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The Labor And The Capital In The Era Of “Gilded Age” In The USA

The Labor And The Capital In The Era Of “Gilded Age” In The USA


The last decades of the XIX century proved fatal to the United States, which turned out from mediocre, the peripheral countries in a first-class world power. In this regard, the political life of the American society is of quite a natural interest.

It is believed that the modern American economy was built during the “Gilded Age” – the era of rapid economic and population growth after the U.S. Civil War and the Reconstruction of the South. The name comes from a book of Mark Twain and Charles Warner’s “Gilded Age” and plays with the term “golden age”, which in American history was the gold-plated only on the surface.

In the 1870s and 1880’s the economy as a whole, and wages, wealth, national product and capital in the United States grew at the fastest pace in history. So between 1865 and 1898 wheat crops grown by 256%, corn – by 222%, coal – by 800%, and the total length of railways – by 567%. A corporation has become the dominant form of business organization. By the early twentieth century, per capita income and industrial production in the U.S. has become the world’s highest. Per capita income in the United States doubled the German and French, and 50% – the British. (Kirkland). In an era of technological revolution businesses built in the Northeast U.S. new industrial city-forming plants and factories, which employ workers from different European countries. Multimillionaires such as John D. Rockefeller, Andrew Mellon, Andrew Carnegie, John Morgan, Cornelius Vanderbilt, Astor family, acquired the reputation of the robber barons. The workers began to coalesce into yet smaller unions such as the American Federation of Labor. (Arnesen) 

The emergence and development of the labor movement in the U.S.

“Gilded Age” was based on industrialization, especially in the development of heavy industry: factories, railroads, coal mines. Steel production in the U.S. during this period exceeded the total production in the steel industry, the UK, Germany and France. The first transcontinental railroad U.S., which was opened in 1869, made it possible to deliver cargo and passengers from the East Coast to the West in six days. Total length of American railroads between 1860 and 1880 increased three-fold, and by 1920 – three times more. The need to finance large industrial plants and railroads stimulatde consolidation of capital on Wall Street. By 1900, this process resulted in the formation of new large corporations in most industries, the trusts. (Ambrose)

Peculiarities of the “Gilded Age” was all the greater degree of mechanization of production in order to lower production costs. Frederick Taylor noted that labor productivity in the steel industry could be improved if the introduction of mechanization of works make fewer transactions in less time. This technological innovation have increased the speed and mechanisms to reduce dependence on wage labor factories. Mechanization also allowed to hire low-skilled workers who fulfill the same simple operations under the direction of experienced craftsmen and engineers. Skilled workers were needed for engineering plants. Number of wage workers, both skilled and unskilled, remuneratively grew.

The total number of the working class on the eve of the U.S. Civil War, reached 2 million, of which approximately 800 thousand were skilled workers. On the formation of the proletariat, on the one hand, the presence of a large fund of public lands in the West has a huge impact, and, on the other hand, it triggered the constant influx of immigrants (U.S. Bureau of the Census).

We should say that the standard of living of workers was largely dependent on the geographic area of the country. In the West, labor was valued at 1.5 times higher than in the East, where wages directly affect the flow of immigrants from Europe.

The situation of immigrant workers has been particularly severe. They became victims of ruthless exploitation. Quite often, there have been cases of starvation. “New York Daily Tribune” reported, or example, about the death from starvation of an entire family: a husband, a wife and a 8-year-old child, and about the mother’s attempt to kill her 3-year-old son, as she had nothing to feed him with.

In the same newspaper, from March 27th, 1851 weekly budget costs to the family of five people, including three children, was cited – $ 10 dollars 57 cents. Mr. Greeley noted on this budget, “The question is, should I take life of these working people too comfortable? And where is the money for entertainment … Sunday walks by the river to get some air, and where to get the money for a doctor or pharmacist, for a place in the church, books and musical instruments?” This budget, according to Greeley, provided only the most meager existence (Neil).

However, such salaries were quite rare even among skilled workers. For comparison, we note that the average weekly income of  New York businessman was 1330 dollars, that is, 100 times more than was earned by skilled workers.

It should be noted at the same time that the labor movement in the 50s of the XIX century was mainly economic in nature and does not go beyond trade unionism. From 1853 to 1860 there was about 10 major national trade unions (in 1860 there were already 27). Success motion for a shorter working day was achieved. Labor strikes have become a permanent feature of life in the industrial centers of the country. Newspapers reported on strikes of miners, printers, railway workers. For two years (1853-1854), the country has about 400 strikes.

In the 40’s Fourierists increased their activity. Across the country, Fourierist societies were created. In their ranks there were about 200 thousand of members.

