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Corporate Power Brought Progress, Not Oppression
Ubiquitous lies about “robber barons” reflect larger distortions about the Gilded Age, in which they reshaped the country. While leftist historians have always derided the era following the War Between the States as a time of corruption and complacency, no single generation in human history raised living standards more rapidly, absorbed and assimilated comparable waves of immigration, settled more vast and remote frontiers, built as many new states and glittering cities, or brought a nation so quickly to the top rank of world power.
In the introduction to their book The Confident Years, about U.S. life from 1865 to 1914, the editors of American Heritage magazine enthused, “It was a period of exuberant growth, in population, industry and world prestige. As the twentieth century opened, American political pundits were convinced that the nation was on an ascending spiral of progress that could end only in something approaching perfection. Even those who saw the inequity between the bright world of privilege and the gray fact of poverty were quite sure that a time was very near when no one would go cold or hungry or ill clothed. These were indeed the Confident Years.” In other words, an era of rampant capitalist power that saw the emergence of giant corporations that touched the lives of every American corresponded with the most dynamic and dazzling achievements in our history.
Of course, the period also witnessed a surge in radicalism (among both agrarian populists and urban unionists) and a good deal of labor unrest. But Harvard historian Crane Brinton pointed out that revolutionary sentiments generally develop in periods of long-term economic progress, not abject deprivation. When business produces a sharp increase in living standards, the “revolution of rising expectations” leaves workers and farmers impatient for more rapid advancement.
The working class, in fact, benefited mightily from the explosive growth of the Gilded Age. As Gary Walton and Hugh Rockoff document in their History of the American Economy, between 1860 and 1890 real wages increased by a staggering 50 percent in America. Meanwhile, the average workweek shortened, meaning that the real earnings of the American worker increased by something more like 60 percent in just thirty years…
Corporate Growth Brings Cheapter Goods, With Better Jobs
Thomas J. DiLorenzo, economics professor at Loyola College in Maryland, highlights the deeper impact of corporate expansion. “Capitalism improves the quality of life for the working class not just because it leads to improved wages but also because it produces new, better, and cheaper goods,” he writes in his 2005 book How Capitalism Saved America. “When Henry Ford first started selling automobiles only the relatively wealthy could afford them, but soon enough working-class families were buying his cars.”
The efficiency and productivity made possible by corporate organization gave typical Americans a range of choices and an economic power unimaginable for prior generations. Federal Reserve Board economists W. Michael Cox and Richard Alm make this clear in their book Myths of Rich and Poor:
A nineteenth-century millionaire couldn’t grab a cold drink from the refrigerator. He couldn’t hop into a smooth-riding automobile for a 70-mile-an-hour trip down an interstate highway to the mountains or seashore. He couldn’t call up news, movies, music and sporting events by simply touching the remote control’s buttons. He couldn’t jet north to Toronto, south to Cancun, east to Boston or west to San Francisco in just a few hours… He couldn’t run over to the mall to buy auto-focus cameras, computer games, mountain bikes, or movies on videotape. He couldn’t escape the summer heat in air conditioned comfort. He couldn’t check into a hospital for a coronary bypass to cure a failing heart, get a shot of penicillin to ward off infection, or even take aspirin to relieve a headache.
Jeremiads about the “horrifying” gap between rich and poor miss this point — that poor people in America’s twenty-first century enjoy options and privileges that even the wealthiest couldn’t claim a hundred years ago. Far from oppressing the working class, the corporate system has vastly improved the purchasing power of all Americans. Cox and Alm note that a worker in 1900 labored two hours and forty minutes to earn the cost of a three-pound chicken; in 1999, a mere twenty-four minutes of toil could buy him the bird. If anything, the growth in rewards for working have only accelerated in the past fifty years. In 1950, typical workers put in more than two hours to afford 100 kilowatts of electricity; by 1999, the cost had dropped to fourteen minutes…
The False Choice of “People vs. Profits”
Adam Smith defined capitalism more than two hundred years ago in The Wealth of Nations, describing the essence of the system as a series of mutually beneficial agreements: “Give me that which I want, and you shall have this which you want.” This captures the essential fairness and decency of the free-market system, which relies on voluntary associations that enrich both parties.
Concerning the process of industrialization, which saw millions of workers empowering the engines of major corporations, the great economist Ludwig von Mises trenchantly observed:
The factory owners did not have the power to compel anybody to take a factory job. They could only hire people who were ready to work for the wages offered to them. Low as these wage rates were, they were nonetheless much more than these paupers could earn in any other field open to them. It is a distortion of facts to say that the factories carried off the housewives from the nurseries and the kitchens and the children from their play. These women had nothing to cook with and to feed their children. These children were destitute and starving. Their only refuge was the factory. It saved them, in the strict sense of the term, from death by starvation.
The same process applies to newly opened factories throughout the developing world today, despite the efforts by antiglobalist and anticorporate activists in the United States to obliterate the only jobs that keep suffering millions from a return to misery and destitution…
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Michael Medved
“The Power of Big Business Hurts the Country and Oppresses the People”
The 10 Big Lies About America
