A successful economy is perhaps the most key ingredient leading to a successful nation. An economy is a delicate balance of many different conflicting and coexisting elements. Naturally, an economys success can often be measured by the amount of wealth is contains, not to mention the effectiveness or ineffectiveness of its distribution of the wealth. Effective distribution of wealth is no easy feat. Wealthy and poor people will always need to coexist- this is an inescapable truth. The governments job in many cases becomes that of a referee.
Naturally, perfect peace and harmony between to totally different classes would be a utopia, and probably will never be completely achieved. A government must, therefore, regulate economy so that one class does not overrun the other. The real struggle is over a vastly more important issue: who owes what to whom. This most hoary and basic of all social debates usually afforded reverence and inattention of great art: People know its there and mostly they ignore it(Wines238). Society will constantly debate this issue. By very definition, however, there will also always be a wide spectrum of opinions because of social status.
Naturally, the poor will always feel cheated because they feel as if opportunity never has and never will pass them by. The rich, conversely, will always feel as if they are doing society a great favor simply by having their wealth. Poor versus rich debates will never go away no matter how much change is done to government and society. The just deserts theory of poverty is one that best describes American society. For many, the logic of the mobility ideology led to a just deserts rationalization. The matter was simple, according to a local editor: We declare it a vice and a sin for a man to be poor, if he can help it.
And the typical poor man in America could help it(Thernstrom33). More often than not poverty can be helped. Perhaps poverty is what is deserved for laziness in American society. America can not alleviate the defective state of society. Other nations inevitably encounter many of the very same problems and deal with them differently, establishing a wide range of economic systems. Some take on a traditional economy in which one assumes the same job as his or her parents. This system allows very little mobility and is not seen very much worldwide. Other nations chose a command economy.
This entails the federal government appointing individuals with occupations and allows them to become skilled at their respective craft. The market model of economy, developed by Adam Smith entails a freely flowing economy that places little or not restriction on occupation allowing individuals utmost rights. America took on an ethos of a mixed economy of market and command that struck a successful economic equilibrium. American economy also changes with different periods of history. The Civil War had lit the spark of industrialization needed to enhance the American economy.
Technology advanced by leaps and bounds and free labor was done away with to make room for Industrialization and Adam Smiths market model of capitalism. Capitalism was a promoter of the entrepreneur and individual success. It was only natural that during this time of private interest the gap between rich and poor would be greatly widened and a state of disorder might arise. Capitalism was a new ideology and drastic labor problems and social disorder arose because Americans were simply adjusting to (and taking advantage of) the new system.
Although the gap between rich and poor during the late nineteenth and early twentieth century was unquestionably large, the nation was also prospering through large economic gains. Although it may have seemed like a nation in which the rich were detached from the poor, the US was actually harvesting a new breed of self-accomplishing individuals. With the end of free labor, the US had sought a new ideology, and found it in Adam Smiths market model. The market model was a beneficial system overall, however, many focused not on the gains that it brought but instead on the condition of the poor.
The market model was indeed a gain of the time period and was met by the pursue of individual interest. These questions lead Smith to a formulation of the laws of the market. What he sought was the invisible hand, as he called it, whereby the private interests and passions of men are led in the direction which is most agreeable to the interest of the whole society(Borg74). Smiths model promoted a much more aggressive economy and individuals sought their own success. The entrepreneur became the icon of society. The new system allowed individuals to exploit opportunity and rise to astronomical heights.
However, the new system was not solely based on individual success. Corporations sprung up all over the US, which promoted a constant struggle to compete in the business economy. Corporations were constantly seeking the improvement that would put them over the top, above competition. This cutthroat competition, by its nature left some corporations and individuals in the proverbial dust. The entrepreneurial war of all vs. all had begun. Both businessmen (Benjamin Franklin Newhall and Benjamin Franklin) experienced the entrepreneurial war of all against all.
Both saw merchants sometimes pursue interests different from manufacturers. And both stood committed to the underlying system of private property in the means of production owned and controlled by individuals and small firms who bought and sold commodities (including the time and skills of human labor) and competed with one another for sales and, ultimately, profits. the definition of virtue as hard work and self-denial(Dawley40). In order to attain optimal circumstances for increased capitalism heads of corporations naturally needed to outdo each other.
In many cases the price of lowering prices and speeding up production came in the form of pay cuts and layoffs. The individual needed to serve the means of the corporation. Simply because some workers had poor working conditions does not mean that the US economy was in the gutter. Statistics show that the American economy on the whole flourished during the Guilded and Industrial Age (91).
