The Paradox of Industrialization

The Gilded Age, produced not only an elite class of wealth-holders, it also created a class of people whose newly acquired purchasing power fueled an industrialized economy.  The demography of this class was the equivalent of middle to upper middle class, in modern terms.  They possessed material resources which allowed them to purchase a never-ending river of abundant commodities that were manufactured and brought to market as fast as labor could produce.  Perhaps Horatio Alger’s instructional “rags to riches” novels presented in a previous blog post offered factory workers a sense of hope, and that hard labor and a strong work ethic might offer a chance to improve their economic mobility.  Factory production clipped along at a steady pace, which benefited the overall economy of the country.

The 1860's experienced unprecedented production output.  Many believe industrialization and mechanization could promise unlimited goods which would be consumed by the masses.  The country held onto a hope that rapid technological advances would create a less laborious life for most households, and that technology could be an instrumental democratizing economic agent of change that would improve the lives of all Americans.  The primary symbol for economic prosperity was mechanized technology, which at the time was celebrated around the country as a source of abundant production.  However, societal beliefs that mechanized factory work could offer a cornucopia of products to enhance the daily lives of many, a dark undercurrent came with that belief.  With the celebration of technology an inequitable bifurcation of class structure emerged, which was evinced by the oppressive poverty in the slums of factory towns and large cities.

The rapid mechanization, combined with deluded market confidence--in particular, the overall sense that a free-market economic system could continue to expand without repercussion or retraction--was derailed by global economic contraction that occurred between 1873 and 1896.  The economic crash left no industry unscathed.  Ironically, it was industry that created the dire conditions of the twenty years of economic depression during the later 19^th century.  As overproduction of factory goods flooded global markets, consumer demand could not maintain a level of consumption commiserate with manufacturing output.  Massive surpluses, along with disintegrated market conditions led to excessive price erosion and devastating deflation.   Weakened economic conditions led to cuts in factory wages, layoffs, and a complete breakdown of steady employment.  Industrial workers already earned a sub-par wage which guaranteed lifelong impoverishment. 

The stock market crash in 1873 triggered a global economic depression which resulted in bankruptcies and business enterprise failures in the U.S.  As many as six thousand businesses closed in 1874 alone.  Eventually, the crisis bled into nine hundred closures per month during 1878 (Trachtenberg pg. 39).  While it can be said capitalists took a large economic hit during this period, the collapse of steady employment without industrial or governmental safety nets in place for labor proved to be too much for struggling workers to bear. 

Wage-earners became suspicious of the close relationship between capitalists, corporations, and a federal government that did little to represent the common interests of its constituents.  Labor unrest was commonplace during the economic depression of the 1870s, but the crest of the wave broke in 1877 when the Baltimore and Ohio railroads instituted an unannounced 10 percent cut in wages.  Ultimately, the wage cut culminated in the great railroad strike of 1877.  There are many factors that make this particular work stoppage significant.  The strike gained solidarity from other railroad’s workers, as well as support from other industrial workers, small local businesses, and by farmers, all

of whom had all suffered economically from the depression that appeared to be provoked by a speculative economic bubble.  The mood of the country turned dark when alienated laborers destroyed the very machines they worked with on a daily basis.  This raised the ire of big business who called on the federal government to protect property and restore civil order.  

However, some companies didn't wait for government response and took control of local law enforcement, hiring armed police officers and militia men to protect their assets.  It must be said that one kink in hiring local mercenaries to rough up a disgruntled workforce is that many of the thugs refused to fire upon the strikers, many of which were relatives or friends.  The chaos finally came to an end when President Rutherford Hayes authorized federal troops to use violent force on the strikers in order to protect machines owned by railroad companies. 

Rutherford’s executive order offered protection to machines over the lives of United States citizens, and his action resulted in the deaths of more than one hundred people.  Companies had lost millions of dollars to damaged or destroyed property.  The reaction to suppress labor was swift and oppressive.  They went after the unions.  Many strikers were fired and blacklisted from working with other companies, and union leaders were fined and jailed.  However, the most significant outcome of the great railroad strike of 1877 was the creation of armories in all major cities by the federal government.  The armories would house a standing domestic army, which became the “national guard” (Trachtenberg).  Industrialization of society now required the industrialization of state military force to maintain civil order and protect the interests of big business, who with brute force and union-breaking stratagem, demonstrated that they were stronger than labor, and therefore, the fittest to survive...with the help of violent coercion from federal government.

Works Cited

Trachtenberg, Alan. "White City." The Incorporation of America: Culture and Society in the Gilded Age. New York: Hill and Wang, 2007. N. pag. Print.