1. Professor Roxalyn Baxandall
Stephen Cheng
US Labor History
Due: May 16, 2012 (final research paper)
The Causes and Significance of the Gilded Age
Introduction
In terms of the United States of America, along with other countries such as
Germany after its unification in 1871, the late nineteenth century was a period of rapid
and advanced economic development. Among other processes and trends associated with
such development, corporations established themselves, financial institutions such as
banks and stock and bond markets took on more crucial economic roles, a socioeconomic
class system specific to capitalism took shape, and a gap between wealthy and destitute
widened. This period in the history of the United States was and still is commonly
referred to as the “Gilded Age,” as christened by the novelist Mark Twain.
The Gilded Age represented the height of capitalist economic development in the
US as demonstrated by aforementioned examples like the burgeoning rich-poor gap (a
sign of the general law of capitalist accumulation at work). It was a product of the
conclusion of the American Civil War, which redefined the US not just politically but
also economically (i.e. the destruction of slavery, etc.), thus allowing for a transition from
an unevenly developed and distorted form of capitalism (a slave labor force in the
southern US which grew cash crops for plantation owners versus merchant and industrial
capital that tended to employ wage laborers in the northern US) to a more “pure” and
“complete” form of capitalism in the later nineteenth century.
1

2. Capitalism in the nineteenth century US entailed extensive industrialization
which, furthermore, entailed a socioeconomic group of people who must work for
monetary compensation (i.e. wages) in order to survive. The industrial revolution, along
with the construction of a national railroad system and the rapidly growing prominence of
corporations and finance, represented the height of capitalist economic development at
this point in US history. Yet the roots for these trends that were characteristic of an
industrial form of capitalism in the country are to be found in the evolution of
socioeconomic relationships during the eighteenth and nineteenth centuries.
The beginnings of capitalism in the United States are associated with changes in
agricultural socioeconomic relationships that simultaneously occurred. In the context of
English history, historians Ellen Meiksins Wood and Robert Brenner attribute the earlier
development of capitalism in England to the fundamental shift in the nature and structure
of agriculture. In rural England, the relationship between noble and serf gave way to a
“landlord/capitalist tenant/wage laborer structure,” thus demonstrating a general turn
from feudalism to capitalism.1
A discussion of the origins of capitalism in England is
necessary in order to understand the agricultural origins of the transition from a pre-
capitalist and/or non-capitalist socioeconomic system to a capitalist one. Later on, such
an understanding, originally grounded in the history of England, can be applied to the
history of the US.
English economic history: An analytical detour
In general terms, Wood writes,
1
Robert Brenner, “Agrarian Class Structure and Economic Development in Pre-Industrial Europe,” in
T.H. Aston and C.H.E. Philpin (editors), The Brenner Debate: Agrarian Class Structure and Economic
Development in Pre-Industrial Europe (Cambridge University Press, 1987) 48-49.
2

3. The capitalist system was born in England. Only in England did capitalism emerge, in the early
modern period, as an indigenous national economy, with mutually reinforcing agricultural and
industrial sectors, in the context of a well-developed and integrated domestic market.2
In this capsule statement, Wood not only asserts that England was the birthplace of
capitalism but also mentions key and relevant features of the aforementioned “capitalist
system” such as the “indigenous national economy,” “mutually reinforcing agricultural
and industrial sectors,” and a “well-developed and integrated domestic market.” Implied
in the statement is that a capitalist socioeconomic system necessarily establishes itself
and operates within a national context (a statement that is borne out today given that
virtually every nation-state in the world has a capitalist economy), needs a domestic or
“home” market, and requires agricultural and industrial sectors that assist each other in
their activities.
Such factors are important for understanding why Wood and Brenner hold the
view that capitalism had its beginnings in English agriculture. Without a socioeconomic
revolution in the countryside in which feudal relationships transform into capitalist
relationships, there cannot be a “well-developed and integrated domestic market” and
“mutually reinforcing agricultural and industrial sectors” that serve as the foundations for
a functioning capitalist system. Since these foundations can only take shape, exist, and
operate after the establishment of an agrarian form of capitalism, the process that
contributes to the development of the domestic market, coexisting and cooperating
agricultural and industrial sectors, and capitalism as a whole is essential in terms of
understanding the origins of capitalism. This process is an essential part of Brenner’s
thesis.
2
Ellen Meiksins Wood, The Pristine Culture of Capitalism: A Historical Essay on Old Regimes and
Modern State, (London, New York: Verso, 1991) 1.
3

