A Just and Generous Nation

by Harold Holzer

  Their arguments failed to address the fact that the whole structure of the economy was undergoing radical change. Whereas the early American Republic had been characterized by a continuing labor shortage that kept wages relatively high, the influx of millions of immigrants in the post–Civil War era created a labor surplus. The notion that the laborer had significant negotiating power was simply a convenient upper-class myth. Workers everywhere were being forced to compete and settle for below-subsistence wages. While on average the US economy saw a gradual rise in living standards between the end of the Civil War and the beginning of World War I, nearly half the workforce survived on ­below-poverty wages. “By the end of the 1880s,” wrote David Montgomery in The U.S. Department of Labor History of the American Worker, “an income of roughly $500 a year would have been necessary for a family of five in a middle-sized industrial town to enjoy any of life’s amenities (newspapers, beer, lodge membership, outings, tobacco) without literally depriving themselves of basic necessities. About forty percent of working-class families earned less than that.” Long periods of unemployment were common, workweeks in excess of fifty hours were routine, child labor was rampant, and health and safety conditions in many workplaces were appalling. From 1880 to 1900, an average of thirty-five thousand American workers died each year from work-­related injuries, and another half million were injured.

  The extreme laissez-faire versions of the new economic doctrine portrayed government intervention in economic life as nothing less than a violation of “natural law.” While the American economy was growing by leaps and bounds, government regulation of economic life was not growing at all. Lincoln had argued that government should actively assist all Americans in their quest for economic advancement. It should help to promote equality of opportunity, to “clear the path for all.” By contrast, the new economic doctrine insisted that the government should have absolutely no role. The new argument was that any action by the government—especially taxation—would be counterproductive. It would allocate money inefficiently and take the money from private businessmen who would rationally and efficiently act to increase their own income and the total income of the nation.

  The notion that one’s economic fortunes were connected with one’s character—one’s hard work, thrift, persistence, and dependability—ran strong in the American bloodstream throughout the late nineteenth century. The theme had its origins partly in the old Calvinist idea that good economic fortunes were a sign of God’s favor, a visible symbol of belonging to the elect. It was also an outgrowth of individual experience, since many, like Lincoln, found that hard work did enable them to get ahead. But with the dawn of the Gilded Age, this belief was transmuted from Lincoln’s message of hope into a verdict of condemnation. It became a rationale for blaming laborers for their desperation and condemning the working poor for their very poverty. Meanwhile, any government effort to intervene on workers’ behalf was to be fiercely resisted as a violation of natural law. Proposals for legislation to mandate an eight-hour workday “threatened the very foundation of civilization.” Even laws forbidding child labor were anathema. One of the leading proponents of laissez-faire economics, E. L. Godkin, argued in the Nation against a proposal for a New York state constitutional amendment that would forbid employment in factories of children under ten. The government, wrote Godkin, might as well “tell us what to eat, drink, avoid, hope, fear, and believe.”

  The harsh version of laissez-faire thinking was made harsher by the claim of scientific authority based on Charles Darwin’s new theory of evolution. “Social Darwinism” saw human economic life as analogous to the process of evolution: economic outcomes reflected the “survival of the fittest.” Those who prospered economically were the “fit”; those who labored long hours in factories for below-subsistence wages were demonstrably the “unfit.” The growing inequality that America witnessed between a tiny group of superrich industrialists and a mass of increasingly degraded and impoverished workers was actually seen as a sign of social progress; its proponents claimed it was good not only for maximum economic growth but also for the advancement of the “race,” a necessary price of progress toward ever greater national wealth and prosperity. Social Darwinism integrated the ideas of evolution and laissez-faire economics into a new doctrine that not only forbade government intervention in the economy, but also provided a moral justification for harsh working conditions and growing economic inequality.

