Big Business Vs. Labor, 1870-1925

Reunited by the Union victory in the Civil War, America faced an era of reconstruction during which the value of the individual was reanalyzed and redefined in law. After the reconstruction, a sense of peace and prosperity calmed the American people. Given hope by their success in maintaining the Union, the Progressive Era ensued. The previously forgotten vision of Alexander Hamilton was reborn and finally implemented. America was no longer the land of the yeoman farmer. Denizens of rural areas moved to the city and sought to work in the gradually industrializing regions of the country. As big business gained power, the laborers sought to achieve the American Dream of economic prosperity through self-improvement in a laissez faire economy. In response to the exploitation of monopolistic big business owners such as John Rockefeller and Andrew Carnegie, laborers formed labor unions in attempts to gain political momentum and achieve reforms in labor. At first, the government sought to interfere minimally in the affairs of the powerful corporations and maintain a laissez faire economy. Theories such as Social Darwinism, Gospel of Wealth and Adam Smith's "invisible hand" attempted to justify the lack of government interference. After much conflict, and the staunch political support of many labor unions, the government's hand was forced and these conflicting interests fueled bitter debate and governmental intervention. American exceptionalism caused the industrialization of America and the rise of immoral, exploitative big businesses, consequently inciting class conflicts and the advancement of labor unions.

American exceptionalism provoked the industrialization of America by setting the standard for U.S. business owners and laborers. With passing years, many innovative men sought to achieve the American Dream at a level no other had accomplished before. American exceptionalism was simply a side effect of the American Dream. The overall growth of American business was fueled by the abundance of natural resources and land in America. Alfred D. Chandler, Jr. suggests that there were additional causes, including: "the westward expansion...; the building of railroads...; the growth of the national and urban market...; the coming of electricity and the internal combustion energy...; and finally, the growth of systematic and institutionalized research and development...." Using these major technological breakthroughs to their advantage, as well as their own creativity, intelligent men were able to raise their status to an unprecedented level. John D. Rockefeller is an excellent example. Rockefeller used the concept of horizontal integration to control and expand his oil monopoly, and eventually become the first billionaire. Andrew Carnegie implemented vertical integration, and also reached previously unimaginable levels of wealth. Both used trusts, pools and other now-illegal methods of monopolization to help reduce competition and attain larger amounts of capital. Seeing these men raise their position in society, laborers saw the opportunity presented by America and worked as hard as they possibly could. It seemed the Puritan work ethic was still a dear part of every American citizen. Many laborers rose up to meet the standards by demanding higher wages and benefits as a result of themselves increasing their own productivity. A vicious cycle of industrialization began. As wages increased, technological advancements were pursued in order to meet the increasing wages with the same or even more net revenue. As revenue increased, laborers demanded more and more for their work. The cycle continued endlessly until no further advancements occurred. The results were astonishing.

Fig. 1. : "Figure 17.2 Index of U.S. Manufacturing Production, 1864-1914." Chart.

America and its Peoples: A Mosaic in the Making. An illustration taken

from our textbook, showing the increase in manufacturing over the years

1864 - 1914.

Americans achieved the exceptionalism by becoming superior to any other country. Over a mere fifty years, the amount of U.S. manufacturing had increased by about 175%, almost triple what it was in 1864, stopping only in the early 1890s during the economic crisis. America's unstoppable economy was industrializing and maximizing its proficiency, surpassing the economy and industrial power of any other country on Earth. The average American citizen was becoming a consumer, as opposed to a producer, but as a whole the country was still a greater overall producer than any other country. America had become an economic superpower, superior to any other governed body. And thusly, the American Dream was stronger than ever, and American exceptionalism became reality. No nation met America's standard of greatness.

Fig. 2. "Figure 17.2 Index of U.S. Manufacturing Production, 1864-1914." Chart.

America and its Peoples: A Mosaic in the Making. An illustration taken

from our textbook, showing the increase in manufacturing over the years

1864 - 1914.

Figure 2 shows the dramatic incline of American production. The availability of resources in America fueled further industrialization, emphasizing the cycle of growth. With this production came a sense, as well as a reality, of superiority. America wielded a power fearsome to any country who could measure it. Many Americans sought to control a portion of this power.

Aptly named "big businesses" were created as a result of the industrialization of America. As previously mentioned, John Rockefeller and Andrew Carnegie implemented horizontal and vertical integration to maximize profits. Such economic brilliance was used to exploit every line of the legal system. There was an obvious and dangerous amount of corruption that allowed big business to control the federal government.

"What a funny little government!"

Fig. 3. Cartoon by Horace Taylor, The Verdict, Sept. 25, 1899

Horace Taylor puts his opinion into prospective with this political cartoon. Businesses became more powerful than the government itself, which was too afraid to interfere in the exploitation. One such exploitation was the creation of corporation. Corporations were designed to limit the liabilities of its shareholders and thusly minimize the loss of capital by criminalizing only the legal entity, rather than its underlying workers. Thusly, legal suits