While watching the HBO series "The Gilded Age," I was reminded that for most of my adult life I have been living through America's second Gilded Age. The appellation comes from the title of a 1873 novel of the same name by Mark Twain and Charles Dudley Warner. As the Encyclopedia Britannica explains:
The title was a provocation: the word gilded describes something covered in a thin layer of gold, shiny on the outside but, perhaps, cheap or rotten underneath. That’s how Twain and Warner saw the United States. Their book—part comedy, part critique, set in Washington, D.C.—mocked a society that looked bright and successful but that, underneath, was corrupt, driven forward by self-serving politicians and grasping businessmen. The title stuck because it captured the contradictions of the era.
This description might seem just as apt for America since the early 1980s as it does for America of the late 19th century. And, while the cast of characters seems similar, the results are very different. The robber barons of America's first Gilded Age left the country with a sprawling infrastructure of railroads, steel mills, mines, telegraphs and telephones, sturdy physical infrastructure much of which is still in place today.
The robber barons of our current era—the tech overlords who control vast software and information empires—have created ephemeral apps and information products designed to manipulate us and steer us toward a kind of digital indentured servitude, one marked by endless subscription fees and paywalls and constant surveillance of our behavior, both online and off. The tech overlords are in the process of enclosing the digital commons so that everything on it will come at a price, either to our wallets or our privacy.
I do not mean to excuse the cruelty and unfairness of America's original robber barons. Their moral depravity is on display for anyone willing to read novels of the era or any decent historical account. Unfortunately, though watching the television series "The Gilded Age" will entertain you, it will tell you very little about how the wealth of those portrayed was obtained.
You may be enchanted by a cast that is well-dressed, well-spoken and well-mannered in a way that belies the unscrupulous and sometimes cruel and violent means used to secure the wealth that enables their outward gentility. You may become caught up in the rivalry among New York's wealthy matriarchs as new and old money vie for social position. It's a rivalry that seems surprisingly clean and orderly and not very consequential unless social position is all one is concerned about. So sanitized is this version of America's first Gilded Age, that I have so far been unable to find even one road apple on the streets from all the passing horses.
While the robber barons of old could be shamed, they could not be stopped (until the coming of the antitrust laws, about which more later). Today's robber barons by contrast cannot even be shamed. For example, they can say that democracy should be dispensed with, that we should move not to a different kind of politics, but "beyond it," and they say this without even the slightest hint of shame.
This has to do in part with the communications infrastructure that keeps people balkanized in narrow online communities, often filled with misinformation and disinformation. In the late 19th century there were newspapers and journals that catered to the working class and the progressive elements of the upper classes, publications that could still manage righteous indignation regarding working conditions and pay and the corruption of the ruling class.
Anyone who reads about current events understands that the professional managerial class has become the hand of the plutocratic elite in waging war against the lower classes. These professionals and managers may believe in some cases that they are helping those in the lower classes. More often, they see membership in this class as the path to success and financial security without regard to how their actions affect the broader society (though they may still see their actions as benign). But their role is to carry out the directives of the ownership class as they work to secure benefits for themselves and their families within a system that has methodically looted the lower classes and improverished the public sphere (see bleow).
It is against this class that much of the rage against elites in the United States and around the world is aimed. The professional managerial class has prospered while the lower classes have stagnated. Those in the lower classes know this but are having a hard time focusing their anger since neither major political party in America is willing to discuss the class divide head on. So voters with grievances often vote for those candidates who are best at channeling voters' anger, not necessarily the ones who might actually address their grievances—of which their are admittedly few in American politics.
We know how the first Gilded Age in America came to an end. The first blow came as a serious and successful effort to break up trusts which were strangling the life out of ordinary citizens by fixing prices and stifling competition. But there was another effect of trust-busting. It fractured political power that had previously been narrowly concentrated and had kept government policy firmly within the hold of the super rich.
The final blows to the remnants of the Gilded Age came in the Great Depression when the very legitimacy of capitalism came into doubt. President Franklin Roosevelt's New Deal reorganized power in America in a way the allowed progress for the country's lower classes in part through unionization.
In addition, vast public works projects financed by higher progressive taxes increased the effective income and well-being of the lower classes by creating new jobs and providing educational, recreational, and medical facilities and institutions open to them. These public works projects included the electrification of the countryside, something which private utilities had been unwilling to do and something which greatly improved the quality of life for those in rural areas.
World War II transformed the American economy into a world-leading manufacturer and its farmers into food suppliers to the world. A sort of social compact allowed continued gains in the standard of living for the average American until the 1970s.
After that technological change and deliberate government policy worked together to move wealth to the upper classes. Since 1975 some $50 trillion in income has been transferred from the bottom 90 percent of Americans to the top 1 percent. No wonder there is discontent among the electorate. "[I]magine how much safer, healthier, and empowered all American workers might be if that $50 trillion had been paid out in wages instead of being funneled into corporate profits and the offshore accounts of the super-rich." Those words were written by the venture capitalist who is the author of the article cited just above.
Instead of using the antitrust laws to break up monopoly power, the U.S. government succumbed to the argument of the monopolists that they are simply providing low prices to consumers; the government let monopolies flourish. Today there are three major wireless carriers in the United States. I remember when there were hundreds.
Monopolies always end up exerting undue influence on government policy. And, they always make up for the low prices they charge after their predatory pricing finally eliminates the competition. Just ask long-time Uber riders how they are feeling about much higher fares, fares made possible by destroying the cab companies through a combination of ignoring municipals laws, greasing the palms of local politicians, and using predatory pricing to eliminate the competition. (In case you don't know, predatory pricing is illegal in the United States. But enforcement has been almost nil.)
So what will bring about the end of the current Gilded Age? It is hard to imagine today the eruption of a vast social revolution such as that which transformed America in the 1930s, even in the face deep economic hardship. Other countries, namely Germany and Italy, chose fascism as a solution for governing back then. Certainly a major war would shake up current arrangements. But a major war might also mean the end of civilization through a nuclear conflagration.
With the twin crises of climate change and resource depletion, we do not face the central problems of the 1930s, lack of demand and underutilization of resources. Instead, these twin crises promise only hard limits on the growth that economies can achieve, if they can achieve growth at all.
From our perspective the first Gilded Age had a somewhat happy ending which resulted in broad improvements in the lives average Americans. But, right now I'm having a hard time imagining a happy ending for anyone living through America's seconded Gilded Age.
Kurt Cobb is a freelance writer and communications consultant who writes frequently about energy and environment. His work has appeared in The Christian Science Monitor, Resilience, Common Dreams, Naked Capitalism, Le Monde Diplomatique, Oilprice.com, OilVoice, TalkMarkets, Investing.com, Business Insider and many other places. He is the author of an oil-themed novel entitled Prelude and has a widely followed blog called Resource Insights. He can be contacted at kurtcobb2001@yahoo.com.
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