  White working-class Northerners were not the only group targeted under this new theory. Increasingly, the freed slaves and all other African Americans were thought of as “unfit.” The supposedly scientific concept of social Darwinism provided a basis for supporting segregation in the North as well as the South as the new dominant pattern of separating white Americans from “unfit” African Americans.

  Any interference in the natural human competition for survival—particularly by government—was utterly counterproductive in the view of the social Darwinists. The role of the state was solely the “defense” of “individuality,” a scrupulous protection of individual rights and rigid noninterference in economic activity. Those societies that most perfectly did not interfere with the individual’s absolute rights to “life, liberty, and property” would survive and progress; those societies that interfered with these rights would eventually die out.

  It followed that any attempt by the state to relieve the unemployed, to guarantee rights of employment, or even to provide charity for impoverished widows and orphans or newly freed African Americans posed a threat to progress. The laborer struggling with wages below subsistence, the sick and infirm, in short society’s millions of “losers”—all were “unfit,” and the most “unfit” among them deserved to die, so that the “race” as a whole would prosper. To its advocates, the obvious cruelty of this new modern economic system was actually kindness in disguise.

  What is remarkable is how, under the influence of social Darwinism, the definition of democracy was gradually turning into something approaching its opposite. Repelled by the huddling masses of underpaid laborers, some self-styled “reformers” even raised questions about the merits of universal suffrage, advocating a return to the old system of voting rights on the basis of property ownership. Such obvious antidemocratic proposals never gained much traction. But they signified a sharp departure from Lincoln’s understanding of democracy. Lincoln had regarded the equality posited by the Declaration of Independence as a core democratic value. Increasingly, the social Darwinists saw inequality as a sign of a healthy democracy, albeit one that now exhibited sharp divisions between the rich and the wretched.

  Social Darwinists produced an ideology tailor-made for business interests. Industrial magnates and the business community enthusiastically took up the slogans of laissez-faire—an irony, since at the same time big business lobbied the federal government increasingly energetically for what amounted to millions of dollars in preferential treatment. Lincoln’s program of government action to clear the path for the poor and disadvantaged was translated into government action to support wealthy Americans. Federal land grants and loans for the railroad magnates in the tens of millions, high tariffs to protect selected industries, and banking and financial regulations that enabled investors to line their pockets at the expense of the unwitting—such were the policies of the federal government in the Gilded Age. Far from maintaining a scrupulous laissez-faire or “hands-off” attitude, the government had its thumb on the scale on behalf of its richest citizens. Railroad magnates received federal lands at minimal cost. State government troops were provided by local and state governments to prevent strikes and reduce labor unrest. Still, despite its contradictions—even its hypocrisy—laissez-faire came to reign as a kind of official ideology of the era.

  American politics in the years before and during the Civil War had been marked by high idealism—elevated debates about the meaning of democracy, the nature of labor, and the future of the nation. By the end of the war, with three quarters of a millio
n dead on the two sides, Americans were understandably exhausted at the prospect of further ideological struggles between the political parties. In the period from 1870 to 1900, Republican and Democratic policies were often indistinguishable. James Bryce, an English aristocrat who wrote a book about his own Tocqueville-like tour of the United States in the late 1880s, noted that “neither party has any principles, any distinctive tenets.” “All has been lost,” he wrote, “except office or the hope of it.” Both parties claimed to champion the interests of the common citizen, but both parties were most responsive to business interests.

  President Grant, the Civil War general who was intimately familiar with Lincoln’s reasons for waging war and his hopes for the nation’s future, seemed to have quickly forgotten his predecessor’s legacy. He openly hobnobbed with James Fisk, the financier who controlled the Erie Railroad, and other business leaders who were described by contemporary journalists as “robber barons.” The Republican program of “internal improvements,” most notably land grants to support railroad construction, cemented a new and often corrupt alliance between the party and business interests, the latter eager to gain access to the government’s millions. The Republican Party in turn increasingly tapped its rich business friends for the growing sums of money needed to run political campaigns.

