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9. Social

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Activities: Context Activities

The Gospel of Wealth: Robber Barons and the Rise of Monopoly Capitalism

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View of the Ewen Breaker of the Pennsylvania Coal Co.

[2855] Lewis W. Hine, View of the Ewen Breaker of the Pennsylvania Coal Co. (1911), courtesy of the Still Picture Branch, National Archives and Records Administration.
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John D. Rockefeller, the leader of the oil industry and the wealthiest man in the world in his day, once articulated his beliefs about money and power this way: "I believe the power to make money is a gift of God . . . to be developed and used to the best of our ability for the good of mankind. Having been endowed with the gift I possess, I believe it is my duty to make money and still more money, and to use the money I make for the good of my fellow man according to the dictates of my conscience." In justifying his incredible fortune in this way, Rockefeller expressed the ideology of "the gospel of wealth," a term coined by steel tycoon Andrew Carnegie. According to the gospel of wealth, unrestrained capitalism will reward the best and most virtuous people, who will then use their fortune to benefit all of society. The duty of the virtuous industrialist, then, is to seek as much profit as possible by whatever means necessary.

While not everyone agreed that big business unfettered by government regulations was a good idea, or that it benefited the right people, no one could deny that by the end of the nineteenth century a new class of financiers with unprecedented power and wealth had emerged in the United States. Industrialization had radically altered the character of the American economy by promoting the growth of giant corporations, monopolies, and trusts over the small businesses, shops, and farms that had formed the economic backbone of the prewar nation. These new corporations employed thousands of workers who were valued not for their artisanal skills but instead for their ability to perform menial tasks in factories and plants. Factory employment in the United States nearly doubled between 1850 and 1880. For many Americans, the growth of industrialism meant longer hours, unsatisfying working conditions, and a modest salary. But for a tiny minority, industrialism provided opportunities for extraordinary and unprecedented wealth.

In the economic climate of the late nineteenth century, some entrepreneurs were able to buy out or bankrupt all of their competitors to create monopolies. By 1900, a handful of men enjoyed virtually exclusive control over such important industries as steel, oil, banking, and railroads. Men like Carnegie, Rockefeller, J. P. Morgan, Jay Gould, and Leland Stanford developed innovative financial and management practices, centralizing control of their far-flung business interests through the use of trusts and holding companies. The men who ran the trusts made enormous profits and came to be regarded as aristocrats--to admirers, they were "princes of industry," while to critics, they were "robber barons." Many of these tycoons came from lowly or impoverished backgrounds and liked to remind people that they were examples of the fulfillment of the American Dream, in which a poor boy achieves success through hard work and virtue.

In accordance with the tenets of the gospel of wealth, many of these men gave tremendous sums of money to charity. They funded everything from churches to art museums to public swimming pools. Carnegie--who liked to call himself a "distributor of wealth"--by some calculations donated over 90 percent of his vast fortune to projects like the 2,811 libraries he founded in towns across the United States and all over the world. John D. Rockefeller gave lavishly to religious mission work, hospitals, schools, and countless other philanthropic organizations. Many of the industrialists endowed scholarship funds and universities, although ironically most of them did not have university degrees.

While the robber barons' philanthropic activities undoubtedly benefited countless people, some critics complained that their charitable works were motivated more by self-glorification and a desire for social acceptance than by a sincere desire to help the less fortunate. Other critics felt that no amount of charitable giving could outweigh the damage the robber barons caused with their unscrupulous business practices. They pointed out that these "captains of industry" were known for forcing their employees to labor in dangerous working conditions, paying poor wages, ruthlessly undermining fair competition, bribing politicians, and gouging consumers. Eventually, public outrage over monopolistic practices led to a call for the government to begin "trust-busting." In response, in 1890 Congress passed the Sherman Anti-Trust Act to punish corporations who engaged in "restraint of fair trade." In its first decade, the act was more symbolic than effective. More lasting reforms came through the efforts of labor unions that organized workers and staged protests demanding fair treatment.

  1. Comprehension: What is a monopoly? What is a trust?

  2. Comprehension: What is the "gospel of wealth"?

  3. Context: Listen to the archive soundfile of John D. Rockefeller's speech encouraging Americans to donate money to the war effort during World War I. What values and beliefs inform his lecture? How does he attempt to appeal to Americans?

  4. Context: How does Henry Adams characterize industrialism in The Education of Henry Adams? Why is the Dynamo such an important symbol to him?

  5. Context: Many of the authors featured in Unit 9 did not support unrestrained capitalism. W. E. B. Du Bois, Theodore Dreiser, Abraham Cahan, and Anzia Yezierska were all interested in socialist theories at some point in their careers. Why do you think socialism was so attractive to these social realists?

  6. Exploration: What kinds of regulations has the government instituted to control large corporations since the days of the robber barons? Have "trustbusting" efforts succeeded? What effects has government regulation had on the U.S. economy?

  7. Exploration: What responsibilities do wealthy people have to the rest of society?

  8. Exploration: In The Great Gatsby, F. Scott Fitzgerald portrayed Jay Gatsby as an extremely wealthy but lonely and dissatisfied man. Do you think Fitzgerald might have modeled Gatsby after the robber barons? How is Gatsby influenced by the gospel of wealth?

[2855] Lewis W. Hine, View of the Ewen Breaker of the Pennsylvania Coal Co. (1911),
courtesy of the Still Picture Branch, National Archives and Records Administration.
The thickness of the dust is visible in this photograph of children working for the Pennsylvania Coal Company. These children were often kicked or beaten by overseers.

[5749] John D. Rockefeller, Address by J. D. Rockefeller, Jr. (1920),
courtesy of the Library of Congress.
Rockefeller used his oil monopoly to become the richest man in the world during the first decade of the twentieth century. What he espoused as the "Gospel of Wealth" was criticized by others as the cruel and unfettered capitalism of "Robber Barons." Though Rockefeller donated huge sums to charity, many felt this inadequately redressed the damage done during his acquisition of wealth.

[7136] Frank Leslie's Illustrated Newspaper, Boss Waving His Fist at Female Employee in a Sweatshop(1888),
courtesy of the Library of Congress [LC-USZ62-79589].
The late nineteenth and early twentieth centuries saw some gain great wealth at the expense of multitudes, like this mistreated worker. Eventually, inhumane working conditions became a cause for social reformers.

[7255] Alfred R. Waud, Bessemer Steel Manufacture (1876),
courtesy of the Library of Congress [LC-USZ6-1721].
One of six illustrations that appeared in Harper's Weekly showing the operations in a steel mill. Steel was big business at the end of the nineteenth century, and, in the days before the income tax, so-called "robber barons" amassed extravagant wealth.

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