“The ‘tramp’ comes with the locomotive, and almshouses and prisons are as surely the marks of ‘material progress’ as are costly dwellings, rich warehouses, and magnificent churches.”1
—Henry George
No one better embodied the romance of bourgeois heroism than Andrew Carnegie. So it is sobering to hear the famous steelmaker say this: “As I know them, there are few millionaires, very few indeed, who are clear of the sin of having made beggars.” Carnegie’s verb sense is strikingly apt: it is not merely the unfortunate fact that poverty coexisted alongside plenty, but that progress actually produced beggars where there had been none before. So while it is true that life expectancy rose by six years during the Gilded Age, it is also the fact that the life expectancy of white males born during or after the Civil War was ten years less than it had been a century earlier. What can explain this paradox?2
Our Gilded Age ancestors were well aware—sometimes painfully aware—that Progress begat poverty. Since then, the triumphant story of the American Industrial Revolution has always acknowledged that Progress was not cost-free. Abuses occurred. The New World’s natural endowment was drawn down without regard to the future and the environment bore the scars. Farmers lost their homesteads. Handicraft workers lost their trades. Industrial workers lost some of their humanity. Cities developed slums, as well as sweatshops that were staffed by children. Businesses went belly-up in the competitive maelstrom. Social unrest boiled over now and then.
However lamentable this dark side of Progress may be, it does not alter the underlying assumption: Gilded Age industrialism was the irresistible and empyrean story of the orchestration of the forces of production at the hands of great men. Joseph Schumpeter, the renowned Harvard economist, would later call this period one of “creative destruction.”
Dispossession, however, should not be treated as an ancillary subplot to the principal drama. Instead the whole industrializing enterprise may be seen to rest on the systematic cannibalizing of various forms of precapitalist economies and the societies they supported. Capital accumulation at the expense of these “others”—a process that has been characterized as “primitive accumulation”—constitutes the underground history of Gilded Age Progress. It is what accounts for the gross inequalities of income and wealth that emerged alongside a rise in the standard of living for some. It is why it is possible to speak of those days as the best of times and the worst of times. More profoundly than that, primitive accumulation fostered an abiding sense of loss felt by all sorts of ordinary people. It inspired them to resist their own social extinction, to form counterdreams to the official romance of Progress. Indeed, resisting what some chose to call, both at the time and in hindsight, the inevitable did not seem that way to those living through the agonies of primitive accumulation back then.
Capitalism did not emerge de novo out of the ether. Native pastoralists and buffalo hunters, slaves and ex-slaves, artisans, homesteaders, European peasants and peddlers, small-town shopkeepers, Southern hillbillies, New England fishermen, prairie sodbusters, and subsistence agrarians were the raw material of the miracle of Progress. Wealth once embedded in these societies was absorbed by fair means and foul into the musculature of the new economy. The mechanisms included conquest, legerdemain, and theft. Slavery depended on all that and more, transforming the flesh and blood of whole African civilizations into the liquid capital of Atlantic commerce. Funds accumulated that way later became the foundation of industrial investment.
More peaceable, orderly, everyday means were also at work. Trade, for example, could function less innocuously than mere trucking and bartering might suggest. Export of factory-made goods swamped local, self-contained economies not involved in accumulating capital but rather in the reproduction of ancient ways of life. Here and abroad cheaper goods drove under peasants, husbandmen, and handicraftsmen, detaching men and women from traditional occupations, “freeing” them to join the founding generations of wage labor. Banks built up their resources by similarly digesting alien life forms silently and most of the time lawfully. Farmers who might have been content to maintain the family homestead were inexorably caught up in the web of international commerce, making them ever more dependent on lines of credit to survive. Depending on creditors until they couldn’t bear the load anymore also afflicted handicraftsmen and local merchants, corroding away their independence until they too joined the new ranks of the proletariat. Something as homely as taxes could function as a kind of forced savings, extracted from people involved in small-scale farming or artisanal pursuits, the revenue then used to subsidize capitalist enterprises like railroads.
Nor did primitive accumulation entail strictly an economic uprooting, which ended once the ex-peasant, homesteader, artisan, slave, or shopkeeper walked through a factory gate or descended down some mine shaft or found herself picking strawberries on someone else’s plantation. Slavic or Italian immigrants stoking furnaces in Pittsburgh or threading a needle in a New York City sweatshop had not all of a sudden become acclimated to capitalism’s brave new world simply by virtue of pocketing a weekly paycheck. It would take decades, more than a single generation, before primitive accumulation as a social undertaking had extinguished the last vestiges of older ways of life.
Take Native Americans. They were subject to the whole repertoire of primitive accumulation. In a generation millions of bison that had supported communities for centuries—providing their food, clothing, shelter, and tools—were reduced to hundreds, their hides filling up the arteries of domestic and international trade. Buffalo skins morphed into leather belts for millions of industrial machines so that the nomadic way of life became insupportable. Cross-country trains traveled the Great Plains, stopping to allow armed passengers to slaughter whole herds as part of a deliberate policy to coerce tribal resettlement on reservations. Even the Dawes Act of 1887, ostensibly designed to convert Native American communalists into private farmers and tradesmen, ended finishing off the bloodier story of mass Indian removal: under the act’s allotment system, most tribes suffered catastrophic losses of land and resources that reduced their members to a state of woeful dependency.3
Collateral damage up to and including social extinction had been the market price paid by native cultures even before the advent of industrialism, beginning with the first New England settlers. The Montauketts of eastern Long Island, for example, did not think of their lands as privately owned and alienable but rather as, like them, part of the natural order of things, to be used, not possessed in perpetuity. Europeans thought otherwise. They treated parcels as if they were commodities like any other, to be bought and sold whether or not the “owner” maintained any other active connection to that land.