In the fifty years between the eight consensus and the twelfth consensus, taken in 1860 and 1910 respectively, the countrys population soared from 31. 5 million to 92. illion, an increase of almost three times. During these same years the GNP, representing the dollar value of all the goods and services produced each year, leaped from about $7 billion to over $35 billion.
This meant an average increase of in output from $150 to about $380 for every adult and child in the nation(Burner411). These statistics point to economic gains of colossal proportions. Goods produced made up for job layoffs as the US economy became, like a machine, more industrialized each day. All of the key components were in place to have a thriving economy.
Investment bankers also stepped in and became powerful. J. P. Morgan is a prime example of not only economic success, but also how the rich gave back to society. Although the rich of the time (such as Rockafeller, Carnegie, and Morgan) seemed detached from the rest of society and appeared to be dominant, they actually contributed more than they took. While the stereotype contains much truth, it overlooks a redeeming aspect of that opulent time: our harshest industrial overlords proved our most enlightened philanthropists.
The lives of John D. Rockafeller and Andrew Carnegie, tough men from hardscrabble backgrounds who lacked college education, furnish rich lessons for would-be benefactors. They transcended the sentiment and haphazard methods of Victorian charity, substituting the rigor of modern philanthropy. Instead of sponsoring another hospital or museum wing, Carnegie and Rockafeller promoted ideas(Chernow103). It is clear that the rich of the time were elevated to another level, however these men never lost sight of society no matter how high they got. The time of rising large businesses had arrived in force and brought with it newfound economic gains.
The industrialization and guilded age were characterized by abuses through American society, which were not the fault of the system, but the fault of the people. It is common knowledge that the time of Carnegie, Rockafeller and Morgan was marked by extreme wealth of the upper class. Corporation, as illustrated, was a new and thriving force and many individuals were simply taking advantage of the opportunity that frequently passed their way. In many cases the advantages taken were excessive and it is for this that abuses in the national economy were the fault of the bosses and entrepreneurs.
Granted, all individuals were adjusting to the new system of economy, however the blame must be laid somewhere. The rich were living a life of flamboyancy during the early twentieth century. Andrew Carnegies annual income was nearly twenty five million dollars whereas many of his laborers and employees made a mere four hundred and seventeen dollars per year on average (Allen24). The rich were also mentally incapable of even dreaming of being poor. The lives they lived were so extravagant that it was often easy to lose oneself in upper class society and neglect the lower class without a thought.
If Rockafellers own house was not a palace, it was one of more than seventy-five buildings on his estate; if he himself used one car for fifteen years, the garage on the estate was built to hold a fleet of fifty. Within his estate there were seventy miles of private roads on which he could take his afternoon drive; a private golf links on which he could play his morning game; and anywhere from a thousand to fifteen hundred employees, depending on the season(Allen30). Hundreds of entrepreneurs lived in similar lavishness.
During a time of private interest such conditions were natural, however in this particular case the effects of privately interested classes were amplified due to the state of government. The government at the time was practicing a laissez faire attitude, which ultimately meant that they would not interfere with business matters and basically allow the cycle to occur. The aristocracy took advantage of this ideology of government and also thrived without the burden of income taxes. The more advantages the aristocracy took, the greater the gap between rich and poor grew.
The social abuses used by the rich against the poor created an unstable, yet prosperous economy. It is irrefutable that technological advances and success had created perhaps the richest economy to date- rich not just monetarily however, but also rich with ideas and knowledge. All of this wealth came at the price of abuses, however. The biggest categorization of these abuses was namely exploitation. The rich were so detached from the poor mentally, economically, and socially that they could not even fathom the injustices that they were causing. Working conditions and wage labor were at all-time lows.
About the same time a New York newspaper surveyed the unemployed and the poor of the city and found 150,000 persons were out of work. Another 150,000 earned less than 60 cents per day, many of them girls who worked eleven to sixteen hours daily. During the course of the year over 23,000 families were evicted from their homes because they could not pay the rent(Meltzer51). American society at the time was really a coin with two very opposite sides. Working conditions were perhaps the most apparent sign of exploitation. Never before had employers and entrepreneurs acted with such disregard for the laborer.
There were men who worked in the cooking rooms, in the midst of steam and sickening odors, by artificial light; in these rooms the germs of tuberculosis might live for two years, but the supply was renewed every hour. There were the beef luggers, who carried two-hundred pound quarters into the refrigerator cars, a fearful kind of work, that began at four oclock in the morning, and that wore out the most powerful men in a few years(Sinclair101). The gap between rich and poor had grown so big, in fact that bosses only cared about success, and not the means necessary to achieve success.