American Fourierists were actively engaged in advocacy, giving lectures, participatin in discussions, and sought to practically implement the ideas of their teacher, and came to the creation of the phalanges. The first of these was the “Sylvania” (Pennsylvania), founded in 1843, the newspapers reported that several innovative and energetic workers, desperate to get help from people with capital, decided to create an association on the basis of their own labor. The existence of this community was short-lived. Because of financial difficulties, it was dissolved in August 1844.

Of all the movements of this kind Fourierism had the most success, has acquired a truly national scope, but yet the movement suffered a complete collapse. Yet experiments of utopian socialists in the U.S. contributed to the spread of socialist ideas among the workers, and this is their historical significance.

Thanks to the efforts of the Marxists in Washington in April 1853, a national association of workers, which began to publish the newspaper “National Uorkingmenz advokeyt” (“National Defender of the workers”), was created. Native Americans along with the emigrants were in this organization. Weydemeyer noted in connection with the establishment of this organization, that its appearance indicates the growth of class consciousness of the workers (Arnesen).

80 years were characterized by storm speeches, boycotts. “Central” issue around which most of the speakers were united was that of the 8-hour working day. In this movement for the 8-hour working day hundreds of thousands of workers were involved. [7] The most powerful national organization of workers was incurred in 1869 – “Order of the Knights of Labor”. Great success in the organization of Negro workers was achieved by “Knights of Labor”.

In 1881, the Federation of trade unions and workers’ associations of the United States and Canada was organized, which was renamed after five years in the American Federation of Labor. Among the founders of the new trade union center a prominent role was played by S. Gompers and A. Strasser. In contrast to the “Order of the Knights of Labor”, the AFL is an amalgamation of the top of the working class. (Livesay)

Worldwide activities of the labor movement was the beginning of reform and recognition in many countries, thee rights of workers in the two-day holiday, paid vacation, and 8-hour working day. Recent history knows many labor activists who have gained revolutionary change from employers and the state, and these social gains are now considered fundamental. For example, Mary Harris Jones, better known as Mother Jones, and the National Catholic Welfare Council played a major role in the campaign to ban child labor in the U.S. in the early 20th century. Active and vacancy motion is recognized as an important element of democracy and is considered useful for the economy. 


The industrial revolution has created not only new forms of work organization, but also a new kind of subject of work – the organized worker, interests of which were represented by the trade union. The unions have set before the employers not only tasks of the organization work, but also organization of the system of labor relations. It is at this stage that the basis of the emerging human resource management system of law came out, and the main tasks of specialists working in this field, the task of regulating the relationship between the employer and the employee were fulfilled.

In the first phase of development (1990-1930) personnel management did not stand out in the structure of management as an independent phenomenon. Such feature was caused by domination of technocratic approach to the analysis of all the processes (economic, social and labour), the industrial revolution. The main practical goal of the period was the task of organization of large numbers of people gathered at the factories. The need for mass production of serial products identified and features views of the work, its organization and evaluation system. The main task of the management was the task of raising the productivity of labor, the primary control mechanism was a discipline, the main product of management – ideal performer of a given function.

Despite the fact that the control problems such as problems of work organization and interaction of people have a long history traditionally accepted to consider the dynamics of personnel management in the length of time a century – from the beginning of the twentieth century (ie, namely the“Gilded Age”) to the present.

Scientific management school, or a school of scientific organization of labor, in frames of which a system of production organization called by the name of its author, “Taylorism” was created in the United States in a period from 1885 to 1920. Taylor, an American engineer, businessman, scientist, using an abundance of unskilled labor (migrants) in labor market, effectively solved the problem of the separation of complex skilled labor into small operations, each of which does not require high qualifications, but cooperation of relatively simple workflow produces complex products.

Taylor’s approach to the analysis of movements of workers, the elimination of superfluous and awkward movements, scientific rationing of labor, accounting and control and other modern systems are the basis for the modern organization of labor. The level of implementation of Taylor approaches are different; among them is direct manufacture, production units, workplace of production workers. F. Taylor was criticized for the fact that he turns the worker into an appendage of the machine. In his later writings, he spoke of the need to develop a conscious attitude of workers to the input innovation, stimulate initiative, diligence, integrity, training, working, caring for them, explaining the objectives of the organization. Although these suggestions have not attracted the attention of his contemporaries, Taylor system was remembered as “sweating system”. Without his work the pace of scientific and technological progress would obviously slowed. For example, in modern Japanese system of production organization redundant, and even more awkward motions are eliminated, work quota setting is brought on the highest level, the problems of separation and specialization, cooperation and coordination of work, timing of production  are solved but it’s all done with the employees themselves, with their interested and encourage participation.



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