Notes on the Gilded Age and Economic Expansion

Overview

• The economy of the United States expanded significantly after the Civil War.
• The 1870s and 1880s, known as the Gilded Age, were marked by unprecedented economic growth.
• Coined by Mark Twain, the term reflects both the prosperity and underlying issues of the era.

Economic Position

• During this time, the U.S. became the largest economy in the world, a position it still holds today.
• Critics argue that wealthy industrialists were robber barons who exploited workers and manipulated markets.
• Some historians advocate for government regulation to prevent business malpractice.

Alternative Perspectives

• Evidence shows intense competition among businesses and an increase in workers' living standards.
• A more positive view suggests that economic growth during the Gilded Age helped lift people out of poverty.
• The debate on business regulation reflects contemporary political discussions.

Expansion of Businesses

• The second half of the 19th century saw significant growth in business size and scope:
  • Railroads: The first capital-heavy enterprises operating nationally.
  • Emergence of mass production and factories.
  • Introduction of public stock corporations.

Management Techniques

• Horizontal Integration: Merging with competitors.
• Vertical Integration: Controlling all aspects of production, from raw materials to marketing.

Key Figures

• Andrew Carnegie: A steel magnate who used innovative processes to reduce costs and prices, effectively buying out competitors.
• John D. Rockefeller: Founder of Standard Oil, known for similar business strategies to dominate the oil industry.

Economic Conditions

• Following post-Civil War inflation, prices began to gently fall until the 1890s, benefiting savers and consumers.
• Farmers faced challenges due to deflation, especially those who borrowed for land and equipment.
• Engineering advancements led to increased farm productivity, allowing many to move to urban areas for better opportunities.

Role of Small Businesses

• Small businesses thrived, catering to niches that larger companies did not serve.
  • Example: Small steel companies in Pittsburgh produced items like nails and bolts.

Labor Conditions

• Factory workers faced long hours (average of 72 hours per week) and dangerous conditions.
• Despite this, the standard of living and disposable income for laboring families increased:
  • Unskilled workers saw wages rise by 44% from the Civil War to World War I.
  • Skilled workers fared even better.

Immigration

• The era witnessed a massive influx of immigrants, particularly from eastern and southern Europe, drawn by economic opportunities.