The Gilded Age: Then and Now

Earthsharing readers will want to tune in to PBS’s American Experience on February 6th for a new documentary on the Gilded Age. This trailer will whet your appetite: it describes the period of the last three decades of the 19th century as “an age of possibilities,” “an age of extreme wealth,” and simultaneously — like today — “an age of extreme poverty.

The term Gilded Age comes from th    e 1873 novel The Gilded Age: A Tale of Today by Mark Twain. (The book was cowritten by Charles Dudley Warner; it was the only one of Mark Twain’s books to have a co-author, which probably explains why it was his least-popular book.) It’s revealing that the term is “Gilded” rather than “Golden” – implying a surface prettying-up, a patina applied over a much grittier underlying reality.

Just this week, we heard Donald Trump brag about the strong economy over which he is presiding, the GDP growth, the record-setting stock market. President Rutherford B. Hayes offered a similar message in his 1877 State of the Union speech:

There has been a general reestablishment of order and of the orderly administration of justice. Instances of remaining lawlessness have become of rare occurrence; political turmoil and turbulence have disappeared; useful industries have been resumed; public credit in the Southern States has been greatly strengthened, and the encouraging benefits of a revival of commerce between the sections of the country lately embroiled in civil war are fully enjoyed.

In those days, America was being made great again following the withdrawal of federal troops from the defeated states of the South, ending the reconstruction period, and ushering in that Renaissance of American race relations that came to be known as the Jim Crow era.

The big question in my mind, though, is whether this “Gilded Age” program is just about the past, or about what’s happening now. One of the things, after all, that swept Donald Trump so unexpectedly into office is the growing number of Americans who feel left behind, who are finding it harder and harder to make ends meet every month, and whose wages have not kept pace with the stock market and productivity growth. Over the last few decades many people have been talking about a new “Gilded Age.” Indeed, the immigration issue amounts to another side of the same question: many people fear that their standard of living is threatened by competition from workers in other countries – or willing to come here – who’ll work for less.

Many commentators, pointing to many charts like this one, note that the huge trend starting in the mid-1970s: for wages to diverge from overall rates of productivity. You’ll note that this chart shows both lines rising together before that – wages, in other words, increasing along with productivity, like they ought to. The clear implication here is that wage increases are supposed to track productivity increases, and that “something happened in 1970s” to disrupt that healthy trend.

The real truth of the matter, though, is that the long-term trend much more akin to the right side, post-1970s, part of the chart. Actually, something happened in the late 1940s: a confluence of new deal programs, the G.I. Bill, the rise of labor union membership and post-war prosperity in general. Prior to 1940, the long-term trend looked just like the left-hand side of our chart. In fact, just what the great American political economist Henry George described in his 1879 bestseller Progress and Poverty: “It is as though an immense wedge were being forced, not underneath society, but through society. Those who are above the point of separation are elevated, but those who are below are crushed down.” George also wrote in that book, “The association of progress with poverty is the great enigma of our times.” Clearly, the tendency for productivity to increase while wages get pressed downward is the long-term historical trend, not simply the result of “something that happened in 1970s.”

The PBS documentary devotes at least ten minutes to Henry George, who was one of the seminal voices of the Gilded Age. Progress and Poverty became an international bestseller largely because George, who had experienced extreme poverty in his own life, wrote with deep feeling and empathy about the abject suffering that seemed inextricably tied to economic progress. This made him an influential voice, and even led the combined labor parties to draft him to run for mayor of New York City in 1886 – and he nearly won, beating Theodore Roosevelt, only losing, some say, because the Tammany Hall candidate, Abram S. Hewitt, got illegal help.

There is even a separate trailer about this segment of the film, which elevates George to the level of fame enjoyed by Andrew Carnegie and J. P. Morgan. Unfortunately, though, filmmaker Sarah Colt emphasizes Henry George’s biography — his hardscrabble early years and his dramatic mayoral race — at the expense of his analysis. Viewers of this documentary will see the problem of deepening poverty along with material progress as a matter of society’s inevitable power dynamic between Haves and Have-nots — a state of affairs that Henry George poetically described, but for which he offered no workable remedy.

Henry George would’ve hastened to point out that the income-gap chart above only represents half the story, and not the more interesting half. Over time, the income gap leads inexorably to the wealth gap – which is far, far greater. “Wealth,” in this context, refers to assets can be piled up, stored, bequeathed and collateralized – not just to widgets made by widget-factories and sold in widget stores. Millions and millions of middle-class Americans live from paycheck to paycheck, storing up no “wealth.” Indeed, a big part of their income goes to paying interest on the consumer debt that they’ve piled up as they tried to keep pace with the lifestyle that their declining wages can no longer support.

The biggest point of Progress and Poverty and Henry George’s other books was that there is one asset, one form of “wealth,” whose importance outweighs every other kind. He stressed the point, which many had made before him, that no person can live, work or produce anything at all without access to land: the surface of the earth and all of the natural resources it contains. As technology and productivity improve, the value of land – which nobody is making any more of – can do nothing but increase. As social progress increases, the total of resources that we now call “natural capital” can do nothing but become more important in every way: environmentally, politically and – especially – financially. Yet the “natural capital” is owned by private individuals and corporations. Hence the new “Gilded Age.”

This point, by the way, was not lost on Mark Twain. The Gilded Age, in 1873, was all about land speculation. The quest to get rich from simply owning a piece of well-placed ground is the backbone of the book’s plot. Twain went further, though. He was acquainted with George in San Francisco, where Progress and Poverty was written. Twain was quoted as saying, “The earth belongs to the people. I believe in the gospel of the single tax.” The pointedly Georgist article “Archimedes” appeared in Henry George’s newspaper The Standard under the byline “Twark Main,” and Twain scholars have endorsed it as Mark Twain’s work.

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2 thoughts on “The Gilded Age: Then and Now

  1. It’s sadly ironic that, despite Henry George achieving world-wide recognition for his “Progress & Poverty,” which was soon translated into many languages and offered a practical, non-violent, non-socialist way to end poverty with all its suffering and related social ills, today only a few have heard of George at all, and even fewer know of his remedy. The world is in a darkened state, and it is hard to see whether or how the Georgist light might come again.

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