4. The thesis on the English origins of capitalism originates from the “Brenner
Debate” in which Brenner argued,
[B]y the end of the seventeenth century, English landlords controlled an overwhelming
proportion of the cultivable land – perhaps 70 – 75 per cent – and capitalist class relations were
developing as nowhere else, with momentous consequences for economic development. In my
view, it was the emergence of the ‘classic’ landlord/capitalist tenant/wage-labourer structure
which made possible the transformation of agricultural production in England, and this, in turn,
was the key to England’s uniquely successful overall economic development. With the peasants’
failure to establish essentially freehold control over the land, the landlords were able to engross,
consolidate and enclose, to create large farms and to lease them to capitalist tenants who could
afford to make capital investments.3
According to Brenner, the “landlord/capitalist tenant/wage laborer structure” that serves
as the core relationship for an agrarian capitalist system arose due to the inability of serfs
or former serfs to become free-holding farmers within the countryside. Had a system of
“freehold control” been established over the land, each farmer or farming household
probably would have had a tract of land which would allow for adequate self-subsistence
as opposed to a division of labor centered around growing crops for the goal of exchange
for other goods (in the case of the latter, signs of the beginnings of commodity production
and exchange). But as Brenner notes, no such effort by farmers to control the land as
free-holders succeeded.
Instead, landlords were able to establish control via enclosure over large tracts of
land and thus force ordinary farmers off the land. Consequently, these farmers either
became rent-paying tenants or wage laborers in the urban communities. Since enclosure
of the land meant that landlords held control over vast amounts of land, the land could
thus be used for purposes such as commodity production. In the case of these landlords
3
Robert Brenner, “Agrarian Class Structure and Economic Development in Pre-Industrial Europe,” in T.H.
Aston and C.H.E. Philpin (editors), The Brenner Debate: Agrarian Class Structure and Economic
Development in Pre-Industrial Europe (Cambridge University Press, 1987) 48-49.
4

5. who acquired numerous acres of land, such an opportunity appeared in form of the
raising of sheep for wool. The wool was a necessary raw material for the growing textiles
industry. Therefore landlords could produce and sell wool and thus, in concrete terms,
capitalism began in rural, feudal-turning-capitalist England as peasants found themselves
forced off the land and sheep took the place of people. Likewise, Barrington Moore, Jr.
writes to such effect,
Propelled by the prospect of profits to be made either in selling wool or by leasing their
lands to those who did and thereby increasing their rents, the lords of the manors found a variety
of legal and semilegal methods to deprive the peasants of their rights of cultivation in the open
fields and also their rights to use the common for pasture of their cattle, the collection of wood for
fuel, and the like” and “The yeomen were the chief force behind peasant enclosures. Directed
toward land for tillage, these enclosures were quite different from those of the lordly sheep
farmers. They were mainly a form of nibbling away at wastes, commons, and very frequently at
the fields of neighbors, including landlords who did not keep a sharp lookout to defend their
rights. At other times peasant enclosures were mutual agreements to consolidate plots and
abandon the system of strips in the open field. Within the limits of their situation, the yeomen too
were eager to break away from traditional agricultural routines and try new techniques in the
hope of profit […] Those who promoted the wave of agrarian capitalism, the chief victors in the
struggle against the old order, came from the yeomanry and even more from the landed upper
classes. The main victims of progress were as usual the ordinary peasants.4
In the first volume of Capital: A Critique of Political Economy, Karl Marx also refers to
the land enclosures as a historical example in a series of chapters devoted to “primitive
accumulation,” a violent, bloody, and repressive socioeconomic process which allows for
the rise and development of capitalism.5
From the English historical context to the US historical context
In terms of the US during the eighteenth and nineteenth centuries, historian
Charles Post writes about similar socioeconomic developments. Post argues that while
the antebellum northern US was capitalist, the antebellum southern US was not
4
Barrington Moore, Jr., Social Origins of Dictatorship and Democracy: Lord and Peasant in the Making
of the Modern World, (Boston: Beacon Press, 1966) 9-11.
5
Karl Marx. Capital: A Critique of Political Economy (volume one), (Penguin Books, 1990) 873-913.
5