For some generations during and after the colonial era, Dutch and British settlers negotiated deeds of “sale.” The Montauketts might get manufactured goods in return—hatchets, pots, knives, coats. The deeds included clauses allowing Montauketts to continue to live and hunt, fish, and collect shells for wampum on portions of the land. They could as well salvage the fins and tails of beached whales, which—before the Europeans drove them far offshore—had supplied a regular part of the Montauketts’ livelihood, had been hunted from oceangoing coastal canoes, and had been featured as items in ceremonial rituals. Meanwhile, the colonists could use the same territory to graze their cattle and hunt and trap animals for the marketplaces of New York and New England. They regularly renewed the deeds, anticipating that eventually the Indian population would die out or get killed in some war among indigenous tribes or by getting inveigled in intracolonial conflicts or both.
That was a sound speculation. And it was hurried along by the inexorable ecological rhythms of the market economy. As they grew more accustomed to using English finished goods, the Montauketts became less able to make their own. Meanwhile, livestock owned by colonists flourished so well that the animals put enormous pressure on lands still in some sense possessed and used by the native population. So, for example, the Montauketts normally hunted wild hogs for immediate consumption. But the British planned on fattening the quarry for slaughter and sale later on. And for that they increasingly wanted access to those common lands, feeding their animals on cornfields in areas the Indians were presumably entitled to live on. As for the English hogs, “The poor brutes were drove without any respect or mercy, driving off the sows that had young pigs leaving the pigs to starve in the swamp.”
Conflict erupted inevitably. In 1657, for instance, several members of the Shinnecock tribe and a group of African American women conspired to burn down buildings in Southampton. But it was the demographic and economic drift of events that was most fatal. During the last four decades of the seventeenth century the Montaukett population drastically declined and its cultural cohesion withered away, due to European-borne disease, military defeats, and the relentless dwindling and expropriation of their material wherewithal. One after another customary right—for example, sovereignty over grazing meadows or wood rights for fuel—was ignored. Modern technologies like scythes and axes felled trees and cut grasses so that deer, an Indian staple, disappeared. Commercial herds of foraging horses, goats, and hogs devoured what grass was left and hogs particularly spoiled vital clam banks.
Soon enough dispossessed Montauketts were absorbed into East Hampton households as domestics, day laborers, and indentured servants… or were not absorbed at all, but instead became “vagabonds upon the face of the earth,” as one Montaukett put it. By the eighteenth century they were tenant farmers or proletarians working as cattle keepers, whalers, fence menders, and casual migratory laborers. Most of their land was gone: “They take our land away every day, a little and a little,” mourned a local sachem.
Moreover, the English had managed as well to undermine what had once been a thriving local coastal economy hunting right whales as they migrated south in the fall. By taking over Montaukett skills and organizational savvy, and reducing the native population to the status of deeply indebted aquatic sharecroppers, colonial enterprises moved large volumes of whale oil to the ports of New York, Boston, and London. By the mid-eighteenth century, onshore whaling was practically over with. So too was the world of the Montaukett people—by the twentieth century the remnants of that tribe no longer even had the legal right to call themselves by that name.4
Before letting the Montauketts vanish into the maw of the market, one other landmark on their road to extinction is worth noting because of its implications for the larger story. In Captains Courageous, his tale of rough and tough adventuring, Rudyard Kipling featured a railroad baron and his wastrel son. Kipling selected Austin Corbin as his real-life model for the railroad king. Corbin had made his fortune during the Gilded Age, first out in the Midwest buying up the land of homesteaders who couldn’t meet their mortgages. He founded a bank in Iowa and ran a plantation in Arkansas that used convict labor. Then he headed east, founded another bank, and started investing in railroads. He became president of the Reading line.
By the 1890s he had hooked up with Arthur Benson, another fabulously wealthy New York tycoon. Benson was busy buying up large chunks of Montauk. This entailed closing off or simply ignoring what remained of the Montauketts’ customary and legal access to their common lands. It was done. After all, Benson and Corbin had big plans, which included extending Corbin’s Long Island Rail Road from Bridgehampton to Montauk so as to turn the whole region into a resort for the rich, including the leisure classes from Europe who could disembark, so Corbin hoped, at the new deepwater port he also had in mind to build at Montauk. It was done. Today Montauk is the capital of summertime hip. So it was that an obscure tribal society was finally swallowed up by the inexorable mechanisms of global capitalism.5
Lost in the mists of history (if it ever got into the textbooks at all), this general dynamic was once well-known and commented on, first of all by Karl Marx: “The expropriation of the direct producers was accomplished by means of the most merciless barbarianism, and under the stimulus of the most infamous, the most sordid, the most petty, and the most odious of passions.” Certainly the Montauketts could testify to that. But so too might John Locke, who called for children to be put to work at the age of three, or Jeremy Bentham, who preferred four-year-olds. About that and bearing on the miracle of American Progress, Marx noted that “a great deal of capital, which appears today in the U.S. without any birth certificate, was yesterday in England, the capitalized blood of children.”6
Although he didn’t call it primitive accumulation, that specter haunted Jefferson’s mind (an irony to be sure for someone whose on-again, off-again fortunes rested on slavery) when offering up what he saw as the best available alternative: “… A manufacturer [by which Jefferson meant an industrial worker] from Europe will turn to labour of other kinds if he finds more can be got by it, and he finds some employment [sic] so profitable that he can lay up enough money to buy fifty acres of land to the culture of which he is irresistibly tempted by the independence in which it places him.” Some were fortunate enough to gain or retrieve that way of life. Many more were not.7
If Indians ended up on reservations or scattered to the winds, all those other refugees from preindustrial capitalist ways of life and of making a living ended up as proletarians of factory and field. Or sometimes worse, driven into lives of semipeonage, toiling away as convict laborers, indebted tenant farmers and sharecroppers, and contract workers, making up a whole menagerie of unfree or semifree labor.
The miracle of capital accumulation in the Gilded Age depended on a second miracle of disaccumulation taking place beyond the borders of capitalism proper. The new order depended on creating proletarians where there had been none or too few. By expanding the market for capitalist-produced goods, the process of primitive accumulation also worked its magic by absorbing and eliminating all those preexisting forms of household and craft production that until then had supplied those markets.