By allowing such blatant problems in working condition for the workers, the employers and aristocracy in many cases displayed an apathetic feeling towards the consumer. If the bosses had such disregard for the workers, the workers in many cases attempted to find ways to better their conditions (rather than continue weathering them), which only hurt the consumer. A classic example of disregard for the workers from a boss was on the Durst Ranch in California. Ralph Durst, the ambitious boss acted as if his employees were machines and had no need to be cared for.
Living conditions on the Durst Ranch were hellishSince Durst has provided no garbage cans or common trash receptacles of any sort, garbage piled up throughout the encampment. Choked with garbage, two well sump-holes filled the area with stench, polluted the well water, and became the breeding ground for swarms of blue flies The most distress, personal and environmental, was caused by the lack of toilets(Starr159). Although success was imminent in the American economy, social conditions were failing to say the least. The richest one percent of the country enjoyed wealth greater than the total of the remaining 99 percent.
As one historian said, Never before or since in American history have the rich been so rich and the poor so poor(Meltzer53). The Gilded Age was named as such for a reason and it was becoming clear why. The time around the turn of the century had given new meaning to the phrase all that glitters is not gold. Fueling the entrepreneurial exploitation of the lower class was the governments policy of laissez faire in dealing with business. By having a passive government, the aristocracy acted more or less as it chose, actually controlling all three branches of government.
It was well known at the time that the wealthy controlled the senate. Many of the elite upper class would not even deny this accusation. these men constituted a ruling clique that through the committee system of legislation controlled every bill that tried to run the gantlet of the Senate. And pressing over their activities was Vice President Levi Morton, who ranked with Belmont and Morgan as one of the greatest bankers in the land. This august body was labeled the Millionaires Club by contemporaries(Cochran&Miller164). The cause of such extreme wealth had been a lack of regulation by the Federal Government.
Now, however, the lack of regulation would be frozen in place because of the social status of the men in the senate, who understood the power of their position. To put it plainly, no bill would be passed by the Millionaires Club that would in any way cripple themselves. The millionaires did not just control the legislature, either. Harrisons cabinet was sometimes called the Businessmans Cabinet because it included the merchant John Wanamaker and the marble king of Vermont, Redfield Proctor(Cochran&Miller163). The executive and legislative branches were being controlled by a group that could not call themselves unbiased if forced to.
American government had become an aristocracy. One example of the manipulation of government by individual enterprise was the Sherman Anti-Trust Act. The Sherman Anti-Trust was originally meant to restrict big businesses from merging and forming trusts. The act was also passed in order to avoid monopolies. This act, as well as the Interstate Commerce Committee were both toothless regulatory acts which were ultimately turned on the people. The Sherman Anti-Trust was even manipulated by the legislature of millionaires to thwart the rising union powers.
In the Danbury Hatters Case (1905), the Supreme Court also decided that a labor union could not, under the Sherman Act, initiate a secondary boycott-could not boycott one business to force it to put pressure on another engaged in a labor dispute(Burner429). The judicial branch of the Federal Government was also manipulated by entrepreneurs and affected greatly by the laissez faire attitude. The Fuller Court was sitting in the Supreme Court at the time and essentially was used by corporations incessantly. In essence, what the court did through a smattering of decisions all favoring companies (such as Wabash vs.
Illinois and Santa Clara vs. South Pacific Railroad), was protect the companies from the rights of the state government. State government, by right should have had the power to regulate business and be generally dominant in any unfair business matters. Through these court rulings, however, the tables had completely been turned. In Santa Clara Co. v. Southern Pacific Railroad (1886) the court accepted the view that corporations were legal persons and so, like black people protected by the Fourteenth Amendment against being deprived of property without due process of law(Burner428).
Under these rulings, only the Federal Government could regulate commerce, yet the Federal government was practicing a laissez faire attitude. The only regulations of the time were narrow and most were vague and minimally enforced. With all three branches of the Federal Government being controlled by entrepreneurs and millionaires, large corporation held all the cards. Naturally, the lower class would only take the beating of corporation for so long and eventually struck back (literally) in a flurry of strikes and labor protests that were caused by none other than the actions of the wealthy.
For years the railroads of this country have been wholly run outside the United States ConstitutionThey have charged what they pleased for fare and freight rates. They have corrupted the state and city legislatures. They have corrupted Congress employing for the purpose a lobby that dispensed bribes to the amount of millions and millionstheir managers have been plundering the roads and speculating on their securities to their own enrichment(Meltzer91). The corruption spoken about in the above Daily News article had been brewing since the beginning of the generation of such great wealth.
