America is in a new Gilded Age, or so the headlines say. “It’s Beginning to Look a Lot Like the Gilded Age,” Bloomberg warned in February, noting that the late nineteenth century “was a time of exploding economic inequality, stagnant living standards, growing concern about monopolies, devastating financial crises ... brazen political corruption, frequent pronouncements that the American republic was doomed, and seemingly unending turmoil over race and national identity.” Even some Republicans agree: “Back then you had iconic innovators who built these dominant companies and amassed great fortunes,” Brad Mehlman, once George W. Bush’s assistant secretary of commerce for technology policy, told The Washington Post last year. “You’ve got that again today. You saw income inequality spike. The last time it was as high for the top 10 percent as it is today was the Gilded Age.”
These comparisons predate the Trump administration. They greeted the publication of Thomas Piketty’s Capital in the Twenty-First Century back in 2014, when Politico magazine dedicated a full issue to “The New Gilded Age.” And surely they will outlast Trump, given that the aforementioned conditions only seem to be worsening. But are we really living in a new Gilded Age, or is this just the status quo for America? The answer lies in how society responds to today’s troubles.
“I think of it more conceptually than maybe statistically, but in the Gilded Age inequality was a function of the Great Leap Forward, of industrial revolution and economic growth, which happened unhinged from other kinds of compensating social institutions or mechanisms of wealth redistribution,” said Leon Fink, a distinguished professor of history at the University of Illinois-Chicago and the author of The Long Gilded Age. “So it was a great explosion of wealth creation, combined with a really immature or even invisible welfare state. It just cemented the initial inequalities of a very new and wealthy class.”
In 2018, we aren’t witnesses to a new industrial revolution, but we are experiencing a digital one. The new monopolies live in Silicon Valley. While their advances aren’t as tangible as the westward march of the railroads and the early growth of mass production, they have reshaped our lives, and the consequences are newly apparent. Amazon will deliver most anything to your door within two days—or perhaps even two hours, if you live in one of the wealthiest cities in America—but doesn’t pay many of its workers a living wage. Uber will pick you up within minutes and take you anywhere for the fraction of the cost of a taxi cab, but its drivers are treated as disposable. Facebook and Google have made the world more interconnected and informed, but at the cost of users’ privacy (and sometimes the truth).
Historical comparisons are rarely precise. Income inequality today is indeed at levels that recall the Gilded Age. But labor conditions don’t compare to those depicted in Upton Sinclair’s The Jungle, and the legalized political corruption encouraged by the Supreme Court’s Citizens United decision isn’t nearly as brazen as the machine politics of the late 1800s. The key difference, however, is that there was no welfare state back then: It took the grotesque inequalities of the era to inspire the necessary social reforms.
“The Gilded Age also saw ideas that challenge the conflict between economic growth and political institutions,” said Fink. Reformers and revolutionaries both forced these issues into the public square: Fink cites the socialist movement, which picked up momentum in the late nineteenth century, and the Knights of Labor, a radical labor organization whose affiliates organized black workers along with white workers. The Knights of Labor in particular risked violence to unite workers across racial lines in opposition to low wages, inhumane working hours and other indignities. The late nineteenth century was an era of corruption and inequality, sure, but it also produced the Haymarket riot.
The welfare state eventually emerged from this struggle. “The period from the 1930s, really up until the 1970s, is kind of considered the key moment when we had a fairly expansive welfare state. Although it was not nearly as expansive as what you saw in Western Europe,” said Premilla Nadasen, a professor of history at Barnard College and the author of Welfare Warriors: The Welfare Rights Movement in the United States. “The various components of the New Deal programs, like the Social Security Act, which includes both the Social Security program as we understand it now but also the various welfare programs; the Fair Labor Standards Act, which guaranteed minimum wages for workers, which had not been the case before; the National Labor Relations Act, which gave workers the right to organize and bargain collectively: Those are some of the main pillars of the welfare state.”