Appetite in this instance is insatiable, inexorable, and systemic, not a function of personal greed. As the revolutionary and political theorist Rosa Luxemburg noted, “Capital must begin by planning for the systematic destruction and annihilation of the non-capitalist social units which obstruct its development…” so that it “ransacks the whole world… all corners of the earth, seizing them, if necessary by force, from all levels of civilization and all forms of society.”8
Industrial capitalism did not invent cruelty and exploitation. But its advent set in motion wholesale social transfigurations never seen before. Once there had been many slave, subsistence, and petty forms of production and social reproduction: plantation monocultures, smallholder agriculture in America and seigniorial village cultivation across southeastern and central Europe, handicraft production on both sides of the Atlantic, mercantile activities serving local markets, and an enormous variety of small businesses filling up the arteries of production and distribution. It isn’t the advent of the market that placed them in jeopardy. Most were quite accustomed to engaging in exchange and regularly made use of credit and carried on private production alongside and in harmony with common holdings. They were even used to price fluctuations as long as they didn’t go so far as to threaten honest livelihoods, the “just prices” that protected them, and the ways of life that depended on them. Capital did precisely that to all of these customary societies.
Most of this was disappeared—that is, was caused to vanish, in one way or another. Early on in colonial Virginia, for example, people clung to traditional forms of subsistence farming, even enduring bouts of periodic hunger, preferring it to working for others. The harshest measures had to be taken by colonial authorities to force the change, including various forms of corporal punishment.
Later, war ended the slave system. Yet in the course of a single generation ex-slaves—freedmen—were reduced to various forms of agricultural peonage, thanks to the failure of the Republican Party to provide them the landed wherewithal to become freeholders. If slaves were abandoned, so too were those millions who took Horace Greeley seriously and thought they would reinvent themselves out west.
Particularly galling was the way the Homestead Act was abused. Passed during the Civil War, it was supposed to make a reality out of Lincoln’s version of the free labor, free soil dream. But fewer than half a million people actually set up viable farms over nearly half a century. Most public lands were taken over by the railroads, thanks to the government’s beneficent land-grant policy (another form of primitive accumulation); by land speculators backed by eastern bankers, who sometimes hired pretend “homesteaders” in acts of outright fraud; or by giant cattle ranches and timber companies and the like who worked hand in glove with government land agents. As early as 1862 two-thirds of Iowa (or ten million acres) was owned by speculators. Railroads closed off one-third of Kansas to homesteading and that was the best land available. Mushrooming cities back east became, in a kind of historical inversion, the safety valve for overpopulated areas in the west. At least the city held out the prospect of remunerative wage labor if no longer a life of propertied independence. Few city workers had the capital to migrate west anyway; when one Pennsylvania legislator suggested that the state subsidize such moves, he was denounced as “the Pennsylvania Communist” for his trouble.
During the last land boom of the nineteenth century (from about 1883 to 1887), 16 million acres underwent that conversion every year. Railroads doubled down by selling off or mortgaging portions of the public domain they had just been gifted to finance construction or to speculate with. But land-grant roads were built at costs 100 percent greater than warranted and badly built at that, needing to be rebuilt just fifteen years later.
Cattle companies, often financed from abroad, used newly invented barbed wire to fence in millions of acres of land once depended on by small farmers and ranchers to water and graze their animals in common. This American version of the British enclosure acts of the seventeenth century (which turned British landlords into commercialized land barons and British yeomen into wayfaring, itinerant laborers) left in its wake dead cattle and bankrupted homesteads.9
Nature conspired with global commodity capitalism to ramp up the rate of dispossession from the land. A punishing drought in the mid-1880s was by itself enough to drive thousands of farmers under. Then, as the Russian and Canadian steppes, the Australian outback, and the Argentine pampas added to the tidal wave of grain and meat flooding world markets, prices collapsed: corn that cost $8.60 an acre to grow could be sold for only $6.60; $9-an-acre wheat for $5.53. Prices for staples declined by two-thirds after 1870 and by two-fifths for all products coming off the farm: barley was worth 20 percent less in 1900, wool 30 percent less, and wheat 29 percent less than it had been in 1860. As the mechanization of American and worldwide agriculture overwhelmed the markets, prices tended to fall off a cliff. In 1889 corn fell to 10 cents a bushel in Kansas (it had been 46 cents in 1870). Between 1889 and 1893, eleven thousand farms were foreclosed on in Kansas alone. A mass exodus of farmers from western Kansas and elsewhere followed.10
Impoverished Southern tenants and sharecroppers turned to large planters or local “furnishing agents” to borrow what they needed for essentials; collateral consisted of a pledged portion of their next year’s crop. Their creditors charged usurious rates of interest, ranging from 25 to 80 percent; such creditors in Louisiana were charging 60 percent in the late 1880s. Usury laws, which once existed in most states, were systematically attacked and often modified or eliminated entirely as “barbaric relics” to please investment institutions back east. Nor were eastern farms exempt. In a surpassing irony, bankrupted farmers there sold off small pieces of land to industrial workers who were themselves trying to produce enough to subsist through the merciless uncertainties of the market.11
To survive this mercantile cyclone, farmers hooked themselves up to long lines of credit that stretched circuitously back to the financial centers of the east. These lifelines provided the wherewithal to buy the seeds and fertilizers and machines, to pay for storage and freight charges, to keep house and home together while the plants ripened and hogs fattened. When market day finally arrived, the farmer found out what all his backbreaking work was really worth. If the news was bad, then those life-support systems of credit were turned off and became the means of his own dispossession.
In the South, hard-pressed growers found themselves embroiled in a crop-lien system, dependent on the local furnishing agent to supply everything needed, from seed to clothing to machinery, to get through the growing season. In such situations, no money changed hands, just a note scribbled in the agent’s ledger, with payment due at “settling up” time. This granted the lender a lien, or title, to the crop, a lien that never went away.
