this video I’m going to focus on the other side of the debate, namely, the arguments that were being made against government regulation. So in order to get into this, let’s remind ourselves about the dominant economic ideology during this period, namely, laissez-faire economics. Now laissez-faire is French for “leave alone,” or “let alone,” or whatever, some French speaker always corrects me in the comments. [Call Matt, what does laissez faire mean?] Anyway this way of understanding economics is this: just leave everything alone and eventually all shall be well. Now the industrialists and the politicians who supported them didn’t make up this way of thinking. It actually goes back to 1776 when Adam Smith published The Wealth of Nations. His argument was that economies are best governed by the laws of supply and demand, and that if you just let people make decisions in their own best interest then the invisible hand of the market will always flourish best under those conditions and therefore lead to the flourishing of society. Now the problem is that while Gilded Age politicians and tycoons were spouting off about Adam Smith and the invisible hand, they apparently forgot that the scenario they created was nothing like what Adam Smith envisioned. One vital ingredient for a healthy economy in Smith’s view is competition, but these business leaders had so consolidated power in their respective industries that competition vanished like a fart in the wind. But that didn’t keep these folks from arguing against government regulation in business or the economy as a whole. And that was true even during economic downturns. During the severe Panic of 1893 President Grover Cleveland largely did nothing to alleviate the economic disaster for many Americans who ended up standing in bread lines to feed themselves. And even when the federal government did get involved, they did so half-heartedly. For example, in 1886 the Supreme Court handed down a decision in a case whose name you don’t really need to know, but the decision basically said that states couldn’t regulate railroads. And so the government created a federal agency called the Interstate Commerce Commission to ensure that states didn’t violate this law. But the ICC was deeply underfunded and therefore had no real power to meddle in states’ affairs. So all that to say, laissez faire was the rule of the game during the Gilded Age, both for enterprise and for politics. However, the government DID get involved when gains for business and the economy could be made. For example, business leaders worked with Republican politicians to expand markets overseas by means of diplomacy. Now this will come into focus very clearly at the start of the next period, so here I’ll just mention a couple of examples of how this played out. First, laissez-faire capitalists strongly supported the overthrow of the Hawaiian monarchy in 1893. Eventually that would lead to the U.S. annexing the islands in 1898 and that meant new markets were opened. Second, was the Open Door Policy established between China and the United States in 1899-1900. Essentially it just advocated for equal trading rights in all the ports in China which were being rapidly consumed by European powers. Again, we’ll get way more into that in the next period, but for now, you just need to understand that during the Gilded Age the government DID get involved in business when the outcome looked to be good economically for them. However, the government almost never got involved in any meaningful way when it came to regulating business. OKay, that’s what you need to know about Unit 6 Topic 12 of the AP US History Curriculum. If you need help getting an A in your class and a five on your exam in May, then you might want to click here and let the invisible hand guide you towards my Ultimate Review Packet. If you want me to keep making these videos for you, then the way you can let me know that is by subscribing, and I shall oblige. Heimler out.