6. capitalist.6
The existence of these fundamental socioeconomic differences between these
two regions of the country led to the outbreak of the American Civil War. Post writes
about the build-up of political, social and economic pressure and hostility which led to
the beginning of the war in 1861,
By the 1840s, the continued expansion of plantation slavery threatened the further development
of capitalism in the US, which rested on the expansion of agrarian petty-commodity production.
The growing contradictions between the social conditions of the development of capitalism and
slavery set the stage for the sharp class conflicts that culminated in the Civil War. Sharpening
conflicts between manufacturers, merchants, farmers, planters and slaves in the 1840s and 1850s
over a variety of issues – but especially the class structure of western expansion – produced a
political crisis: the collapse of the bi-sectional Whig and Democratic parties, the increasing
sectionalization of politics, and the secession crisis that culminated in four bloody years of Civil
War. The outcome of the war and nearly a dozen years of tumultuous struggles during
Reconstruction ultimately secured the social and political conditions for industrial capitalist
dominance in the Gilded Age.7
The end of the American Civil War pointed to a transformation of the US into an entirely
capitalist nation-state.
The development of capitalism in the late nineteenth century US: The American
Civil War and the Reconstruction
The causes for the Gilded Age period of US history originate from the way the
American Civil War occurred and concluded. The importance of that conflict lies in its
origins and conclusions. The war was a definitive example of the uneasy and doomed
coexistence of two fundamentally incompatible socioeconomic structures in the
antebellum US. The conclusion of the American Civil War with the victory of the Union
meant that the US path towards complete industrial capitalist development was set. In
6
Post situates the agrarian beginnings of capitalism in the antebellum northern US in Charles Post, “The
agrarian origins of US capitalism: The transformation of the northern countryside before the civil war,”
Journal of Peasant Studies 1995: 389-445. Concerning the antebellum southern US, Post writes,“Plantation
slavery in the Americas was the creature of the capitalist world market and was subject to its imperatives of
cost-cutting, but rested on non-capitalist social property relations (emphasis added),” in Charles Post,
“Plantation Slavery and Economic Development in the Antebellum Southern United States,” Journal of
Agrarian Change July 2003: 302.
7
Charles Post, “Agrarian Class Structure and Economic Development in Colonial British North America:
The Place of the American Revolution in the Origins of US Capitalism,” Journal of Agrarian Change
October 2009: 480.
6

7. order to understand the importance of the American Civil War’s conclusion in relation to
the economic development of the US during the late nineteenth century, the causes for
the war are also important to understand.
Prior to the American Civil War, the northern and southern regions of the country
had different economic systems. These economies differed in terms of their workforces
and types of production. While the northern US economy had a work force that mainly
consisted of a growing majority of wage laborers so as to accommodate and facilitate an
industrial commodity production process, the southern US economy had a primarily slave
labor force involved in an agricultural economy based on the cultivation and harvest of
cash crops such as cotton. During the late eighteenth century and the early-to-mid
nineteenth century, these fundamentally distinct economic systems coexisted. This
coexistence was an uneasy relationship which eventually and ultimately became hostile.
Although the Missouri Compromise (1820) and the Compromise of 1850 were aimed at
prolonging coexistence, such efforts proved impossible and, shortly after the 1860
electoral victory of Abraham Lincoln and the Republican party, the American Civil War
began.
A unified, or much more closely reunified, US meant that the political and
geographical boundaries of the country became the framework for large-scale capitalist
accumulation. This accumulation process encompassed not just the entire polity of the
US but also the country’s whole economy. The geographic breadth of such accumulation
is worth noting given that it would not have existed at such a magnitude if the war ended
differently. However, since the war concluded with the total military and political victory
of the Union and the destruction of the slave-based economy in the southern part of the
7