In this fashion, the South became “a great pawn shop,” with farmers perpetually in debt. In Alabama, Georgia, and Mississippi, 90 percent of farmers lived on credit. The first lien you signed was essentially a life sentence. Either that or you became a tenant farmer or you simply left your land.12
This was primitive accumulation with a vengeance. In the South the furnishing agent was often enough himself in debt to financiers up north. Frequently what sharecroppers or tenants owed exceeded the value of the crops just harvested; an endless cycle of debt dependency ensued.
And because cotton was the most liquid of all commodities, planters and merchants and northern banks insisted on its exclusive cultivation, inhibiting any diversification, leaving Southern farmers, black and white, singularly vulnerable to the world cotton market. The emergence of Egypt and India as major cotton producers only exacerbated the plight of Dixie agriculturalists by exerting further downward pressure on prices.
Just as barbed wire out west had fenced in what was once common grazing land, so too in the South the planter oligarchy passed laws excluding self-sufficient, up-country hog farmers from pastures and water sources once available to all. Nearly one-half of all Southern farms were run by various species of non-owners. The human runoff from this systematic undermining of small-scale producers, cut off from any other legitimate means of support and compelled to survive one way or another, even outside the law, became itself a crop to be harvested by enterprising capital.
The convict lease system—the renting of prisoners (overwhelmingly African American) to planters and private industry—boomed and was symptomatic of a regional system of primitive accumulation that blanketed the post–Civil War South. In fact, prison labor as a lucrative form of capital accumulation was ubiquitous in the north and among white prisoners in the antebellum years. Convicts were worked either inside prisons by outside contractors or in all sorts of manufacturing facilities outside prison walls, ranging from small-scale carpentry shops to very large textile and shoe factories. New York State led the way, but there was virtually no state in the union that didn’t provide this kind of coerced and very cheap labor.13
In the South, convict leases provided workers for cotton plantations, mining, lumbering, and turpentine camps as well as for quarries, dockyards, and road-building projects; Alabama derived 73 percent of its state revenue from leasing convicts. Nor was this flow of unfree labor restricted to regional industries and agribusinesses. Large, northern-headquartered banks and corporations were complicit. So, for example, the Tennessee Coal and Iron and Railway Company, the leading coal, iron, and steel producer in the rich fields surrounding Birmingham, Alabama, was a heavy user of prison labor; by the early twentieth century it had become an affiliate of the J. P. Morgan–run U.S. Steel, and by 1907 it had become the largest user and profiteer of this slave-labor system.
Making sure the supply of coerced workers was ample became a function of the region’s policing and judicial systems. Wholesale arrests among black men in Georgia and throughout the South for disobeying a boss, being impudent, gambling, partying, talking to white women, having lascivious sex, riding freight cars without a ticket, vagrancy, or even for just being out of work produced a robust supply of convict labor at harvesttime or when railroad track needed to be laid or phosphate mined. Some didn’t survive the ordeal, having been worked to death: 44 percent of the 285 convicts building the South Carolina Greenwood and Augusta Railroad died. The mortality rate among convict laborers in Alabama was 45 percent. At the Pratt mines in the Appalachian foothills of northern Alabama, among the largest in the South, the mortality rate was 18 percent. At Tennessee Coal and Iron, workers were shackled together in underground pits, lived in fetid, disease-ridden barracks, worked to exhaustion from sunup to sundown, were regularly whipped and sometimes tortured (water torture was commonly resorted to) for every imagined infraction, and were hunted down by dogs if daring enough to attempt escape. If they didn’t die of whipping, disease, near starvation, or a bullet in the brain, they committed suicide at alarming rates, their bodies tossed into nameless roadside graves. A rare government investigation in Alabama in 1882 concluded these prisons “were totally unfit for use, without ventilation, without water supplies, crowded to excess, filthy beyond description,” where the prisoners were “excessively and sometimes cruelly punished.” An equally rare ex-Confederate plantation owner appalled by what was going on described these prison mining operations as “nurseries of death.”
Unlike slave masters of old, those overseeing the process in this way had no stake in, nor did they offer any paternal pretense about caring for, the health, well-being, or reproductive potential of their unfree workers. Those more candid among them admitted they thought of these peons as mere “clever mules.” Moreover, the whole judicial system of the South, from the lowliest country sheriff and justice of the peace to the highest reaches of state capitals, conspired to replenish the supply of convict labor as a lucrative source of self-enrichment and government revenue. In effect the legal apparatus became a mechanism of primitive accumulation by monetizing criminal behavior (if it could even be called that) of the most trivial or contrived nature through a web of debt. Labor in this arrangement became a kind of currency used to pay off judicial fines and accumulate capital in the private sector.
A regional economy rooted in the production of foodstuffs and primary raw materials rested to some considerable degree on these related forms of unfree labor. And soon enough a regional market in convict labor emerged in which agents scoured the countryside to fill positions in coal mines, lumber and turpentine camps, and numerous other enterprises. In this venture into primitive modernism there was even ample opportunity for speculators to buy up discounted scrip for prisoner debt only redeemable when the convict had worked off his fine (a day that for the least fortunate never came, in which case the speculator lost his shirt).
Three generations after the Civil War the system was still ensnaring hundreds of thousands. Extreme in its flagrant disregard of the 13th Amendment abolishing involuntary servitude and laws against peonage, this fixing of the human body so it could be milked until dry was, after all, part of the broader scheme implemented in the South after the war to restrict the mobility of the newly emancipated so that they would remain an ever-ready labor force.14
Most Dixie labor contracts—when they existed at all—contained all sorts of obligations coercing workers to stay put for a year or more (even sometimes including lifetime contracts). In Mississippi if you hadn’t entered into a contract by January 1, you were subject to arrest. In Alabama, North Carolina, and Florida, it was a crime to change employers without permission. Together with all the other disabling features of post-Reconstruction life and labor, the network of debt peonage functioned to forestall or destroy independent farming and other forms of economic self-reliance, reducing a whole population to a state of abject dependency. At the turn of the twentieth century, a young black man in the South (and some poor whites as well) faced three options: “free labor camps that functioned like prisons, cotton tenancy that equated to serfdom, or prison mines filled with slaves.” Resistance when it miraculously surfaced was met with violence and, not infrequently, consignment to forced labor. And while young African American males languished in industrial and agricultural prison camps, black women (if they weren’t also working in prisons, sometimes as unpaid prostitutes), once the helpmates of their husbands on small family plots, found work instead as wage earners in canning and tobacco factories, as domestics, in mechanized laundries and textile mills, and in the fields.