The exploitation of corporation would only go unnoticed for so long and finally the general public began a series of defensive strikes. These strikers sought not to run the entrepreneur out of business, but merely to protect what they had, which was very little. Unions were firstly formed in order to reassure laborers that they would have some protection to fall back on. The unions agreed only to strike when threatened. The logic behind this was that if an entrepreneur had such disregard for his laborers, perhaps a strike would help to wake him up.
The American Federation of Labor (AFL) was an impeccable example of the nature and goals of these early labor unions. Under Gompers, the AFL avoided politics. A former socialist, he concluded that capitalism was in American to stay. Whatever benefits wage earners gained they would have to get within the capitalist system. Taking up with radical movements would only alienate the middle class. Even engaging in middle-of-the-road politics was a mistake. Better to stick to pure and simple trade unionism(Burner471).
The AFL did not seek any grand riot or revolution, they simply wanted justice to be done. The strikes led by the AFL and other unions reflected these humble approaches to labor protests. The Homestead Strike of 1892 reflected a demand for greater wage for the hours worked. The Homestead strikers wanted to defend what they had. The price of living had gone up and their wages down (and plummeting continuously), so that it became almost impossible to support oneself let alone a family.
A man who has a family of normal size to support, can provide for them only a two-room tenement in a crowded court, with no sanitary conveniences; a supply of food below the minimum sufficient for mere physical well-being; insurance that makes provision which is utterly inadequate for the family left without a breadwinner; a meager expenditure for clothes and furniture, and an almost negligible margin for recreation, education and savings(Meltzer136). The strikers were seeking to protect themselves economically, chiefly, but also physically. The disregard for working conditions by the company managers crated a very unsafe and risky workplace.
By striking against economic and physical conditions the demonstrators were striking defensively, and only because they had been provoked for so long that they could not ignore it anymore. The Pullman Strike of 1894 was another example of an entire town uniting to defend itself against George Pullman himself who held a firm stranglehold on the throat of the citizens. The depression caused Pullman to reduce wages by a dire 25 to 40 percent. The effects of such a great chop dealt a debilitating blow to the towns economy, however the citizens found themselves with nowhere else to go.
We are born in a Pullman house, fed form the Pullman shop, taught in the Pullman school, catechized in the Pullman church, and when we die we shall be buried in the Pullman cemetery and go to the Pullman hell(Meltzer151). For lack of a better action, the citizens of Pullman struck and fought to defend themselves from the drastic pay cuts. George Pullman, the unscrupulous businessman won out, however and the men returned back to work. The Lawrence Strike was no different in idea than these other two strikes. Of all the mingled peoples of Lawrence, none are so humble as the Italians, none so eager for work at any price, and none so ill-paid.
They are the last and the poorest of the successive waves of people from Europe, which have been surging upon our shores during the last thirty years. When these people opened their envelopes, they found that there was a reduction of pay corresponding to two hours of work in a week- the price, perhaps, of three or four loaves of bread(Meltzer172). The strikers in Lawrence managed to improve their own conditions somewhat by their defensive strike, yet the exploitation of corporation still remained a dominant force.
Society will always have these natural flaws of exploitation and gap between rich and poor. An economy thrives on the fact that the gap between rich and poor will never be completely bridged. From the time of Carnegie and Rockafeller to the present day, the aristocratic upper class has always been a world away from their workers and employees. Today, however, entrepreneurs have changed form as robber barons. Rather than thriving on the steel industry as Carnegie did or in investment banking as Morgan did, the super rich have now focused on new technological advancements.
The image of greedy bosses and corporate heads has been softened into images of CEOs. Entertainment giants have taken the place of steel robber barons, yet their abuses remain. The potency of entrepreneurship has changed a great deal over the years, however. In December, Disney CEO Michael Eisner exercised 7. 3 million stock options worth over $400 million. But, since the sale came after the close of Disneys fiscal year. Eisners windfall wont show up until next years pay survey. Eisner has more stock option fortunes to come.
Thats not the case for the families who save for years to visit Disney World, or the workers paid pennies an hour to make Disney toys in China and Vietnam(Sklar137). The US still grapples with many of the same issues it did over one hundred years ago- most importantly the issue of who owes what to whom? However, the US is not currently in constant strife between upper and lower class. Strikes are not a frequent occurrence as they were at the turn of the century happening at least every two years. To explain this one can only turn to the hypothesis that the US has shifted from a period of private interest to one of public purpose.
Even if some are still self-interested, the US as a nation has matured and handles labor issues more effectively, accomplishing more. One major difference is that the government has stopped practicing a laissez faire attitude that allows all branches of government to maintain a firm grasp on business using regulations. Now problems attack the economy and government from very different angles. One thing remains constant, however and that is that there will always be a contrast between classes and the struggle to succeed will take on different forms as history progresses.