The most popular historical analogy for current American troubles is the Civil War era. The second most popular is the Gilded Age. But where the 1850s do not meaningfully resemble today, the 1890s certainly do. Technological change, economic concentration, and rising inequality; political partisanship, financial corruption, and social turmoil; populism, racism, and xenophobia—the similarities are striking. Moreover, the paths the country took out of that earlier crisis offer valuable lessons for what we should do now, and what we should fear.
In the last third of the nineteenth century, the United States was a country in ferment due to three broad trends: economic growth and industrialization, demographic growth and social change, and the rise of mass political participation. These national transformations fed on one another, as did the backlashes they provoked. And the eventual result was the taming of the laissez-faire economy and the suppression of popular democracy.
From 1870 to 1900, the U.S. population doubled from 38 million to 76 million, and by the turn of the century, one in seven Americans was a new immigrant. The population spread across the continent as railroads, steamships, telegraphs, and telephones tied the country together and linked it to the world at large. In the South, meanwhile, the democratizing thrust of Reconstruction increasingly brought formerly enslaved people into the mainstream of regional life.
The combination of modern corporations, industrial research labs, and globalized markets kicked off an unprecedented surge of continuous technological innovation and economic growth. And as usual with capitalist development, all that was solid melted into air. As economic historian Brad DeLong puts it, “Before 1870, you almost certainly had a job very much like that of your father or mother. After 1870, that was no longer the case. A wild ride of Schumpeterian creative destruction gave rise to enormous wealth while destroying entire occupations, livelihoods, industries, sectors, and communities.” The historian Henry Adams claimed that “the American boy of 1854 stood nearer the year 1 than to the year 1900.”
For many of the white, male, Anglo-Saxon Protestants who had long dominated the country, these changes were deeply troubling. Independent farmers and craftsmen had once formed the base of Jeffersonian-Jacksonian democracy; now they were increasingly out of place in the new urban, industrial economy, competing with Catholics and Jews, foreigners, Black people, and women.
The rhythms of the business cycle battered the old middle classes both ways. Booms eroded traditional social structures and hierarchies, while busts left individuals stranded and bereft. Agricultural employment plummeted and the industrial workforce became proletarianized, even as economic consolidation produced huge organizations and giant fortunes at the top of the ladder. “Small shops employing artisans or skilled workers increasingly gave way to larger mechanized factories using more unskilled labor,” writes the historian Charles W. Calhoun in The Gilded Age: Perspectives on the Origins of Modern America. “American workers found their economic lives reduced from independence to dependence as the wage system of labor came to dominate the workplace.”