Inundated by debt, Jefferson’s independent farmer was becoming an endangered species. By the turn of the century, two-thirds of all agricultural work, north and south, was performed by tenants, sharecroppers, or wage laborers. In South Carolina plow hands earned as little as twenty cents a day, paid partly in cornmeal and tobacco.15
Debt-based capital formation, which may or may not be reinvested in industry, has been a classic mode of primitive accumulation around the world. Here in the United States, it was enforced by adherence to the gold standard, which offered debtors no relief, safeguarded creditors, and kept foreign investment capital—British funds especially—flowing into what was after all still a developing country and a risky one. Creditors and investors were reassured by the gold standard that they could always redeem their paper assets in a fixed amount of gold. For debtors, however, this meant their obligations became ever more onerous as prices for agricultural commodities and other goods declined. It was because so many independent proprietors, especially on the land, but also in small towns and cities, found themselves entangled in webs of credit and debt which threatened their social existence that Gilded Age politics often seemed obsessed with the money question, with greenbacks and the gold standard, with cries for the free coinage of silver and fiat money.
Globalized capitalist agriculture also wiped out or imperiled peasant proprietors and other small producers in Sicily and southern Italy and all across the Balkans, Germany, Austro-Hungary, Poland, and Scandinavia. As miraculous as the rapidity and scope of American industrialization (and as enmeshed in its triumph) was the overnight uprooting of millions of people from their ancestral villages and from traditional ways of life that could no longer be sustained. If local populations managed to hang on, they did so only by a process of social amputation, exporting their young (and not so young) men, and eventually whole kin networks, to work in the New World, there to remit back what they could to those left behind. A century before industrial ghost towns haunted the American Midwest, ghost villages made their spectral appearances across the underbelly of Europe.
Nearly seven million migrated to America from Europe between 1881 and 1894, increasing numbers of them from the continent’s rural hinterland. In 1907 five thousand immigrants arrived at Ellis Island each day. By 1910, immigrant working-class women from the old country constituted the core of the workforce in textiles and garment manufacturing, and in mechanical laundries and domestic service. Human chains of sojourning labor migrated back and forth across the Atlantic in rhythm with the business cycle, returning home when the economy went south. Once in the United States they joined their efforts with home-grown superannuated farmers along with native handicraftsmen displaced by the machine and the factory’s exquisitely refined division and specialization of labor. These legions of displaced immigrants became charter members of an American proletariat. By 1870 the foreign-born accounted for one-third of the industrial workforce; soon enough in some cities, like Chicago, they would constitute the majority.16
Expatriated peasants were not the only river flowing into the sea of wage labor. Mass-production, factory-based, machine-driven industry grew robust at the expense of home-grown handicraft economies and the knowledge, skills, and traditions embedded in those ways of life. They weakened, were debased in a futile effort to compete with the factory, and then vanished. Craftsmen—woodworkers and printers, barrel makers and bakers, butchers and iron molders, tailors and shoemakers, glassblowers and brass workers, masons and smithies, weavers and bookbinders—were swept up into the process of industrial capital accumulation. Once they had been small-shop proprietors in their own right. Or, even after losing that independence, they had clustered together inside factory gates as groups of invaluable industrial craftsmen, enjoying a functional quasi-independence thanks to their secret knowledge, experience, and self-directed control of what went on in their specialized precincts; iron puddlers, rollers, boilers, and heaters, for example, for a time exercised decisive control over production in the iron and steel mills; skilled butchers did the same in the new meatpacking plants of Chicago.
Soon enough, however, these industrial artisans became “nothing more than parts of the machinery that they work.” Capital accumulated at the expense of their social existence; they took up new lives, became part of that larger waged labor force which modern capitalism produces and depends on—its chief commodity and natural resource. Indeed, the stupendous rate of mechanization in America was in part driven by the need to reduce the high costs associated with those forms of handicraft, skilled, and highly valued labor that for a while continued on into the factory age. They not only were expensive but, given their leverage over vital aspects of the manufacturing process, slowed the pace of production on the shop floor. New machines promised to wipe out those remnants that resisted. After a while the machines, aided by the efforts of determined managements, won.17
Victory, however, emerged only gradually. In the early decades of the nineteenth century, farmers, handicraftsmen, and various tradespeople swept into the new textile or shoe factories or the farm women set to work out in the countryside spinning and weaving for merchant-capitalists still held on to some semblance of their old ways of life. They maintained vegetable gardens, continued to hunt and fish, and perhaps kept a few domestic animals. When the first commercial panics erupted and business came to a standstill, many could fall back on precapitalist ways of making a living, even if a bare one. When industrial capitalism exploded after the Civil War, unemployment suddenly became a chronic and frightening aspect of modern life affecting millions. Crushing helplessness in the face of unemployment was also a devastating new experience for those great waves of immigrants landing on American shores, many of them peasants accustomed to falling back on their own meager resources in fields and forests when times were bad.
Inexorably, or so it seemed, capital prevailed, and its triumph could assume a somber shape. During this formative phase of industrialization, 35,000 workers died each year in industrial accidents, many of them key skilled mechanics. In 1910, one-quarter of all workers in the iron and steel industries were injured at least once, partly because of management’s failure to install safety devices or shorten the hours of work. Two thousand coal miners died each year on the job. Every day, around that same time, there were one hundred industrial accidents somewhere in the country.