Politicians built the welfare state up, and they broke the welfare state apart—a devolution that began, Nadasen said, with the Carter administration’s deregulation of the airline industry, and which has continued nearly to the present day. From Ronald Reagan’s war on air traffic controllers to Bill Clinton’s welfare reform, the reach of the welfare state has been deliberately shortened by Democratic and Republican presidents alike. It might be flippant to call our present moment “a new Gilded Age,” but the phrase reflects a certain understanding. We’ve reverted, and the process didn’t begin with Trump.
But the Trump administration does pose a specific threat to the welfare state. His cabinet has prioritized attacks on the very regulations and policies that members of organizations like the Knights of Labor died to put on the books. Trump’s labor secretary has proposed relaxing restrictions on hazardous labor performed by minors; the USDA has proposed speeding up line-processing in hog plants. The National Employment Law Center reported on Tuesday that OSHA—the agency charged with enforcing workplace safety rules—has reduced enforcement since Trump’s election. Republicans, emboldened by Trump, have attacked food stamps and health care reform.
The key to stopping this reversion may lie in the process that formed the modern welfare state. Politicians in the late nineteenth and early twentieth centuries didn’t create and pass welfare policies because of sudden moral epiphanies. Rather, Nadasen credits direct action for pushing the dial. “Those reforms really happened because of massive organizing and protest in the streets. And it started with labor organizing. There were tenants and sharecroppers who were organizing, there were unemployed individuals who were organizing. There were textile workers who were organizing,” she said. It’s this pressure, she added, that drove Franklin Delano Roosevelt to eventually craft the New Deal.
Though the labor movement has weakened significantly, there are still some signs of life. Teachers’ strikes in West Virginia, Oklahoma, Arizona, Kentucky and elsewhere put labor back in the spotlight; at UPS, 260,000 Teamsters members are ready to strike if management does not meet their demands for their new contract. But other, equally important efforts take place outside the traditional boundaries of organized labor. The teachers’ strikes were grassroots efforts, mostly organized in secret Facebook groups, and participating educators didn’t all belong to unions. Domestic workers, fast food workers, and farmworkers have long organized outside the trade union movement, just as they labored outside the protections of the welfare state.
In these latter movements, Nadasen sees the greatest reason for hope. They unite documented and undocumented workers and are led, mostly, by women of color. For these reasons, they explicitly challenge yet another parallel between 2018 and the Gilded Age: nativism. America’s economic explosion in the nineteenth century didn’t just further enrich the wealthy; it drew immigrants, and white Americans didn’t exactly embrace them. From anti-Catholic prejudice to the Chinese Exclusion Act of 1882, white Americans, when confronted with economic trends that benefited a few and left everyone else behind, tried to close ranks.
Added Fink, “In the respectable white sectors of society, these immigrant groups were kind of seen as lesser races. The other issue was the legacy of slavery and an utterly botched, incomplete Reconstruction, which continued to fester.” Even now, Southern states still lag behind economically, and Americans of color still bear the brunt of America’s wealth inequality. The racial wealth gap isn’t shrinking with the progression of time. It’s growing.
“I think we thought that the period of the welfare state was kind of normative for American life, that this is indeed what the United States is: a nation that provides for its poorest and the neediest and protects the rights of the weakest,” Nadasen said. “But I think part of what people are looking at now is how that 50-year period was really a kind of a blip in American history, and are asking the question of whether or not that norm of wealth inequality that was so prevalent during the Gilded Age is actually what we’re returning to.”
But it doesn’t have to be this way. All this worry about the prospect of a new Gilded Age can obscure the fact that there are solutions to many of the problems informing these comparisons. Policy experts and analysts already have begun to fill in the gap: A federal jobs guarantee no longer sounds quite like a fantasy. A sovereign wealth fund, as outlined recently by Ryan Cooper at The Week, could allow the state to collect and redistribute its collective wealth to public health, public works, or other social goods. These redistributive efforts could accompany a renewed trust-busting focus in Congress. The struggle to prevent another Gilded Age doesn’t suffer from a lack of political imagination. It suffers from a lack of political will.