8. reunified US (not to mention the military and political defeat and destruction of the
Confederate States of America), the end of the conflict and the onset of the
Reconstruction period meant that the country was able to embark on a path of complete
capitalist development in terms of its own economy. Few or no obstacles such as a once
powerful but defunct slave-owning socioeconomic system stood in the way.
Such economic development pointed to various tendencies (some of which were
mentioned before in earlier pages of this paper) that favored the growth of US capitalism.
Some of those tendencies were:
1) the geographic expansion of the US in order to acquire natural resources, raw
materials, and land for industrial commodity production;
2) the opportunity to construct a national railway network (thus, in
terms of connecting eastern and western regions, crossing not just the entire US
but also the entire North American continent) so as to aid, expand, and quicken
travel, commodity exchange, and the shipment of commodities;
3) the increasingly important and central roles of corporate and financial
institutions in mediating large-scale commodity production and exchange,
given that factory-based industrial production required and still requires the
involvement of many people, not least of all wage laborers.
The historical periods that encompassed US capitalist development included the
Reconstruction, which lasted from the mid-1860s into the late 1870s, and the Gilded Age,
which lasted throughout the late nineteenth century from the 1870s onward and possibly
into the turn of the century and the early twentieth century as the US became not just an
advanced capitalist nation-state but also a world power that exercised political, economic,
8

9. and military force in regions beyond its borders.
The Reconstruction was an effort by the US government to subject the defeated
post-Civil War southern states to a thorough political, economic, and social
transformation and thus allow for the integration of these states into the reunified Union.
This historical period allowed for the possibility of transforming former slaves into wage
laborers or freeholding farmers. Additionally, it also allowed for the possibility of greatly
and substantially limiting the political power and wealth of the plantation owners.
However, despite the promising potential of the Reconstruction, its success was limited
and ultimately its end in 1877 proved to be ignominious. Even a Reconstruction-era
institution such as the Freedmen’s Bureau, aimed at helping former slaves integrate into
mainstream post-Civil War US society, was viewed with suspicion and contempt by
white Southerners, Northern Democrats, and some Republicans and was considered to be
an aid provider to the “undeserving” poor.8
Likewise, efforts at postwar reconciliation
between the northern and southern regions of the US papered over the question of race
and the status of former slaves in during the period of Reconstruction, as can be seen in
the attempts by Protestant ministers to promote a new sense of national unity.9
Ultimately, the Reconstruction fell short of its goals due in no small part to
opposition and indifference from various sectors of post-Civil War US society. However,
one of the key accomplishments of the Union victory in 1865, the American Civil War’s
last year, the end of slavery in the country, remained intact. In relation to the
development of capitalism in the US and its culmination during the Gilded Age, the basic
8
Chad Alan Goldberg, Citizens and Paupers: Relief, Rights, and Race, from the Freedmen’s Bureau to
Workfare (Chicago and London: The University of Chicago Press, 2007) 51.
9
Edward J. Blum, Reforging the White Republic: Race, Religion, and American Nationalism 1865-1898
(Baton Rouge: Louisiana State University Press, 2005) 136-141.
9