  The Democrats may have attacked Republicans as the party of business, but they increasingly interpreted their own Jacksonian heritage in light of the newfangled laissez-faire doctrines. While ostentatiously championing the cause of the common people, they were prepared to do little for them. After defeating the Republican candidate in 1884, Democratic president Grover Cleveland filled his cabinet with businessmen and corporate attorneys and, in a wholehearted embrace of laissez-faire views, stood steadfast against government intervention in the economy to support the disadvantaged. In words that formed a striking contrast to Lincoln’s famous closing lines of the Gettysburg Address, Cleveland affirmed, “Though the people support the Government, the Government should not support the people.” So much for government “for the people.”

  Moreover, the laissez-faire doctrines not only influenced the executive branch and Congress, but had an even more profound influence on the federal judiciary. As the century wound to a close, even as the states and the federal government slowly began to take action to control the excesses of the railroad magnates and the trusts, the Supreme Court consistently ruled that government-chartered corporations were entitled to the same privileges as individual American citizens. Regulation of corporations was rejected as an unjust attempt to deprive them of “life, liberty, or property without due process of law.” In 1895 the US Supreme Court ruled in United States v. E. C. Knight that the Sherman Antitrust Act—explicitly designed to prevent unfair restraint of trade and monopolies—could not outlaw monopolies in manufacturing. The effect was essentially to gut the act. In Lochner v. New York, in 1905, the Court in a similar spirit struck down a New York state law designed to limit the workweek of bakers to no more than ten hours per day or sixty hours per week.

  In the course of a generation, American social Darwinists had in effect rewritten the nation’s social contract and reinterpreted the country’s founding documents as laissez-faire charters enshrining economic freedom as an absolute right of individuals and corporations, empowering the “fit” to prosper while consigning the “unfit” to “deserved” suffering and presumably eventual extinction. In the process, Lincoln’s dream of a middle-class society had all but disappeared. In its place was a new vision eulogized by industrialist Andrew Carnegie.

  Carnegie’s Gospel of Wealth turned Lincoln’s dream on its head. In Lincoln’s America, the underlying principle of economic life was widely shared “equality” of opportunity, based on the ideals set forth in the Declaration of Independence. In Carnegie’s America, the watchword was inequality and the concentration of wealth and resources in the hands of the few. Whereas in Lincoln’s America government was to take an active role in “clearing the path” for ordinary people to get ahead, in Carnegie’s America the government was to step aside and let the “laws of economics” run their course. Whereas in Lincoln’s America the laborer had a right to the “fruits of his labor,” in Carnegie’s America the fruits went disproportionately to the business owner and investor as the “fittest.” Whereas in Lincoln’s America the desire was to help all Americans fulfill the dream of the “self-made man,” in Carnegie’s America it was the rare exception, the man of unusual talent, that was to be supported. Whereas in Lincoln’s America the engine of progress was the laboring of all Americans, in Carnegie’s America the true engine of progress was the industrial magnate. Whereas in Lincoln’s America government was to be on the side of the laborer, in Carnegie’s America government was to be on the side of corporate America.

  Not everyone accepted every detail of Carnegie’s Gospel of Wealth. But in its broad themes, it reflected ideas that enjoyed wide social and political acceptance in late-nineteenth-century America and would enjoy a revival in the twentieth and the twenty-first centuries. For decades to come, the struggle over the government’s economic policy would essentially boil down to the question: which was the true vision of America, Carnegie’s Gospel of Wealth or Lincoln’s dream of a middle-class society?

  Nine. POSITIVE GOVERNMENT

  THE LINCOLN LEGACY

  AT THE TURN OF THE TWENTIETH CENTURY, Theodore Roosevelt became the first president, and arguably the first national politician, to give voice to a rising new national consciousness of the injustices, corruption, and abominable conditions of life for the working class under the new American industrial economy. Roosevelt, scion of a wealthy New York family, former governor of New York, and the youngest man to assume the nation’s highest office, spoke in a language that the citizens of America’s urban North could understand.