Especially for various skilled occupations, the railroads, for example, became a killing ground. Between 1890 and 1917, 158,000 mechanics and laborers were killed in railroad repair shops and roundhouses. In 1888–89 alone, of 704,000 railroad employees, 20,000 were injured and nearly 2000 killed. On the Illinois Central between 1874 and 1884, one of every twenty trainmen died or was disabled; among brakemen—railroaders who did the most dangerous work—the ratio was one in seven (and among railroad switchmen, another skilled position, the number was almost as alarming). Part of the reason for this appalling record of disfigurement and death was management’s relentless drive to increase the workload; brakemen, for example, were required to brake four or five cars rather than the two or three that had been the custom earlier. The bones of thousands of workmen were encased in the concrete of dams and bridges, bodies interred by the thousands in underground caverns, limbs shattered and sheared off by gears, wheels, lathes, chains, pulleys, spindles, cables, and flywheels; mountains of fingers, forearms, legs, ears, and even heads made up the human geography of industrial Progress.18
High death, injury, and unemployment rates; precipitous deterioration in diet as well as in the size and comforts of home; abandoned backyard vegetable gardens; common hunting grounds and fisheries privatized; urban squalor; obsolescent skills and forsaken traditions; exhausting, high-speed work routines lasting twelve hours or more unlike anything experienced before; a daily life cycle consisting of work, punctuated by shorts bouts of eating and sleeping; chained to the inorganic respiration of machines and the befouled climate of “dark Satanic mills”; chronic insecurity and dread, of work, of no work, of the foreman, of the poorhouse; periodic or permanent excommunication as vagabonds and tramps; social disgrace, demoralization, dependency.
Loss. A typical coal mining family in Pennsylvania during the 1870s lived like this: in a two-room “black coated shack,” dining on potatoes, soda crackers, and water, forced to buy their paltry groceries with company scrip exchangeable only at a “truck store” (also known as “pluck me” stores) run by the colliery. When one of their two daughters got sick, there was no way to pay a doctor. Nor was there any money to bury her when she died.
Childhood itself became a resource for capital accumulation. In Pennsylvania late in the nineteenth century, children contributed 25 percent of family earnings, 40 percent among the unskilled. These kids ranged in age from ten to fifteen. Already by 1880, 69 percent of boys and 20 percent of girls aged fifteen to nineteen were working, and 18 percent of children between the ages of ten and fourteen were working at nonagricultural pursuits in 1890. At the turn of the century, one-fifth of all children in the country under the age of fifteen worked for wages, and this doesn’t count the millions who worked on farms. In the Carolinas toddlers picked strawberries.
These children toiled especially down in the mines, in the meatpacking plants, in textile mills north and south, and in the tenement warrens of garment and cigar-making shops. One-third of those between ten and fifteen worked twelve-hour days in the Carolina and Georgia textile mills, in Virginia tobacco sheds, and all over the country in toy and candy factories, in coal mines and glass and food-packing plants. There were four-year-old button sewers and basting pullers in the garment industry. There were pea shellers not much more than infants. When the Triangle Shirtwaist Factory went up in smoke in 1911, many of those killed were not really women yet, but young teenage girls. And then there was that sizable population of abandoned children, cast off and barely surviving in urban underground economies.19
Downward mobility—more precisely, the descent into social oblivion—is the arc inscribed by primitive accumulation. It is the underground, invisible story of industrial Progress, the counterpoint to that widely celebrated tale of upward mobility at the heart of the American mythos. And it left its mark not only among the “lower orders”—struggling farmers, peasant immigrants, dispossessed, déclassé handicraftsmen—but also among middling merchants, storekeepers, and petty producers in towns and small cities across the nation. They succumbed to the relentless pressures of the giant corporation. Often enough, that corporation was erected on their remains, sometimes absorbing their facilities, their equipment, their personnel, or else leaving all that bankrupt and inert by the side of the road. Or just as frequently those small businessmen devoured one another or effectively committed suicide, driven to compete close to and then past the point of economic survival. Their death cleared the market, opened up the way for enormous industrial combines, raw materials producers, mass market distributors, nationwide transportation and communications corporations, the champions of consolidated capital accumulation and the integrated national marketplace—all the purveyors of Progress.
Winning was definitely better than losing in this Darwinian war to the death. However, one central irony of this era is that the same competitive strains that produced a relentless downward pressure on prices and that helped account for the rising standard of living enjoyed by many, also generated a pervasive unease among even the biggest capitalists. Their profit margins were under constant assault, their mood oscillating between surly and gloomy, always anxious, often lacking in confidence except when periodic but short-lived booms temporarily restored their good spirits. Matters improved dramatically around the turn of the century, when the publicly traded corporation began to occupy vast stretches of the economic landscape and brought with it oligopolistic powers to restrain competition and raise prices and profits. But for decades during the long nineteenth century, even the new bourgeois elite harbored doubts about the course of Progress. Still, those who survived did thrive, often at the expense of what was once an ocean of petty entrepreneurs.
Stepping beyond the boundaries of the Gilded Age for a moment, it is worth noting that 80 percent of Americans were self-employed in 1820; by 1940 that number had shrunk to 20 percent. Was it all a matter of the inexorable, impersonal workings of the free market? Sometimes it was, but sometimes not.20
The most famous conspiracy to bring about that kind of social extinction was authored by John D. Rockefeller and Tom Scott, who ran the Pennsylvania Railroad (the nation’s largest). Together they cobbled together a cartel of oil refiners and oil transporters (including William Vanderbilt’s New York Central and Jay Gould’s Erie). Calling their new enterprise the South Improvement Company (SIC), they divided up the market among themselves, fixed the rates, provided SIC members a 40 to 50 percent discount, and drove a host of independent refiners out of business. SIC’s basic mechanisms for digesting or obliterating once freestanding enterprises were duplicated many times across broad stretches of the economy, from raw materials to retailing, and from the beginning to the end of the Gilded Age and beyond.