10. requirements of capitalism in terms of acquiring a wage labor –based workforce were
already met when the war ended with the demise of the slave system. Although freed
slaves lacked important and basic political and legal rights, so far as the system of
capitalism was concerned they constitute a source of human labor power that can be paid
for. Likewise, capitalist development entailed a large group of wage laborers, of people
who sell their labor power in exchange for wages. The US during the Gilded Age was no
exception.
The development of capitalism in the late nineteenth century US: The Gilded Age
As mentioned before, the Gilded Age marked the pinnacle of US capitalist
development in the late nineteenth century. Telltale signs included the prominence of
factory-based industrial production, the rise of an incredibly wealthy capitalist class of
industrialists and financiers, and the burgeoning population of wage laborers, otherwise
known as proletarians. In an astounding and telling observation about the rich-poor gap
that existed then, Priscilla Murolo and A.B. Chitty write,
“There are too many millionaires and too many paupers,” observed the Hartford Courant in
1883. In 1890, the richest 1 percent of Americans had a combined annual income larger than the
poorest 50 percent. Captains of finance and industry feasted at lavish banquets. The guests at one
dinner puffed cigarettes wrapped in $100 bills; at another, rare black pearls were tucked into the
oysters served as appetizers. Workers, meanwhile, scavenged for firewood.10
As leading capitalists, or captains of industry and finance (or “tycoons” or “robber
barons”), such as J.P. Morgan, John D. Rockefeller, Andrew Carnegie, and Jay Gould
came to the fore in US society, the ranks of the US wage labor force, or proletariat, rose.
Again, Murolo and Chitty observe,
10
Priscilla Murolo, A.B. Chitty, and Joe Sacco, From the Folks Who Brought You the Weekend: A Short,
Illustrated History of Labor in the United States, (New York: The New Press, 2001) 111.
10

11. As industrial capitalism expanded, so did the ranks of wage workers. By 1900, they number about
18 million, up from 6.7 million in 1870; together with their families, they added up to at least
three-quarters of the U.S. population of 76 million.11
Not surprisingly, ideologies which justified such a vast socioeconomic divide arose and
circulated. In the case of Russell H. Conwell in 1915, direct access to monetary wealth
was available to any person and, furthermore, the possession of monetary wealth was a
sign of devotion to the Christian God,
Now then, I say again that the opportunity to get rich, to attain unto great wealth, is here in
Philadelphia now, within the reach of almost every man and woman who hears me speak tonight,
and I mean just what I say. […] I say, then, you ought to have money. If you can honestly attain
unto riches in Philadelphia, it is your Christian and godly duty to do so. It is an awful mistake of
these pious people to think you must be awfully poor in order to be pious.12
However, working people begged, or rather demanded, to differ as clear-cut signs of class
struggles appeared. Workers went on strikes and other forms of mass protest. Leftist
politics developed as anarchists, syndicalists, and socialists gained popularity among
disaffected, alienated, and infuriated sections of the US population. The railroad workers’
strikes in 1877 make up one prominent historical example. The same holds true for the
Haymarket protest in 1886, in which the political left and the labor movement fought
against the capitalist class. Toward that end the Industrial Workers of the World, the
Socialist party, and later on the Communist party, took shape and became active in labor
organizing. Likewise, a more mainstream and moderate Progressive movement arose to
combat the distorting effects of an uneven concentration and distribution of wealth on the
liberal democratic, or bourgeois democratic, system of politics and government in the
US.
Concluding remarks
11
Murolo, Chitty, and Sacco, 116.
12
“Russell H. Conwell Sanctifies Wealth, 1915” in Leon Fink (editor), Major Problems in the Gilded Age
and the Progressive Era, (Lexington, Massachusetts, and Toronto: D.C. Heath and Company, 1993) 10-11.
11