  Roosevelt, who as a little boy had viewed Lincoln’s 1865 funeral procession from his family’s home in New York City, proudly told reporters that he kept a portrait of Lincoln behind his presidential desk. “When I am confronted with a great problem,” he explained, “I look up to that picture, and I do as I believe Lincoln would have done.” He also kept a lock of Lincoln’s hair in his ring—a relic he got from his secretary of state John Hay, who had once been assistant private secretary to Lincoln himself.

  Roosevelt felt comfortable pursuing what he called a “Jackson-­Lincoln theory of the presidency,” meaning that he would be an active executive prepared to do even what Congress was reluctant to approve. Because, he insisted, Lincoln and Jackson had done the same. Although Lincoln and Jackson had different beliefs about slavery and economic policy, they both believed that the president should use his power directly to promote the general welfare. Jackson used this power to destroy the national banking system. Lincoln used this power to restore the national bank and to manage the conduct of the Civil War. Roosevelt said Lincoln practiced what he called “tempered radicalism,” and so would he.

  President Theodore Roosevelt speaks at the Lincoln log cabin in Hodgenville, Kentucky, on February 12, 1909, the Lincoln centennial and the day the outgoing president (and devoted Lincoln admirer) pledged the sacred birthplace site to the federal government.

  NATIONAL PARK SERVICE

  Roosevelt self-consciously presented himself as the legitimate heir to Lincoln’s political philosophy. He declared himself committed to government “for the people” rather than for the corporations or the wealthiest Americans. Roosevelt painted in bold public strokes. He famously called the presidency a “bully pulpit” (the word bully being his particular slang for “great” or “wonderful”), and he used it in this fashion just as Lincoln, in a more reticent day, used so-called public letters to speak directly to the general public. In his first State of the Union message, Roosevelt said, “The tremendous and highly complex industrial development . . . brings us face to face . . . with very serious social problems.” The “old laws, and the old customs . . . once quite sufficient to regulate the accu
mulation and distribution of wealth” were “no longer sufficient.”

  Roosevelt’s commitment to use the federal government to tackle the nation’s “serious social problems” was put to the test when 140,000 coal miners went on strike in May and June 1902. The whole country suffered under the absence of coal, which was then the principal source of heat for American homes, businesses, and public facilities. What began as a tolerable absence in the summer months would become dire in the fall. Roosevelt faced a difficult national problem, as long as the strike continued with little promise of a settlement. By October one journalist described the strike as “the most formidable industrial deadlock in the history of the United States.”

  The owners of the coal mines were adamantly opposed to negotiating with the union and expected to be supported by a Republican probusiness administration in Washington. But Roosevelt was a new kind of Republican president. He interjected himself into the conflict on October 3, 1902, by inviting both the owners and the union leaders to come to Washington to discuss their differences with him. The union leaders were eager to meet, and the owners reluctantly agreed. The president greeted the two parties with the statement that there are “three parties affected by the situation in the anthracite trade—the operators, the miners and the general public.” Roosevelt said he spoke “for neither the operators nor the miners, but for the general public.”

  Despite Roosevelt’s efforts to broker a deal, the mine operators rejected all suggestions for government intervention, and the strike went on. As winter weather arrived, the public was still without heat, and, not surprisingly, public opinion turned against the mine owners. With public sentiment supporting him, Roosevelt enlisted business leader J. P. Morgan to persuade the owners to settle the dispute by agreeing to accept a decision of a Federal Government Arbitration Commission. The owners reluctantly agreed. The Arbitration Commission ultimately awarded the miners a retroactive wage increase of 10 percent as well as a reduction in daily work hours from ten to nine. For Roosevelt and his supporters, this was a confirmation that Lincoln’s idea of taking positive government action for the people was possible in twentieth-century America.