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Capitalism in the Gilded Age
• Adam Smith (1776)• Origins of Species (1859)• Social Darwinism• William Graham Sumner
(1880s)• Andrew Carnegie (1901)
• Gospel of Wealth (1889)• J. P. Morgan (1837-1913)• U. S. Steel (1901)• John D. Rockefeller (1881)• Standard Oil (1882)
I. Origins of Capitalist ThoughtII. The Ideology CapitalismIII. Industrial Concentration
Key Terms
The Wealth of Nations“Were the Americans, either by combination or by any other sort of violence, to stop the importation of European manufactures, and, by thus giving a monopoly to such of their own countrymen as could manufacture the like goods, divert any considerable part of their capital into this employment, they would retard instead of accelerating the further increase in the value of their annual produce, and would obstruct instead of promoting the progress of their country towards real wealth and greatness.”
The Concentration of Wealth: Its Justification
“What matters more than that some millionaires are idle, or silly, or vulgar. . . . The millionaires are a product of natural selection, acting on the whole body of men to pick out those who can meet the requirement of certain work to be done. . . they get high wages and live in luxury, but the bargain is a good one for society”
“Let it be understood that we cannot go outside of this alternative: liberty, ineqaulity, survival of the fittest; not-liberty, equality, survival of the unfittest. The foremost carries society forward and favors its best members; the latter carries society downwards and favors its worst members”
Ideology of Capitalism1) A natural aristocracy controlled the American
economy for the benefit of all.2) Politicians, unlike businessmen, were not subject
to natural selection.3) If the state interfered with the economy it would
upset natural selection.4) Slums and poverty were the unfortunate but
inevitable results of the competitive struggle.5) The stewardship of wealth obliged the rich to
help the poor.
The Gospel of Wealth and Other Essays
“This, then, is held to be the duty of the man of wealth: To set an example of modest, unostentatious living, shunning display or extravagance; to provide moderately for the legitimate wants of those dependent upon him; and, after doing so, to consider all surplus revenues which come to him simply as trust funds, which he is called upon to administer, and strictly bound as a matter of duty administer in the manner, which, in his judgment, is best calculated to produce the most beneficial results for the community--the man of wealth thus becomes the mere trustee and agent for his poorer brethren, bringing to their service his superior wisdom, experience, and ability to administer, doing for them better than they would or could do for themselves.”
Income Comparison25,000,000
5000
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
Income in 1900
Andrew CarnegieAverage Worker
Spread of Railroads
020,00040,00060,00080,000
100,000120,000140,000160,000180,000
1860 1870 1880 1890
Miles of Track
John D. Rockerfeller (1839-1937)
“The day of combination is here to stay. Individualism has gone, never to return.”
Standard Oil• Used special rates with railroads to drive
smaller competitors out of business.
• By 1881Rockerfeller’s cartel controlled 90% of the nation’s oil refining capacity.
• Within three years the number of oil refineries were reduced from 53 to 22.
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