12. The Gilded Age was the first sign of a dynamic US capitalist socioeconomic
system at work. While this dynamism was a hallmark of modernity in the US, it also
brought forth a barbarism of its own in the form of a type of poverty that is specific to
capitalism; namely, poverty due to a lack of monetary wealth. This period in the history
of the US, or more precisely the economic history of the country, also demonstrated the
potential and soon-to-occur reality of the US as a leading power in the world. The events
of the late nineteenth century and the entire twentieth century have proven the latter a
fact.
However, and needless to write here, the Gilded Age was a specific moment in a
historical process of capitalist development within a nation-state located in North
America. It had its roots in the development of agricultural capitalist relationships in the
late eighteenth century and early nineteenth century US. One can even add that, in the US
during the 1840s and 1850s, agricultural technologies such as the reaper helped
contribute to the growth of a wage labor class and assisted in the establishment of a
domestic market.13
Both were signs of early capitalist development in the country, and
which also confirm the arguments that Wood and Brenner made.
Although the Gilded Age was a historically specific time period, its legacy
remains relevant in the present day. Given the vast division between wealthy and poor
today and a severe crisis induced by the financial sectors of a socioeconomic system that
is still fundamentally capitalist, among other trends such as free trade agreements,
sweatshops, and austerity policies, protests in the form of Occupy Wall Street are only
appropriate and to be expected in a contemporary era which some have referred to as a
13
Charles Post, “The ‘Agricultural Revolution’ in the United States: The Development of Capitalism and
the Adoption of the Reaper in the Antebellum U.S. North,” Science and Society, Summer 1997: 216-218.
12

13. “second Gilded Age.” The anti-austerity protests in the European countries and the Arab
Spring only confirm the virtual, indeed actual, possibility of rebellion, not just on a
national scale but on an international level. The significance of the Gilded Age, then, is
anything but lacking.
13

14. Bibliography
Aston, T.H. and C.H.E. Philpin (ed.). The Brenner Debate: Agrarian Class Structure and
Economic Development in Pre-industrial Europe. Cambridge: Cambridge
University Press, 1987.
Blum, Edward J. Reforging the White Republic: Race, Religion, and American
Nationalism, 1865-1898. Baton Rouge: Louisiana State University Press, 2005.
Brenner, Robert. “Agrarian Class Structure and Economic Development in Pre-Industrial
Europe.” The Brenner Debate: Agrarian Class Structure and Economic
Development in Pre-Industrial Europe. Ed. T.H. Aston and C.H.E. Philpin.
Cambridge: Cambridge University Press, 1987. 10-63.
Fink, Leon (ed.). Major Problems in the Gilded Age and the Progressive Era. Lexington,
Massachusetts, and Toronto: D.C. Heath and Company, 1993.
Goldberg, Chad Alan. Citizens and Paupers: Relief, Rights, and Race, from the
Freedmen’s Bureau to Workfare. Chicago and London: The University of
Chicago Press, 2007.
Marx, Karl. Capital: A Critique of Political Economy (volume one). Penguin Books,
1990.
Moore, Jr., Barrington. Social Origins of Dictatorship and Democracy: Lord and
Peasant in the Making of the Modern World. Boston: Beacon Press, 1966.
Murolo, Priscilla, A.B. Chitty, and Joe Sacco. From the Folks Who Brought You the
Weekend: A Short, Illustrated History of Labor in the United States. New York:
The New Press, 2001.
Post, Charles. “Agrarian Class Structure and Economic Development in Colonial British
North America: The Place of the American Revolution in the Origins of US
Capitalism.” Journal of Agrarian Change 9.4 (October 2009): 453-483.
Post, Charles. “The agrarian origins of US capitalism: The transformation of the northern
countryside before the civil war.” Journal of Peasant Studies 22.3 (1995): 389-
445.
Post, Charles. “The ‘Agricultural Revolution’ in the United States: The Development of
Capitalism and the Adoption of the Reaper in the Antebellum U.S. North.”
Science and Society 61.2 (Summer 1997): 216-228
Post, Charles. “Plantation Slavery and Economic Development in the Antebellum
Southern United States.” Journal of Agrarian Change 3.3 (July 2003): 289-332.
14

15. “Russell H. Conwell Sanctifies Wealth, 1915.” Major Problems in the Gilded Age and
the Progressive Era. Ed. Leon Fink. Lexington, Massachusetts, and Toronto: D.C. Heath
and Company, 1993. 10-11.
Wood, Ellen Meiksins. The Pristine Culture of Capitalism: A Historical Essay on Old
Regimes and Modern State. London, New York: Verso, 1991.
15