A menagerie of comparable trusts loomed over the economic landscape. There was a jute or bagging trust, a cottonseed oil trust, a fertilizer trust, a binding twine trust, a tobacco trust, a beef trust, trusts in leather, salt, rope, sugar, lead, lumber, and so on, all of which represented mortal threats to free enterprisers. All sorts of small-scale businesses, from local merchants to neighborhood butchers, were placed in harm’s way.
Insofar as Progress was strongly associated, as it was perceived to be back in the Gilded Age, with gigantic concentrations of both dynastic and corporate capitalism, this was the metabolism responsible, petty businesses its waste material. Entrepreneurs and would-be entrepreneurs struggled and often failed to get off the ground, thanks to the choke hold on entering the market exercised by trusts or monopolies. Nor were they the only unwilling contributors to capital accumulation. Towns were tithed for tax subventions and rural and urban consumers of industrial goods, foodstuffs, transit services, and other necessities were gouged at the cash register by those predatory oligopolies no longer subject to the rival competitive pressures.
Yet it is also undeniable that even without the conscious connivance by trust builders and their political enablers, the ground-level remorseless logic of the free market worked to destroy the free market.
Some economic historians have described the whole last third of the century as one long depression, worldwide in scope, characterized by price deflation, mass bankruptcies, and declining rates of profit, interrupted by spasms of meteoric growth. Occurring with increasing frequency and ferocity, depressions—there were major ones beginning in 1837 and recurring in 1857, 1873, 1882, 1893, and 1907—became the killing fields for legions of small and medium-sized enterprises. The Darwinian struggle to survive was succinctly described by one nineteenth-century economist: “No sooner has the capitalist fairly adopted an improved machine, than it must be thrown away for a still later and better invention which must be purchased at dear cost if the manufacturer would not see himself eclipsed by his rival.” The process elicited merciless cost-cutting (labor costs especially), overproduction, saturated markets, devaluing of existing means of production by newer, more productive ones, and overall commercial chaos, a war of all against all. Depressions were the free market’s solution to its own dilemmas. But their consequences were often worse than the disease they were meant to cure. Even the victors, not to mention the vanquished, were disturbed.21
Corporate consolidation emerged as a way out of this maelstrom, suspending (permanently some hoped) the laws of the free market, replacing them instead with conscious centralized control—of pricing, output, and technological innovation, as well as of costs of raw materials, marketing, transportation, and distribution—by a singularly powerful corporation or by secret alliances of a tiny handful of such goliaths. Rockefeller, for one, had nothing but contempt for free market competition, scorning “academic Know-Nothings about business” who prated on about its virtues. “What a blessing it was that the idea of cooperation, with railroads, with telegraph lines, with steel companies, with oil companies, came in and prevailed.” He was a believer in the genius of monopoly and managerial control, not shy about pronouncing that “the individual has gone, never to return.” Rockefeller’s oil combine, Armour’s meatpacking supremacy, Carnegie’s steel dominion, Frick’s coke and coal mine empire, among others, all emerged first out of the ruins of the catastrophic depression that lasted through the heart of the 1870s.22
Six thousand firms went under in 1874 alone. Similarly, business activity plummeted by 25 percent in the downturn of the early 1880s, dragging down railroad revenues, pig iron and coal production, domestic cotton consumption, imports, and multitudes of petty businesses that depended on their patronage. During the depression that began in 1893—the worst of them all until 1929—the nation’s output imploded, dropping by 64 percent. The rate of business failures nearly tripled over the previous bust. In just a few years, farm income dropped by 18 percent. Freight cars stood empty, factory chimneys remained smokeless, steel furnaces were banked. The economy as a whole operated at 25 percent below capacity.23
Calamity for many, however, was a boon for a fortunate few. During the collapse of the 1870s, for example, the Mellon family banking and real estate empire swallowed up liquidated businesses auctioned off at sheriff sales and evictions. A decade later the Mellons used the capital accumulated in this way to fund investments in natural gas, plate glass, western land development, and more.24
Pain from a spasmodic economy like this one penetrated deep into the tissues of American society, way below the level of the family business. Casualties accumulated among the country’s growing population of invisibles. When Jay Cooke, the country’s most famous financier, went under in 1873 along with his recklessly overextended and highly speculative Northern Pacific Railroad, the bottom also fell out for millions of working people. Between then and 1877, when the Great Uprising shocked the nation, wages fell by as much as 60 percent and 3 million out of a total population of 45 million were without work of any kind (this was nearly one-fifth of the workforce).
We have long since grown accustomed to treating unemployment as a normal and natural part of the economic order of things. But during a good part of the long nineteenth century, unemployment struck people as shocking, unnatural, and traumatic. This strange new calamity had already surfaced in the colonial era. The first manufactories were public enterprises created in the 1760s and ’70s to relieve the larger eastern cities of what had been unthinkable before—namely, a growing population of unemployed, idling laborers no longer able to find work in settled areas of the coastal colonies. People feared they would breed crime, dissipation, and disorder, transplanting to the New World vices already rife in the Old one.25
Unemployment as a recurring feature of social life really caught American attention, however, only with the rise of capitalism, first in the pre–Civil War era. Before that, even if the rhythms of agricultural and village life included seasonal oscillations between periods of intense labor and downtime, farmers and handicraftsmen generally retained the ability to sustain their families. Hard times were common enough, but except in extremis most people retained land and tools, not to speak of common rights to woodlands and grazing areas, and the ability to hunt and fish. They were—we would say today—“self-employed.” Only when such means of subsistence and production became concentrated in the hands of merchant-capitalists, manufacturers, and large landowners did the situation change fundamentally. “Unemployment” was not even invented as a census category until the 1870s. Then a proletariat—those without property of any kind except their own labor power—began to appear, dependent on the propertied for employment. If, for whatever reason, the market for their labor power dried up, they were set adrift.
What soon came to be called “the reserve army of labor”—able-bodied but destitute workers—stunned onlookers. The “tramp” became a ubiquitous figure, traveling the roads and rails, sometimes carrying his tools with him, desperate for employment. For villagers and city people alike, he was a foreboding specter. “Tramp acts” were passed to “check or exterminate” the tramp. In 1877 one million vagrants were arrested, double the number of the year before. Their punishment often enough was forced work. Missouri, for instance, auctioned such prisoners off to the highest bidders.
Whether working or not, fifteen million people lived in poverty; the cost of food took up three-fifths of a worker’s pay. And legions of the homeless also tramped the roads. During the “milder” downturn of the mid-1880s, unemployment exceeded 13 percent and wages fell by more than one-quarter. “Soup houses” and “societies for the Improvement of the Conditions of the Poor” provided some food and sponsored laundries, woodyards, workrooms, and wayfarer lodges for the homeless, but couldn’t keep up with the need. The Johns Hopkins economist Richard Ely noted that “never before had there been seen in America such contrasts between fabulous wealth and absolute penury.” Fetid slums that were often dark, airless, and wintry cold; filthy streets and alleys; people scouring in ash cans for rotten vegetables; epidemic disease—all of this social ugliness and more shocked observers like Ely.26
Matters only became grimmer during the great depression of the 1890s. Real earnings declined by 18 percent during the first two years of the collapse as wages were slashed. The consumption of items like clothing, canned corn, coffee, shoes, and dry goods of all kinds shriveled. In Boston more than a third of the city’s craftsmen were out of work. Millions more across the nation were fired (only during the 1930s would unemployment levels exceed those of the 1890s), the homeless took shelter in empty school classrooms, and “armies” of tramps (sometimes known as “industrials”) demanding work or relief converged on Washington, D.C., from all over the country—Boston, St. Louis, Seattle, Spokane, Chicago, San Francisco, Portland, as well as Massillon, Ohio, and the hinterlands of Colorado, Montana, and Utah.
Twenty thousand vagrants huddled in the streets of New York, where for two months Joseph Pulitzer’s New York World handed out 5000 loaves of bread. Desperate, some hurled stones through store windows hoping to be arrested and so sheltered in a jail cell for the night. At least 100,000—some estimated close to 200,000—were workless in Chicago during the bitter winter of 1893–94. Accounts appeared of people “living from the ash barrels where they found half rotten vegetables and from offal they were given by local butchers.” From Buffalo came reports of 5000 Polish immigrants in “imminent danger of starvation”; the city’s postmaster, who moonlighted as a baker, distributed free bread. In Washington, D.C., a scene of “greater destitution than before known,” especially among the city’s always hard-pressed African Americans, included “a vast army of unemployed and men pleading for food who have never before been compelled to seek aid.” Trainloads of out-of-work silver miners in Colorado were shipped eastward for free to get them out of the state. Zones of rural devastation in Kansas, Nebraska, and the Dakotas were depopulated virtually overnight. Kansas governor Lorenzo Lewelling declared the state’s vagrancy law unconstitutional, ordered police not to harass the state’s swelling population of the homeless, and made a personal observation: “It is no crime to be without visible means of support. I was in that condition once, in 1865, in Chicago. I was no thief, but I was a tramp.”27
Primitive accumulation thus helped generate the stupendous economic inequality that the Gilded Age is famous for. But the picture is more mixed than that. Capital was indeed piling up in factories, mills, pipelines, railroads, granaries, shipyards, stores, and of course banks. Owners naturally benefited. So too did a new species of middle managers and clerical and administrative employees. That white-collar population of managers, technicians, clerks, and sales and other personnel rose from under 400,000 in 1870 to more than three million by 1910. Moreover, the standard of living of skilled industrial workers also measurably improved. Their precious forms of know-how, so long as they lasted, were rewarded by managements with little choice in the matter.
Fierce competition drove prices down through the whole era, so that even if nominal wages fell (in severe downturns, for example) real wages did not; indeed, the division of spoils between labor and capital tended to favor the former, especially among the skilled, as internecine competition drove down not only costs but profits as well. The purchasing power of skilled workers doubled between 1865 and the end of the century.
For some then, and by no means only an elite few, Progress, measured at least in material terms, was real. Per capita income doubled between the end of the Civil War and the turn of the century. Health and nutrition got dramatically better for multitudes, thanks to the advent of bacterial biology and the technologies of canning and refrigeration. Technological innovation could and did both intensify and ease toil. But the rate of productivity slowed each decade beginning in the 1870s. So that for others—many, many others—inequality was stark and growing starker.28
By the midpoint of the Gilded Age about 4000 families owned as much wealth as the remaining 11.6 million. Two hundred thousand individuals controlled between 70 and 80 percent of the nation’s property. The arithmetic of dispossession and of the descent into the new American proletariat went like this: while 87 percent of private wealth belonged to a privileged fifth of the population and 11 percent to the next luckiest fifth, the bottom 40 percent had none at all. Multimillionaires (another invention of the Gilded Age) accounted for 0.33 percent of the population but owned one-sixth of the country’s wealth. The richest 1 percent owned 51 percent of all real and personal property, while the bottom 44 percent came away with 1.1 percent. Most workers earned less than $800 annually, which wasn’t enough to keep them out of poverty. And most of them had to toil for nearly sixty hours a week to make even that much.
Progress—that is, capital accumulation—had created a nation of haves and have-nots. Whether pleased with the result or not, all were astonished at its strangeness. The shock reverberated up and down the ranks of this new world, now pockmarked by a steep hierarchy once thought alien to the American experiment. Nor did the lower orders, those living on the edge of social if not physical extinction, think they’d ended up there by accident. On the contrary, they were convinced they had been driven down by an overweening aristocracy, presumptuous beyond measure, a noxious import from the Old World.29
Observing this in the Old World, Marx was struck by something that prefigured, at least in part, one answer to the mystery this book wrestles with: “The class struggles here in England, too, were more turbulent during the period of development of large-scale industry, and died down just in the period of England’s undisputed industrial domination of the world… and it will be no different probably in America. It is the revolutionizing of all traditional relations by industry as it develops that also revolutionizes people’s minds.” Decades before he issued this forecast, Americans were already experiencing similar premonitions of stormy weather ahead.30